How to get a mortgage without a credit score

Most lenders require at least 2 tradelines

For many homebuyers, establishing credit came naturally once they began working, applied for a credit card, took out a car loan or paid back student loans. But what about potential homebuyers who don't have a credit score, either because they are averse to credit cards or have yet to build up a substantive credit history? Can they still apply for a mortgage?
The answer is yes, but "it's exceedingly difficult to obtain a mortgage without a credit score," says Tim Ross, president and CEO of Ross Mortgage Corp. in Royal Oak, Mich. "Lenders use automated underwriting systems that base a loan decision on certain criteria, including a credit score. But there are some nontraditional sources that can be used for credit verification."
Mortgage lenders typically require a credit score of at least 620 or 640 to even consider an applicant for a loan.

Whether you prefer not to use credit cards, are new to this country or are simply a younger borrower who hasn't built up enough credit history, there are some alternative sources that mortgage lenders can use to determine your credit risk.
While most lenders require three or more sources of credit, Clint , a senior mortgage banker with XXXX says, "I've worked with borrowers who have a slim credit file and been able to get them approved for a loan. The first thing we look for would be 12 to 24 months of canceled checks or verification from a landlord of on-time rent payments."


Alternative sources of credit
Here are several other items that can be used for nontraditional credit verification, Ross says:

• Utility bills for gas, electricity or water, as long as they are paid separately from your monthly rent.
• Phone and cable bills.
• Car insurance, renters insurance, life insurance or medical insurance payments, if they are not paid by payroll deduction.
• Child care or school tuition payments.

The more evidence you can provide that indicates a history of on-time payments, the greater your chances of qualifying.

Bernanke told Congress "Easy Money to Stay "

Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that the Fed intends to keep its Easy Money   policies going until the job market improves significantly.
In his semi-annual report to Congress, Bernanke also said the Fed will carefully weigh the costs of its bond-buying program, such as inflation and excessive risk-taking by investors that could led to financial instability.
But Bernanke said he doesn't see the costs of risk-taking "as outweighing the benefits of promoting a stronger economic recovery and more-rapid job creation." Despite stronger job growth recently, he said "the job market remains generally weak."
Bernanke's remarks appeared intended in part to settle financial markets that have grown more concerned recently that the Fed will rein in its economic stimulus sooner than expected.
Worries that the Fed may soon end or reduce its $85 billion in monthly purchases of Treasury bonds and mortgage-backed securities—which are aimed at holding down long-term interest rates— arose last week after minutes of the Fed's Jan. 29-30 meeting were released.
The minutes showed that "many" Fed policymakers voiced concerns that the bond-buying posed risks, such as eventual inflation and financial instability. "A number" of officials said such hazards could prompt the Fed to "taper or end" the purchases before the job outlook gets substantially better, seemingly undercutting a roadmap the Fed has been emphasizing for months.
Stocks fell sharply last week after the minutes came out.
Bernanke also urged Congress and the White House to temper the $85 billion in automatic spending cuts slated to take effect March 1. He said such large cuts would put a "significant" near-term burden on the economy. Instead, he said Washington should devise a plan to address the nation's massive deficit by cutting the budget in a few years when the economy is stronger.
"Such an approach could lessen the near-term fiscal headwinds facing the recovery whle more effectively addressing the longer-term imbalances in the federal budget."

Ty Laffoon

Will the Obama Mortgage Bill Pass?

 A sharply divided Congress isn't likely to jump at President Barack Obama's challenge for quick passage of a mortgage refinancing bill that supporters say could help millions of homeowners save big each year and boost the economy.
Obama praised the legislation in his State of the Union speech last week, saying the proposal would help more homeowners with mortgages backed by Fannie Mae and Freddie Mac take advantage of low interest rates and refinance their loans.
Even with mortgage rates near a 50-year low, Obama said, too many families that have never missed a payment and want to refinance are being turned down.
"That's holding our entire economy back, and we need to fix it," the president said. "Right now, there's a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today's rates. Democrats and Republicans have supported it before."

