The Importance of The Mortgage Pre-approval. Does A 40 Year Mortgage Make You Poor? With interest rates nearing fourteen-year highs buyers are looking at all methods to help with lowering the monthly payment so they can buy a particular home. Buyers mainly consider the monthly payment and how it will fit within their budget.
By spreading out that payment over a longer period the buyer can reduce the monthly payment. Adding interest into the mix a 40-year mortgage may not be the best financial option for buyers considering the short-term monthly payment savings as this article explores. Lower Payment? Certainly a 40-year mortgage can offer a lower payment compared to a 30-year mortgage regardless of interest rate, but how much lower is it really? Let’s take for example a $400,000 mortgage with a 30-year and 40-year term at a 7% interest rate. At 30-years a $400,000 mortgage results in a payment (not including tax and insurance) of $2661.21.
Looking at the overall interest a homeowner will pay though can raise some concern. Refinancing The Mortgage Final Thoughts. Does A Mortgage Payment Stay The Same During The Life Of The Loan? When one buys a house with a mortgage the common thought may be that now my house payments are fixed for thirty years and there is nothing else to worry about. Depending on the type of mortgage a house is purchased with and whether taxes and insurance are escrowed the monthly home payment may not stay the same for thirty years. This article explores what a home mortgage payment actually consists of and how sometimes the monthly payment can go up or down at times. What Does A Mortgage Payment Consist Of? The most common parts of a mortgage payment consist of the principal and interest payment. If a homeowner has paid less than 20% down towards the purchase of their home then the lender will require that the homeowner also pay into escrow a pro-rated monthly amount to cover the payment of homeowner’s insurance and property taxes.
Escrow payment. What Parts Of The Mortgage Payment Can Change? The principal amount of the mortgage will generally never change. Bottom Line Additional Resources. 10 Smart Tips That Will Turn You Into a HELOC Genius. What You Should Know When Mortgage Shopping. Housing may be a necessity, but real estate is certainly an investment. In fact, it’s the investment of choice for many. In a recent survey, "Bankrate.com" discovered that 25% of the "Financial Security Index Survey" respondents answered "Real Estate" to the question: "Which would be the best way to invest money you wouldn't need for more than 10 years?
" For most people, their home is the single largest investment that they’ll make –and it’s worth spending some time to make sure that investment is financed using the best loan possible. Sadly, though, nearly half of all mortgage buyers don’t take the time to shop for a mortgage first. Sometimes, seemingly small things can make a big difference over the long haul. For homebuyers and investors alike, it’s important to obtain a favorable loan in order to get ahead. To help make the process a bit easier, we’re going to walk you through the process, showing you how to shop for a mortgage. Get Pre-Qualified It’s an all-too-common scenario. Pre-Approval vs. Pre-Qualification, Which Is Better? Prequalification vs. PreApproval Prequalification and preapproval are two important real estate finance terms. Unfortunately, these terms often get confused. The difference is important as it describes a lender's actual level of commitment to a home buyer.
Prequalification Explained Think of Prequalification as the initial first steps in "The Steps to Buying a House". To do this, the lender needs to answer these three questions: How does your credit look? Credit will be the primary factor that determines which type of loan you can get and if you can get a loan at all. The lender will start by pulling your credit report. Additionally, a conventional loan will in most cases require a larger down payment. Loan Limits The downside to an FHA loan is they have limits. The next limiting factor of an FHA loan is going to be property type. When you finish getting prequalified, you should walk away knowing the following: What type of loan are you going to get?
Preapproval Application Checklist. Should I Go With A Local Bank Or Mortgage Broker? One of the most common questions I get from home buyers is; “what do you recommend, should I go with a mortgage broker or should I go with a bank for my home loan?” "Also, is a mortgage broker the same as a loan officer? " "Is one better than the other? " All good questions! Although yes, finding yourself a good Realtor is vital to ensuring a smooth home purchase, a great mortgage professional is equally important to ensuring a successful closing. During the home purchase process, you will spend way more time with your Realtor, driving around, looking at homes and a good personality fit helps. For your lender, however, you might see them once or twice, or maybe even never, through the whole purchase. For this article, I teamed up with mortgage expert Luke Skar of Inlanta Mortgage and MadisonMortgageGuys.com to help explain the difference between the two main sources for mortgages.
