Residential Mortgage Home Loans
Welcome to Allstate Mortgage & Loans Corporate website. We very much look forward to the opportunity to assist you with your home financing needs. Presently, we originate residential mortgage loans within the states of Florida, Georgia and Alabama, and assist home buyers and home owners just like you with a wide range of purchase and refinancing options. We offer fast turn around times with expedited closings and, in many instances, we can close at your work or home.
Overview of the Programs We Offer:
FHA Mortgage Programs
VA Mortgage Programs
Fixed Rate Mortgage Programs
Sub-Prime Mortgage Programs
Jumbo and Super Jumbo Mortgage Programs
Specialized Financing - Stated, No Doc and Nina Mortgage Programs
With loan officers located throughout the TRI-State area, and some of the industries most competitive interest rates, we invite you to contact us toll free at 1-866-867-6400 or simply complete our Quick Inquiry form to have one of our professional Home Lending Specialists call you at a time that is convenient to you.
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FHA Home Loans
Allstate Mortgage & Loan Corp. is a HUD approved Florida Georgia and Alabama mortgage lender. The FHA home loan provides easier access to low rate mortgage programs designed for low to moderate income families. If you are a first time home buyer, have little savings, or have credit dings, our FHA mortgage program may best meet your needs more so than the typical conventional home loan programs.
The FHA Product Line Offers:
30 Year Fixed Rate Mortgage
15 Year Fixed Rate Loans
1 Year ARM Program
Streamline Refinancing
Facts that make the FHA Loan ideal for the average home buyer:
The Program is credit driven rather than based upon a credit score.
High Approval Flexibility for Credit Dings.
No credit history is required to be eligible for a home loan.
College acts as your job history for those new to the work force.
You can finance these residential property types: Single Family Homes, Duplex, Townhouse, Condo's and Manufactured Homes with land.
Works easily with Grants and Charities that assist home buyers with Down Payment money.
Typically up to 6% in seller concessions are allowed.
Everyone is eligible with no income restrictions.
Interest Rates are typically lower than comparable conventional rates.
Absolutely no prepayment penalties are allowed.
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VA Mortgage Program
VA Home Loans are very much like the FHA Mortgage Program. The VA Mortgage Program uses existing eligible income and credit, rather than credit score. You must be a DD-214 eligible VA Veteran and provide a copy of your existing VA certificate of eligibility. If you've already used your eligibility, you can restore it or have some remaining for an additional VA Loan.
Our Georgia, Alabama and Florida VA Loan Program Offers The Following Loan options:
30 Fixed Rate Home Loan
15 Year Fixed Rate Home Loan
1 Year Adjustable Rate Mortgage
Streamline Refinancing
Facts that make the VA Home Mortgage ideal for eligible Veterans:
100% financing.
Loan Limits are comparable to conventional programs.
Low interest rates.
Offers both fixed and adjustable rate mortgages
Easy streamline refinancing with no income documentation requirements.
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Conventional Home Loans
Looking for a regular old Conventional Mortgage? Well, we offer that to. A conventional home loan is based upon underwriting and loan limit standards as established by Fannie Mae and Freddie Mac. These programs offer the full range of financing from 30 Year Fixed Rates to Adjustable Rate Mortgages all the way to specialty programs such as State Income Home Loans and No Documentation Mortgages.
These programs are designed with Seasoned Home Buyers and Home Owners with good to excellent credit in mind. First time home buyers may have a more challenging process because of a lack of home ownership history. We do offer a conventional mortgage program designed for First Time Home Buyers with easier credit qualifying and down payment standards. This emerging markets program is a Freddie/Fannie product designed to compete with the FHA Home Loan and offer up to 103% financing. As with all conventional mortgage programs, this loan is credit score driven and credit quality driven.
Our Conventional Residential Home Loan Products Include:
30 Year Fixed Rate Loan
20 Year Fixed Rate Loan
15 & 10 Year Fixed Rate Loan
Interest Only Programs
1/1, 3/1, 5/1, 7/1 and 10/1 Adjustable Rate Mortgage
Up to 103% Financing
Construction Perm Financing
Stated Income Mortgage
No Income No Asset (NINA)
No Ratio Loan Programs
No Documentation (No Doc) Mortgage Loan
90% Non-Owner Occupied Residential Loan
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Bad Credit Home Loans
If you have challenged credit and find yourself unable to qualify for our low interest rate FHA Mortgage program, Allstate Mortgage & Loan Corporation offers a wide range of Sub-Prime mortgage programs to assist home buyers. Our product range can help home buyers with credit scores starting with a mid-FICO® score of 500 and provides up to 100% financing.
The Range of Products Offered Under Our Sub-Prime Mortgage Program:
30 Year Fixed Mortgage
20 Year Fixed Mortgage
10 & 15 Year Fixed Mortgage
2/2/8 ARM Mortgage
3/2/7 ARM Mortgage
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Jumbo Mortgage Loans
Allstate Mortgage & Loan Corporation offers Alabama, Georgia and Florida residential Jumbo and Super Jumbo mortgage loan products for qualified high income home buyers. These programs cover the full range of options from Stated Income, No Documentation, NINA and Full Documentation mortgage loan programs for loan amounts up to $5M with very competitive rates and terms.
