How to Make Home Buying Easy on your Budget

Most people buy a home only once or twice in their lifetime, and it rarely makes sense to buy if you expect to move within two years. Most buyers live in their new homes an average of seven years or more. During a housing slump it may not seem like real estate values will ever go up, but it usually does. Homes appreciate about 4-5% per year as a fairly general rule. 

Financially, there’s a lot at stake when you buy or sell a home. Unfortunately, many of the factors involved are beyond your control. An inspector might discover a fault that you were unaware of, or interest rates could jump without warning. The first step is to hire a good real estate agent. Here’s how you can eliminate buyer’s remorse and purchase the home you love for a price you can afford:

* Bear the location in mind

What type of neighborhood would you like to live in? What school district would be suitable for your family? Where do you like to shop?

Do you own a vehicle, or would you have to take public transportation? Do you need a driveway? If you already have an area in mind, you can start by driving around and looking for “For Sale” signs.

* How much house can you afford?

Even if you’re short on funds, the home buying process will go smoothly if you get familiar with the real estate market and narrow down your choices to fit within your budget.

Speak to a lender to see how much you can get pre-approved for. You can use your pre-approval letter as leverage, especially if the seller receives another offer similar to yours.

* House size matters

You can start the process of finding a perfect home once you have a workable price range. List the things you want, like hardwood floors, skylights or a spacious living room, and the things you definitely need, like three bedrooms, a garden, a first-rate school district, etc. If you discover a house that comes close to having all your needs but doesn’t have all you want, give it another look.

During a housing slump, it’s possible to buy a large home at significantly less than its listing price. This is because so many people are desperate to sell. Remember to take into consideration the physically challenged family member who may need wheelchair access, or the heart patient who cannot climb too many stairs to get to her room.

* Find a way to finance your new home

There are a number of mortgage loans nowadays that suit many different people for different reasons. The three most common are fixed rate, where your payment is fixed for the life of the loan, adjustable rate, where the rate can go up or down after a few years, depending on the market, and interest only mortgages, where for a specified time you’re allowed to make payments that cover only the interest portion of your monthly mortgage payment.

The 5 Most Common Mistakes That Can Hurt Your Home Mortgage Approval

Recently, President Obama put into action the Homeowner Affordability and Stability Plan to help Americans on the brink of foreclosure to receive the loan modifications they need to be able to stay in their home.  This could be the closest we get to a consumer bailout, but the money won’t be available to just anyone who applies.

Most Americans know that they should pay their bills on time to help their credit score, but there are many other factors that can dramatically affect your ability to get a loan.  Let’s take a look at the 5 most common credit mistakes:

1.  Maxing out your credit cards

Repayment ability is the main factor that lenders are looking at, which is essentially your debt-to-income ratio.  If you have a small amount of debt compared to your income, you’re in a much better position to pay off what you owe (quickly).  Before you apply for a home loan, try to avoid charging a lot on your credt cards, so that your balance stays low.  If you carry a balance month-to-month, try to pay them down as much as possible.

2. Buying a car on borrowed money

One of the biggest mistakes many families make is financing a car or other major purchase right before they apply for a mortgage.  Sometimes is can mean the difference between approval and denial.  Wait until after your loan has closed - not just been ‘approved’ - before you take out another loan.

3.  Procrastinating

When you’re looking to refinance an adjustable rate mortgage (ARM), don’t wait until crunch time.  Start preparing at least a year in advance.  Most homeowners wait until just 2-3 months before the expiration of their initial rate, and this can really limit the number of available options. 

4.  Reconciling old bad debt

If you have old charge offs or collections on your credit history, it might seem like a responsible idea to pay down or completely pay off these debts.  Unfortunately, by paying into this debt, your credit report adjusts it to ‘current debt’ which makes your credit problems seem more recent than they were.

5. Reaching out for help

Credit counselors will often give advice that is relevant for getting you out of debt, but typically neglect your ability to get new financing, including home mortgages.  Many times, a counselor will recommend closing healthy credit accounts to stop you from using them, but canceling these accounts is bad for your credit score.  Additionally, lenders don’t like to see that you are having difficulties handing your own finances, and having credit repair services on your record can send up a red flag.