From the Realtor's perspective. The importance of a good mortgage professional: Your Morgage source options: Homebuyers: How to Spot a Great Mortgage Lender. Share on Facebook Share on Twitter You’re ready to take the plunge from being a renter to a homeowner. This transition is a new experience that’s full of challenges, from finding that perfect home to financing it. Before you pick out a fresh paint color, learn how to spot a great mortgage lender by following these simple steps. Start With Your Bank Most major banks offer mortgages with competitive rates. Be Ready For Several Interviews Don’t stop your shopping process at just one bank. Ask Hypothetical Questions There are many time-sensitive parts to a mortgage, and your lender should be able to guide you through the process with ease. Consider Online Quotes Your town might be limited to just a few banking institutions. Take Time to Explore the Options A good mortgage lender offers several quotes for one purchase. Be Frank About Fees A mortgage lender is excited to fund a loan, but there are fees that tend to be glossed over at first.
Narrow Down Your Contact List Related Articles: Gift Money for a Down Payment. Share on Facebook Share on Twitter For many first-time buyers, coming up with the down payment is one of the greatest challenges of buying a home. If a loved one is willing to gift you the money for a down payment on a Long Beach home, it may be just what you need to clear a major hurdle to buying your home, but make sure you are aware of the pitfalls and restrictions. Using money you receive as a gift to buy your home usually comes with additional paperwork and there may be tax consequences to consider.
Here’s what you should know. Can You Use Gift Money? Rules for using a gift for a down payment used to be much more stringent as you would need to put down most of the money yourself if you had a down payment of less than 20%. There are also restrictions on where a gifted down payment can come from. Gift Money Must Be Documented If you are going to use gift money for your down payment, you can expect that your lender will want documentation to prove it’s a gift and not a loan.
Is The FHA Mortgage Right For Your Home Purchase? The FHA home loan is definitely a loan program to look at for cash strapped first time home buyers. It is certainly not a program just for first time home buyers, it can also be used for refinances and move up or down buyers. Should you get an FHA loan or not when purchasing a home? What is an FHA Loan? An FHA home loan is one backed by the Federal Housing Authority or the FHA.
The FHA loan program was initially created to help low to moderate income buyers secure low money down loans. It can be used to buy an owner occupied single family home. condominium or multy family between 1-4 units. An FHA home loan traditionally has more forgiving underwriting criteria than a conventional mortgage. The Pros of an FHA Home Loan Should you get an FHA loan when purchasing a home? Less Stringent Credit Requirements One of the biggest benefits of an FHA home loan is less stringent credit requirements. Low Down Payment with No Income Requirements An FHA home loan has a minimum down payment of 3.5%. Podcast #10: Luxury Mortgages Explained. For this podcast about Jumbo Mortgages for purchasing a luxury home I sat down with Walt Wollet of Summit Funding.
During our conversation we discussed the jumbo mortgages, the application process, credit score and down payment requirements and more. This podcast is helpful for those wanting to buy a luxury home through the use of jumbo mortgage financing. I hope you enjoy the podcast and find it informative. Please also consider sharing with those who may find it useful. Listen via YouTube: You can connect with Walt Wollet on LinkedIn, Facebook, and at SummitFunding.net. You can connect with me on Facebook, Pinterest, Twitter, Google+, LinkedIn, YouTube and Instagram. About the author: The above Podcast “Podcast #10 Topic: Luxury (Jumbo) Mortgages Explained” was provided by Paul Sian.
Paul: Hello, everybody. Walt Wollet: Hey, Paul. Paul: Yeah. Walt Wollet: Yup, and whatever I can do. Paul: Sounds good. Walt Wollet: They call it a jumbo mortgage. Paul: Okay. Paul: Okay. Paul: Okay. Pay Off Your Mortgage Faster. Buying a home is probably the most important deal in your life, and your home loan is the biggest investment you will ever make. And surely, a mortgage is what most people would like to pay off as quickly as possible. It is known, that more than 20 million Americans own their homes outright.
So many homeowners have the goal of making the last mortgage payment one day. So, this article is all about getting out of a debt sooner and smarter. Bear in mind that analyzing your mortgage time by time will help you do savings and get the mortgage off your back more quickly. So, here are a few suggestions to help you do it. Round up your payments Round up your payments so that you pay $10-50 extra money each month. Use your “found” money Get a tax refund? Go for biweekly payments Making smaller payments more often will save you money as well as help you pay off your mortgage faster. Refinance and use the difference Extra payments By: Hermine Aslanyan …Did I Miss Something? The Process Of Getting A Mortgage For A Luxury Home. Purchasing a luxury home requires a slightly different approach than if one were buying a non-luxury home.
