WEI Mortgage Corporation: CFPB Regulation Aims to Fortify Lending Standards

A residental mortgage lender licensed in 40 states, WEI Mortgage Corporation furnishes a high professional standard of financial products and services to a diverse range of residential clients. For more information about WEI, including a message from President Wesley Yuan, please visit www.weicorp.com.

Recently, the Consumer Financial Protection Bureau (CFPB) unveiled its widely anticipated rule heighten mortgage standards for consumers and reduce lender liability. These regulations require loan providers to verify the capacity of each borrower to repay his or her debts before a loan is approved.

The CFPB aims to shield people from deceptive lending practices and to reassure financial institutions concerned about lawsuits. These lenders understandably display a reluctance to extend loans in fear that borrowers might seek legal redress when they come up short on payments.

The new standard for mortgages, called the Qualified Mortgage, was mandated by the Dodd-Frank Act and takes effect in 2014. It explicitly bans certain problematic loan features, including once-prevalent interest-only payment schemes that fueled the housing crisis.  If lenders make Qualified Mortgages, they are shielded by a “safe harbor” from borrower lawsuits in the future.  This rule has been applauded by both industry and consumer groups as a way to help borrowers know that they are receiving a loan that they can repay.

WEI Mortgage Corporation: Federal Housing Administration Home Loans

The Federal Housing Administration (FHA) is a U.S. government agency that insures the lenders of home loans in America. Since 1934, the FHA has assured that banks and other home-loan lenders in the United States can make loans to lower-income Americans for home purchases with very little down payment. 

After a potential homeowner makes arrangements with a bank or mortgage company, the lender is protected by FHA insurance in the event that the borrower is unable to meet the terms and conditions of the mortgage. 

WEI Mortgage Corporation is a direct mortgage lender based in Maryland, licensed in 40 states. During the past decade, WEI Mortgage has quickly become one of the most praised and trusted mortgage providers. With a commitment to home ownership, the company provides a full range of FHA-approved loans and lending programs, demonstrating the company’s commitment to home ownership.

WEI Mortgage Corporation Presents: Fixed-Rate Versus Adjustable Rate Mortgages

Fixed-rate and adjustable rate mortgages are the two most common mortgages available, but many people do not know which mortgage to choose for their financial situation.

A fixed-rate mortgage sets a rate of interest that remains the same through the loan period. This makes it easy for homeowners to factor mortgage payments into their budgets. Fixed-rate loans also protect homeowners from sudden jumps in monthly payment should interest rates spike. In contrast, an adjustable rate mortgage (ARM) changes over the loan’s lifetime. The rate starts at below the market rate of a more-or-less equal fixed-rate loan, then increases over time.

The idea of gradually rising interest might make fixed-rate mortgages seem the more attractive option, but an ARM is a good choice for homeowners who believe they can pay off their mortgage, or plan to move, before interest rates climb too high.

About WEI Mortgage Corporation: Founded in 2002, WEI Mortgage Corporation is a direct mortgage lender and a leader in the lending industry.

Adjustable Rate Mortgages from WEI Mortgage Corporation

Mortgage companies, like Maryland’s WEI Mortgage Corporation, offer their clients a variety of loans, including adjustable-rate mortgages (ARMs). With an adjustable-rate mortgage, the interest rate will be tied to a market index rate and therefore will fluctuate periodically. ARMs can help borrowers lower the initial payments, however, these types of loans require the borrower to assume the risk of interest rate changes in the future. Therefore, ARMs are routinely used by borrowers who do not plan on living in the home for a long period of time.

The interest rate on an ARM loan is adjusted periodically, often on a yearly basis. When looking at an ARM loan, the first figure in the loan term describes the initial period of the loan, during which the borrower’s interest rate will stay the same. The second number represents the adjustment period, shown most frequently as an annual number.

For example, in a 5/1 ARM, the initial interest rate will stay constant for five years, and then after those five years are up, the rate can be adjusted annually. The change in the interest rate can be based on a few different factors, depending on the loan. The interest rate will always be based on some sort of index.

Some of the most common indexes include the weekly average yield on U.S. Treasury securities adjusted to constant maturity of one-year and the London Interbank Offered Rate (“LIBOR”), which represents the average interbank offered rates for one-year U.S. dollar-denominated deposits in the London market. ARM loans also often come with a rate cap to shield the borrower from extreme changes in the interest rate.

