Points, Interest Rates, And How You Can Cut Down On Mortgage Payments

Points, Interest Rates, And How You Can Cut Down On Mortgage Payments
Points, Interest Rates, And How You Can Cut Down On Mortgage Payments
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Points would be the common term for an upfront cost paid to a lender in exchange for the loan itself. The higher your credit score and annual wages, the fewer points you have to pay to get your loan. Despite this, having more points can be better and something you can request for.

The correlation of points and interest is a fascinating thing to consider in a mortgage. A low-interest rate usually goes with a high amount of points to be paid. Only in case you have a bad credit rating, the above rule would not always apply. You can play around with this relationship to your benefit.

It doesn’t matter whether you pay a lot of points on a loan – the cost will not even come close to the amount of interest paid over the loan’s entire lifespan. If you love your new home and want to stay there for a good number of years, you will need to find a way to cut down your interest rate big-time. This is an excellent way to save cash. And you can do so by actually using your points.

It is possible to buy down your interest rate through points – pay a greater amount of points to the lender so that you can enjoy lower rates. Try to balance the effect on your interest rate with some points you need. The math can be complicated, so have the documents from your lender in writing and use a mortgage calculator to do the math. It would also be nice to reduce your monthly payments. After figuring out the numbers, compare them to the number of points needed before making your final choice.

The concept of points can be simple if mastered, and doesn’t need to be considered the wrong side of the mortgage business. You could potentially save thousands, or even hundred thousand, over the lifespan of your loan.

Interest-only mortgage rates allow you greater purchasing power. Because interest-only mortgage rates have lower costs compared to fixed rates or other types of loans, you are afforded extra money which would have been spent on high monthly payments. Interest-only mortgage rates give you the chance to qualify for other loans, thus enabling you to buy more home or real estate properties.

3 Ways To Cut Home Energy Costs

3 Ways To Cut Home Energy Costs
3 Ways To Cut Home Energy Costs
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Home energy use can be very expensive, and the high expense of home energy sneaks up on us. Most homeowners don’t know how much energy an appliance or a technology item really uses. It isn’t easy to find out the energy use of any one item, not to mention every item collectively. Regardless, saving energy is possible by taking a few steps to reduce energy consumption. The following steps have been proven over time to save homeowners money and also to prolong the life of some equipment.

Set the Water Heater Thermostat 120 Degrees

Most households only require the water heater temperature to be set at 120 degrees. This temperature will also prolong the life of the water heater by slowing mineral buildup in the tank. This temperature poses little if any health risk. if a family member has a suppressed immune system or a chronic respiratory disease, you might consider setting the temperature at 140 degrees.

Change the Furnace Filter

A clean furnace filter puts far less stress on the furnace and its fan motor particularly. A dirty filter forces the furnace to work harder because the filter restricts the air flow. Thus, the air quality in the home will not be as comfortable, and it might even be less healthy because the allergens, dust and other floating material cannot get through the filter. The frequency with which you change the filter depends on several factors. Pets in the home may require a frequent change as might a home located in an area where there is a lot of dust in the air. Of course, and a filter that appears to be dirty is dirty. Several opinions exist on the best type of air filter. Check this website for an excellent discussion on filters: bobvilla.com/articles/furnace-filter/bv=relart#.VtdE7vkrI1k


Caulk Around Doors, Windows, Outlets and Switch Plates

These areas will allow outside air to enter and inside air to escape to the outdoors. You can also buy foam pieces that fit behind the outlet and switch plates. Caulking around the door and window frames is an excellent idea for saving energy. Infrared technology studies have been conducted on homes that do not have adequate caulking and these studies clearly demonstrate that air does escape through these unprotected areas. Installing new weather stripping around exterior doors is also an excellent idea. Make sure that the door thresholds seal the bottom door opening. Have someone outside watch while you shine a flashlight under the door. If the light comes through, then the threshold needs to be adjusted.

A Smart and Easy Way to Pay off Your Mortgage

A Smart and Easy Way to Pay off Your Mortgage
A Smart and Easy Way to Pay off Your Mortgage
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Are you struggling to pay off your mortgage? Have you ever heard of a government program called the Home Affordable Refinance Plan (HARP program)? Well, if your answer to the first question was yes, then the HARP program is here to rescue you! This program can greatly benefit millions of Americans by decreasing their monthly payments by as much as $4,264 each year.

Unfortunately, this program will most likely expire by the end of this year, so it is imperative that you take advantage of it while you can. The good news is, once you are in the program, you are in the program forever. So if you are looking to lower your payments, pay off your mortgage faster, and possibly take out some cash with your accrued equity, it is necessary that you act now.

The HARP program one hundred percent free to see if you qualify. Do not be fooled into believing that this program is too good to be true! It is a no-cost government program that was created to be very easy to sign up for.

The HARP program was created by the government beginning in 2008 to make it easier for middle class homeowners to make it through the recession by providing the opportunity to reduce their mortgage payments.

