Posts Tagged ‘mortgage’

• Jan 16

  3 Reasons to Consider an Adjustable-Rate Mortgage

  Although financial experts usually advise buyers to avoid adjustable-rate mortgages like the plague, there are a few instances when choosing this type of home loan over a fixed-rate mortgage can actually be beneficial. If you’re buying a house in the near future and you don’t know which type financing you should be looking for, here are a few reasons why you might want to consider an ARM.

  1)    You’re expecting a promotion. If you’re anticipating an increase in your annual income over the next few years, it could behoove you to take out an adjustable-rate mortgage on your new home. You’ll be able to save money on your low initial payments, and when your interest rate starts to increase, you’ll have the resources to handle it.

  2)    You don’t plan on living there for long. If you’re buying a house that you don’t plan to inhabit for longer than five years, an adjustable-rate mortgage is actually a better option than fixed-rate financing. As long as you put your home up for sale before the fixed-interest period expires on your ARM, you’ll end up paying much less than you would have at a higher permanent rate.

  3)    You want to attack your mortgage. Adjustable-rate mortgages can also be attractive to homeowners who want to aggressively pay off their homes. If you’re determined to own your house in half the time your loan period dictates, then you can use the low initial interest rates of ARMs to your advantage. Keep in mind, though, that paying off a house in seven years or less isn’t a viable option for many homeowners.

  Adjustable-rate mortgages aren’t right for everyone buying a house, but there are definitely times when they have an edge over fixed-rate financing. If you find yourself in any of these scenarios and want to know if an ARM is right for you, contact your loan officer today. If you’re smart about it, you can save yourself thousands of dollars with one of these home loans.

   

  Tags: buying a house, mortgage
  Posted in Financing, Home Buying | No Comments »

• Jan 6

  3 Ways to Get the Best Interest Rate on Your Mortgage

  If you’re buying a house this season, you’re in luck. Due to the sagging market, lenders are giving new homeowners lower mortgage rates than they have for the past 10 years. However, you’re going to need to do more than just show up to a lender’s office if you want to minimize your interest. Before meeting with your loan officer, make sure that you’ve taken these three steps to strengthen your portfolio.

  1)    Pay off all of your debts. Your credit score is the most important factor in determining the interest rate your lender will offer you. Don’t even bother applying for a mortgage until the majority of your credit card debts and other loans are paid off. Believe it or not, a 40-point ding on your credit score can result in a 1% higher interest rate on your mortgage. That can mean a house that costs you $20,000 more than it would have otherwise.

  2)    Explore different lenders. A good rule of thumb when looking for a home loan is to meet with five different lenders before accepting an offer. Exploring different options will give you some leverage when meeting with a loan officer. After all, if one financer offers you a good interest rate, the other ones you visit are likely to match it.

  3)    Get a fixed-rate mortgage. Adjustable rate mortgages might seem like better deals at first, but their variable interest rates will always cost you more in the long run. Unless you’re planning on selling a house within five years of moving into it, you should always, always, always get a fixed-rate loan. Fixed interest rates seem higher at first, but those rates will stay the same throughout the entire period of the mortgage.

  The two keys to securing a good interest rate on your mortgage are presentation and competition. You want to present yourself as a reliable and trustworthy applicant while encouraging different lenders to compete for your mortgage. If you remember these two key things when buying a house, you can be sure to get a great offer for your home loan.

  Tags: buying a house, mortgage
  Posted in Financing | No Comments »

• Jan 2

  Want to Pay Less for Your House? Refinance Your Mortgage.

  If you want to save some real money this holiday season, why not give yourself the gift of a home loan modification? In this buyer’s market, refinancing your mortgage can save you tens of thousands of dollars on your interest, and it can even reduce the period of your loan by five or more years. Here are a few ways you can adjust your mortgage to best work for you:

  • Lower your interest. If you originally took an adjustable rate mortgage on your home and aren’t planning on moving any time soon, it pays to refinance and opt instead for a lower-interest fixed-rate mortgage. By renegotiating your 6% interest ARM to a 5.5% fixed-rate home loan, you can save more than $100,000 in interest over a 15-year period.
  • Shorten your period. With defaults on home loans at an all-time high, the number-one priority for lenders is getting back the money they lent you. They’re often willing to give up a few years of interest in order to shorten the period on your mortgage, and this is always in your best interest if you’ve got the income to handle it. While shortening your loan’s period might increase your monthly payments, it will save you thousands on interest in the long run.

