For the average person who does not work in the mortgage industry, the mortgage jungle is very overwhelming. Mortgages are complicated! This article is a small collections of tips and advice of what an average person should know when looking for a mortgage. We kept it simply, but informative.
Reverse Mortgage Funding
As we grow older, living expenses seem to increase drastically, it is for this reason a great number of elders choose to seek a reverse mortgage to provide help with these expenses. This option typically works well for those who have fully paid for their home, and have no mortgage upon it. Simply speaking, when you take advantage of a reverse mortgage you will receive a monthly stipend from the equity that your home carries. This is especially useful to the elderly, sometimes securing a reverse mortgage aides them with living expenses, that alone could help in allowing them to remain within their own home. It is wise to request to a mortgage broker that the cost of closing should be paid out of the money received from the reverse mortgage loan. Essentially meaning, no expenses directly out of pocket.
Mortgage Options – Interest Only
Interest only mortgages are specifically designed to substantially decrease your payment amount over the first years of the mortgage term. The way this program works is that for these first few years you are only making payments towards the interest of the mortgage. This keeps the mortgage payments lower than other mortgage options because you are not required to pay on the principal of the loan. Eventually the time will come that you will be required to pay both the interest and the principal. It is wise to fully investigate this mortgage option prior to choosing it. Very carefully make some calculations and determine rather or not you will be able to afford the payments once both interest and principal are required.
The Right Mortgage Broker for you.
With the vast presence of the internet, obtaining the proper mortgage broker has never been easier. Additionally the internet allows you to locate mortgage brokers from all over your area. You are not limited to using a local broker or company in any way. The mortgage brokers you can find on the internet are in great competition with each other. What does this mean for you? It is simple because they are so competitive, you will win with excellent program and competitive rates. To choose the proper mortgage broker for you, you first must be comfortable in choosing them. Choose a mortgage broker that gives you confidence in their guidance. Take your time in finding the perfect mortgage broker for you; make sure their goals and your goals match, thoroughly research all your options before making a choice.
Obtaining a Mortgage Loan the Fast way.
Obtaining a mortgage loan through the internet is easier than ever before. The benefit of an online mortgage broker is that generally, they have a wider spectrum of lenders and various programs that a typical mortgage broker might have. More often than not, they have the ability to process request more quickly, as well. Online mortgage brokers can even aid you if there is urgency because of a fast approaching closing date or you are in need of speedy refinancing. All of this is thanks to the technology of automated credit checks, verification of income and online loan applications. You can find mortgage brokers through various measures such as using a popular search engine like Google, simply type in mortgage broker and you will be amazed with the results. A better option is to search for reviews about the mortgage broker or seek the advice and referrals from your friends and family. The best mortgage broker will possess the seal of the Better Business Bureau.
Adjustable Rate Mortgage and What you should know about it.
If you opt for an adjustable rate mortgage ensure that you are fully aware of these facts , this will help you be ready when the time comes for your fixed rate mortgage ceases.
1. You should know when the first rate adjustment will occur and how much the adjustment will be. Knowing the specific date will prepare you for the event.
2. You should know that the adjustable mortgage rate fluctuates with the changes of interest rates. Find out what index your rate is associated with, so you can investigate the interest rates on your own.
3. Know all of your options when it comes to refinancing. If a adjustable rate mortgage proves to be unbeneficial for you, you have the option of refinancing with a fixed rate mortgage. To get a good interest rate on a fixed mortgage you should watch the rates closely and if you choose to refinance, do so when the rates are comfortable to you.
Obtaining Flexible Interest Only Mortgages
For those that practice self-discipline, a flexible interest only may be practical. This option provides a payment arrangement that is flexible in regards to the payments that you make. This does not mean they are flexible on the timely manner in which you pay them, this simply means when your payment date arrives you are required to make a minimum payment of at least an amount towards the interest on the loan. However, with this flexible option you can opt to pay an additional amount towards the principle of your mortgage. Generally, your flexible interest only coupon book will include an area that determines the amount needed to be applied towards the principle if you should choose to do so. This is where that self-discipline comes in handy, it is wise to apply as much as possible towards the principle, bringing the amount down and coming that much closer to paying off your mortgage.
Posts Tagged ‘Mortgage Refinance’
Mortgage Management – Essential Refinance Considerations
January 3rd, 2010The Single Largest Financial Obligation
Your mortgage is probably the single largest financial obligation that you will have in your life. The investment that you have in your home can have great long term value, but on a month by month basis it represents a significant expense. The math for most people is simple, the more you pay on your mortgage, the less you have to spend on other things.
