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More Bang for Your Buck With MortgagesElaine VonCannon Choosing a knowledgeable mortgage lender can make a difference in the quality of home you are able to purchase with your finances. I prefer to recommend a mortgage broker to my clients, because they usually offer 50 or more programs. Regular mortgage companies are usually locked into one source. Take time to research a mortgage lender. And, remember, creative financing can be the way to go if you need a higher priced home with more space. Home buying is different now then when your parents or grandparents purchased a home. When they bought real estate, 30-year mortgages were the standard. That�s because 10-15 years ago, a person bought one or no more than two homes in their lifetime. Currently, Americans tend to own more than three homes in their lifetime. Creative Financing Find a lender who knows the business inside and out and can make your dollar go further. Ask your realtor to research the housing market in your area, to predict a rise in property value for that area. When you seek a mortgage, obtain quotes from three or more lenders. Make certain at least one of these is a mortgage broker. Ask how many loan products they have to choose from. Flexible Mortgage The 30 year mortgage is just one of many choices in the real estate loan market. Rebecca Nichols, a loan officer with Breakwater Mortgage in Virginia Beach, says, �It�s not so popular anymore to do a 30-year fixed loan. People want options to help them get the most value from their investment. Some want to pay lower monthly mortgages so out-of-pocked expenses are less. There�s no real reason anymore to be locked into a 30 year amortized loan.� Rebecca pointed out that in the beginning of the loan stages, most consumers are paying off the interest anyway. A Twelve Mat Loan This popular loan is based on the treasury market index, which is usually lower than the prime rate. For the first year the mortgage is at 1% interest. After that, it�s usually a loan that is 3-5%. Some advantages of this type of loan include a choice between three different types of payment plans: minimum payment, interest only or principal and interest. Interest Only Mortgages One new trend in mortgages that is very popular right now is interest only loans. The buyer may elect to make lower payments for two years, five years, or ten years. Adjustable Rate Mortgage ARM Generally, a homebuyer is locked into a certain interest rate for a 3-year period with an ARM loan. After this the rate fluctuates with the prime rate. Rebecca Nichols, a mortgage broker, says, �I usually recommend people commit to an ARM rate for 3 years. When the value of the home has gone up, I recommend they refinance into a 30-year fixed mortgage or another ARM, depending upon whether they want to stay in the home.� There are interest only ARM loans available too. These loans are popular with real estate investors because the mortgage is easier to cover if they lack a tenant for several months. Interest only ARMS often homebuyers will be able to obtain a bigger house or something closer to what they want with an ARM. 80/20 Combo � Fixed or ARM Some clients prefer to avoid paying mortgage insurance, which is not tax deductible. If this is their preference, Nichols recommends �finance 80% of the loan in one loan, and 20% in another. ARMS can also be split this way. 30 Year Fixed Mortgage If you plan on residing in the same home for at least 20 years, this is the perfect way to go. It�s a standard, fixed rate for the whole loan duration. Remember to shop for a mortgage, just as you would for auto, home, health insurance, or auto loans. Be wary of obtaining your lender on the internet. Some sites may promise rock bottom interest rates, but the hidden costs and fees can add up. Also, having a lender present at the closing is an invaluable resource to the homebuyer. The loan officer or mortgage broker should be present to make certain the loan documents are correct and answer questions. A lender on another coast is probably not going to provide you with this type of service. If you�re in the market for a home and a mortgage, choosing the right lender will help you get more bang for your buck and the type of dwelling you desire.
