Mortgage - Home Ownership - First Step To Riches

Buy NOW, mortgage now...get rich...soon!

2008-08-09T23:35:00.001-04:00

I bought a house during the housing crash of 1988 and have never doubted my investment, even though the media said not to buy a home at that time. Don't believe the media because they take pride in creating anything neagtive. What sells better than bad news?

In 1987 there was a decline in house prices and the talk was that it was not the time to buy a home. I went against the grain and I'm glad I did. The house I bought at that time is worth 80% more now that it was then. If you plan to buy and hold....now is the time to buy...really anytime is the time to buy real estate because over time real estate is like wages, the price of automobiles, the price of groceries, the price of cloths, and RENT ...IT INCREASES IN VALUE! And unlike those things mentioned it should RESALE for more than you paid for it, you can (consult your tax advisor) take the tax deduction for interest paid and you are paying toward principal. Incase you don't understand the idea of principal, it is like taking part of the money you usually use for rent and putting it in the bank. Jerry W. Williams

Knowing When To Refinance Is Half The Battle

2008-01-11T12:19:00.000-05:00

By Dan Harris

Do you ever feel like you know just enough about refinance to be dangerous? Let's see if we can fill in some of the gaps with the latest info from refinance experts.

If you don't have accurate details regarding refinance, then you might make a bad choice on the subject. Don't let that happen: keep reading.

Many people are considering refinancing their mortgages in order to reduce the cost of their loans. This article discusses when and how to refinance.

These days, long-term interest rates are hovering right around 6%. Even though the rates have come up from their historic lows, they are still comparatively low. For anyone with a higher mortgage rate, the market provides a golden opportunity for mortgage borrowers to refinance.

Deciding When to Refinance

The rule of thumb in the 1980s used to be that you should refinance when you can lower your mortgage rate by 2 percentage points. However, today you should consider refinancing whenever rates have declined since you took out your mortgage.

There are two reasons why the old rule of thumb no longer applies:

The level of interest rates is lower than it was in the 1980s. Refinancing from 7% to 6% would give you the same proportionate reduction as refinancing from 14% to 12%. The costs of originating a loan have fallen. You should calculate how long it will take you to recover the loan origination costs when you refinance. If you are charged little in points or origination fees, then it takes only the smallest reduction in interest rates to warrant refinancing.

Nowadays, any time you see an advertised rate on a mortgage that is lower than the rate on your current mortgage, you should investigate refinancing. It could be that rates have fallen since you obtained your mortgage. Or it could be that you did not shop as well as you might have when you got your current mortgage.

If you think choosing the time to refinance should be based on whether interest rates are going down or up, there is good news and bad news. The good news is that it is correct knowing where interest rates are headed would help you make the correct refinance decision. The bad news is nobody knows for certain where interest rates are headed (and anyone who claims to know should not be trusted).

Choosing a Loan Product

In today's environment, you may want to avoid adjustable-rate mortgages, or ARMs, that adjust in less than five years. The reason is the maximum amount by which the rate can adjust typically still is 2%, even though rates have come down considerably since the products were first designed. A 2% rate adjustment is proportionately higher now than it was a few years ago (see point 1 of the preceding section).

There are consumers who take out one-year ARMs and refinance them every year, always dodging the rate adjustment. They go for no-point loans to keep their refinancing costs down. This strategy works out well when rates decline, but when rates will go up, these one-year ARM borrowers will have to pay the toll.

One question to ask yourself is whether you can afford the monthly payment on a 15-year fixed-rate mortgage. The monthly payment on a 15-year mortgage is higher than that on most other mortgages, because it is designed to be paid off in 15 years rather than 30 years. However, if rates have fallen enough or your income has risen enough since you took out your current mortgage, the 15-year product may now be affordable for you. You can use payment calculator to check.

If you cannot afford the monthly payment on a 15-year mortgage, then you need to consider different products. The 5-year balloon, 7-year balloon, and 10-1 ARM products all have merit. The more likely it is that you will be moving in less than 10 years, the more you should lean toward the 5-year or 7-year balloon.

Should you pay points when you refinance? For example, suppose that you can get an interest rate that is 0.5% lower by paying 1.5 points up front. Thus, the payback would be approximately three years: if you keep the mortgage longer than three years, it will be beneficial to have paid the up-front points.

Many people prefer not to pay points. The thinking is this:

Here I am, refinancing today. But what if rates fall again in the next few months? If I pay points now and end up refinancing again soon, then I've just thrown away money.

What is happening here is that all of a sudden, because people are refinancing, their time horizons are very short. However, this may not be entirely rational. Although it is possible you will want to recycle your mortgage again in three months, this is relatively atypical. There is a reasonable chance that you will keep your mortgage for at least three years. If you can get a three-year payback or less by paying points, then paying points up front is an attractive option.
That's how things stand right now. Keep in mind that any subject can change over time, so be sure you keep up with the latest news.

Dan Harris operates Harris Capital Management and Mobil Settlement, LLC in New York and can provide detailed information on New York Mortgages, New York Title Insurance Issues, New York City Mortgage Companies, New York Mortgage Rates and more. Dan is also available for seminars and speaking engagement
He can be reached at CashDan or MobilSettlement
Article Source: http://EzineArticles.com/?expert=Dan_Harris

10 House Buyer Traps And How To Avoid Them

2007-11-29T12:18:00.000-05:00

1. Trusting tax assessments
Some people think that tax assessments are a way of evaluating a home. The difficulty here is that assessments are based on a number of criteria that may not be related to property values, so they may not necessarily reflect the homes true value.

2. Bidding without knowing
What price should you offer when you bid on a house? Is the seller's asking price too high? Are in front of a real deal? Before making one the biggest purchases of a lifetime, you should take a very close look at the real estate market in the area you're a thinking of purchasing. Without the knowledge of the real market value of the houses you intend to visit, and ultimately purchase, your are more than likely to make a blind bid.

3. Getting the wrong house
Simple questions, like what do you want in a house, can have pretty complex answers. A lot of buyers get all excited atthe prospect of finally owing their house. So excited and emotional, that sometimes they end up being the owner of ahouse that does not answer their needs. The house may be too big, or too small, or it's too far from work, or what looked like just a few small renovations is much more then expected. Take time now, before the buying process, and define what you really want in your house. Write it down.

