The Truth About Choosing The Right Fixed Rate Mortgage

James Redder is with us today to help us choose the right fixed home mortgage. We’re very excited to present this article to you, since it breaks through many of the myths and misconceptions in the mortgage market. Take it away, James!

The Truth About Choosing The Right Fixed Rate Mortgage

There is always a debate when home buyers have to decide on the merits of 15 or 30 year fixed mortgage rates. Many people wait until they are older before taking on the responsibility of a mortgage so an early payment of this large debt is an important issue to think about. In a situation as important as this time needs to be spent considering all the available options. Home buyers looking into this need to be assured their monthly payments will not increase.

Even though it was important for us to pay off our loan at the earliest possible opportunity, we didn’t want high, unrealistic monthly payments which we would have trouble maintaining. Considering longer term fixed rate mortgages was one option if we could not afford a 15 year plan. We didn’t really like the prospect of having a mortgage as we approached retirement so were really hoping to get one of the loans with 15 year fixed mortgage rates. We felt that there was a great deal of emphasis on paying the mortgage off early.

We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. Although a number of things had to be pondered over, eventually the choice was made for us. Discovering my wife was having a baby was the most important reason. As she intended to raise our child at home we couldn’t rely on her financial income to the monthly expenditure. The problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. We knew that it just wasn’t an option and the risk was too great. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

We are also able to make extra payments throughout the year to make the principal shrink quicker. Those few extra payments also help reduce the number of years you have to pay the loan over. In the long term, this is a strategy well worth pursuing if you are able. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. Anyway, everything worked out fine despite our hesitancy.

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James Redder markets a Finance website. If you liked the finance info, GET the powerful info RIGHT NOW. Goto Refinance After Bankruptcy website.

Excellent tips, James! Thank you for sharing your experience with us!

For a personalized consultation about your home mortgage needs, just drop us a line today. It’s always free, and always great advice.

Home Mortgage 101 - What You Need to Know to Get Started

Joining us today is Barry Stein, with some excellent advice on getting started with home mortgages. As always, I know you’ll find this article to be a great resource for getting your feet wet in the world of mortgages.

Home Loans

Buying a home remains the great American dream. Home ownership rates have been exploding in recent years, spurred on by the historically low interest rates in the home mortgage market. Home prices have been rising at far faster than inflation, especially in major urban areas such as San Francisco, San Diego and Chicago. This means that not only can that home you’ve always wanted put a roof over your head, but it can provide you with a great investment as well. For people new to the mortgage market, buying their first home starts with finding the best home loans.

All potential homeowners should take some time to research home loans before calling their local realtor. There are a dazzling array of choices available when it comes to home loans, and finding the right mortgage for your needs can be difficult. Approach your upcoming home purchase with the same seriousness you apply to other major purchases. Your home will most likely be the biggest single investment you ever make. Take the time at the beginning to educate yourself about home loans. It will be time well spent.

Home loans are available from a wide variety of sources. These sources include banks, savings and loan associations, credit unions and mortgage brokers. Shop around at all of these sources to find the home loans with the lowest interest rate and lowest costs.

You will also have to decide between fixed rate home loans and variable rate home loans. Variable rate home loans are often advertised with extremely low “teaser rates”. These rates are used by lenders to get your attention and lure you in.

Before signing up for a variable rate mortgage, make sure you find out what the interest rate cap is. Variable rate home loans are usually based on an underlying interest rate, like the prime rate. The interest rate you pay will typically be the prime rate plus or minus a certain percentage. The variable rate mortgage will have a cap above which the interest rate cannot rise. Find out what that cap is, then use a mortgage payment calculator to see what your monthly mortgage payment will be at that rate. If you cannot afford the monthly payments at the maximum interest rate, you may not want to take the mortgage loan. While it is unlikely that interest rates will rise sufficiently to make the maximum interest rate kick in, it is always a possibility.