Home Buyer and Refinance Products Include:
30 Year Fixed Rate Jumbo Mortgages
20 Year Fixed Rate Jumbo Mortgages
15 & 10 Year Fixed Rate Jumbo Mortgage
Interest Only Programs
State Income Jumbo Mortgage
No Income No Asset Jumbo Mortgage
No Ratio Jumbo Mortgage
No Documentation (No Doc) Jumbo Mortgage
Adjustable Rate Jumbo Mortgage:
1/1, 3/1, 5/1 and 7/1 ARM Products
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Non-Conforming Mortgage Programs
Non Conforming loans are mortgage programs with guidelines outside of those established by traditional conventional financing. They off the full range of financing options and expand beyond traditional mortgage products offered using conventional Fannie/Freddie underwriting guidelines. From a more flexible qualifying credit score requirement to wider financing options including loan amounts which exceed conventional mortgage restrictions. Underwriting for these mortgage programs include both Automated and Manual underwriting.
Mortgage Programs Include:
40 Year Fixed Rate Mortgages
30 Year Fixed Mortgages
20/15/10 Year Fixed Mortgages
6 Month, 1/1, 1/6, 3/1, 3/6, 5/1, 5/6, 7/1, 7/6, 10/1, 10/6, 5/2/5, 2/2/6
True No Documentation - No Doc Loan
Stated Income Loans
No Ratio Mortgage
No Income No Asset (NINA) Mortgage
80/20 Combination Mortgage
80/15 Piggie Backs
80/10/5 Piggie Backs
Up To 106% Financing
Up To 100% Non Owner Occupied Programs
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Adjustable Rate Mortgage Loans
Many home buyers and Home Owners like the adjustable rate mortgage for its lower starting interest rates, flexible terms and with some programs, the ability to pick your own payment. Rates typically start between 1% to 2% below conventional 30 year fixed rate mortgage rates. All adjustable interest rates are tied to an index which determines present and future rates the borrower pays. Every program has an life time cap on how high the interest can go. Caps very by program offering and the same 5/1 program can have multiple interest rate caps.
Many programs offer the financing options many fixed rate loans have to include:
Stated Income Programs
NINA - No Income No Assets Programs
No Documentation - No Doc Programs
No Ratio Programs
Non Owner Occupied Programs
Traditional ARM Programs
Credit Challenged ARM Programs
Because of the Low Start Rate, most require a prepayment period equal to the fixed period of the loan
Adjustable Rate Mortgage Terms Include:
6 Month - Fixed First 6 Months, adjusts every 6 months
1/1 - 1 Year Fixed, adjusting once a year
1/6 - 1 Year Fixed, adjusting every 6 months
2/2/6 - 2 Years Fixed, adjusting twice a year with a maximum increase of 6% over the life of the loan
2/2/8 - 2 Years Fixed, adjusting twice a year with a maximum increase of 8% over the life of the loan
3/2/7 - 3 Years Fixed, adjusting twice a year with a maximum increase of 7% over the life of the loan
3/1 - 3 Years Fixed, adjusting once a year
3/6 - 3 Years Fixed, adjusting every 6 months
5/2/5 - 5 Years Fixed, adjusting twice a year with a maximum increase of 5% over the life of the loan
5/1 - 5 Years Fixed, adjusting once a year
5/6 - 5 Years Fixed, adjusting every 6 months
7/1 - 7 Years Fixed, adjusting once a year
7/6 - 7 Years Fixed, adjusting every 6 months
10/1 - 10 Years Fixed, adjusting once a year
10/6 - 10 Years Fixed, adjusting every 6 months
Pick A Payment - Start Rate 1% to 4.25%, Negative Amortization, adjustments begin immediately and occur monthly
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Home Equity Lines
As property values escalate, home buyers who took advantage of lower interest rates might not want to refinance in order to make improvements to their home, consolidate debts or simply use the equity built up in their home. Allstate Mortgage & Loan Corporation offers home equity lines at great rates up to $1 Million. Financing options include Traditional Full Documentation and Stated Income Documentation Types.
HELOC Product Options
Loan Amounts to $1 Million
Interest Only Options
Fixed & Adjustable Rate Terms
5 Year Loan
7 Year Loan
10, 15, 20 & 25 Year Loans
30/5 Year Loan
30/10 Year Term
30/15 Year Loan
State Income Option
Up to 100% Stated Income Interest Only Purchase Terms
No Prepayment Penalties on Most Products
Non-Owner Occupied Financing Options
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2nd Mortgage Programs
Our second mortgage program is designed to allow home buyers to utilize equity within their home to pay off debt, make home improvements, purchase a vehicle, pay for college tuition or simply cash out. Our program offers both fixed and adjustable rates and up to 30 year terms. In many instances, no appraisal is needed and offer up to 125% CLTV (Combined Loan To Value).
Typical 2nd Mortgage Program Terms:
Stated Income Programs
Alternative Documentation Programs
Non-Owner Occupied
Second Homes
30 Year Repayment
20 Year Repayment
15 Year Repayment
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Mobile Home Loans
Today's home buyer knows that the cost of buying the conventional residence has escalated in many areas to the point that a new manufactured home may be a better option. Today's mobile home standards exceed the building and safety requirements of the standard "Brick and Mortar" home while offering far more amenities, square feet and options compared to traditional residential homes based upon a cost analysis. We offer highly competitive rates and financing terms typically equal to those offered for conventional residential home loans with up to 97% financing, typically allow down payment assistance and up to 6% seller concessions.
Product Types Offered For Manufactured Home Loans:
30 Year Fixed Rate Mortgage
15 Year Fixed Rate Home Loan
1/1 Adjustable Rate Mortgage
Benefits of Doing Business With Allstate Mortgage & Loan Corporation:
Interest rates typically comparable to conventional rates.
Up to 6% seller concessions are allowed.
The home must be tied to the land.
Up to 97% financing.
