The demise of the mortgage industry is the news of the year. Exotic loans, predatory lending practices, high-flying investors buying risky mortgage securities, and the plight of homeowners faced with mounting monthly payments are just a few of the topics making headlines everywhere. But little attention is given to teaching consumers how to pay off their mortgages completely, in a shorter amount of time, so that they are no longer tied to borrowed money and can own their homes free and clear.

Buying your own home is a practical realization of the American Dream. We who live in the USA pride ourselves on the value of freedom in our everyday lives, and paying off your mortgage is one of the most liberating goals a homeowner can accomplish. The way to shrink your mortgage is to pay off the principal at an aggressive pace. More and more consumers are making it happen by following disciplined, strategic formulas.

The basic premise of any plan to reduce your debt revolves around three steps:

1) Use your monthly statement to find out the breakdown of your mortgage payment. There are two main components. The principal payment shows the portion that you pay each month of your actual original debt. The interest payment represents the fee you pay for borrowing the principal.

2) In the beginning of your loan, monthly payments may be entirely dedicated to interest. As the loan matures, you will gradually pay larger chunks of the principal. Paying off the principal is the key to erasing your debt, and you can voluntarily increase your principal payments to speed up the process.

3) Decide what you can afford. Simply add that to your regular payments and designate it for payment of principal so that your mortgage company will credit your account appropriately. You want to ensure that they don’t use it to pay interest, because applying it to principal instead is more effective and should be your main goal.

To accelerate the process of “paying down” your mortgage, apply one or more of the following ideas that help you chip away at the principal at a faster rate:

Make an extra payment every year:

Make the equivalent of an extra payment each year. One way to do this rather painlessly is to divide your normal payment into twelve parts. Next, add one-twelfth to each payment you make during the year. For example, if your monthly payment is $1,200, divide it by 12 to get $100. Pay an extra $100 each month. After 12 months you will have effectively paid an entire extra monthly payment.

By paying an extra $100 a month on a 30-year, $200,000 mortgage at 6 percent interest, you will shorten the life of the mortgage by about 5 or 6 years, saving around $25,000 in interest payments.

Refinance into a shorter mortgage:

If you find a 15 or 20-year conventional fixed rate loan that offers lower interest than your 30-year loan, you may save money by refinancing into the shorter mortgage. You’ll pay off your loan much sooner, too. But your monthly payments will increase due to the shorter amortization period.

Pay biweekly instead of monthly:

Sending a payment every two weeks is another tried and true strategy for reducing the balance on your mortgage. You don’t double your payments but instead divide your normal payment into two increments, so the amount you pay each month remains essentially the same as normal. But by paying half of your payment every two weeks, you wind up paying a full extra month’s worth of mortgage payments each year. The result is a function of mathematics and how our 52-week, 12-month calendar operates.

Many people pay a fee to have their lender set up an official biweekly payment program. This can legally obligate you to stick to the program, but it can also cost so much in service fees that the whole idea defeats itself. If you don’t have the discipline to pay biweekly, paying your mortgage company to set up a plan may be justified, but in most cases it is a waste of money because you can put the plan in motion for free all by yourself.

Invest gifts, year-end bonuses, and tax refunds:

One way to shave your debt is to simply increase your payments of principal whenever you can afford it. Put your extra income directly to work paying for your home, and it may turn out to be one of your wisest investments.

If you, too, yearn to “get off the grid” by no longer having to make a monthly mortgage payment, it is certainly possible. With a little bit of planning and some motivated determination, you may soon be debt-free. Then you can join the ranks of those happy homeowners who sit atop a mountain of equity and never lose any sleep over a pile of outstanding debt.

Related posts:

1. The Secret of Mortgage Amortization and How to Pay Off Your Mortgage 7x Faster
2. Fast-tracking to Mortgage-free
3. Confused with your numbers? Use a refinance calculator

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Help For Subprime Mortgage Crisis – How and Where to Find the Ideal Subprime Mortgage Assistance

Subprime Mortgage Plan – Ways to Find Out if You Are Facing Subprime Mortgage

Lessons From US Subprime Mortgage Crisis – The Impact Of The US Subprime Mortgage Crisis On Banks

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The White House has recently unveiled a plan to help mitigate the wave of foreclosures that have recently swept the US as reports continue to predict that an even greater number (some estimate as much as 2 million) of Americans are likely to default within the next year.

