Thirty Year Verses Fifteen Year Mortgage – Which Amortization Is For Your Home?

Amortization is defined as the monthly payment including principal and interest required to pay off a loan in a specific period of time. When choosing a home mortgage, it is obvious that the required monthly payment will be higher to pay off a loan in fifteen years than it will be over thirty years but…

Amortization is defined as the monthly payment including principal and interest required to pay off a loan in a specific period of time. When choosing a home mortgage, it is obvious that the required monthly payment will be higher to pay off a loan in fifteen years than it will be over thirty years but there are other considerations.

Many of the standard fixed rate mortgage programs offer long term amortization up to forty years and as short as 10 years on conventional mortgages. By far the most popular options with consumers are the thirty and fifteen amortized mortgages. Fifteen year loans offer the obvious advantages of an early pay off and a substantially reduced amount of interest paid out during the term of the loan. The additional advantage is the interest rate is usually somewhat lower with a fifteen year mortgage. The variance is generally per percent to per percent depending upon current market conditions. Forty year amortization seems like a good idea for keeping the payment low but in execution it does not provide much of a payment advantage over the thirty year. The objective is additionally compromised because the interest rate can be slightly higher than the thirty year mortgage, negating some of the monthly payment savings. Shorter payment terms such as twenty-five and twenty years do not normally provide an interest rate advantage over the thirty year term rendering them “functionally obsolete” although there may be exceptions based on the consumer's commitment to a long term plan.

Fifteen year amortized mortgages have great advantages over thirty year terms; shorter term pay off, lower interest rate and rapid equity build up. There is one glaring problem with them as an option for most home buyers. Because of the shorter term, the monthly payment is significantly higher than that of the thirty year amortization; so much so that the fifteen year payment is out of reach for most home buyers. The fifteen year loan is best suited for those with upward employment mobility who are buying well below their means or those refinancing a home with substantial equity or significant cash reserves.

Consideration should be given to possible unforeseen financial setbacks causing the monthly payment on the fifteen year mortgage to become a serious burden. In such events, the only recourse is an expensive refinance to a thirty year amortized mortgage which only works if the borrower's qualifications have not been compromised by the negative events. If the objective of the fifteen year term is to realize an early pay off or to build equity at a faster rate, there are other alternatives. Standard mortgages today have no prepayment penalty. In other words, any payment in addition to the required monthly payment is allocated to the principal loan balance. The result is an early payoff and lower amount of interest paid over the life of the loan. Many home buyers make their mortgage payment twice each month.

For example one half of the mortgage payment is paid before it is due on the fifteenth of the preceding month and the other half on the first of the month when the entire payment is due reduces the pay off term from thirty years to twenty-two years . The mortgagee is not paying more, just making half of the payment early. Interest is only charged on the mortgage balance so in effect paying early reduces the interest accrual; therefore, shorting the pay off term. In addition, one supplementary mortgage payment per year (sometimes at tax refund time) further reduces the amortization to eighteen years. Most loan servicers will readily accommodate this arrangement. The effect of this strategy is that it can accomplish nearly the same equity and pay off result as the fifteen year amortized mortgage without the high monthly payment obligation.

The consensus is inflation and supply and demand factors work in contradiction to low property values ​​and are likely to push property values ​​higher in the near future. The fifteen year mortgage is a practical strategy for those in a stable living and employment environment. Fifteen years is not very long over a lifetime and the equity in a home with no mortgage can contribute to a very comfortable retirement.

Buying a Home? Use Your Bank Statements to Qualify

If you're buying a new home or just refinancing an existing one it's important to be prepared; get all your ducks in a row before you begin shopping for a lender. When you do find a lender you want to work with, and a broker you think you can trust, make sure you're both on…

If you're buying a new home or just refinancing an existing one it's important to be prepared; get all your ducks in a row before you begin shopping for a lender. When you do find a lender you want to work with, and a broker you think you can trust, make sure you're both on the same page before he submits your loan. Once the engineers get a hold of it it's difficult to change things, and once the underwriters get it, it's impossible.

One of the first things you should do is figure out your income situation. Who will be the primary borrower and how are you going to prove your income. Lenders consider the borrower with the greatest income to be the primary borrower and sometimes that creates a problem. What do you do if the one who makes the money has the worst score? That's a hard one to work out, but there may be a way around that.

Sometimes borrowers have multiple sources of income and their W-2s only show part of it. If that's the case with you, you might try using bank statements in lieu of Full Doc. If you do this, you have to have your W-2 income directly deposited into your bank account or you can not use it. How this works is pretty simple. Your Loan Officer will simply add up all your deposits for twelve months of statements, then dividend by twelve. Whatever that number is, becomes your monthly income figure. Some lenders will require eighteen months or two years of statements, usually to be determined by the loan to value you're using. When you present your statements you have to show complete statements, even if it's a hundred pages. The lender needs to make sure that your deposits are not just moving money from one account to another. I once went through nearly three hundred pages and it was not fun. If you do this program then you can choose who will be declared as your main income earner and primary borrower so long as the story makes sense. If you claim your wife is the fireman who made all the money and you're the housewife it might be a tough sell to the underwriters. If you have a lot of NSF, or non-sufficient funds on your bank statements you may not be allowed to use them. You'll just have to ask your lender. Each one will have different guidelines about this.

