31 Aug 10

The Bad Credit Mortgage Company How To Avoid Predatory

The Bad Credit Mortgage Company How To Avoid Predatory Mortgage Lending Companies

One of the most important parts of choosing a bad credit mortgage company to work with is avoiding predatory lenders. Predatory lenders run smooth operations, and specialize in taking advantage of those who are inexperienced or think that they have few or no other loan options. However, thoughtful and informed mortgage company shopping will go a long way towards avoiding predatory lenders and the hook, line and sinker methods they employ.

Watch The Hook – If a bad credit lender is trying to hook you making first contact and aggressively selling their services be suspicious. When avoiding predatory lenders, youll have to be alert, as some use more subtle types of hooks than the blatant hard sell. They may sprinkle their conversation with such phrases as bad credit, no problem, and make it all seem very easy. A predatory lender may try to rush you, perhaps pushing you towards a deal, saying it may not be available much longer. They are interested in making their fees, and you keeping the house is not important to unscrupulous bad credit lenders. In fact, its better for them if you dont.

Beware of The Line – Knowledge is the best way of avoiding predatory lenders when seeking a bad credit lender. Predatory lenders count on their victims not having a lot of knowledge about the lending process, legal or financial. If you do a little research prior to seeking a lender, you have less of a chance of being fooled by some of the lines predatory lenders use. You wont be lured into a loan that is too high under the premise that youll be able to refinance after a year or so for a lower rate. A legitimate new home loan bad credit lender will advise you against an arrangement that consumes more than 30% of your monthly income. Youll know to read every word of the contract to make sure that it matches exactly what you were told. With research, youll know what common lending rates and fees are and be able to compare with clarity, rather than be taken a smooth line.

Avoid The Sinker – Often, predatory lenders prey upon those that they consider to be in a financially precarious position. They prey on people who feel as though they dont have a lot of choices when it comes to lenders. Unprincipled new home loan bad credit lenders take advantage of these situations by offering arrangements that court loan repayment failure. These include balloon payments, a large sum due at the end of the mortgage, prepayment penalties, which punish the borrower for paying off the loan early, generally through sale or refinancing, and mandatory arbitration clauses, which do not permit you to bring a complaint against the lender to court.

When it comes time to shop for a bad credit lender, do your research first. There are numerous resources available to help you in avoiding predatory lenders. And, remember, no matter how bad your credit may be, you always have a choice. Making the choice to wait is always better than accepting a predatory loan arrangement.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , , ,
24 Aug 10

The Advantages Of Reverse Mortgages

In recent years property values have soared, while investment returns have been modest. This has created a situation where a lot of seniors are finding themselves in the position of being house rich and cash poor. These cash strapped seniors are looking for ways to increase their retirement income while continuing to live in their homes. These retirees find that their options are limited, and in most cases require them to risk their home. Enter the reverse mortgage, which can provide many advantages over these other less desirable options.

No Payments With Reverse Mortgages

The biggest advantage of a reverse mortgages is not having to make payments as long as you continue living in your home. In fact, this is the number one reason that seniors choose to borrow reverse mortgages. Almost 80% of reverse mortgage borrowers use a reverse mortgage to pay off their current loans in order to eliminate their house payments. Let’s say you owe 50,000 on your first mortgage and borrow 80,000 with a reverse mortgage. This would pay off and eliminate the payment on the first mortgage and provide you with 30,000 to use as you please.

Live in Your Home as Long as You Like

The second advantage of reverse mortgages is the ability to live in your house as long as you like. The great thing about this is the amount you owe on the reverse mortgage can never be more than the house is worth. Let’s say you live to 115 and have selected to recieve a 300 a month payments for life from the reverse mortgage. The amount received from the reverse mortgage payments could be substantially higher than the value of your home, yet the amount owed will still only be the value of the home. In this situation, FHA insurance will cover the difference.

