Freddie Mac’s HomeOne Mortgage

For many first-time home buyers, one of the largest obstacles that face purchasing a home is coming up with a large down payment that is needed to buy their dream home. Because of this, they are often left having to rent homes or apartments, rather than becoming homeowners. However, as more and more financing options…

For many first-time home buyers, one of the largest obstacles that face purchasing a home is coming up with a large down payment that is needed to buy their dream home. Because of this, they are often left having to rent homes or apartments, rather than becoming homeowners. However, as more and more financing options are becoming available in today's real estate market, mortgage lending company Freddie Mac has chosen to introduce the HomeOne mortgage, which offers a low down payment option of only three percent. Especialially aimed at low to moderate income home buyers, it's expected to help numerous people purchase the homes they've always wanted. Therefore, if you're in the market to sell my house quickly because of an illness, divorce, relocation, or inheritance, your timing may be perfect.

According to Freddie Mac, the HomeOne mortgage will be offered as an option to first-time home buyers starting on July 29, 2018. Along with targeting first-time buyers, the mortgage will have few if any geographic or income restrictions, making it possible for buyers across the country to realize their dreams of home ownership. Likewise, it will also make it much easier for those wanting to sell their homes, since this will bring many new home buyers into the market. As a result, if you tell yourself it's time to sell my house due to a divorce, illness, or other reason that dictates a fast sale, chances are good you will have plenty of buyers lined up to make you an offer.

In many home buying situations, potential buyers find themselves facing a seemingly endless array of rules and regulations that have little if any flexibility. But with the HomeOne mortgage, large amounts of flexibility are built in to the program. Along with the three percent down payment option, the mortgage program also aims to promote various financial and social benefits that are attached to home ownership, which very help to create strong communities.

To ensure you will qualify for the HomeOne mortgage, it's important to remember that if a couple is applying for the mortgage, at least one of the borrowers must be a first-time homebuyer. In addition to this, it is also geared toward one-unit properties that will be a buyer's primary residence, so keep these details in mind when deciding to apply for the loan.

With a strong housing market available today and more and more buyers choosing to pursue their dreams of home ownership, there's no better time than now to sell your house. Even if you need to sell fast due to life-altering circumstances, you'll have no shortage of buyers waiting for you and your home.

The CADRED Of Obtaining A Mortgage

Since the vast majority of home buyers, take advantage of, at least, some degree of financing, and securing a mortgage, would not it make sense, if these individuals, were better, ready, and prepared, to prepare effectively? As a Real Estate Licensed Salesperson, in the State of New York, for over a decade, I have witnessed…

Since the vast majority of home buyers, take advantage of, at least, some degree of financing, and securing a mortgage, would not it make sense, if these individuals, were better, ready, and prepared, to prepare effectively? As a Real Estate Licensed Salesperson, in the State of New York, for over a decade, I have witnessed individuals, lose – out, on obtaining, the home, of their needs, and dreams, because they did not prepare properly, and put their financial, eggs, in order! With that in mind, this article will attempt to briefly consider, discuss, and examine, using the mnemonic approach, what I refer to as, the CADRED of obtaining a mortgage.

1. Credit report / score: Before beginning the home – hunting process, wise potential buyers, obtain copies of their credit report, and fully review them, in order to identify any weaknesses, and / or inaccuracies! Before shopping, be certain your credit score, is, at least, in the 700's, or higher, so as to qualify, for the best available mortgages, and receive the most favorable rates. One can either do so, himself, or get a recommendation, of a quality mortgage professional, and ask them, for assistance, up – front! Do not wait for the last – minute, because, improving these scores, might take several months!

2. Assessment / evaluation: Have your mortgage professional, begin, by obtaining a pre-approval, so you know, what you qualify for, and look at houses, priced, accordingly, and affordably. In addition, hire a quality real estate agent, who will represent you, as a Buyers Representative / Agent, and provide you, with accurate competitive information / data, so you are certain, you do not over – pay, and have difficulty getting the desired house, to, Comp – out .

3. Down – payment: In most cases, you will need, approximately 20% of the purchase price, to put down, and get a mortgage, for the balance, although there are certain mortgages available, where less is required to be put down !

4. Reserves: In addition to the down – payment, accumulate necessary reserves, for contingencies, etc. Many lending institutions demand borrowers, demonstrate, they have, at least 6 to 9 months, worth of payments, in reserve. In addition, it is wise, to begin owning a house, with at least 2 other reserves, put aside, for maintenance / repairs, and renovations.

5. Earnings: You should understand, most lending institutions, want borrowers, to have earnings, which warrant the loan. There is a formula used, and discuss this, with your mortgage professional, so you know, what you might qualify for.

6. Debts: It is wise to pay – down, other debts, and avoid taking on, any additional credit (such as credit cards, loans, etc), because there is a loan, to debt, ratio, which is used. This should be done, in advance, and, by listening to the advice, of a trusted professional.

Pay attention to the CADRED of obtaining a mortgage, before hunting, for your desired home. Since, for most, their house presents, their single, largest financial asset, that does not make sense?