4. Unclear house title
As soon as you start negotiating your new home, make sure that it is free and clear by having a title search done. One of the last things you want to learn later in the process is that there are taxes, leases or other liens on the property you are about to own.

5. Incorrect survey
When you make your offer to purchase, you have to make sure you request an up to date property survey that defines very clearly the boundaries of the property. You never know what type of changes may have occurred since the last survey(i.e. swimming pool, extension to the house, fence, etc.)

6. Surprise fix-ups
You just can't expect every seller to sell their home it perfect condition. Remember the old saying: Buyer beware!You have to ensure that a complete inspection of the houseis done before you sign anything. Or if you do sign, make sure it is conditional to your entire satisfaction after a house inspection. An independent inspector will check the house inside and out and give you a report outlining the items that needs to be fixed with the associated costs.

7. No mortgage pre-approval
You're not pre-approved on your mortgage! What are you waiting for! It's fast, it's free, and it's easy. Once you have a pre-approved mortgage, your house shopping is much easier. You will feel free and secure because you will know that the money you need to purchase your deam house will be there when you need it.

8. Seller neglect
If the home seller fails to do some repairs or to comply to any part of the purchase contract you will feel very frustrated. One way to avoid this is to agree, in thepurchase contract, to put a fixed amount of money in an escrow fund that will cover the items the seller was supposed to attend to.

9. Hidden charges
Before you make your offer, make sure you made a list of all the costs associated with the purchase. The typical"forgotten" cost is usually a forgotten mortgage disbursement charge or some sort of mortgage underwriting fee. One way to avoid any hidden charges is to have the mortgage lender give you the total charges in writing.

10. Close too fast
This is a critical part of the whole buying process. Take your time, read all the paperwork a day or two before you sign. Have a lawyer go through it and make absolutely sure that all the paperwork reflects the transaction your are about to do. Double check everything, it's the best way to avoid a forgotten clause or to notice, too late, that something has been added or subtracted. If there is a problem, you will have a hours to solve it before the closing day.

Getting the mortgage process is one of the most important things you can do. For a Georgia or Alabama mortgage contact Jerry Williams at 706-324-0071 ext 107

The Benefits Of Working With A Mortgage Broker

2007-11-02T13:26:00.000-04:00

By Anthony T. Torres

There are many benefits of working with a mortgage broker, whether you're looking to purchase a home or refinance your existing mortgage. Many incorrectly think that the only benefit of working with a mortgage broker is that the he or she will be able to shop for their loan with various lenders. Although this is a benefit, the benefits of working with a mortgage broker goes beyond this point.

As a New York Mortgage Broker I ask all of my potential clients what they feel the benefit of working with sompe like me is. The number one response that I receive is that I work with many wholesale lenders. However, many fail to realize that part of working with many wholesale lenders also provides me with wholesale mortgage rates. A reputable and ethical broker will pass along his or her wholesale mortgage rates directly to their client. In addition, a good mortgage broker will be able to provide the customer service and support that is not normally provided at large institutional lenders. I provide all of my clients with my cellular phone number so that they may call me to address any questions or concerns they may have with their mortgage financing.

Below are some of the benefits one can expect to receive by working with a mortgage broker.

Various Lenders to Place Your Loan With - A direct lender can only offer mortgage programs they have available. Brokers often work with many wholesale mortgage lenders thus providing you with more options.

Wholesale Mortgage Rates - Brokers receive wholesale mortgage rates. A good mortgage broker will pass their wholesale pricing onto you.

Personal Attention - Brokers normally go above and beyond what the large institutions will provide with regard to customer service. Expect a good broker to provide you with a way to contact him or her when their not in the office.

Speed and Efficiency - A good broker will have pre-established relationships with key parties at various wholesale lending institutions. Often mortgage brokers will be able to provide you with faster service and a much smoother closing.

Now that you've read about the benefits of working with a mortgage broker, please consider utilizing their services if you're looking to purchase a home or refinance your current mortgage.

Anthony T. Torres is a Managing Partner of Diverse Funding Solutions, LLC, a New York Mortgage Brokerage as well as a licensed real estate salesperson in the state of New York specializing in buyer representation.

Article Source: http://EzineArticles.com/?expert=Anthony_T._Torres

The A-to-Z of Mortgage Loans: 42 Definitions for Home Buyers

2007-10-24T12:57:00.000-04:00

By BR Cornett
Without a proper grasp of mortgage lingo, the home-buying process can leave your head spinning. But fear not, for help has arrived. The 42 definitions that follow will give you a solid understanding of mortgage loans and lenders.

Amortization -- The monthly reduction of a mortgage loan brought about by making regular mortgage payments.

Annual Percentage Rate (APR) -- Shows the monthly cost of the mortgage (including interest, points and mortgage insurance), expressed as a percentage.

Application -- First step in getting approved for the (mortgage)loan. The application provides information about the borrower that the lender will use to justify the loan.

Appraisal -- A formal assessment of a home's fair market value, generally required by the mortgage lender to ensure the home is worth the loan amount.

Adjustable Rate Mortgage (ARM) -- A type of loan that starts out with a lower interest rate for an introductory period (3 years, for example) and later adjusts to whatever the current interest rate is at the time of adjustment.

Balloon Mortgage -- A mortgage that offers low rates for an initial period (generally 5, 7 or 10) years. After this period, the owner must pay the full balance or refinance the loan.

Cap -- A limit to how much a monthly payment or interest rate can increase or decrease. Caps are commonly used on adjustable rate mortgages.

Cash Reserves -- Money often required to be held in addition to the down payment and closing costs. Lenders have their own requirements as to the amount.

Closing -- The process through which property ownership is transferred from the seller to the buyer. Also known as settlement.

Closing Costs -- Expenses above and beyond the sale price of the home. Closing costs vary from state to state, but they often include such items as title searches and lawyer's fees.

Conventional Loan -- A loan made from the private sector and not guaranteed by the U.S. government.

