Articles

Options for Dealing With Mortgage Loan Trouble

If you’re having trouble making your mortgage loan payments, being proactive is the best way to avoid foreclosure. Though you may be afraid to, talking with your lender can help you come up with options that may save your home.

Mortgage loan reinstatement

You may be able to reinstate your loan if you had temporary trouble making your mortgage payments. Through loan reinstatement, you agree to pay your past due mortgage payments by a certain date and your mortgage is back on track. You might also be required to pay late fees and certain penalties. This option might be difficult if your past due account is high. Continue reading →

Should You Refinance Your Mortgage Loan?

If you took on an adjustable-rate mortgage (ARM) a few years ago, you might have done so with the expectation that you would refinance once the interest rate started increasing. Now, you’re probably wondering whether refinancing is the best option.

Refinance Qualifications

Refinancing your mortgage loan generally only makes sense when you can get a better interest rate than your current one or when you can switch from an adjustable interest rate to a fixed rate.

These days, it’s harder to get a great mortgage interest rate. To get the best rates, you need a FICO above 720, at least 20% equity in your home (that hasn’t been used to secure a second mortgage or home equity loan), and two years of steady income. Without all three of those things, you may not get the best rate or you may be denied a refinance all together. Continue reading →

Making a Choice: Adjustable or Fixed-Rate Mortgage

When it comes to mortgage types, there are traditionally two categories: fixed rate and adjustable rate. Both types of mortgage loans can be advantageous to you financially but it really depends on your financial situation to determine which will work best for you.

What the Difference?

Adjustable-Rate Mortgages

Adjustable-rate mortgages are those that contain an interest rate that fluctuates along with a predetermined index throughout the term of the loan. If the rates go up, your mortgage payment will go up. If the rates decrease, you’ll may less each month on your mortgage payment. Typically, the adjustable-rate mortgage is riskier because there is no way to predict how the rates will trend. It can be difficult for those on a fixed budget to calculate and meet mortgage payment amounts. If finances are not a concern, an adjustable-rate mortgage may be beneficial when the rates are down and payments are lowered. For those with financial concerns, an adjustable-rate mortgage may not be the answer. Interest rates will likely continue moving in the upwards direction and adjustable rate mortgages make it hard to create long-term planning goals. Continue reading →

Why a Hefty Down Payment is Essential To Securing a Good Mortgage

In recent times much has changed about the financial industry, among lenders, and with mortgages. These changes have been made to combat the high rate of mortgage defaults that wrecked the housing and mortgage industries not so long ago. So many homebuyers were given mortgage loans on homes they could not reasonably afford, leading to a nationwide crisis.

Since the storm has finally began calming down, lenders are now much more demanding of borrowers than in the past. Steps are being taken to ensure the borrower is creditworthy and capable of paying off their debts and it is harder to get a mortgage loan than ever before. With credit scores much lower across the board than before, it is not easy to finance a home if you do not have all your finances in order. Continue reading →

Mortgage Loan Closing Costs

Mortgage loan closing is a time many homeowners look forward to. It’s the time when all the final documents are signed and the seller finally hands over the keys to your new home. Closing is one of the last steps in the home buying process. Closing can also be a scary time. There are several different costs involved with the process and it’s important that you’re familiar with all of them. Since there are so many different costs, there are several points of negotiation, which can allow you to reduce your closing costs.

Mortgage loan application fee

The lender or mortgage broker charges an application fee between $65 and $640 for the cost of processing your loan. Your application fee also includes the cost of accessing your credit report and the credit report of any co-borrower. Continue reading →

How to Deduct Interest Paid on Your Mortgage Loan

One of the biggest benefits of owning a home and having a mortgage loan is having an extra tax deduction. The tax rules in the United States allow homeowners to deduct all mortgage interest paid on federal taxes. This means you can reduce the amount of taxes you have to pay to the government.

Requirements

To deduct mortgage interest on your federal taxes, you must meet certain requirements that have been defined by the Internal Revenue Service (IRS).