This plan involves the major US lending companies making an agreement to freeze the relatively low “teaser” interest rates that many Adjustable Rate Mortages are set up with, instead of allowing them to reset at their regular time, usually two years from the loan’s issue.

These subprime loans have an artificially low introductory rate of between 7 and 9 or more after the grace period, which many real estate owners have been unable to cope with in recent months, sending shockwaves through global markets as investors in mortage-backed securites have been spooked. As their loans have defaulted, the bonds that have been repackaged and sold have become basically worthless.

Bush’s talks with mortage companies have been concerned with solving both aspects of this problem by extending the introductory rates to a select cross-section of subprime borrowers, thus preserving some of the cashflow supposedly guaranteed to those investors who believed the AAA bond rating for the securities into which these mortages have been sold off. Since the cost of a forclosure is often over $50,000, the investors have little choice if they want to salvage any of their investment.

However, the standards used to judge which borrowers qualify for the rate freeze have been left (some say intentionally) vague. They have stated that those who are already in danger of default will be given no assistance, as well as those who can afford to pay their mortages at the increased rates. What is unclear is how the lenders will determine who is able to pay.

Those who fall into the middle bracket, or who are likely to default at some point if rates increase but who are able to make their payments now, are the targeted borrowers for the freeze, which is proported to last from two to five years past the date at which the rate would normally reset. Therefore, some foreclosures are still guaranteed, but the specter of falling property values, which threaten to send the entire US economy into a tailspin, will hopefully be offset somewhat.

Many economists have recognized the mortage-related woes as a necessary reassessment of the American economy. In combination with the falling dollar, recent developments in this crisis make it clear that the housing market of the US has artificially inflated for years, which would have to be corrected somehow anyway. And, while this scenario is relatively unpleasant, the US has had unsustainably high levels of consumer spending, coupled with the lowest percentage of consumer saving in three decades.

These statistics point towards a reckless tendancy of many Americans to spend because the economy will always grow. While this assumption has helped industrialize the world through American spending, it may do harm in the long run. With any luck, the real estate landing will be softened and Americans will be more apt to work with their lenders. If not, it may just encourage more recklessness by the government’s taking responsibility for the market’s woes. Only time will tell.

Related posts:

1. Help For Subprime Mortgage Crisis – How and Where to Find the Ideal Subprime Mortgage Assistance
2. Subprime Mortgage Plan – Ways to Find Out if You Are Facing Subprime Mortgage
3. Lessons From US Subprime Mortgage Crisis – The Impact Of The US Subprime Mortgage Crisis On Banks

]]> http://www.mortgagebestrate.net/the-impending-subprime-interest-rate-freeze/feed/ 0 http://www.mortgagebestrate.net/keep-yourself-updated-with-the-latest-mortgage-rates/ http://www.mortgagebestrate.net/keep-yourself-updated-with-the-latest-mortgage-rates/#comments Tue, 12 Oct 2010 11:31:24 +0000 admin http://www.mortgagebestrate.net/keep-yourself-updated-with-the-latest-mortgage-rates/

Mortgage Rates Canada – Employ a Mortgage Broker Get the Best Rates

Mortgage Rates Canada – All You Should Know About Mortgage Rates Canada

Making The Most Of Current Mortgage Rates

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We all face poor financial conditions in our life a number of times. During this financial crisis, mortgage loans are one of the best options through which we can overcome these pathetic circumstances. Today most of the people are unaware of the mortgage loans which are easily available in the market. A mortgage loan is a type of a loan that is issued on behalf of a real estate property. These loans are not at all issued on behalf of the movable properties. There are several aspects which are related to these mortgages. Mortgage rate is really one of the most important factors related to these loans. These mortgage rates may vary from one company to another these mortgage rates play a very important role in the process of loan taking.

