5 Mortgage Refinancing Tips
Homeowners everywhere need to save money. Their has been a lot of talk recently about mortgage refinancing and its potential to save a homeowner a lot of money on their home loan. Mortgage refinancing, depending on your personal finances, can be a good or bad decision. Here, I have included some tips which will help, and could save you a lot of money, should you decide to refinance your home loan:
1)Mortgage Refinancing with Points or without Points
Lowering interest rates should be the ultimate goal of a homeowner who is looking to save money. Homeowners will need to figure out the benefits of paying points up front, versus having a lower interest rate. Depending on what you choose, and how long you plan on living in your home, you need to figure out the benefits taking these factors into consideration.
2)Mortgage Interest Rate Games
Do not be a victim for mortgage lenders who advertise 0% interest rate home loan refinancing. Typically, these mortgage lenders will try to get you into a low interest arm (adjustable rate mortgage) loan, which will inevitably skyrocket in the future, and leave you in a bad financial spot, again.
3)Watch out for hidden fees and costs associated to refinancing your home loan.
If it seems like the new mortgage rate you are able to get is much lower than you thought it would be, there is probably a catch. Make sure to find out how much all associated closing costs and fees are prior to signing and mortgage refinancing deal.
4)Get a “Good Faith Estimate”
A good faith estimate is a document which is a valid quote for a mortgage which is valid for 3 business days. Take this time to carefully review and compare your potential mortgage to other lenders options.
5)Know how long you plan on living in your home.
Sometimes the costs of refinancing a home loan can be outweighed by the savings if a homeowner is not planning on living in the home for an extended length of time. Typically 6 years is when homeowner breaks even and will start to see savings from refinancing a home loan.
Mortgage Refinancing – Help, Advice, and Tips
Mortgage refinancing is a very popular option for a lot of homeowners who are looking to save money. In general refinancing a home loan is easy to do. However, there are some simple tips which can help you save time and money.
Mortgage Lenders
There are all types of mortgage lenders competing for your business today. Some of them do not even have a traditional brick and mortar location, just an internet presence. While all traditional mortgage lenders typically operate the same, the are hardly alike. Look for a mortgage lender who offers low interest rates, low closing costs and fees, and good customer service. That is the winning trifecta needed for a homeowner to have a good refinance.
Homeowners with bad credit should look at sub prime mortgage lenders. While their interest rates are generally higher than a standard refinancing option, they are usually better than a person with bad credit would be able to get through a standard mortgage lender. Sub prime refinancing, while not the best option, may still be beneficial for homeowners in certain financial situations.
Mortgage Loan Types
When refinancing, a homeowner will have a wide variety of loan and rate choices. In general, a fixed rate has a higher interest rate than an ARM (Adjusted rate mortgage) but is often the better financial move to make. Fixed rate home loan offer long term financial stability, and a homeowner with a fixed rate loan will never see an interest rate increase.
Homeowners who are no planning on staying in their home for long or are in other situations may want to opt for an ARM loan. These loan types sometimes offer an introductory fixed rate, sometimes for up to 36 months. Homeowners who think they will be getting a large amount of cash, moving, selling, or who believe their credit will dramatically increase in the future, should think about an ARM loan. Then refinance into a fixed rate mortgage in the future when conditions improve.
3 Mortgage Refinancing Money Saving Tips
With mortgage refinancing becoming much more popular lately, many homeowners do not know what to look for. Many homeowners make a few costly mistakes when they refinance, which can cost them a lot of money. Here are some tips which can help you get the best mortgage refinance possible.
-Know the True Costs and Benefits of Refinancing your Mortgage
When refinancing, lower interest rates are always better. However, sometimes a lower rate comes with increased fees and costs. Many times, mortgage lenders and banks will advertise an ultra low interest rate, but make up for it with their extreme closing costs, fees, or qualifying standards. The best thing you can do is make sure the interest rates do not come with huge fees which would negate any potential savings.
-Know Why You want to Refinance
Are you interested in getting lower interest rates? Want a lower monthly payment? Need to get out of an ARM loan and into a fixed rate mortgage? Want to get some cash from your homes equity? There are many options available for homeowners who want to refinance. You can get a lower interest rate, change the length of your mortgage, of get cash back. All of these options have drawbacks and advantages. Each situation will determine the appropriate mortgage, but make sure you know your options.
-Compare your Options and Different Mortgage Lenders Quotes
Always make sure to comparison shop between different lenders, their options, and their costs. Most of the time, you will get a different quote from different lenders. Everyone charges different fees and costs, and have different requirements to qualify for a lower interest rate. Be sure to get several quotes from potential mortgage lenders, and pick the one which is best suited for you.
3 Mortgage Refinance Tips to Help you Save Money
Mortgage refinancing can be a great thing for a lot of homeowners to do. However, there are some common mistakes which homeowners make that can cost them time, and money. Here are some tips which will help you get approved the first time, and get the best mortgage refinance deal possible:
-Double Check All Documents
Homeowners need to realize that even a little mistake, on your application or credit rating, can carry huge consequences. Always request copies of your credit report, so you can check for errors. Small mistakes can get a homeowner denied, or not let them get the lowest interest rates they can. Also, the application to your lender is important. Always make sure all income and statements made on your refinancing application can be verified. If there are any questions which a lender can not answer, you will get denied.
-Compare Different Lenders and Mortgage Refinancing Options
When refinancing, always be sure to compare different mortgage lenders, and what they are offering you. Mortgage lenders and banks have all different restrictions and terms which can vary drastically. When you comparison shop different mortgage lenders, you are ensuring you get the best deal possible. This is just like shopping for any other large purchase.
-Know Why you want a Mortgage Refinancing
Make sure you have a reasons to refinance your mortgage. Many different reasons, and options exist for all homeowners. Picking the right one for you is crucial. You need to know if you want lower interest rates, smaller loan payments, or cash back from the refinancing. This will make choosing, and figuring out which refinance option is best for you.
Mortgage refinancing is often made to look a lot more difficult than it is. These few tips can dramatically decrease the cost of a home loan refinance.
The 2 Best Mortgage Refinancing Tips for All Homeowners
Mortgage refinancing, especially now with mortgage rates near all time lows, can benefit many homeowners. However, there are 2 things which all homeowners can do when refinancing which will ensure that they are getting the best deal possible. Here are 2 of the best tips all homeowners can use when refinancing a mortgage:
-Have a clear cut reason for refinancing.
Whenever your going to refinance your home, make sure you know why you want to. You do not ever have to refinance, yet many people can benefit from refinancing.
Do you want to get lower interest rates? Has your credit improved since purchasing your home? Want to shorten, or lengthen the length of your home loan? Want to use some of the equity you have built up in your home and use it as a low interest loan, so you can get cash back? These are all legitimate, and good reasons many homeowners refinance. While not everyone will benefit, homeowners who know what they want from it stand a much better chance of getting a beneficial home loan.
-Find the best mortgage lender.
Each lender or bank will have their own terms and conditions, as well as different costs and fees associated with refinancing. There also may be cost differences between getting a lower interest rate, or getting cash back, when your refinancing a mortgage.
Always be sure to shop around your situation to a variety of mortgage lenders. Once you obtain quotes which you like, from lenders who seem supportive in helping you reach your goal, carefully scrutinize each loan offer. Once you have 2 or 3 mortgage refinancing offers which you like, bring them to the competing lenders, and see if they can match or beat it. Often, a mortgage lender will lower some costs in order to make their offer a little more lucrative.
Mortgage Refinance Benefits
Mortgage refinancing can be a great move for a lot of homeowners. Mortgage rates are near all time lows, and new Government programs make getting approved easier than ever. Here are some of the benefits of mortgage refinancing a homeowner can look forward to:
-Refinancing into a Lower Interest Rate
Getting a lower interest rate is the main reason homeowners refinance. Many people have seen their credit improve, and interest rates go down, as the years have gone by. Getting a refinancing now, with rates as low as they are, can mean big savings for a homeowner who locked in an interest rate just a few years ago. Rates have dramatically dropped as a result of the struggling housing market, and homeowners who are paying a high interest rate should look into refinancing now while rates are low, and getting approved is easy.