Down Payment Programs can be used.
Credit dings are typically over looked.
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Reverse Mortgages
Home owners who are 62 years or older and maintain a small mortgage balance or have paid off their home are eligible to participate in the HUD reverse mortgage program. The Reverse Mortgage is designed to supplement retirement income and allow older home owners to utilize equity to better enjoy retirement.
No repayment is required as long as the owner resides in the property nor are there asset or income limitations to the borrow. The older you are, the higher the percentage of your home's value you can borrow against. Give us a call to find out more!
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Refinance Loans
Is your monthly mortgage payment taking to big a bite out of your monthly budget? Maybe you have an adjustable rate mortgage you want to move into a fixed rate loan before rates escalate. Was your first home financed under a subprime program and now you're ready to try for a low rate FHA Mortgage? Maybe you want to cash out, but maintain your current terms so you can still meet you home payoff goals. Whatever your reason, we offer highly competitive rates and terms across hundreds of programs that will meet your financing needs.
Refinance Home Loan Options Include:
FHA Streamline Mortgage
VA Streamline Home Loan
40 Year Fixed Rate Mortgages
30 Year Fixed Mortgages
20/15/10 Year Fixed Mortgages
6 Month, 1/1, 1/6, 3/1, 3/6, 5/1, 5/6, 7/1, 7/6, 10/1, 10/6, 5/2/5, 2/2/6
True No Documentation - No Doc Loan
Stated Income Loans
No Ratio Mortgage
No Income No Asset (NINA) Mortgage
80/20 Combination Mortgage
80/15 Piggie Backs
80/10/5 Piggie Backs
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Stated Income Mortgage
Whether purchasing or refinancing your home or investment property, we offer highly competitive rates on programs for self employed or 1099 borrowers. We also offer stated income programs for W-2 clients who are simply unable to show all of their income. The stated income loan allows borrowers to state income without documenting sources. This programs is available in our Conforming Conventional Loan, Non-Conforming Mortgage Programs, 2nd Mortgage Programs, Home Equity Programs, Jumbo Mortgages, Sub-Prime Programs and is offered in both our Fixed Rate Mortgage and our Adjustable Rate Mortgage Products.
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No Ratio Home Loans
Our No Ratio Mortgage Program allows home buyers, refinance clients and real estate investors to achieve a competitive interest rate without disclosing income. This program is ideal for the self employed and investor whose net after tax income is below what is normally considered acceptable, but can show significant assets to support adequate income to meet financial due diligence.
This program is available in our Conventional Mortgage, Non-Conforming Product Range, Investor Programs and Jumbo Home Loans. This product is available with both Fixed and Adjustable Rate terms.
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No Income No Asset Mortgage
Our NINA Program is ideal for the self employed and real estate investor whose net after tax income is below what would be considered acceptable and whose available liquid assets are inadequate due to the type of business or real estate holdings funds are tied into. This program is available for purchase and refinance mortgage loans.
This program has limited availability in our Conventional Home Loan Portfolio, the Non Conforming Mortgage Offerings and the Jumbo Mortgage Programs. The NINA Program is offered with both Fixed and limited ARM Terms.
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No Documentation Home Loans
The No Documentation Mortgage Loan is designed for high credit score home buyers who wish to simplify the loan application process. No employment, income, assets or liabilities are factored into the loan decision. With the No Doc loan, only the home buyer or home owners credit is factored into the decision. This program is available with up to 95% financing and is available for both Purchase and Refinance in addition to being available for real estate investors with sufficient equity or down payment.
The No Documentation Loan is available in our Conventional and Non Conforming Mortgage Product Lines with both Fixed rate and Adjustable Rate products being available for this program.
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Non-Owner Occupied Loans
We offer a wide range of residential real estate investment term and options for the savvy investor. From the full spectrum of adjustable and fixed rate mortgages to Full Documentation, No documentation, NINA, No Ratio, and State Income mortgage products. These products include financing options from our 100% full documentation program to 80/10 and 75/15 piggie back programs. With such a wide range of options, we'd love the opportunity to asses your situation and to identify how we can best meet your real estate investment needs.
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About Us
Allstate Mortgage & Loan Corporation opened its doors in March of 1996 with the belief that our customers deserve the best rates and options available to meet their individual life style. We accomplish our client goals through continuous industry training which provides knowledgeable and experienced loan officers who deliver the best products and programs tailored around you.
Since that time the mortgage industry has matured, and we believe, followed our lead. We continue to offer our clients the best service and lending options tailored to fit where you are financially in your life; providing not just a mortgage loan, but a home loan that helps you, our clients, achieve your long term financial dreams.
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Where We Lend
Allstate Mortgage & Loan Corporation originates home loans in the states of Florida, Georgia and Alabama. We presently have loan representative located throughout most of these communities who are available to assist prospective home buyers and refinance clients meet their mortgage needs.
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First Time Home Buyers
If you're a first time homebuyer, one of the most difficult obstacles to overcome is the fact you have no "mortgage" history with which a lender can review to make a sound decision. In these situations, length of employment - job stability - income to debt ratios and past credit history become highly pronounced in the conventional residential home lending market.
We offer several low rate alternatives which help you to achieve your dream of buying a home at highly competitive rates. The most effective residential mortgage is the FHA Loan. This program allows credit dings and typically bellow market rates for comparable conventional programs. Eligible Veterans will find the same benefits and 100% financing with the VA Mortgage Program. Finally, we offer a conventional mortgage for first time home buyers as well that offer competitive rates, in some instances credit dings and up to 103% financing which allows an eligible borrower to finance some of the costs to close.
