Mortgage Articles and Helpful Tips
Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you?
A credit score is a single number that helps mortgage lenders and others decide how likely you are to repay your outstanding debts. One kind of credit score is a FICO score (FICO stands for Fair Isaac Corporation Inc., the company that developed a common scoring method). FICO scores range from 400 to 900 points.
You’ve probably heard it often -- another friend or neighbor has refinanced and is enjoying lower monthly mortgage payments. You may have read headlines that talk about home mortgage interest rates reaching historical lows. So, you ask, is now the best time to refinance my home mortgage?
FHA helps people by administering a variety of programs that develop and support affordable housing. Specifically, FHA plays a large role in homeownership by making loans available for lower- and moderate-income families through its FHA mortgage insurance program and its FHA Homes program.
Current VA mortgage loans under the Department of Veterans Affairs program, allows an original principal balance (OPB) to $417,000 for the U.S. mainland, and $625,000 in Alaska, Guam, Hawaii and the U.S. Virgin Islands.
When a loan amount is higher than the conforming limit, it becomes a Jumbo Loan, or non-conforming loan, with slightly higher interest rates .
Acting much like a second home mortgage (but often with lower interest rates) a home equity loan is a program which offers a homeowner up to 85% of their home’s current equity in the form of a large sum loan.
More and more mortgage lenders are offering home equity lines of credit. By using the equity in your home, you may qualify for a sizable amount of credit, available for use when and how you please, at an interest rate that is relatively low.
If you are in the market for credit, a home equity plan may be right for you. Or perhaps another form of credit would be better. Before making a decision, you should weigh carefully the mortgage fees and costs of a home equity line against the benefits
Because they sound similar, people often think that being pre-qualified for a home loan is the same thing as being pre-approved for one. However, being pre-qualified for a home loan is quite different than being pre-approved for one, and it is important to know the difference and not confuse the two.
As you search for the FreeLoanComparison.com mortgage and lender that are right for you, this section helps you better understand the home loan mortgage choices and your home mortgage finance options.
Real Estate Procedures Act is about closing costs and settlement procedures. RESPA requires that consumers receive disclosures at various times in the transaction and outlaws kickbacks that increase the cost of settlement services.
It used to be that if you were age 62 or older, there were only two ways to get cash out of your home. You could sell it or you could borrow against your home equity. But now, with reverse mortgages, seniors can tap into the home equity they’ve built up without moving or taking on extra debt.
It’s vacation season. Whether you’re enjoying a beachfront house, country cottage, or mountain chalet, chances are you have a vision of calling your favorite vacation spot "home" one day.
A Home Construction to Permanent mortgage combines financing for the purchase of land, the construction of a new home, and a permanent mortgage into one loan with one closing.
Unlike a traditional home loan, your home improvement loan amount is based upon the value of your home after the improvements. So if you are a homeowner with little equity in your home, you can still make home improvements and build the dream home you’ve always wanted.
If you currently own your home and are looking to purchase land to build a new home, you can obtain an Equity Line of Credit on your existing home to finance the down payment on the lot purchase.
Typically, subprime loans are for persons with blemished or limited credit histories. The loans carry a higher rate of interest than prime loans to compensate for increased credit risk.
So you’re interested in entering the world of property management? Have you thought about how you’re going to get into this potentially lucrative market? Let’s face it; unless you’ve just inherited a large sum of money or are otherwise independently wealthy you’re going to have to borrow. This is where apartment financing comes in.
Typically, home buyers work with a real estate sales professional to find a home. When looking for a real estate agent, ask your friends and relatives to give you the names of agents they’ve worked with in the past.
Before you understand title insurance, you need to understand what a title is. Basically, a title is a term that includes all of your legal rights to own, use and sell a piece of land. The title reflects all previous ownerships and transfers, including rights previously granted by other parties, such as mortgages and easements.
Real Estate Settlement Procedures Act (RESPA) limits the amount of money a lender may require the borrower to hold in an escrow account for payment of taxes, insurance, etc. RESPA also requires the lender to provide initial and annual escrow account statements. The newest escrow account regulations became effective in October 1997.
Mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages. It’s required primarily for borrowers making a down payment of less than 20%.
Mortgage settlement--sometimes called mortgage closing costs--can be confusing. A settlement may involve several people and many documents and fees.
When you are looking for a mortgage, you are likely to shop among lenders for the most favorable interest rate, and the lowest points and other up-front charges. When you find the most favorable terms and the lender that you want, you will apply to that lender.