The economy's slow recovery from the recession gives the idea urgency, Obama said. "Send me that bill," he told members of Congress listening to his speech in the House chamber.
The proposal is part of a push by Democrats and the White House to help homeowners take advantage of low interest rates as a way to help the housing market recover and to give the economy a shot in the arm.
While the bill could gain traction in the Democratic-controlled Senate, it faces a rough road in the GOP-run House, where many Republicans favor scaling back the government's role in the housing market as a way of aiding the economy. Similar versions of the measure died in the House and Senate's lame duck sessions last year.
"At the moment, it's an uphill battle," said Rep. Peter Welch, D-Vt., who plans to file the House version of the bill.

Welch said he will reach out to Republicans this year in hopes of building more support, but the bill's association with the government-controlled Fannie Mae and Freddie Mac, the federal housing agencies partly blamed for the collapse of the housing market, hurts its support base among GOP lawmakers.
"The American taxpayers have already sunk $190 billion dollars into the operations of Fannie and Freddie," said Rep. Randy Neugebauer, R-Tex., a member of the House Financial Services Committee. "It's time that we wind their operations down instead of using them as a piggy bank for failed programs that further delay the housing recovery. "
In the Senate, Democrats Bob Menendez of New Jersey and Barbara Boxer of California have legislation to aid borrowers who are current on their loans backed by Fannie Mae and Freddie Mac, but who are not able to refinance because their home values have declined too much.
Nearly 12 million homeowners have Fannie Mae and Freddie Mac loans and stand to benefit refinancing, the two senators said. Many can't refinance at a lower rate because of red tape and high fees. The red tape has reduced competition among banks, so borrowers pay higher interest rates than they would if they were able to shop around more, according to the senators.
The bill also would reduce up-front fees that borrowers pay on refinances and eliminate appraisal costs for all borrowers. The measure seeks to expand the Obama administration's Home Affordable Refinancing Program, which saves an average homeowner about $2,500 per year, they said.
"Homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will continue building momentum," Boxer said.
Among the bill's supporters are the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders.

Twenty Senate Democrats are co-sponsors of this year's bill, but no Republicans have signed on.
"I support finding ways to smartly streamline the refinance process, but I'm not sure that eliminating all documentation requirements makes sense," said GOP Sen. Bob Corker of Tennessee, a committee member. "I also think we need to quickly move beyond short-term stimulus and start focusing on the structural issues in our housing finance system."
Sen. Mike Crapo, the committee's top Republican, declined through a spokeswoman to comment on the bill.
Welch's House bill also died during the last Congress. Welch accused Republicans of not wanting to give Obama an election-year boost by passing the mortgage refinance measure.
"Last year was even tougher because it was an election year," said Welch. "The Republican leadership wanted Obama to fail."

 Ty Laffoon

What's up with rates this week 1/23/13

1. Current Mortgage Rates for Wednesday, January 23, 2013

   Treasury bonds and mortgage backed securities are rallying today , and if the rally is sustained  rates could make up some of the ground they lost last week. Will the rally be sustained? Today is a relatively quiet day, and no economic data of any real import will be published. The day-to-day swings that we see in the financial markets are often impossible to explain, but if you take a step back, mortgage rates have been remarkably consistent for the past several months, and there really is no reason to believe there will be a change of course in the immediate future.
   
   Ty Laffoon
   619-767-8687

20 Hottest Home Sales In San Diego County By Zip Code

Last month, San Diego County recorded its best month in home sales in six years for a December, the latest numbers from DataQuick show. Last month's tally was 3,757 transactions. The previous high for a December was 3,823 in 2006.

Here are the Top 20 ZIP codes that saw the biggest percentage jumps in sales when comparing December of this year to the same month a year ago. Areas with at least 10 sales were logged are included in the list.