-Changing the Terms and Conditions of a Home Loan
Many homeowners can benefit from simply adjusting the terms and conditions of their mortgage to meet their current needs. A lot of people refinance and change the length of their home loan. Shortening the mortgage will increase the payments, although this is not necessarily true if the interest rate you get is low enough. Pretty much regardless of why, extending your home loan will lower your payments, but increase your overall interest costs over the course of the mortgage. Make sure you do the math, and find the right choice for your personal financial situation, and goals.
-Getting a Cash Back Mortgage Refinancing
Many homeowners look into refinancing so that they can tap into some of the equity in their home. Many times, a cash back refinancing is cheaper than taking out a traditional loan. When refinancing like this, a homeowner is basically taking out a new mortgage which is bigger than their old one, and pocketing the difference. This is a great way to gather a large amount of low interest cash for any situation.
Mortgage and Refinancing Interest Rate Predictions
Mortgage rates are they key to saving money when refinancing a home loan. Right now, mortgage rates are around 5.19% for the average homeowner who refinances. However, my mortgage rate predictions are that interest rates will drop a little further, potentially saving homeowners a lot of money. Here are my mortgage rate predictions, and forecasts for 2009 and 2010:
Mortgage rates are near all time lows right now. Earlier in the year, home loan rates were at their lowest, around 4.69% for a typical fixed 30 year mortgage. When interest rates were that low, millions of homeowners needed help getting a better, or more affordable home loan. Homeowners literally rushed to mortgage lenders and banks to apply for refinancing. Very quickly, the lenders and banks became backed up with paperwork, and homeowners to help. To try to slow down the rush, mortgage rates were increased to 5.19%. While this rate is still very low, it was enough of an increase to slow down the rush.
However, now that mortgage lenders and banks are getting caught up, I predict mortgage rates will lower to their prior lows of 4.69%. Mortgage lenders and banks will be eager to have another rush of customers to help. To spur another wave of interest, rates will be dropped around .5%. While this may not seem like a lot, .5% can easily make or break a refinancing deal, and could be just what a homeowner needs to save a lot more money.
Mortgage refinance rates are not facts, just educated guesses. Homeowners should wait until these lower interest rates kick in to refinance. However, since interest rates are still very low, homeowners who are struggling and at risk of losing their home, should take action now. After the predicted rate drop, the interest rates will only be increasing.
5 Things You Could Do With $8000
With only three months left in the program that pays first-time homebuyers an $8000 tax credit, those hoping to take advantage of the offer will need to act quickly. November 30th is when the program is scheduled to expire and, even though some lawmakers are pushing for an extension, this is money that you might be leaving on the table starting December 1st. The money is part of the economic stimulus package and is reserved for first time homebuyers, which in this case can be defined as anyone who has not owned a home for the past three years and meets income requirements to qualify.
Most people can probably think of a lot of things to spend the $8000 on, but here are five ideas that you could consider if you’re a first-time buyer thinking of entering the housing market:
- Pay Down Debt: Purchasing a home when you’re in a position to do so can be a very wise financial decision. If you’re receiving $8000 as an incentive to make that wise decision, why not use that money to improve your financial circumstances? Most Americans carry a debt balance that they would love to reduce but it’s difficult to do when most of each paycheck is already reserved for other needs within your budget. An $8000 windfall could put a big dent in credit card debt or pay off a car or student loan and put you in a stronger cash flow position moving forward.
- Start A Business: With unemployment continuing to increase and many employees seeing their pay or hours reduced, the idea of starting a business to generate primary or supplemental income is appealing to many people right now. The average startup costs for a small business are between $10,000 and $15,000, so your tax credit could go a long way in funding your own small business and allowing your inner-entrepreneur to see what it can do!
- Purchase Health Insurance: If you are among the millions of Americans not currently covered in a health insurance plan, this money could be used to fund good health insurance for close to a year for many families. The government may or may not come up with a solution to insure those currently without the protection of insurance, but you’d sleep better at night in your new home knowing your family was covered in the event of a major medical expense.
- Upgrade Your New Home: Many of the homes being purchased today are at deep discounts compared to normal market prices, but the homes are usually also in need of some TLC. Your $8000 could be used to upgrade flooring, paint, appliances, or other areas that could make your house feel more like home to you. Doing at least some of the work on your own will stretch those dollars even further.
Start an Emergency Fund: In a poor economy, it’s a great idea to have some cash in a safe place to guard against a future job loss or some other financial hardship. This money should be kept in an FDIC insured, interest-bearing account. A good rule of thumb is that you should have 3-6 months worth of living expenses in an emergency fund.
Three Reasons to Consider Credit Card Consolidation
For the first time in several years, the uncertainty of the economy during this recession has caused Americans to begin saving money again. Some are simply stockpiling cash in case things take another turn for the worse. Others are cutting back on personal spending and paying down debt instead, trying to strengthen themselves financially. Just a few years ago, the national savings rate was negative as the average American was spending more than he or she was earning. This spending led to high balances on credit cards, many of which carry high interest rates.
One of the tools that many people effectively use to manage credit card debt is credit card consolidation. The average American has about 4 credit cards, and one out of every 7 Americans has more than 10 credit cards. Some people have the income and discipline to pay off their balances each month, but many consumers carry balances on their various cards, making payments as bills roll in one after another. The average borrower with at least one credit card carries more than $10,000 in credit card debt. Here are three reasons why you should consider consolidation of your credit card debt:
- It’s Simple: Having multiple lines of credit open means opening several bills each month, tracking information like due dates and minimum payments, and trying to determine which credit balances you should be paying down first. It’s not impossible to manage a debt situation like this, but wouldn’t it be much easier to have one bill for all of your credit card debt each month? Part of the reason that getting out of debt can be difficult is that it’s confusing to keep it all straight. With a single consolidated debt position, you can focus on reducing that debt much more effectively.
- It’s Flexible: There are many ways that you can consolidate credit card debt. A few years ago, the Home Equity Line of Credit (HELOC) was the most popular option. HELOC’s are a little more difficult to obtain now, but if you have equity in your home and a solid credit history, this is still an option that carries a very reasonable interest rate, and the interest you pay would be tax deductible. You can also use your credit card with the lowest overall interest rate and transfer your higher-interest debt to that card. Another option is to ask your bank for a personal loan or signature loan–with good credit, this may give you a lower interest rate and allow you to pay more to principal.
- It’s Smart: Simplifying your financial life is always an attractive option, and if you can carry most or all of your debt in one place with a manageable interest rate, you’ll be on the right track to paying off that debt. One consolidated loan means you can allow your payment amount to vary based on your income and circumstances. Having a larger balance with creditors will also give you a stronger position with lenders to negotiate for a lower interest rate. Finally, you’ll feel a greater sense of accomplishment as you see your debt picture more clearly and face your debt head on, paying it down month after month.
Three Reasons to Consider Credit Card Consolidation
For the first time in several years, the uncertainty of the economy during this recession has caused Americans to begin saving money again. Some are simply stockpiling cash in case things take another turn for the worse. Others are cutting back on personal spending and paying down debt instead, trying to strengthen themselves financially. Just a few years ago, the national savings rate was negative as the average American was spending more than he or she was earning. This spending led to high balances on credit cards, many of which carry high interest rates.