   

  • Turn your equity into a cash out. Your equity is the difference between what your home is worth and how much you’ve got left to pay. If you undergo a home loan modification for an amount greater than what you still owe on the home, you can “cash out” on part of your equity. This means you’ll get a sum of money in exchange for receiving less cash when you sell the home. This is a good idea if you want to build an addition or start a college fund for your child. This is not a good idea if you need the cash to pay off unsecured debts, like credit cards.

   

  The weak housing market has given homeowners a variety of home loan modifications to choose from. By refinancing your mortgage, you can pay less for your house, pay off your house faster or even cash out on part of its value. If you want to know more about these modifications, contact your loan officer today.

  Tags: home loan modification, mortgage
  Posted in Financing, Home Buying | No Comments »

• Dec 14

  3 Reasons Why You Should Consider a Home Loan Modification

  It’s a buyer’s market right now, which means that it’s a perfect time for people who have bought a home in the past 10 years to refinance their mortgage. While many people are put off by the idea of refinancing, undergoing a home loan modification now could save you thousands of dollars in the future. If one of the following scenarios is true for you, a home loan modification could make sense.

  1)    You’re having trouble making your payments. If you’re struggling to keep up with your mortgage payments every month, a home loan modification is definitely a good idea. By renegotiating your mortgage you can extend the term of your loan in exchange for lower monthly payments. It will take you longer to pay off your real estate investment, but eliminating the chance of foreclosure is always worth an extra few years of debt.

  2)    You plan on living in your house for a while. People who don’t plan on living in a house for a long time will often get an adjustable-rate mortgage (ARM) because of the reduced down payment and lower initial interest rates. While this is typically a good idea, if you have an ARM and decide to live your house longer than you initially planned, you should modify your home loan to a fixed-rate mortgage. While the term on a fixed-rate mortgage is typically longer than the term on an ARM, they have much lower interest rates overall. If you keep up with your mortgage payments, then you’ll end up saving money in the long run.

  3)    You want to pay off your house faster. If you recently received a promotion or a substantial amount of money from an inheritance or contest winnings, then a home loan modification is the key to paying off your house faster. By increasing the amount of your monthly payments, you can lower your interest rates and shorten the term of your loan by as much as 10 years.

  In the current economy, your lender should be more than willing to renegotiate your home loan. Even if you’re falling behind on your payments, a lender would rather refinance your mortgage to lower the payments than to go through the hassle of trying to collect your unpaid debt. If any of these three conditions apply to you, contact your mortgage broker today to discuss how a home loan modification can help you achieve your financial goals.

  Tags: home loan modification, mortgage
  Posted in Financing | No Comments »

• Dec 9

  3 Ways to Survive a Foreclosure

  When your lender decides to foreclose on your home, it’s easy to feel like the world is ending – but a foreclosure doesn’t mean that you’ll never be eligible for a mortgage again. There are plenty of steps that you can take to get back on the right financial track, if you’re willing to work hard enough. Here are three things you can do now.

  1)    Understand your rights. Although your lender will hound you to pay your mortgage even after they foreclose on your house, they can only pursue your debt within the bounds of the law. Under the Fair Debt Collection Practices Act, a lender isn’t allowed to call your house outside of business hours, inform your employers of your debt or otherwise harass you into paying. If they try any of these underhanded tactics on you, find a lawyer and take them to court.

  2)    Use your credit cards. If you still have credit cards open after your foreclosure, then you should make sure to use them as often as possible. You might not have much money, but spending a little and paying it off in full every month will help pull your credit rating out of the well. If you use the cards responsibly – in other words, if you don’t carry a balance – your credit rating will improve markedly after the foreclosure on your credit score expires.

  3)    Hound your lender to clear your credit score. In some cases, harassing a lender as much as they harass you can be a good thing. If you call, send emails and write letters to your lender every day demanding that they remove your foreclosure from your credit score, you might bug them enough that they’ll clear your credit rating just to get rid of you. Remember, though, that if you’re going to try this, it’s important to stay within the boundaries of the law – just one overzealous message could land you in court.

  Surviving a foreclosure isn’t easy, but it isn’t impossible either. After seven years your foreclosure will be removed from your credit score, so use the time wisely to build up a solid credit rating through responsible credit card use, and don’t be afraid to sue your lender if their collection practices start getting unethical.

