Loans and Mortgages Blog

Benefits of a Mortgage Calculator

Mortgage calculators can offer something very important to individual consumers — self empowerment. You don’t have to call your broker every time the interest rates change — you can figure out the costs and benefits yourself with a mortgage calculator. You can do this if you need to gauge the benefits of a refinance as well. Even though mortgages and mortgage calculators can seem intimidating, having control over your finances and more knowledge about interest rates and loan programs will make a huge difference in your financial success down the line. When you are self reliant enough to learn the benefits of a refinance or home mortgage, you’ll be better prepared to find a really great program.

Continue reading "Using a Mortgage Calculator" »

Posted at 04:00 PM | Permalink

Spend Less Each Month — Refinance Your Mortgage

These days, life seems to come down to monthly payments. If you are stretching to meet your monthly payments on your mortgage, maybe you need to consider refinancing options. If you can get a lower interest rate than you currently have, you’ll be able to save substantially on your monthly payment. The key is to look down the road. Don’t get yourself into an incredibly low interest 3 year ARM program unless you plan to sell your home or refinance again within that timeframe. Choose a smart refinance plan and you’ll save money and maintain your security.

Continue reading "Refinance Tips" »

Posted at 11:37 AM | Permalink

Mortgages — 3 Important Factors

When buying a home for the first time, a mortgage can seem like a daunting thing that you don’t understand. Here is some basic mortgage terminology that you need to know in order to make an informed decision.

Term — A mortgage term is the length of time you have to pay off your loan. It could be anywhere from 10 years to 30 years. Like any loan, the longer you have to pay off your mortgage, the lower the payments will be. An important mortgage tip — in some cases, the shorter the term, the lower the interest rate.

Rate — The “rate” is the interest rate, which basically defines how much you will be paying the bank to borrow money from them. The interest rate offered to you is dependent on your credit rating, how much money you are able to put down, how much money you make and the value of the home you’re buying. Rates can also change depending on the loan program.

Cost — Costs typically refer to closing costs, which are a part of every mortgage. You may see offers for “No Closing Costs” but these programs are rare. If you get a no closing cost loan, it usually means the mortgage company is making a large enough commission on your loan to cover the closing costs for you. Closing costs usually include an appraisal, recording fees on documents at the registry or deeds, attorney or notary fees and the like. Watch carefully for junk fees!

Continue reading "Mortgage Tips" »

Posted at 11:25 AM | Permalink

Finding Today’s Current Mortgage Rate

Mortgage shopping for any length of time can be really frustrating. The rates are constantly changing, the refinance programs are constantly evolving and it’s hard to keep up. If you want to be really educated, try to read as much as you can about interest rates and the US economy. You can hop onto sites like Bankrate.com to get opinions about mortgage rates, the low rates of the day and you can check your local newspaper for up to date information. Being informed is a great way to make smart decisions about your long term financial goals, both in real estate and otherwise.

The Best Way to Lower Mortgage Rates

Who doesn’t want to save money or make their money work better for them? That is why refinancing has been such a popular activity for homeowners in the US for the last couple of years. People are saving thousands of dollars each year by shaving points off of their mortgage rates. Some folks have even refinanced multiple times to continue taking advantage of constantly dipping interest rates. If you haven’t done this yet, it’s not too late. Granted, you probably won’t find interest rates as low as a year ago, but they are still far lower than they have been historically. Find the lowest mortgage rate by shopping around online and with various mortgage brokers.

Continue reading "Mortgage & Refinance Rates" »

Posted at 04:14 AM | Permalink

Gone are the days when we took out a mortgage and stuck with it for life, until the debt had been completely repaid. The remortgage market is big business these days, and taking a look at the options available could considerably improve your finances. What are some of the reasons for considering switching your mortgage?