Reverse Mortgage Withdrawal Options

Another advantage of reverse mortgages is the different withdrawal options that a you are able to choose. These options include lump sum distributions, line of credit, monthly payments, or any combination of these three. So if you were eligible to borrow 100,000 on a reverse mortgage you could select to receive 30,000 up front to cover current expenses, and hold the rest as a line of credit that you can use whenever you need it. This flexibility of reverse mortgages can significantly improve you financial independence during retirement.

Tax-Free Nature of Reverse Mortgages

Another advantage of reverse mortgage is the tax-free nature of the loan proceeds. The American Bar Association guide to reverse mortgages advises that generally the IRS does not consider loan advances to be income. This means that all the money from the proceeds of the reverse mortgage end up in your pocket.

With these features, reverse mortgage are definitely an option to consider if you are looking for ways to supplement your current income. As with any financial decision, you should seek the advice of a trained professional, a reverse mortgage counselor, to evaluate and determine if a reverse mortgage is right for your situation.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , , ,
17 Aug 10

The 7 Sins of Mortgage Brokers

Honesty is the most important aspect of dealing with mortgage brokers. Unfortunately not all brokers are forth coming with certain information that would allow you to trust them and make an informed decision about the deal they recommend. Dont get me wrong not all mortgage brokers are bad. Just dont underestimate the influence that commission has on their recommendations. And, as always there are bad eggs in every industry.

Being aware of the following broker sins will help you pick a trustworthy broker and make sure they get the best deal for you. Most importantly, dont be afraid to ask questions.

Sin 1: Favouring their loan product.
You need to be aware if the mortgage broker is also a lender, i.e. do they have their own loan products? If they do, and they offer there own product, there needs to be a clear, understandable reason why their product is the best choice for your situation.

Sin 2: Being influenced by commission.
Brokers get commission from the lender you end up borrowing from. You need to ask if the broker has special incentives for referring you to a specific lender i.e., do some lenders pay more commission? If so, this may lead them to be biased about which lender they recommend to you. They may be inclined to recommend you to the lender that pays the most; regardless of whether this is the best choice for you.

So again you need to be given a clear and understandable reason why the product and lender is the best choice for your situation. You also need to find out how big a range of lenders the broker deals with. They cant claim to find you the best loan product on the market for your needs if they only deal with 20% of lenders on the market.

Sin 3: Hiding the real cost of the mortgage.
Make sure the broker provides you with the comparison interest rate, when looking at or comparing any home loan products. The comparison rate shows you the real cost of a home loan by taking into consideration all the foreseeable fees and charges associated with the loan. This is so you can easily compare home loan products.

Sin 4: Withholding information.
Know the whole deal. You need to know the whole service provided by the broker. Do they provide ongoing service and assistance after you secure your loan? If so, find out for how long. Also, what are the fees involved? Theirs and the lenders. All this needs to be made clear before any papers are signed.

Sin 5: Allowing client ignorance.
Make sure you understand what the benefits and the drawbacks are for you. You need to have it explained to you in a clear way so you can understand it. This is so you can weigh it up and decided for yourself if refinancing is actually in your best interest. There is a bad practise in the mortgage broker industry called churning. Churning is the act of refinancing for the sake of commission even though there are no benefits for the mortgage owner. Making sure you understand the benefits and drawbacks of the refinancing deal yourself will make it impossible for you to fall victim to this practice.

Sin 6: Being Uninsured
Do the brokers have their own professional indemnity insurance? This protects professionals against liability claims resulting from negligent work. All lenders will have it. However the brokers should not assume they are covered by the insurance of an umbrella organization. The broker needs to know for sure if they are or are not protected.

