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Home Mortgages: Think Before You Borrow
In today's overheated housing market, lenders are making it easier and easier to get a mortgage. For example, some lenders have lowered the credit score needed to qualify for a mortgage. Others have increased the debt load that borrowers can carry or have made it easier for borrowers to get loans while providing little documentation. In some cases, lenders have even made it easier for people to borrow money to buy investment properties.
There are also many kinds of mortgages available today that were never available before. There are interest only mortgages, adjustable rate mortgages (ARMs) for 3,5 or 10 years and adjustable rate mortgages with balloon payments at the end of a five or ten year period.
There are even adjustable rate mortgages that have introductory rates as low as 1% and that give borrowers multiple payment options.
Lenders also used to loan only 80 percent of a home's value, meaning that the borrower had to come up with 20 percent as a down payment. So, if you wanted to buy a home valued at $150,000, you had to put down at least $30,000. This might have been difficult, but at least you started out with $30,000 in equity in your home.
This standard was then lowered to ten percent, meaning you needed only $15,000 to buy that $150,000 home.
Today, it's possible to find mortgage brokers who will lend 100 percent of the value of a house or even more than 100 percent.
This can be good news for families who, until now, might not have been able to afford a $10,000 or $20,000 down payment. But you need to be careful of. Some unscrupulous lenders may try to sell you a mortgage you can't really afford. Let's say your monthly take home pay (after taxes and other deductions) is $4,000. You find a house for $150,000 and a mortgage broker willing to lend 100% or the full $150,000. A 30-year fixed FHA loan (not including taxes and insurance) will have a monthly payment of about $851.00. The total monthly payment PITI (with taxes and insurance) would most likely be close to $1,000.
A good rule of thumb is that your cost of housing should not exceed 20 percent of your net monthly take home pay (after taxes and other deductions). This means that for a $1,000 monthly mortgage payment, your net monthly income should be at least $5,000. If your income were only $4,000 a month, you would be spending about 25% of your income on housing alone.
Before you make this kind of commitment, you should take a long, hard look at your other commitments, such as car payments, tuition, and insurance to make sure you can cover them as well as your normal living expenses.
Easy, no-down mortgages can be very tempting, but it's important that you understand the exact terms and that you can meet them without stressing your finances.
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Is the Inverse Mortgage a Scam? New Program Promises Mortgage Payoff inside of 5 Years
If a mortgage could be paid off in five years or less, without it costing homeowners an extra cent, why wouldn't every homeowner in America be doing it? Because they don't know, or because they're too wise? Although the former may be the case for many, I certainly hope the latter is the answer for most.A real estate finance consultant company, who shall remain nameless here, claims it has the secret to paying off your mortgage in five years or less, without you paying any more on your monthly payment or adding to the principal mortgage of your real estate loan.
Mortgage: Effective Household Investment for Financial Autonomy
If finances had a copyright, we would have bought it by now. But it is hardly sold anywhere near the place we live.
Flexible Mortgages - Offering Relief from the Fixed Mortgage
A pension mortgage may seem lucrative at the first sight. However, they seldom are, if the customers who took pension mortgage are to be believed.
Bad Credit Refinance Loans - Finding a Good Lender
Finding a good lender to help you with refinancing your home loan can be tricky if you have bad credit. There are plenty of predatory lenders out there who would like to take advantage of you with excessively high interest rates and fees.
What is a Commercial Mortgage?
A commercial mortgage is a loan that uses commercial property as collateral. A commercial mortgage is a business loan which is secured against a commercial property.
To Refinance or not to Refinance -- Here is the Answer
I have written many articles on refinancing a fixed rate mortgage to an adjustable rate mortgage. I have helped people cut as much as $800 off their monthly payments by turning their high fixed rate mortgage loan into a much lower ARM.
Mortgage after Bankruptcy - Bankruptcy Discharged Yesterday? Purchase a Home Today!