What happens if all your money is in a business bank account, can you still use those bank statements? That will also depend on the lender. The ones I worked for allowed it so long your mortgage was paid from that account. Or if you did not have a mortgage you had to be able to prove your other bills were paid from that account.

And there you have it; bank statements in Lieu of Full Doc. It requires a lot of paperwork and is a serious pain but it just may get you the best possible rate on your loan. Before you go this route make sure you do the numbers first. Add up all the deposits, divide by twelve and then see if that is enough income to do the loan. Good luck and happy borrowing.

Adjustable Terms Of Mortgage Loans

Mortgage loans can be incredibly useful if you are interested in buying a house. Through the use of a loan, you can buy a property that is far more valuable than you would be able to buy if you were to use your personal cash to make the purchase. Before you enter into an agreement…

Mortgage loans can be incredibly useful if you are interested in buying a house. Through the use of a loan, you can buy a property that is far more valuable than you would be able to buy if you were to use your personal cash to make the purchase. Before you enter into an agreement to borrow a large sum of money to buy a property though, you should learn about the various terms of these agreements that can be altered to ensure you get a deal that suits your unique financial situation.

One of the most important aspects of any loan is the amount of interest the borrower must pay in order to obtain the capital. The interest charged by lenders can vary substantively from institution to institution and the amount paid by the borrower over the life of the agreement can also vary to a great extent.

For this reason, you should review the offers of multiple lenders prior to borrowing any money. By doing so, you will be able to identify the lenders who are offering capital to their clients at the cheapest rates and you will be able to save a substantial amount of money over the life of the contract.

Most lenders offer loans to their customers with adjustable mortgage rates. Since lenders can easily raise the interest rates on the loans they hand out to greatly increase their profits, you should do your best to obtain an affordable fixed rate mortgage. By doing so, you will know exactly how much you will be paying out over the life of the agreement without having to fear the possibility that your bank will pad their profit margin by charging you obscene amounts of interest in the future.

The terms applied to a contract can also affect the suitability of a loan for you. For instance, the amount of time you have to repay the funds you borrow can greatly affect the suitability of a mortgage relative to your financial needs. Most people require thirty years to pay back the capital they borrow and then seek out contracts that give them this allotted time to do so.

The frequency of payments may also be a factor you should take into account prior to signing a contract. By choosing a mortgage that allows you to pay at times that are most convenient for you, you can easily reduce the amount of financial strain you will face over the life of the mortgage.

The required down payment associated with borrowing can also be an important factor you should take into account. Depending on your credit score and the current condition of the financial markets, the amount of money you must pay up front can greatly vary. Also, if you are interested in possibly paying back the funds you borrow at an earlier date than is required by the contract, you should search for a lender who does not apply prepayment penalties to customers who wish to take this route.

By keeping all of these factors in mind as you search for the best mortgage loans to suit your needs, you can choose to work with lenders that offer loans with the best available terms. Once you have found a lender who can give you a deal that suits your financial needs, you can be confident that you will be able to pay back the money you borrow while saving money in the process.

What You Need To Know About Commercial Mortgage Loans

These types of mortgage loans undersigns assets as security. It is similar to the normal home loan where the lender is in charge of the titles of the asset. The loan mortgage lender may decide to dispose of the asset if you default. They are integral to the funding of commercial real estate schemes. They…

These types of mortgage loans undersigns assets as security. It is similar to the normal home loan where the lender is in charge of the titles of the asset. The loan mortgage lender may decide to dispose of the asset if you default.

They are integral to the funding of commercial real estate schemes. They represent the debt secured by the current or potential property. Adequate debt incurred as a result of attractive interest rates can increase the yield of the scheme. This will be achieved by reducing the investors' equity, reducing risk and allowing more cash for investor capital for future schemes launch. It is there prudent that you find a financial lender that is favorable to the successful financing of the scheme without applying you stake.

Normally this type of refinancing is meant to enable you purchase a place to do business. Amount borrowed can also be used to purchase a commercial place to let. You can also decide to use the borrowed amount in building funds for you business related costs.

The repayment of this loan lies squarely on the shoulders of the trader. The sole borrower runs a risk of losing his personal property in the event of a foreclosure. If the loan was borrowed by partners then the liabilities extend is spread across the members.

In the case of a limited company, the liability lies with the relevant business and not the people operating it. This deviates from the liability attached to sole proprietorship businesses and partnerships which place the liability on the owners of the business. The company offering the loan may ask for personal guarantees and surety if the business setup in the profit-making property consists of limited funds.

If the amount borrowed is guaranteed against assets then the guarantee giver runs a risk of losing his property. There are many types of mortgage loans that one may opt for. The own use commercial loan is used by a sole proprietor to finance his own business.

While the commercial investment loans let borrowers put their money to lease or rent. The only catch in this type of financing is that the borrower has to make extensive citations related to the utilization of the leased asset. Before being financed the lending company will assess the credibility of both the company and the business owners.