One of the tools that many people effectively use to manage credit card debt is credit card consolidation. The average American has about 4 credit cards, and one out of every 7 Americans has more than 10 credit cards. Some people have the income and discipline to pay off their balances each month, but many consumers carry balances on their various cards, making payments as bills roll in one after another. The average borrower with at least one credit card carries more than $10,000 in credit card debt. Here are three reasons why you should consider consolidation of your credit card debt:
- It’s Simple: Having multiple lines of credit open means opening several bills each month, tracking information like due dates and minimum payments, and trying to determine which credit balances you should be paying down first. It’s not impossible to manage a debt situation like this, but wouldn’t it be much easier to have one bill for all of your credit card debt each month? Part of the reason that getting out of debt can be difficult is that it’s confusing to keep it all straight. With a single consolidated debt position, you can focus on reducing that debt much more effectively.
- It’s Flexible: There are many ways that you can consolidate credit card debt. A few years ago, the Home Equity Line of Credit (HELOC) was the most popular option. HELOC’s are a little more difficult to obtain now, but if you have equity in your home and a solid credit history, this is still an option that carries a very reasonable interest rate, and the interest you pay would be tax deductible. You can also use your credit card with the lowest overall interest rate and transfer your higher-interest debt to that card. Another option is to ask your bank for a personal loan or signature loan–with good credit, this may give you a lower interest rate and allow you to pay more to principal.
- It’s Smart: Simplifying your financial life is always an attractive option, and if you can carry most or all of your debt in one place with a manageable interest rate, you’ll be on the right track to paying off that debt. One consolidated loan means you can allow your payment amount to vary based on your income and circumstances. Having a larger balance with creditors will also give you a stronger position with lenders to negotiate for a lower interest rate. Finally, you’ll feel a greater sense of accomplishment as you see your debt picture more clearly and face your debt head on, paying it down month after month.
credit card consolidation
Rising interest rates and mounting credit card debt may prompt many consumers to look for ways to consolidate their credit card bills. Financial and money management experts say consumers should consider transferring high-interest balances to 0 percent or low interest credit cards if they can.
Credit card balance transfers
* Balance transfer basics
1. - Balance transfers 101
2. - Credit card consolidation
3. - Comparing balance transfer credit cards
* Things to watch out for
1. - 6 steps for successful credit card balance transfers
2. - Too many credit card balance transfers can be a bad idea
* Transferring balances after the holidays
1. - Holiday spending can lead to financial hangovers
2. - Post-holiday credit card bills getting you down?
* Balance transfer and other consolidation options
1. - Become debt-free with credit card debt consolidation
2. - Credit card debt consolidation
3. - Social lending and debt consolidation
"Now is the time if you are able to do balance transfers," says Jim Tehan, a spokesman for MyVesta.org, a money management Web site. Anyone with minimum monthly credit card bills that exceed their available incomes may need "a temporary solution to lower their monthly payment right now," Tehan says.
The credit crunch and decline in home values means fewer homeowners can tap into home equity lines of credit (HELOC) loans to consolidate credit card debt. HELOCs had been a popular method to consolidate credit card debt prior to mid-2007.
"The market has changed and consumers need to be aware of that," says Brad Stroh, managing partner of Bills.com, a Web site that helps consumers manage and pay their monthly bills. "It's harder than ever to get a refinance loan or a HELOC loan due to the credit crunch."
Stroh's advice: "Think strategically. What that means is find the lowest rate instruments. For homeowners, first pursue a refinance and then a HELOC because those are your lowest cost of capital options and they are tax deductible --assuming you have equity that's available to you."
As for renters, "If you're not a homeowner, look for balance transfers or teaser rates on new cards to pay down your other debts. Shop for the lowest interest rate -- not the lowest payment." Methods of calculating minimum payments differ, and some that offer lower monthly payments are just stretching out your repayment, costing you more in the long run.
Read the fine print
Several credit card issuers offer balance transfer options. However, financial experts advise consumers to read the fine print and know the terms and actual costs they might incur when choosing these options.
Stroh says, "Look for cards without universal default, that have low fees and low interest. You make a decision based on lowest costs and that's fees and costs."
He notes that many consumers focus solely on the annual percentage rate (APR) charged on a credit card and ignore balance transfer fees, annual fees, late fees, over-the-limit fees and other costs that may be associated with using the credit card. "Now is the time to end that cycle," Stroh says.
"Research which cards might be the most beneficial for you before applying for them because you don't want to go applying for a lot of credit cards all at once," says Tehan from MyVesta.org. "That can drastically hurt your credit report and score."
He, too, recommends reading the terms and conditions of the credit card agreement. Look for whether balance transfer fees are capped. An example of a fee is 3 percent of the transferred amount up to a certain capped dollar amount, however, recently credit card issuers have been eliminating the cap. When reading the fine print, be sure to note whether this is the case.
"There are always fees involved. Read about everything before you decide what to do. Look and see what the final rate is after the teaser time period expires," Tehan says. "It's very important to look and see what's going to happen after that. Chances are you will not have that credit card debt paid off after that time period."
Tehan says after consumers are armed with information, they should then consider bargaining for the best deal.
"Just call your current credit card company and say, 'Hey, I've been a customer for X amount of years. What can you do for me? I've got five offers in front of me for 4 percent.' Sometimes they can offer you something better," he says. Remember to ask politely.
Downsize your wallet
There's another reason to consider consolidating credit cards, says Lynne Strang, a spokeswoman for the American Financial Services Association Education Foundation, an organization that focuses on teaching money management skills.
"There is some value in using one or two cards to consolidate purchases," Strang says. Reducing the number of credit cards you have helps simplify your monthly budget and financial management routine. "When you get your statement at the end of the month, it's a lot easier to do that with a few accounts rather than getting several statements."
Honestly assess money habits
Strang says consumers should consider their own money management styles when determining which credit cards to keep.
"If you are a person who pays off your balance in full every month, then the benefits of the card and annual fees become more important than APR. If you don't, then APR moves up to the top of the list for things to look at on the card," she says. "The consumer needs to do an honest assessment of what type of card user they are, then choose a product that best matches up with that type of use."
People who have high interest rate credit cards should review their monthly statements and credit card agreements for terms and conditions.
"Take a look at what the terms are," Strang says. "There's lots of consumer choice today. If the card product that you currently have doesn't best suit your needs, there are many options out there to evaluate."
How many cards are too many?
How many credit cards should consumers have? Are 20 too many? Are two too few?
"We recommend that people have only two cards," says Tehan. "If you decide that you want more, that's' entirely up to you. Realistically, it's what you can afford."
He notes that those with numerous cards who are carrying balances on those accounts may be paying a considerable amount in interest each month.
"If you do have 20 cards and they're all maxed out, that could be a sign of a larger problem that debt consolidation may not help you with," Tehan warns.
How do you know when it's time to consolidate credit cards? "If you think you're having money problems, you are," Tehan says "If you can't afford the minimum payment, then you really need to take action. Consider consolidation, debt management, bankruptcy, paring down your expenses and cutting back on entertainment."
Stroh from Bills.com adds more words of warning about a common mistake made by those who consolidate credit card debt: "If and when you consolidate those credit cards, please put them in a bowl of water and stick them in a freezer and do not make the common error of running those cards back up. It is all too common that consumers pay them off, they exhale and then they go straight to the mall."
Credit card balance transfers
* Balance transfer basics
1. - Balance transfers 101
2. - Credit card consolidation
3. - Comparing balance transfer credit cards
* Things to watch out for
1. - 6 steps for successful credit card balance transfers
2. - Too many credit card balance transfers can be a bad idea
* Transferring balances after the holidays
1. - Holiday spending can lead to financial hangovers
2. - Post-holiday credit card bills getting you down?
* Balance transfer and other consolidation options
1. - Become debt-free with credit card debt consolidation
2. - Credit card debt consolidation
3. - Social lending and debt consolidation
"Now is the time if you are able to do balance transfers," says Jim Tehan, a spokesman for MyVesta.org, a money management Web site. Anyone with minimum monthly credit card bills that exceed their available incomes may need "a temporary solution to lower their monthly payment right now," Tehan says.