Sin 7: Being Unqualified.
Is the broker qualified to give you lending advice? In every country there are reputable authority organizations that provide mortgage brokers with credentials, provided they undertake certain courses. Find out who these organizations are and make sure the broker youre dealing with is a member or has been given credentials.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , ,
10 Aug 10

Ten Mistakes And How They Can Affect Your Mortgage

Wouldn’t it be great if everything in life came with a checklist? Unfortunately, for most of us we have to learn life’s lessons the hard way – by experiencing them! Fortunately, for home buyers there are some rules of the game that are well known and can help you avoid major pitfalls when buying a home or refinancing your mortgage. Let’s take a look at ten mistakes that can have detrimental affect on your mortgage so you can prepare yourself now to get the best terms possible on your next mortgage.

#1 – Not shopping around. Too many people go to their local bank or other financial institution for their mortgage and never shop around. As a result, they end up paying more over the life of the loan because they don’t realize what they could have had. Go to at least three mortgage providers when looking for a loan – make them compete and earn your business!

#2 – Using the mortgage broker the realtor recommends. Sure the realtor is the sweetest person you ever met and tells you not to worry because her friend over at ABC Mortgage will take care of you – what she isn’t telling you is that she is getting a kickback for recommending them. Realtors have one goal in mind – to earn commission on the sale. You can often get much better deals by shopping around yourself and saying “no thanks” to the recommendation.

#3 – Buying too much house. How many square feet do you need and how much can you afford? Don’t get yourself into a situation where you have too much house that you can’t afford over your lifetime. Remember, it’s not just the monthly payments you have to worry about. You also need to think about property taxes, insurance and heating and cooling costs.

#4 – Getting into the wrong mortgage. A quick scan of the newspapers will show you that a lot of people have gotten into the wrong mortgage. Make sure you know the differences between fixed and adjustable rate mortgages and seek the help of a trusted, third party to help you make the right decision. Be sure to review the prepayment penalties as well – why should you be penalized for paying off your loan ahead of time?

#5 – Credit. This one you probably already know about, but it is worth repeating again and again. Clean up your credit and don’t make any big purchases right before you go to take out a mortgage. Save the new car purchase or flat-screen TV purchase until after you have signed the loan paperwork!

#6 – Borrowing too much. This goes hand in hand with #3. Don’t anticipate future earnings and buy a house you simply cannot afford. Purchase a house you can afford now, even if it may not be your dream house. In a few years, if you are earning more, you can look into buying a bigger house. Start small and work your way up so that you know you can afford your mortgage and not get yourself into financial trouble down the road.

#7 – Missing out on programs for first time home owners. Many first time homeowners don’t take advantage of the various programs and discounts available for them. Check into local, state and federal programs that can help reduce your interest rate and potentially negotiate better terms.

#8 – Inaccurate information, or garbage ingarbage out! Don’t try and fool the lender – it isn’t worth it. Make sure you have supporting documentation for everything you put down on the mortgage application. Furthermore, never sign a mortgage document in which the lender hasn’t completely filled out all the fields. Insist on honesty on both sides of the desk!

#9 – Not locking in the rate. Rates can change in the blink of an eye. Get your rate locked in and don’t wait around until the last moment. Get your rate in writing with the complete terms spelled out from your mortgage lender when you lock it in.

# 10 – Not considering the other “charges” in your mortgage. Sure, you got a great rate on your mortgage, but did you carefully read about the other charges the lender has stuck in? Rates are important, but make sure you understand the full cost of your loan. Read (and question) all the charges listed. Sure, you might have to pay a quarter of a percent more by going somewhere else, but after you add up all the fees you may find that by going to a lender with a slightly higher rate can actually save you money.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , , ,
3 Aug 10

Subprime Mortgages and the Refinancing Boom

There are more than 19,000 mortgage companies in the U.S. and some of the largest and most reputable of them specialize in subprime mortgage refinancing.

Steven Frank, Senior Vice President of Marketing at FlexPoint Funding identifies a subprime borrower as someone with a FICO score below 620. He or she will pay between 1.5% and 2% higher interest for a mortgage, but there is no shortage of money or willing lenders in the subprime mortgage market.

What trends do you see in the subprime mortgage market for 2006 and beyond?