1. Get a better deal: Are you sure that your current mortgage is the best one you can get? The market is very competitive and mortgage providers are desperate to attract new business, usually by offering special deals to people who switch their mortgage over to them. As well as aiming for a lower interest rate and lower monthly repayments, remortgaging could net you other benefits such as cash back, free home insurance, or other valuable extras depending on the deal.
2. Lock in a low rate: Interest rates are at historic lows, even taking into account the recent rise. Many experts are predicting that rates will begin to rise again over the next few months and years, leading to more expensive mortgages. By replacing your variable rate mortgage with one that has a rate fixed for a few years, you can protect yourself against future rises in the interest rate.
3. Release equity: As house prices have gone through the roof over the last decade or so, many people find that they are sitting on a large amount of equity in their home - the difference between how much their house is worth and what the outstanding mortgage balance is. Taking out a remortgage that will pay off your current mortgage and also give you some extra funds is an effective way of unlocking some of this stored wealth, providing you with the funds you need for home improvements, a holiday or wedding, or any other large expense. It is often cheaper to raise the money with a remortgage than by, for example, taking out a personal loan.
4. Debt consolidation: It's well known that the public as a whole are in debt to a level never seen before, with easy access to relatively cheap credit providing the temptation to 'live now and pay later'. Nonetheless, the money has to be repaid at some time, and credit cards and the like aren't an ideal way of obtaining long term credit. Taking out a remortgage large enough to cover both your mortgage and your other debts will simplify your finances, leaving you with a single monthly repayment to make, which will usually be for a smaller amount than your total repayments at the moment.
5. Change your mortgage type: People's circumstances change over time, and what might have been an ideal mortgage a few years ago when you took it out might not be the most suitable for your current needs. Maybe you want to switch from an interest-only mortgage to a capital repayment one, or you might want to take advantage of some of the more recent features of mortgages such as flexible payments or offsetting - a remortgage can give you the chance to get a deal more in tune with your current circumstances.

Bearing all the above in mind, a remortgage might seem like an ideal way forward for restructuring your finances. It's important to remember though that the decision to remortgage is not to be taken lightly, as you could potentially be putting your home at risk if you get it wrong, and so it's essential to seek the advice of a properly qualified mortgage advisor if you are in any doubt.

Source: www.superfeature.com

Nicholas Hunt is a contributor to 1Stop Finance UK, your source for remortgages, mortgages and homeowner loans.

Posted at 03:54 PM | Permalink

When to Look Into Home Equity Loans

Home equity lines can be perfect for a variety of people in different financial situations. Here are some scenarios where a home equity line of credit can come in handy.

• An Unexpected Expense – Home equity loans have some of the lowest interest rates around and essentially, you are borrowing from yourself. If you have an open home equity line of credit, no matter what the expense you can be prepared.
• Home Improvements – What better to finance your improvements to your home than your home equity? You can use a home equity line of credit for a new roof or to paint your home or to complete the addition you need for your growing family.
• Loan Consolidation – If you have accrued too many debts there is nothing wrong with taking out a low interest home equity loan to consolidate your bills and get your on firmer financial ground. Just make sure you get your spending under control and reinvest your money back in your home equity as your situation improves.

If you fit into any of these categories, contact your mortgage broker today. You really can't go wrong with the low interest rates currently available.

3 Benefits to Home Equity Loans

There are many benefits of taking out a second mortgage or home equity line of credit. Here are several of those benefits:

• Extended Repayment Terms – Home equity lines of credit can have incredibly flexible repayment terms. Some will not require payment in full until you sell your home. This isn't to say you should allow debt to languish, but the extended payment terms on loans like these are a huge benefit.
• Payments on Interest Only – Home equity lines often only require a payment based on the interest you have accrued. This makes for much lower monthly payments.
• No Closing Costs – Most home equity lines of credit are available with no closing costs and no money out of pocket for you. There are always some fees, but with the right lender, these fees will be built in to their commission structure.

Home Improvements? Take a Second Mortgage

If you want to improve your living environment and your home equity, but you don't know where to get the money to complete the improvements, the answer may be far simpler than you think. Many lenders will be more than happy to help you take out a home equity line of credit for home improvements. Of course, it will depend on how much home equity you have accrued, but many lenders, because you are improving on their investment, will look well upon home improvement equity lines of credit.

Don't avoid improving your home out of fear of a second mortgage. If you think about it, there is nothing wrong with taking equity out of your home to reinvest it in your home. You are just putting that money to good use and making more money by wisely improving on your investment.

If you are interested in exploring the possibility of a second mortgage, talk to a few lenders and compare interest rates. Choose someone you trust and go for it. Smart home improvements will exponentially increase the value of your home.