The credit crunch and decline in home values means fewer homeowners can tap into home equity lines of credit (HELOC) loans to consolidate credit card debt. HELOCs had been a popular method to consolidate credit card debt prior to mid-2007.
"The market has changed and consumers need to be aware of that," says Brad Stroh, managing partner of Bills.com, a Web site that helps consumers manage and pay their monthly bills. "It's harder than ever to get a refinance loan or a HELOC loan due to the credit crunch."
Stroh's advice: "Think strategically. What that means is find the lowest rate instruments. For homeowners, first pursue a refinance and then a HELOC because those are your lowest cost of capital options and they are tax deductible --assuming you have equity that's available to you."
As for renters, "If you're not a homeowner, look for balance transfers or teaser rates on new cards to pay down your other debts. Shop for the lowest interest rate -- not the lowest payment." Methods of calculating minimum payments differ, and some that offer lower monthly payments are just stretching out your repayment, costing you more in the long run.
Read the fine print
Several credit card issuers offer balance transfer options. However, financial experts advise consumers to read the fine print and know the terms and actual costs they might incur when choosing these options.
Stroh says, "Look for cards without universal default, that have low fees and low interest. You make a decision based on lowest costs and that's fees and costs."
He notes that many consumers focus solely on the annual percentage rate (APR) charged on a credit card and ignore balance transfer fees, annual fees, late fees, over-the-limit fees and other costs that may be associated with using the credit card. "Now is the time to end that cycle," Stroh says.
"Research which cards might be the most beneficial for you before applying for them because you don't want to go applying for a lot of credit cards all at once," says Tehan from MyVesta.org. "That can drastically hurt your credit report and score."
He, too, recommends reading the terms and conditions of the credit card agreement. Look for whether balance transfer fees are capped. An example of a fee is 3 percent of the transferred amount up to a certain capped dollar amount, however, recently credit card issuers have been eliminating the cap. When reading the fine print, be sure to note whether this is the case.
"There are always fees involved. Read about everything before you decide what to do. Look and see what the final rate is after the teaser time period expires," Tehan says. "It's very important to look and see what's going to happen after that. Chances are you will not have that credit card debt paid off after that time period."
Tehan says after consumers are armed with information, they should then consider bargaining for the best deal.
"Just call your current credit card company and say, 'Hey, I've been a customer for X amount of years. What can you do for me? I've got five offers in front of me for 4 percent.' Sometimes they can offer you something better," he says. Remember to ask politely.
Downsize your wallet
There's another reason to consider consolidating credit cards, says Lynne Strang, a spokeswoman for the American Financial Services Association Education Foundation, an organization that focuses on teaching money management skills.
"There is some value in using one or two cards to consolidate purchases," Strang says. Reducing the number of credit cards you have helps simplify your monthly budget and financial management routine. "When you get your statement at the end of the month, it's a lot easier to do that with a few accounts rather than getting several statements."
Honestly assess money habits
Strang says consumers should consider their own money management styles when determining which credit cards to keep.
"If you are a person who pays off your balance in full every month, then the benefits of the card and annual fees become more important than APR. If you don't, then APR moves up to the top of the list for things to look at on the card," she says. "The consumer needs to do an honest assessment of what type of card user they are, then choose a product that best matches up with that type of use."
People who have high interest rate credit cards should review their monthly statements and credit card agreements for terms and conditions.
"Take a look at what the terms are," Strang says. "There's lots of consumer choice today. If the card product that you currently have doesn't best suit your needs, there are many options out there to evaluate."
How many cards are too many?
How many credit cards should consumers have? Are 20 too many? Are two too few?
"We recommend that people have only two cards," says Tehan. "If you decide that you want more, that's' entirely up to you. Realistically, it's what you can afford."
He notes that those with numerous cards who are carrying balances on those accounts may be paying a considerable amount in interest each month.
"If you do have 20 cards and they're all maxed out, that could be a sign of a larger problem that debt consolidation may not help you with," Tehan warns.
How do you know when it's time to consolidate credit cards? "If you think you're having money problems, you are," Tehan says "If you can't afford the minimum payment, then you really need to take action. Consider consolidation, debt management, bankruptcy, paring down your expenses and cutting back on entertainment."
Stroh from Bills.com adds more words of warning about a common mistake made by those who consolidate credit card debt: "If and when you consolidate those credit cards, please put them in a bowl of water and stick them in a freezer and do not make the common error of running those cards back up. It is all too common that consumers pay them off, they exhale and then they go straight to the mall."
3 Roads to Credit Card Consolidation
If you're overwhelmed by the credit card companies calling every month to harass you about late payments, you may need to consider making some drastic changes towards credit card debt relief. The first thing you need to do though, is simplify your life by consolidating your credit card debt. You can do this in one of three ways.
- Home Equity Loan - You can take out a low interest home equity loan or line of credit and pay off all the credit card debt in one fell swoop. Yes, you now have another payment to make, but in all likelihood it will be much lower and easy to keep up with.
- You can approach your bank, or another lender about a low interest personal loan to pay off your credit card debt. If you have good credit, this shouldn't be a problem for you - but if you don't, do not saddle yourself with yet another high interest loan.
- Consolidate your debt onto a single 0% interest or low interest credit card and then make double payments to ensure that you're paying down the principle of your credit card debt.
Benefits of Credit Card Debt Consolidation
The benefits of consolidating your credit card debt are many, with one of the most important being the peace of mind you'll have when you need to make just one payment a month, all while getting in control of your credit card debt. If you have good credit, you can also benefit by being able to negotiate a lower interest rate. After all, the 0% rate is usually introductory, but depending on how much money you bring onto the card, the credit card company may respond by offering you a lower interest rate. No matter what, getting in control of your debt and your spending, although hard to do at first, will eventually offer you a great sense of accomplishment.
Paying Too High Interest? Look For Credit Card Consolidation
If you can, you should consolidate your credit card debt. This means moving the balance from your high interest credit cards onto a single card with a lower interest rate. For instance, if you have about $200 on each of your credit cards that have interest rates between 11% and 22% and you move those balances onto your third card which carries a 5% interest rate, the money you are saving on your interest payments to the other credit cards will allow you to whittle down the principle on all of your credit card debt. Of course, in order to make this really work, you need to cut up your old high interest credit cards. Don't fool yourself into keeping them for an emergency - get rid of the temptation so you won't dig yourself another hole. To compare low intrest credit cards
Using a HELOC for Credit Card Debt Consolidation
Battling overwhelming credit card debt can be stressful and almost impossible. One way that many homeowners are solving their credit card debt woes is by taking advantage of the equity built up in their home and the low interest rates being offered today. If you take out a home equity line of credit, you can get a very low interest loan that can pay off your credit cards. Yes, this does become another bill you need to pay, but you'll be saving so much money on the interest payments that you're no longer making, that you'll be able to pay this HELOC off and soon be credit card debt free. If you go down this path, don't make the mistake of keeping old credit cards around. Eliminate credit card temptation by living on a cash basis whenever possible - it will keep you honest!
3 Ways to Eliminate Credit Card Debt
Are you looking for three simple ways to eliminate your credit card debt? The first one is obvious, stop using your credit cards. This may seem like a silly thing to suggest, but the best way to get a handle on your spending is to only spend the cash you have - after you've paid your bills. Second, consider consolidating your credit card debt onto one card - or moving a balance from one card, to one with a lower interest rate. Some people are in a constant cycle of moving to the next 0% interest rate card. This can be a pain, but you'll save a lot of money and buy yourself more time to pay off the debt. Third, start making double payments. If the calculated minimum payment is only on the accrued interest, then you need to make a double payment to hit the principle of the debt. By finally hitting the principle and discontinuing use of the card for purchases, you'll see that balance begin to drop.