Steve: We went through the biggest refinancing boom in history from mid 2002 through September of 2005. As many as 80% of Americans refinanced their homes during that time. Interest rates on adjustable rate loans dropped to under 4% during the boom with some homeowners opting for fixed rates as low as 5%.

Now both fixed and adjustable are back around 6.5% and will probably reach 7% for an A-grade 30-year fixed mortgage and 9% for a subprime mortgage by the end of 2006. The rate of appreciation is a more normal 6% – 12% annually. A typical home in most parts of the country stays on the market about six months, which means its a balanced market favoring neither buyers nor sellers.

What type of mortgage would you recommend for subprime borrowers?

Steve: Most subprime borrowers wont qualify for a second mortgage or a home equity line of credit. They will have to refinance their first mortgage if they want to cash out some of their equity. Depending on their personal situation, a homeowner may be able to borrow up to 95% LTV (loan to value). More likely, it will be in the 75%-85% range. There are very few 125% LTV mortgages anymore, and subprime borrowers wont qualify for these.

Subprime borrowers should work with a company that understands their particular needs; one that sees more than their past problems and that specializes in flexible, affordable mortgage solutions.

Mortgage Refinancing Advice

Check your credit – According to the government loan agency, Freddie Mac, up to 15% of subprime borrowers have credit scores that qualify them for traditional loans. Dont settle for subprime rates if you can get prime-rate mortgage refinancing.

Watch your costs – Interest rates wont vary much among subprime mortgages, however, there are some aspects of the loan structure that will impact the bottom line, such as:
– length of the mortgage term; 10, 15 or 30 years
– if it is a fixed-rate loan or an adjustable-rate loan
– whether any points have to be paid ( a point equals one percent of the loan)
– what kind of processing fees and closing costs are required

Look for good customer service – A good lender will walk potential borrowers through the application process, verifying personal information and making sure all the terms of the loan are understood. The lender will also recommend whether to lock in an interest rate during the processing phase or let the rate float until the closing.

Get a free quote – Prospective borrowers looking for refinancing can take advantage of sites like www.badcreditmortgagerefinancingnow.comBad Credit Mortgage Refinancing Now.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , , ,
27 Jul 10

Stepping Onto The Property Ladder: First Mortgages

Stepping onto the property ladder and buying a home for the first time can seem like a really daunting prospect. You need to get the decision right because getting a mortgage is perhaps the biggest financial commitment you will ever make. Despite this, many people get a mortgage without really knowing a lot about the process. It pays to be clued up before stepping onto the property ladder. If you know about the mortgage buying process then you will get a better deal and find the right home for you.

The costs of a mortgage

Obviously the biggest cost of the mortgage is the lump sum that you want to borrow and the interest on top of this. However, there are many other charges that you need to think about when getting a mortgage. Arranging the mortgage will usually cost a few hundred pounds, as will legal fees. You also need to think about survey costs, land registry costs and stamp duty. There is also the amount of down payment you are going to make, all of which can add up to making the initial process of getting a mortgage expensive. Make sure that you have all of these funds in place before proceeding. You should be financially stable before even thinking about getting a mortgage.

Finding a lender

Once you have worked out the costs of getting a mortgage, you need to find the right lender for your needs. Shopping around to find the best deal is important, and looking at both online lenders and your local high street banks and mortgage providers is a good idea. You should look at lenders before you go house hunting, as you will have a better idea of how much you can afford to borrow and how much you will the lender will give you. That way you will have a budget to stick to when looking at properties. Some lenders will offer you a pre-approved amount, which can help to speed up the house buying process.

Finding a property

Once you have looked at lenders you should find a property that meets your needs and falls within your budget. Once you have done this you can get a survey done and exchange contracts.