Generally a luxury house is considered luxury because the price is higher than $500,000.00 and offers luxury amenities not commonly found in non-luxury homes. While the $500,000.00 is a general guideline that does not mean that amount applies the same to every area in classifying a home as luxury. In the Greater Cincinnati, Ohio and Northern Kentucky Real Estate Market homes $500,000.00 and above generally will be considered to be luxury homes. Other areas may be different based on the real estate market in those locations since real estate is all about location.
Buying A Luxury Home With A Jumbo Mortgage If you plan on purchasing your luxury home with cash then this may not apply to you. Luxury mortgages are a little different compared to mortgages for non-luxury homes. Luxury Home Mortgage Underwriting Review Luxury Home Jumbo Mortgage Limits Appraisals and Luxury Homes Bottom Line.
The Benefit of a Pre-Approval Letter. Get Your Pre-approval Letter First! You have been looking at homes for months, now you have found the perfect home. It is time to put in an offer on the home you like, your agent tells you that you need to submit a mortgage pre-approval letter with your offer for it to be considered. You put the kids to bed and you sit at the computer and you get a pre-qualification letter that you print off the compute, or dig out an old pre-qual letter. Yes, it may satisfy the home seller, but you are under serving yourself. Avoid a pre-qualification letter. Having your information verified by the mortgage originator will save you tons of aggravation.
If you are considering buying a home, the first thing I recommend you do is sit down with a mortgage originator and go over the financing before you ever start your home search. Home Sellers Want A Pre-Approval Letter That Inspires Confidence The biggest reason real estate deals fall apart is the borrower has been denied a mortgage. What To Do After Being Turned Down For A Home Loan. Step By Step Directions To Follow After Being Turned Down For A Mortgage What Should I Do After Being Turned Down For A Home Loan? It’s inevitable that not every potential home buyer is going to get approved for a mortgage.
There are a variety of reasons why mortgages are denied. Many buyers who are turned down for a home loan have no idea what to do after they’ve received the bad news that they aren’t able to finance a home right now. In most cases, the reason why these buyers have no clue what to do next is that they’re not educated on the next steps. If you’ve been turned down for a home loan, you need to know what steps you should be taking next in order to put yourself in position to get a home loan. 1.) It’s pretty common that a buyer who has been turned down for a home loan to have no idea why they were turned down. If you’re working with a reputable mortgage company, you should have no issue discovering why you were turned down. 2.) 3.) 4.) 5.) 7.) 8.
. ) © 2016, Kyle Hiscock. Mortgage Shopping Tips To Use Prior To Buying A Home. Top Mortgage Preparation Tips & Tricks Tips For Preparing To Get A Mortgage When Buying A Home One of the most important steps in the home buying process is the mortgage phase. Many buyers don’t realize why it’s important to get pre-approved for a mortgage when buying a home. Getting a mortgage is something that buyers need to prepare for. It’s something that should be thought about well before deciding to walk into a bank or mortgage lender to get approved.
When preparing to get a mortgage there are certain tips and tricks that should be followed. Below are some of the top tips to be aware of when preparing to get a mortgage. Make On-Time Payments One of the top tips for preparing to get a mortgage is to make sure you’re making on-time payments. There are many bills that you need to make sure you’re staying current with as you prepare to get a mortgage. All of these bills can have a major impact on your ability to get a mortgage. Review Credit Lines Monitor Credit Balances & Scores. Using A VA Loan To Buy A Home. Whether you’re buying your dream home or refinancing your existing home, deciding on the right loan product is a crucial decision. It is an important step in laying the foundation for your family’s financial future. There are a lot of loan choices. The one that was right for your friend or family member may or may not be right for you.
It truly depends on your situation and your financial goals. Thank you for your service to our country. Have you served 181 days during peacetime (Active Duty)? A certificate of eligibility (COE) is required before securing a VA loan. The right loan is your financial foundation Click To Tweet VA offers fixed rate loans with terms ranging from 10 years to 30 years. A VA Loan, in most cases, will not require a down payment. There are also other loans with little or no down payment required. Above we discussed that the VA itself does not make loans but guarantees them. VA has no restrictions on the number of loans that you can have. Reasons Your Mortgage May Be Denied. Ending Mortgage PMI. FHA and Conventional Mortgages Explored. A Guide For Home Mortgages. Mortgage Pre-Approval Amounts. Podcast: Mortgages. Important Mortgage Terms To Know and Understand. The Basics For Getting A Mortgage. Mortgage Overlays Explained.