Important Things You Need to Know Before You Take a Home Loan

These have been specifically designed to not let you miss on the opportunity to make such dreams come true without having to pay all the money up front. However, taking a home loan may seem a complicated process. There are many factors associated with a home loan that you need to know before taking a…

These have been specifically designed to not let you miss on the opportunity to make such dreams come true without having to pay all the money up front. However, taking a home loan may seem a complicated process. There are many factors associated with a home loan that you need to know before taking a loan. The most prominent ones are listed below: –

1. The factors that may affect the eligibility criteria: The best way to calculate your home loan eligibility is by calculating the EMI. Typically, banks limit the amount to 40 and 50% of the borrower's income – including the basic salary and the diligence allowance. It also considers the credit history of a borrower. So if you have any existing loan or a poor credit score, the loan amount will be reduced further or you may have to pay an increased rate of interest on the home loan. People with a stable income, strong repayment capability and good credit score find it relatively easier to get a loan as compared to those with erratic incomes and poor credit history. Also having a co-applicable allows you to get a home loan easily.

2. Understand your loan type: Banks offer home loans in two interest types – the fixed interest loan and the floating interest loan. The fixed interest loan is a type of home loan where the interest rates remain same and borrower has to pay a fixed EMI through the loan tenure. On the contrary, in case of a floating interest rate, it varies as per the market conditions that lead to fluctuation in EMI amount more often. This is why home loans with fixed interest type have 1 to 2.5% higher interest rate than floating interest loans.

3. The interest rate: Whatever home loan type you choose, do not forget to negotiate on the rate. Although the banks would always have an edge, you'll have to haggle on this, especially if you have been a loyal customer of the bank and have savings account in the same bank. The negotiation would be a lot easier if you have a clear credit history. Beside, you may also be benefitted if you apply for the loan at the end of the month. Since the banks have business goals, they can be more flexible at this time if they want the business.

4. The fine print: A home loan agreement is a legal document that has all the details of the loan. If you think that not paying the EMI on time will only lead to troubles, you're wrong! There are many clues hidden in the fine print. Thus it is advised to read the final papers of the loan agreement carefully before signing the dotted line. Be careful about the loan processing fee, penalty charges, hidden clauses, service charges and the prepayment penalty, etc. Any negligence in this context would lead to bigger problems in future.

5. Longer loan term means costlier loans: As a general rule of thumb, the longer the tenure of the loan, the more will be the interest you are likely to pay over a period of time. Many can afford this rise but not everyone can do so. Therefore it is wise to apply for a loan amount that you can easily payback in the shorter tenure. This way you may have to pay huge EMIs but for a shorter duration and without propping up more interest rate.

These are quite a few things that you must keep in mind while applying for a home loan. Note that if you get a loan from one bank does not mean you are stuck there until the time your loan is fully paid. You always have the option to switch. You just have to pay the processing fee in this switching process and also the pre-payment penalty (if charged by your current bank).

The FUMAH Options For Financing A Home

Most homeowners, need to rely on some sort of financial assistance, and / or financing, in order to be able, to secure, the home, of their dreams, and needs. Since, for many, one's house, representations, their single – largest, financial asset, it is important, to discuss, and evaluate, some of the relevant capabilities, in order…

Most homeowners, need to rely on some sort of financial assistance, and / or financing, in order to be able, to secure, the home, of their dreams, and needs. Since, for many, one's house, representations, their single – largest, financial asset, it is important, to discuss, and evaluate, some of the relevant capabilities, in order to maintain all options and alternatives. Especially, with the escalating prices of most real estate, few are able, to proceed, with, an all – cash, deal, so, we will attempt, in this article, to briefly examine, discuss, and consider, using the mnemonic approach , the FUMAH options for financing one's home.

1. Friends / family: Depending on one's connections, and relationships, some home buyers, utilize the financial support, of friends, and / or family members. This may be, in order to have the necessary funds, for the down – payment, etc, required by a lender, or, at times, may be the entire funding source.

2. Usual: The most usual form of financing used, is referred to as Conventional Mortgage. This is, generally, a fixed – rate, combined with a term of the loan, of 30 – 40 years. Generally, one must put down, a down – payment, of 20%, plus certain other requirements of the lending institution. The advantage is, for the entire period of time of the loan, the homeowner knows, his monthly financial commitment, in terms of interest, and principal, repayment.

3. Modified: This form of financing, generally, is modified, in some ways, from the usual, or fixed – rate mortgages! Most often, the modification, is related to, the term of the loan, and, rather than 30 – 40 years, length, the length is shortened to 15 or 20 years. The advantage is, generally, a lower interest rate, paid, combined, with the total payments, significantly reduced. The challenge is, often, because there is a larger monthly payment, it is more difficult to qualify, for the same amount of the loan, while the advantage is, it gets paid off, more quickly!