Things to look out for

If you are new to mortgages, then there are a number of things you need to look out for. Most importantly, do not borrow more than you can afford. Although you may have seen the perfect house, that house will be taken away from you if you cannot meet the repayments. Do not be pressured into borrowing more than you can afford either. Remember that the lender can recover their money through repossession and know that lenders will get into other debts rather than default on their mortgage. Work out a strict budget and do not go over that amount. Also make sure that the mortgage terms you get are fair and that there are no hidden costs or services that you dont need, like credit insurance.

Know the terms

The last key to finding a good first mortgage is to know the terms involved in the mortgage process. If you know what to look out for and the things that you really need, then you can get a mortgage that will suit your needs and not cost you too much money. All you have to do now is find the right house for your budget.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , ,
20 Jul 10

Shared Ownership Mortgages

Introduction:

Shared ownership mortgages were formed to help people buy the property of their own, when they cannot afford to buy full property at a time. The share of property is usually 50%, but may also be 25% or 75%, and is purchased from housing associations. Thus you own a certain shares of property and pay rent on the remaining part of the property. You will not be asked to share the property with someone else and may mortgages and rent for the property.

Demands for shared properties are growing continuously and there are limited vacant properties and even if you meet the criteria for shared ownership, you may be asked to wait for some time. Once you have become a shared owner, you are bound to pay all utility bills and taxes and your responsibilities include that of a full owner. Most of the housing associations provide you the opportunity to purchase share and become a full owner as and when you can afford to buy the shares.

Social Landlords:

Social landlords are non-profit organizations such as housing associations or housing societies. These social landlords provide home for rent and sale to those people, who cannot afford to buy.

Shared Ownership Lease:

If you buy a property as a shared owner, you enter into a contract with the social landlord. The contract is a legal document, which provides you a lease usually for 99 years. You occupy the house and your responsibilities include that of a full house owner. Social landlord further provides you the opportunity to purchase full shares as per the certain clause provided in the contract. As it involves legal documentation, you are advised to legal help before entering into contract.

Houses offered for shared ownership:

Renovated houses and flats are generally offered for shared ownership. Sometimes a few new houses may also be offered. Prices of these houses or flats are generally below than the prices of properties available sale in the market in the same area.

Shared Ownership Mortgages:

The amount of share, you purchased for a shared ownership is mortgaged, which you will have to arrange and the rent for remaining part of the house will be deposited with the social landlords.

Mortgage Selection:

Before selecting any of the mortgage option, you should see your financial health and repayment capabilities. You will also have to pay service charges, charges for utilities, and other taxes. On the basis of all your financial capabilities, you should select a share 25%, 50% or 75% of the property. The benefit of higher share will allow to pay less rent for the remaining part of the property. The common part of mortgage includes fixed rate mortgage and adjustable rate mortgage.

In fixed rate mortgage, the interest rate remains same for throughout the mortgage periods. Some mortgage may be as high as for 30 years and some may be lower periods. The benefits of fixed types of mortgage are that you can plan in advance the amount to be paid.

In adjustable rate mortgage, interest rate generally starts lower than the fixed rate mortgage and may vary once or twice during the year as these rates are linked to a financial index. Depending on financial index (Treasury Security Index for United States) the rates may be either low or high. As the initial amount in these rates is always lower than the fixed rate mortgages, a more mortgage loan can be secured for the same burden.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , ,
13 Jul 10

Seven Benefits of Christian Mortgage

The Christian Mortgage concept is built on the basis of Christian faith and principle. Various institutions around the world follow Christian Mortgage principles to shape their terms and conditions.

According to Catholic social teaching a mortgage is the provision under which people is permitted to utilize the merchandise of the globe. It signifies that no one is bestowed with the illogical right of private property while others in the world suffer from lack of it.

There are seven basic components that are found to be most attractive in choosing a Christian Mortgage.

Seven Benefits of Christian Mortgage: -

Benefits of Christian Mortgage #1 – Refinance to get a better rate: There are two types of mortgage loans in consideration of interest rates available – (a) Fixed Rate Mortgages (FRMs) and (b) Adjustable Rate Mortgages (ARMs). When you have cash down your credit at certain amount, it would be wise to opt for an ARM in exchange of a FRM. Christian Mortgage institutions often offer this opportunity to refinance. Moreover, Christian Mortgage institutions offer remarkably low rates in comparison to other institutions.