In the case of a limited liability companies the credit details of the top management and any other relevant governing body will be assessed. To minimize the risk of defaulting, most lenders are interested in the money involved and not the commercial property. A foreclosure is a very expensive exercise that does not benefit either party. This explains the reason why lending companies try to minimize the risks associated with defaulting.

These types of mortgage loans are usually dependent on two key factors. The main factor that will be considered is the prevailing interest rate. Secondly the amount of risk that is perceived to be incurred by the lender will also have to be considered.

What You Need To Know About Refinance Mortgage

You need to be sure what influence comes when you need to refinance mortgage. There are a number of elements that need to be studied to determine the rates you are likely to get. The major thing here is the size of the loan you intend to go for. The other thing is your credit…

You need to be sure what influence comes when you need to refinance mortgage. There are a number of elements that need to be studied to determine the rates you are likely to get. The major thing here is the size of the loan you intend to go for. The other thing is your credit score. It would mean that you either get the loan or miss it altogether.

You always need to know that the advertised rates are not always as reliable. According to experts, going for a mortgage refinancing, you will be able to notice that only around 10 percent of the applicable get to gain from them. You need to know that most of the low rates that could be displayed are only meant to lure you. This is the reason you do not always need to fall prey to them.

You also need to make sure that you understand the kind of option you want to go for. You need to make sure that the loan details are disclosed to the loan officer who will provide facilitation for you to gain from the best available rates. You need to provide details on how long it would take you to repay the loan fully as well as the total amount you would need.

You need to weigh the options especially you accept to take an offer. You need to provide immediate information concerning whether you are able to meet the conditions or not. This is for them to consider exempting you from having to pay some of the supplementary fees.

Before you decide on a lender, you need to go around shopping for the best. This is to gain information on such details as the credibility the lender holds. You need to make sure that you have sufficient time to understand the terms and conditions of the mortgage. This is especially if you are novel to the industry. This is one of the best ways to avoid any heads in future.

It is a good idea to analyze through the rates available. When the rates drop at a margin of between 1 and 2 percent, it could be a good time to go for a mortgage refinance. You could also think of considering other options such as going for home equity loans. This is especially if you have such accounts like checking, credit or prefer for direct payments.

Ensure that you consolidate any other previous debts. You will be able to use mortgage refinancing as a pat for you to be able to go around debt consolidation into a single payment. You also need to ensure that the decreasing rates are considered before taking the step to consolidate the debts.

If you are to stay in the particular home for more than 5 years, you will be able to enjoy some good refinance mortgage rates. This is because you will be there for an extended period. You could also decide to limit the mortgage terms by making larger monthly repayments. This is to mean that you could be able to pay off the loan faster as well as enjoy lower rates. With this information you are sure of making the right decision in relation to the process.

General Information Regarding Current Mortgage Loans

Mortgage loans are a type of loan meant to finance the purchase of a home, with a specified repayment period and interest rates. The home on which it is taken out often serves as the collateral, with interest and other costs running typically over 15 to 30 years. The lender may be a bank, financial…

Mortgage loans are a type of loan meant to finance the purchase of a home, with a specified repayment period and interest rates. The home on which it is taken out often serves as the collateral, with interest and other costs running typically over 15 to 30 years. The lender may be a bank, financial company or private agency and they use the legal documents of the house in question to determine the interest rate.

There are various places to use as starting point when sourcing for this type of loan. There are lenders websites with this type of loans as their specialty, and you may also walk into a financial house that deals with mortgages and get needed information. You will be provided with information like the rate of interest charged which will enable an individual to compare with other lenders.

A form may be issued for the applicable to fill out. It may contain information like the purpose of the loan, estimate of home value, credit history, current monthly income, borrower contact details and the amount needed. This also prepares the applicants mind on what to expect.

There are various types of mortgage loans available for home buyers, but the popular ones are the fixed rate, adjustable rate and interest only mortgages. Listed below is what they are all about.

Fixed Rate Mortgage: This is suitable for people who are going to live in the home for a very long time. It has a fixed interest rate as the name suggests for the entire loan period. This means that interest here remains the same as long as the loan is on.

The interest payments are paid up-front, so that only a small amount of money is needed to clear the principal during the first few years of the loan term. One of the main benefits of this is that it offers the lowest monthly payment when compared to others.

Adjustable Rate Mortgage: This is most beneficial to people who always shift their homes and want low interest rate. Here, the interest is fixed for a certain number of years, and then it changes every year afterwards. After the initial fixed-interest period, the rate will adjust based on a predetermined agreement.

Interest Only Mortgage: It is structured like an adjustable mortgage, and it allows a buyer to pay only the interest for the first few years of the loan. The payment may be based on only the interest rate, so the principal is not paid down. Interest only is most beneficial to buyers who believe their income will increase in years to come.

There are various reasons why people choose to own a home, like they get to pay cheaper monthly fees with the prospect of finally becoming home owners. Another reason is to build equity which gives them the right to live in the home. They may also be trying to establish credit records, as on-time payments will help build a higher credit score.

There are many options available for mortgage loans but the important thing is to do accurate research. Be sure to understand the contract and make sure you are not missing out any vital information, as this may backfire. With an organized approach, an individual can sail through the loan application process and get the needed approval to make the dream of a new home, a reality.