Credit Report -- A record of your credit history, including previous debts, payments and other financial details. Used by lenders to determine your credit score.

Credit Score -- a number derived from your credit report. Used by mortgage lenders to determine your level of qualification for a loan.

Debt-to-Income Ratio -- A ratio calculated by dividing your overall monthly debt by your gross monthly income. Mortgage lenders use this to help determine your "credit worthiness."

Deed -- Official document that shows ownership of a property. It transfers from seller to buyer during the closing process.

Default -- This is what happens when a homeowner is unable to make mortgage payments. Defaulting on a loan could lead to foreclosure (defined below).

Discount Point -- Equal to 1% of the loan amount. Points can be paid by the buyer at closing to reduce the interest rate on the loan.

Down Payment -- Portion of the home's purchase price that is paid in cash and is not part of the mortgage loan.

Earnest Money -- Money the buyer puts down to show sincerity in buying the home. If the offer is accepted, the money becomes part of the down payment. If the offer is rejected, the money is returned. If the buyer pulls out of the deal, the money is forfeited.

Fixed-Rate Mortgage -- A mortgage with payments that stay the same throughout the life of the loan. In other words, the interest rate and other terms of the loan remain fixed.

Foreclosure -- Process through which the home is sold to repay the loan of the defaulting homeowner. See definition of default above.

Good Faith Estimate -- An estimate of all fees and charges that will be due at closing. Must be given to the borrower within three days of a loan application submission.

HUD-1 Statement -- A list of all closing costs. This document must be given to the buyer prior to closing. Also referred to as a settlement statement.

Interest -- A fee charged for borrowing money, expressed as a percentage of the amount borrowed.

Lien -- A legal claim on a property. Must be resolved before the property can be sold.

Lock-in -- Offered by some lenders to guarantee a certain interest rate if the loan is closed within a certain time.

Mortgage Broker -- Individual or company that originates and processes loans for a number of different lenders.

Mortgage Lender -- Bank or lending institution that loans you money for a home.

Mortgage Insurance -- Insurance purchased by the buyer to protect the lender in the event of default. Usually required on loans with less than 20 percent down payment. Also known as Private Mortgage Insurance or PMI.

Origination -- Process of preparing and submitting a loan application. Usually involves a credit check, a property appraisal, and other forms of financial review.

Origination Fee -- Charges associated with origination, defined above.

PITI -- Principal, Interest, Taxes, and Insurance. These are the four elements that will make up your overall monthly mortgage payment.

PMI -- Private Mortgage Insurance. See "Mortgage Insurance" above.

Pre-Approval -- When a lender commits to loaning you a certain amount (as long as you still meet their qualification requirements at time of purchase).

Pre-Qualification -- When a mortgage lender informally reviews your finances to determine the maximum amount they're willing to lend you.
Principal -- The "core" amount borrowed from a lender, excluding interest and additional fees.

RESPA -- The Real Estate Settlement Procedures Act is a law that protects consumers during
the home buying and loan application process. Among other things, it requires lenders to make full discloses about settlement costs and conditions.

Settlement -- See previous definition under "closing."

Title Insurance -- Protects the mortgage lender against claims that come from a dispute about property ownership. Similar coverage for home buyers is also available.

Title Search -- A review of public records to ensure the seller is the legal owner of the property and that there are no unsettled liens or claims.

Truth-in-Lending -- A federal law that requires mortgage lenders to provide written disclosures of all conditions and costs associated with a loan.

VA Loan -- A loan guaranteed by the Department of Veterans Affairs. These loans are made to qualified military veterans and often come with the benefit of no money down.

* You may republish this article online if you retain the live hyperlinks below.

About the Author

BR Cornett writes on behalf of Jimmy Jacobs Custom Homes, a home builder in Georgetown, Texas since 1988. Learn more about Georgetown, Texas real estate by visiting http://www.jacobshomes.com

Article Source: http://EzineArticles.com/?expert=BR_Cornett

10 Ways Your Mortgage Lender Might Be Ripping You Off

2007-09-22T14:14:00.000-04:00

By Chet Wall

With the Fed's latest rate decision, many consumers may be back in the business to purchase a new home or refinance their existing home, in hopes of getting a lower interest rate. However, BEWARE, and don't forget that many of the problems in the market right now are caused by lenders who took advantage of past borrowers. Below are 10 common strategies that I have seen loan officers use in order to increase their commissions.

1- Unnecessary refinancing: The lender "Strips" homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower. Unnecessary refinancing can quickly drain borrower equity and increase monthly payments -- sometimes on homes that had previously been owned free of debt.

2- They try to steer you into the wrong mortrgage loan: An example of this is a mortgage lender trying to steer borrowers into sub-prime mortgages, even when the borrowers could qualify for a mainstream loan. Vulnerable borrowers may be subjected to aggressive sales tactics and sometimes outright fraud. Some have estimated that up to a third of borrowers with sub-prime mortgages could have qualified for loans with better terms. These lenders pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.

3- Abusive Prepayment Penalty: Borrowers with higher-interest subprime loans have a strong incentive to refinance as soon as their credit improves. However, up to 80% of all subprime mortgages carry a prepayment penalty (a fee for paying off a loan early). An abusive prepayment penalty typically is effective more than three years and/or costs more than six months’ interest. In the prime market, only about 2% of home loans carry prepayment penalties of any length.

4- Excessive fees - Dubious fees are costs not directly reflected in interest rates. While an origination point is common, discount points should only be used to buy-down the interest rate, not pad the commission of a loan officer. Because these costs can be financed, they are easy to disguise or downplay. Don't be afraid to ask the loan officer what he or she is making on the loan. If they are afraid to tell you, more than likely you are paying too much.

5-Knowingly lend more money than a borrower can afford to repay. Do not let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.

6- They discriminate. They are knowingly charging higher interest rates to borrowers based on their race or national origin and not on their credit history. This is a crime, and while it should never happen, I have seen this be the case many times when doing refinances for people.

7- They Monopolize: A lender tells you that they are your only chance of getting a loan or owning a home. You should be able to take your time to shop around and compare prices and lenders. Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one mortgage lender.

