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Can your Mortgage be your Savings Account?
February 07, 2014 - Mortgages

(VMS Source) It is becoming increasingly popular to use a mortgage in lieu of a low-interest savings account. Is this a good idea?

The latest version is a home-equity line of credit that is used to buy a home. It is marketed as a way to pay down your mortgage faster than the traditional mortgage. But it only works at this if you use it correctly. It could be both good and bad that you can use the funds from the account whenever you want to. All you have to do is write a check.

It is basically an adjustable-rate home-equity credit line that is based on the value of the property. You make interest-only payments for the first 10 years. The balance is then fully amortized over the next 20 years. You will pay both the interest and the principal at this time.

If you go ahead and own the home for ten years, you could be facing amazing monthly payments. Your monthly payment could more than double on you. Yet, there is no negative amortization on this loan program. The interest is capped for five years and high-credit score borrowers are currently looking at a cap of 8% over the starting rate. In today's world, the maximum the interest rate could hit is in the 14% range. Yet, after five years, the cap could revert to either 21% of the state's usury.

This plan could work well for the dedicated purchaser who puts all extra money and bonuses into the mortgage account as payment on the balance. The interest is then lowered and the loan is paid off much faster. Most borrowers must have a score of over 660 to be approved.

Many advisors suggest the use of a 30-year fixed-rate mortgage with interest-only payments for the first ten years instead. Yes, the payment will go up after the inital ten years, but the interest rate won't. The concern against the equity-line to purchase is that borrowers would simply write checks without thinking about the addition to their mortgage balance. Plus, the interest rate is adjustable -- always a risk.

If you are considering an alternative loan program for the purchase of your home it is important that you sit down and do all of the necessary math. For example, you should calculate how high the payment could go due to rising interest rates on an adjustable rate mortgage. You should be able to afford the worst. If you can't, you probably should look to a less expensive home.

If you only plan on living in a home for three to five years, a loan in which the interest is fixed for five years is perfect for you. You get the lower rate, but you have to be sure that you are going to want to move in the time period. It still remains that the best long-term bet for a mortgage is the 15-year fixed rate mortgage. You pay less interest and build equity faster.

Other new trends to watch for in the marketplace include mortgages that can be automatically converted into reverse mortgages and longer fixed-rate term mortgages.

(Sign up for your FREE monthly e-issue of the LifeandHomes Magazine. There is No-cost, No-obligation. Each monthly issue features informational articles, local real estate listings and our exclusive "Ask the Expert" business directory where you can find local resources to answer your how-to questions. Just Click on the FREE Magazine Tab at the top of this page)

 
Considering a Mortgage Refinance
February 07, 2014 - Mortgages

(VMS Source) If you are looking for a mortgage refinance, it never hurts to shop around for the best rate and deal. Shopping around could mean the difference between paying or saving thousands of dollars in closing costs, and interest fees?.

If time happens to be on your side, and you don?t need to refinance your mortgage immediately, take some time to educate yourself about the mortgage industry.

By educating yourself about the mortgage industry, you are essentially putting yourself into the driver?s seat.

There is so much mortgage jargon, terms, and definitions that will be thrown at you when considering a mortgage refinance, that it is impossible for any one person to understand everything.

It is not necessary to become an expert in the mortgage industry. You just need to have somewhat of an understanding. This way, while you are shopping around for a mortgage refinance, your decision on which lender you want to work with, will be all the more educated.

The mortgage industry is a very competitive one, so by shopping around, and making it clear that you are shopping around to the lenders or brokers you are dealing with, they will be forced to come back at you with the best deal possible. They know that they are competing with other mortgage companies, and they will not want anyone else to get your business, so they will offer you the best rate available to them in order to keep your business.

Keep in mind when a loan officer or broker offers you a deal that sounds too good to be true, it just may be, so be careful. You don?t want to get to the closing table only to find out you are not getting what you thought you were getting.

Remember, before you commit to a lender, ask for everything they told you to be sent to you in writing, this way you won?t have any surprises at the table.

This is why it is so important to educate yourself about the mortgage industry.

With just a fair amount of knowledge, you will have a general understanding of what you are being offered, and you will be able to determine whether or not the deal is reasonable.

My suggestion to you would be to allow for up to four loan officers or brokers to assess your situation. Whichever one comes back with the best, and most reasonable deal, should be the one for you to consider.

(Sign up for your FREE monthly e-issue of the LifeandHomes Magazine. There is No-cost, No-obligation. Each monthly issue features informational articles, local real estate listings and our exclusive "Ask the Expert" business directory where you can find local resources to answer your how-to questions. Just Click on the FREE Magazine Tab at the top of this page)

 
Tips On Home Mortgage Refinancing
January 24, 2014 - Mortgages
Home mortgage refinancing can be a sound financial move for any homebuyer, most especially if the interest rates are ideal.
(PK Source) - If you are thinking of home mortgage refinancing, make sure you give it a good thought. Here are some tips you may want to consider before you refinance.