What is a mortgage rate? An accurate answer to this question can really help you a lot in understanding the real meaning of these mortgages and their aspects. Mortgage rate is the rate of interest that is charged on the principal amount. Everybody wishes to have a low mortgage rate for their property dealing. You must have a good understanding of property dealing. You must have the power to enhance your acclaim as best as you can.

If anybody is scheduling for doing an acquisition, he must be conscious of all kinds of regulations related to the Mortgage rates. You must do a thorough research in the markets regarding mortgage loans and their rates. You must also stay in relationship with the knowledgeable person in this field who can update you with day to day changes.

There are many factors which affects this rate. If you are demanding the low rate in the refinement period of paying back, you will able to receive your desire rate but if not in that particular period you could not able to receive the desires rate at any cost. Try to fetch this low rate during your grace period only. Another factor responsible for the low rate of mortgage is the Credit sore or rating. It is clear like transparent glass, as high you credit rating will be, you will have the high probability to receive the low rate.

People, who do not have any previous knowledge regarding these rates, have to face lots of trouble while financing their loans. There is always a probability to be fooled by the others brokers. Recovery from this, you should always try to read the news paper for the fluctuation in rates as well as there is need of hand to hand with the knowledgeable people in this field.

So, it is great duty for those people to update their knowledge regarding this field as soon as possible.

Related posts:

1. Mortgage Rates Canada – Employ a Mortgage Broker Get the Best Rates
2. Mortgage Rates Canada – All You Should Know About Mortgage Rates Canada
3. Making The Most Of Current Mortgage Rates

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Tips for Researching Lowest Mortgage Rates

Tips for Using the Internet to Find the Lowest Mortgage Rates

Mortgage Rates – Apply Online to Get the Best Mortgage Rates

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The internet can be very useful for those individuals who are in the market for a mortgage loan, allowing them not only to borrow money from lenders who operate online but also to find more information about potential loans before they actually commit to a specific lender. While not all borrowers take the time to research mortgage rates online, those who do can often find competitive if not superior rates. These rates can be superior when compared to those that would be found after simply visiting a few different mortgage lenders in their local area. If you have been looking to learn how use the internet to help you research mortgage rates before committing to a loan, then this information should assist you in being able to make an informed decision when you borrow.

One of the first things that you should do when researching mortgage rates online is to spend a few minutes finding out what the national average rate is for a mortgage loan. Mortgage rates fall under federal regulation, but they may still vary from one location to another; by discovering the national average you can get a better idea as to whether the rates in your area are above or below the average. This in turn helps you to decide whether you can be better served by using a local mortgage lender or if you would be better off to expand your search to lenders in some other areas (or to focus more on lenders who operate primarily or exclusively online.)

Once you have determined what the national average is for interest rates, take a little bit of time to shop around online for properties in your area. While you may already have a specific property in mind when you start looking for a mortgage loan, this may give you a better idea of how much homes and other property in your area is selling for and may assist you in negotiating a better purchase amount for the property that you buy. Once you know both the average national mortgage rate as well as the average rate of properties in your area, you should be in a much better position to shop around for a good deal on both the property that you buy and the mortgage loan that you use to buy it.

When using the internet to research mortgage rates, do not forget that most if not all of the mortgage lenders that you might be considering should have websites that you can visit. Not only can this help you to find out more about the lenders themselves, but in some cases you may be able to learn things about their lending policies that you might not have known previously. Many of these mortgage lenders may also give you access to valuable tools on their websites, such as mortgage calculators that can help you to develop an estimate of both your likely interest rate and how much you should have to pay each month for your mortgage at that rate.

Some mortgage lenders choose to operate primarily or exclusively online, so when researching mortgage rates online you may find yourself with access to lenders that you would not be able to use otherwise. By requesting loan rate quotes from these online lenders, you should have a chance to expand your search for a good mortgage rate while gaining a better idea of whether the quotes that you have received from local lenders are the best that are available to you. You may find that you have gotten a truly exceptional rate quote from one or more of the lenders that you have already considered, or you might discover that you can find lower rates by shopping elsewhere.