To qualify for a certain type of home loan under the Homeowner Stability Initiative, you might have to sign up for HUD-certified debt counseling program, but otherwise you should stay away from credit counseling before applying for a home loan.  If you really have a spending problem, a better strategy is to put your credit cards where they aren’t easily accessible to you (like a safe deposit box), or even cut them up.  Keep the accounts open, and continue to pay down your balances and make your payments on time.

By avoiding these mistakes, you can help boost your credit score enough to qualify for lower rates, bigger loans, or both!

If you’d like a free consultation to get the best mortgage for your current financial position, drop us a line and we’ll help you out.

Take 13 Years off your Mortgage! Without Paying a Cent More per Month!

We’ve all been looking for the magic bullet to help reduce the duration of our mortgages, but here it is! Without increasing your monthly payment ONE CENT, your can have the bank redirect more of your payment to your principal, and less to your interest. Without further adieu…

Payoff Your Mortgage ~ Use the Fastest Method Without Cutting Into Your Paycheck

WARNING: You’re at a strict disadvantage mortgage companies charge as much interest as plurality as possible without informing you in a clear way all the steps you can take to change it.

The current system requires your payments come after an ‘amortization schedule’, which forces most of your stock to go towards interest.

In the first five years, you could end up spending five times more in interest than in mortgage principal - and that’s a huge chunk out of your paycheck! So if you make $12,000 in principal payments, you end up spending $60,000 in interest. Unbelievable! For a homespun calculation go to Bankrate.

And when you move, the bleeding starts all over again…

The banks know you’ll apparently move again or refinance in 5 years, and then the cycle of paying more interest starts all over again.

It takes years before your loan balance is reduced by a minute amount-how unfair is that?

How several years have you been paying off your mortgage and are you really further ahead?

But here’s how to fight back…

You’re going to love this…there’s an improved wise you can use to reduce these interest payments.

The way to do this is simple. Apply more of your monthly mortgage repayment to principal rather than interest without changing your repayment or refinancing your mortgage.

For example, if you pay $1,200 towards your monthly mortgage repayments, $1,100 goes towards interest and $100 towards principal object in the life of the mortgage.

You can pay more to principal, underADJ Expensiveness to interest…and it’s perfectly OK with the bank!

Hang onto your seat, now there is a way to apply $900 towards interest and $300 towards principal without changing your lifestyle or paying more anything…and the best part is that the banks will gladly accept this!

This fashion has been on every side forever but nobody has figured out how to use it.

Until now.

Wouldn’t you like to shave 13 years off your mortgage? You can! Here’s how…

Your mortgage can be paid off in one-half to one-third of the time. Most of our clients shave at least 13 years of their mortgage without spending a cent more.

And no, you do NOT have to refinance or get another mortgage; just have an perforate mind and a disposition to tackle a common math problem!

The concept is really simple. All you have to do is use a mortgage checking account the right way. Once you set this up you enter upon immediately allocating more of your payments to principal rather than interest and end up paying your mortgage much faster. The best part of all, the banks happily accept this.

Here are the 7 basic steps you need to follow:

1. Calculate your personal ‘HELOC number.’

2. You set up a Home Equity Line Of Credit (HELOC) for the Heloc number.

3. You pay your bills and mortgage on time.

4. You assignment cash to your HELOC at the right time.

5. Your bank takes care of the rest-and they’re happy to do it!

6. Create a spreadsheet to make sure you stay on track.

7. …and YOU PAY OFF YOUR MORTGAGE AS EARLY AS 13 YEARS SOONER THAN NORMAL, AND SAVE AN AVERAGE OF $67,636 CASH!

You will NOT have to change your day-to-day spending habits or your lifestyle to take advantage of this concept. It’s a sound, smart way to pay down your mortgage.

–
Go directly to http://www.eqxl.com, EquityExcel. You will find out the step by step method to pay off your mortgage and the risks to avoid so that you don’t lose your home in the process, and you will be on the path to financial success.

That was a real eye opener! I’ve been waiting for this info for a long time! If you’d like to speak with someone who can talk more in-depth about your personal situation for absolutely no cost, just let us know by dropping us a line today.