| | | | RELATED ARTICLES 5 Easy Ways to Save and Build Wealth 1. Pay off high-cost debt. The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. For example, if you have a $3,000 credit card balance at 19.8%, and you pay the required minimum balance of 2% of the balance or $15, whichever is greater, it will take 39 years to pay off the loan. And you will pay more than $10,000 in interest charges. Learning the Disturbing Facts about Credit Card Debt When I received my first credit card in the mail at age 18 I was ecstatic, I said to myself, wow now I�m getting somewhere in life. This credit card company thinks I�m worthy of 500 dollars in credit. So I made my monthly payments like a good consumer and watched my credit limit grow. I thought boy this company must think alot of me to take such a risk. I however had no idea how the money came into existence. All I cared about was that as long as when I slapped the plastic down I was approved. Like most young people I had no idea what an interest rate even was much less how it effected my monthly payments. I was like a lot of kids in America today, my parents were not a big part of my early adult life and so I really didn�t have much guidance when it came to making financial decisions. The lessons I learned were hard and I continue to learn as each day passes. How Long Your Mortgage Runs Determines How Much You Pay The first thing most of us think about when the time comes to take out a mortgage on a new home is the interest rate. How To Tell if a Property is Overvalued In the wake of the incredible house price boom witnessed in most of the developed world over the past decade, a lot of ideas have sprung up as to how to value a house fairly. The reason for this is that traditional methods, such as working out house prices as a multiple of salaries, or perhaps mortgage affordability as a percentage of income, seem to have stopped working recently. Getting The Most Bang For Your Buck Out Of Your Banking Services I realize most people have already made their resolutions for the New Year, but try adding one more.Decide that you are going to get the biggest bang for your buck out of your banking services this year. To Buy or Rent For Your College Student September always means Back To School, and for thousands of families it also signals Off To College. In addition, more and more young people are opting to continue their education with post-graduate studies. Budgeting For Prosperity Budgeting For ProsperitySeven Steps to Follow To Achieve Financial Freedom 5 Tips for Savvy Use of Your Home Equity Line of Credit Tapping your homes equity to pay college expenses, consolidate credit card debt or even to buy a new car or boat is common place. Many economists attribute the additional buying power afforded consumers through home equity debt as a primary reason the nations economy has been able to emerge from the recent recession. Yet, aside from simply allowing consumers to spendmore, the flexibility and efficiency of a home equity line of credit HELOC can provide the financially savvy person with the means to savemoney, make money or simply take advantageof opportune situations he or she might otherwise miss out on. Here are five tips to show you how: New Credit Scoring Model Could Help Millions Mark and Beth, a young married couple in their twenties, established a goal to buy a home within the first three years of their marriage before starting a family.They budgeted and used their money wisely in order to save for the down payment.Whenever they purchased something they always paid cash - no credit cards for them.Why waste money by paying interest to a credit card company Ten Ways Start-ups Use Venture Leases And Loans To Generate Millions The rise of venture leasing and lending has created an opportunity for sophisticated entrepreneurs to gain a competitive advantage. Savvy entrepreneurs are using venture leases and loans to generate millions of dollars for shareholders by leveraging existing venture capital. They have discovered ways to use this flexible financing as a tool to build enterprise value between equity rounds and to leapfrog less sophisticated competitors. Reduce Your 30 Year Mortgage To 10 Years Using Mortgage Cycling With all the talk lately about Mortgage Cycling versus Bi-Weekly Mortgages which one is really right for you Choosing the correct one could literally save you thousands of dollars and shave off approximately 20 years on the life of your 30 year mortgage. Top 10+ Ways to Jumpstart your New Years Finances! Of course, these dont have to be done in any particular order! How To Create An Organized Filing System INTRODUCTION Which IRA Is Best For You An Ira is one of the greatest ways to save on taxes currently and accumulate money for the future. Easing Your Way Into Homeownership: How Your Real Estate Agent Can Help You Qualify For A Low Down Payment Mortgage For many renters, the first step in buying a home is becoming educated about the process.If you�re like many people considering a home purchase, you�ve spent nights and weekends poring over your local real estate section.You�ve talked to friends and relatives about their experiences.Maybe you�ve even purchased a book or tow to help you become more familiar with real estate terminology and the various types of mortgages commonly used today. Ten Financial Tips for Women On average, women earn 76 cents for every dollar men earn in the workplace. Because women typically spend approximately seven years out of the work force to have and raise children, their earnings are even further curtailed. With lower pay and less time spent in the work force, women are generally left with smaller retirement portfolios, lower company pension benefits and lower Social Security benefits than men. Teach Your Child About Money What are we teaching our children about money Hopefully something! The Pros and Cons Of Debt Consolidation Loans You are swimming in debt. You have 4 credit cards maxed out, a car loan, a consumer loan, and a house payment. Simply making the minimum payments is causing your distress and certainly not getting you out of debt. What should you do Should you choose to refinance Refinancing has become a valid option for many individuals with high interest rates on their mortgage. Refinancing is essentially a replacement loan, with a different lender and hopefully a lower interest rate. Renting Versus Buying: Pros and Cons Realtors have benefited from a new variety of homebuyer in todays market: the young, single professional. It used to be that most single men and women resigned themselves to a somewhat transient, short-term renters lifestyle until Mr. or Ms. Right came along. Thats not the case anymore. With more and more people delaying marriage until their careers have assumed the direction they wish to take -- and due to the fact that a greater percentage of young people are financially independent and quite successful -- single professionals are changing from renters to buyers. |
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