Clustrmaps
Posts Tagged ‘mortgage’
More Refinancing Mistakes to avoid for your home
In these tough economic times and with the housing market making a slow recovery in many places, more homeowners are considering refinancing their homes to get better rates and a better deal. However, refinancing can be very confusing and costly if you are not sure how to go about it. Here are some more refinancing mistakes to avoid for your home and better peace of mind in the future.
Number of Views :49Mortgage Terms Defined For Home Buyers
When people are looking for a home whether it is for the first time or for a new home after a few years there are many things to think about and consider. One of these things is financing and mortgages. However, many people may not understand the basic terms that are used when discussing mortgages and it can get very confusing and frustrating. Here are the basic mortgage terms defined, this way you can know you are making the best decision for you and your family.
Ask your real estate agent for advice
Many people may wonder why this is such a good idea, but real estate agents buy and sell homes to many people all the time. They may be able to explain some basic terms to you or put you in touch with someone who can. They make for an excellent resource.
Underwriting
This term is used to explain how much of a risk you and your mortgage may be to the company you use. A professional underwriter would take your credit score, available collateral, employment status, and current debt into consideration.
Discount
This means that fees are tax deductible and you, the home buyer, pay about one percent of the total loan amount for each fee or point. Paying fees can help reduce your final interest rate.
Origination
This term is less popular with buyers because these are fees paid to a lender or loan officer when they evaluate and process your mortgage loan. They are not really of much benefit to the actual borrower.
Escrow
This is when your money or funds are held in an account by a third party until you close on your home or complete the transaction. This is usually done to make sure that everything is safe and secure for all of the parties involved.
Some of these terms can be quite confusing and even overwhelming at first, but knowing the basic meanings can help you make the right financial decisions now and in the future. This way you can rest easy knowing that this one thing is taken care of and move on to other things like looking forward to your new home and life in the future.
Number of Views :87Energy Efficient Mortgages
The FHA is offering a new mortgage geared for the eco-centered home buyer. These energy efficient mortgages may allow you to finance “green” improvements to your new home without paying anything out of pocket.
Although taking out this type of mortgage may cost you more on a monthly basis, you will be able to save on your monthly utilities, making up most of the difference. The changes made to your new home can lower your heating and cooling costs, and reduce energy usage. These improvements will also lead to a higher sales price when you move.
Energy efficient mortgages can be used to replace windows, improve insulation, install or repair duct systems, purchase energy efficient appliances, perform weatherization and buy a new water heater, amongst other possibilities. Any updates that will significantly improve the energy efficiency of home. The loans are available through the FHA, Fannie Mae or Freddie Mac, and through VA loans.
There are some things to be aware of when looking at energy efficient mortgages. Depending on whom your lender is, you may have a time limit for when the work has to be done. Some lenders will give you up to 90 days, others give you 14. You also might have to have the home inspected to see how much improvements will actually help the home. There is also a cap on how much you can take out, based on the work that needs to be done and the cost of the home.
If you’re considering an energy efficient mortgage, the best time to apply for one might be after the new Cash for Caulkers program passes the Senate and is signed by the President. This program will give homeowners a 50% rebate on any “green” home improvements. The money you get back can go towards other home improvement projects, new furniture, or even paid back to your lender, reducing your overall mortgage. The Cash for Caulkers bill is expected to pass later this year.
Number of Views :198Wealthy Home Buyers Struggling to Get Mortgages
With the economy not doing so well and the real estate market struggling, many people may think that the only people who can afford to buy homes are the wealthy, however, recent evidence shows that even if you have many assets or are wealthy, you may not even be able to get a mortgage. Even the wealthy seem to be falling behind on their payments with 12 percent of U.S. mortgages of $1million being late.
Lenders are making it even harder to get a loan, especially Jumbo loans because they are larger loans and are harder to get backed by the government through Fannie Mae or Freddie Mac. Some lenders want more than twenty percent to be put down on loans and some are even asking for fifty or sixty percent to be put down on some loans. If you have a one million dollar home this means you would have to have $500, 000 ready to give to a lender. All other parts of the loan need to be in order too, which is hard for some wealthy customers because their assets may be a little more complicated.
Mortgages for second homes or vacation homes are even harder to get, because it seems that if you cannot tell the lender you will be in the home seventy-five percent of the time then they are not interested in giving you a loan. They also require at least a fifty percent down payment.
For many wealthy people, this means that they have the some financial concerns that we all have been experiencing. We all seem to be limited by the rules and guidelines that help protect lenders during this shaky economy. This means then that even the wealthy will have to wait things out.
