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
Photo Credit: karen roach/Shutterstock.com

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.

Common Mistakes Made When Applying For a Mortgage Loan

Common Mistakes Made When Applying For a Mortgage Loan
Common Mistakes Made When Applying For a Mortgage Loan
Photo Credit: Brian A Jackson/Shutterstock.com

Did you know that some mortgage applications are turned down just because of a few simple mistakes? Here are some of the most common errors made by those looking for a mortgage loan. Take a look at them; maybe you can identify or if not hopefully avoid doing them in the future. This could save you some money on your mortgage.
First of all, when it comes to the amount of down payment to apply towards the purchase, some people are unsure of exactly how much. The more money that is used towards the acquisition for a deposit means there is less of a risk to the lender, along with cheaper interest rates. Just remember to stay within your budget and financial resources.

Unfortunately, not all mortgage loans are processed. It would be in your best interest to have a talk with your mortgage broker about his track record. Does he provide you with any guarantees?

Apply for a mortgage loan is not that familiar of a process for Americans, being that it is not something we do every day. It is important that you work closely with your mortgage broker and try to understand the mortgage process. Stop and ask any questions you might have, and make sure that you are working with someone who is willing to help you out.

A common mistake made by prospective homeowners is choosing a lender that has limited options. It is important that you go with a lender who offers you a range of mortgage products. Figure out your needs and make sure that they will be met, before deciding on that broker. Look for a mortgage broker with many connections and who will be able to meet your needs accordingly.

Some people believe it is in their best interest to get large purchases paid off before going into a mortgage. Lenders take a look at your total debt to income ratio when assessing applications. It is best to leave expenditures along until the mortgage has been drawn up.

Everyone would like to get the best interest rate possible on their mortgage; this is a goal. Just keep in mind that with every application there also is a credit check. Too many of those will eventually affect your credit rating. This is where your mortgage broker should be helpful with any insight into the market. They should be able to discuss their lenders with you and cut out any need to process applications just for the sake of establishing interest rates.

Let’s be honest; just about everyone has had some form of financial difficulty in their lives. Of course, when it comes time to apply for a mortgage loan, some believe it is better not to be forthright with their entire financial past. Your broker and lender are there to help you, but it’s better, to be honest, upfront so it can be dealt with and go from there.

You cannot keep any part of your financial or credit past a secret.

Take a look at your past year when it comes to paying your bills. Have you been on time or possibly even missed any of those payments? This could have an adverse effect when applying for a mortgage loan.

Ultimately, depending on your record, this could end up in being refused the loan. Just make sure you are on top of your finances, not missing any payments and paying on time.

If you are looking at getting a mortgage loan, now is the time to work really on keeping your debt as minimal as possible. By keeping your credit balances low or even paying them off, will result in the best terms for your mortgage.

The common mistake some people make when committing to a mortgage is not having all of the facts from the beginning. Make sure you understand what are the closing costs and any ongoing costs. When you are comparing lenders, just a fraction of a percent might not seem like much, but make sure you do the math. Over the term of your mortgage loan, that can add up.

Just make sure you get all of the facts before taking out a mortgage loan. Try to avoid the common mistakes, take care of your finances and before you know it, you will be on your way to owning your home.

5 Tips To Manage Your Mortgage

5 Tips To Manage Your Mortgage
5 Tips To Manage Your Mortgage
Photo Credit: pedrosek/Shutterstock.com

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.

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
Photo Credit: Tomasz Guzowski/Shutterstock.com

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.

 

5 Tips To Help You Sell Your Home Faster

5 Tips To Help You Sell Your Home Faster
5 Tips To Help You Sell Your Home Faster
Photo Credit: Indypendenz/Shutterstock.com

If your home is not selling as fast as you think it should, then consider these 5 tips to help your home sell faster. Keep in mind that you should prepare your home to be sold with the same attention that you would prepare yourself for that all important job interview. The principle is the same; you want to attract the attention of buyers. A few simple projects can make the difference in how your home sells and even how much it sells for.

