With the plethora of mortgage lenders at an all-time high, and still expanding at an exponential rate, the borrower in search of a quote can easily obtain estimates with little effort. There are dangers to this reality that consumers must understand to avoid finding themselves stuck with a loan that is not exactly what they anticipated.
Basic Breakdown
In order to ensure accurate comparison from one quote to another, it is essential that the borrower have a basic understanding of the different aspects of a mortgage quote. This knowledge will allow him to filter out those quotes that are not in his best interest, and focus only on those contracts that meet his specific needs.
There are three main pieces to a mortgage quote that a potential borrower should use to evaluate a loan’s potential: monthly payment amount, interest rate, and loan type.
Monthly Payment
For most consumers, the ultimate factor in determining whether or not a loan has potential is the monthly payment. If the payment is within the confines of the allocate budget, then it should be placed aside for further evaluation. If the contract would require a monthly payment that is above what the borrower can handle, then there is no reason to waste time analyzing the other features of the loan.
Interest Rate
A loan’s interest rate should not be the main focus for the borrower’s decision. The interest rate is merely a numerical description of the lender’s profit with that particular contract. In essence, the interest rate is the lender’s fee for loaning such a large amount of money over a period of time.
Loan Type
The loan type is another extremely important factor to consider when comparing mortgage quotes. Since there are countless types of loans available, understanding exactly what he could expect will permit the borrower to make a more informed decision. Fixed mortgage loans are the easiest to understand because the provisions of the contract do not change. The borrower would pay the same amount every month for the entire duration of the contract, usually 15 or 30 years. Adjustable loans, called ARM’s, offer the borrower a fixed payment for a certain number of years, usually between 2 and 7. At the end of that period, the interest rate may adjust at regular intervals, thereby altering the monthly payments.
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Bad Credit Mortgage Tips-
Read this article to learn some tips on getting approved for a mortgage loan with bad credit.
แสดงบทความที่มีป้ายกำกับ mortgage loan แสดงบทความทั้งหมด
แสดงบทความที่มีป้ายกำกับ mortgage loan แสดงบทความทั้งหมด
วันพุธที่ 30 กันยายน พ.ศ. 2552
วันอังคารที่ 29 กันยายน พ.ศ. 2552
10 Things To Know Before You Accept A Mortgage Quote
Basic Information About Your Quote
Mortgages are binding documents that will be with you for the term of the loan, so you want to make sure you select the best quote for you. If you break your mortgage or don’t pay your monthly payments, your lender will repossess your property.
Bait-and-Switch Tricks
Be cautious of lenders who lure you in with the idea of crazily low interest rates or no-fee loans. These are often tactics used to get you in the door. These good deals might be available to some people who have really good credit. But if you have average to low credit and a lower down payment amount, you might not qualify for these deals and would be stuck with a higher offer. You don’t have to take such offers.
Don’t Feel Pressured
Be cautious of any realtor, broker, or lender who tries to push you into agreeing to your loan. Make the decision on your own terms and your own time. If someone pressures you into signing, it may not be the best deal for you.
Fees From Your Lender
Know what the fees will be from your lender before you agree to any mortgage quote. You’ll likely see lender fees like appraisal fees, application fees, and credit report fees. Understand up front what these fees will be and how much you should expect to pay.
Closing Costs
Know what the closing costs will be as early in the process as possible, so you can compare your offers. Closing fees will include any attorney fees, property taxes, title insurance, notary expenses, and homeowner’s insurance. Ask for these fees laid out in writing along with your quotes, so you can make an educated decision.
Tax Implications
Any interest payments you make on interest of your mortgage loan are tax deductible. An accountant would be able to help you with all the deductions that would be available to you, because you are making payments on your property. You likely won’t see any tax breaks when you purchase your property, but deductions on the interest will help you out on tax day.
Can I Change My Mind?
Yes. If you decide within the first three days of signing a mortgage agreement that you made a bad choice, you can withdraw the agreement. But it must be done within those three days. If you change your mind, put your withdrawal statement in writing and make sure your lender or broker receives that document within those 72 hours.
Fixed Rate Vs. Variable Rate Interest
There are two basic types of interest payments available to you with a mortgage. The first is a fixed-rate mortgage. With a fixed-rate mortgage, your interest rate stays the same throughout the entire time you have the loan. With the other type, a variable-rate mortgage, your interest rate will fluctuate based on current interest rates. A good rule of thumb is that if interest rates are low when you’re agreeing to your mortgage, sign with the fixed-rate mortgage. If interest rates are high, go with the variable rate.
How Do I Know If It’s The Best Deal?
Compare several different mortgage quotes at once. Line them all up on a table and look at all the offers’ good points and bad. Consider the interest rates, the terms of the loan, the monthly payments, and fees. Make an educated decision as to which deal is the best one for you before you sign on the dotted line.
How Can I Tell If I’m Overcharged?