Getting a Mortgage – Be Aware of Deceptive Practices

Here are some mortgage Insights and pitfalls to avoid. Be aware of deceptive practices when getting a mortgage. Have you ever heard a pitch from a mortgage salesman that went something like this: “If I could lower your monthly payment by $ 300 dollars, would you refinance your mortgage with me?” This may not sound…

Here are some mortgage Insights and pitfalls to avoid. Be aware of deceptive practices when getting a mortgage.

Have you ever heard a pitch from a mortgage salesman that went something like this: “If I could lower your monthly payment by $ 300 dollars, would you refinance your mortgage with me?” This may not sound like a bad deal, and it is not necessarily, but there is a quite a bit more to consider than just this.

Learn as much about the company you are dealing with as possible. Some brokers and banks pretended that they are able to get “deals” for you that are indicative of how much better their company is than others. The reality is, except for very infrequent circumstances, all banks / brokers are dealing with a similar cost of mortgage money. So any deal they are able to offer should be similar to other qualified operations. They are not able to get you a cheaper loan based on their cost of capital. The only way they can compete financially is on the amount of fees they charge.

Of course, they can compete on service, competency, advisory capability, etc., and that is indeed worth something. But that needs to be evaluated separately from any discussion of saving X dollars a month, or how good the deal the current pitchman has. A knowledgeable salesman / banker can help identify your needs and guide you into the right product at the right time. This is much different than one who is touting huge savings, regardless of your situation.

So, back to saving $ 300 a month claim – First, all other factors must be equal for it to have validity. The loan must be for the same remaining term that you have remaining on your current loan. If you are paying $ 1,500 a month, with ten years left on your current mortgage, then the comparison must be with a ten year loan. If it's made with a typical fifteen year loan time-frame, of course the payment will be significantly lower, since it is spread out among many more payments. If you look at the total costs of the new loan, you may see they may now be higher. So that needs to be checked. Most people would probably catch this. Often, however, multiple changes are made in the loan at the same time so the benefit is nowhere near as great as it first appeared.

For instance, they may be lowering your monthly payment, large through a switch to an adjustable rate mortgage, and secondly by increasing the term of the loan. Perhaps general interest rates have come down. This will be packaged as if you are saving big money on a monthly basis primarily because interest rates have come down. The adjustable feature itself drives the interest rate down. You are probably getting a quarter to half percentage point lower rate with the adjustable rate. But the reality is you are taking more risk with the adjustable terms to get the lower interest rate. Also, you are achieving lower monthly payments by spreading out your current loan further into the future. Is this what you really wanted to do?

Do not forget that an adjustable rate mortgage is only appropriate for those who expect to be in their home for less than five years, and ideally for less than the adjustable rate period. It's true you may benefit in the short run by switching to an adjustable rate loan. However, you are betting that interest rates will stay reasonably low by the end of the adjustable timeframe. This risk can be glossed over by those eager to get you to enter into a new mortgage transaction. It's important to appreciate the true risks. There is a significant chance that interest rates will be much higher in five tears than they are now. Only those in excellent financial condition, able to withstand a large interest rate and payment increases, should take risks of this type.

Another trick is to quote a monthly payment without the equivalent tax and insurance payments built into the quoted payments of the loan. In other words, you are quoted a loan without tax and insurance included in the payment, for comparison with your current “stub” payment, which does include those charges. Perhaps those charges have been purposely underestimated by the new mortgage company in their calculations. It is not until closing that the true charges are “uncovered”. You may then realize that the benefits of the new loan have been overstated. This is why it is so important to have a bank / broker that you can trust, as they will steer clear of these questionable tactics.

New financial rules, such as Restoring American Financial Stability Act of 2010 (RAFS) as well as new RESPA rules, are being put in place to help you combat deceptive practices by mortgage professionals. Make sure you are just as aware of the rules and the protections they equal as the mortgage products that are being sold to you.

Again, it is important to have an honest and knowledgeable mortgage advisor to help you through the mortgage process. Just as important is to find one whose compensation is not tied to the terms of the loan.

For more information related to mortgages and many other personal finance topics please go to http://www.best-financial-advice.com .

A Broker’s Guide When Looking for Mortgage Leads

Creativity is one important skill mortgage brokers must have to manage a successful business. This will help them establish client credibility and secure new businesses. Brokers must continue to come up with unique techniques helping them stay ahead of the competition. One way they do this is by finding mortgage leads. If you are a…

Creativity is one important skill mortgage brokers must have to manage a successful business. This will help them establish client credibility and secure new businesses. Brokers must continue to come up with unique techniques helping them stay ahead of the competition. One way they do this is by finding mortgage leads. If you are a newbie in the industry and are not aware of what these are, read on.

What are Mortgage Leads?

A mortgage lead is the term used when referring prospective mortgage borrower or customer to a mortgage lender or broker. Brokers usually find leads from many sources such as advertisements, websites, and referrals. There are even cases where a third party compiles these and give them to the lender or broker. Like any other businesses, customers may come from a wide array of sources.

If you are a broker, this should be an important component of your business. Reliable mortgage leads translate to profit. Look for reputable companies providing these. Getting refinance mortgage lead is also great, as customers who usually have trouble paying loans look for refinancing services.