In order to make it even easier for homeowner to qualify, some specific requirements for the program such as minimum credit scores and equity requirements have been relaxed. The HARP program is one of the most effective opportunities for homeowners to lower monthly mortgage payments. As a middleclass homeowner, it would be extremely smart of you to apply to refinance under the HARP program, even if you have previously applied under a different program and been turned down. Check today to see if you qualify for the HARP program by visiting the HARP Eligibility Website.

5 Tips To Manage Your Mortgage

5 Tips To Manage Your Mortgage
5 Tips To Manage Your Mortgage
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A home mortgage is not something you acquire and then forget about it, except for making payments. There are, however, ways that every homeowner can manage their mortgage for better short-term and long-term results. We have put together 5 tips to manage your mortgage. These are tips that have been proven to be important for every homeowner with a mortgage.

1. Pay The Payment On Time

Take every precaution to ensure that you make every mortgage payment on time. People can forget to make a payment when they are caught up in the challenges of everyday living, but forgetting a payment can ruin your credit for seven years. A late payment might result in accrued interest and penalties. You can avoid this by having the payment automatically deducted from your checking or savings account.

2. Consider Other Expenses You Will Have To Make When You Buy A Home

Buyers often have to scrape up every dollar they can find just to make the down payment and pay for the closing costs. Often, buyers will then go into debt to buy items for their new home. Buyers may also take out a personal loan to make these purchases. Problems arise when the interest accumulates and the payments are more than can be paid on time. A condition like this can interfere with making mortgage payments on time. Living on the edge is dangerous for managing a mortgage.

3. Create A Rainy Day Fund

Homeowners need a rainy day fund to cover unexpected expenses such as a leaking roof, a burst water heater, or leaking water pipes. Doing so will keep your mortgage payment funds untouched.

4. Keep A Watchful Eye On Your Property Taxes An Home Insurance

These are two automatic inclusions in your mortgage payment, and these can go up which means that your mortgage payment will go up by a corresponding amount. Many taxing authorities and insurance companies do not tell you when their rate are increasing. For some homeowners, this can be a significant problem. Property insurance premiums have been increasing by 10 to 20 percent annually. Call your insurance company before the renewal date and ask if your policy premium will increase. If it will, then look for another insurance company. If your property taxes are scheduled to increase, then you might want to appeal the increase. Check the tax rates for the property around you to see if rates are increasing for those owners. If they are not, then you have a right to challenge your increase. Keep in mind that many municipalities increase property taxes every year.

5. Try To pay Down Your Mortgage Quickly

One easy way to accomplish this is to pay your mortgage payment by paying one-half every two weeks. This will result in making one extra payment every year, and the savings in the long-run will be significant. Or, pay a monthly amount that is equivalent to what your principle and interest payment would be for a 15-year mortgage.

What Is A Jumbo Loan?

What Is A Jumbo Loan?
What Is A Jumbo Loan?
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Jumbo loans are mortgages that exceed $417,000 which is the traditional mortgage limit, also known as the conforming loan, for single-family mortgages. The conforming loan limit is the maximum amount that will be backed by Fannie Mae or Freddie Mac. However, the real estate market is not the same in every city, so in some places the jumbo loan threshold is higher. For example, in Alaska and Hawaii the conforming loan maximum is $625,000, so jumbo loans would be made for a larger amount. Jumbo loans are used to purchase higher priced homes.

Qualifying For a Jumbo Loan

It is not easy to qualify for a jumbo loan even if you have $1 million in liquid assets. Qualifying for a traditional mortgage loan means jumping through several hoops, and there may be more hoops to jump through for a jumbo loan. You will need to have all of the documents that will support your income from all sources. Tax returns and bank statements will also be required. It is nearly mandatory that you have at least six months of cash that could be used to make the payments on the jumbo loan. This requirement could be stricter if you work for yourself.

Your debt-to-income ratio must be below 36% if you are applying for a traditional mortgage loan. This ratio is calculated by dividing the total monthly debt payments by your monthly income. Jumbo loan applicants will need a significantly lower debt-to-income ratio. The ratio requirement may vary between jumbo loan lenders. However, it will not be as high as 36%.

An excellent credit score is essential when applying for a jumbo loan. Most jumbo loan lenders look for a credit score of at least 700. Keep in mind that credit scores are created by a variety of credit bureaus and by the independent FAIR ISSAC score organization.

Favorable Interest Rates are Available For Jumbo Loans

As recently as 2008, jumbo loans were not available, and if they were, the interest was higher than for traditional mortgage loans. However, borrowers looking for jumbo loans today will find that interest rates are slightly lower. The reason is people who apply for jumbo loans are viewed as less likely to default on the mortgage or fail to make payments on time. Many applicants are high-income earners with substantial assets. They are also considered to be financially stable through any economic downturn.