4. Adjustable: Many use an adjustable mortgage, because, often, for the initial period (anywhere, usually, from one to 7 – 10 years), the interest rate, is lower, and, then, somewhat easier, to qualify for ! For those, expecting to stay, in a specific home, for a shorter – period of time, this may be a great solution, too! Obviously, the disadvantage is, the unpredictability of the rate, after the initial period, expires!

5. Hybrid: Some combination of the components, of the types of financing, listed above, create, what might be referred to, as a hybrid form! This may, include, some modification of the length, term, etc.

Wise Buyers understand and know, the best course of action, and alternatives / options, involved, in financing one's home. Will you prepare, and proceed, in whatever manner, best serves your personal needs, and scenario?

What Length Of Mortgage Is Best For You? 5 Options

Since, for most people, their house, representations their single, largest, financial asset, it makes sense, for potential homeowners, to become as knowledgable, as possible, in terms of their options, regarding financing, and purchasing their homes. The vast majority of Americans take advantage of using a mortgage, but, few, fully consider, realize, and recognize, their options,…

Since, for most people, their house, representations their single, largest, financial asset, it makes sense, for potential homeowners, to become as knowledgable, as possible, in terms of their options, regarding financing, and purchasing their homes. The vast majority of Americans take advantage of using a mortgage, but, few, fully consider, realize, and recognize, their options, and opting for the length of mortgage, which best serves, their needs, and personal situations. With that in mind, this article will attempt to briefly examine, consider, review and discuss, 5 options, and some of the potential, pros and cons , of each of these.

1. Traditional 30 – 40 year term: The vast majority of fixed mortgages, have a term of between 30 and 40 years. This is beneficial to most, because it typically offers a compromise between the rate of interest paid, and affordability of monthly payments. In addition, because most mortgages have no prepayment penalties, one can pay additional amounts, as is most beneficial, and, thus, reduce the length of the mortgage's life. One should understand, however, is, when one uses this term, his total principal and interest payments, will be significantly greater than the amount borrowed. This is remedied, to a certain degree, because mortgage interest, within certain limits, is tax – deductible!

2. 15 – 20 years: Reducing the length of the term, typically creates a lower rate of interest, being charged. However, it also translates, to higher monthly payments, and lower, total payments.

3. 7 – 10 years fixed rate / then adjustable rates / term: Those who are intending to remain in their present home for a shorter period, often benefit from this type of mortgage. It provides lower rates, and, often, makes qualifying for a particular amount, easier to do. The drawback, potentially, is after the initial period, if one remains in the present home, their rate will change, according to pre-determined terms, or they will need to refinance.

4. 1 year – adjustable: These types of loans generally offer the lowest initial interest rates, but, also, the least predictability, for the future. Of course, if one can only qualify, previously, using this form, or, intends, to relocate, very soon, this might be the best way to proceed.

5. Balloon / interest – only: There are sometimes interest – only loans available, for a specific period of time, and of course, since one is not paying down the principal, the monthly cost / payment, will be lower. However, it should be realized, you are not paying – down, what you owe, and doing so, brings the risk of future undesirable ramifications / results. In addition, these are usually referred to as balloon loans, because, at a specified period, the full amount of the principal of the loan, becomes due, and, one, must, either repay it, in full, or secure a new mortgage .

Based on one's individual circumstances and needs, it becomes possible to determine, the best mortgage to secure. Remember, the more educated and knowledgable, you become, the better decisions / choices, you will probably make!

Getting A Mortgage: 5 Steps For Ease And Success

Whether you are a potential home buyer, looking to find a home, of your own, or an existing homeowner, who seeks better terms, and / or rate on your mortgage, it's important, to know a little more about the process of getting the best one, at the best terms, which fits your needs, priorities and…

Whether you are a potential home buyer, looking to find a home, of your own, or an existing homeowner, who seeks better terms, and / or rate on your mortgage, it's important, to know a little more about the process of getting the best one, at the best terms, which fits your needs, priorities and situation. Since the vast majority of individuals, use a Mortgage loan, to pay for their house, I felt it might be helpful, to review, some things to consider, from the sunset. With that in mind, this article will attempt to briefly examine and consider, 5 steps, you may wish to consider following, to ensure this often – tense, stressful process and period, becoming somewhat easier, and more successful.

1. Check, and fully review, your Credit Report: ESPecially in today's atmosphere and environment, where there is so much Identity Theft, it's smart to begin, by doing this. First, review the report for accuracy, etc. Then, look at the items, and report, the way the lending institution might. Begin, by looking at your debt – to – income ratio. The desirable maximum for these changes, periodically, but if you keep it to about one – third (maximum), you'll probably be certain safe. Prepare about 3 months, or more, before you begin the process, and pay – down, your debt. Do not wait to the last – minute to do so. If you can do this, a year or more before, ir's even better! Look at the report, and consider, whether, if you were the lender, would you consider you, to be a good risk?

2. Repair: One of the primary reasons to begin Step One, as far in advance, as possible, is to give you the opportunity, to make any necessary repairs, and to strengthen your credit rating, as much as possible. Be careful to avoid asking or taking out any new credit during this period, because doing so, may harm or reduce your credit score!