Is Your Mortgage Lender Doing the Best They Can? Find out with These Questions…

Today we have Brian Jenkins joining us to give us some very important tips about talking with your mortgage lender. If you’re wondering if you’ve selected the right lender, discussing these ideas with them will help you find out for sure. Enjoy!

Real Estate ~ Important Questions To Ask Your Mortgage Lender

Most of us will only buy a few homes during the course of our life. Combine this fact, with the axiom that home mortgages are perpetually the largest single debit that most people carry, and you can see why choosing a mortgage lender can be nerve wracking. In what is frequently the biggest business transaction of your life, there are certain questions that you can ask that will better help you follow your loan and negotiate the best deal.

What type of loan do you advise?

There are in nonconformist types of loans, and the competent lender should help you grasp each one, and explain the benefits and drawbacks of each. Adjustable rate mortgages are frequently touted for low interest rates, but they are not the best pick for everyone. The rate typically remains low for a year or two, but when it adjusts up, the amount of the monthly liquidation can increase enough that the home owner has trouble meeting their monthly obligations. Fixed rate loans have a fixed interest rate over the life of the loan. The fixed rate is every day a little higher than the adjustable rate mortgage rate, but you have the advantage of cognizant each month exactly how much your reckoning is. If rates drop substantially, you can always refinance your loan. Interest only loans are not as common. In interest only loans, the monthly arrangement is only the amount of interest on the mortgage. These types of loans are best suited for people who have high and steady incomes, and resolution on animated in a home a number enough for it to bodily increase in value. At the end of the loan term, the home owner will either refinance the loan, or pay the balance of the loan in full. If the home has not appreciated during the loan term, it can be onerous to refinance.

What are interest rates and annual percentage rates?

A qualified mortgage lender should be more than willing to lift the veil what their interest rates are for out of place types of loans, as well as the annual percentage rate. They should also be willing to run the numbers for you so that you can see exactly how the anomalistic percentage rates affect the amount of your monthly payment.

How much will the loan cost?

The qualified mortgage lender should supply you with a advantage faith estimate. This is an estimate on the amount of cash that it will cost to shut up your loan. This service faith estimate is not an exact amount, but should be very close, and include appraisal fees, medal insurance and any other fees that the lender requires to fill up the loan. If the lender is unwilling to give you a advantage faith estimate, it is likely that there will be some surprises on closing days. Some disreputable lenders pad the closing costs with administrative fees that are unnecessary and add up quickly. Before you commit to one lender, you should see a copy of the improvement faith estimate that lists every fee you will be to pay to occlude on the loan.

Is there any prepayment penalty?

Although not as common as it once was, some lenders charge a fee if you pay off your mortgage early. While you may ponder that this does not apply to you, if the lender has a prepayment retribution it can be enacted even if you refinance your loan. It is important to confirm with your prospective lender that there are no penalties for prepayment of the mortgage.

How for ages will it take and what if interest rates change?

Closing can take a week or a month, or even longer. It is important to ask your mortgage lender how for a long time they anticipate it will take from the start of the process to closing. You should also ask what happens if interest rates change during the closing process. Ideally, you will lock in your rate at the proviso phase, and if mortgage rates increase, you keep this rate, but if they drop, your lender will ‘float’ your rate down with them.

How much of a down compensation is required?

Down payments can swerve greatly, depending on your credit history, the appraised appraise of the home and even market conditions. Never assume that you know, ask the lender what percentage of the loan amount you should have on hand for a down payment. This is perpetually negotiable, but you need to know person in the process if you will have enough legal tender to case the cost.

How to qualify?

Ask the mortgage lender person in the process what the qualifications are to qualify for a loan. In accession to a solid job history, you will apparently be exigent to have several years’ value of income tax statements, as well as bank statements and notice on any stocks, savings bonds or other investments. Even if you do not conception on cashing these to buy your home, they do count as assets and make it easier to qualify for a loan.

About Author: Brian Jenkins is a freelance writer who writes about topics pertaining to the mortgage industry such as a Pennsylvania Mortgage

Thanks for the the awesome article, Brian, it’s always a pleasure.

I hope you all enjoyed Brian’s article, and if you’d like to discuss your options or have any questions about your specific challenges, we’d be more than happy to assist you. Just drop us a line today.