Variable rate home loans can be a good choice if you believe interest rates are likely to fall. In an environment where interest rates are steady or rising, they may not be so good a choice. You may also want to consider a variable rate mortgage if you do not plan to stay in your home more than five years. For instance, if your job transfers you every couple of years, you could probably get away with a variable rate mortgage and take advantage of the lower interest rate. When you move and sell your home, you will probably realize a gain due to rising home prices.

On the other hand, fixed rate home loans have a set interest rate for a set period of time, generally either 15 or 30 years. The interest rate does not change, therefore you will always know what your monthly mortgage payment will be. You are protected from rising interest rates with a fixed rate mortgage. If rates fall significantly, you can always refinance your mortgage loan to take advantage of the lower rates.

If you can afford the payments, 15-year home loans can substantially lower the amount of money you will ultimately pay for your home. When you run the numbers on a 15-year versus a 30-year home mortgage loan, you may be surprised at how affordable the 15-year home loan can be. Your mortgage payment will not double if you go with a 15-year mortgage versus a 30-year. This has to do with the affect of compound interest. You are paying far less interest in the long run on a 15-year mortgage.

Whatever type of home loan you decide on, the most important thing is to take that step which transforms you from a mere renter to a home owner and builder of equity. There are a great many home loans out there, but once you find the right one, you will find the rewards of home ownership well worth the time and effort put forth.

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Barry Stein is the owner of aWebBiz.com where he offers cutting-edge tips on all aspects of business and a Free Newsletter on Internet Marketing. To find more advice, tools and resources to help you succeed in your business, visit: http://www.aWebBiz.com

Incredible article, Barry! We’re excited to bring these tips to our readers!

If you’re reading this and would like to know more about how this advice applied directly to where you are right now, get in touch with us today, and we’d be happy to talk with you for absolutely no cost.

How To Get a Home Mortgage If You’re Self-Employed

As the self-employed community grows, so does the need for lenders who tailor their services to the market. If you’re self employed, it’s very hard to get the loan you deserve unless you go to a specialist. This excellent article by David Miles sheds some light on the subject.

How To Get a Mortgage If You’re Self-Employed

If you are self-employed, work on a contract basis, or have an income that is irregular or comes from multiple sources, it will generally be harder for you to get a mortgage than it is for someone who is an employee and can easily prove their income.

A self-employed person is someone who runs their own business and works for themselves without an employer. Directors of small limited companies, although technically employed on a PAYE basis, will generally be classed as self employed when it comes to applying for a mortgage or remortgage.

With over three million self-employed individuals in the UK, the attitude of many mortgage lenders towards the self-employed population is a problem that can affect a large number of people, even though many self-employed people often earn more than a lot of salaried workers.

The problem stems from the fact that the majority of mainstream mortgage lenders require proof of income when assessing a mortgage or remortgage application. Employed people can use their payslips and P60 as proof of salary, but there is no such straightforward equivalent if you are self-employed.

In place of payslips, self-employed workers may be asked to provide audited accounts that show their income over the last three years. However, in many cases, these accounts will not give an accurate reflection of how much money a self-employed person is making. This is because if the accountant who prepared the accounts is doing his job properly, he will have offset as many allowable expenses as possible against tax. This has the effect of reducing the self-employed person’s net profit, upon which the lender will base the size of mortgage or remortgage they are prepared to offer.

The situation is even worse for the newly self-employed, as they may not yet have been trading long enough to have had three years’ worth of accounts prepared.

This is where mortgage lenders who specialise in self-certification mortgages and self-employed mortgages come into their own. These types of lenders appreciate the different and complex working patterns of the self-employed, contract workers, and people whose jobs are seasonal. They are prepared to look at each case individually and assess each mortgage application on its own merits, rather than just applying a series of one-size-fits-all income tests. In many cases, self-certification means that you do not need to supply any proof of income - you just declare what your income is without having to provide any supporting documentation.