3. Patially wait after steps one and two: Optimally, waiting a year, will get you the best results, but you should always wait, at least 3 or more months, after you've made your repairs and / or fixes, and / or paid – it – down, to best position yourself.

4. Stay away from any credit offers, etc, during this period: That offer you get in a retail store, which will give you, immediately, an extra discount on your purchase, is not harmless, but, rather, maybe negatively impact your overall credit. Keep your eyes on the target!

5. Be prepared for the down – payment: Most lenders will want to know where your down – payment, and other funds, come from. At least 3 or more months in advance, place your probable down – payment, in an account, you can clearly provide statements for, demonstrating your ownership, etc. Also, realize, most lenders seek borrowers, with a significant amount of other assets, etc.

A little bit of preparation, and paying attention to some relevant details, will generally make the process, go smoother and easier, and more successfully, If you really want and / or need that mortgage, do, all you can to be prepared!

Mortgage Home Loan Packages – Good Option?

Many Loan Options When you are looking for a home loan there are so many options out there in the market that it can get rather confusing. One of those options is a Home Loan Package. It's usually a bank that offers these types of packages and it offers a way to utilize a few…

Many Loan Options

When you are looking for a home loan there are so many options out there in the market that it can get rather confusing. One of those options is a Home Loan Package. It's usually a bank that offers these types of packages and it offers a way to utilize a few of the bank's services at a discounted rate. What the bank provides is a home loan and they add a few financial products. Sometimes a credit card and / or a transaction account with no fees.

These packages are quite attractive to buyers. Banks ensure the popularity of their packages by offering at least three products, usually the minimum needed to be eligible, to add to the home loan.

Sweeteners

It's a competitive market, particularly for banks considering they dominate the home loan market, so they can dangle the proverbial carrot on that home loan interest rate discount. Because they have you on board, do not be surprised to see further discounts added to your credit card interest rate, lower account fees and while you're there, you might as well take their heavily discounted home and contents insurance. It's all about savings.

The level of discount that will be offered varies between financial institutions, so it is essential to understand the pros and cons and weigh this against your circumstances.

PROS

All in One Place

If you have had a few different accounts and cards with numerous institutions you will find it a lot more convenient and manageable to have all your banking with the one lender. Given the lender has probably offered you savings on accounts, cards and your mortgage, it would not make much sense to have accounts and cards at a higher rate or transactional costs with other institutions.

More Discounted Products

As mentioned, the four major banks own a big chunk of the existing market in mortgages and that gives them the ability to offer these package deals against which smaller lenders have difficulty competitive. If you are looking to take out a home loan with a building society or a credit union, they usually offer products in which they specialize.

High Income

For high income earners, package deals will help build equity a lot quicker in an offset account. The savings on interest can be worked through a combination of having the salary reduce the interest charge and living off the credit card. Just remember to pay off the card each month!

CONS

Locked In

It's not always smooth sailing when you are paying off a mortgage. Interest rate increases, changes in lending policy, and on a personal level, problems that make repayments difficult. Also, someone offers a better deal. Wriggling out of a home loan package may incur costs. In fact, those costs can make it unattractive to move to another lender.

The Rate

Do not kid yourself that discounts on financial products will save you anywhere near the savings you will make on a lower mortgage rate. Repayments over 30 years add up to an astronomical amount of interest. Saving a couple of dollars per transaction or having a lower credit card rate will not come anywhere near that amount. While discounted mortgage rates may sound attractive, talk to a mortgage broker or use an online mortgage calculator to compare basic mortgage rates.

Keep it Simple

You may be better off by taking out a simple home loan and not being attracted by the bells and whistles of special packages. Technology these days means accessing your loan account online and utilizing a redraw facility (f applicable) to pay off the mortgage faster, which saves some serious interest, or if you're in need of extra funds, withdraw from that account.

Does it Cost?

Check that the package deal does not have something like an annual charge. If it does carry an annual fee, work out wherever the savings overall on lower interest rates for the life of the loan make you better off.

Here to Help

If you do not have the time to do a lot of research, then using expert mortgage broker services, knowledge and experience is great way to get the information you need and the best home loan tailored to your budget and circumstances. Mortgage Broker services are free, and personalized service is an added bonus!

5 Tips to Consider When Refinancing Your Mortgage

Here are 5 tips to consider when refinancing your mortgage. Is it the right move? When conditions are right, financially and economically, you might be considering a refinance of your mortgage. Before you jump into what looks like a good idea, it's best to know exactly what the refinancing process is, and just what it…

Here are 5 tips to consider when refinancing your mortgage.

Is it the right move?

When conditions are right, financially and economically, you might be considering a refinance of your mortgage. Before you jump into what looks like a good idea, it's best to know exactly what the refinancing process is, and just what it entails. You should know that when you are going to refinance, it involves starting the loan application process right from the start, as if you are buying a new home. Will you be taking the loan with a new lender, setting up a new deal, or should you shop around and see what's on offer from other loan providers? The best person to lead you through what is now a veritable minefield of lenders, is your mortgage broker. They are far more up to date with what's on offer than if you spent hours scouring the internet looking for the best deals.