Managing Your Credit Card Debt
Interest rates are one of the keys to managing credit card debt. If you have a high balance on a high interest credit card, you are spending a lot of money to "borrow" that money from the credit card company. Additionally, the minimum payment that the credit card company calculates for you is only based on accrued interest, so if you only pay that, you'll never reduce your debt. If you have decent credit and some credit card debt on one of these high interest cards, you should consider applying for one of the many 0% interest rate cards that are out there. Be wary, many of these 0% rates are introductory, but paying less money to maintain your debt is your first step towards managing and eliminating credit card debt.
Real Estate Grants - Free Money You Never Have to Pay Back
What is a real estate grant? It's cash that individuals can obtain to purchase a new home, repair or update their existing home, or to help them pay down a mortgage. This is funding that is available regardless of income or credit.
Real estate grants are available through local and state government agencies as well as private foundation groups. They provide you with the cash you need, which in one way or another they benefit from as much as you do. Here's how...
Let's say you obtain a real estate grant to help you buy a new home. First time home buyers, for example, can receive as much as $20,000 in cash to be used for a down payment or closing costs. By obtaining these funds, it gives the individual the opportunity to buy a home when she may not otherwise be able to.
As a result of helping thousands of people in your community, the government helps move the needle in the real estate market by assisting with home sales. That means property values will rise, hundreds of construction workers keep their jobs as investors and home builders continue to have opportunity. In the end, the government imposes mortgage taxes and makes the money back in the long run.
Similarly, with a home improvement grant, you can get the cash you need to upgrade, restore or expand your home. That increases home values for the entire neighborhood, which increases taxes and attracts a higher class of buyers. While real estate grants may be $20,000 in free money for you, it's just a drop in the bucket for the government who wins in the end.
Real Estate Industry in Recession-Tips & Tricks
Staying afloat and keeping your job in an economic recession can prove to be tough. Everyone in the real estate industry, from agents to appraisers and even title companies, is affected by the declining economy and the lack of home sales. By taking the time to do a few small things, you can easily make sure that you have work at all times, even when things are on the slow side. For example, if you're an appraiser, take the time to advertise to people who are looking to sell or refinance their homes. This is almost the only business going on since home sales are so slow right now, and you can actually benefit greatly from these people. Let people know how important your services are, no matter what you do, so that they feel the need to acquire your services for their real estate ventures.
Agents, title insurance companies, inspectors, mortgage companies, and appraisers alike all need to do the same thing. Find the business that is going on, and do everything in your power to convince people to work with you. Build a reputation for yourself, or use the one that you have previously built, to help people feel secure in working with you. Reassure those people who are uncertain about buying a home that now IS a good time to buy a home, as long as they can afford it. In these declining and uncertain economic times, people need someone and something that they can trust. For those who are looking to get involved in real estate, that trust comes from real estate professionals like you.
Buyers are skeptical about buying right now. Banks are crumbling and foreclosures are growing exponentially, almost overnight. All people hear on the news is about the mortgage crisis and how bad the economy is. They don't hear about how they can get a great deal on a home that will be worth much more once the economy bounces back. Tell people this stuff, because they won't hear it anywhere else. For every five or ten people that are selling or being foreclosed on, there is someone out there bravely considering buying a home. As a professional, it is your job to make them feel secure enough to decide to go through with it, or to at least procure your specific services.
You shouldn't lie to consumers, by any means. However, reassuring them that they are doing the right thing, if they are, is not lying. When all people hear on the news is bad things, it's hard for them to believe that there is anything good left in the real estate industry. Find the good, and show it to these people. This can keep your real estate business going, even when things aren't looking so good nationwide
Refinance Mortgage Leads
Mortgage leads are the vital constituent for the successful marketing operation in the mortgaging business. Some of the common home mortgage leads are refinance mortgage leads, home mortgage refinance, home improvement leads and more. Mortgage leads can yield gain only when it is updated and well qualified. Fixed interest rate with fixed monthly payments and adjustable interest rates with changing monthly payments are the basic mortgages classifications.
Refinance mortgage is the process by which a borrower acquires second or a fresh mortgage on the same old property and pays down the old loan in addition to the new loan. A refinance mortgage leads help those people who refinance a mortgage by tending to get a lower rate of interest and payments or to take cash out of their home equity.
Experienced refinance mortgage brokers and mortgage refinance lenders realize that to be profitable they must always be working with perfect and qualified refinance mortgage leads to generate a standard move of new customers. A home mortgage lead will allow you to get your best prospects for any of your residential mortgage products and services.
One can replace the existing mortgage with a brand new mortgage loan by refinancing the old mortgage through mortgage refinance leads. Acquiring a lower rate of interest on the mortgage principal balance is the very familiar reason for refinancing an existing first or second mortgage. A mortgage refinance lead can help you to save your money by refinancing, by providing refinance quotes freely and numerously from mortgage lenders for your business. A refinance lead can find you the markets best refinance rates and terms by searching the national database of mortgage lenders as soon you fill your form.
A home mortgage is a finance service secured by a first lien on real estate on which there is located a structure which is principally designed for residential use by one to four families. A home mortgage refinance must be designed not only for the sake of getting mortgage insurance but also to find a lower rate than your current loan to eliminate mortgage insurance. Reducing your rated more than just the cost of your monthly mortgage insurance payment alone will be the ideal situation for your home mortgage refinance.
A mortgage refinance lead can reduce your monthly payments and hence put more money into your pocket every month. They can lock a very low rate of fixed interest and speed up your debt repayment process. Mortgage refinancing can be a great way to lower monthly mortgage payments. Mortgage refinance lead provides security of a fixed rate with their adjustable rate loan which reduces the rate of interest payable.
A mortgage refinance leads help in consolidating your first and second mortgage in to single low repayment. With the help of home mortgage refinance lead, you can avoid splitting out cash and still manage to safe a minimum rate by increasing the points and closing costs to your new mortgage. A home mortgage lead can also help the customers to remove tax liens.
Refinance mortgage lead helps freelancers to find the customers who are ready to decide about home improvement requirements. A freelancer can focus on contacting individuals interested in refinance mortgage services but not on spending energy and time running down dead end sales avenues with a list of potential clients. Refinance mortgage for home improvement leads can be tracked through internet - which is a valuable tool in researching unique types of services in marketing process.
Follow refinance mortgage leads diligently to provide your company or home with great future opportunities. With little bit of patience and research over the net, both customer as well as mortgage lead generators could benefit. Choose the best option of refinance mortgage loan relevant to your need and enjoy the good life!
Mortgage Recommendations on how to get a mortgage easily
With the latest fiscal crisis, it is increasingly difficult for house purchasers to successfully get hold of a buy to let mortgage to buy or re-mortgage their homes. The lenders are often refusing lending money to most mortgage applicants, the way they were a couple of years ago. The approval rates are at the lowest levels and the capability to get a mortgage is more harder.
So what is the secret to ensure that you increase the likelihood of you of getting a mortgage in this poor business climate?
The initial point to remember is to obatin a copy of your personal credit history to check the position of your score. That implies retrieving a credit report online for an amount as low as 5 pounds and working through your credit score to make sure you have not scored low on your score.
If you notice that there is a negative score on your rating, you can see why the history has a score and the contractor who has marked your credit down. Immediately ask the credit scorer to to explain that the adverse result was the result of a rare payment oversight and if they would review the score for you so that the credit scoring can be resolved. If it turns out that the reasoning behind the bad credit score is trivial then there is a good chance for you to have your credit score adjusted.
When you have finished sorting out your bad credit score, speak with a good mortgage provider to analyse and help you select the most appropriate mortgage product for you. Mortgage providers normally have an enhanced insight into the market so they are well worth using.
If you have found a required mortgage plan, get through the final stages of the mortgage application procedure and if you have submitted your application to the lender correctly, you should pass the application, if you suitably match banks lending criteria. A successful cleaning of your credit history and ultimately a proper application will save you chasing for a bad credit mortgages that can cost the earth.