Shopping for Equity Loans Online

An online lender like us is going to offer you the widest range and selection on equity loan rates, terms and programs. The best part about working with an online vendor is that they can get you competing quotes and you can still compare and make the best decision for you.

By using resources on the internet you may find other viable online lenders, but if you do solicit quotes from these people, be wary. If they are not accredited by a third party or they have any blemishes on their business record, you may not want to share your personal information with them. Don't farm out your personal information to any loan site you come upon so you feel like a better consumer. Your information is vitally important so protect it!

Finding a No Closing Cost Home Equity Loan

When you saw the closing costs for your home purchase, you may have been a bit appalled. There are a lot of junk fees thrown in with the legitimate ones and this may be something that is holding you back from considering a second mortgage. Stop right now.

Home equity lines are far simpler than a first mortgage on your property. In many cases there are no closing costs, or the closing costs are very low. Therefore, not only will you have money available at a low interest rate, you don't even have to pay out of pocket to get that money.

If you can find a no closing cost home equity line with a good interest rate there is no reason not to move forward. Many people even take out a home equity line just to have it available in case they need it. Talk to your mortgage representative today and find out which program will fit your needs.

Take The Max with Your Home Equity Line of Credit

Here is something to consider when you plan to take out a home equity line:

Did you know lenders will give you a lower interest rate if you take out a larger home equity loan? It may seem scary to take out a loan for more than you need, but if you have self discipline, why not get the lower interest rate?

A great tactic is to take the maximum loan so you can secure the lowest interest rate and then pay it back almost immediately. A line of credit, like a credit card, will stay open even if the balance is paid. This is a great way to secure a terrific interest rate and barely pay any money to keep a line of credit open.

You do want to make sure they won't penalize you for using this tactic, but typically they will only issue a penalty fee if you close out the line of credit too early. A good mortgage broker will have more strategies like these so try to develop a solid relationship with your broker. You'll get better advice in the long run.

Consolidating Your First and Second Mortgages

Due to the refinance boom and the increasing values of home, many people now hold a first and second mortgage on their property. At some point you don't really need that second mortgage so you may want to consider consolidating your home debt under one mortgage. It is easy to refinance your first mortgage to absorb your second and you'll be left with only one will and potentially lower monthly payments depending on the interest rate you secure.

You will have tons of refinancing options so find a mortgage broker you can trust and compare rates, terms and loan amounts across the board. You'll have this loan for a long time so choose wisely.

Interest Only Equity Loans – Quick Cash and Low Payments

If you need money quickly, at a low interest rate an equity loan may be your best or only option. One of the best parts about an equity loan is that you can typically get a larger amount of money, for a low interest rate with incredibly low monthly payments. This is because your payments on an equity line are based on interest rather than on the principal of the loan you have borrowed. This is not to say you should squander the proceeds from your equity loan, but if you need money quickly and you don't have a ton of budget flexibility to make large payments towards your loan an equity line may be just the ticket.

Investing Your Home Equity Loan Wisely

If you decide to cash out your home equity in order to invest in other money making ventures, make sure you consider the following factors in your decision making.

1. Make sure you realistically weigh the risks involved with taking out a home equity line and putting your cash into another investment. Real estate is a very steady investment vehicle, so if you are considering taking home equity out to become a day trader, you may want to think again. Look at the risk and reward scenarios that are associated with your potential investment before you leap.
2. You are going to need to pay back any home equity loan that you take out. This is not a situation where you can borrow from your home equity and then just hold the loan. Make sure you new investment vehicle will not impede your ability to pay back your home loan.

You should consult a financial advisor before removing home equity for investment in a different money making venture. Protect yourself and your home by making smart decisions based on good information.

Retirement Planning with a Home Equity Line of Credit

Any financial advisor will tell you to be wary of how you spend the money from your home equity line of credit. This is not money to spend on going out to dinner and grand shopping sprees. You really should only use home equity dollars for home improvement, debt consolidation or reinvestment opportunities.

Investing your home equity in the right retirement fund could be a great way to spend your money and make sure it's making money for you. Perhaps you want to put it into an IRA or some other long term, interest bearing vehicle. The best way to go is to consult a financial planner on the best way to reallocate your investments.

They will help you assess whether it is better to pull out home equity and reinvest it in another vehicle or if you should leave the equity in your home and sit tight. Follow the advice of a trusted professional – they will most likely lead you down the right path.