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Down Payment Assistance
Depending upon your credit, job history and rental history, some buyers will simply need to have some form of down payment to "invest" in the prospective home purchase. We work with with a wide range of assistance programs throughout the states of Florida, Georgia and Alabama to assist qualified home buyers with any additional necessary down payment and closing cost money needed to close on their first home purchase.
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Property Taxes
The property tax you pay can play a huge role in the amount of home you can actually afford to purchase. On average, property taxes on a residential home purchase make up 15% of a home buyers monthly mortgage payment when included in the PITI factor for qualifying. We highly recommend that our customers review the property taxes on any home with one of our associates prior to contracting. To help you, we've provided links to your county property tax authorities for the state of Florida:
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Tuesday, December 5, 2006
How Your Credit Score is Calculated
by Janet Wickell
Understanding Your FICO Score and How it Affects Home BuyingHome buyers who are seeking a mortgage find out early-on that their credit score plays an important part in the home buying process and in determining the interest rate that a lender offers.
What is a credit score?
A credit score is a number that lenders use to estimate risk. Experience has shown them that borrowers with higher credit scores are less likely to default on a loan.
How are credit scores calculated?
Credit scores are generated by plugging the data from your credit report into software that analyzes it and cranks out a number. The three major credit reporting agencies don't necessarily use the same scoring software, so don't be surprised if you discover that the credit scores they generate for you are different.
Why are credit scores sometimes called FICO scores?
The software used to calculate a great number of credit scores was created by Fair Isaac Corporation--FICO.
Which parts of a credit history are most important?
The pie chart above right shows a breakdown of the approximate value that each aspect of your credit report adds to a credit score calculation.
zSB(3,3)
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200 Points To Your CreditFix Your Credit Literally Overnight Always Check Co.with the BBB firstwww.creditsolutions4u.orgUse these percentages as a guide:
35% - Your Payment History30% - Amounts You Owe15% - Length of Your Credit History10% - Types of Credit Used10% - New Credit
Your Payment History Includes:
Number of accounts paid as agreed
Negative public records or collections
Delinquent accounts:
total number of past due items
how long you've been past due
how long it's been since you had a past due payment
What You Owe:
How much you owe on accounts and the types of accounts with balances
How much of your revolving credit lines you've used--looking for indications you are over-extended
Amounts you owe on installment loan accounts vs. their original balances--to make sure you are you paying them down consistently
Number of zero balance accounts
Length of Credit History:
Total length of time tracked by your credit report
Length of time since accounts were opened
Time that's passed since the last activity
The longer your (good) history, the better your scores
Types of Credit:
Total number of accounts and types of accounts (installment, revolving, mortgage, etc.)
A mixture of account types usually generates better scores than reports with only numerous revolving accounts (credit cards)
Your New Credit:
Number of accounts you've recently opened and the proportion of new accounts to total accounts
Number of recent credit inquiries
The time that's passed since recent inquiries or newly-opened accounts
If you've re-established a positive credit history after encountering payment problems
In general, checking to make sure you aren't attempting to open numerous new accounts
Credit scoring software only considers items on your credit report. Lenders typically look at other factors that aren't included in the report, such as income, employment history and the type of credit you are seeking.
What's a Good Credit Score?
Credit scores (usually) range from 340 to 850. The higher your score, the less risk a lender believes you will be. As your score climbs, the interest rate you are offered will probably decline.
Borrowers with a credit score over 700 are typically offered more financing options and better interest rates, but don't be discouraged if your scores are lower, because there's a mortgage product for nearly everyone.
Here's an look at credit scores among the US population in 2003:
Up to 499: 1%500 - 549: 5%550 - 599: 7%600 - 649: 11%650 - 699: 16%700 - 749: 20%750 - 799: 29%Over 800: 11%
Multiple Credit Scores
Your bank will pull credit reports and scores from all three major credit reporting agencies: Transunion, Equifax and Experian. They'll probably use the middle score to work your loan application. Ask your lender to explain which credit scores will be used and how they affect your loan application.
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by Janet Wickell
Understanding Your FICO Score and How it Affects Home BuyingHome buyers who are seeking a mortgage find out early-on that their credit score plays an important part in the home buying process and in determining the interest rate that a lender offers.
What is a credit score?
A credit score is a number that lenders use to estimate risk. Experience has shown them that borrowers with higher credit scores are less likely to default on a loan.
How are credit scores calculated?
Credit scores are generated by plugging the data from your credit report into software that analyzes it and cranks out a number. The three major credit reporting agencies don't necessarily use the same scoring software, so don't be surprised if you discover that the credit scores they generate for you are different.
Why are credit scores sometimes called FICO scores?
The software used to calculate a great number of credit scores was created by Fair Isaac Corporation--FICO.
Which parts of a credit history are most important?
The pie chart above right shows a breakdown of the approximate value that each aspect of your credit report adds to a credit score calculation.
zSB(3,3)
Sponsored Links
How's Your Credit Score?Get Your Free Official Credit Score Report Quickly & Easily!www.CreditReport.com
Fico Credit Score RepairHow I raised my credit score 40 pts. in 24 hrs. and saved $8,800!www.thebestever.net/credit/
200 Points To Your CreditFix Your Credit Literally Overnight Always Check Co.with the BBB firstwww.creditsolutions4u.orgUse these percentages as a guide:
35% - Your Payment History30% - Amounts You Owe15% - Length of Your Credit History10% - Types of Credit Used10% - New Credit
Your Payment History Includes:
Number of accounts paid as agreed
Negative public records or collections
Delinquent accounts:
total number of past due items
how long you've been past due
how long it's been since you had a past due payment
What You Owe:
How much you owe on accounts and the types of accounts with balances
How much of your revolving credit lines you've used--looking for indications you are over-extended
Amounts you owe on installment loan accounts vs. their original balances--to make sure you are you paying them down consistently
Number of zero balance accounts
Length of Credit History:
Total length of time tracked by your credit report
Length of time since accounts were opened
Time that's passed since the last activity
The longer your (good) history, the better your scores
Types of Credit:
Total number of accounts and types of accounts (installment, revolving, mortgage, etc.)