Why Refinance?

What are your reasons for refinancing? There could be a variety of reasons. Lower interest rates on offer? A difference of a point or two in the rate may seem small when you look at it, but that couple of points can save you thousands over the years because your repayments will go on for 15 to 30 years for a typical mortgage.

Another reason some may decide to refinance is to get a shorter term, which also saves thousands of dollars. For example, things have never looked rosier personally, and both you and your partner are working, and your income is higher. So, a change in your financial situation can be used to save money on higher monthly payments. Conversely, you might be after a lower monthly payment or have that fixed rate changed to a variable rate, or vice versa.

Refinancing Costs

There are some obvious things to look at when considering refinancing. One of the first things is the actual cost of refinancing. Look at the fees you will be paying and divide it by the months of your mortgage and see if there is a saving as a result of the refinancing. Sometimes you are ahead straight away, other times you might have to work out when you will hit the break-even point.

Penalties

Are there any penalies in your mortgage terms and conditions that apply if you pay out the mortgage early? Lenders do NOT like mortgages paid out early. Remember, when you refinance, you are paying off one loan and applying for another completely new loan. Add any penalties to your total costs for refinancing and calculate that break-even point again. Be certain that you are not losing money overall when you refinance.

Your Equity

An important factor in this whole process is to work out the equity you have in your home. A negative equity is when you owe more on the home than what the house is worth. If you have been in your home for a number of years, the annual increase in your home's value will stand you in good stead. But if this is a refinance taken out after only a short time into your mortgage, price fluctuations may have worked against you. If your lender is offering less than the equity, you will not be able to get the refinance, unless, of course, you have the money to pay the difference. Current markets indicate an overall rise in prices, but there have been some downward movements as well over the year and that may have had a negative effect on your home's value.

PITFALLS Of A Home Mortgage

The vast majority of homebuyers use some sort of mortgage, in order to be able to afford, buying their home. Since one one's house, is their single, big financial asset, would not it make sense, to clearly identify, issues which may impact the borrower, and be ready, willing and able to proceed, in the best…

The vast majority of homebuyers use some sort of mortgage, in order to be able to afford, buying their home. Since one one's house, is their single, big financial asset, would not it make sense, to clearly identify, issues which may impact the borrower, and be ready, willing and able to proceed, in the best possible manner. With this in mind, this article will briefly attempt to examine and discuss, using the mnemonic approach, some of the potential PITFALLS of any specific mortgage, and, hopefully, assisting these individuals, in being, as well prepared, as possible.

1. Points: When comparing various, available mortgages, naturally, one hopes to pay the lowest, possible interest rate, he qualifies for, and is available! However, one of the most misunderstood items, is something, known as, paying, points. In mortgage lending, a point translates to something pre-paid, to lower the overall, monthly rate, to be paid. One point equals 1% of the amount of the mortgage principal. For example, on a $ 500,000 mortgage, one point would amount to pre – paying $ 5,000, upfront!

2. Interest rate: Consider the stated interest rate. Is it a fixed amount, for the life of the loan, or variable (which means, will change, after certain periods, and adjust)? Monthly mortgage payments consist of a portion for principal repayment, another for interest, and another part, for escrow (which equals real estate tax, insurance, etc.)

3. Term: How long is the term, of the loan? Most fixed mortgages have either 30 or 40 – year, terms (despite 30 years, is prevalent), while 15 – year mortgages, generally carry a lower interest rate (but higher monthly payments). If a variable mortgage is used, identify, the initial term of the guaranteed rate, as well as how often the rate changes, after the first period. Also, discover and know, how this adjustment might be based / determined!

4. Fixed ( versus variable): Know the advantages of a fixed, versus a variable loan, and vice versa! There is often a lower rate, for variable loans, but fixed ones are guaranteed, at a specific rate, for the life. Which is best for you, is often determined, by how long, you plan, to remain in the house!

5. Aims: Do you plan to live in this house, for an extended period, or is your aim, to move – on, in a reliably shorter period of time? Knowing your aims, helps you best decide, what kind of loan, you should seek!

6. Length: Mortgage terms vary in length. While some are 30, or even 40 years, in recent times, many have used 15 – year loans, in order to pay, far less, total payments, over – time! Variable – term mortgages, often, vary in length, with most either being, known as 7 / something, or 10 / something! The second number refers to, how often, after the initial period, the rate changes, etc.

7. Liquidity: These days, there are very few pre – payment penalties. Some loans may be transferable, and if so, this might help, in marketing the house, in the future!

8. Serve your needs: There is no such thing, as one – size, fits – all, when it comes to determining the best mortgage, to serve your personal needs and circumstances!

If you understand, fully, the PITFALLS , of securing the best financing, for your home, you will be, best prepared, to be a happier, homeowner! Will you be as ready, as you might possibly be?