When you look at your different mortgage quotes, you’ll get a good idea as to whether one mortgage appears to offer higher charges than the other. Also, talk with your trusted realtor or broker about high charges and see what these advisors think.
See a List of Recommended Mortgage Companies - We maintain a list of recommended mortgage companies online and update the list regularly.
Poor Credit? See a List of 50 Things You Can Do To Improve Your Credit
Mortgages are binding documents that will be with you for the term of the loan, so you want to make sure you select the best quote for you. If you break your mortgage or don’t pay your monthly payments, your lender will repossess your property.
Bait-and-Switch Tricks
Be cautious of lenders who lure you in with the idea of crazily low interest rates or no-fee loans. These are often tactics used to get you in the door. These good deals might be available to some people who have really good credit. But if you have average to low credit and a lower down payment amount, you might not qualify for these deals and would be stuck with a higher offer. You don’t have to take such offers.
Don’t Feel Pressured
Be cautious of any realtor, broker, or lender who tries to push you into agreeing to your loan. Make the decision on your own terms and your own time. If someone pressures you into signing, it may not be the best deal for you.
Fees From Your Lender
Know what the fees will be from your lender before you agree to any mortgage quote. You’ll likely see lender fees like appraisal fees, application fees, and credit report fees. Understand up front what these fees will be and how much you should expect to pay.
Closing Costs
Know what the closing costs will be as early in the process as possible, so you can compare your offers. Closing fees will include any attorney fees, property taxes, title insurance, notary expenses, and homeowner’s insurance. Ask for these fees laid out in writing along with your quotes, so you can make an educated decision.
Tax Implications
Any interest payments you make on interest of your mortgage loan are tax deductible. An accountant would be able to help you with all the deductions that would be available to you, because you are making payments on your property. You likely won’t see any tax breaks when you purchase your property, but deductions on the interest will help you out on tax day.
Can I Change My Mind?
Yes. If you decide within the first three days of signing a mortgage agreement that you made a bad choice, you can withdraw the agreement. But it must be done within those three days. If you change your mind, put your withdrawal statement in writing and make sure your lender or broker receives that document within those 72 hours.
Fixed Rate Vs. Variable Rate Interest
There are two basic types of interest payments available to you with a mortgage. The first is a fixed-rate mortgage. With a fixed-rate mortgage, your interest rate stays the same throughout the entire time you have the loan. With the other type, a variable-rate mortgage, your interest rate will fluctuate based on current interest rates. A good rule of thumb is that if interest rates are low when you’re agreeing to your mortgage, sign with the fixed-rate mortgage. If interest rates are high, go with the variable rate.
How Do I Know If It’s The Best Deal?
Compare several different mortgage quotes at once. Line them all up on a table and look at all the offers’ good points and bad. Consider the interest rates, the terms of the loan, the monthly payments, and fees. Make an educated decision as to which deal is the best one for you before you sign on the dotted line.
How Can I Tell If I’m Overcharged?
When you look at your different mortgage quotes, you’ll get a good idea as to whether one mortgage appears to offer higher charges than the other. Also, talk with your trusted realtor or broker about high charges and see what these advisors think.
See a List of Recommended Mortgage Companies - We maintain a list of recommended mortgage companies online and update the list regularly.
Poor Credit? See a List of 50 Things You Can Do To Improve Your Credit
วันจันทร์ที่ 28 กันยายน พ.ศ. 2552
5 Things to Look For in a Mortgage Quote
When shopping for a mortgage lender, it is absolutely imperative that you obtain more than one quote. You should also ensure that every lender provides you with a Good Faith Estimate (GFE) to substantiate each offer. When reviewing these quotes, here are five important factors to think about:
1. Fixed or Adjustable
If a rate seems very low compared to other offers, make sure that you are not getting an adjustable rate when you requested a fixed mortgage. Brokers will often try to bait you with a low, adjustable rate.
2. Cash to Close
Look closely at how much cash each lender is requiring you to bring to the closing table. Sometimes a slightly higher rate is fine if it means that you need les money to close.
3. Escrow
Look carefully to see if the quoted loan requires you to escrow your taxes and insurance. If so, make sure your lender estimated the reserves that you will need to pay in order to set up the escrow account.
4. Origination Fees
Generally, the top line on a GFE will show how many origination points you are paying the lender for obtaining the loan on your behalf. It will always be to your advantage to negotiate this amount. Remember, most loan officers are paid on commission so they would rather make a little less than nothing at all.
5. Complete GFE
Make sure all fees are disclosed that you will be required to pay, i.e. origination fees, lender fees, processing fees, taxes, title insurance, transfer tax, etc. Some brokers/lenders will attempt to leave off non-fixed costs like taxes in an attempt to make their loan look more attractive.
These thoughts should prepare you quite well when seeking out a fair and affordable mortgage loan.