A mixture of account types usually generates better scores than reports with only numerous revolving accounts (credit cards)
Your New Credit:
Number of accounts you've recently opened and the proportion of new accounts to total accounts
Number of recent credit inquiries
The time that's passed since recent inquiries or newly-opened accounts
If you've re-established a positive credit history after encountering payment problems
In general, checking to make sure you aren't attempting to open numerous new accounts
Credit scoring software only considers items on your credit report. Lenders typically look at other factors that aren't included in the report, such as income, employment history and the type of credit you are seeking.
What's a Good Credit Score?
Credit scores (usually) range from 340 to 850. The higher your score, the less risk a lender believes you will be. As your score climbs, the interest rate you are offered will probably decline.
Borrowers with a credit score over 700 are typically offered more financing options and better interest rates, but don't be discouraged if your scores are lower, because there's a mortgage product for nearly everyone.
Here's an look at credit scores among the US population in 2003:
Up to 499: 1%500 - 549: 5%550 - 599: 7%600 - 649: 11%650 - 699: 16%700 - 749: 20%750 - 799: 29%Over 800: 11%
Multiple Credit Scores
Your bank will pull credit reports and scores from all three major credit reporting agencies: Transunion, Equifax and Experian. They'll probably use the middle score to work your loan application. Ask your lender to explain which credit scores will be used and how they affect your loan application.
-----------------------------------------------------
Bump up your credit score in a hurry (Page 1 of 3)
On a $165000 30-year fixed rate mortgage, that half point could cost you more than ... First things first: You can take steps to improve your credit score. ...www.bankrate.com/brm/news/credit-scoring/20040128a1.asp - Similar pages
How credit scores work, how a score is calculated (Page 1 of 3)
Your credit score is a number generated by a mathematical algorithm -- a formula ... Credit scores are used extensively, and if you've gotten a mortgage, ...www.bankrate.com/brm/news/credit-scoring/20031104a1.asp - Similar pages
myFICO - FICO Credit Scores, Online Credit Reports and Identity ...
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myFICO - A Higher FICO Score Saves You Money
myFICO.com: Get your Free credit report and Free credit score with a 30-day ... fixed home mortgage APRs are estimated based on the following assumptions. ...www.myfico.com/myfico/CreditCentral/LoanRates.asp - 35k - 3 Dec 2006 - Cached - Similar pages
4 credit-scoring myths - MSN Money
That's important, because the FICO credit score, in its various permutations, is used in three-quarters of all mortgage lending. ...articles.moneycentral.msn.com/Banking/YourCreditRating/4creditScoringMyths.aspx - 28k - Cached - Similar pages
Beef up your credit score in 5 steps - MSN Money
Anyone who wants to improve a credit score should first do some basic ... Tip: If you plan to apply for a mortgage, car loan or other major credit account ...articles.moneycentral.msn.com/Banking/YourCreditRating/BeefUpYourCreditScoreIn5steps.aspx - 32k - Cached - Similar pages
Home Buying - How Your Credit Score is Calculated - Your FICO Score
Home buyers who are seeking a mortgage find out early-on that their credit score plays an important part in the home buying process and in determining the ...homebuying.about.com/cs/yourcreditrating/a/credit_score.htm - 27k - 3 Dec 2006 - Cached - Similar pages
E-LOAN: Mortgage Refinance, Home Equity, Auto Loans, Savings ...
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Your credit rating may be the key to a lower mortgage - Jul. 14, 2005
While lenders will consider your income and how much you have invested for down payment when approving your mortgage, your credit score will be scrutinized. ...money.cnn.com/2005/07/12/pf/debt/creditscore_survey/index.htm - 41k - Cached - Similar pages
Sunday, December 3, 2006
VALUE OF A DOLLAR IS SHRINKING
VALUE OF A 1913 DOLLAR
Year Amount it took to
equal $1 in 1913
1913 $1.00
1920 2.02
1925 1.77
1930 1.69
1935 1.38
1940 1.41
1945 $1.82
1950 2.43
1955 2.71
1960 2.99
1965 3.18
1970 3.92
1975 $5.43
1980 8.32
1985 10.87
1990 13.20
1995 15.39
2000 17.39
2001 $17.89
2002 18.17
2003 18.59
2004 19.08
2005 19.73
2006 20.18
Understanding What a Dollar Really Is
One of the many lessons traders learn is to greatly limit their information flow, which is especially tough in today's environment of information overload. Ironically, those who are just starting out in trading often do better than seasoned pros precisely because they don't take in lots of information that leads to fear and uncertainty, which leads to making exactly the wrong trades. But there are a few exceptions, and one of them for me is David Nichols and his daily Fractal Market Report.
Here's a discussion of inflation and the dollar from yesterday's report that I think is pretty much on the money. The bottom line is that regardless of what you believe about the propriety of the matter, the dollar is a financial instrument that fluctuates in value relative to other assets and financial instruments. Understanding that is essential for making the correct long term moves.
Here's the article, reprinted with permission...