Adjustable-rate mortgages (ARMs), are loans with interest rates that change. ARMs may start with lower monthly payments than fixed-rate mortgages, but keep the following in mind:
Owning a home is part of the American dream. But high home prices may make the dream seem out of reach. To make monthly mortgage payments more affordable, many lenders offer home loans that allow you to (1) pay only the interest on the loan during the first few years of the loan term or (2) make only a specified minimum payment that could be less than the monthly interest on the loan.
A Good Faith Estimate (GFE) lists the charges the buyer is likely to pay at settlement. This is only an estimate and the actual charges may differ. If a lender requires the borrower to use a particular settlement provider, then the lender must disclose this requirement on the GFE.
Is buying a home the right decision for you? How do you get started? How much house can you really afford? You will find the answers to these questions in this section.
The 15-year FRM this week averaged 5.92 percent with an average 0.6 point, down from last week when it averaged 6.04 percent. A year ago at this time, the 15-year FRM averaged 6.30 percent.
Putting Your Home On The Loan Line Is Risky Business! If you are a homeowner who needs money to pay bills or for home repairs, you may think a home equity loan is the answer. But not all loans and lenders are the same--you should shop around. The cost of doing business with high-cost lenders can be excessive and, sometimes, downright abusive.
When commiting to buying a home, it seems that the most common borrower mistake is they don’t read what essential is their biggest financial responsibility, the mortgage related financial documents; and all it takes is one mistake, one late payment, and disaster can set in. So why don’t borrower’s read the over legalesed defined mortgage documents? Well, because they’re too legalese!
Shopping around for a home loan or home mortgage will help you to get the best financing deal. A residential home mortgage--whether it’s a new home purchase, a mortgage refinancing, or a home equity loan--is a product, just like a car, so the mortgage price and mortgage terms may be negotiable.
To become a first-time homebuyer, you need to know where and how to begin the homebuying process. The following questions and answers have been carefully selected to give you a foundation of basic knowledge.
In the commercial or investment real estate context, the debt ratio, also known as a debt service coverage ratio or debt service ratio, is the ratio of net operating income to debt payments. The higher this ratio is, the easier it is to borrow money to purchase or improve the property. In the personal finance context, a debt ratio is the ratio of personal debt to income.
Most mortgage consumers just aren't buying it. Two out of three adults believe mortgage pitches are either only slightly credible or not credible at all. More than one in five adults, 22 percent, are convinced mortgage advertising and marketing is not credible at all and that could be putting the industry's reputation at stake, according to a recent poll.
The first step in securing a home loan is to complete a mortgage loan application. To do so, you'll need the following information.
A manufactured home (formerly known as a mobile home) is built to the Manufactured Home Construction and Safety Standards (HUD Code) and displays a red certification label on the exterior of each transportable section.
Is buying a home the right decision for you? How do you get started? How much house can you really afford? You will find the answers to these questions in this section, which details the steps you and your FreeLoanComparison.com lender partner will take to help you qualify for a mortgage.
Debt consolidation is the process of rolling your short-term debt into your home loan. If you have credit card debts, a car loan or other bills that typically carry a higher interest rate than a mortgage, you may want to consider debt consolidation loan.
Points are often called different names -- such as loan discounts or origination fees -- but regardless of their name, they represent money which you -- the homeowner -- will be required to pay in order to get your mortgage loan. And the payment is usually up-front, in cash, at settlement.
A Deed of Trust (sometimes called a Trust Deed as the terms are interchangeable) is a security instrument and functions for all practical purposes just like a mortgage although in California they usually contain a power of sale reposing in the trustee in the event of default.
The starter home is usually an economic "Hail Mary" pass for most first time homebuyers who scrape together the down payment from relatives, wedding gifts, 401K plans, savings bonds, insurance, mattress money, and any other sources their creativity can muster. But despite pulling out all the stops, not many can come up with the $22,000 down payment required by most lenders. That is where private mortgage insurance (PMI) comes in.
Whether you are looking to finance a new house or refinance the one you're already in, you can protect yourself from being overcharged by following this list of "dos and don'ts" from the National Mortgage Complaint Center, a for-profit company which inspects mortgage loan documents for unnecessary and duplicative mortgage lender fees prior to closing.
Chances are you know the seven warning signs of cancer; many people do. But do you know the seven red flags that a lender is taking advantage of you? Or that the loan you are considering is not in your best interests?
You want to find the absolute best rate and terms on the planet, but how can you be sure you're getting the best deal? There are literally hundreds of mortgage lenders and brokers, so can any of them guarantee that you'll get the best rates and terms?
You're shopping for a mortgage and you contact a lender advertising competitive interest rates. You're told that while the lowest rate is no longer available, you might qualify for a loan at a bit higher interest rate that has a prepayment penalty built in. You decline; but are amazed when the lender calls back in two hours to offer you a competitive interest-rate loan without a prepayment penalty.