8- They pull a fast one at closing: The cost or mortgage terms at closing are not what you agreed to. Be sure to get a copy of a lock-in-agreement. If the loan rate changes by 1/8 % the lender must disclose to you the changes. Also, the lender must review your closing docs with you 24 hrs before closing. This way you can ensure you are getting what you are paying for.

9- Use high pressure sales tactics to sell you loans that you shouldn't consider: DO NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your down payment, failing to disclose the nature and amount of your debts, or even how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.

10- Has you sign mortgage documents with blanks. Never sign a blank document or a document containing blanks. If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract. Insert "N/A" (i.e., not applicable) or cross through any blanks. Read everything carefully and ask questions. Do not sign anything that you don't understand.

In sum, throughout my mortgage lending profession I have seen many people suffer from the pitfalls of bad lending practices. I personally recommend doing your due diligence, and research before you look to refinance or purchase. This investment process should be enjoyable, and very simple. After all, it is usually your biggest investment you will ever make-don't let a lender spoil this moment by bad lending practices.

Chet J Wall is the founder of http://www.correctlending.com He founded this company based on correct lending principles. After years of scientific research Chet Wall, and software engineer Harold Madsen set out to create software that protects the borrower from the downfalls of mortgage lending. What they came up with was a proprietary algorithm that matches each borrower with the perfect loan.

At http://www.correctlending.com borrowers use a sophisticated mathematical engine (Correct Loan Analyzer) that allows the borrower to answer 8 different questions, and receive an answer regarding which is the best loan type for them. There is also a paid version, that allows a borrower to take a more in-depth scientifically proven questionnaire that helps them make this decision.

After they receive their personalized report, Correct Lending prices out the loan, and then closes the loan for them. Borrower's are guaranteed the correct loan at the lowest possible price. It is a new way of lending that puts the borrower in charge, and allows them to get the perfect loan at the perfect price.

Article Source: http://EzineArticles.com/?expert=Chet_Wall

Overcoming Your (Mortgage) Fear!

2007-09-14T13:23:00.000-04:00

By Markita Aldridge-Woods

Fear stands for False Evidence Appearing Real! I don’t think we realize how much this can truly impact our personal and business life. I believe fear is the reason so may borrowers have called my office or met with me personally and been pre-approved for excellent mortgage programs, viewed several properties with their Realtors but have yet to move forward on actually signing a contract. And basically giving up on their dreams of homeownership!

The external noise of the media and sometimes friends and family members can actually paralyze us from moving forward with our goals and dreams. In most cases, you will have to step out on faith. This simply means that you believe in yourself and that you will be able to make it work. Definitely you must not make foolish decisions but prepared and informed decisions that will help you deal with the unknown. This weekend I was listening to a song that had an appropriate hook “How will you make it if you never even try?”

Of course I am basing this article on mortgages and purchasing a home, but the information is true for any endeavor we are looking to accomplish. In many cases we often let ourselves or other people talk us out of doing something rather than into it. Distance yourself from the well-intentioned naysayers who think they are protecting you. But many times stealing away your dreams is exactly what they do.

It is okay to be afraid when doing or starting something new. As a matter of fact it is perfectly normal. As stated by a spiritual leader with the utmost integrity,” Do it with the fear!” How many people would have let golden opportunities pass them by, if they let their FEAR stop them from moving forward? I admit it can be frightening to think about all the different aspects of the transaction with realtor, lender, and title company, etc. Then there is the mound of paperwork that needs to be signed in advance such as the real contracts, inspections, and loan applications. As one buyer put it, you feel like you are signing your life away. Which is relatively true in a reverse way if you don’t sign you could be giving away certain aspects of your financial life such as the opportunity to build home equity that could fund your child’s college education, receive the large tax savings that you definitely deserve, or the opportunity to become debt-free through smart mortgage planning.

I encourage you to use fear as a tool to make sure you are informed and prepared versus paralyzed in your tracks. Meet with your local and accountable real estate professionals, ask plenty of questions, and use their expertise as your safety net. This will only be true when working with lenders and Realtors that you trust. Any Realtor or lender can place an advertisement in the paper or on the internet. Only work with individuals that come highly recommended and will add value to your Real Estate transaction.

Since way back in the nineties, this is one of the most excellent times to purchase. The difference in this era is mortgage rates, although they have crept up in the last few years, still remain at overall thirty year lows. So if you have the opportunity to buy a home go ahead and seize it today before the window closes. Contact your local and accountable mortgage professional, to start the process or update your existing mortgage pre-approval. Get back out there on the market and purchase your new home today. False Evidence Appearing Real can never win unless you let it stop you instead of stepping out on faith!

Markita Aldridge-Woods AKA "The Queen of Mortgage Financing" is the expert at helping first time homebuyers and buyers with past bankruptcy and credit challenges purchase a home with low interest rates and very little down in the Woodbridge, Virginia area.

For free reports on the secrets other lenders don't want you to know visit my website at http://thelendingadvisors.com/ or checkout my weekly blog at http://queenofmortgagefinancing.blogspot.com/

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Chicago, IL - The No-Closing Cost Loan Can Save Big Money When Refinancing Your Mortgage

2007-09-10T09:30:00.000-04:00

By Pete Thompson

When rates are down, the biggest obstacle to homeowners lowering their payments and taking advantage of the low rates is the cost of refinancing. The more that the loan costs, the longer you will need to be in the new loan before refinancing makes sense. So if a loan costs a lot upfront, it takes a big improvement in the rates before it is worth doing. On the other hand, if there are no costs at all, a reduction of a small amount in the rates can save you a lot of money over time.

With a no-cost refinance, we are using the yield spread premium (the money that the lenders pay the mortgage broker to bring them the loan) to pay for the closing costs. When we price loans we have several different options. Every day the lenders we deal with send us new price sheets. These sheets have matrices which allow us (the mortgage banker or broker) to price the loan in different ways. It is common in the Chicago area to price a loan to show no points or origination fees, but with customer paying the normal costs at closing. If someone wants a lower rate, I can price it so that they pay more money upfront and get a lower interest rate. We can also do it the other way, offering them a slightly higher interest rate means that the lender pays us a higher premium, which can then be used to cover all of the loan costs. This program isn’t available with all lenders, but is available with many mortgage brokers or mortgage bankers.