Source: LowerMyBills.com

Posted at 02:41 PM | Permalink

Avoid Needing a Bad Credit Mortgage – Fix Your Credit Now

If you have bad credit, you may get stuck with a high risk mortgage with a higher interest rate, prepayment penalties and high closing costs. The best thing to do is to avoid damaging your credit or to repair it as much as you can before you apply for a mortgage. To fix your credit, begin by getting a copy of your credit report and getting your current FICO score. Make sure all the information on your credit report is correct, and if it isn't, get it repaired. Then consider consolidating your credit card debt, student loans and the like and always make your payments on time. In time, your score will improve and the money you save by getting lower interest rates will be worth all your work and sacrifice.

Finding Bad Credit Mortgages Online

Just because you can't qualify for an "A" paper loan, doesn't mean you are without options. There are many decent bad credit mortgage options available if you take the time to look around or if you find a good mortgage broker you can trust. Online lenders usually have a ton of bad credit mortgage programs you can compare and choose from. Don't feel as though you need to only go with one broker though. Different brokers may be able to provide you with various interest rates, loan terms and loans with or without prepayment penalties.

Applying for Bad Credit Mortgage Loans

Bad credit mortgages, although not the best option, will help you rebuild your credit quickly. If you want to apply for a bad credit mortgage, you'll need several pieces of information before you proceed. First, make sure your credit report and score are accurate. If removing old or closed accounts or removing something that is incorrect from your credit report can improve your score, even slightly, it is worth the effort. Next, you'll need data on your income including pay stubs, deposit slips and the like. Bad credit mortgage loans will often hinge on your proof of steady income. Finally, you'll have strict repayment guidelines. Make sure you can make the payments on time and in full. Don't get in over your head and make your bad credit situation even worse.

Need a Mortgage with Bad Credit? Not the End of the World

A few bad credit mortgage tips to make sure you get the best deal possible:

1. Shop Around - Don't be embarrassed by your bad credit, embrace the challenge of taking steps to improve it - and a mortgage can absolutely be one of those steps. Talk to different mortgage brokers and look online at your bad credit mortgage options.
2. Make sure your credit score is correct. Remove paid off or closed accounts - make sure you aren't a victim of identity theft or mis-reporting. It can take some time and effort to fix your credit report, but it'll be worth the work.
3. Once you have a bad credit mortgage, use it to your advantage. Making mortgage payments on time is the fastest road to improving your credit score.

Continue reading "Finding a Bad Credit Mortgage" »

Posted at 02:16 AM | Permalink

With real estate prices at record levels throughout much of the country, would you believe there are still some home bargains waiting to be found? How about a three-bedroom Kansas City, Mo., bungalow for $22,000? Or a two-story river-view Victorian in Jonesville, N.C., for $19,000?

Still too rich for your blood? Maybe you'd be interested in a traditional New England farmhouse for, say, $1. Yes, you read that right: A home that costs a single George Washington, one dollar.

The price might sound like a scam, but it's not, although strings the size of tow ropes are often attached. And, to be sure, it's going to take more of a search than looking in the classifieds or checking your local real estate office listings online. But such fabulous finds are out there -- all you have to do is find them.

The march of history

For example, every so often, the Town of Norfolk, Mass., sells historic homes for $1 each. The catch is that anyone interested in buying the homes must be willing to move them elsewhere. In most cases, current owners want to build new construction on the lots, and will demolish the existing homes unless they can get someone to relocate them.

"In Norfolk, we have what's called a 'demolition delay bylaw,'" says Bill Domineau, chairman of Norfolk's historical commission. "If a home is determined to have some historic value, we can require the owners to hold off on destroying it for at least six months." During that period, town and historic commission officials try to interest someone in moving the home to a new lot or, at the very least, dismantling historic details -- from crown moldings to pine floor boards -- for sale or use in other homes.

Most sellers in this kind of situation actually don't mind offering up the homes for $1, since they get out of paying for the demolition. Prospective homeowners or investors also get a heck of a deal in the process. And historic home aficionados such as Domineau are happy to see any part of an old home saved from the wrecking ball. "It's a win-win-win situation," he says.

