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Home Loan Refinance: Back To The Basics

Basics of Home Loans

Three fundamental pieces of knowledge for obtaining and maintaining a home loan include the application, rates, and repayment habits.

Home Loan Application Process – Filling out home loan applications can be time consuming, and overly detailed. Before beginning, get yourself organized by finding all of the paperwork you will need to complete your application. Once you have everything located and in front of you, you’ll find the application process to go very smoothly.

Rates Change – Keep an eye on home loan rates for major changes, particularly changes of the downward version. Refinancing is inexpensive in comparison to the amount of money you can save if you obtain the right low interest home loan. Developing a good relationship with your mortgage broker may result in him or her calling you when the rates drop!

On Time Payments – There is nothing that can hurt or help your credit rating more than your payment habits on your home loan. Make payments on time and your credit score will raise quickly. Alternatively, pay late and you’ll do long term damage that is difficult to repair.

Quick Home Mortgages Online – Safe

Why should you shop for home mortgages online?

1) Obtain mortgage quotes from a reputable lender and your information will be secure. Don’t check with every no-name mortgage company online, stick with names you can trust, as their online security will be top notch.

2) Fast Processing – Mortgage companies who operate online aren’t bound by the same home loan processes as large local banks, and can process applications faster.

3) Low Rates – With so many lenders from which to choose from, online mortgage brokers and home loan specialists are bound to find a program that’s right for your budget and home loan needs.

How to Compare Various Home Loans

You’ve heard the saying “You can’t compare apples to oranges”, right? When you’re shopping for a home loan, you need to make comparisons among the same types of loans. When you compare a 30 year fixed home loan with 7% interest to an adjustable rate mortgage with 3.2% interest, you’re comparing apples to oranges- unless you know the specifics to each type of loan.

1)Loan Term – The term of a loan is the length of time you will be repaying on the loan Many mortgages are 30 year terms, but some are shorter, 10, 15, and 20 year terms are common. The longer the term of your loan, the lower you pay each month, but the higher you’ll pay in interest!

2)Interest Rate – An adjustable interest rate is one that can change from time to time, while a fixed rate interest means it remains the same for the entire term of your loan. To compare a fixed rate with an ARM loan, use an online mortgage calculator (they’re free!) to compare your future payments as well as current payments.

3) Closing Costs – There are many things that are factored into closing costs, including lenders, closing agents and attorneys. Choose a lender with the fewest junk fees or a lender that pays for your closing costs out of their revenues.

Home Mortgage Prepayment

It’s not often that people stay in their home for thirty years. A thirty year mortgage probably seems like forever to most borrowers! Since no one would want to pay a mortgage forever, there are a few tricks that can save you a lot of money:

1)Make use of free home mortgage calculators online to see how much of a difference one or two extra payments on your mortgage will make on your amortization schedule. Sometimes, as little as $20 extra on each payment can reduce the term of your loan a year or more! Many people never actually take advantage of paying one additional payment per year in order to shorten their 30 year mortgage term by up to ten years- because they have not educated themselves on prepayment.

2) You can shorten your mortgage term by up to 20 years if you’re able to make double payments. While it may seem that you should only be able to reduce your mortgage payment in half by doubling your payments, the fact is the extra payment goes towards the principal and saves you interest, so it reduces the amount owed much faster than if you only send the minimum payment each month.

Consolidating Home Loans to Save Money

If you have a refinance loan and your original home loan, you may want to consolidate them into a single loan. This may sound complicated, but should be a painless process for you.

Find all of your current home loan information, including account numbers, bank name, initial loan amount, date of the loan, and any other documents you’ve obtained through the loan processes. Find out how much equity you have in your home, to determine whether or not refinancing and consolidating your second mortgage is feasible. Finally, go to your mortgage specialist to get a more specific and accurate portrayal of the options that are available to you.

Connecticut Home Loans – Shopping Online on the Internet for A Mortgage

If you are not using the internet while shopping for your Connecticut home loan online then you may be losing hundreds if not thousands of dollars in potential savings. There are many benefits to Connecticut homeowners while leveraging the power of the internet. However the benefits that I am talking about are based on doing some research and getting industry knowledge to recognize a good Connecticut home loan, not putting inputting your information into mini application forms that send your information to over 30 mortgage banks.

We have all seen the commercials that encourage you to give your Connecticut home loan information out so that they can send it to mortgage companies all over the country. Submitting your information to dozens of lenders online is a great option if you are getting a conventional mortgage and you have stellar credit with good income. In that case using the Internet will allow you to submit your mortgage request to multiple companies and easily compare Connecticut home loan programs from many lenders and brokers. Some borrowers even feel that by shopping online you can avoid the possible embarrassment that might be found when baring your financial soul to a loan officer.

However, over the years I have concluded that the internet should be used as primarily a research tool when it comes to getting a Connecticut home loan. Do you prefer to meet the person to whom you are sending all of your valuable information? Do you want to be able to go down to your local bank if you have an issue and speak to a manager face to face? What if you have a unique situation? Who do you think will be more willing to work with you? While I agree that shopping online will allow you access to a national database of mortgage lenders, do you need all of them or just one good one?

Yes, online Connecticut mortgages lenders can be an excellent tool to see what you qualify for and learning about what the mortgage market is doing. After doing that homework take it down to a local bank and simply let them know that this is the program, rate and terms that you want. Trust me; they will get the loan done for you if at all possible. You will also feel a lot better when you are rushing to make a mortgage payment on your Connecticut home loan if you can simply take a little stroll down the street and drop it off and knowing that your mortgage company knows your name and face.

Texas USDA Rural Development Home Loan Information

The Texas USDA Rural Development home loan program was designed to provide affordable housing for residents in rural areas. In many cases this is the best mortgage for buyers in rural areas. Here are some of the USDA RD program features:

  • 100% Financing – No down payment is required
  • No cash reserves are required – Many other programs require that you have a certain amount of cash in reserve at closing
  • Seller concessions are allowed up to 6% – This means that the seller can pay some or all of your closing costs
  • There is no minimum FICO credit score – Clients with no credit history may qualify. (Those with a credit history should have reasonably good credit)
  • There is no limit to the purchase price – It must be reasonable for your income
  • NOT just for first time buyers
  • Very low interest rate
  • No PMI insurance – This helps keep your mortgage payment low

Recently the mortgage industry has tightened rules so that even borrowers with stellar credit need a good down payment. The USDA program and the VA program are the two main programs that allow 100% financing.

Here are some of the key requirements to qualify for the Texas USDA mortgage program:

  • You must be a US citizen or a legal permanent resident
  • The property must be in a qualified rural area
  • The property must be for residential use – not a farm of for commercial use
  • You need to have enough income for the home you want – generally the payment should not be more than 29% of your gross monthly income
  • You must have no credit or a reasonably good credit history
  • Your family income should not be more than 115% of the US median income
  • The applicant should not already own a suitable home in the commuting are of the proposed property
  • Other conditions may apply but you will probably qualify if you meet the above requirements