The interest rate cap of an ARM loan may either be an annual cap, preventing the interest rate from fluctuating too much over the course of a year, or a lifetime loan cap, which is the maximum amount the interest rate may rise above the initial rate over the lifetime of the loan. ARMs can be beneficial to borrowers, but with the added risk of interest-rate changes, can be more confusing as well.

Do not hesitate to ask many questions to your lender about ARMs in order to help understand all options and terms for home loans available to you. For more information on ARMs or other loan products, please visit http://www.weicorp.com.

Taking the Next Step: Home Purchasing Overview

Purchasing a home can seem like a daunting and complex process, especially for first-time buyers. WEI Mortgage Corporation offers resources to help its clients gain an understanding of what goes into home ownership.

One of the first steps to take is realizing the advantages of home ownership over renting. Along with an investment in the future, home ownership offers tax advantages that can reduce an individual’s or family’s overall tax burden. After coming to a realization, the decision to purchase a home comes shortly after.

The next step in purchasing a home is finding a trusted Realtor to discuss options for financing and prequalification. Considering affordability entails calculating a number of factors, including mortgage principal and interest, taxes, insurance, fees, and utilities.

Pre-approval for a loan is an essential step in moving toward a purchase. Through the help of a mortgage, which allows homeowners to pay over time, clients can focus on finding a home that is right for them.

Rounding out the home purchasing process is financing and closing on a home, which is often known as the settlement. After closing the deal, it is time for the purchaser to take the most important step: celebrating ownership.

WEI Mortgage Corporation helps its clients realize the dream of home ownership. For more information on the company’s services, visit www.weicorp.com.

A Refinancing Primer

With home interest rates lower than ever, many homeowners are refinancing their mortgages. WEI Mortgage Corporation details what customers should consider when refinancing.

Refinancing is the process of replacing your current mortgage with a new mortgage in an effort to save on monthly payments. This can be accomplished by either lowering the interest rate, adjusting the length of the mortgage, or a combination of the two. Interest rate adjustment is one of the most important considerations in properly refinancing a home.

Interest rates can either fluctuate throughout the loan, called adjustable-rate mortgages, or are fixed at a single rate for the life of the loan. Where a home loan is on a fixed rate that exceeds the current market interest rate, refinancing may help you save considerably on your monthly payments by taking advantage of the lower market rates. If you plan on living in your home for the next several years, the cost of the refinance will be paid by the monthly savings in the long run.

For borrowers who wish to refinance to an adjustable-rate mortgage, lower monthly payments are also possible, however, there is also the possibility that the current market rates adjust upward, thereby negating any future savings. This type of refinancing may be attractive if you plan to sell your house before the rate increases, for example.

Beyond considering rates and terms, refinancing a home also usually involves a variety of processing costs that can significantly affect the amount you save. Such fees include document preparation fees, title costs, and appraisal fees. These amounts can vary from one lender to another. Thus, it is important to look at a number of plans to determine your ideal new mortgage. WEI Mortgage is happy to work with you to determine whether refinancing is appropriate and what options are best for your needs.

WEI Mortgage Corporation has routinely been honored as a top-tier lender by its various investor partners and is a licensed lender in 38 states and the District of Columbia. For more information on the company’s services, visit www.weicorp.com.

The Mortgage Bankers Association, by WEI Mortgage Corporation

WEI Mortgage Corporation proudly associates with the Mortgage Bankers Association (MBA) as its advocate in Washington, DC. More than 2,400 companies maintain ties with the MBA; members include banks, mortgage lenders, insurance companies, and other institutions. The MBA offers publications and meetings to enhance communications and knowledge among its members. It strives for providing affordable housing access for all Americans and for financial literacy.

Research comprises one of the most vital services of the MBA. It conducts ongoing surveys of market conditions, such as loan applications and foreclosures. Other survey topics include industry compensation, originations, and loan maturity.

CampusMBA provides educational opportunities for MBA members, enabling them to adapt to rapid changes in real estate. Classes include compliance with regulations; leadership; and capital and secondary markets. CampusMBA provides the courses online and at members’ offices, and confers the prestigious Certified Mortgage Banker designation.

WEI Mortgage Corporation now provides customized mortgages for the special situations of individual homeowners.