To underline this point it might be of interest to note that in 1980 the average person spent 25% of their gross monthly income on housing expenses. By 2005 that percentage had risen to over 43%. This is not really a surprise. We are all aware that home prices have risen significantly during this period of time. Income levels have not kept up with home prices and as a result home buyers are finding more of their paycheck going towards their mortgage payment.
Florida mortgage holders have acutely felt the impact as home prices in recent years have rivaled those of California. Your mortgage may consume more or less than the average 43% of your gross monthly income, but it is probably safe to say that it deserves to be intelligently managed. Mortgage Management
I’ve been a licensed Florida mortgage broker since 1989. My company Power Mortgage Corp. a Florida Mortgage Company is also licensed in Georgia, Massachusetts, and Virginia. Over the years I have originated, refinanced, and analyzed countless mortgages. I’m always happy when we can help a customer make an intelligent decision about their mortgage. Active, regular mortgage management can make a big difference in your life. The right choices will save you money. Sometimes lots of money. To Refinance or Not to Refinance
Active mortgage management does not always mean taking action. Active mortgage management means an intelligent periodic review of available options. Call your friendly mortgage broker from time to time! We like to hear from you. We will always take the time to help you understand your options. And always make sure that you know all of the costs involved.
Request a Good Faith Estimate. Make sure that your mortgage broker includes all third party charges and statutory costs along with the lender fees. It is equally important to consider your personal goals; how long will be in the home? Do you plan to retire soon? What type of personal saving plans do you have? What is your aversion to risk? Is an adjustable rate mortgage suitable?Fixed or Adjustable
Fixed rate mortgages are pretty easy to understand. Adjustable rate mortgages on the other hand can be surprisingly complex. And there are literally thousands of variations of adjustable rate mortgages. Over the last five years negative amortization adjustable rate mortgages have become popular. Florida mortgage borrowers have embraced these programs for the advertised low payment rates. But these loans are complex; I believe that very few people that get this type of mortgage understand them. I also believe that there are mortgage brokers actively selling these programs that do not understand them.
Please take your time. Ask lots of questions. Take notes. Ask more questions. Make sure you understand the index, the margin, the adjustment period for both the note and the payment. It wouldn’t hurt to look at the worst case scenario. Can you live with it? If your mortgage broker can’t answer your questions find a new mortgage broker. Your financial life may depend on it. How About a 15 Year Fixed?
There was a time when the interest rate on a 15 year fixed rate mortgage was consistently and significantly lower than the rate on a 30 year fixed rate mortgage. Between June of 2004 and June of 2006 the Federal Reserve increased the Federal Funds rate 17 times. This rate directly impacts all short term interest rates such as the Prime Rate. During the same period of time the long term rates remained more or less steady. The net effect was to close the gap between rates on shorter term mortgages like the 15 year fixed and longer term mortgages like the 30 year fixed.
At the time of this writing the rates on these two loan products happen to be exactly the same. But this should not take the 15 year fixed rate mortgage out of contention. For many people it is an excellent option. And it can still save lots of money.
For example, the payment on a 30 year fixed rate mortgage for $100,000 at 6% is $599. 55. The payment on a 15 year fixed rate mortgage for $100,000 at 6% is $843. 85. That is an extra $244. 30 per month on the 15 year mortgage. But consider that the total payments made on the 30 year loan would be $215,838, versus $151,893 on the 15 year mortgage. By choosing the 15 year mortgage you would save $63,945. And you get to stop making mortgage payment in 15 years!Interest Only
Given the high cost of homes it is no surprise that interest only programs have become so popular. Florida mortgage customers have flocked to these programs to make increasingly expensive homes affordable. An interest only mortgage can be appropriate if your sole concern is cash flow. During the interest only period you will not be paying any principle off. There are many types of interest only mortgage programs. The majority of interest only mortgage programs are “fixed period adjustable rate mortgages”. This means that they are fixed for a limited period of time; typically 3, 5, 7, or 10 years.
The interest only period usually corresponds to the fixed rate period. Once the fixed rate period ends the mortgage becomes adjustable. A new version of the interest only mortgage worth considering is the 30 year fixed rate mortgage with a 10 year interest only period. You get the benefits of the low interest only payment for 10 years – but with no adjustable rate risk waiting for you at the end of the interest only period. It’s Your Money
How often do you balance your checkbook, get a physical exam, go to the dentist? Your mortgage can have a huge impact on the quality of your life. Think of your mortgage from time to time. Call your friendly mortgage broker. Have a chat. Ask questions. It’s your money.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