Here is how it works. Let’s say you have a mortgage with a balance of $200,000 and an interest rate of 6.75%. This loan would have a monthly payment of $1,297 for principal and interest.

Let’s say that rates drop. If you are able to refinance at 6.0%, your new payment will be $1,199, for a savings of $98 per month with closing costs of $2,000.

If 6.0% is available with closing costs, the rate with no closing costs would be around 6.25% (it would be less if the loan was larger). This means a payment of $1,231 and a savings of $65 per month. The monthly savings are lower, but you save $2,000 up front. This works especially well for people who don’t plan on being in their home or their mortgage for a long period, or if you think that the rate trend is going down and there may be more opportunities to refinance and lower the payments again down the line.

These loans are more attractive when the loan amount is higher. In many cases we can do a no-cost refinance for the same rate as other companies are doing full cost loans. Smaller loans, those under $150,000 are harder to do without any cost. Depending on your situation, this could be the best option.

Pete Thompson is a long time resident of the Chicago area, and has been a mortgage loan officer specializing in helping first-time home buyers since 1992. Go to http://www.ptmortgage.com/ for a Free copy of The Real World Home Buyer’s Guide – How to save thousands when buying a home and getting a mortgage.

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Secrets Lenders Don’t Want You to Know! Read This 11 Point Report Before You Sign Anything!

2007-08-26T16:13:00.000-04:00

By Jerry W. Williams

The right or wrong decision when signing your home mortgage can mean thousands of dollars difference in interest paid. There are very important considerations to evaluate before you commit to a 15 or 30 year mortgage note. For many of us our mortgage payment is the most important financial decision we’ll ever make. Doesn’t it make sense to know as much as possible about the financing of our home? Take the time to thoroughly investigate all of your options!

Unbelievably, many of us sign the first mortgage placed in front of us. Typically the excitement of the new home purchase reduces the mortgage to not much more than an afterthought. What you read here could save you hundreds or even thousands of dollars. Your real estate professional has established relationships with the top lenders in your area. By aligning yourself with a professional agent you ensure that all the financial steps are taken care of properly and economically.

1. Utilize a Mortgage Lender With Established Ties to an Agent- Mortgage Lenders are much more flexible with the real estate agents who have done business with them previously. This relationship then establishes them as a team. The mortgage lender and agent work effectively together, referring each other business. That’s why a good agent can make substantial difference in setting up the most economical financing. And the right mortgage financing can, literally, save you tens of thousands of dollars over the life of your loan!

2. Don’t Attempt Paperwork Alone- All the paperwork required to complete the purchase of a home can be quite intimidating and frustrating for a home buyer. Make sure you have your lenders help you with all the paperwork. Get help from your team, your lender and agent. Their expertise will help alleviate the stress and it will prove to be invaluable before you sign your mortgage.

3. Look at All Your Options- Make sure you see at least 5 loan programs for your mortgage. Lenders have at least 10 programs and should work with you and your agent on deciding what is best for your circumstances. Evaluate all your options. After all it’s your money you’re spending - not theirs!

4. Demand Service- There is little difference between a bank, savings and loan, or a mortgage broker when it comes to the competitiveness of their loan rates. The difference is in the service they provide. It is their job to serve you! You want to get the loan approved and move into your new home as quickly as possible, but don’t overlook the fact that you are the one spending the money and they are the ones who should cater to your needs. Don’t let the process become so intimidating that you lose that understanding.

5. Stay in Complete Touch- You should receive a written report from your lender about every step. This will ensure that no details are overlooked and there will be no surprises.

6. Negotiate a Flexible Mortgage Loan- Don’t just accept the terms they lay down in front of you. Lenders are in the business of loaning money and they want your business. Make sure you examine every option available to you. If you negotiate a variable rate loan, many mortgage lenders have the ability to move you into a fixed loan if rates start going up. Make sure that you understand whether or not that is an option in the package you are looking at.

7. Don’t Give Up on the First No- Initial decisions are not always final decisions. Going to a higher authority can sometimes get you the loan, but do so with the assistance and compliance of your lender and agent. Many times special circumstances when explained properly to the person in charge, will win you the loan.

8 Don’t Wait for the Bottom of the Market- The odds of you hitting the bottom of your market are about like the odds of you hitting your state lotto! You will almost never hit the bottom of a market. And trying to time it exactly right is often costly. It usually causes a person or family to miss out on the opportunity to purchase a very nice property. You’re better off simply negotiating the best rate and terms you can at the time you find a property. If interest rates go down, you can refinance. This is a much better approach because you won’t miss out on the property you’ve spent so much time locating.

9. Be Honest With Your Mortgage Lender- Your mortgage lender wants to help you with your loan. The only time they get paid is when you get approved. The more information (good or bad) you provide your lender, the easier it will be for them to get an approval. It helps them present the loan in the best light. This in turn helps the loan get the highest approval rating.

10. Become Completely Educated- Pick your lender’s brain. Lenders will teach you all about your various options, even if you haven’t found the right property yet. They will be very patient with you while you are looking, especially if you have aligned yourself with the right agent. They understand all the up-front work will pay off in future business. Your agent will then continue to refer people to the courteous and service-minded lender on down the line.

11. Get Prequalified- Mortgage lenders will provide you with a certificate of pre-qualification. By getting prequalified you know exactly what financial parameters to stay within. Your agent and lender will consult with you and help you get qualified for the loan that best fits your needs. Many times they are able to get you a larger loan than you may have thought possible.

Getting approved for a mortgage is often times much easier than you might have previously thought.

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Buyers Beware… Making The Wrong Choice When Choosing Your Real Estate Agent Can Cost You Thousands of Dollars!!!

2007-08-23T22:50:00.000-04:00

The Surprising Differences Between Employing An Exclusive Buyers Agent Versus A Traditional Agent…

Deciding to purchase a new home is a fun and usually joyous experience. However because the home represents the single most costly investment most of us make, this decision should also be very diligent and serious.

