Mortgage
Rates and Quotes
Mortgage Loan 101
By Louie Latour
Mortgages can be an intimidating subject for any homeowner.
There are a number of mistakes homeowners make that cost thousands
of dollars. To avoid common mortgage mistakes you need to do your
homework before applying for a mortgage loan. Here are the basics
to get you started.
A mortgage is simply a loan secured by your home. If you default
on this loan the lender will foreclose on your home and sell it
to repay the loan. A mortgage is simply a tool to purchase your
home. There are several different types of mortgage loans you need
to be familiar with.
Traditional Mortgage Loans
Traditional mortgages are the type of loan most people are familiar
with. The most common traditional mortgage is a fixed interest rate
loan with 30 year duration. This is the variety of mortgage with
the lowest amount of risk; the repayment amount will not change
from month to month because of the interest rate.
Adjustable Rate Mortgage Loans
Adjustable rate mortgages have become extremely popular because
of their lower monthly payment amounts. These mortgages come with
much more risk to the homeowner because the interest rate changes
on regular intervals. If interest rates go up the monthly payment
can go up significantly with it. There are several different types
of adjustable rate mortgages ranging from risky to extremely risky.
The primary advantage of a mortgage over any other type of personal
loan is that the interest you pay is a tax deduction on your Federal
Income Tax. Any points you pay at closing are also tax deductible.
Finding the right mortgage is not as difficult as you think. You
need to shop from a variety of mortgage lenders and brokers to find
the right loan for you. You have to shop smartly; there are a number
of costly mistakes to be made during the mortgage process. To learn
more about avoiding common mortgage mistakes sign up for a free
mortgage guidebook.
To get your free mortgage guidebook visit RefiAdvisor.com using
the link below.
Louie Latour is a mortgage professional and the owner of RefiAdvisor.com,
a mortgage resource site offering a free gift for homeowners: "Mortgage
Refinancing - What You Need to Know." This guidebook helps
homeowners avoid common mortgage mistakes and predatory lending
practices.
Claim your free guidebook today at: http://www.refiadvisor.com
Minneapolis Mortgage Refinance
Article Source: http://EzineArticles.com/?expert=Louie_Latour
Basic Mortgage Terms
By Joseph Kenny
If it is your first time applying for a mortgage,
there are a number of terms you should know. Educating yourself
on the various mortgage terms you will run into will help you make
better decisions when deciding which home you want to purchase.
When you sign a mortgage contract, your home is used for collateral
and it is your responsibility to make sure your payments are made
on time each month.
The first term you should know is principal. The principal is basically
defined as the amount of money you borrow for your home. Before
the principal is provided you will need to make a down payment.
A down payment is the percentage you will put towards the principal.
The amount of the down payment will often depend on the cost of
the home. Once you pay off the principal, the home is yours.
The next term you will need to know is interest. Interest is a
percentage that you are charged to borrow a certain amount of money.
Along with the interest rate, lenders may also charge you points.
A point is a portion of the total funds financed. The principal
and interest makes up the majority of your monthly payments, and
this is a method that is called amortization. Amortization is the
method by which your loan is reduced over a given period of time.
Your payments for the first few years will cover the interest, while
payments made later will be applied towards the principal.
A portion of your mortgage payments can be placed in an escrow
account in order to go towards insurance, taxes, or other expenses.
The next term you will hear a lot is taxes. Taxes are the amount
of money that you have to pay to your state or government. When
it comes to your home, these are known as property taxes. These
taxes are used to build roads, schools, and other public projects.
All homeowners must pay property taxes.
Insurance is another important term that you will hear in the real
estate community. You will not be allowed to close on your mortgage
if you don't have insurance for your home. Home insurance covers
your home against floods, fire, theft, or other problems. Unless
you can afford to repair your home if it is damaged, it is usually
a good idea to get insurance for your home. If your home is located
within a zone that is known for having floods, federal laws may
require you to have flood insurance.
If the down payment you put towards your home is less than 20%
of the total value, you will often be charged additional premiums
on your insurance by the lender. This is done to protect you in
the event that you default on your loans and fail to make payments.
Without this, many people would not be able to afford a house. Once
you have paid off about 78% of the home, the lender will stop charging
you insurance premiums.
These are the basic terms you will need to know before your purchase
a home. Understanding these things will allow you to avoid many
of the pitfalls that exist in the real estate field. You want an
interest rate that is low, and you should always try to get a fixed
interest rate if possible. This will allow you to focus your income
on making payments towards the principal, and this will help you
pay off the loan faster. A mortgage is an important part of your
financial picture, and you want to make sure you pick a home that
you can afford. If you fail to make your payments, you may lose
your house.
Joseph Kenny writes for http://www.ukpersonalloanstore.co.uk
where you can find more information on what a mortgage is, available
on site.
Article Source: http://EzineArticles.com/?expert=Joseph_Kenny
Mortgage Loan – Make Lenders
Compete and You Win
By Louie Latour
The mortgage industry is extremely competitive today.