Benefits of Christian Mortgage #2 -Second Mortgages to consolidate debt or for other purposes: Christian Mortgage many times offers a second mortgage to a single person. By this way, one can get a second mortgage on a single property, after the first mortgage payment is cleared; or on the other hand, one can identify another property to mortgage when they are still paying a mortgage debt.

Benefits of Christian Mortgage #3 -Lower monthly payments: A very important benefit from a Christian Mortgage is its lower monthly payment. A monthly payment comprises of a basic payment with some interest rate. Christian Mortgages by providing you with a low interest rate cuts down your monthly payments and thereby your monthly expenses to a large extent.

Benefits of Christian Mortgage #4 -Cash Out Equity: Another benefit of Christian Mortgage is cash-out equity. When a person recognizes that the value of herhis asset has increased, or that the principal has been paid down to a particular amount, then she or he can re-borrow on that principal. The homeowner may “cash out” this equity in the home. By this way one can get some extra fund as cash. Christian Mortgage offers this Cash out Equity system to be used as extra cash for other beneficial purposes.

Benefits of Christian Mortgage #5 -Large tax Benefits: Christian Mortgages always fall under release of tax amount. As the basis of Christian Mortgages is social welfare and as Christian Mortgage offers genuine help to the needy people, governmental tax decreases upon this mortgage. Thus it offers a large tax benefit with it.

Benefits of Christian Mortgage #6 -Short Duration of Payment in few cases: Christian Mortgage in general offers short payment duration depending on the amount of debt. But considering the other types, Christian Mortgage institutions always aims to shape their offer personally either on shorter payment period, or shorter monthly payment amount.

Benefits of Christian Mortgage #7 – Private Mortgage Insurance: PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home’s value. But in Christian Mortgage, the PMI starts at lower cash down limit, considering the borrowers’ financial status.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , , ,
6 Jul 10

Selective Mortgage Decision Making

In a recent article appearing on IndyStar.com*, it was reported that Indiana and Ohio lead the nation in the number of home mortgage foreclosures. As the article describes, there are many reasons for the high mortgage foreclosure rate. Regardless of the reason, one key to avoiding this situation is proper mortgage planning. Unexpected medical expenses or the loss of a job are likely beyond your control, however, you can control the decision regarding your next mortgage. Making an informed and educated decision regarding a mortgage refinancing, second mortgage, or home purchase loan will help you avoid trouble. Remember the following the next time you are shopping for a mortgage.

Think Independently Most children have heard this sage advice If your friend jumps off a cliff, are you going to jump, too?essentially meaning think for yourself. That same philosophy applies when talking to your loan officer. Just because heshe states that you qualify for a certain mortgage refinancing, second mortgage, or home purchase loan amount does not mean you should accept the loan. Compared to a few years ago, todays lending guidelines accept higher debt to income ratios andor reduced income documentation, which allows more mortgages to be approved. Remember, you are the one who must make the mortgage payment, not the loan officer. If you are not comfortable with the payment, do not accept the loan.

Understand Your Mortgage It is imperative that you understand the terms of the new mortgage refinancing, second mortgage, or home purchase loan you are considering. You need to know the following:
1)Is the mortgage a fixed or variable interest rate?
2)Is the mortgage interest only, deferred interest, or fully amortizing?
3)Is there a prepayment penalty?
4)Are there any balloon features to the new mortgage?
5)Are the property taxes and homeowners insurance included in the mortgage payment?

If your loan officer is elusive or gives vague answers to these or any other questions, find a new loan officer

Shop Consult with two or three loan officers about your mortgage refinance, second mortgage, or home purchase loan. You will find a wide range of knowledge and ability among loan officers. At the same time, working with more than three will often lead to information overload. Along with comparing interest rates and closing costs, consider your loan officers integrity, knowledge, and experience.