When purchasing a home, most buyers select a price range then focus entirely on amenities and location. Since we spend the vast majority of our daily lives at home, it certainly makes sense to purchase one that you find emotionally appealing. However, it’s these emotions that can also become your worst enemy, as they will blindly feed a psychological attitude of “I must have this home now” that may cause you to overlook or hurry your diligence.

So that your home purchase not only provides you with years of personal enjoyment but ensures that it is of sound construction, does not have a history of problems and is a reasonable investment you need to employ an exclusive buyers agent. An exclusive buyers agent will guide you through the purchase of your home and to act in your best interest.

Exclusive Buyer Representation
What most homebuyers don’t realize is that agents that represent buyers and sellers may be working under a conflict of interest. After all, the agent has a legal obligation to protect the seller’s interest. He must get the highest price possible for the seller. Where does that leave you… the buyer?

If an agent, or his agency, lists homes for sale he cannot be an exclusive buyers agent. And an exclusive buyers agent is the only agent that can guarantee 100% representation of a buyer’s interests.

So before you make your decision on who should represent you… get all the facts. Then make your own well-reasoned conclusions. The following are key responsibilities between exclusive buyers agents and traditional dual agents and also some important questions that you should ask before selecting your agent.

1) Representation
Exclusive buyers agents: Act solely on behalf of the buyer. Obligated to help you buy a home for the lowest possible price on the best terms.

Traditional dual agents: Legally bound to help their sellers to get their property sold at highest possible price.

2) Providing and interpreting market data

Exclusive buyers agents: Can provide a complete market analysis of every home you are interested in, interpreting all data for you.

Traditional dual agents: Can only provide the raw data, leaving it up to you, the buyer, to make sense of all the raw data.

3) Negotiation of Selling Price:

Exclusive buyers agents: Will guide you through the entire negotiation and represent you throughout the negotiation process.

Traditional dual agents: Do not offer advice or guidance to assist during the negotiation. They simply are bound to convey each offer to their seller.

4) Confidentiality

Exclusive buyers agents: Must disclose any useful information known about the seller to you and keep any sensitive information concerning yourself confidential.

Traditional dual agents: Obligated to the seller to disclose anything known about you, the buyer, to their client in an effort to get the highest possible price for their home.

Here are 8 key questions to ask of real estate agents vying for your business. These questions will help you paint a clearer picture not only of the representation but the kind of service you will receive from the agent.

How long have you been a buyer’s agent?
Do you, or the company you are with, take listings?
Have you ever represented the buyer and the seller in the same transaction?
What percent of your personal business and what percentage of your company’s business is representing buyers?
Is the balance representing sellers?
Will you try to sell me one of your listings before showing me properties from other real estate companies?
Can I have at least three names and phone numbers of your most recent clients?
Will there be a written contract?

We truly hope these tips will be of value to you in your search of a real estate agent. Be sure to visit http://www.urdollars.com/ for more tips and articles in regards to purchasing your home and finding mortgage options that are available.

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A home is one of the best ways there is to build wealth and a mortgage is the means to obtain that goal.

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Which Mortgage Do I Choose?

2007-08-08T18:08:00.000-04:00

Key Questions to Ask Yourself and Lenders
When Shopping for a Mortgage!

Traditional Fixed Rate Mortgage? Graduated-Payment Mortgage? Adjustable Rate Mortgage? FHA Mortgage? Two-Step Mortgage?

You are wondering which kind of mortgage is best. The answer: There is no one correct answer. Deciding which type of mortgage will best fulfill your needs can be difficult. There are so many types of loans and different term lengths. Your choice is extremely important and can take some time and effort to research. While often neglected by homebuyers, a little research before choosing your mortgage can save you thousands of dollars in the long run.

There are several elements of a loan that should be analyzed. While one of these elements may suggest one type of loan, another may call for a different type. You must weigh each ingredient separately and collectively. You will find that your answers to the questions below will ultimately determine the type of mortgage that best fit your needs.

How long do you plan to stay in this home? Five years? Ten years? Thirty years?
The length of time you will be in the home will certainly play a part in determining which loan to apply for. If you only plan to be in the home for 5 – 7 years or less, you should seriously consider an adjustable rate loan. If you intend on staying 20 – 30 years, a fixed rate mortgage may be right for you.

How much risk are you willing to accept?
If you are the type of buyer that needs to know exactly what you will be paying each month for the term of the mortgage, a fixed rate mortgage will fulfill this need. The fixed rate loan, however, will also net a higher interest rate. If you are willing to take some risk of fluctuations in the interest rate, may receive a lower interest rate.

What are your income expectations?
Plan for the future. Do you anticipate a gradual or dramatic increase in your income in the next few years? If you expect a big increase, a graduated payment mortgage may be best for you.

How much cash do you have available for upfront costs?
If you have the resources, you may want to make a larger down payment to lower your monthly payment. By keeping a higher monthly payment however, you might be able to shorten the term of the loan to a 15-year loan in order to pay it off quicker.

Keep in mind that you’ll have closing costs and fees to pay in addition to your down payment. If you don’t have much cash saved for your upfront costs, don’t despair. You may be forced to accept a higher monthly payment or could even lower your monthly obligation by choosing an adjustable rate mortgage.

In addition to choosing a type of loan, you must also consider which lender to use. Once again, several factors of a loan will influence your decision.

Annual Percentage Rate (APR)
This most likely is the best way to make an “apples-to-apples” comparison of lenders. The APR reflects the cost of credit on a yearly rate and includes any points and fees in addition to the interest rate.

Interest Rate
Find out the rate the lender will commit and how long the lender will guarantee it. Get any commitments in writing. As with any transaction, if it isn’t in writing it doesn’t exist.

Points and fees
These factors will vary greatly. Look out for hidden fees. Make sure the lenders disclose all fees; ask what they charge and what is included and what is not.

Loan Approval
Both approval and funding time should be considered. You don’t want to lose a prospective home because your lender takes weeks to fund your loan. A lender should be able to fund the loan within ten days.