You should look to choose a good mortgage broker who has good relationships with a variety of lenders who are currently lending. Access to a large amount of lenders gives you the ability to get a better choice of mortgages from a greater number of lenders. This simply means that you are finding a better mortgage deal which you otherwise may not have found on the high street.
A broker who is good should not cost the earth. A majority of the good and established mortgage brokers will usually have a brokers charge to help you get the most suitable mortgage product and their broker fee can change from anything between 300 pounds to 1000 pounds. The best way to find your self a well respected mortgage broker is to have a chat with your family members and friends tell them to let you know about an honest and a reliable mortgage broker that they may have employed. There is every possibility that relatives and friends who is close to you should have taken out a mortgage recently or re-mortgaged their residence recently and you should look to their recommendation.
After choosing a mortgage broker and your mortgage application has been accepted, make sure that you have all the relevant paperwork is handy to easily and quickly obtain your mortgage offer. The kind of documents required includes bank statements, your own Id including your passport and proof of your house address plus proof of your income. Pass all the required paper work to your mortgage advisor and you are likely to get on the accurate path to getting a real mortgage to help in making your home procurement good.
Home Refinance Stimulus Package - Relief is Just Ahead
The 2009 stimulus plan has created many alternatives to help get the American market back up on it's feet. The stimulus is allowing many incentives and relief programs to help individuals as the assistance is needed. The home refinance stimulus package is one of those plans which plans to cover some nine million mortgages and spend about $75 billion helping homeowners.
The home refinance stimulus plan has two main components. The plan aims to refinance homes and allow for loan modifications. The refinancing aspect would require two of the most powerful government related mortgage agencies which are Fannie Mae and Freddie Mac to refinance home loans of owners that owe much more to the bank than the actual value of the house. The only requirement for home owners to qualify for assistance for refinancing is that they have a mortgage under Fannie Mae or Freddie Mac.
The loan modification is a little broader and reaches out to a larger branch of individual homeowners. The loan modifications would help provide assistance to all home owners that borrowed loans. The biggest features of the loan modification program would be that the interest rate will decrease by a whopping two percent, the possession of the loan would be increased so that the amounts of the monthly payments would be reduced and borrowers will be able to have their late fees waived. Both the home refinancing and loan modifications are great steps for homeowners which will make the home refinance stimulus plan a successful step towards making the housing market in the U.S. stronger.
Another interesting perk is that first-time home buyers who purchase homes from the beginning of 2009 through November of 2009 may be eligible for an $8,000 home purchase tax credit. The tax credit is only a dollar per dollar reduction but in the end it would save home owners about $1,500 when everything was added up. The tax credit is also refundable which is great news for individuals that have little income tax liability. That means you could be getting a refund in the mail!
Despite the economy being in a slump the 2009 stimulus package has allowed for great incentives. If perspective home owners have the money then they should purchase homes now so that they can take advantage of the $8,000 home purchase tax credit. The home refinance stimulus package also allows for current homeowners to find some relief in their personal mortgages and loans that they have borrowed on.
Getting a Mortgage After Bankruptcy
It is easy to declare bankruptcy, but it is unusually difficult to bear its brunt. You feel helpless, vulnerable, insubstantial and ineffective. Suddenly, everything seems to be out of reach and out of control. In such a grim scenario, you can't even think of taking another mortgage to buy a home. However, in reality, you can easily get a home mortgage loan even after bankruptcy. You are just required to do a few things. Let's find out what are they.
• Be very frank and honest- Before sanctioning you a home loan, the mortgage company would use different ways and means to find out everything about your financial health and your credit worthiness. For this reason, don't hide your bankrupt status. Never even think to hide your true identity or present fake documents; this practice is completely illegal. Instead, be overtly frank and honest.
• Create New Credit Lines- Don't allow your bankruptcy to overpower you; rather strive hard to make a new beginning. Create new credit line by applying for new credit cards. It is advisable to begin with secured credit cards. Such cards allow you to build your credit by using your own source of money.
• Start improving your credit report- The next step is to start improving your credit report. Check your credit report regularly to weed out all the errors and inaccuracies. A good idea would be to engage an agency that specifically monitors credit reports. Such an agency would not only handle your credit report efficiently, but would also deal with all the suspicious and unusual activities in your account effectively.
• Pay all your bill on time- Another important thing that you need to do is to pay all your bills on time. These bills include not just your credit card bills, but also your telephone and electricity bills. All this will work together to improve your credit report, and once, that happens mortgage lender will start to send you quotations.
• Devise ways for down payment- In addition to cashing out your fixed deposits, insurance policies, bank deposits and 401K, you can borrow money from your relatives, friends, colleagues and neighbors. Beside this, there are several down-payment assistance programs like Homes for All Program, Nehemiah Program, and AmeriDream Gift Funds, that provide funds for making the down-payment and paying the closing costs.
Also called down-payment grant programs or down-payment gift assistance programs, such programs merely act as a mediator between the buyer and seller. At the time of closing, the seller can give back a portion of the proceeds to the buyer. However, as sellers are not allowed to give down-payment directly to the buyers, down-payment assistance programs mediate and make the entire process legal.
If you have declared bankruptcy, mortgage companies would ask you to wait for about 2 years. After this period, if you have improved your credit report dramatically, you become eligible for 100% financing. Conversely, if you need a home mortgage loan before the 2-years period, then you should go to those companies that specialize in making mortgage available to those people who have recently gone bankrupt.
Refinancing Your Bad Credit Mortgage
If you've been religious about making your mortgage payments on time and you've paid down your credit card debt and raised your FICO score, it may be time to refinance that bad credit mortgage you secured a few years ago. You are probably safely beyond your prepayment penalty and you are probably sick of paying such a high monthly payment. You'll be able to get more money for a lower interest rate and you'll be gratified to see all that hard work repairing your credit paying off. Enjoy the benefits of repairing your credit by refinancing your mortgage with a reputable online lender.
Refinancing a Mortgage with Bad Credit
Ironically, someone who secured a great rate in 1985 can get an even better rate today with worse credit. The incredibly low interest rates today make even sub-prime loans affordable. If you think you can get a better interest rate, even with bad credit, look into bad credit mortgage options or bad credit second mortgage options. If you aren't sure about proceeding, just hop online and use a mortgage calculator to figure out how much you might save or learn for yourself that there is no real benefit.
Advantages to a Bad Credit Mortgage
A bad credit mortgage may leave you with a bad feeling in your stomach, but in reality, despite the higher interest rate, this is really a smart next step towards reaching your financial goals. When you consider the benefits of home ownership and credit repair, the short term obstacles of a bad credit mortgage are well worth the risks. You won't be throwing money away on rent, on time mortgage payments are the fastest way towards credit repair, and you'll truly be on your way to improving your financial situation through smarter investment of your money. Take advantage of bad credit mortgages to move forward. The short term pains are worth the long term gains.
Choosing Between Bad Credit Mortgages
When considering your options for bad credit mortgages, look out for the following three pitfalls that can sneak up on you:
- Fees and Penalties – Sub prime loans can not only cost more to process, they can also incorporate higher late fees and payment penalties of which you should be aware.
- Prepayment – Some bad credit mortgage companies need you to stick with their program to ensure they make their allotted profit - and this can mean prepayment penalties (a fine for paying off the mortgage too quickly). This can mean a huge loss if you refinance too soon, so watch out for length and amount of prepayment penalties.
- Rewards – Some mortgage companies and banks will reward you for improved money management. For instance, if you make a number of payments on time, your interest rate may be reduced. These kinds of incentive rewards are great for folks determined to turn over a new and better credit leaf.