December 2012 home sales

Rank	Neighborhood	ZIP code	Sold '11	Sold '12	Sold % Chg	Median '11	Median '12	Median % Chg
1	Jamul	91935	5	12	140.0%	$605,000	$333,500	-44.9%
2	Ocean Beach	92107	12	24	100.0%	$567,000	$592,000	4.4%
3	Carlsbad NE	92010	24	48	100.0%	$444,500	$537,500	20.9%
4	San Carlos	92119	19	37	94.7%	$310,000	$352,000	13.5%
5	Chula Vista NE	91914	31	60	93.5%	$550,000	$505,750	-8.0%
6	Tierrasanta	92124	17	30	76.5%	$355,000	$413,500	16.5%
7	Rancho Santa Fe	92067	8	14	75.0%	$1,750,000	$1,900,000	8.6%
8	Carlsbad SW	92011	26	44	69.2%	$549,000	$710,000	29.3%
9	Carlsbad NW	92008	21	35	66.7%	$466,500	$560,509	20.2%
10	Oceanside (Central)	92058	15	24	60.0%	$165,000	$239,750	45.3%
11	Vista S	92081	22	34	54.5%	$324,955	$368,500	13.4%
12	Rancho Bernardo E	92128	66	100	51.5%	$280,000	$385,000	37.5%
13	San Marcos N	92069	49	74	51.0%	$330,000	$350,000	6.1%
14	Imperial Beach	91932	14	21	50.0%	$232,000	$286,500	23.5%
15	Point Loma	92106	24	35	45.8%	$575,000	$675,000	17.4%
16	National City	91950	18	26	44.4%	$249,750	$230,000	-7.9%
17	Clairemont	92117	42	60	42.9%	$350,000	$390,000	11.4%
18	Hillcrest Mission Hills	92103	35	50	42.9%	$350,000	$475,000	35.7%
19	Lakeside	92040	35	50	42.9%	$300,000	$251,500	-16.2%
20	Mission Beach Pacific Beach	92109	38	53	39.5%	$472,500	$550,000	16.4%

Source: DataQuick

Ty Laffoon 

Prime Mortgage Loans

Rates on the Rise. Are they to keep climbing

WASHINGTON (AP) — Average rates on fixed mortgages rose this week but remained close to record lows.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 3.40% from 3.34% last week. That's still near the 3.31% rate reached in November, lowest on records dating to 1971.
The 30-year fixed mortgage rate averaged 3.66% in 2012, lowest annual average in 65 years, according to Freddie Mac.
The average on the 15-year fixed mortgage increased to 2.66% from 2.64% last week. The record low is 2.63%.
Mortgage rates tend to track the yield on 10-year Treasury notes. The yield has risen this year from 1.70% to 1.89% Thursday.
A deal between Congress and the White House to avoid sharp tax increases and a mildly positive employment report for December led investors last week to buy stocks and sell Treasurys. As prices and demand for Treasurys decline, the yield increases.
Cheaper mortgages are a key reason the housing market began to come back last year. Many economists predict the housing recovery will strengthen in 2013.
Home prices are steadily increasing, which makes consumers feel wealthier and more likely to spend.
Another reason for the housing rebound is that there aren't enough houses for sale. A limited supply has created demand for new construction, which has made builders more confident.
Lower mortgage rates also have persuaded more people to refinance. That typically leads to lower monthly mortgage payments and gives homeowners more discretionary cash to spend. Consumer spending drives nearly 70% of economic activity.
Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can't qualify for stricter lending rules or they lack the money to meet larger down payment requirements.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.
The average fee for 30-year loans was unchanged at 0.7 point. The fee for 15-year loans ticked up to 0.7 from 0.6 point.
The average rate on a one-year adjustable-rate mortgage rose to 2.60% from 2.57%. The fee for one-year adjustable-rate loans edged up to 0.5 from 0.4 point.
The average rate on a five-year adjustable-rate mortgage declined to 2.67% from 2.71% last week. The fee was steady at 0.6 point.

Ty Laffoon

Are you going to get priced out of the housing market in 2013?

Some real-estate analysts are predicting that the nascent housing recovery could accelerate more quickly than expected in 2013, jacking up prices in some areas by double digits. Would an increase like that price you out of the market?
In this installment of Buying Advice, we'll look at the forecast for prices in the year ahead and examine how this outlook might affect your home search. We'll also check in with the latest housing data and get some advice on the best way to evaluate a condominium's association fees.
Can you afford to wait?
The housing recovery seems almost too new to pose much of a threat to affordability. But in some areas, it's chugging along a lot faster than in others, as demand pushes up against a dwindling supply of homes for sale.
J.P. Morgan last month revised its U.S. housing forecast upward, predicting an overall gain of 3% to 4% in home prices for 2013. In some markets, however, the pace of gains has already been dramatic enough to strain the budgets of many first-time buyers before the spring selling season even begins.


Ty Laffoon
Prime Mortgage Loans
619-630-0396