Why Home Appraisals May Be Wrong: 5 Possibilities

While there are many challenges, in terms of effectively selling a house, it must be recognized, most potential buyers, are only able to afford, buying a home, by taking advantage of acquiring a mortgage! We often discuss the need to insure, a potential buyer, possesses a quality credit rating, in order to qualify, as well…

While there are many challenges, in terms of effectively selling a house, it must be recognized, most potential buyers, are only able to afford, buying a home, by taking advantage of acquiring a mortgage! We often discuss the need to insure, a potential buyer, possesses a quality credit rating, in order to qualify, as well as have proven, a responsible approach to taking care, of his personal finances, and obligations. However, one potential, stumbling block, which is often overlooked, is whether the subject property, will be assessed, for a high – sufficient, price, so a lending institution, will often the most favorable loan! Unfortunately (but the reality is), the appraisal process and procedure, is far from perfect, containing flaws, which sometimes creates, undesirable challenges and / or obstacles! This article will briefly examine 5 of these possibilities, which may negatively affect impact, a potential transaction.

1. Price higher than what the market, indicates: There are times, when a buyer, either because he does not know the marketplace, or loves a particular home, offers considerably more than what the market, might dictate. When the lending institute evaluates the house, it shows a lower value, and then, the LTV , or loan – to – value, ratio, creates resistance to obtaining the best terms, or, even, the loan, at all. A prepared buyer understands this, and, if he stills wants the house, should put consider more down, so it does not become a negative factor!

2. Wrong “comps” : There are times, when an appraiser, improperly, under – values, a subject property, because he, either uses the wrong properties, to compare the home, to, and / or, is not fully familiar with the local real estate market. Beware if the assessment compares a Colonial style house, to Capes, etc. Look closely at the characteristics of all properties, and, either the buyer, and / or his real estate agent, should help, guide the assessor, to the most appropriate homes.

3. Appraiser does not know local market: Every real estate market has certain specific characteristics, and, in some cases, there may be several micro-markets, even within a local area. If the appraiser is not familiar, it may compare a house in a more desirable market, to one, in a less valuable one. Remember the edict, Location, location, location !

4. Errors: Check carefully, to discover and learn, if there are any errors, involved, in describing the features, etc, of the subject home (yours). Typical areas to check, include, conditions described (windows, doors, HVAC, bathrooms, kitchens, patio, deck, etc). Has the appraiser subtracted when he should have added, etc? Remember, if you believe there's an error, you have the right to contest it!

5. Inaccuracies: Is lot size, properly listed? Has only the size mentioned, even if one lot, is fully usable, when another is not? Have any of the competitive ( “Comps” ) properties, overlooked the condition of another home, and its impact, etc.

While the appraisal process is important and essential, potential homebuyers should beware, they are not necessarily accurate or complete. Either, you or your agent, should contest any inaccuracies!

The Benefits of Using a Second Mortgage

A second mortgage is a secondary loan secured against a property. If this loan goes into default, the initial loan must get paid off first. These loans are taken for a variety of reasons and are commonly used as a source of emergency funding. A mortgage can either be taken out as an installment loan…

A second mortgage is a secondary loan secured against a property. If this loan goes into default, the initial loan must get paid off first. These loans are taken for a variety of reasons and are commonly used as a source of emergency funding.

A mortgage can either be taken out as an installment loan or a revolving line of credit. In all types of home loans, the homeowner puts up equity in the property as collateral. For an installment loan, the loan must be repaid in fixed amounts over a fixed period of time. A line of credit on a home is similar to a credit card, but it is secured by the equity in the home. Home equity is typically the main factor for financing approval but in many cases, a high credit score improves your chances of being approved. This kind of loan is worth considering if one needs to borrow a large sum of money at a low rate.

How to qualify for a second mortgage

Lenders have different methods of assessing loan applications but it basically involves analyzing the homeowner's equity, job history and credit score. Lenders must see that the applicant has an ample credit score as well as sufficient equity in order to approve a loan. If a client's credit score is below the banks' requirements, they can only get the assistance of private lenders who prioritize home equity more than one's credit score. Private mortgage lenders will divide the value of a property with its debts to get a metric known as LTV. The result should be 85% or less to get a mortgage as the lenders are sensitive to low equity amounts. Lenders have a high chance to lose their investment on high LTV mortgages if the loan goes into default. While equity is important to private lenders, some also consider job history.

Uses of a second mortgage

There are no restrictions to what you can do with the money so mortgages are preferred by customers to handle various financial obligations. People have several ways of spending the money but mainly:

• Paying off Debts: You may have a number of high-interest loans bogging you down each month. Instead of trying to keep up and risking penalties, you can get a new mortgage to pay off multiple loans and pay lower monthly rates.

• To keep up with debt payments: The second mortgage allows homeowners to avoid defaulting on their other loans. The money can also be used to bring an existing mortgage back into good standing if the homeowner has defaulted on their first mortgage.