Bad credit mortgage
Finding Bad Credit Mortgages Online
Just because you can't qualify for an "A" paper loan, doesn't mean you are without options. There are many decent bad credit mortgage options available if you take the time to look around or if you find a good mortgage broker you can trust. Online lenders usually have a ton of bad credit mortgage programs you can compare and choose from. Don't feel as though you need to only go with one broker though. Different brokers may be able to provide you with various interest rates, loan terms and loans with or without prepayment penalties.
Applying for Bad Credit Mortgage Loans
Bad credit mortgages, although not the best option, will help you rebuild your credit quickly. If you want to apply for a bad credit mortgage, you'll need several pieces of information before you proceed. First, make sure your credit report and score are accurate. If removing old or closed accounts or removing something that is incorrect from your credit report can improve your score, even slightly, it is worth the effort. Next, you'll need data on your income including pay stubs, deposit slips and the like. Bad credit mortgage loans will often hinge on your proof of steady income. Finally, you'll have strict repayment guidelines. Make sure you can make the payments on time and in full. Don't get in over your head and make your bad credit situation even worse.
Mortgage & Refinance Rates
Finding Today's Current Mortgage Rate
Mortgage shopping for any length of time can be really frustrating. The rates are constantly changing, the refinance programs are constantly evolving and it's hard to keep up. If you want to be really educated, try to read as much as you can about interest rates and the US economy. You can hop onto sites like Bankrate.com to get opinions about mortgage rates, the low rates of the day and you can check your local newspaper for up to date information. Being informed is a great way to make smart decisions about your long term financial goals, both in real estate and otherwise.
The Best Way to Lower Mortgage Rates
Who doesn't want to save money or make their money work better for them? That is why refinancing has been such a popular activity for homeowners in the US for the last couple of years. People are saving thousands of dollars each year by shaving points off of their mortgage rates. Some folks have even refinanced multiple times to continue taking advantage of constantly dipping interest rates. If you haven't done this yet, it's not too late. Granted, you probably won't find interest rates as low as a year ago, but they are still far lower than they have been historically. Find the lowest mortgage rate by shopping around online and with various mortgage brokers.
Researching Refinance Rates
Have you been part of the refinance mania that has gripped the US in the last five years? If not, you should consider it. Refinancing for lower rates has saved millions of people billions of dollars. You don't even have to take money out of your equity - you can just save money or shorten your loan term. The interest rates are really the drivers of the refinance craze and if you want to find out what the going refinance rates are you have a couple of options:
- Look online. Tons of sites list current refinance and mortgage rates free of charge and many of them can even provide you a refinance or mortgage quote at the same time.
- Check your local paper and keep abreast of any major interest rate fluctuations.
- Develop a long term relationship with a mortgage broker. These folks can proactively call you when there is a change in the interest rates or a new program that might fit your needs.
About Rate & Term Refinancing Rates
What is a rate and term refinance? This is when you refinance just to change the interest rate and the term of your mortgage. You aren't pulling out any cash or equity - you are hopefully just negotiating a better deal for yourself. Your new interest rate will depend on how much money you are borrowing and for what length of time. Mortgage companies use something called a 'loan to value' ratio to calculate this. For instance, if you had an $80,000 home and an existing mortgage of $40,000, you would have a loan to value ratio of 50%. Basically, the higher your loan to value (LTV) ratio, the higher the interest rate.
Buying Down Mortgage Rates
If you are one of the lucky Americans that have control of their finances, or come into some money, you may want to consider a buy down mortgage refinance. Basically, you take that money and pour it into the equity of your home in one lump sum. By doing this you reduce your principle and your can reduce your interest rate. Buy down interest rates will depend on the lender and this is a situation in which you definitely want to shop around. Investing in your home equity is never a bad idea, and if you have the flexibility to do this, go for it.
Negotiating the Lowest Mortgage Rate Possible
Just like buying a car, you can negotiate with your mortgage broker on fees, interest rates and programs. A mortgage broker gets a commission based on how much a bank is willing to buy a loan from his company for - whether it's a percentage or a flat fee. In some cases, the mortgage broker even makes enough commission to pay for all of your closing costs and still net a solid payment. The best way to make this work for you is to let banks vie for your business. Work with a couple of mortgage brokers and play them against each other. This may be a little painful if you're not used to doing it, but you need to focus on getting the best deal possible for you - not on their feelings.
Don't Get Greedy – Lock In The Current Mortgage Rate
When you are shopping around for a mortgage, don't wait around for the market to potentially improve, lock in that low rate as soon as possible. If you get greedy and wait too long, you may lose out on a full percentage point of savings or more - and if you use your trusty mortgage amortization calculator, you'll really see what this means to you in the long run. If you've developed a relationship with a mortgage broker, follow their advice. They want you to get the best deal possible so you'll come back to them in the future, so don't be afraid to be guided by expert advice.
Cash Out Refinance Rates
What is a cash out refinance? Basically, this means that you refinance your mortgage - often for a different interest rate and loan term and you get a mortgage for higher than what you currently owe, leaving cash on the table for you. This is cashing out equity in your home for home improvement, large expenditures and even debt or credit card consolidation. The interest rate on a cash out refinance is usually lower than what you would get from a credit card. In some cases, specific loan programs will require the closing company to disburse checks to your creditors or they may want proof of home improvements, but it's worth it to get such a low interest loan.
Refinancing Rates for Mobile Homes
Financing mobile homes is much different than a traditional home because mobile homes tend to depreciate rather than appreciate. If you want to refinance your mobile home, you may have trouble finding mortgage rates that are lower than your initial mortgage rates. If you have good credit, steady income and you look like a great credit risk, you'll probably be able to get a lower mortgage rate, but you may want to consider selling and putting your equity into a traditional home with a more traditional rate of return on your investment.
Have We Seen the Lowest Mortgage Rates
Why do interest rates rise and fall all the time? Real estate is an investment, and when an investment is holding and rising in value, people want to put more and more money into that investment. If home values drop, interest rates may rise again because lenders won't want to put as much money in the real estate market. This is why it's so important to buy a home you can afford and one that will certainly appreciate in value. Be smart and you'll be protected even if home values drop.
Five Mortgage Tips
Here are some quick tips on mortgage shopping to help you keep your sanity:
Shop, Shop, Shop: Do not just jump on the first mortgage offer that seems remotely appealing. If you have nothing to compare it to, then how do know it is a great deal? Shop several lenders before you make a move on establishing your mortgage. Try to obtain at least comparisons so that you will be able to determine what the average pricing should be for your mortgage.
Don't Take the Bait: If something sounds too good to be true, then most likely it probably is too good to be true. Do not let yourself be drawn into a mortgage based solely on one appealing factor, such as a low introductory rate. Remember that introductory means that it will change after some determined period of time.
Think Small: Do not just limit yourself to the big national lenders. Consider local and community banks that offer mortgage lending. If you are a member of a credit union, there may be benefits to you for doing your loan through them. Try to include a couple of different types of lenders n your comparison shopping to see what the difference may actually be.
Read, Learn & Listen: Gain your own knowledge about mortgages. Learn how interest rates are set, how mortgage brokers are paid, and what standard mortgage fees are so that you aren't gullible. Gullible mortgage shoppers can find themselves getting ripped off.
Consider A Professional: Consider hiring a broker">mortgage broker. They have the resources to shop your loan a lot faster and easier than you will be able to. They do this in return for a small fee paid by you directly or it is figured into the costs that the lender charges you for processing your mortgage. It pays off in the long-run to save a lot of time and hassle on your part to go down the mortgage road with a professional.
Advantages to a Bad Credit Mortgage
A bad credit mortgage may leave you with a bad feeling in your stomach, but in reality, despite the higher interest rate, this is really a smart next step towards reaching your financial goals. When you consider the benefits of home ownership and credit repair, the short term obstacles of a bad credit mortgage are well worth the risks. You won't be throwing money away on rent, on time mortgage payments are the fastest way towards credit repair, and you'll truly be on your way to improving your financial situation through smarter investment of your money. Take advantage of bad credit mortgages to move forward. The short term pains are worth the long term gains.