My discussion of inflation vs. deflation sparked some questions, so I want to continue on this topic. The reason this is so important is the fluctuation in the dollar is almost never factored into most people's thinking about financial markets.
I'm just going to ramble on a bit on these ideas, as I want to get this down quickly. I'm not going to document each point I make, or show charts on everything, as that would be a big job, and I'm just writing this after the close today. I'd rather just quickly make a few points, and let this be the starting point for your own independent rumination and study. You definitely do not have to take my word on any of this.
In a deflationary environment, the dollar becomes strong, as demand for dollars grows as assets come down in value. People want to get their hands on cash, as cash buyers are a scarce commodity, and those with cash are just as likely to wait on a purchase, as the asset they're considering is losing value with each passing day in this deflationary environment. In a deflation, dollars goes up in value as just about everything else sinks.
The Fed is scared of deflation, as they have limited policy tools to combat it. This is also why the Fed targets an inflation rate of 2% to 3% per year -- so there's always room to take interest rates below the level of inflation to stimulate spending and not saving (In deflation people become savers of cash, as it's going up in value in relative terms with each passing day). If inflation is in the Fed's target zone, they have the power to take interest rates into negative territory in real terms, in an attempt to spur spending and speed up the velocity of money moving through the economy.
One thing we know for sure is the Fed -- and Chairman Bernanke -- are avowed deflation-phobes. Inflation is their stated policy objective. They want it to continue.
But the problem is this: systematic inflation also systematically destroys the purchasing power of the dollar.
Let's look again at the monthly chart of the dollar.
It's no coincidence that during the Fed's most recent "reflation" campaign the dollar has lost almost 30% of its value -- and that is just relative to other currencies, which are also being systematically devalued by their central banks.
During this reflationary period -- starting in 2001, during the bear market -- gold has gone from $250 an ounce to a current $624. This also means that gold is doing much, much better relative to the declining dollar than other currencies, as it's gone up 136%, and other currencies -- most notably the Euro -- have only appreciated 50% against the dollar (A 30% decline in the dollar is equivalent to a 50% rise in the other currency).
But gold has gone up 136%, so it's apparent that gold has a lot of "gearing" to a declining dollar. Because of its scarcity, increased demand for gold causes big price moves, as lots of dollars chase relatively small amounts of gold.
Okay then..... let's get down to what the Fed's inflationary policies mean for you and me. I think it's fair to assume the Fed will keep on systematically destroying the value of a dollar. Already the dollar has lost 92% of its purchasing power since the Fed started in 1913. Remarkably, until the Fed came along, the value of a dollar had pretty much stayed the same throughout the 1800s. The inherent inflation we all assume is "part of the system" didn't exist at all until the Fed was created in 1913.
So we have to assume that the Fed's actual policy objective is to create inflation, and to systematically lower the value of the dollar over time. It's hard to argue with their track record.
We also know that debt levels in the US are now at record highs. We're swimming in consumer and government debt, not to mention the untold trillions in unfunded pension and healthcare liabilities that we've accrued and continue to accrue.
There is absolutely no way we can pay back any of this debt in today's dollars. It's simply not going to happen. Even if we all gave 90% of our income to pay down the national debt, we couldn't do it, because we spend so much. The only way to deal with this debt is to make tomorrow's dollars -- the ones we'll theoretically use to pay back today's debts -- worth a lot less.
This is also why personally I'm not too concerned about a "housing bubble", even though there is no end to the hand-wringing these days. That's because owning a house -- even with a big mortgage on it -- will always be the single best way to hedge against the systematic devaluation of the dollar.
It's actually a very simple concept to understand. Real estate goes up in value as the dollar goes down. Obviously there are other factors, most notably speculation and demographic trends, but the main reason real estate has ramped up so quickly since 2002 has been the plunging dollar.
Let's use the San Diego housing market to take a closer look at this.
In August 2001 -- right as the dollar was topping -- the San Diego Home Price Index was at 127. Right now it's at 247, so it's gone up 94% over the last 5+ years. But just to stay even with the decline in the dollar over this period -- and this is against other declining currencies, mind you -- explains about half of this gain. I think the scarcity value of real estate vs. currencies explains the rest of the gains, and this is why real estate is such a great hedge against the Fed's policies.
It's also worth noting that since the dollar index bottomed out at $81 in December 2004, housing markets have mostly gone sideways. To me all of this does not seem like such a big deal. Only in a true deflationary environment will housing markets be in serious trouble.
If the dollar starts going down again -- and I think it will, because that's what the Fed wants -- then real estate will start going right back up. But again this price appreciation will mostly be an illusion. Housing values will again go up in some proportion to how much the dollar goes down. Owning a house is always going to be the best way to maintain relative purchasing power in the US economy.
This is why I also purposely took out a big loan back in 2003, when I bought in San Diego County. I also did a much-maligned interest-only loan to boot. I just can't see the point of spending even one dollar of today's currency to pay down dollars that are due in 30 years. It doesn't make any sense.
Maybe I learned from my mom and dad's experience with our family house in La Jolla California. In 1967 they paid $54,000 for 3/4 of an acre in the "Old Muirlands," one of the most desirable neighborhoods in San Diego. 30 years later the land alone was worth well over $1 million, and now it's probably worth $2.5 million or more. It was completely insignificant to their overall financial situation in 1997 whether they owed $45,000 on the house, or owned it free and clear.
I think the amount that comes due on my house in 30 years will be a laughably small amount in 2033 dollars. (I took the mortgage in 2003). If anything, inflationary trends like this tend to accelerate. Most of the damage to the dollar has occurred since 1987, when Alan Greenspan took over. I think the next 27 years will see this trend accelerate, beyond anything we can dream of today.