Suggested Mortgage Lenders Online
- We maintain a list of recommended mortgage companies online and update the list regularly.
List of Suggested Lenders for People With Bad Credit- We also have a list of recommended mortgage lenders for those with low credit scores.
1. Fixed or Adjustable
If a rate seems very low compared to other offers, make sure that you are not getting an adjustable rate when you requested a fixed mortgage. Brokers will often try to bait you with a low, adjustable rate.
2. Cash to Close
Look closely at how much cash each lender is requiring you to bring to the closing table. Sometimes a slightly higher rate is fine if it means that you need les money to close.
3. Escrow
Look carefully to see if the quoted loan requires you to escrow your taxes and insurance. If so, make sure your lender estimated the reserves that you will need to pay in order to set up the escrow account.
4. Origination Fees
Generally, the top line on a GFE will show how many origination points you are paying the lender for obtaining the loan on your behalf. It will always be to your advantage to negotiate this amount. Remember, most loan officers are paid on commission so they would rather make a little less than nothing at all.
5. Complete GFE
Make sure all fees are disclosed that you will be required to pay, i.e. origination fees, lender fees, processing fees, taxes, title insurance, transfer tax, etc. Some brokers/lenders will attempt to leave off non-fixed costs like taxes in an attempt to make their loan look more attractive.
These thoughts should prepare you quite well when seeking out a fair and affordable mortgage loan.
Suggested Mortgage Lenders Online
- We maintain a list of recommended mortgage companies online and update the list regularly.
List of Suggested Lenders for People With Bad Credit- We also have a list of recommended mortgage lenders for those with low credit scores.
วันศุกร์ที่ 18 กันยายน พ.ศ. 2552
Obtaining a Mortgage Quote Online - What to Look For in a Quote?
Requesting an online mortgage price quote is one of the simplest ways to compare different loan programs. However, before you submit a request with a mortgage broker or lender, it's crucial that you know what information to look for on a price quote.
1. Mortgage Interest Rate
The interest is the rate charged to the borrower. Mortgage lenders and brokers offer a variety of products with different types of interest rates. For example, the price quote may include a quote for an adjustable rate mortgage, in which the rate changes periodically, or a quote for a fixed rate mortgage. If the rate is adjustable, the price quote may also include information such as the initial rate period and frequency of the adjustment period.
2. Mortgage Term
The term is the time used to determine the monthly mortgage payment. The average home loan term is 30 years. However, home buyers can select other alternatives such as a 15-year mortgage, 40-year mortgage, or a balloon mortgage. Unless a shorter term is requested by the borrower, lenders always calculate mortgage payments based on the standard 30-year term.
3. Pre-Payment Penalty
The majority of bad credit home loans include a pre-payment penalty, in which the borrower is charged a fine for paying off the mortgage early. The charge is typically 3% of the loan balance. After 3 - 5 years, mortgage lenders get rid of the pre-pay penalty, which allows the homeowner to sell or refinance the property without paying a fee.
4. Origination Fee
The origination fee is an upfront fee that lenders charge borrowers. Standard origination fees are 1% of the loan amount. For example, if the home price is $165,000, the mortgage lender should charge approximately $1,650 for the loan origination. If the lender or broker charges a higher percentage, confront the loan officer.
List of Preferred Mortgage Lenders Online - We maintain a list of recommended mortgage companies online and update the list regularly.
Credit Difficulties? See a List of Poor Credit Mortgage Companies Online
1. Mortgage Interest Rate
The interest is the rate charged to the borrower. Mortgage lenders and brokers offer a variety of products with different types of interest rates. For example, the price quote may include a quote for an adjustable rate mortgage, in which the rate changes periodically, or a quote for a fixed rate mortgage. If the rate is adjustable, the price quote may also include information such as the initial rate period and frequency of the adjustment period.
2. Mortgage Term
The term is the time used to determine the monthly mortgage payment. The average home loan term is 30 years. However, home buyers can select other alternatives such as a 15-year mortgage, 40-year mortgage, or a balloon mortgage. Unless a shorter term is requested by the borrower, lenders always calculate mortgage payments based on the standard 30-year term.
3. Pre-Payment Penalty
The majority of bad credit home loans include a pre-payment penalty, in which the borrower is charged a fine for paying off the mortgage early. The charge is typically 3% of the loan balance. After 3 - 5 years, mortgage lenders get rid of the pre-pay penalty, which allows the homeowner to sell or refinance the property without paying a fee.
4. Origination Fee
The origination fee is an upfront fee that lenders charge borrowers. Standard origination fees are 1% of the loan amount. For example, if the home price is $165,000, the mortgage lender should charge approximately $1,650 for the loan origination. If the lender or broker charges a higher percentage, confront the loan officer.
List of Preferred Mortgage Lenders Online - We maintain a list of recommended mortgage companies online and update the list regularly.
Credit Difficulties? See a List of Poor Credit Mortgage Companies Online
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