One other important advantage of using the internet to research mortgage rates online is the fact that you can often find out the information that you want quickly. Many online mortgage lenders offer instant quotes that are calculated and sent to you via email, and their rate information is updated daily to stay up-to-date with the latest federal mortgage rates. There may be some discrepancies between what is displayed on the website and what rate is available. This is why is it best to request a quote because mortgage rates can change often. Online lenders and other mortgage information websites are generally able to get you the information that you want quickly and without having to deal with lending officials for every question that you might have. You can even spend your down time at night finding out more information about your mortgage rate options, freeing up your time during the day and not making you have to adjust your schedule just to find out the information from local lenders when they are open.

Related posts:

1. Tips for Researching Lowest Mortgage Rates
2. Tips for Using the Internet to Find the Lowest Mortgage Rates
3. Mortgage Rates – Apply Online to Get the Best Mortgage Rates

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8 Ways to Save Money and a different approach to Saving Money on your Mortgage Loan

Save Money With A Mortgage Calculator

Saving The Most Money With The Lowest Mortgage Rates

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When it comes to mortgages, there are so many different variables that come into play, it’s sometimes hard to know what your payments will be.

A mortgage calculator can save you a lot of money

Even if you already have a mortgage, you might want to gauge how quickly you could repay your mortgage if you increased your payments to a certain amount or the amount you would have to pay each month to repay your mortgage within a certain about out time.

You don’t have to be a mortgage expert to do these calculations. Using a mortgage calculator you can input information about your mortgage and the variable you want to change and find out numbers you are looking for.

Types of Mortgage Calculators

A mortgage loan payment calculator calculates the amount of your monthly payment based on the amount of the loan, the interest rate, points charged by the lender, cost of the loan, and the length of the loan.

By adjusting these factors in the mortgage calculator, you can estimate how your monthly payments will change. For example, if you are unsure of your interest rate, you can test various interest rates to see how your monthly payment will be affected.

Another scenario you can test using a mortgage calculator is how your monthly payment will change if shorten or lengthen the amount of the loan.

Some mortgage calculators allow you to test the amount you can afford to pay for a mortgage.

Into the mortgage calculator you enter your income information, the amount of down payment you would like to pay, debt information, and loan information. The mortgage calculator will return to you the amount you should qualify. The calculator also gives you the monthly payment and tax information for the mortgage you are qualified for.

Finding a Mortgage Calculator

Locating a mortgage calculator isn’t difficult at all. You can easily find one by entering the phrase “mortgage calculator” into a search engine.

The search engine will return several results of websites to you. Look at the different calculators and play around with the functionality offered.

Bankrate.com offers a mortgage calculator that is fairly easy to use. You can find the calculator by visiting the website and typing “mortgage calculator” in the search box.

In the calculator, enter your mortgage information and monthly payments, and then click the “Show/Recalculate Amortization Table” button. You will be shown a table listing your payments for the length of your loan, along with the principal and interest with that payment and the balance of your loan.

Using Bankrate’s mortgage calculator, you can also calculate the affects of adding extra money to your monthly payment, adding a lump sum annual payment, or a one-time payment during a specific month and year. When you recalculate the amortization table you can see the effect of the payments on your mortgage.

A mortgage calculator is a good way to play with factors associated with your mortgage and see the effect those factors have on your monthly payment and total payoff. If you have a mortgage, or you are thinking about getting one, a mortgage calculator will be of assistance to you

Related posts:

1. 8 Ways to Save Money and a different approach to Saving Money on your Mortgage Loan
2. Save Money With A Mortgage Calculator
3. Saving The Most Money With The Lowest Mortgage Rates

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An Adjustable Rate Mortgage Can Be The Best Option

A Guide To Adjustable Rate Mortgage Loans

Potential Disadvantages of an Adjustable Rate Mortgage

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An adjustable rate mortgage, called an ARM for short, is a mortgage with an interest rate that is linked to an economic index. The interest rate, and your payments, are periodically adjusted up or down as the index changes.

ARM Terminology

Index

An index is a guide that lenders use to measure interest rate changes. Common indexes used by lenders include the activity of one, three, and five-year Treasury securities, but there are many others. Each ARM is linked to a specific index.