Finding hidden gems

Sharon Hinson and Marjorie Ellena share Domineau's passion for saving homes -- and love watching homeowners get a bargain in the process. The two women run HistoricProperties.com, a site that currently lists about 750 residential homes and commercial buildings for sale throughout the United States that are 50 years old or older. Listings are updated daily and include many $1 homes and others that actually are free for the taking. Commercial sellers pay to be listed on the site, but Hinson and Ellena offer free listings to historic preservation groups, nonprofits and governmental agencies.

Continue reading "Homes for sale: $1" »

Posted at 02:08 AM | Permalink

After looking at all the costs involved in buying house, you may have begun to have second thoughts: Perhaps, it is better to rent a home.

Real estate in most areas today is not a top investment compared with investment securities. "You're not going to get a 30 percent return on your house," said Steve O'Connor, senior director of residential finance at the Mortgage Bankers Association of America. In the past decade, people have been advised to think of a home "as shelter not investment" O'Connor said. "Wealth accumulation is secondary."

Still, as shelter, most experts say if you can afford the down payment, it makes sense to buy your home rather than rent it. That's because you can deduct mortgage interest on income tax and build equity in your property. This is especially true when mortgage interest rates are low. Mortgage interest rates are deductible up to a $100,000 annual limit.

Example

A homeowner has a gross annual income of $40,000. The monthly mortgage payment is $1,000 on a 30-year mortgage. In the first few years, 80 percent of that payment goes to interest and is therefore tax deductible. In the 15 percent tax bracket, the homeowner saved about $375 more in taxes with the home provision versus with only a standard deduction.

Lease-Purchase Agreements

Some people take a middle road. They ease into homeownership by renting a house or condominium with an option to buy.

• Lease-purchase gives a buyer time to save for a down payment or to clean up a credit history.
• It can work in a buyer's favor in areas where real estate values are rising quickly at a rate of 10 percent a year. A buyer benefits from this appreciation because the purchase price of the home is locked in on the day the buyer signed the rent-to-own contract with the seller.
• In most agreements, the seller allows a portion of the rent to be applied towards the purchase price, which some lenders consider to be part of the down payment. The amount of rent credited could be 10 percent to 100 percent, based on your contract.
• Most rent-to-own options require some down payment to secure the agreement, which is not refundable in case the renter decides not to buy.

Homeowners who would agree to a lease-purchase option include people who have had property on the market longer than they wish or owners who had to move and want the house to be lived in. The owner benefits with rental income to help pay the carrying costs of the home, and the strong possibility of selling the house when the contract expires.

Source: Yahoo! Finance

Posted at 02:06 AM | Permalink

A mortgage is basically a long-term loan that you arrange through a bank or other financial institution, or even through the seller of the property. The house and/or property serve as collateral for the loan.

A home mortgage is most likely the largest debt you will assume. You typically pay off that debt in monthly payments over a long period of time, most often 15 to 30 years.

What's In a Payment?

A monthly mortgage payment typically includes the following, known as PITI:

• Principal
• Interest
• Real estate Taxes
• Property Insurance and, often, private mortgage insurance, known as PMI.

PMI gives the lender protection if the homeowner should default on the loan. The mortgage company charges insurance if the down payment is less than 20 percent of the sale price or appraised value. PMI usually can be eliminated once the principal balance of the mortgage reaches 80 percent of the sale price or appraised value, which is known as the loan-to-value (LTV) ratio.

The process of paying the principal takes years because mortgages are based on a repayment plan called amortization. During the years of the mortgage, a homeowner pays a lot of money toward interest in order to have manageable monthly payments on the huge house debt. During the first few years, most of the mortgage payments will be applied toward the interest. During the final years of the loan, the payments will be applied primarily to the remaining principal.

Example

Let's look at a $100,000 mortgage, at a fixed interest rate of 7.5 percent, for 30 years. In three decades, the homeowner would pay $151,717 in interest.

Of course, you cannot put a price on the pleasure of living in your own home and building equity, an unencumbered interest in your property. Equity grows as you pay off the principal of the mortgage and as the property appreciates in value. Also, there are tax incentives, since mortgage interest is a deduction on your federal income tax.

Still, the amount of interest you will pay may affect your decision on what type of mortgage you choose.

Source: Yahoo! Finance

Posted at 11:22 PM | Permalink