  Tags: foreclosure, mortgage
  Posted in Financing | No Comments »

• Nov 28

  3 Things that Will Ruin Your Closing

  Even if you’ve found the perfect house for your next real estate investment, you’re not out of the woods yet. If you’re buying a home, it’s important to remember that the process isn’t over until there’s ink on the paper. Make sure to avoid these three last-minute mistakes as your closing day approaches:

  1. Buying anything on a payment plan. Your lenders will keep a very close eye on your credit score right up until your mortgage has been signed for. As tempted as you may be to purchase a new entertainment center or set of furniture for your new house, don’t make any major purchases until you’ve got the keys to the house in your hand. Every payment-plan purchase forces a hard inquiry into your credit rating, which will ding your score by about 30 points for a short time. Although this ding will go away in time, you can be sure that your lenders will increase your interest rate if and when they notice it – which can cost you thousands of dollars on a 15-year mortgage.
  2. Leaving your job. Lenders require a proof and history of employment in order to determine the terms of your mortgage, and if you abandon your place of work right before closing day, you can kiss these precious documents goodbye. Even if you’re offered a better job with a new company, ask them to wait until you’ve got the house title in your name before starting.
  3. Ignoring closing costs. Although it’s common for the seller to pay most of the closing costs of real estate transactions (such as title transfer fees, attorney fees and brokerage commissions), you’re still going to be expected to cover at least a portion of these expenses. After you and the seller come to an agreement, make sure you have about $1,000 in your checking account to contribute to the costs of officially closing the sale. If you don’t, you could find yourself in hot water pretty quickly.

  When you’re buying a home, you want your closing to go smoothly. It’s a smart move to put yourself on financial lockdown the moment you commit to the purchase and to keep your hands off your wallet until you’re safe and secure inside your new house. If you save your money and avoid job transfers or other actions that will alter your financial records, you’ll save yourself a lot of trouble down the line.

  Tags: buying a home, mortgage
  Posted in Home Buying | No Comments »

• Nov 21

  4 Ways to Stay Sane During the Home-Buying Process

  Buying a home isn’t always easy. The stress of locating a new house, inspecting it, committing to it and then financing it can overload a buyer’s real estate circuits. But never fear. There are a few steps you can take to lighten the burden of buying a home. Here are four tips that will help make things easier:

  1)    Get an attorney to look over your mortgage. Mortgages aren’t exactly quick and easy reads. Legal language can be a real pain to examine, especially when you’ve got a dozen other things on your to-do list for the day. Instead of putting yourself through that hassle, why not take your legal papers to a real estate attorney and have them look over your mortgage and other documents to make sure everything checks out? After all, it’s in their job description, and they’ll be able to point out inconsistencies that you might not have noticed.

   

  2)    Plan as far ahead as you can. While you can’t plan for everything that happens when buying a house, you can schedule most of your tasks far in advance to help you avoid any unwanted surprises. As soon as you set a move-in date, start packing. Additionally, get ahold of the local tax and inspection offices early enough that you can schedule or reschedule meetings easily.

   

  3)    Make checklists. Checklists are a great way to keep you and your family organized, efficient and on track throughout the home-buying process. Make a list of the things you need to do for the coming week and check them off as you go along. It’s a lot easier to accomplish necessary tasks like checking with your loan agent and stopping by your realtor’s office when you aren’t busy worrying about what else you may be forgetting.

   

  4)    Take a break. Sometimes the best thing you can do for yourself when buying a house is to take a break from everything and spend an evening doing something you enjoy. Go out with your friends, watch a movie, play saxophone – do something that takes your mind off of all the work that has yet to be done. A little R and R will go a long way towards increasing your productivity.

  Everyone likes owning a house, but nobody enjoys buying one. The best way to stay sane during the process of purchasing a new home is to keep yourself as organized as possible, seek expert advice to help you understand your legal documents and take enough breaks to keep yourself relaxed and efficient. If you do, you’ll find yourself settled into your new house before you know it.

  Tags: buying a house, mortgage
  Posted in Home Buying | No Comments »

• Nov 20

  How to Handle Adjustable Rate Mortgages

  While the low initial interest of an adjustable-rate mortgage can attract many first-time homeowners, the rising interest rates often sound easier to cope with than they actually are. If you’re stuck in a mortgage with steadily increasing interest, here are a few financial maneuvers you can use to keep your family sane and secure:

  • Start a cushion account. Although you can’t control how much your mortgage interest rates will rise and fall, you can at least make sure that you’ll be able to make your monthly payments on time by stashing a portion of your paycheck in a savings account every two weeks. This way, you’ll have a cushion in case the prime index rate jumps unexpectedly. And if you’ve still got money left over at the end of the year, you can absorb it into your general savings or checking account.

   

  • Plan ahead. If you look at the trends in the prime index rate that your mortgage uses (take a look at the past few years), you’ll be able to get a good idea of which direction your interest is heading in the future. If you have trouble analyzing the data yourself, you can always search the Internet for economists’ predictions. Planning ahead will make it easier to keep the money on hand to cover your increased monthly payments.