Margin

Think of the margin as the lender’s markup. It is an interest rate that represents the lender’s cost of doing business plus the profit they will make on the loan. The margin is added to the index rate to determine your total interest rate. It usually stays the same during the life of your home loan.

Adjustment Period

The adjustment period is the period between potential interest rate adjustments.

You may see an ARM described with figures such as 1-1, 3-1, and 5-1.

The first figure in each set refers to the initial period of the loan, during which your interest rate will stay the same as it was on the day you signed your loan papers.

The second number is the adjustment period, showing how often adjustments can be made to the rate after the initial period has ended. The examples above are all ARMs with annual adjustments–meaning adjustments could happen every year.

If my payments can go up, why should I consider an ARM?

The initial interest rate for an ARM is lower than that of a fixed rate mortgage, where the interest rate remains the same during the life of the loan. A lower rate means lower payments, which might help you qualify for a larger loan.

How long do you plan to own the house? The possibility of rate increases isn’t as much of a factor if you plan to sell the home within a few years.

Do you expect your income to increase? If so, the extra funds might cover the higher payments that result from rate increases.

Some ARMs can be converted to a fixed-rate mortgage. However, conversion fees could be high enough to take away all of the savings you saw with the initial lower rate.

ARM Indexes

While you can’t dictate which index a lender uses, you can choose a loan and lender based on the index that will apply to the loan. Ask the lender how each index used has performed in the past. Your goal is to find an ARM that is linked to an index that has remained fairly stable over many years.

When comparing lenders, consider both the index and the margin rate being offered.

Discounted Rates and Buydowns

When you’re buying a home you might encounter sellers who offer to pay a buydown fee that allows the lender to offer you an initial rate that’s lower than the sum of the index and the margin. New home builders sometimes offer that type of purchase package to help get people into their homes.

The buydown rate will eventually expire and your payments could rise significantly if an ARM rate is adjusted upwards at the same time the discount expires.

Keep in mind that sellers sometimes raise the price of a home by the amount they pay to buydown your loan. The extra cost may in time override any savings from the initial discount.

Interest Rate Caps

Rate caps limit how much interest you can be charged. There are two types of interest rate caps associated with ARMs.

* Periodic caps limit the amount your interest rate can increase from one adjustment period to the next. Not all ARMs have periodic rate caps.

* Overall caps limit how much the interest rate can increase over the life of the loan. Overall caps have been required by law since 1987.

Payment Caps

A payment cap limits how much your monthly payment can increase at each adjustment. ARMs with payment caps often do not have periodic rate caps.

Carryovers

If an interest rate cap held your interest down at an adjustment even though the index went up, the amount of the increase can be carried over to the next adjustment period.

Beware of Negative Amortization

Amortization takes place when payments are large enough to pay the interest due plus a portion of the principal.

Negative amortization occurs when payments do not cover the cost of interest. The unpaid amount is added back to the loan, where it generates even more interest debt. If this continues you could make many payments, but still owe more than you did at the beginning of the loan.

Negative amortization generally occurs when a loan has a payment cap that keeps monthly payments from covering the cost of interest.

The Bottom Line

Lenders are required to give you written information to help you compare and select a mortgage. Don’t hesitate to ask as many questions as it takes to help you understand every aspect of ARMs and other home loans that are offered to you.

For more information on adjustable rate mortgages, amortization tables, mortgage basics visit Independent Loan Information.

Related posts:

1. An Adjustable Rate Mortgage Can Be The Best Option
2. A Guide To Adjustable Rate Mortgage Loans
3. Potential Disadvantages of an Adjustable Rate Mortgage

]]> http://www.mortgagebestrate.net/how-to-decide-if-an-adjustable-rate-mortgage-is-right-for-you/feed/ 0 http://www.mortgagebestrate.net/benefits-of-using-mortgage-calculators/ http://www.mortgagebestrate.net/benefits-of-using-mortgage-calculators/#comments Tue, 14 Sep 2010 11:32:17 +0000 admin http://www.mortgagebestrate.net/benefits-of-using-mortgage-calculators/

Benefits of Mortgage Calculators

Mortgage Calculators Confusion!