I read lots of commentary from perma-bears about how the US economy is about to be destroyed by all of the refinancing and home equity loans taken out over the last 5 years. But I don’t get their logic. In an inflationary environment such behavior is rational. It makes sense to borrow today's dollars and pay back tomorrow's dollars.
If the dollar continues to go down, then everything else is going to go up. That includes equity markets too. It's a very real possibility that the Dow could hit 25,000 and actually be trading at a lower P/E ratio than it is today, and be worth less in real terms than it is now at 12,250. It's all relative.
This is also how gold and other commodities can skyrocket in value over the next 5, 10, or even 15 years. To gain any sort of relative wealth in an inflationary environment --where the dollar is losing vast amounts of purchasing power -- you have to hedge your dollar-denominated assets with something much scarcer than dollars. Gold and silver are natural choices.
Alright, I'm running out of steam, and it's time to send this out. I'm sure this is going to be controversial. But I think it's still early days on all of this, and having a strategy to deal with inflation and the dollar is pretty darn important. Hopefully this will stimulate some thought, at the very least.
http://www.uncsense.com/root/2006/11/understanding_w.html
=====================================================
The Fed's New Conundrum: Slowing Housing
in Federal Reserve | Inflation | Investing | Markets | Real Estate
Yesterday' 1/4 point rate hike was no surprise . . . but the thought processes behind it may be. Consider the conundrum left to Ben Bernanke by his predecessor, Alan Greenspan.
Post market crash, recession, 9/11, and Iraq War, this was a flatlined economy. Anytime a major market takes a 78% whackage, huge swaths of capital gets destroyed. The Fed's response to this was to slash interest rates to half century lows.
The initial results of this were somewhat predictable: the Housing sector accelerated and the global economy reflated. Back in December 2002 I mentioned that investors might want to watch gold due to the inflationary potential of these ultra-low rates. (Not quite the table pounding of last year, but quite timely).
At the same time, China began building out its infrastructure in anticipation of its Olympic hosting duties. Concurrent to this was the enromosu boom in direct China investment by Western companies, all seeking to dramatically
Year Amount it took to
equal $1 in 1913
1913 $1.00
1920 2.02
1925 1.77
1930 1.69
1935 1.38
1940 1.41
1945 $1.82
1950 2.43
1955 2.71
1960 2.99
1965 3.18
1970 3.92
1975 $5.43
1980 8.32
1985 10.87
1990 13.20
1995 15.39
2000 17.39
2001 $17.89
2002 18.17
2003 18.59
2004 19.08
2005 19.73
2006 20.18
Understanding What a Dollar Really Is
One of the many lessons traders learn is to greatly limit their information flow, which is especially tough in today's environment of information overload. Ironically, those who are just starting out in trading often do better than seasoned pros precisely because they don't take in lots of information that leads to fear and uncertainty, which leads to making exactly the wrong trades. But there are a few exceptions, and one of them for me is David Nichols and his daily Fractal Market Report.
Here's a discussion of inflation and the dollar from yesterday's report that I think is pretty much on the money. The bottom line is that regardless of what you believe about the propriety of the matter, the dollar is a financial instrument that fluctuates in value relative to other assets and financial instruments. Understanding that is essential for making the correct long term moves.
Here's the article, reprinted with permission...
My discussion of inflation vs. deflation sparked some questions, so I want to continue on this topic. The reason this is so important is the fluctuation in the dollar is almost never factored into most people's thinking about financial markets.
I'm just going to ramble on a bit on these ideas, as I want to get this down quickly. I'm not going to document each point I make, or show charts on everything, as that would be a big job, and I'm just writing this after the close today. I'd rather just quickly make a few points, and let this be the starting point for your own independent rumination and study. You definitely do not have to take my word on any of this.
In a deflationary environment, the dollar becomes strong, as demand for dollars grows as assets come down in value. People want to get their hands on cash, as cash buyers are a scarce commodity, and those with cash are just as likely to wait on a purchase, as the asset they're considering is losing value with each passing day in this deflationary environment. In a deflation, dollars goes up in value as just about everything else sinks.
The Fed is scared of deflation, as they have limited policy tools to combat it. This is also why the Fed targets an inflation rate of 2% to 3% per year -- so there's always room to take interest rates below the level of inflation to stimulate spending and not saving (In deflation people become savers of cash, as it's going up in value in relative terms with each passing day). If inflation is in the Fed's target zone, they have the power to take interest rates into negative territory in real terms, in an attempt to spur spending and speed up the velocity of money moving through the economy.
One thing we know for sure is the Fed -- and Chairman Bernanke -- are avowed deflation-phobes. Inflation is their stated policy objective. They want it to continue.
But the problem is this: systematic inflation also systematically destroys the purchasing power of the dollar.
Let's look again at the monthly chart of the dollar.
It's no coincidence that during the Fed's most recent "reflation" campaign the dollar has lost almost 30% of its value -- and that is just relative to other currencies, which are also being systematically devalued by their central banks.
During this reflationary period -- starting in 2001, during the bear market -- gold has gone from $250 an ounce to a current $624. This also means that gold is doing much, much better relative to the declining dollar than other currencies, as it's gone up 136%, and other currencies -- most notably the Euro -- have only appreciated 50% against the dollar (A 30% decline in the dollar is equivalent to a 50% rise in the other currency).
But gold has gone up 136%, so it's apparent that gold has a lot of "gearing" to a declining dollar. Because of its scarcity, increased demand for gold causes big price moves, as lots of dollars chase relatively small amounts of gold.