Lender Reputation
Don’t rely on solely someone else’s recommendation. You, not your friend, must feel comfortable with your lender. If you do feel good about your lender and trust him , it will be much easier to trust his advice on what kind of mortgage will best suit your needs.

We sincerely hope these tips and ideas will be of value to you. The types of loans mentioned above are only a few of the multitude of loan types available. If we may be of any further service please contact our office. We would consider it a privilege to be of service to you! If you would like a free consultation call Jerry Williams at 706-577-0507. Licensed in Ga and Ala.

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The Nine Most Common Mistakes to Avoid

2007-08-06T14:21:00.000-04:00

The Nine Most Common Mistakes to Avoid
When Obtaining a Home Mortgage!

You are about to make what will most likely be the largest transaction of your life: your home mortgage. Unfortunately, many homebuyers do not take the time to research some of the little but weighty intricacies of mortgages. Researching the mortgage process takes little time compared to the tens of thousands of dollars it could save you.

Doesn’t it make sense to become as completely informed as possible before you buy your next home? This special report is designed to help you avoid nine common mistakes. Remember that the right lender can help you make good, sound business decisions based on your personal financial situation.

1. Find a Reputable Lender - This is the most important choice you can make when starting the mortgage process. If you don’t trust your lender, you are in for a long and stressful home-buying experience.

2. Pricing - Don’t be lured into a mortgage company strictly by promises of low rates. Find out how long the advertised rate is guaranteed for. Make sure there is enough time to close on your loan. Some companies may make these “promises” but will try changing the rate prior to closing. They may claim that your “lock-in” rate has expired so make sure you have the expiration date in writing. In some cases, the lender may even try to delay your closing to break the “lock-in” rate. In other cases the delay may be beyond the lender’s control. Make sure to allow yourself plenty of time for closing. Delays in the process are common and everyone (builders, title companies, even yourself) is responsible.

3. Programs - You will see several programs that offer special low-interest rates. Keep in mind that they may not be the best program for your situation. Make your lender explain what programs they feel best serve your needs and more importantly, why.

4. Fixed or Adjustable Rate Mortgage (ARM) - Conventional thinking is that fixed is always better and while this is sometimes true, it is not always the case. The key here is to ask, “How long am I going to live at this property?” An ARM can actually be a better choice if you are going to be in the home for a short time. The average for how long a first time homebuyer keeps their mortgage is less than four years. In general, the longer you plan on staying in your home, the better a fixed rate mortgage will suit your needs.

5. Don’t try to bottom out the market - Deciding when to lock in to a mortgage rate can be difficult. Many people will float, trying to guess when rates have hit bottom. Unfortunately, a lot of times they will wait too long and end up with a much higher interest rate. There is nothing wrong with floating but keep a close eye on economic indicators. Your daily newspaper or even the nightly news can be an excellent source of information on the latest interest rate activity. As closing nears, it might be worth locking in.

6. Negotiate problems prior to closing – Its common for a problem to arise before closing. Waiting until closing will rarely be in your best interest. For instance, if you accept $400 at closing in lieu of the seller making a repair and after closing you find that the repair will actually cost $600, you’ve obviously made a poor decision. Whether the builder agreed to add an item and has not or the seller has made a repair that is not acceptable to you, discussing a solution prior to closing will give both parties time to analyze and determine options.

7. Be prepared for closing costs – In addition to the down payment, you will be required to pay fees and other closing costs at the time of the final transaction. Closing costs typically range from 2 percent to 6 percent but will be dependent upon your situation. Lenders must provide you with a “Good Faith Estimate.” The “Good Faith Estimate” will breakdown all costs so that you may know what to expect at closing.

8. Close at the end of the month – When making a mortgage payment, you will be paying interest that has accrued from the previous month. Upon closing however, your lender will charge you prepaid interest for the date the loan is recorded through the end of that month. Therefore, one way to lower your closing costs is to close in the latter part of the month. This will lower the amount of prepaid interest that you must pay.

9. Look out for hidden fees -- Check for certain miscellaneous fees such as inspection, notary, and document preparation. These types of fees can mean hundreds of dollars in closing costs. Remember that this is your money at stake. Never should you be afraid to ask for explanations of fees you are being charged.

We sincerely hope these tips and ideas will be of value to you.
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or visit www.urdollars.com for other articles related to mortgages

Stop Paying Rent Forever! - Six Helpful Tips To Help Save First-time Homebuyers Money… And Anxiety!

2007-07-30T09:58:00.000-04:00

With interest rates hovering around their thirty year lows, a multitude of flexible and low cost loan programs are available as well as a wide variety of assistance programs that can help virtually anybody experience the joy of homeownership. In short, the economic environment simply couldn’t be better to buy your first home.

However, if you have always been a renter than you probably aren’t as well informed of the intimate processes of obtaining a home mortgage, as you’d like to be. To guide you through this exciting but often confusing time, this report details six tips that will help make your purchase a much smoother experience, save you money and eliminate your anxieties.

1) Get Pre-qualified Before Starting Your Search
Before you begin your home search, before you make one single decision regarding a home purchase, get pre-qualified by a mortgage professional. Pre-qualification is free and will give you a definite advantage in the buying process.

During the evaluation stage, it will clarify your financial situation, indicating how much home you can afford. This may influence your decision for location, narrowing your search. You’ll also know exactly how much home you can afford, further clarifying your search.

Pre-qualification will also give you a step up on your competition. Homebuyers that are pre-qualified have increased leverage with Realtors and sellers over buyers who are not. Essentially a pre-qualified buyer becomes a “cash” buyer.

2) Shop Around For A Mortgage Professional
Like most industries, the quality of mortgage professionals can and does vary significantly. With the advancements in lending practices, consolidation between companies and aggressive start-ups there is significant awareness of the value of your business. So don’t immediately settle on the first lender you talk to. Shop your mortgage around to at least three lenders until you find one that you completely and unconditionally trust.

While rates are certainly one of the most significant factors in choosing a lender, compare closing costs, are their “points” involved or not (which is the percentage of the mortgage that the originator takes as commission) and how long is your pre-qualification good for. Traditionally, to get a prime rate you had to pay “points” at the closing, but this isn’t true anymore. Also, the pre-qualification should be good for at least three months and up to six months. In the past, some lenders only approved you for one month.