Mortgage Calculators – Simple But Effective

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Purchasing a home can be a difficult process especially for first-time home buyers. Not only does it take knowledge of the housing market and how it works, but it also can be a lengthy process with several steps along the way. Of course, nothing is more depressing for individuals than to get halfway through the process only to be turned down for a home mortgage. This is often due to the fact they don’t have the financial resources or credit to get the size of mortgage they need to cover the cost of the home they want to purchase. Individuals and families can prevent this from happening to them by utilizing mortgage calculators.

There are many benefits to using mortgage calculators. Many people benefit by using them to figure out what they can expect their monthly mortgage payment to be on a house. They can go around to various open houses and see what is available. Afterwards they can then go home and run the different prices of each home they liked through a mortgage calculator to determine how much they would pay each month. This helps them to know what houses are affordable given their financial resources.

Another benefit of using mortgage calculators is the fact that individuals and families can estimate how much they will spend on interest. Different mortgages offer different interest rates and different payoff periods. Individuals can plug in different interest rates and payoff periods to see how it affects their monthly payment. By using a mortgage calculator, individuals or families may realize they can cut their 30 year mortgage to 25 by increasing their monthly payment by $150 every month.

Many mortgage calculators also provide consumers with the option to compare costs for buying a home or renting it. Depending upon your age, lifestyle, where you live and other factors it can be more of an advantage for you to rent. This is particularly true if you are someone who isn’t interested in remaining in one location for many years. A mortgage calculator allows you to quickly see if renting or buying is the better option for you.

The fact mortgage calculators are provided to individuals and families for free is also beneficial. Lending companies and organizations want individuals to be successful in purchasing their new home, thus they provide them with a mortgage calculator to help them find out what they can afford. Several businesses offer a mortgage calculator for you to use for free, and you can find one by simply searching for it on the Internet.

As you can see, there are many benefits to using one of the many mortgage calculators available on the Internet and through financial organizations. No one wants to have their new home under foreclosure. You can prevent this from happening to you by using a mortgage calculator to ensure you can afford the house you purchase. By doing so you can enjoy your home for many years to come without having to worry about how you’re going to pay for it.

Related posts:

1. Benefits of Mortgage Calculators
2. Mortgage Calculators Confusion!
3. Mortgage Calculators – Simple But Effective

]]> http://www.mortgagebestrate.net/benefits-of-using-mortgage-calculators/feed/ 0 http://www.mortgagebestrate.net/with-mortgage-rates-so-low-more-borrowers-want-to-refinance-their-homes/ http://www.mortgagebestrate.net/with-mortgage-rates-so-low-more-borrowers-want-to-refinance-their-homes/#comments Tue, 07 Sep 2010 11:31:47 +0000 admin http://www.mortgagebestrate.net/with-mortgage-rates-so-low-more-borrowers-want-to-refinance-their-homes/

Fixed Rate Borrowers Must Act Now

Refinance Your Mortgage For A Better Interest Rate

FHA Mortgage loans for Condos and Town homes

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There are a large number of borrowers who want to refinance their homes because mortgage rates are so low. Since the government recently released a number of plans to help borrowers stay in their homes by making refinancing and/or obtaining mortgage modification easier, millions of homeowners have taken advantage and are refinancing their homes and lowering their monthly mortgage payments.

Every bit of savings helps during these tough economic times. Refinancing helps consumers put more money in their pockets which they can turn around and spend elsewhere to help jump start the economy. It’s a win win for everyone.

Benefits of Refinancing

• If you have an adjustable rate mortgage, it is much better to refinance to a fixed rate with today’s low interest rates. Depending on your mortgage amount, you may be able to save as much as $200.00 -$300.00 a month on your payment, especially if you eliminate any PMI payments.

• With lower monthly payments, you can put the money towards other family needs. It makes sense to refinance especially if your income has been reduced as a result of the economy and job cuts. You must show that you do have income to repay the monthly payments so if you do not have enough income, you will not qualify.