Here are some useful tips you should remember when looking for mortgage leads:

– Read up on related articles and know your market

Know who your target market is. You can attract borrowers with different credit history if you provide full-service operation. You will need to research on specific clients if you have plans of becoming a specialized lender.

Others sources may also provide leads depending on credit scores. These firms can rate credit scores as excellent, good, fair, and poor to help find clients. There are also those who filter clients based on loan type. They categorize leads into refinance, purchase loans, home equity, debt consolidation, and home improvement.

– List down all your expenses

Assess your operating costs before buying mortgage leads. Start by listing down all your business expenses. You are in a better position to buy leads if you have extra capital to share. After this, you may now look for great lead generation sources.

– Make use of the registry of deeds

One way of finding reliable leads is through the internet. Most cities and townships have free website listings on mortgages and deeds. Know what you are looking for. You can not get solid results by searching the database blindly.

Here are the kinds of mortgages you have to look out for: ones with big principal balances, ones that are about to change, and ones with prepayment penalties that are about to expire.

– Advertise!

Come up with an attention-grabbing and believable pitch. Include words like 'low-fees', 'guaranteed' and 'pre-approval'. These words lure potential consumers.

– Finding Leads Online

Brokers may find good leads online. There are many sites offering affordable leads. Most of these even offer refinance mortgage leads. If you are looking for online providers, make sure the one you get offers flexible pricing options, makes use of methods generating quality leads, and transparent sourcing with leading management programs.

The Mortgage Broker and the Client

In today's tricky housing market, it is important to make sure that you are getting a loan that fits your particular financial circumstances. The last thing you want is settling for a loan that is incomensurate with your budget and that you can not afford. However, a lot of the time synthesizing all this information…

In today's tricky housing market, it is important to make sure that you are getting a loan that fits your particular financial circumstances. The last thing you want is settling for a loan that is incomensurate with your budget and that you can not afford. However, a lot of the time synthesizing all this information can be very difficult if you are not an expert (and most people are not). This is where a mortgage broker can step in and offer their expertise, knowing full well the importance this decision has to your future and the pressure and anxiety that inevitably surfaces with the decision.

The professional mortgage broker has become increasingly popular in recent years primarily because of some of these difficulties. They act as an intermediary for the homeowner and potential lenders, analyzing their clients' financial standing with a thorough and in-depth professional consultation in order to determine the best possible lending partner.

Most professionals offer multiple services, each of which are very different and demand precision and good decision making, including loans for first-time home owners, fixed-rates, refinancing, residential loans, Federal Housing Administration loans, and jumbo loans. Perhaps the most important of these services is for the first-time homeowner. The largest obstacle of a first-time homeowner is figuring out what exactly they can afford, since this is probably the most significant (and complex) investment they have ever made. The professional mortgage broker is able to guide the first-time borrowers through this stressful and exciting process, where otherwise the owner may very well be overwhelmed and be pressured into making a regretful decision.

Another important service a mortgage broker can offer is in refinancing. Due to current government regulations and historically low interest rates, now is an ideal time to refinance and see immediate savings. Through refinancing, people can lower their monthly lending payments, consolidate debt, and even pay off those pesky credit-card companies that have been damaging their credit scores for so long. And anyone can appreciate that.

A fixed-rate, sometimes just called a “plain vanilla” loan, is just what is sounds like – fixed. The borrower is going to pay the same amount of interest every month regardless of ulterior circumstances. This is, of course, the alternative to the fluctuating interest of an adjustable rate, which changes with respect to an index that reflects how much it costs the lender to borrow on the credit market. Outside of the United States, fixed-rate loans are not as common, but in the US they have become a very popular option. The most common terms are fifteen-year and thirty-year, but there are now shorter terms available and even forty and fifty-year options. Again, however, the average borrower will have a hard time deciding which option is the best fit for their budget and unique financial circumstances. A professional mortgage broker will help synthesize all the information and often-baffling mathematical equations. Sometimes it's okay to ask for help, particularly when your financial future is on the table.

Hunting For The Best Mortgage Rates

There are several sources of information youought to check up when looking for cheap and affordable mortgage rates. Several companies offer different prices for their loans and so it is up to you to compare the services on offer. You need to select a company which will understand your needs and be able to cater…

There are several sources of information youought to check up when looking for cheap and affordable mortgage rates. Several companies offer different prices for their loans and so it is up to you to compare the services on offer. You need to select a company which will understand your needs and be able to cater for them. Ensure you have a comprehensive plan so that selecting an appropriate company is not too much of a hassle.

You should get yourself updated with the recent changes in the housing market. It is only until you understand the ungoing rates being charged by financial institutions will you be able to make the right choices. Therefore, visit a newsstand and collect recent housing magazines and journals as well as their back issues. You can easily obtain comprehensive information from these sources which will guide you towards making the right decisions.

However, the best way for you to get the information you require is by speaking to a financial expert. Your banker or any close friend can easily give you reliable information about the market which will help you make the right choices. Speak to the people directly involved in the financial markets because they may be able to help you using their knowledge. They can find you a suitable company which will offer you the best rates to finance your home.