In addition, specialist self-employed and self-certification lenders are more likely to offer flexible mortgage products that allow overpayments and underpayments. This is ideal for people whose income can fluctuate throughout the year, as it means you can overpay when times are good and underpay if you’re business is going through a quiet period.

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Copyright 2004 David Miles. David Miles is the editor of a number of mortgage websites including UK Mortgages & Remortgages where you can find further advice on mortgages or request a personalised mortgage quote or illustration.

Excellent write-up, David! I personally learned a lot and I know our readers did too!

If you enjoyed this article but want to know more about getting a home mortgage in your current situation, just drop us a line today and we’d be happy to provide you with a free consultation to get you headed in the right direction.

How To Save Thousands in Interest on Your Home Mortgage!

No matter if this is your first or 30th home mortgage, you can always learn new ways to save more money on your mortgage. In this article, Sameer goes over the basics of restructuring your payments to save you lots of money in interest.

How To Save Thousands in Interest on Your Home Mortgage!

So you have a mortgage on your home or planning to get one? Here’s something to consider if you want to reduce your interest payment and save on thousands of dollars. Consider going in for a bi-weekly mortgage payment plan.

So, what is a bi-weekly mortgage payment plan? The difference in this type of mortgage plan lies in the frequency of payments. Out here you make your payments every two weeks instead of every month. By going in with such a payment plan, you end up paying for the 52 weeks in a year, i.e. 1 month more than the otherwise 12 payments you would make with the monthly plan (52 / 4 = 13 payments in a year). You may think why pay extra? But the benefits are there for all to see. By going in for such a mortgage plan, you are reducing the tenure of your loan as well as continuously reducing the principal and interest which has to be repaid.

An illustration to show what we mean - Suppose you were to go in for a mortgage of $150,000 for a term of 360 months at an interest rate of 6%, your monthly payment would work out to $899.93 and your total interest through out the tenure of the loan would work out to $173,757. Now consider the same mortgage taken on a bi-weekly payment plan. Your bi-weekly payments would be of $449.67 while your total interest for the entire tenure would work out to only $135,294 + you end up completing the loan in 24 years instead of 30. Huge difference!

The savings from such a payment plan are huge and are worth considering if you can afford to make the payments every two weeks. At least, keep it as an option!

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Sameer S Panjwani is the CEO and Founder of ChoiceOfHomes.com - Find real estate listings of homes on sale and rent.

Thanks for writing that excellent article, Sameer! This is a great tip for making more effective payments and stretching our dollars further.

To find out more information about restructuring your mortgage payments or other home mortgage topics, we’ll provide a free consultation to get you headed on the right track - just contact us today to get started.

Like Free Money? Take Advantage of the FHA for your Next Home Purchase!

Today, we have the pleasure of hearing from Greg Shuey, a loan originator from Utah, on the topic of the FHA. Since he’s walked clients through FHA-type loans before, he’s in a great position to offer his expertise for us today. Let’s take a look at what he has to say.

FHA Loans Make Buying a Home Easy During Hard Times

The Federal Housing Administration or FHA is a federal agency established as part of the National Housing Act of 1934. Its goal is to improve the housing standards and conditions of every Americans. FHA provides a sufficient home financing system. The agency does this by insuring mortgage loans to help stabilize the mortgage market.

In short, the FHA is your key to homeownership. You can get different types of mortgage loans offered by the Federal Housing Administration. They are the following:

• Fixed-Rate mortgages
• Adjustable-Rate mortgages
• Energy Efficient mortgages
• Graduated Payment mortgages
• Growing Equity mortgages

You need to meet certain requirements such as employment and credit scores to qualify for any of these mortgages. There are limits imposed on FHA loans offered to homebuyers. These limits will help you purchase a home during tough economic times and strict lending standards prevent you from qualifying for conventional loans.

Last year, the Housing and Economic Recovery Act of 2008 signed by President Bush made some changes to FHA loan limits to help more homebuyers qualify. For example, FHA loan limits on single-family home mortgages will be raised to $271,050 in low-cost areas and $625,500 in high-cost areas. The previous FHA loan limit was $362,790.