• Another benefit is you can shorten the mortgage term of your loan. Let’s say you had a 30 year mortgage, you may now want to apply for a 15 year.

• Take equity out of your home and have some extra cash. If you have equi8ty in your home, you may have excess cash that you can take out when you refinance and use for something else, like paying off bills or using it for college tuition.

• Eliminate your PMI payment. If your original mortgage had a PMI payment, and over the years you have paid down the mortgage balance and now have substantial equity of at least 20%, you will be able to get rid of that PMI payment.

Talk to your mortgage broker or lender today and find out if you qualify. If your interest rate can be lowered a minimum of one or two points, then refinancing is the best option for you.

However, keep in mind that there are fees to refinance. Some borrowers have discovered that the fees have increased and outweigh the benefits to them to refinance. While others have found out that their homes values have declined too much to qualify for refinancing.

The New Home Affordable Refinance Program

Here are some highlights of the recent government Home Affordable Refinance Program:

• Homeowners with debt that exceeds their home value by 5% to be eligible for refinancing.

• Eliminates prepayment penalties.

• To qualify, your loan must be backed by Fannie Mae or Freddie Mac.

The government estimates that up to 5 million homeowners could be eligible.

Who’s not eligible?

• Homeowners whose home values declined under 5%.

• Jumbo mortgages exceeding $417,000.

Borrowers must show they have enough income to afford the new mortgage payment. The new plan is estimated to help approximately 5,000,000 more homeowners. From the amount of refinance requests lenders are receiving, the plan appears to be working quite well for homeowners who are eligible.

To read more articles from REI Circle, please visit www.reicircle.com

Related posts:

1. Fixed Rate Borrowers Must Act Now
2. Refinance Your Mortgage For A Better Interest Rate
3. FHA Mortgage loans for Condos and Town homes

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Mortgage Interest Rates-the Current Situation

Key Aspects of Refinancing a Mortgage

Title: How to Find the Best Mortgage Protection

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You have found the perfect home. You are ready to move – yesterday. But you have no idea how to go about in the mortgage world. All home owners learn their way through this maze and you are no exception. Take the time to learn – it is well worth the effort you put into it.

To begin, find out what your credit rating is. There are three credit bureaus in the U.S.A. You are entitled to one free credit report per year and either of the bureaus can provide you with your score. Your credit score will give you a lot of information and it may even help you discover if someone has used your credit or your name without you knowing about it.

Once you know your credit score, then you are in a position to negotiate with your lender. While the interest rate may not be negotiable, several other items relating to your loan may be. You must know what to ask for in the negotiation stage. Remember, to go into escrow to buy a house, you will have points or costs that you must pay toward the loan. Points are actually a charge that the lenders use toward the cost of borrowing the money they will need to finance your loan. Each point equals 1% of total amount you are going to borrow. If you borrow $125,000 and your lender is asking you to pay three points, your total cost to borrow the money is $3,750.00. Ask about lowering the points by a quarter or a half.

In some mortgage loan transactions there are still institutions that charge for their attorney’s legal work on the loan. Point out that some of the other lenders you have talked to no longer charge for this service and ask for a break on the lawyer’s fees. There are document preparation fees and there are the advertisements of other lenders across town. Use the competitive price system to your advantage. Saving a few hundred dollars in up-front escrow costs are a few hundred dollars you might need to put in that skylight that would look great in your new den.

Learn how the mortgage loan industry works; learn its lingo. When you know what the person on the other side of the desk is talking about, then the terms and phrases that they pull out of their hat are not so scary and you can converse and ask questions with confidence.

Fill out your application and begin to get quotes from three or four different lenders. Sometimes, looking at the bottom line is helpful. However, knowing what the escrow costs are and what the long-term mortgage rate is will help you make an important decision: do you want to pay more up front in order to get a better long-term rate or would you prefer to pay less up front and pay a little more each month? Examine the various offers and make sure you know what each charge is for and what it means. If they are professionals in the business, the lender will not mind helping you to understand – they want the other business that you might have for them in the future.