There is also another equally effective source of information. The telephone directory will allow you to have direct communication with the relevant professionals who will give you insightful information. The telephone directory unlocks several opportunities for you because this is the forum in which you can ask any relevant question and get an answer.

Therefore, after you are well informed of the market, you should search for the appropriate company and settle for the one with the best reputation. Those companies which are well known will offer you good deals and attractive financial packages which will be able to accommodate all your financial needs.

Be inquisitive and seek the personal opinions of friends or other people close to you. Word of mouth is an effective way of disbursing information because you can easily be directed to the right financiers on the advice of your friends. Seek the experiences of others who have taken out mortgages before so as to understand the best companies to do business with.

The internet has a vast amount of information which can assist you tremendously when looking for the right financiers. You should browse through the various websites and collect all the information you can on the housing market. Several mortgage companies have online profiles which gives easier access to the information that matters.

Remember that before selecting a company, you should compare their services over the internet with those of contemporary companies. You should search for those financiers offering the best mortgage rates in the market so as to be confident of the services you get. This way, you are assured of getting a good financial deal for your home financing.

Purchasing a New Home or Refinancing an Existing One, Should You Pay Points?

When the question of paying points comes up, most borrowers will immediately say no. After all, no one wants to pay thousands of dollars on top of closing costs. To answer the question of points you first need to calculate what kind of savings it means to you. Every lender has a beginning rate with…

When the question of paying points comes up, most borrowers will immediately say no. After all, no one wants to pay thousands of dollars on top of closing costs. To answer the question of points you first need to calculate what kind of savings it means to you.

Every lender has a beginning rate with zero points that they can offer you. You will also be given an opportunity to buy down the rate by paying the lender points that are added on top of the costs to close your loan. Find out from your lender how much lower of a rate you get if you were to buy it down by paying one point. While you're at it, get the rate for paying two points and so on. On every rate sheet there will be a point where you get maximum bang for your buck, as well as a point where it does not make any more sense to pay any more points.

If you are borrowing $ 300,000 your payment with no points will be about $ 1,850. If you were to pay two points (2%) and be able to lower your rate a full percent, say from four percent to three, your new payment would be about $ 1,700. Even though your loan amount would increase $ 6,000 to accommodate the 2 points (2%), you're going to be surprised at the results. Just by your willingness to pay the 2% (2 points) you save yourself about $ 150 each month. That adds up to $ 54,000 in savings over the life of a thirty year loan. When you look at it this way, why would you not pay any points?

Whether you are purchasing a home or refinancing an existing one, if you only plan on staying in the home a few years you may not want to pay points. You will just have to calculate it. On that same loan of $ 306,000 that saves you $ 150 a month, you will have to stay in the home for 40 months to make back the $ 6,000 the points cost you. After that the rest is pure savings. If you're going to move in two years you may want to pay just one point, maybe less. To do the calculations you need to use a mortgage calculator. If you do not have one you can buy one anywhere that sells calculators, or you can easily Google free mortgage calculators, and use that one.

When you are doing your own calculations make sure you increase the loan amount by the amount the points cost unless you are going to pay for the points out of your pocket. People do not usually do that on a refinance. It's usually done when someone is buying a house. Just start inputting the numbers until you find the largest savings at the lowest cost.

So, the next time you are asked to pay points, do the math and see if it will save you money on your loan; it usually does. Good luck and happy borrowing.

FHA Loans and You

A reputable financial mortgage company is a great resource for getting FHA loans that are affordable, simple, and attainable. This financial institution can provide low-income families with mortgages that are backed by the Federal Housing Administration and provide them with the opportunity to have a safe and comfortable environment to call home. If you believe…

A reputable financial mortgage company is a great resource for getting FHA loans that are affordable, simple, and attainable. This financial institution can provide low-income families with mortgages that are backed by the Federal Housing Administration and provide them with the opportunity to have a safe and comfortable environment to call home. If you believe that this situation would be ideal for you and your family, contact the offices of a professional financial mortgage company for more information. They can get the ball rolling for you.

Those who can easily qualify for a mortgage with a reasonable rate are usually the only ones who are able to achieve home ownership. To add to the problem, the recent difficulties with the real estate market have made the process of home ownership that much more difficult. However, some families have found an answer to their dilemma by obtaining a mortgage that is backed by the Federal Housing Administration. This type of mortgage was created to help low-income families fulfill their dreams of owning a home. Although it may seem like the process of getting FHA loans is complex, there are experts that will explain the entire process to you so that you can get the results you want.

FHA loans may not be for everyone; however, they help thousands of Americans start a new beginning every year. If you are ready to put your financial future in the hands of knowledgeable, experienced, and ethical mortgage agents, choose a financial mortgage company that will work hard to find the best solution for you. There are many benefits to FHA loans, including:

– Low closing expenses
– Easy to qualifications
– Low down payments

If you're interested in FHA loans, call the offices of a financial mortgage company and set up a time for a free initial consultation. You can speak to a specialist and learn about eligibility, benefits, and the type of homes that qualify. You can also get information on the options available to you, as well as competitive rates in the housing market. You may also be able to make contact by visiting their website to learn more about the lender. For your convenience, you may even be able to send an e-mail to allow someone to get in touch with you regarding your application. Assistance with this process can be easy to find, if you know where to look for it.

