Archive for July, 2009
Getting Pre-Qualified for a Mortgage
Getting yourself pre-qualified for a mortgage is a relatively simple process. It can be achieved as easily as contacting a loan officer and having them take down some general questions about your income, employment, and monthly expenses. Once the loan officer has this information from you they will run your credit and and make an estimate of approximately home much money you can afford to borrow at the current interest rates. After this is done you will get a "prequal letter" that will have this amount indicated on it. Prequal letters are often given to realtors as a a form of good faith because they show that a borrower can in fact afford a house payment of a certain amount. This way a realtor will know what price range of houses to show a borrower, and they also know that the borrower is working with a loan officer, and thus serious about finding a home. Another benefit of getting pre-qualified is that it makes you much more desirable to someone who is selling their home. When there are multiple ...
All About Reverse Mortgages
If you are over the age of 62 and you own a house, you have more than likely heard about a Reverse Mortgage. This is an interesting issue due to the fact that Reverse Mortgages are becoming extremely popular in America these days. Unfortunately, though, many people are afraid of this type of mortgage, which can be attributed to a lack of knowledge on the issue, or just because they may have been misinformed. The truth is, a reverse mortgage can offer extremely beneficial assistance (monetarily) to a senior who may be out of options or who is just strapped for cash. But what exactly is a Reverse Mortgage? How do they work? What are the requirements for obtaining one? All of these questions will be answered in the following guide. In the most basic sense, a reverse mortgage is a special type of loan that lets you convert a portion of the equity in your home into cash. What this means is, the money you have built up over the years by making home mortgage payments can essentially ...
All About Private Mortgage Insurance (PMI)
If you find yourself in the market for a new home, it is obvious that you will need some money available to use as a down payment when you get to closing. As far as the industry goes, there is an age old adage that says a new home buyer should have at least 20% in reserves to pay when they get their new home. But why 20%? Isn't that a tad high? Well, the reason for this is Private Mortgage Insurance, or PMI, and if it ends up that you are unable to make a down payment of at least 20% of the sale price, you'll be required to obtain private mortgage insurance from your lender. But what is PMI, and why are you paying for it? In the most basic sense, PMI protects the lender in the event that you default on your mortgage. Unfortunately though, it doesn't protect you from anything. How much you will pay in PMI charges will vary depending on the size of your loan, the size of your down payment, and even the lender you use. Generally, the charge is equal to about one-half of one percent.
The Regular Joe’s Guide to Types of Mortgages
If you are in the market for a new home, it is utterly imperative that you review your financing options before you make any concrete decisions. Depending on the circumstances (and in order to make sure you get the best possible loan) you should be aware of what choices you have, and what types of financing are at your disposal. Believe me, all the different types of loans can be quite intimidating to someone uneducated on the subject. In fact, most people in America don't know hardly anything about their financing options. But don't worry. That's to be expected. BASIC LOAN TYPES The type of mortgage that the majority of people today will get is know as the traditional fixed rate mortgage, or FRM. Over 70% of homeowners this year will get this type of financing for their new home. The main reason for this is that the FRM offers a much stronger sense of stability over the other types of financing. Whether the life of your loan spans 15 or 30 years, the ...
Should You Buy Mortgage (DISCOUNT) Points?
One of the most commonly referred to aspects of obtaining a mortgage is the all-important issue of "points." If you're in the market for a new home, or if you're looking to purchase for the first time, you've undoubtedly heard of them before, although you may have no idea what it means, or what "points" even refers to. Let's start at the beginning. When you hear someone talking about mortgage points, they are speaking in reference to "discount points." In the most basic sense, one point is equal to one percent of the amount you are planning to borrow. So for example, if you were getting a loan for $150,000, then one point would be equal to $1,500. After that is when it gets tricky, so pay attention. When you purchase points, you are basically making the decision to prepay part of your mortgage interest. If that doesn't make sense, look at it this way. For every point you buy, your lender will offer you a lower interest rate. The actual amount your interest rate will drop can vary, but in most cases its is approximately 1/4 of a percentage point per every discount point you ...
Closing Costs Explained
When it comes to purchasing a house there is one thing that will shock a first-time home buyer more than anything, and that is the total cost associated with closing a loan. To be totally honest, closing costs can be quite earth-shaking to someone who isn't ready. If you are planning to buy a house anytime soon it is strongly recommended that you get your budget in order ahead of time. If you would like us to review your situation and give you an estimate of what closing costs you may encounter, please feel free to contact us. If not, feel free to read the rest of the article! Continued: Some of these closing costs are charged by the mortgage company itself, while others are payable to various parties. Here's a little breakdown on some of the fees you may be charged, and who's getting your money. One of the first fees you're going to run into is the Application Fee. This is charged when you fill out your initial application (the 1003) and is non-refundable. This covers the costs your lender pays in regard to paperwork, or maybe ...
Refinancing Your Mortgage
Refinancing your mortgage can help lower your monthly payment, pay off bills and manage your debt. If interest rates have gone down from the rate you are currently paying on your mortgage, it might be a good idea to refinance. For a free consultation to see if you might benefit from a refinance, feel free to CONTACT US and we will review your situation. The truth is, few thing in life can compare to the fun filled adventure that is refinancing your mortgage. Wait, what did I just say? That doesn't seem quite right. The truth is, dealing with a refinance can be quite the arduous process, and for the most part, it's not fun at all. This can be attributed to the abundance of paperwork to fill out, the random lender fees, and the sheer fact that most people don't like modifying their mortgage to begin with. But there is a reason so many people subject themselves to these hardships, and there are times when refinancing your mortgage is an extremely smart decision that can save you thousands of dollars over the life of your loan. You may have heard ...
Qualifying For A Mortgage
Unless you find yourself in the rare situation of having a few hundred thousand dollars laying around (or stuffed under your mattress), you're going to have to take out a mortgage if you want to purchase a house. There just isn't a way around it. So here's some tips for getting the process started, or as we call it in the mortgage biz, "getting pre-qualified." The first thing you are going to need to do is make sure all of your finances are in order. If managed early (and correctly), this can help so there won't be any inconvenient roadblocks at the last minute that might prevent you from buying your dream home. Long story short, lenders are going to look at a few specific things before they give you the green light to go shopping for your first mansion. Here they are: 1. Your credit history. Pretty much the first thing the banks will do when they see your name is pull a copy of your credit report and check it very thoroughly. Banks do this because ...
Topic o’ the Week: Biweekly Mortgage Payments
If you have the pleasure of owning your own home, your loan servicer probably contacts you all the time trying to get you to change or update your mortgage in some way. Some of these changes may include refinancing your current loan, taking out a home equity line of credit, or converting your loan into a biweekly mortgage. While the thought of changing your mortgage may seem as a major annoyance, it is definitely worth the time to see if any of these changes could benefit you. So let's get started. The folks at the bank claim that switching to a biweekly mortgage can cut the total length of your loan by 5 to 7 years, and at the same time save you thousands of dollars in interest. Of course this sounds amazing, but is it TRUE? Is it worth pursuing? Will the Rangers slump after the all-star break? Fortunately for you, the former questions are easier to answer. Overall, the process of converting your existing loan into a biweekly mortgage works quite simply. In fact, by switching to a biweekly mortgage you aren't even really changing anything ...