Not Ready to Refinance Your Home Mortgage? It Could Be the Perfect Time…

Today we’re joined by Brian Jenkins, with a great resource article on the benefits of refinancing. Most of us don’t know the right time to refinance our home mortgage, and that’s okay. The important part is to listen to sound advice and speak with professionals. We’ll let Brian take it away with his article on…

Real Estate ~ The Benefits Of Refinancing A Mortgage

There are a variety of reasons why someone would want to refinance their mortgage. To take in the benefits, it helps to catch exactly what refinancing a mortgage involves. When you refinance a mortgage, you are basically buying your home again. The benefit, of course, is that you are buying the home from yourself. The asking price? The amount left on the loan. So, if you have lived in your home for several years, and have a service deal of equity in your home, you can refinance the balance of your mortgage. Typically, people refinance when mortgage rates have lowered. The benefit then, is that by financing at a low ebb money, and financing it at a lower rate, you can either shorten the term of your mortgage, or you can lower your monthly mortgage payment.

There are other reasons that people refinance their mortgage as well. If you need a substantial amount of money, refinancing is a weal way to come up with the cash. In what is known as a cash out refinance, it is possible to refinance your home, using the appraised appraise of your home as the loan amount (or a percentage of the value, typically without 80%). The difference amid the amount of loan that you qualify for, and the amount you owe on the home, is paid as cash. This is an excellent way to come up with capital for college, home repairs, or other big ticket items. Because homes every moment discern in survey purchase, it is possible to appropriate a substantial amount of wherewithal if you have lived in your home for five or more years. Of course, the more equity that you have in your home, the more cash you can receive. It is important to remember, however, that you will be making mortgage payments on this new loan amount, whatever the amount may be.

Some people choose to refinance a mortgage in order to consolidate their debts. If you have a substantial amount of credit card debit or medical expenses, refinancing can be an excellent way to pay these debts off over an extended week of time. The process is similar to a cash out refinance, however, you will pay off your creditors instead of having extra cash in your account. If you choose this type of refinance, it is important to remember that you are not debt-free. The bills are rolled into your mortgage, so you will be paying the credit card or other insolvency off over a era of 30 years, or whatever your mortgage terms are. If you go caudal to spending the way you were previously when you acquired this debt, then you will end up in a wrong circle. It only makes sense to consolidate your bills into a mortgage loan if you are serious about reducing spending and preventing yourself from getting into the same financial position again.

Drawbacks of Refinancing a Mortgage

Refinancing a mortgage does not always make sense. While it can be an excellent way to save wherewithal on your mortgage, or reduce your monthly expenses, for some people it does not make sense. Typically people look at refinancing their mortgage when interest rates drop one to two percent. This is not, however, the only indicator that refinancing is a improvement choice.

There are costs associated with refinancing. As stated earlier, refinancing is essentially re-buying your home. This capital that you will once again be theme to closing costs. Your home will be appraised, the medal will be checked, and the bank will, of course, have their fees. If you resolution on staying in your home for at least five more years the refinance, then it makes sense to consider refinancing your mortgage when rates drop a percent or two. If you credit that you will move before five years, you will like enough not save any wherewithal by refinancing.

One way to save funds on refinancing expenses is to stay with the same lender that currently holds your mortgage. When you stay with the same lender, you may be able to negotiate reduced closing costs, or a reduced mortgage rate without paying points. If you are interested in exploring a mortgage refinance, and you have been basically happy with your lender over the second of time you have had your mortgage, it makes sense to start there in the search for refinancing options. If you find lower interest rates or low closing cost loans at another institution, first ask your current company if they can match these deals. The mortgage market is very competitive, and, if you have a history of prompt payments, and have a substantial amount of equity in your home, it is very likely that the mortgage company that holds your loan will be willing to work with you.

–
Brian Jenkins is a freelance writer who writes about topics pertaining to the mortgage industry such as a Mortgage Company.

Thanks for the excellent advice, Brian. We appreciate the time you spent to put together this resource for us.

If you’d like to learn more about timing your own mortgage refinance, we’d be happy to help point you in the right direction and start speaking with the right people. To get started, let us know where you’re at and we’ll go from there.

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!

–
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.