If you are in the market for a mortgage it has never been easier
to qualify for the financing you need. Competition is fantastic
for homeowners; however, there are a number of mistakes that can
cost you money. Here is what you need to know about finding the
right mortgage in today’s ultra competitive marketplace.
Mortgage interest rates are still at historically low levels. Real
estate in the United States is beginning to cool and many mortgage
lenders are tightening their belts as the demand for mortgages drops.
Competition was fierce when demand was higher; now that the demand
is tapering off many mortgage lenders are having to make concessions
on the loans they write. What does this mean for you, the homeowner
looking to refinance their current mortgage? You may not be able
to bargain for much when it comes to your interest rate; however,
everything else on the loan contract is fair game. This means closing
costs, penalties, and lender fees are all subject to negotiation.
Shop For Your Best Offer
To find the best mortgage offer available you will need to shop
from a variety of mortgage lenders and brokers. Do not let these
lenders run your credit when you are shopping; wait until you have
found the perfect mortgage before giving up your Social Security
number. When you shop for a mortgage compare all aspects of the
loan. Lender fees, closing costs, and prepayment penalties should
all be scrutinized carefully. Account for every dollar on the loan
contract and use the Annual Percentage Rate to compare one offer
to the next. If one particular mortgage offer has fees that seem
significantly higher than the others, discard that lender from your
search.
Negotiate
You will never know how far a lender is willing to go to get your
business unless you ask. If a loan offer has good terms and a low
interest rate but carries a prepayment penalty, ask the lender to
remove it. Your bargaining chip is your business; with thousands
of lenders competing for your mortgage loan, lenders need you more
than you need any one mortgage lender. To learn more about finding
the right mortgage register for a free mortgage guidebook.
To get your free mortgage guidebook visit RefiAdvisor.com using
the link below.
Louie Latour is a mortgage professional and the owner of RefiAdvisor.com,
a mortgage resource site offering a free gift for homeowners: "Mortgage
Refinancing - What You Need to Know." This guidebook helps
homeowners avoid common mortgage mistakes and predatory lending
practices.
Claim your free guidebook today at: http://www.refiadvisor.com
Minneapolis
Mortgage Refinance
Article Source: http://EzineArticles.com/?expert=Louie_Latour
Can You Afford Your Dream House?
By Martin Lukac
So you want to buy a house eh? And you want to get
a mortgage loan to cover the bulk of the cost. Well, this is a common
way for people to purchase a new house and if you are going to get
approved for a mortgage you will fist have to meet with a lender.
This lender will go over all of your finances carefully. They will
check your credit history to see if you can be trusted to repay
the money as well as go over your gross income. The mortgage lender
will also want to know how much of a down payment you are able to
put down on the home. In order to find out how much you can afford
to spend on a new home you are going to be using the concept of
debt to income ratios.
There is more than one way to do debt to income rations and one
of them is to determine the front end ration by finding what your
gross income is each month. This is the amount that you earn before
the taxes are deducted from your salary. Your mortgage payment should
be under 28 percent of your gross income and this percentage is
including the interest on the mortgage payment. Then you need your
housing expense and to get that all you have to do is multiply your
yearly salary by 0.28 and after than divide it by 12. This final
sum is the most you can pay towards your housing expense.
Now your back end ration is what you need to find to cover all
of your debts. When I say all your debts I mean all your debts including
credit cards and other loans. All of your debts together, including
the mortgage should not be above 36 percent of your gross income.
To find the final numbers for this you will do much like in the
previous example but instead of suing 0.28 multiply 0.36. This will
finally give you your highest possible debt to income ration. Do
not go above this number. Just remember that your gross income is
your income before tax not after.
Average debt ratios tend to be higher than the recommended percentages.
For example conventional loans usually have anywhere from 26 to
28 percent of ones monthly gross income and when you put the housing
as well as the debt cost you are generally looking at anywhere form
33-36 percent of your gross income. And if you are dealing with
FHA loans you will be paying even more. With these loans you will
have more like 29 percent towards housing costs and with housing
and debt you are looking at 41 percent.
Lenders will always take into consideration the prices that you
will have to pay for insurance and your taxes when figuring how
much money you have to put into a new house. The property taxes
that you have to pay each year are worked into your mortgage payments
so that is why lenders will always work to find out just what your
taxes will be each year. If you do not know this number to give
to them you can ask your real estate agent. He or she should be
able to tell you what other people in your neighborhood are paying
towards real estate taxes each year.
Before you can get a mortgage you will have to get homeowners insurance.
To get an estimate talk to an insurance agent. Make sure that you
find out if you should have flood or fire insurance due to the area
in which you live as these will affect your insurance estimate.
And remember that if you don't have at least 20 percent of the cost
of the home to put down you will have to get additional insurance.
This will be mortgage insurance. All insurance payments will cause
your monthly payments to be higher.
Martin Lukac, represents http://www.RateEmpire.com,
a finance web-company specializing in real estate/mortgage market.
We specialize in daily updates, rate predictions, mortgage rates
and more. Find low home loan mortgage interest rates from hundreds
of mortgage companies! Visit http://www.RateEmpire.com
today
Article Source: http://EzineArticles.com/?expert=Martin_Lukac
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