Number of Views :112Graduated Payment Mortgages
If you are a first time buyer or just a buying that only has a certain amount of income right now, finding financing to help you purchase that new home may be a challenge. You do have options though and one of them is a graduated payment mortgage. This type of mortgage has a lower payment in the beginning to help you get started. This may be a good option, especially if this is your first home. Here are some tips about graduated payment mortgages to help you out. This way you can have less to worry about and just enjoy your new home and future.
Ask your Syracuse real estate agent for advice
Real estate agents know that financing a home plays a big role in whether or not you can afford to purchase a home. They can help you go over your options or help you find a lender that can help you out. They are a great first resource.
Starts out with lower payments
Graduated payment mortgages start out with lower payments that increase over the next few years. This allows you to have more money while you are looking for a better job or waiting on a promotion.
Allows you to save for later
This loan allows you to save money for later for home repairs or remodeling or just to budget more for those later increased payments
Good for starter homes
If you only plan to stay in the home for a few years and then move, this is the loan for you, because it has those lower payments in the beginning and may not increase until your income does, so it is good for first homes or starter homes.
Has a fixed rate and maturity
This loan has a fixed interest rate and maturity so that is good since the payments may increase over the years. Just make sure you budget well for the increases that will happen.
If you are just starting out and this is your first home, there is so much to think about and consider. Following these tips and advice about graduated payment mortgages will at least help get you started and give you one less thing to worry about. This way you can focus more on your future and your new home.
Number of Views :55How Rising Interest Rates may Affect Your Mortgage
Like most homebuyers, you’re probably trying to take advantage of this buyer’s market. There are a lot of foreclosures available, and maybe you’re waiting for just the right one, hoping to save thousands of dollars on your new home, and still cash in on the first time buyer tax credit. But waiting too long could end up costing you thousands of dollars, a lot more than you’ll save on waiting for a low enough price.
The current average home price in the Syracuse area is right around $120,000. The current interest rate average, for someone with good credit and minimal debt, is somewhere around 5.5%. Assuming that you have saved the recommended 20% for your down payment ($20,000) and that you will be taking out a 30 year loan, your monthly mortgage payment will be right around $550. During the course of your loan, you will pay a total of $205,000, with $105,000 of that going for interest alone.
If you wait a few months, the average interest rate is expected to reach 6%. Take that same loan, and see how even a half percentage point can affect the amount of interest you’ll be responsible for over the next 30 years. At 6%, your total payment climbs to $216,000. Your monthly mortgage goes up to $600. With just a half interest point more, you end up paying a little over $10,000 more for your home.
That’s not too bad; a little less than $50 a month extra. But what if it takes you a while to find a great deal on a home? Now the interest percentages are up to 7%. Your monthly payment is just over $660, and the total cost of your home is $239,500. You are now paying almost $35,000 more for the home that would have cost only $205,000 total six months ago. That’s a huge difference for most people.
I’m not advising you to rush out and buy the first home that you see. A home is an investment, and you should take the time you need to find the right one. At the same time, don’t pass up a home that you love because you think that you might be able to get a better deal later on. There’s no guarantee that you will find something similar for a better price. At the same time interest rates start rising, home prices are also starting to go up again.
If you close a home before December 1st, and you’re a first time home buyer, you also qualify for up to $8,000 back (during the 2010 tax season). That means that the difference between buying a home now, instead of waiting until some point next year, could be around $43,000, not counting any increase in sale prices. That could be a new car, or significant remodeling, to get your update and improve your new home.
No one can say exactly how quickly interest rates will rise. Usually the changes are gradual, but even a small change can equal a significant difference in what you will be paying over the length of your loan. If you find a home you like now, don’t wait for a better deal. The sooner you act, the more you can save.
Number of Views :57Mortgage Buy down Tips
When you are looking for a new home, there are many things to consider such as location, price, what type of home you want, neighbors, certain features and much more. One of the most important and sometimes difficult things though is figuring out how you will pay for the new home for you and your family. There are many financing options, but here are some tips and benefits of mortgage buy downs for you and your family to consider.
Ask your real estate agent for advice
Real estate agents have experience with all types of financial situations when it comes to buying and selling a home. They are a great resource of information and advice for financial options and choices.
Mortgage buy downs include principal and interest
This means that instead of your payment getting bigger as with some loan option, your amount that you owe actually gets smaller. This is nice for any buyer to hear and to see.
Payments are lower
Mortgage buy down payments are reduced and interest is figured out over a specific time period. The lowered interest rate is paid in cash by the buyer or seller of the home.
Thirty year fully amortized mortgage
This means that the interest rate interests 1 percent for the first three years and then has a fixed rate for the remaining mortgage.