If You’re Buying a New Home or Refinancing One Here Are Some Facts About Your Credit

When you are searching for a lender it is a good idea to do it all within a thirty day window so your credit score only takes one hit. Some unscrupulous lenders will caution you to not let anyone else check your credit after they do or your score will go down. If your score…

When you are searching for a lender it is a good idea to do it all within a thirty day window so your credit score only takes one hit. Some unscrupulous lenders will caution you to not let anyone else check your credit after they do or your score will go down. If your score drops, the further caution, you may not be able to get that good rate anymore that they were promoting.

That's a scare tactic and do not fall for it. Brokers who fear others competition will tell you that you will not shop around. Rather than playing head games with you what they really should be doing is giving you the lowest rate they can and be honest about it. By law, when a lender checks your credit for either the purpose of buying a house or a car, once you take the initial hit, you have thirty days to shop around before you can take another hit. If someone should suggest otherwise, run the opposite direction. Because of this rule it's a good idea to have a list of everyone you want to check your credit already lined up so you can get it done all at once. Do not bother telling one lender to use the credit score and report that you got from another lender; it will not work. Each lender has to own their own report generated by their own computer system and they can not enter another's report and use it. However, if you are considering another lender and you do not want them to check your credit yet, you can always tell them what your last time was it checked. That way they can give you a secure quote. Just keep in mind that the quote they give you will be based on the information you tell them. In other words, if you tell them you have a thirty day late on your mortgage, but it turns out you have two thirty days lates, you can not hold them to the quote they have you. Or if your score drops due to being outside the window, you can not hold them to the quote either. As long as the score you quoted them was from the three bureaus, a tri-merge report, they should be able to give you a quote based upon that report. Just keep in mind that at some point you will have to give them permission to run your report if you want to seriously consider them.

I am often asked how much their score will drop when they have their credit checked, but I really can not tell them, there are just too many variables involved for me to make that kind of guess. Some of those variables are: how many revolving accounts open, how long accounts have been opened, how close those accounts are being maxed out, and how much of their credit is newly received credit. There are other variables as well and as you can see, it would be impossible for anyone outside of one of the reporting agencies, like Transunion, to tell you how much your score will change. In fact I was told by a representative from Transunion who came to our office to educate us that they could not even make an educated guess. It all depends upon a computer algorithm that takes all the variables in account and it's far too complex for anyone to make a real guess.

So, do all your checking in the same thirty day period and you will not have to take more than one hit. Remember, each lender will have to generate its own official report. And, if you check your score on the internet it will not affect your score. Just make sure the report you get is a tri-merged report from the three bureaus, Transunion, Experian, and Equifax. Good luck and happy borrowing.

Mortgage Originators and RE Agents to the Lifeboats! Why Mortgage Rates Are Going MUCH Higher

Think of the bond market like the Titanic. So far, so good. Pretty smooth sailing laTely …. But there is a VERY BIG iceberg and its dead ahead. The only difference it's that it's not in the fog … its right out there for anyone with eyes to see. It's time to make sure you…

Think of the bond market like the Titanic.

So far, so good. Pretty smooth sailing laTely ….

But there is a VERY BIG iceberg and its dead ahead. The only difference it's that it's not in the fog … its right out there for anyone with eyes to see.

It's time to make sure you have a place in a LIFEBOAT.

If you're a mortgage or RE professional, that lifeboat is an income that does NOT depend on interest rates in single digits. Because they will not be in single digits much longer.

The iceberg is so close that there's no question that we'll hit it … the only question is which side do we hit?

The iceberg is UNSUSTAINABLE GOVERNMENT SPENDING and it has very sharp edges on BOTH sides …. on one side is the Federal Debt Ceiling and on the other side is Stagflation. I originally wrote about this on Memorial Day 2011, there was a battle in Congress going on over whether or not to raise the debt ceiling.

Bnet.com had a good article on the subject back then. The title is “Smash the Debt Ceiling and the Roof Falls In On Housing”. It's now March, 2012, and Congress is facing ANOTHER battle over the debt ceiling which, of course, is now much higher than they expected. As long as the government continues to spend more than it receives, it's only a matter of time before inflation will become a BIG problem, and the inflation premium will drive rate to double-digits.

If we keep raising the debt ceiling, who buys the bonds to finance the huge deficits that stretch forever into the future? Just a few years ago the unfunded liability of Social Security was in the vicinity of 3 TRILLION and the unfunded liability of Medicare was over 26 TRILLION. As of early 2011, the combined unfunded liability of those two programs along had risen to 96 TRILLION. As I write this article in March 2012 it stands well over 100 TRILLION … and all the analysts agree that the Obamacare program will make it worse. The cost overrun estimates are just now starting to come in and they are STAGGERING.

And These “Unfunded Liability” numbers DO NOT EVEN COUNT the massive debt that is ALREADY on the books. So back to my last question … who buys the bonds if we just raise the debt ceiling and keep on spending?

You got it … the Fed.

