Fee Low Mortgage Rate

Negative amortization or "neg am" occurs when the minimum payment on a mortgage covers less than the monthly interest charged, causing the balance of the loan to increase instead of decrease. Interest only loans generally don't increase the balance due on a home although they don't diminish the amount due. However, deferred interest loans will increase your loan amount.

This can happen with negative amortizations loans like a payment option ARM, where payment choices can be calculated based on COFI - The 11th District Cost of Funds Index which demonstrates the average interest rate paid by certain banks in Arizona, California and Nevada or on MTA - The 12 month Treasury Average, giving you a variety of choices in payments. While these loans can be a good deal when short-term interest rates are low, they are not necessarily the right choice when short term loans have a higher interest rate, like now.

Wells Fargo Cuts Jobs In Subprime Loan Division

(AP) SAN FRANCISCO Wells Fargo & Co. is eliminating more than 500 jobs in a division that makes home loans to high-risk borrowers, adding to the economic distress caused by the decaying subprime mortgage market.Most of the cutbacks, concentrated in South Carolina, Arizona and California, stem from Wells Fargo's recent decision to make it more difficult for borrowers with blemished credit records to qualify for subprime mortgages.The tougher lending standards means Wells Fargo will be handling fewer subprime mortgages, reducing the need for as much staffing, according to a statement issued late Monday by the San Francisco-based bank.Most of the 514 affected workers received layoff notices last month and will leave Wells Fargo next month unless the bank can find them new jobs. About 70 jobs in Tempe, Ariz.

It’s hold for now but inflation continues to be the key

Ray Boulger of John Charcol, UK Independent Mortgage Adviser, comments on today's decision by the Monetary Policy Committee (MPC) to hold Bank Rate at 5.25%.

“Today's decision probably resulted from another split vote and a 0.25% increase to 5.5% next month is widely expected by the market. However, this is far from a foregone conclusion, particularly in the light of the voting at last month's meeting, where there was one vote for a cut and none for an increase. It is notable that it was Prof David Blanchflower who voted for a cut and, as he spends much of his time in the USA, he will be much more aware than the other MPC members of the potential damage to the US economy from the dire problems in their housing market, and the risk of contagion to our economy if the situation deteriorates significantly.