Rates stay low for the first thirty-six months
For the first thirty-six months, rates stay low when a borrower’s income is expected to later increase. This is nice if you expect a raise later or move to a higher paying career because of a new degree.
Mortgage Buy Downs offer many benefits that other financial options may not. These tips and facts can help you and your family to figure out if mortgage buy downs are the best option for you when finding that new dream home. This way you can enjoy your future and have fewer worries and concerns later on.
Number of Views :61FHA Is Having Busiest Year Ever
About 25 percent of all new mortgages are backed by the Federal Housing Administration in what will probably be the busiest year yet for the federal agency.
Applications for FHA mortgages rose 50 percent from last October through mid-August 2009 and approvals for purchases, refinancings, and reverse mortgages rose 70 percent to 1.67 million.
FHA loans “are one of the most important sources in this market,” says Mark Zandi of Moody’s Economy.com. “Without FHA, the housing slide would be much more severe. We wouldn’t be talking about a recovery now. We’d still be talking about a crash.”
Some analysts are concerned about the risk the FHA has taken on, but others point out that borrowers with FHA-insured loans now have an average credit score of 690, compared to 630 two years ago. Borrowers with a credit score below 500 must come up with a 10 percent down payment.
Source: USA Today, Stephanie Armour (09/02/2009)
Number of Views :43Owner Financing
With the economy the way it is and money being tight for everyone, it has become more of a buyer’s market out there. However, when you find the home you want, the tricky part is figuring out how you are going to pay for it. There are many financing options, but one that most people do consider which actually may be very popular in a buyer’s market is owner financing. This is where the owner helps you as the buyer to pay for your new home. Now this may sound like it is not possible, but it actually can provide benefits to both a buyer and a seller. Here is some information and tips on owner financing to help get you started.
Ask your real estate agent for advice
Agents have experience with all types of financing, and what may be best for you and in which market. They also may be able to help you talk to a seller about this financing option.
Land contract owner financing
This is where the title is not given to the buyer but the buyer is given an equitable title. The buyer makes payments to the seller for a certain amount of time and the buyer receives the deed after the final payment
Promissory Notes
The seller can either carry the mortgage for the entire purchase price which may include a loan, this is called an “all-inclusive mortgage “and the seller receives an override of interest on any loans. The seller may also carry a junior mortgage which would mean that the buyer would take the title to an existing loan or a new loan. The buyer would receive the deed and give the seller a second mortgage for the balance of purchase price.
Lease Purchase Agreements
This is when the seller gives the buyer equitable title and leases the property to the buyer. After fulfilling this agreement the buyer receives the title and obtains a loan to pay the seller after getting a credit for all or part of the payments towards the price of the home.
After reviewing these options, you may consider owner financing. It means little or no qualifying based on your credit for a home, flexible payment options from a seller, flexible down payment options and much more. In a buyer’s market a seller also may be more willing to consider this option. So if money is tight or you are not sure about your credit, this may be the perfect option for you to finance that new home.
Number of Views :61Preapproval versus Prequalified when Buying
When you are buying a home especially for the first time, you may not know that much about loans. So it is a good idea to shop around, look up information and make sure you are getting the best possible deal for your money. It is also a good idea to look around for loans before looking for a home, so you know how much you can afford and will not have to worry about surprises later. Many people may not know the difference between being preapproved for a loan and prequalified. Here are some tips to show you the benefits and to help make things easier for you in the long run.
Ask your real estate agent for advice
Especially if you are a first time buyer, it is a good first step to ask your agent for advice when deciding on a loan. They have experience and may be able to offer some good options you may not have considered.
Getting preapproved has many benefits
Getting preapproved for a loan versus prequalified can save you time and allow you to look at homes that are best for you and within your loan budget. They can also help you to gain confidence, increase negotiating power and more.
Prequalified loans may take longer and not offer as many benefits
If you are only prequalified for a loan, it could take longer to get approved which means you could waste time looking at homes you may not be able to afford, the closing period may take longer, and more.
Prequalified loans may charge additional fees
Since you are not preapproved and you just may qualify for the loan, when you actually do get approved there may be additional fees charged for the whole process and it may waste your time and money.
Preapproved loans provide more security
If you are already preapproved for a loan, this offers you as a buyer a feeling of more security and safety. You will feel safer especially has a first time buyer looking at homes knowing you can afford a house you look at that may be your dream home.
If you are a first time buyer or even if it’s been a while since you have applied for a loan, these tips will help the process easier and better for everyone involved. This way you can search for that perfect home with fewer worries and just enjoy the bright new future ahead.
Number of Views :57