Choosing Between Bad Credit Mortgages
When considering your options for bad credit mortgages, look out for the following three pitfalls that can sneak up on you:
- Fees and Penalties – Sub prime loans can not only cost more to process, they can also incorporate higher late fees and payment penalties of which you should be aware.
- Prepayment – Some bad credit mortgage companies need you to stick with their program to ensure they make their allotted profit - and this can mean prepayment penalties (a fine for paying off the mortgage too quickly). This can mean a huge loss if you refinance too soon, so watch out for length and amount of prepayment penalties.
- Rewards – Some mortgage companies and banks will reward you for improved money management. For instance, if you make a number of payments on time, your interest rate may be reduced. These kinds of incentive rewards are great for folks determined to turn over a new and better credit leaf.
How to Apply for a Mortgage Online
The internet has improved information sharing, especially about home buying, home ownership and mortgage applications. Nowadays you can go online to almost any lender and learn the information they will need, the application process and the rates and terms available to you.
This information and free data has also made the marketplace more competitive which benefits all consumers. After all, with online lenders you can get dozens of mortgage and loan quotes from the comfort of your home without ever visiting a local bank branch.
By arming yourself with knowledge about the process, and by keeping the personal information you need on hand, your mortgage application process will be simple and straightforward.
Downloading a Mortgage Application Form Online
If you are interested in looking at different mortgage applications before going through the process of filling them out, you can look online or visit your local lenders for hard copy examples.
In many cases this is a great way to begin your information gathering. You'll need various forms and paperwork like pay stubs, bank account statements, IRA statements and the like when you submit a mortgage application so getting one in hard copy is a sensible place to start.
You can download mortgage applications online and print them out with relative ease. If you don't have a printer, head out to your local library and print it there. You can also visit your local lenders and ask for a mortgage application to take home for review.
Being prepared will ensure your mortgage application process goes smoothly.
TIPS WHEN THINKING ABOUT A MORTGAGE LOAN
Consider Trying to over pay the mortgage!
For example, if you borrow £100,000 at 6% over 25 years, you'll pay it back at £643 a month. The total charge for credit will be £93,000.
But if you can overpay by £100 a month you'll clear the loan in less than 19 years, giving you 6 years of mortgage-free living and saving a staggering £25,000 in interest and saving you thousands of pounds.
2/ Consider whether you really need such a large mortgage.
It makes me smile that people with 0-2 kids want a mansion, when two generations ago their grandparents were sleeping six to a small property, and they managed just fine.
3/Start saving asap.
Every pound saved is a pound towards your deposit. A pound towards your deposit is a pound you'll not be paying interest on. People think it is great if they get a 95-100% mortgage. But it's their lender who are laughing at the bank.
4/Shop around for mortgage quotes.
This one is very obvious but it is surprising how many people take the first mortgage offer that their bank or broker offers. You should be looking to get at least 4 quotes.
5/Check your credit report.
Because lenders place so much on this you should check it out before applying as it has been reported that as many as 50% of all credit reports contain inaccuracies. Allow time to review and correct any as this could save you 1000's of pounds. You can get your credit report for free from EXPERIAN
6/Get your mortgage Pre-Approved.
This gives you additional bargaining leverage. A home seller may be more likely to accept your offer with pre-approval than another buyer without it.
7 /Read the weekend newspapers.
These normally list some of the best mortgage rates available in their weekend money columns.
8/ Look at the list below for the UK's largest mortgage lenders.
The Tip here is that if they were not offering a competitive deal they would not have such a large share of the mortgage market.
9/ Look at the mortgage facts page on the right to see the rates various mortgages were costing on the last update. (remember these are historical mortgage figures)
Mortgage Tips for a Falling Market
When a real estate market falls, it's unwise to play by the same mortgage rules as those that apply in a fast-moving market. In a hot market, you might have to waive the contingency for a loan. In a slow market, buyers can demand that sellers pay loan points or subsidize mortgage payments and still retain the right to walk away from the deal if the loan falls through.
I've put together a series of tips about to get the best mortgage when the market is depressed. These mortgage tips will help you to consider a few alternatives that you might otherwise overlook such as whether you should look at an FHA mortgage, or figuring out the best time to lock your loan, in addition to giving you practical advice about how to ask for seller concessions.
1031 Exchange or Real Estate Investment Trust?
Well, there is a way, and it's been around for quite some time. It's called a Real Estate Investment Trust, or REIT. A Real Estate Investment Trust is a way for the small investor to invest in big real estate. A Real Estate Investment Trust is an organization that is set up to manage and invest in real estate professionally. You can purchase a Real Estate Investment Trust (REIT) via the stock exchange in the form of a stock, or privately. Private Real Estate Investment Trusts typically require that certain suitability criteria be met. Also, private REITs are typically longer-term investments, with liquidity considerations. Public Real Estate Investment Trusts can be bought and sold on the stock exchange and are considerably more liquid than their private counterparts.
Investing in a Real Estate Investment Trust can come in many forms. You can purchase a Real Estate Investment Trust that focuses on large-scale commercial real estate, for example. This would allow you to take part in major real estate deals involving 100 plus story buildings, that would otherwise be available to the ultra rich. Some Real Estate Investment Trusts may have their focus in apartment buildings or even new housing construction. The point here is that you can choose your Real Estate Investment Trust sector through one of these REITs. If you want a more professionally managed approach there are a large number of REITs actively managed through the purchase of mutual funds. This can provide for diversification, and individual real estate sectors.
Properly set up Real Estate Investment Trusts are tax-advantaged. This means that they are not taxed at the corporate level. However, they must be set up properly. It is required that REITs invest 75% of their funds in real estate. These requirements are met by income derived from mortgage or rent interest. Essentially, you're relying on other parties for their expertise in the real estate arena. Going at it alone is tougher than ever these days. You have the typical headaches, like qualifying for a 1031 exchange, property taxes, escrow, title insurance, and so on. But, that's really the easy part. When the real estate market only went up, the biggest worry for speculators was how to take advantage of a 1031 exchange and save on capital gains. Now, there's much more to worry about, as real estate not only goes up, but it can certainly come down.
It's important to keep in mind that Real Estate Investment Trusts also come with inherent risks. If real estate values plummet, and you have a large percentage of your assets exposed to Real Estate Investment Trusts you may experience declines, as well. This is where diversification is very important. The standard Real Estate Investment Trust me diversify you within different types of real estate, but you should always practice further diversification. Investing in different asset classes, sectors, and the life will provide you with further diversification. Make sure to work with a qualified investment advisor or do your due diligence when investing in any type of Real Estate Investment Trust.
Pros and Cons of a Second Mortgage
Buying a home is a great way to accumulate wealth. Many homeowners often tap into their equity by taking out a second mortgage. However, when it comes to taking out a second mortgage, the risks cannot be ignored.
Second mortgages have many advantages, but they have weighty disadvantages, too. Ignoring the potential risks can be dangerous.
A second mortgage refinance is similar to your first. It's a loan secured against your house, and the interest you pay is tax deductible. The main difference in a second mortgage occurs in the event you default on your loan. If you ever default on your loan, the lender who holds the primary mortgage is the first to receive any funds recovered from the defaulted loan. The second mortgage lender is next in line. Because second mortgages are a slightly riskier proposition for lenders, they're generally tagged with higher interest rates.
What are the advantages of a second mortgage? If you've built up equity in your home, a second mortgage allows you to tap large sums of money at one time. The money can be used for home improvements, paying for college, debt consolidation, and even paying for private mortgage insurance.
What are the disadvantages of a second mortgage? All the advantages of a second mortgage can turn into a huge disaster if you fail to make your mortgage payment. Your lender could foreclose on your home if you default on the loan and your primary mortgage.
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