Category Archives: Mortgages

mortgage-refinance

5 Things to Consider Before a Mortgage Refinance

Refinancing is one effective way if you want to pay off your mortgage early. However, like every method, it has its perks and drawbacks. If you have decided to refinance your mortgage, you should know what you are signing up for.

Refinancing gives the homeowners an opportunity to restructure their finances. But, you have to consider some factors to figure out whether or not a mortgage refinance right for you. Peruse these few considerations before applying for a home refinance:

Home Equity

Your home equity is the first qualification that your lender will consider before approving the refinance. Getting an approval won’t be easy if the current market value of your home is less than what you owe to the mortgage lender.
Some government programs can help you if you have little or no equity. However, you should visit a lender and discuss your particular requirements and needs to know if you qualify for any such program.

Credit Score

Most lenders want a credit score of 740 or more to approve the homeowners the best mortgage interest rates. So, it’s not surprising if you don’t qualify for the lowest interest rates even after having a good credit score. Once in a year, you can get a free copy of your credit report from each of three major credit reporting agencies. So, get your copy and figure out if the score is enough to qualify for the mortgage interest rate you are looking for.

The Cost of Refinancing

If you apply for a refinance, you have to pay something between 2% and 5% of your loan amount as the closing costs, and you have to pay it upfront. So, if you’re refinancing a $300,000 loan, you are likely to pay an amount between $6,000 and $15,000 in closing costs.

You can opt for a no closing cost refinance, but that will demand a slightly higher interest rate. So, you need to calculate which option will be financially beneficial.

The Option for a Cash-Out Refinance

If your equity is good, you can apply for a cash-out refinance that will allow you to get a new loan for more than the amount you owe on your current mortgage. It’s a good option if you can spend the money sensibly. The interest rates for cash-out refinance are slightly higher than other refinance options, but it’ll be worth it if you spend the additional money to increase your property’s value.

Recovery Period of Refinancing Costs

You should consider the period because a faster recovery time is financially helpful. Your refinance costs and the revised mortgage interest rate will depend on the term, amount, and rate of your previous loan. It will be a favorable refinance scenario if you can repay the closing costs between one and two years.

Mortgage refinancing is a complex process and demands patience on the part of the homeowners. If you don’t know much about it, go to a reputable lender to figure out if you need refinancing and which option is right for you.

mortgage

4 Proven Ways to Become Mortgage-Free Early

An obligation to a financial commitment is stressful. Even if you are financially solvent and have no problem in paying your loans and mortgages, every homeowner is familiar about the mental strain the monthly mortgage payment can inflict on them.

The mortgage term is fixed and it can be short-term or as long as 30 years. The term is usually fixed during the approval of the loan, but you can still speed up the process to see yourself mortgage-free before the due time.

Check out the following tips to know how you can pay off your mortgage early:

Refinancing the Mortgage

It may seem daunting at first look to cut the term of your mortgage in half or several years, but the benefits will pay off in the long run. For example, if you refinance a 20-year loan into a 10-year one, you will not only shorten the payoff time but will also have to pay a significantly less amount of interest over the period of the loan.

However, the refinancing will also give you the responsibility of paying a higher monthly payment. So, don’t apply this technique if you don’t have a secure source of income for paying that amount of money regularly.

Refinancing with the Same Monthly Payment

It will be safer than cutting the loan term to half and starting to pay a much higher monthly payment than the current one. Do your research and refinance the mortgage into a term where you will pay a lower interest rate but the monthly payment will be same or close to the current one.

You have to spend some money to pay for the closing costs for refinancing, but the revised interest rate should negate the costs.

Use Unexpectedly Received Fortune

If you are unable to cover the refinancing costs and there’s no opportunity to increase your monthly income, you can use any unexpected good fortune such as money won in a lottery, inheritance, or bonus checks to pay off a portion of the mortgage. It still means spending a large sum of money to wipe out that big financial responsibility but paying this way won’t put any strain on your monthly budget.

Add to the Principal Payment

Adding to the principal payment, even just a small amount, will not only cut the total amount of interest paid but also shorten the mortgage term. Adding just $50 or $100 to your current monthly payment will yield magic in the long run.

Choose a method that suits best your financial conditions. The best way will be to refinance the mortgage into a shorter term go for other ways if you are not confident about your monthly income.

mortgage-rate-hike

The Impacts of Mortgage Rate Hike in the Housing Market

The mortgage rates took a significant jump after the U.S. presidential election. Donald Trump’s victory and his pro-growth agenda have likely affected the borrowing costs, resulting in some fluctuation in the country’s housing market. Read More →

mortgage payment

Mortgage Payment Struggle: The Measures You Can Take

It’s typical for most people to face a financial quandary at some point of their life. Most homeowners live paycheck to paycheck, and any disruption to that routine may push them to the point of thinking how to make their next mortgage payment. Read More →

right-mortgage-rates

How to Know You Have Found the Right Mortgage Rate?

Getting a good mortgage rate is tough and it’s actually a whole lot different than comparison shopping. The mortgage lenders analyze and investigate lots of factors to determine your eligibility for the loan. However, according to the recent data published by the St. Louis Federal Reserve, average 30-year fixed mortgage rates are still less than 4% in 2016.

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online-mortgage-lenders

Shopping Mortgage Online? 3 Ways to Find out If Your Lender Is Legit

Home buying is daunting – both physically and financially. Only a handful of people are possibly able to buy a home outright with cash. Others have to take mortgages that involve repaying a huge amount of money over a long period. Plus, the entire process of shopping, applying, and securing a mortgage is complicated and stressful. Finding a mortgage online is a tad more convenient and hence cuts down a lot of stress. However, the only problem with online mortgage is to avoid scam and find out a lender who is credible!

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common-mortgage-misconceptions

Mortgage Misconceptions that Keep Homebuyers on the Sideline

Most of the consumers don’t have any clear idea about the requirements for a mortgage qualification. A recent Fannie Mae survey shows that almost half of the respondents either have no idea or bear misconception about some key mortgage requirements such as credit score, down payment percentage, and debt-to-income ratio. It means that many eligible homebuyers face rejection just because they don’t know!

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Paper Trail: The Documents You Must Have to Get a Mortgage

Buying a new home is exhilarating but managing the money to pay for the new digs is a different story. Though you can’t really control anything when it comes to the approval of your mortgage application, a few things are there that you can do to speed up the process.

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mordenied

When It’s Time to Call Off a Home Buying Deal

Buying a home is an emotional process, which is equally exciting and stressful. You’re visiting open houses, you’ve started making offers, and great chances are you might get hooked on a house or two. However, despite going far into a home buying deal, several situations can occur to make you uncomfortable about the deal. If this happens, you’ll have to seriously consider whether you want to move forward.

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