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August 18 - Why An Adjustable Rate Mortgage Can Be Beneficial

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Why An Adjustable Rate Mortgage Can Be Beneficial


Adjustable or Fixed? That’s one of the decisions you’ll need when considering a new mortgage either for a purchase or for a refinance. When rates are at relative lows and the expectation is to keep the property well into the future it can make sense to latch onto a fixed rate loan. A fixed rate loan is much easier to budget for as the home owner knows how much the mortgage payment will be throughout the life of the loan. It’s easier to plan for. Pick out a fixed rate term, lock in the rate and forget it. But does that mean an adjustable rate mortgage is rarely an option? Should borrowers ever even consider a variable rate loan? The answer, even in times of low rates, is yes. There are times when an adjustable rate mortgage can be beneficial.
Adjustable rate home loans can have an interest rate change at various points throughout the life of the loan. For a 1-year loan adjustable rate loan, the rate can change once per year based upon a…

August 17 - Why a 15 Year Mortgage Makes Sense

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Why a 15 Year Mortgage Makes Sense


When you talk to your loan officer and get an interest rate update more than likely the loan officer will turn directly to the 30 year fixed rate loan. Why? Because it’s the most popular loan choice, that’s why. It’s also the most heavily advertised and promoted. When lenders quote and advertise a home loan program they also are required to quote the appropriate annual percentage rate, or APR. Lenders have multiple loan programs from which to choose from fixed to adjustable to variable but there really isn’t the time or space when doing so to quote every loan program across the board. Instead, the 30 year loan term is the most common and most familiar with borrowers. But are borrowers short-changing themselves when they only look at a 30 year term? Let’s look at why a 15 year mortgage can make sense.
There’s a tradeoff between the 30 and 15 year loan. The 30 year loan, because it’s spread out over a longer period, will have lower monthly payments com…

August 16 - What Are the Biggest Obstacles to Home Ownership?

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What Are the Biggest Obstacles to Home Ownership?

A recent survey asked renters a multitude of questions in order to get a better handle on what motivates renters to become home owners and two matters stood out- saving enough for a down payment and credit questions. Renters have the opportunity to check on their own credit profile for free at a site supported by the three main credit repositories of Equifax, Experian and TransUnion. This site is www.annualcreditreport.com. Yet far too often renters don’t check their credit and that can keep many from home ownership simply because there are mistakes on the report suppressing scores. However, the biggest obstacle by far was saving money for a down payment and closing costs.
As rents keep hitting record highs that also means renters have less disposable income to put back every month in a savings account. Mortgage lenders employ an ability to repay formula that compares gross monthly income with housing costs. Housing costs include amou…

August 15 - 3 Things You Need to Know About Mortgage Preapprovals

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3 Things You Need to Know About Mortgage Preapprovals

You’ve read here before about the important distinction between a preapproval and a prequalification and why the distinction is important. First, when you make an offer on a home the sellers want to see how serious you are about the process and whether or not you’ve even talked to a mortgage company. Second, with a preapproval you can shop for a home with the knowledge that all you need next to do is find a property and provide a copy of your signed sales contract to your lender. Beyond that, here are three things you need to know about mortgage preapprovals.
Documentation. Be prepared to provide your fair share of paperwork. When a lender reviews an application for a preapproval the lender realizes there is no property as of yet but documents the loan application is if there were. Your credit report is pulled and credit scores examined. You’ll be asked to provide your two years most recent W2 forms along with recent pay check stubs…

August 14 - The Value of Mortgage Refinancing

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The Value of Mortgage Refinancing

For those who currently have a mortgage and are perhaps curious about refinancing, is there a bona fide way to determine if refinancing is a good idea or not? Simply making a few queries about refinancing and soon online ads appear wanting to know if you’d like to refinance and why you should. But is there an independent method to find out if a refinance makes sense? Is there truly a value refinancing a mortgage? Yes, but it does take a little math to get to that point.
Home owners can have various motivations about refinancing. For most refinance transactions the primary reason is because interest rates have fallen and current market rates are lower than what is currently on the note. Mortgage rates have been at or near historical lows for years now and even though most expect rates to gradually rise over the next several months and perhaps into 2018, rates are still very attractive. All one needs to do is research where the 30 year fixed rate has be…

August 11 - The Benefits of an FHA Cash Out Refinance

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The Benefits of an FHA Cash Out Refinance


Do you have an FHA loan? Are you thinking of refinancing to get a better rate, change the term of the loan or switch from a variable rate loan to the stability of a fixed? Then you may also want to tap into the equity you have while you’re in the process of refinancing your existing FHA loan. There are two types of FHA refinancing. The most common is what lenders refer to as a “streamline” refinance. A streamline is an option when replacing one FHA loan with a new one. It’s referred to as a streamline due to the reduced documentation needed to close the loan.
How much documentation is reduced? There are no credit report or credit score requirements. There is no need to verify employment or even income. There’s no need for an appraisal, either. As long as there is no more than one payment made more than 30 days past the due date over the past 12 months and no such payments within the previous six, the existing FHA loan is eligible for the strea…

August 10 - Start Building Your Wealth Through Home Ownership Today

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Start Building Your Wealth Through Home Ownership Today


You may have heard that real estate has created more wealth for more people than any other asset class but you may not be clear on how and why. There are those that invest in real estate and hold onto the property for both positive cash flow and property appreciation. Such investors may own multiple single family homes for those reasons and for some that’s their full time job. But you don’t have to be a real estate investor to take advantage of the benefits home ownership provides. Real estate investors charge more than enough rent to pay for all the expenses of owning the property including the mortgage payment, property taxes and insurance plus all maintenance costs. If you’re ever heard the phrase “let your tenant pay your mortgage for you” that’s what it means.
When you send your rent payment each month in return you get a place to live. But that’s a negative cash flow and an expense. You don’t get anything in return when you…