As with any mortgage, it pays to shop for the best jumbo loan deal. Jumbo loans come in a variety of adjustable and fixed interest rates. You might find investors among the secondary mortgage market.

Look at your finances carefully. Find the best jumbo lender for your needs. Be sure that you can make the long-term commitment to making the mortgage payment along with the high taxes and property insurance.

How To Determine The Best House For You

How To Determine The Best House For You

Buying a home is exciting, and the process can often be terrifying. Searching for your dream home, a place where living is at its best and memories are made is not difficult when you follow some guidelines. The question in the minds of many buyers is how do we know if a house if right for us? We have put together some ideas on how to determine the best house for you.

The first and only way to begin your search is to figure out how much you can afford to pay not just for the purchase of a house, but also for the monthly payment. Include in this assessment how much more you will spend on utilities and maintenance than you are spending currently. A home you cannot afford becomes a nightmare instead of a dream.

Decide on how you want to live rather than where you want to live. Focus on the features of a house that will make living in it enjoyable. Nice views are wonderful, but it is unlikely that you will enjoy the views more than you will enjoy your house. Look at the house from the viewpoint of practicality. If you have children, will they be safe in the house? Look at the amount of time required keeping up the house.

Can you imagine your furniture fitting nicely into the house? Will you need to buy more furniture? Does the house have a nice flow, or is it chopped up meaning that living in it could be frustrating. Does the house feel good? You will find some houses that just are not comfortable to be in.

Trust your intuition. Does the house impress you in the first 15 seconds, or is it depressing? Be sure to consider cosmetic repairs. Perhaps minor painting or some changes in decor will make a major difference for you. Can you imagine it being a happy house? Pay attention to your reactions as you move through the home.

You will also need to think about buying a resale home versus buying a newly constructed home. New construction will not have the same problems that older homes can have. Of course, putting in a yard and buying window treatments is an added expense. While you can get a home inspection on an older home, all of the problems may not be readily identifiable.

Ask the local police about the crime statistics for the area you are considering. Also ask the local government authorities if the neighborhood will be subject to any planned special tax assessments. Consider the quality of the schools even if you do not have children or do not plan to have children. The schools will affect the resale value of the house.

These are just some of the factors that you should consider when looking for a house to buy. A qualified realtor who is experienced in the area you want to buy can be an invaluable resource in your search for a house.

Mission Viejo View of Property

10 Major Mortgage Mistakes To Avoid

10 Major Mortgage Mistakes To Avoid
10 Major Mortgage Mistakes To Avoid
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Getting a mortgage is not easy, but it can become far more difficult than it needs to be due to some mistakes that mortgage applicants make. Here are the 10 major mistakes to avoid, and you avoid these with some planning and discretion in managing your finances.

1. Not Checking Your Credit Records

Check your credit history at least six months before you intend to apply. This includes checking your credit scores including the FairIssac score.

2. Applying For Credit Just Before You Apply For A Mortgage

Lenders will consider you to be a greater risk if you apply for new credit just before or while you are applying for a mortgage. Your credit score might drop causing you to either not be approved or approved for a higher interest rate.

3. Failure To Consider The Total Housing Costs

Your mortgage payment includes principal and interest, but taxes and insurance costs are added. All of these costs figure into the percentage formula used to qualify your income for mortgage repayment. Divide the mortgage payment by your gross income and the result should be around 25%.

4. Not Having Assets In Your Account For At Least Two Months

Lenders will want to see assets that you have accumulated and not used for living expenses. Don’t borrow from a relative days before applying. You can be sure that the underwriter will find this transfer.

5. Changing Jobs Frequently

Lenders look for stable employment and a job history in your field. Underwriters are wary of applicants who have gaps in their job history and fail to stay in one job or one field.

6. Not Getting A Pre-Approval

There is no substitute for good preparation when you want a mortgage. Make sure you can qualify for a mortgage before you even begin to look at homes. A pre-approval is better than a pre-qualification because it is based on a more thorough review of your financial status. Realtors will be more willing to work with you when you have been pre-approved.

7. Not Shopping For The Best Mortgage

Don’t let a pre-approval confine your mortgage search to that lender. A broker can shop your pre-approval at a number of lenders. You will want not only the best interest rate bit also the best terms and the lowest fees. Knowing closing costs in advance is essential.

8. Spending Time And Energy Looking At Unconventional And Complex Mortgages

Go with a mortgage that you can understand. Avoid paying interest only or adjustable rate mortgages. A fixed rate, fixed long-term mortgage is the best.

9. Forgetting To Lock-in Your Mortgage Rate

Mortgage interest rates can change daily. If you find an interest rate you like, then lock it. This means that the rate will be good for the number of days it is locked for. Always get the locked rate in writing,

10. Neglecting To Read The Mortgage Documents

Even though it may be a chore, take the time to read and understand the mortgage documents. This is time and energy well spent.