1. De-clutter
You may find that many of your possessions remind you of enjoyable times and successes in life. You may enjoy all of the over-stuffed furniture. However, all of these make your home look cluttered, too small and unattractive to buyers. Remove any indications of political party affiliations and signs of other organizations that may be objectionable to some buyers. Although your religious beliefs are important to you, a home that is filled with religious articles is not going to be attractive. Put items in drawers or closets rather than leave them scattered about. You can rent a storage locker to store excess furniture as well as boxed items. Now, you can imagine that buyers will visualize a home that they could live in.

2. Make What You Have Look Better
A few simple fixes can give your home a more modern feel. Upgraded fixtures will be attractive to buyers even if they might not like the fixture you choose. You can upgrade items without replacing them. For example, light fixtures can be painted a pewter color and doorknobs can be decorated with appliques. Replacing faucets is always a good idea, but if you can’t afford to do this, then clean them thoroughly and use a product that will make them shine. The concept at work here is to help buyers realize that they will not have to spend a lot of money immediately to make the home attractive.

3. Make Sure The Rooms Are Neat And Clean
Children’s bedrooms should reflect how the rooms can look when everything is in its place and the beds are made. Clothes should not be scattered over the floor. The colors in the rooms should be neutral if possible. Make the closets look better by not stuffing clothes into them. Clean carpet and clean tile are essential for attracting the buyers’ interest.

4. Change Colors That Over-Stimulate
Neutral colors attract buyers, and the bright red, purple and yellow colors are a turn-off for buyers. Area rugs should be designs that are attractive and in colors that compliment the rooms.

5. Curb Appeal Is Important
Your home’s curb appeal will be the buyers first visual image of your home, and it will create their impression of the inside of your home. A yard full of weeds or a flower bed with overgrown plants will deter buyers. Grass that is not cut and trimmed properly is not attractive.

For more information regarding Jerry Stiles and home loans, visit the website or Facebook page!

5 Tips For Refinancing Your Mortgage

5 Tips For Refinancing Your Mortgage
5 Tips For Refinancing Your Mortgage
Photo Credit: simez78/Shutterstock.com

The historic low mortgage interest rates are encouraging many homeowners to refinance their mortgage. Refinancing could reduce your monthly payments, and the total interest you will pay over the time you own the home could be much less. We have put together 5 tips for refinancing your mortgage, and you will find that these tips can save you money and make the process easier.

1. Research
Research the lenders who are offering the low rates, and check the terms of the offers. Read the fine print of all offers that seem to be attractive. Always learn about costs like points which are fees paid to a lender for granting a mortgage. One point equals one percent of the loan. In some instances a great mortgage might be worth a point or two, however, read about our recommendation for making a cost-benefit analysis which follows. Be sure to find out what closing costs are charged, because these can vary widely. Also, research your current mortgage documents to see if you will be subject to a payoff penalty. These penalties are found in some mortgages, and they are applicable for from two-five years.

2. Make A Cost-Benefit Analysis
If you are working with a mortgage broker, then you will have an expert available to make this analysis for you. If you need to make this analysis yourself, then add up all of the costs involved in obtaining a new mortgage. You will have to estimate some of the costs, but you can get reasonably close to the number. One method for making the analysis is to add all of the costs to the amount of your current mortgage. Then look up the interest rate for this amount for the same number of years as your current mortgage is for. This will give you your new monthly interest payment as well the total interest over the life of the mortgage. However, you are interested in the monthly interest savings. While you may be able to pay for all of the costs in cash, this method will give you an idea of whether refinancing your mortgage will be cost efficient. A mortgage broker is in the best position to advise you about all of the factors in making a cost-benefit analysis.

3. Act Quickly
Once you find the rate you are looking for and decide that it cost effective, then act quickly to lock it in. Mortgage rates can change quickly.

4.Ask Questions
Ask any question to clarify an issue you don’t understand. It is better to get the answer up front than to be surprised at closing.

5. Don’t Extend Your Current Mortgage
Avoid the temptation to borrow from the equity or to extend the mortgage term. Your objective is to reduce your monthly cash outlay.

For more information regarding Jerry Stiles and home loans, visit the website or Facebook page!