   

  • Refinance your mortgage. With foreclosures at an all-time high, banks are looking for strategies to get homeowners to pay their mortgage consistently. For many homeowners, this means refinancing an adjustable-rate mortgage, turning it into a fixed-rate mortgage instead. If you’ve got equity in your home and the fixed period of your ARM isn’t up yet, you’re an especially good candidate for a fixed-rate mortgage. However, you should be aware that this move likely means that you’ll have to stay with your real estate investment for a few more years before you’re able to sell it.

  In the current buyer’s market, an ARM might actually be more affordable than a fixed-rate mortgage. But if you’re uncomfortable with the shifting interest rates, now is a perfect time to modify or refinance your loan in order to extend your fixed-rate period.

  Tags: mortgage, real estate investment
  Posted in Financing | No Comments »

• Nov 14

  Home Financing Options for People with Poor Credit

  In this tough economy, it’s hard to keep your credit rating as high as you’d like it to be, and only a few financial mistakes on your record can compromise your ability to finance a new home. If you’ve got less than stellar credit, here are a few financing options to investigate:

  • Federal Housing Authority Loans. In an effort to expand home ownership and give a boost to the real estate market, the government has begun offering federally funded mortgages to people with bad credit. While the terms of these loans may not necessarily be ideal, they’re one of the best ways to secure financing for your real estate investment if you’ve got a spotty credit score.

   

  • Secured Loans. Secured loans operate on the principal of collateral: you offer something of value to your lender in case you can’t pay your mortgage. As you can imagine, having to put up a vehicle or other valuables as collateral in order to finance your real estate investment isn’t the most desirable scenario, but lenders who are able to secure their investments will likely care much less about your financial history. Furthermore, since these types of loans are fully legal, you can take your lender to trial if things go awry.

   

  • Sub-Prime Mortgages. Sub-prime loans are mortgages which charge more interest than the prime rate. Specifically targeted towards people with bad credit, these mortgages will end up costing homeowners thousands more than the price of their real estate investment. Since the credit crunch of 2008, these loans have been harder to find, and even if you do manage to find a lender willing to finance your real estate investment at a sub-prime rate, it’s better to shop around for other financing options before signing on the dotted line.

  As you can see, the mortgage options for people with bad credit are extremely limited. While it’s always a good idea to build up your credit score before applying for a home loan, if you need to find financing for your house immediately, there are ways to do it. While an FHA loan is probably your best bet for securing a mortgage, don’t be afraid to apply for a secured loan – as long as you’re sure the lender is legitimate.

  Tags: mortgage, real estate investment
  Posted in Financing | No Comments »

• Oct 23

  4 Things You Should Know Before Signing a Mortgage.

  So you’ve found the home of your dreams, and now the only thing keeping you from your new life is signing for a mortgage to finance it. Simple enough, right? Not quite. Mortgages are complex legal documents that are easy to misread or misinterpret, so there are a few things you should know about your home loan before putting the pen to the paper. Here are a few:

  1)    Does the house come with liens? If you’re buying a foreclosure, there’s a good chance that some liens will be attached to the title and mortgage. Liens are unpaid fees like insurance or back taxes that the last owner didn’t pay. These fees might not show up on the sticker price, but they’ll transfer to you all the same, so make sure you’re prepared to take on the costs.

   

  2)    What’s your interest rate? Your interest rate is the most important thing to consider before signing on the dotted line. Different types of lenders will offer different levels of interest, but you should make sure that yours is a fixed, non-adjustable rate in the single digits. If you don’t, you could end up paying tens of thousands of dollars more than the sticker price.

   

  3)    Can your lender sell your mortgage? Although lenders usually sell off mortgages only as a last ditch effort to save their agencies, you should still find out whether yours is eligible for resale. If your mortgage gets pawned off to another broker, you could find yourself facing interest hikes and other unwanted costs.

   

  4)    What’s the fine print say? When it comes to mortgages and home loans, there’s always fine print. As a future homeowner and titleholder, it’s your responsibility to familiarize yourself with every condition, catch and clause of your mortgage. Not doing so could mean a lot of trouble down the road for you and your real estate investment.

  Signing for a mortgage doesn’t have to be hard, but it shouldn’t be taken lightly, either. Before you sign on the dotted line, ask your broker questions and read through all of the paperwork. That way, you can ensure that your home will be a happy one for years to come.

  Tags: buying a home, home mortgage, mortgage
  Posted in Home Buying | No Comments »