We recently went to settlement on our first home. The attorney conducting the process handed us a large pile of papers and asked us to sign them. One of them was a form which would authorize our lender to get our personal financial information from the IRS. We objected but were told that this was a lender requirement. Is this legal?
With the 30-year fixed rate mortgage at 6.25%, does it make sense to refinance your home mortgage?
We owe about $155,000.00 on a 30 year, 8% mortgage that is 2 years old. We are in the 35% tax bracket, but plan to "move" within the next five years. Does it make sense to refinance our home mortgage?
Our current home loan mortgage carries an interest rate of 8.25 percent, and several friends have strongly suggested that we refinance our mortgage. Exactly what does that mean? Are there costs associated with refinancing our home mortgage, and what kind of home mortgages are available? This is our first home and we will probably stay here for a long time.
With rates trending down during the past few weeks many howmowners have consider refinancing their home loan. Like millions of other homeowners, many approach refinancing with mixed feelings -- lower rates are wonderful but the details and requirements associated with the process seem endless and numbing.
Perhaps the most important facet of the VA loan program is that eligible veterans can buy almost any home with no down payment. Closing costs, with the exception of the VA funding fee, cannot be financed into the loan amount. However, the seller can pay for all your closing costs, prepaids and 4% of the purchase price of the home in other concessions.
It's not everyday you go looking for a mortgage. It's not a trip to the mall. It's a methodical, step-by-step process requiring planning, time, effort and attention to details.
You've seen the advertisements and heard the radio commercials. "Here at XYZ Mortgage we compare rates with over 100 lenders" or "Our company has access to over 300 mortgage loan companies nationwide!" Pretty impressive, isn't it? 100 lenders? 300 banks? Do you believe all that?
Online mortgage origination never became the home loan assembly line experts once forecast, but mortgage services that are available on the Internet have been a boon to savvy consumers.
It's the greedy loan officer that turns what should be a standard transaction into one that robs customers of their equity along with some of their self-esteem.
A weakening economy and poor home economics have been pushing up mortgage delinquencies and foreclosures for much of the past two years, but there are steps you can take to avoid becoming a statistic or worse -- losing what's likely your most valuable asset.
Not all mortgage lenders exhibit predatory behavior. Most lenders abide by a code of ethics, they disclose all lending terms and lend money only to those who can truly afford to borrow it. But some sub-prime equity lenders are giving the industry a bad name and they are threatening the open market.
Congratulations! You finally found the house of your dreams. You made a bid, had it accepted by the seller, and went through the mortgage application process. It looks like you'll qualify. The closing is only weeks away, and you are feeling pretty good.
Yes, there are lenders who will lend while you're still making Chapter 13 payments, but the trustee assigned to handle your case will want to know why you're using money to buy a new home instead of paying off your old bills. I'm not saying it doesn't happen, it's just not all that common. Further, many lenders who place a mortgage under such circumstances may not be prepared to offer their most competitive product.
When you shop for a mortgage loan -- which is something every potential homebuyer should do -- you will be given a lot of information. One item which you must understand is the concept of "mortgage points".
Did you ever think there would be that much paperwork just to apply for a loan? Did you ever wonder where all those people suddenly came from, wanting you to sign this and verify that? Didn't you already tell your loan officer everything?
We bought our townhouse in February of last year, and obtained a very favorable mortgage interest rate of 6.25 percent. Recently, we received a letter from our lender, suggesting that we pay off our loan on a bi-weekly basis.
Home owners who've developed a habit of refinancing every time rates drop a half point or more in recent years, may now find themselves unable to benefit from refinancing to yet lower interest rates without paying a prohibitively expensive prepayment penalty.
When we refinanced the first time -- two years ago -- we paid one point and were advised by our accountant that we could not deduct that point in full, but would have to spread it over the 30-year life of the loan. However, at that time, we were also advised that if we sold our home -- or refinanced again -- the balance of the nondeductible points could be deducted in full.
"Yikes! Where are all these mortgage loan fees coming from? Those weren't on my Good Faith Estimate!" No they weren't. But they should have been. And it's your loan officer's fault.
What exactly is a lock and how do they work?
When you apply for a mortgage, you're simply applying for a loan, you're not locking anything. Unless your lender requires you to lock upon application, which is rare, applying and locking are two different things altogether. But when you are ready to lock, here are a few things to consider.
Borrowers always wonder if they should lock-in interest rates when they first apply for a loan -- or should they wait and see where the market goes.
Should you lock the interest rate or let it float?