Once you have the quotes and you understand what the programs and costs mean, then you are in a position to choose the lender you prefer. Let the lender know that you have gotten other quotes and start asking them to work with you in the places where the other lenders quote might look better.

There are several laws that you also need to be aware of as you begin to search for a loan. The first one is the Equal Credit Opportunity Act. Another is the Fair Housing Act. Both of these prohibit lenders and sellers from discriminating against any buyer/borrower and they make it illegal to charge more for their services to people of a different backgrounds, belief systems, nationalities, etc. These laws are designed to protect you, the buyer and borrower. You need to know your rights as you begin this process.

Even if you have credit problems, there are still ways to negotiate loans. You might need to explain the circumstances of late pay situation, especially if it was due to the loss of a job or an illness. It is especially important to point out to lenders when you have fixed the situation and show them the plan you have in place now to avoid future situations of the same nature.

You need to learn something about interest rates and the different types of interest rates available. Some interest rates appeal because of their stability while others appeal because of their flexibility. Can you work with the flexibility of an adjustable-rate mortgage or do you feel more comfortable with a fixed-rate loan? Those are questions you need to ask and examine with your financial advisor and your lender.

Once you have your questions answered, pursue the dream for purchasing your home for yourself and your family.

Related posts:

1. Mortgage Interest Rates-the Current Situation
2. Key Aspects of Refinancing a Mortgage
3. Title: How to Find the Best Mortgage Protection

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The Benefits of Reverse Mortgages

Calculators for Reverse Mortgages

Why You Should Consider Getting A Reverse Mortgage

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Reverse mortgages are an exciting and fast growing way for seniors 62 and older to keep their property and tap their equity to improve cash flow. Many people have questions about reverse mortgages and here are some common questions and answers.

What is a reverse mortgage?

A reverse mortgage is a loan for seniors 62 and older to tap their equity in their home. They do not make any payments on the loan until the house is sold.

Who qualifies for a reverse mortgage?

To qualify for a reverse mortgage, you need to be at least 62 years old and own the property free and clear or have a very small mortgage balance. Unlike traditional mortgages, credit and income is not considered for reverse mortgage eligibility.

How do I get my money?

This is up to you. It’s your equity. The only requirement is that any outstanding lien (mortgage or other debt against the home) on the property must be paid in full at the time the reverse mortgage is done. You can take the remainder of your reverse mortgage funds as a lump sum, line of credit or monthly payments. And the best part of all is, you can take any combination of these choices- some money as a lump sum to perhaps pay off bills, some as a line of credit to meet future needs, and some as a monthly amount to supplement your current income. You can even change your mind down the road- it’s your equity, it’s your choice.

What are some things that I can do with a reverse mortgage?

You can do anything you want with the proceeds as long as you pay off any liens against your home. Once that is done, the funds from a reverse mortgage can be used for virtually any purpose- supplement your current income, pay off bills, home improvement, travel, the list is virtually endless.

Why don’t I just sell my home?

Sometimes, that may be the best solution. A good loan officer will answer all your questions about a reverse mortgage and then let you decide. However, if you sell your home, where will you live? You also need to consider the costs associated with the sale.

When does the reverse mortgage become due?

Once the home is no longer your residence, the loan becomes due. Depending on the situation, you may decide to have children or other heirs sell the home, or if they want to keep the property, they will need to pay off the reverse mortgage either with their own funds, or by obtaining a regular or “forward” mortgage. In any case, a reverse mortgage is an FHA insured “Non Recourse” loan which means that you will never owe more than the property is worth. Of course, any remaining proceeds after the sale of the home will go to you or your heirs. This is a very safe and highly regulated financial product.

How can I find out how much money I qualify for?

This depends on your age, the property value and the amount currently owed. The best way to find this out is to contact your loan officer or use the calculator on the AARP website.

As you can see, reverse mortgages are here to stay. For more information about reverse mortgages and to see if they are right for you, contact your loan officer.

Related posts:

1. The Benefits of Reverse Mortgages
2. Calculators for Reverse Mortgages
3. Why You Should Consider Getting A Reverse Mortgage

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