The new limits, according to the Housing and Urban Development secretary, is targeted at assisting neophyte homebuyers and those struggling with money to refinance to government-backed loans such as FHA loans. One of the most beneficial things FHA does is that it allows you to refinance or buy a home with a low down payment. This spells great for first-time homebuyers and those who dont have much money for initial payment. Other than that, FHA-insured loans have more benefits than the conventional loan. They have lower down payment, which is at 3 percent. In addition, it can come anybody”family members or organizations as a gift.

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Greg Shuey originates loans for Utah Financial, a mortgage company in utah. Together with Chase Gunderson, we specialize in FHA home loans and Utah FHA Streamline loans. We are here to educate and help you along the way when researching streamline refinance in utah.

Thanks for sharing those excellent insights, Greg! I know our readers have picked up some valuable tips!

If you’re a reader and considering making a move in the mortgage industry, talk to our experts first. We’ll get you pointed in the right direction after a no cost consultation.

Buying a New Home? Use These Essential Tips to Do It Right!

If you’re looking to buy a new home, we’ve got a great article for you. Robin Smith has a great article for those new to the mortgage world. Without further adieu…

Getting a Home Mortgage Loan To Buy Your New Home

Most people find it difficult to buy their home as they are not in a financial condition to afford it. If you are looking for a new home and if you dont have enough money to make your purchase then you can apply for a home mortgage loan with which you could buy your dream home.

Home mortgages are a typical kind of home loan in which you are required to keep your home as collateral against your home mortgage loan amount. All home mortgage loans are secured kind of loan and they require security against the loan amount. Other than putting your home on mortgage, some financial lenders may also require you to provide some down payment in order to get approval for your home mortgage loan. The amount of your home mortgage loan finance is also determined by the current equity value of your home and also the amount that you provide as down payment.

Moreover, your credit history plays a vital role in determining the interest rate and the terms and conditions of your home mortgage loan. However, because of your collateral and your down payment, you will receive a larger home loan amount with a favorable interest rate.

Home mortgages may be again divided into fixed rate home mortgage loans and adjustable rate home mortgage loans. If you take a fixed rate home mortgage loan then you will have to make a fixed monthly installment until the end of your repayment. A large number of homeowners prefer this kind of mortgage loan as they get the knowledge of the amount that they are required to pay throughout the entire loan period. Moreover, it relieves them from surprises like a sudden rise in monthly installment. On the other hand, an adjustable rate home mortgage loan allows the borrower to adjust their monthly repayment according to their repaying ability. The interest rate of an adjustable rate mortgage loan keep on changing with the market trends.

Normally, an adjustable rate mortgage loan allows you to start your repayment with easy monthly installment as you can adjust the interest rate according to your convenience. However, the principal mortgage loan amount and the interest rate usually become much bigger with the completion of the loan period. This is the main reason for the rapid increase of foreclosures over the past few years.

Another type of home mortgages that you can apply is the bad credit home mortgage loans. Even if you have a poor credit record, you can still get a bad credit home mortgage loan if you own the clear title of your present home. Like other home mortgage loans, you are required to put your home as security against your bad credit home mortgage loan amount. Your bad credit mortgage loan amount depends up on the market value of your home and your repaying capacity. Before applying any of the home mortgage loans, you should fist figure out the type of home mortgage loan that will suit for financial condition. Moreover, you should consider various factors like the amount of your down payment and the means of financing the closing payments of your mortgage loan amount. You should also feel comfortable with the monthly repayment that you are going to make in order to avoid defaults on your home mortgage loan.

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The above article has been written by Robin Smith, a professional having keen knowledge of home mortgage loans. Find out more on types of financing and mortgages as listed in real estate directory.

Thanks for your contribution, Robin! We loved your article!

To learn more about how these tips and others can apply to your personal home search, just drop us a line today.