The first thing in locking in the best mortgage interest rate is to not fog everything up comparing everything under the planet from the number of days to the Summer Solstice to the Construction Spending numbers released later this month.
What does the Consumer Price Index (CPI) number and your mortgage rate have in common? If the pundits are right, the CPI may directly affect mortgage rates almost immediately after they're released. PPI? Probably.
The most frustrating part about getting the best interest rate is actually getting a rate quote you can trust. Some of these tricky loan officers will make used car salesmen seem like saints when it comes to quoting an interest rate.
Getting an interest rate quote and getting that rate guaranteed are two different breeds. Also, rate quotes can vary depending upon how much time you have until you close.
You found the right agent, you found the right home and you found the best lender. Right? But most of all, you got the best danged interest rate in these here parts.
Today's growing number of foreclosures is largely attributed to mishandled underwriting for subprime, nontraditional and other risky mortgages. Until recently, and for several years, millions of loans were approved, based not on a long-term ability to repay, but based on the ability to repay the loan at the starter or teaser mortgage interest rates.
What are mortgage rates gonna do?
If you seriously think a 1% mortgage rate in a 6% mortgage rate market is available, then stop right here, go look in the mirror and tell yourself how foolish you really are, because a 1% mortgage in a 6% market is the biggest fools trap a borrower can fall into.
It still amazes me the amount of bad information that floats around out there. Mortgage Rates are Tied to the 10-yr Note, (false); Fed Cuts Funds Rate, Lower Rates Ahead (yeah, whatever).
As any loan officer will tell you, almost every borrower is shopping around for the lowest mortgage rate. And why not? Borrowers are supposed to do that, right? But some of these loan officers have been around the block a few times and know how to structure a mortgage rate quote that looks a lot better than it actually is.
The choice is between using a mortgage broker and a mortgage banker. You figure that mortgage bankers might be a little safer, someone you know, while the mortgage broker is notorious for getting a lower rate, right?
Most of the loans for people with bankruptcies on their credit reports typically fall into a standard description; most likely the borrower was self-employed, had good credit, something bad happened, then the bankruptcy.
Did you know a consumer with a credit score of more than 720 signing for a $150,000, 30-year, fixed-rate mortgage, will get a mortgage rate of about 5.72 percent and pay $872 a month.
Did you know a consumers with credit scores below 560 will be charged a 9.29 percent rate with monthly payments of $1,238 if they can qualify for the loan.
You can offset the effect of tighter mortgage underwriting standards by improving your credit report profile and, as a result, your credit score.
I got an email from a man that retired last year. He bought the condo he’s living in with a Payment Option ARM. Trouble was, he really didn’t know it was "one of those" loans. And he’s been around the block a few times and had purchased at least three other properties throughout his adult life.
Leveraging yourself by means of putting little or nothing down on your mortgage is not a new concept, but over the past couple of years it’s morphed itself away from those who don’t have any down payment money or for those qualified for a VA loan -- to those who have down payment money but don’t want to use it.
This section explains the term "main home." Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium
Whether you have community property and community income depends on the state where you are domiciled. If you and your spouse have different domiciles, check the laws of each to see whether you have community property or community income.
You can deduct your moving expenses if you meet all three of the following requirements. Your move is closely related to the start of work. You meet the distance test. You meet the time test.
Situations in which you are not entitled to relief. You are not entitled to innocent spouse relief for any tax year to which the following situations apply.
If you are unmarried, your filing status is single or, if you meet certain requirements, head of household or qualifying widow(er). If you are married, your filing status is either married filing a joint return or married filing a separate return.
The basis of property you buy is usually its cost. The cost is the amount you pay in cash, debt obligations, other property, or services. Your cost also includes amounts you pay for the following items.
You generally must include in your gross income all amounts you receive as rent. Rental income is any payment you receive for the use or occupation of property. In addition to amounts you receive as normal rent payments, there are other amounts, discussed later, that may be rental income.
This section explains what expenses you can deduct as a homeowner. It also points out expenses that you cannot deduct. There are four primary discussions: real estate taxes, sales taxes, home mortgage interest, and mortgage insurance premiums.
Generally, you cannot deduct items such as mortgage interest and real estate taxes as business expenses. However, you may be able to deduct expenses related to the business use of part of your home if you meet specific requirements.
A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. A sudden event is one that is swift, not gradual or progressive. An unexpected event is one that is ordinarily unanticipated and unintended. An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged.
An installment sale is a sale of property where you receive at least one payment after the tax year of the sale.
For more helpful mortgage tips on mortgage refinancing, home loans, reverse mortgages or a home equity line of credit, contact FreeLoanComparison.com today!
Last update: November 14, 2008