Okay then..... let's get down to what the Fed's inflationary policies mean for you and me. I think it's fair to assume the Fed will keep on systematically destroying the value of a dollar. Already the dollar has lost 92% of its purchasing power since the Fed started in 1913. Remarkably, until the Fed came along, the value of a dollar had pretty much stayed the same throughout the 1800s. The inherent inflation we all assume is "part of the system" didn't exist at all until the Fed was created in 1913.
So we have to assume that the Fed's actual policy objective is to create inflation, and to systematically lower the value of the dollar over time. It's hard to argue with their track record.
We also know that debt levels in the US are now at record highs. We're swimming in consumer and government debt, not to mention the untold trillions in unfunded pension and healthcare liabilities that we've accrued and continue to accrue.
There is absolutely no way we can pay back any of this debt in today's dollars. It's simply not going to happen. Even if we all gave 90% of our income to pay down the national debt, we couldn't do it, because we spend so much. The only way to deal with this debt is to make tomorrow's dollars -- the ones we'll theoretically use to pay back today's debts -- worth a lot less.
This is also why personally I'm not too concerned about a "housing bubble", even though there is no end to the hand-wringing these days. That's because owning a house -- even with a big mortgage on it -- will always be the single best way to hedge against the systematic devaluation of the dollar.
It's actually a very simple concept to understand. Real estate goes up in value as the dollar goes down. Obviously there are other factors, most notably speculation and demographic trends, but the main reason real estate has ramped up so quickly since 2002 has been the plunging dollar.
Let's use the San Diego housing market to take a closer look at this.
In August 2001 -- right as the dollar was topping -- the San Diego Home Price Index was at 127. Right now it's at 247, so it's gone up 94% over the last 5+ years. But just to stay even with the decline in the dollar over this period -- and this is against other declining currencies, mind you -- explains about half of this gain. I think the scarcity value of real estate vs. currencies explains the rest of the gains, and this is why real estate is such a great hedge against the Fed's policies.
It's also worth noting that since the dollar index bottomed out at $81 in December 2004, housing markets have mostly gone sideways. To me all of this does not seem like such a big deal. Only in a true deflationary environment will housing markets be in serious trouble.
If the dollar starts going down again -- and I think it will, because that's what the Fed wants -- then real estate will start going right back up. But again this price appreciation will mostly be an illusion. Housing values will again go up in some proportion to how much the dollar goes down. Owning a house is always going to be the best way to maintain relative purchasing power in the US economy.
This is why I also purposely took out a big loan back in 2003, when I bought in San Diego County. I also did a much-maligned interest-only loan to boot. I just can't see the point of spending even one dollar of today's currency to pay down dollars that are due in 30 years. It doesn't make any sense.
Maybe I learned from my mom and dad's experience with our family house in La Jolla California. In 1967 they paid $54,000 for 3/4 of an acre in the "Old Muirlands," one of the most desirable neighborhoods in San Diego. 30 years later the land alone was worth well over $1 million, and now it's probably worth $2.5 million or more. It was completely insignificant to their overall financial situation in 1997 whether they owed $45,000 on the house, or owned it free and clear.
I think the amount that comes due on my house in 30 years will be a laughably small amount in 2033 dollars. (I took the mortgage in 2003). If anything, inflationary trends like this tend to accelerate. Most of the damage to the dollar has occurred since 1987, when Alan Greenspan took over. I think the next 27 years will see this trend accelerate, beyond anything we can dream of today.
I read lots of commentary from perma-bears about how the US economy is about to be destroyed by all of the refinancing and home equity loans taken out over the last 5 years. But I don’t get their logic. In an inflationary environment such behavior is rational. It makes sense to borrow today's dollars and pay back tomorrow's dollars.
If the dollar continues to go down, then everything else is going to go up. That includes equity markets too. It's a very real possibility that the Dow could hit 25,000 and actually be trading at a lower P/E ratio than it is today, and be worth less in real terms than it is now at 12,250. It's all relative.
This is also how gold and other commodities can skyrocket in value over the next 5, 10, or even 15 years. To gain any sort of relative wealth in an inflationary environment --where the dollar is losing vast amounts of purchasing power -- you have to hedge your dollar-denominated assets with something much scarcer than dollars. Gold and silver are natural choices.
Alright, I'm running out of steam, and it's time to send this out. I'm sure this is going to be controversial. But I think it's still early days on all of this, and having a strategy to deal with inflation and the dollar is pretty darn important. Hopefully this will stimulate some thought, at the very least.
http://www.uncsense.com/root/2006/11/understanding_w.html
=====================================================
The Fed's New Conundrum: Slowing Housing
in Federal Reserve | Inflation | Investing | Markets | Real Estate
Yesterday' 1/4 point rate hike was no surprise . . . but the thought processes behind it may be. Consider the conundrum left to Ben Bernanke by his predecessor, Alan Greenspan.
Post market crash, recession, 9/11, and Iraq War, this was a flatlined economy. Anytime a major market takes a 78% whackage, huge swaths of capital gets destroyed. The Fed's response to this was to slash interest rates to half century lows.
The initial results of this were somewhat predictable: the Housing sector accelerated and the global economy reflated. Back in December 2002 I mentioned that investors might want to watch gold due to the inflationary potential of these ultra-low rates. (Not quite the table pounding of last year, but quite timely).
At the same time, China began building out its infrastructure in anticipation of its Olympic hosting duties. Concurrent to this was the enromosu boom in direct China investment by Western companies, all seeking to dramatically
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