So you have been through a bankruptcy and surely have been told to wait at least two years before applying for a home loan. Waiting two long years without any guarantee of being approved for a mortgage after bankruptcy can be disheartening.
Bad Credit Home Loans
There was a time that seems like decades ago when people with less than pristine credit were not able to get home loans. At that time people with bad credit were all but assured that their dreams of homeownership would never come to fruition.
Home Equity Lines of Credit - the Basics
A Home equity line of credit is a loan which is similar to a credit card. These often have a very low interest rate (In most cases even lower than home equity loans).
Is an ARM Right For You?
Let's start by taking a look at 7 key elements of an adjustable rate mortgage:1) ARM defined: While a fixed rate loan is constant and never changes throughout the life of the loan, an adjustable rate mortgage changes periodically. The interest rate of an ARM goes up and down based on whatever external index it is tied to.
Home Owner Loans Explained
How To Release Equity Locked Up In Your Home For Immediate Use.Free up the monetary worth tied up in your property by asking your financial advisor for information on a secured home owner loan.
Home Equity - Let the Market Eliminate Your Private Mortgage Insurance
In decades past, most people who were interested in obtaining a home loan were required to put down at least 20% of the purchase price. Those days are gone, and as home prices have risen faster than incomes, the average down payment required by lenders has dropped.
Top 10 Things to Consider on Home Loans
Here are our Top 10 most important things to consider when shopping for a Home Loan, Equity Line of Credit, or Refinance, courtesy of Loans-Directory.Org:Down-PaymentFixed Versus Adjustable RateAPRLoan TypesLoan Amount Qualification, IncomeLoan Amount Qualification, ExpensesEmployment and Credit HistoryPointsSub-Prime LoansShort-Forms1.
Look For a Great Mortgage Online
People who are looking for a mortgage today have many more options than those who were searching for a mortgage a few years ago, thanks to the Internet. Consider how technology has changed the way we do many things, including shopping for products and services - including loans and mortgages.
Basic Tips for First Time Home Buyers
The first time you purchase a home is an exciting experience. You are anxious to call the place yours and maybe a little worried about how the whole thing will play out.
Home Equity Line of Credit or Second Mortgage Loan Online - Things To Do With Your Homes Equity
If you are wanting to get a home equity loan, rates are still low enough that you may want to make use of that equity in your home. Do you need some ideas on what you could do to multiply your equity or make some extra money off of the capital that could be available to you?Here are some suggestions of ways to put the equity to good use when you go to take out a home equity or cash out refinance loan.
How Not To Be Ripped Off By Mortgage Brokers
One of the things that bothers me about the mortgage industry is the number of unscrupulous brokers that operate in this market.Talk about giving the industry a bad name!I worked for a mortgage lender until quite recently and I used to be shocked at the fees that brokers charged their clients.
Option ARM Mortgage Loan - Is This Really for You?
What happened to the days of a 15 or 30 year fixed rate mortgage loan? Ultimately this is the safest and most popular mortgage loan product in our industry, but new mortgage products are hitting the market, and we in the mortgage business are using them to our advantage; ever heard the radio advertisement saying, "buy a $200K home for $643.28 per month; call XYZ Mortgage Company to apply"? The product used in this ad is called an Option ARM, and I feel it's my duty as a mortgage professional to tell you what this product is in case you happen to meet up with that loan officer whose only concern is to make a fee, and not have your best interest in mind.
Why You Should Not Get Hung Up on the Interest Rates!!
This is what a mortgage can do for you!AND Why you shouldn't get hung up on the interest rate!Let me show you the bottom line or the total dollar amount you will pay when paying a mortgage and paying rent and what the benefits of a mortgage are:Let's say John bought a home and has a $75,000 mortgage @ 10% interest for 30 years on his home with a payment of $750.00 per month.
Choosing a Mortgage Lender
Just as there are many types of mortgages and mortgage deals to choose from, there are also many sources where you can go to get a mortgage. Your key choices are to use a mortgage broker, a more general financial adviser, or shop around yourself and go direct to the mortgage lender.
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