These guidelines are simple and common sense ideas, but are often forgotten during the excitement and emotion of completing a home purchase loan, mortgage refinancing, or second mortgage.

*www.indystar.com; March 18, 2006; Title Foreclosures in Indiana Hit New High; Author Ted Evanoff

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , , ,
29 Jun 10

Searching for Mortgage Rates-How to Utilize the Internet

Anyone who has every had to look for a mortgage will tell you how important it is to check various mortgage rates to ensure that you are getting the best interest rate and the best mortgage for you and your finances. In the past, searching for mortgage rates meant calling lenders and finding out what their rates were, as well as their terms. This was a long process that many people balked at – and many didn’t do at all because of the amount of time that it took. However, now you’re in luck. Finding mortgage rates for comparison has never been easier thanks to the Internet.

The Internet has opened a whole new realm of competition between lending institutions, which is beneficial to mortgage rate seekers. This means that the information about different mortgages, including the mortgage rates, is just a few clicks away for anyone. It’s important that you have your ducks in a row, and that you have a mortgage in place before you begin to purchase a home. Having a mortgage in place will tell you how much money you can spend on a home and you will go in knowing how much it will cost you. This can help make your decision on the upper limit you want to spend on your home – you may want to save some of that ‘mortgage credit’ to upgrade the home you choose, so spend carefully.

The very first thing you need to do when looking for a mortgage is create a database so that you can make your comparisons. Microsoft Excel, or a similar program, is perfect for this, because you can have multiple tabs for different types of mortgages and you can lay it out so that it is easy to understand when you begin to make your comparisons.

Your database should compare an in-depth comparison of the many options and rates associated with a mortgage. Your database should include:
Mortgage type (adjustable rate mortgage, fixed rate mortgage, balloon, etc.)
Interest rate overall
Index rate (that the lender uses to create the final interest rate)
Lender’s margin (percentage point that is added onto the index rate by the lender)
Lengthterm of the mortgage
Any other features that make or break a mortgage to make it more friendly to your finances

The first thing you should do is compare the interest rates. These can vary quite a bit, and it’s important to understand how they work. Regardless of the type of mortgage that you get, the lender will base the interest rate on an index. The most common indexes used to determine the interest rates are:
One-year constant maturity treasury securities (CMT)
Cost of Funds Index (COFI)
London Interbank Offered Rate (LIBOR)
A lending institution’s own costs of funds.

On top of that index interest rate, the lender will attach their margin percentage. The margin ensures that the lender will make money on your mortgage at a fairly steady stream.

It’s also important to note that when you are looking at the interest rates, the very first thing that will jump out at you is how ‘low’ the adjustable rate mortgage interest rates are. While they can be very compelling, in some cases several percentage points lower than a fixed rate mortgage, it’s imperative that you check out all the factors that pertain to an adjustable rate mortgage, including:
Payment cap
Interest rate cap
The margin
How often the rate will adjust
Prepayment penalties on the mortgage
How long you will be staying in the house

Most adjustable rate mortgages appeal to home buyers who only plan to live in the house for three to five years – this means they can take advantage of the lower interest rates and pay less, while not having to worry about drastic increases in the interest rate over a longer period of time.

To use the Internet, all you have to do is go to a major search engine and search for ‘mortgages rate’. You will find thousands and thousands of results, literally. There are many websites that offer mortgage rate comparisons online from many different lenders as well. But, by doing your own research, you may be able to find some smaller company that is offering great interest rates. The best place to start is with an idea of where you want to look – your friends, relatives, neighbors, other home owners, forums on the Internet, your realtor – all of these people may be able to give you some referrals to mortgage lenders that you should check out.

0 Comments
Filed in Compare Mortgages
  Posted by Admin
Tagged , , , , , , , , , , , , , , , , , , ,

« Older Posts

Copyright © 247mortgages