3) Don’t Become Fixated On The Interest Rate Alone!
Be careful! The lowest interest rate does not always translate to the best deal. Look at the loan programs that are being offered, not just the rate. There are several factors that have to be taken into account when evaluating programs – the loan type (fixed or adjustable), the loan term (15 year or 30 year), the rate and the down payment requirement.

Adjustable Rate Mortgage’s (ARM’s) are typically very low at the beginning but can escalate quickly. These are good for short-term purchases, but long-term mortgage holders are typically better off with a fixed rate.

If you can afford it, you may consider a fifteen-year mortgage. Typically the monthly payments are only 20% higher, and you cut off half the duration of your loan. Additionally, your credit will play a big part in what program will be offered to you. “A” paper, lender lingo for an applicant who has perfect credit may find a 6.5% rate with only 10% down. But if you have some credit history problems, sometimes referred to as “B” or “C” paper, you may find that to receive the prime rate you need 20% down. So shop around!

4) Clean Up Your Credit
By getting pre-qualified, you will be made aware of any potential credit problems in your credit history. Don’t despair if the credit report is not stellar. Even if an incident cannot be taken off the report, by knowing the background of your financial history your lender may be able to put your financial situation in a better light when submitting the actual loan application.

Review your credit report carefully. It is very common for non-payments to be listed that are not even yours. Your mortgage professional will help you address problems showing up on the credit report. Many times, a simple letter to the creditor explaining the circumstances at the time of the incident will rectify the situation. However this may take a few months, so start early.

5) Get A Realtor
As a first time homebuyer, the biggest mistake you can make is believing that you can save money if you do not use a Realtor ®. Although the seller pays the commissions, some listing agents will tell you they can represent both you and the seller fairly. While in some cases this may certainly be true, it’s better to be safe than sorry. Get a real estate agent that represents your interests solely. A buyer agent will make sure the home is inspected properly, do diligence on any hidden discovery and more times than not the money they save you on negotiating the price of your new home will more than off-set any reduction in price due to the commissions not being paid by the seller.

6) What Do You Want In A Home?
There will be many decisions as you start this process. Your Realtor will take you to several different homes, some you will like, some you won’t but most will land somewhere in between.

“You love this home except it doesn’t have…” or “That home would be perfect if it only had…” will be common phrases during this process.

Decide now what features you feel are “necessities” in a home and which features are items that would be “nice to have”. This list will no doubt change the farther along you go but the list will be extremely useful as you begin to look at homes. It will also be useful to the Realtor so he can better qualify the homes that he shows you.

If you would like to get a eMail copy of all the articles send a blank email to me at:
send-reports-@aweber.com and the various articles will be sent to you in a printable format.

How Much Home and Mortgage Do I Qualify For?

2007-07-27T12:15:00.000-04:00

Income. Debt. Down Payment. Closing Costs. Two Years Income Tax Returns. Assets. Liabilities. IRAs. You want WHAT? Just what can I afford?

Buying a home in today’s marketplace is a bit intimidating. And your new home purchase is likely to be one of the most important decisions you’ve ever had to make. Usually it’s one of the single most valuable assets you’ll own.

Where to Start
Before you invest hundreds of hours searching and to avoid any heartbreak if you find yourself unable to qualify for your dream home sit down with a lender. Your lender can perform a simple verbal prequalfication in about twenty minutes and a full-fledged prequalfication in about 5 days.

Pre-qualification on your mortgage not only allows you to focus your search in the correct price range, saving a lot of wasted time and frustration but it can also give you an edge when competing with other offers on a home that you find. If a seller is deciding between two offers—yours who has been qualified and another unqualified offer, they are much more likely to pick yours. Pre-qualification will also give you leverage when negotiating with a seller in a non-competitive atmosphere… it essentially makes you a cash buyer.

The amount of home that you qualify for will be determined by three key factors: Your down payment, your ability to qualify for a mortgage, and closing costs.

The Down Payment
Whereas a current homeowner can rely on equity from their home sale, a first time homebuyer is limited to the money they can save. The days of having to put 20 percent down on a home are in the past. Although putting a large amount of money down definitely makes it easier to qualify for a mortgage and to get the lowest interest rates available. With the various programs that are available today, you can put as little as 3 percent down on a home.

Qualifying for the Mortgage

There are two basic guidelines that lenders use to determine what size mortgage you are eligible for:

1. Your monthly mortgage payment of principal, interest, taxes and insurance (PITI) should not exceed 25 to 28% of your monthly gross income.

2. Your monthly housing cost (PITI) plus other long- term debt should not exceed 33 to 38% of your monthly gross income.

Specifically, most mortgage lenders will consider 4 key factors to determine your ability to qualify for a home loan:

Income – This first element can include not only your gross monthly income and secondary income (commissions, bonuses) but also your history of employment, stability of income, education, even potential for future earnings.

Credit History -- This encompasses your history of debt repayment, total outstanding debt, highest balance, and your highest monthly debt balance.

Assets – Your assets consist of cash on hand, savings and checking accounts, CDs, stocks, bonds or any other type of liquid asset.

Property – The home you are planning to purchase will be appraised to determine the market value. The estimated value must be sufficient to secure the loan. Lenders will loan you no more than a certain percentage (usually 95% Conventional ,97% FHA) of this value.

Closing Costs

Keep in mind that in addition to your down payment, you will also be responsible for paying fees for the loan and closing costs. These will be required at the time of closing unless you qualify and choose to have these included in your financing.

* Closing Costs generally will range between 2 percent and 6 percent of mortgage loan depending on the loan and lender. You will be provided with a “Good Faith Estimate” of closing costs so you can know what to expect.

*“Points”, which are one time charges equal to one percent of your loan amount, may be required by your lender at closing.

*Your closing agent will charge a fee at the close of the sale.

We sincerely hope this information will help you gain a better understanding of the mortgage process. Other articles will follow over the course of weeks.

If you would like to get a eMail copy of all the articles send a blank email to me at:

send-reports-@aweber.com and the various articles will be sent to you in a printable format.