Home mortgage refinancing can be a sound financial move for any homebuyer, most especially if the interest rates are ideal. You can save a lot on your monthly payment, and you can swiftly ease your way back to regain financial control.

Factors to Consider Before Refinancing

When you refinance, it is just as important to consider other factors related to your mortgage. You do not only look into the interest rate, but make sure you consider the following as well:

-The amount you still owe. The amount you can refinance is determined by the amount you have paid for your mortgage and how much you still owe.

-The length of time you have been paying for your existing mortgage. If you have paid 15 years out of a 20 year mortgage term, refinancing will cause you to extend your payment once again.

-Your credit rating. If your credit score is great, then you will most likely have no problems with home mortgage refinancing approval. On the other hand, those with low credit rating will not only face difficulties with approval, but may be faced with higher interest rates or charges as well.

-How long you intend to stay in your home. If you intend to sell your house in a year or two, then you will most likely not benefit if you refinance. But if you will live for longer than ten years, refinancing can help you pay off your home sooner with some monthly savings on top.

-How much bills you pay for each month. If you are having trouble making ends meet or having problems paying of credit card bills and unsecured loans, refinancing can be a good solution to start with a clean slate by consolidating. Refinancing can help you save on monthly payments and get you started in saving for the future.

Tips to Ensure Financial Success with Refinancing

After you have carefully thought of the factors stated above, make up your mind as to whether refinancing is definitely a good financial decision for you. If you believe so, here are some tips to help you ensure success with home mortgage refinancing:

-To make home mortgage refinancing more worthwhile, make sure that the interest rate is significantly lowered, say at least 2 or 3% lower than your original mortgage. Consider the points as well. Lenders usually charge more points with lower interest rates, so make sure you weigh accordingly.

-Compare the total costs you need to pay off with your existing mortgage, with the some total you will be required to pay when you refinance. You can use a loan calculator available online to help you. Make sure you consider fees and charges you incur when you take on a new mortgage.

-Shop for a good lender. Be wary about fraud lenders, as they have become rampant in the recent years. Research about the lender's services, ask for recommendations and talk to some of their old clients. Also, ask them for a list of charges that they will impose to you at closing.

Home mortgage refinancing may offer you the best chance you have to get your finances straight, but it can only be so if you do it right.

(Sign up for your FREE monthly e-issue of the LifeandHomes Magazine. There is No-cost, No-obligation. Each monthly issue features informational articles, local real estate listings and our exclusive "Ask the Expert" business directory where you can find local resources to answer your how-to questions. Just Click on the FREE Magazine Tab at the top of this page)

 
Save Thousands On Your Mortgage
June 07, 2013 - Mortgages
Interest on the average home mortgage will cost the homeowner nearly TWO TIMES the cost of the home.
 
100 Percent Mortgages
February 22, 2013 - Mortgages
A 100 percent refinance will be more expensive then a typical refinance. This is because one is borrowing against the full value of their home.
 
Keep Your Home Warm and Safe
January 07, 2013 - Mortgages
Low-cost and no-cost ways homeowners can save money this winter.
 
Need A Style Lift For Your Home?
August 03, 2012 - Mortgages
Homeowner trend moves toward home makeovers instead of upgrading to a new one.
 
Tips on Buying and Financing Your First Home
May 09, 2012 - Mortgages
Tips for first time home buyers.
 
Pros And Cons Of Modifying Your Mortgage
November 02, 2011 - Mortgages
What you need to know before deciding on mortgage modification.
 
FHA Loan Limits Could Effect Buyers and Sellers
August 29, 2011 - Mortgages
Lawmakers are discussing changes to the FHA that could have a significant effect on home buyers and sellers, as well as the future of the real estate market.
 
What You Should Know About Strategic Default
August 01, 2011 - Mortgages
What happens when you walk away from your mortgage commitment?
 
Tips To Pay Down Debt and Avoid Bankruptcy
June 08, 2011 - Mortgages
If you're struggling to pay your bills it's critical to act quickly to avoid bankruptcy,
 
Three Steps to Ensure You Get the Best Deal When Buying a House
February 28, 2011 - Mortgages
How to ensure you're well positioned to take advantage of the current buyers' market.
 
What You Need To Know About Getting A Mortgage
February 02, 2011 - Mortgages
New rules make securing a mortgage more challenging.
 
Ten Important Questions To Ask Your Mortgage Broker
January 03, 2011 - Mortgages
What to ask before you sign for a mortgage.
 
Mortgage Payments Sending You Reeling?
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How to help save your home, and how to recognize and avoid foreclosure scams
 
Upside-Down In Your Mortgage?
August 03, 2010 - Mortgages
Choosing to default on your mortgage will take a significant toll on your credit rating
 
Avoiding Default and Foreclosure
June 02, 2010 - Mortgages
Consider discussing the following prevention options with your loan servicer
 
Too Much House?
January 26, 2010 - Mortgages
How much house is too much? Your mortgage payment should not be more than 25% of your take-home pay. Do the math.
 


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