• For home improvements and repair: A property secured loan can be helpful if you need to repair or make home improvements. Repairs and renovations absolutely increase the value of a property and allow you to sell it at a better price than similar properties. Extra equity earned from strategic home repairs could also qualify you for affordable loans in future.

Second mortgages are a good low-interest way to gather money

In summary, a second mortgage is a flexible financial tool and can be tailor to address a person's unique needs. It makes sense to have a single secured loan at low interest other than multiple credit cards with high monthly interest rates. To gather emergency funding, you can get the cash needed. Unlike credit cards, mortgages are an ideal low-interest way of getting money for university tuition, remodeling a home, paying emergency medical bills or financing a business. These types of loans may come at slightly higher interest rates compared to first mortgage but they are certainly cheaper than credit cards and unsecured loans.

When Does Paying Points Make Sense For Obtaining A Mortgage? 3 Considerations

Since the vast majority of those, who purchase a home, or any other form of real estate, use some sort of mortgage vehicle, it may be beneficial, and / or beneficial, to better understand and appreciate, as much as possible, regarding the many variables and / or factors, involved and related! We often discuss factors,…

Since the vast majority of those, who purchase a home, or any other form of real estate, use some sort of mortgage vehicle, it may be beneficial, and / or beneficial, to better understand and appreciate, as much as possible, regarding the many variables and / or factors, involved and related! We often discuss factors, such as the term / length of the loan, interest rates, variable versus fixed type, etc, it looks, few people fully understanding what, points, mean, when it comes to this process and transaction. When someone pays points, in acquiring a mortgage, he must realize, one point is equal to one percent, of the amount borrowed. For example, paying 1% for a $ 500,000 mortgage, means pre – paying $ 5,000. Sometimes, this is necessary, because of a less – than – optimal credit standing, and at others, may be used to pay down the rate, one may pay, on a monthly basis. This article will briefly discuss and examine, 3 considerations, for whether paying points, is a good strategy, and / or makes sense, for the borrower.

1. Need extra interest write – off, this year: Many individuals have varying income, from year – to – year! It may make sense, since mortgage interest is still, tax – deductible, for these people, to pay the points, in order to have a greater write-off, in the year, when they are in a higher tax bracket! However, one should discuss this, though, with his trusted, tax professional, prior to using this strategy / approach!

2. Have present funds, but needs a lower monthly carrying cost: Imagine, if one has ample funds, to pay the extra amounts, needed for the down – payment, but either does not qualify, for a loan, with the higher monthly payment, and / or needs to have a lower monthly installation, to be qualified! In these circumstances, paying points might make sense, and be an effective strategy, and / or approach!

3. Pay – down mortgage interest rate: When one pre – pays a portion of the overall interest, necessary to obtain a mortgage, by paying points, he will receive a lower interest rate, from the lending institution. Again, one should thoroughly discuss, with his financial and tax professionals, whether this approach, makes sense for him!

Should you pay points, when you seek a mortgage loan? There is no one – size – fits – all answer and / or response, and, the answer, is, It depends !

When You Should/Shouldn’t Refinance Your Mortgage: 5 Considerations

Because of the continued period of historically low, interest rates, a record number of Americans, have decided, it may be the ideal time, to consider refinancing their existing mortgage, in order to take advantage of these conditions. Since one's home, for most people, is their single, largest financial asset, does not it make sense, than…

Because of the continued period of historically low, interest rates, a record number of Americans, have decided, it may be the ideal time, to consider refinancing their existing mortgage, in order to take advantage of these conditions. Since one's home, for most people, is their single, largest financial asset, does not it make sense, than any step taken, should be well – considered, etc? This article will attempt to briefly review and examine, 5 considerations, regarding whether one should, or should not refinance their home mortgage.

1. Run the numbers clearly and thoroughly: Be carefully to avoid proceeding hastily, or without thoroughly examining, however it makes sense, for you! Examine all relevant factors, including costs associated with refinancing, how long, and how much remains on your existing mortgage (as well as its interest rate), closing costs, term of the new document, etc. How long might it take you to recoup the costs of refinancing?

2. How long do you plan to live in your existing home ?: Be certain you plan, to live, where you do, long enough, for taking this step? Depending upon that period, your decision might vary! Also, the length of time, you plan to stay, will help you decide, the best type of mortgage, to seek, and go after!

3. Home value: Has your home's value substantially increased, since you first, funded it? Does it make sense, to take advantage of that, and, if you qualify, seek a greater mortgage, to generate disposable funds, etc?

4. Your quality of credit: How good is your credit, and how much might you qualify for, based on the combination of your credit worthiness, income, existing other debt, and the enhanced value of your house? Will you feel comfortable, with additional debt, or, prefer, to have far less? Since our tax code, still, provides preferential tax treatment, to home mortgage interest, be certain you include that factor, in your determination!

5. Hassle / time / focus / reasoning: Any time, one refinances , there is a degree of hassle, and disturbing one's comfort zone! In addition, the process requires a reasonable amount of time, effort and resources, including gathering all the necessary documents / paperwork, and other requirements, underwriters seek! Is your focus and emphasis, practical and realistic, and does, proceeding with refinancing, make sense, for you? Examine your reasoning, and determine, what might be the best course of action!