For a sobering read on what happens when governments finance their debt by printing money or the electronic equivalent (as the Fed and the European Central Bank are doing right now) I suggest you read “When Money Dies”. It's an eye-witness account of what happened during the Hyper Inflation in Weimar Germany from 1921 to 1923. as told by reports from British diplomats stationed in Germany and memoirs of local residents.

Think of the “stagflation” of the Jimmy Carter years multiplied by BILLIONS. I'm not exaggerating … it took a 1 mark stamp to send a letter across Germany as 1921 opened. It took 40 BILLION marks to send that same letter as 1923 came to a close. The German Mark was completely destroyed in 2 years once confidence collapsed.

If the Fed continues to create dollars out of electrons to make a market for all the debt spewing from the Treasury, we will be WISHING for a return the 13% (official) inflation rate we experienced in the late '70s. (That's when the 30 year mortgage rate went to 18% …. yes, 18% …. really)

None of us will be able to earn a living in the mortgage business when that happens.

If you know you're a winner, then you know you can win big again if you can just find the right horse to ride and the right race to ride …. but you probably have to stop thinking of yourself as a mortgage loan originator, or as a real estate agent.

William James wrote that: “The greatest discovery of the 20th Century is that we can change the way we LIVE by changing the way we THINK”. As I said in the 'GET REAL' Memo, if we're willing to change your mind and think of yourself as a “solution provider” instead of a mortgage originator or real estate professional, then the local online marketing industry is a place where we can get back to the great income, the personal freedom, and the FUN that we all used to enjoy in the mortgage and real estate industries.

$ 78 BILLION dollars in local ad spending is shifting from traditional media to the Internet over just the next few years. Local business owners know they need to make that move, but they do not know what do …

Now, when 49 million business owners do not know what to do, that's a BIG PROBLEM … and a BIG PROBLEM means a BIG OPPORTUNITY for those who can provide the solution. Change is an inevitable part of life. Those who embrace change and learn to adapt can re-invent them into exciting new online careers ….

… even old Baby Boomers like me who are a bit “technology challenged” because there are plenty of sharp young techies out there who understand online marketing, but there are not a lot of great communicators and connectors, who can help equally tech challenged local business owners make this big shift into the 21st century.

The skill set and mindset of successful real estate and mortgage professionals is particularly well-suited to the local online marketing industry. And it is a wide open opportunity right now. There are a lot of very entrepreneurial ways to participate in this latest “online goldrush”.

I prefer being the “connector” between the needs of the local business owner and the solution providers that I work with, but others love the techhie stuff involved in video SEO, SMS text marketing, mobile apps for local buzz, creating Facebook Fan pages. … the list of ways to play is endless.

Mortgage rates Are going up … a lot. The Titanic IS going to hit the iceberg. It's only a matter of when. And when that happens it's going to really slow things down in the RE and mortgage industries.

You Will want a lifeboat.

But the good news is that a new day is just now dawning and revealing huge new opportunities in new industries being creating almost daily by the Information Revolution … like the local online marketing industry that did not exist even two years ago, but which presents such a huge and juicy opportunity now.

Some Questions to Ask Your Online Mortgage Broker

It is an imperative for everyone to get home buying right. Why? For starters, your house will be your most valuable investment, which in turn would mean that your home loan will be your most expensive debt. A mortgage broker's advice just might be the turning point in your decision-making process. For sure, you will…

It is an imperative for everyone to get home buying right. Why? For starters, your house will be your most valuable investment, which in turn would mean that your home loan will be your most expensive debt. A mortgage broker's advice just might be the turning point in your decision-making process. For sure, you will face a number of questions that only a mortgage broker can answer. Here are some of the most important questions that you can ask your mortgage broker.

How long has the property been up for sale? This question will provide you with important information regarding whether or not the pricing is okay. Asking your online mortgage broker this question can motivate him or her to try and carve out a good deal and earn their commission. When a house or property has been listed for around eight weeks, there is a pretty good chance that the seller would agree to a lesser offer compared to what they originally ask. This is based on the promise that since the house has been up for sale for quite some time now, the buyer might think that it is overpriced.

A mortgage broker can gain access to the reasons as to why the seller is selling his or her property. Ask your broker if the owner of the property would be willing to negotiate and settle for a slightly less amount. If that kind of information is unavailable to the broker, they can get it from the listing agent. It is always worth it to ask because your broker can help you cut the purchase price.

Have there been other parties that showed interest on the property? You need to know if there have been other offers from interested parties. This will give you a heads up regarding what the seller has turned down, allowing you to come up with a better and more irresistible offer. You can also try and ask your broker about the lowest price from the previous offer. They might not be able to specifically tell you, but still they can give you a hint at the least.

How do I know which home loan type is best for me? You need to come up with facts and present them to your broker when asking this question. That's because your broker will analyze your circumstance in order to come up with a list of probable mortgage choices. Not only will they tell you that a mortgage comparison will tell you what loan type will suit you; they will also help you conduct a mortgage comparison.

What mortgage tools do you offer? Mortgage tools are one of the many ways that can help you speed up the process of mortgage comparison. Usually, an online mortgage broker offers a number of mortgage calculators on their websites. While your broker may provide you with multiple calculators at your disposal, it would still be wise to check out other mortgage tools from other sites to get a better reference.