For many homeowners, refinancing is both wise and prudent. However, it does not always make sense for everyone. Before you proceed, examine your personal situation, and decide, what's best for you!

What Length Fixed Mortgage Is Best For You?

In today's historic, low – interest environment, the vast majority of home mortgages, issued, are of the fixed – rate variety. In most instances, individuals want to lock – in these low rates, for the entire term of their loan, and therefore, opt to proceed, in that manner. Once you determine that you are better…

In today's historic, low – interest environment, the vast majority of home mortgages, issued, are of the fixed – rate variety. In most instances, individuals want to lock – in these low rates, for the entire term of their loan, and therefore, opt to proceed, in that manner. Once you determine that you are better served, using this type of mortgage, rather than a variable type, and you qualify, you must decide, which term, and / or length, is best for your needs, conditions, and / or situation. This article, therefore, will briefly discuss, which length, makes the most sense, for you.

1. 15 Years, or less: The main advantage of this term, is the interest rate, is almost – always, lower than longer – term, ones. Fewer payments over less years, combined with lower rates, translates to far lower, total payments. One's asset accumulation grows more quickly, and payments go, far faster, towards paying – down principal, rather than simply, paying interest. However, there are also some draw – backs, or limits, involved. One of these is that they require possessing a higher income, less overall debt, and others assets, to qualify. In addition, the monthly installment payments, are obviously higher, because of the shorter – term / period.

2. 20 – 25 Years: These are generally used, as a compromise, and / or middle – ground, which stands between the shorter (15 years, or less), and longer – term mortgages. Although interest rates may be slightly lower than longer – period, ones, they are generally a little higher than shorter ones.

3. 30 Years: Traditionally, the 30 – year, length, is the most commonly used, type of mortgage. Although the interest rate may be a little higher, today, these rates are still, historically low. They generally provide an excellent opportunity for qualified individuals, to acquire the necessary financing, needed, to purchase a home. Especially in today's market, where home prices have been rising for a couple of years, they often provide the best option available!

4. 40 Years: This extended term was rarely used, until recently. However, with the increasing prices of houses, extending the number of years, to repay, lowers monthly installments, even though it increases the overall payments. Since qualifying for a mortgage is based on several factors, including percentages based on that monthly installment, obviously, this term, makes it easier for some, to be able to qualify.

Deciding which term, and length, of a mortgage, is an individual decision, based on several factors, including financial, one's comfort zone, monthly, as well as overall total costs / expenses. Which length do do you think, might best serve your needs and purposes, and why?

4 Key Benefits Of Adjustable Mortgages

Since the vast majority, of those purchasing a home of their own, whether a private, condominium, or cooperative one, take advantage of some sort of mortgage loan, as part of their payment, it should not make sense alternatives, and examine, which might best, fit their needs, and situations? In over a decade, as a Real…

Since the vast majority, of those purchasing a home of their own, whether a private, condominium, or cooperative one, take advantage of some sort of mortgage loan, as part of their payment, it should not make sense alternatives, and examine, which might best, fit their needs, and situations? In over a decade, as a Real Estate Licensed Salesperson, in the State of New York, I have witnessed, few who actually do so, rather focusing on the selling price, they pay, and the amount of their monthly commitment / expenses. While there are multiple considerations, including lengths, points, etc, one of the major ones, is whether to seek a Fixed or Adjustable Mortgage. This article will, therefore, briefly examine and review, 4 key benefits / reasons, for using an adjustable mortgage.

1. Qualifying: Sometimes, one may find it easier to qualify for an adjustable, rather than a fixed mortgage, because the lower payments are used as part of the financial qualifying and qualification process. This may be the difference, for some, especially middle class, first – time homebuyers, between being able to, or unable to purchase one's dream house, or home, of their own!

2. Monthly costs: If the adjustable type, creates a lower monthly payment, because of the initial lower interest rate, it may make it somewhat less stressful, to go that way! Especially, when one purchases a property, and has has an excellent chance of having a substantially higher income in the future, this may be a suggested approach.

3. More house: If the introductory rate, either permits one to qualify for a higher amount of loan, or permits it to buy a more expensive house, which is desires, an adjustable mortgage, might be the preferred approach! While one should not buy or pay, more than he can somewhat comfortably afford, one's future financial consideration and status, might suggest, this is the best course, to follow!

4. How long you'll live there: If you plan to stay in this house, for under ten years, the lower rate, often available, with an adjustable loan, versus a fixed mortgage, may be indicated! For example, imagine, someone, aged 60 – 65, who has excellent earning power and income, and could qualify for either type, which offers the more attractive, lower rate, might be the best, for his life situation, and needs.

Ever since interest rates have dropped (remember when almost every mortgage had an 8.5% rate), the vast majority of individuals, have thought and used fixed – rate borrowing. However, there are conditions, where the variable approach, might be the better alternative!