You must file Form 1040 and itemize your deductions. You can’t claim mortgage interest taxes if you use any other form.

It must be your mortgage loan. You can’t take the mortgage interest deduction if you’re making payments on a loan that belongs to someone else. (Be careful paying someone else’s mortgage – you may owe gift taxes.)

The mortgage interest must have been paid on a qualified home. Qualified homes include your primary home and a single second home that is not rented out. If you have a second home that’s been rented out, you can deduct the mortgage interest if you used the home more than 14 days. Continue reading →

6 Steps to Qualifying for Mortgage Loans

Lenders carry strict requirements when it comes to mortgage loans. The mortgage application process is more intense than most other types of loans, like car loans and personal loans. It helps to know what you need to do to qualify for the loan ahead of time. That way, when you visit the lender to apply for the loan, you’re ready.

Check your credit report. Your mortgage lender will check your credit as part of the mortgage process. If you have outstanding negative information, it will hurt your chances at getting a loan. You check your credit report for free by visiting www.AnnualCreditReport.com. You have three credit reports, one from each of the three major credit bureaus – Equifax, Experian, and TransUnion. Check all three of them to make sure they’re accurate. Continue reading →

The Ins and Outs of a Mortgage Broker: Do You Need One?

With many big decisions in life, it makes sense to have a source to go to when you need help in understanding a deal. There is no greater time to need help than during the process of finding a mortgage loan. Because loans nowadays come in all shapes and sizes, it is wise to be selective in your choices and diligent in your research.

A mortgage broker can be a resource for guidance through the selection process. The broker will not actually make the home loan for you but will guide you through the process of selecting the right lender. With so many deals to be hand, a mortgage broker can help be sure you have covered all of your bases.

Here are the benefits and disadvantages consumers may experience when working with a mortgage broker: Continue reading →

How to Find the Right Mortgage Lender

After the recent crisis in the mortgage industry, consumers are rightly concerned about the lender they choose to handle their own mortgage loans. Fear of schemes, scams, and con men have driven consumers to be more astute at selecting a lender. This is good news for everyone involved and with more consumers checking out lenders before making a commitment, the mortgage world can be a safer place.

Selecting the right lender for you is not as impossible as you may think. Here are some tips for finding the lender who will meet your needs and see you successfully through the mortgage loan process:

Be Prepared

Rushing through the process of finding a good lender with the right mortgage loan for you is the biggest mistake you can make. By understanding first-hand where your credit score lies and knowing what answers you need to find, you can conduct a more thorough search for the perfect lender. Get your facts together and know what kind of loan you are looking for, what price range you are considering, and how fast you want to act. Never be in a hurry to get a mortgage loan because the mistakes you can make in a rush will cost you financially. Continue reading →

How Much Mortgage Loan Can You Afford?

Before you go home shopping, you should figure out how much mortgage loan you can afford. Your mortgage – and any down payment you’ve saved up – will directly impact how much home you can buy. The amount of loan you can afford depends on your current income and expenses. Generally, the higher your income and lower your expenses, the higher mortgage loan you can afford.

Front-End Ratio

Most conventional mortgage loans – those loans that aren’t government-funded – expect that your housing expenses be less than 28% of your monthly gross income. Twenty-six percent (26%) is ideal. This percentage is known as a front-end ratio. Continue reading →

Good Faith Estimates Now Easier to Understand

As of early 2010, lenders have been making their mortgage loan information more straight-forward and consumer friendly. It used to be that long, complicated forms where confusing consumers and causing bad decisions to be made. With the many changes in the mortgage industry, consumers will now benefit from the revisions and less complex documents necessary to obtain a mortgage as regulated by the new Real Estate Settlement Procedures Act (RESPA).

One prime example of an easier form is the Good Faith Estimate. This form is what outlines the fees, interest, and other financial terms involved in a mortgage loan. The form is meant to serve as a comparison piece for consumers who are shopping for mortgage offers. The new form has advanced from a single page to a three-page document. It more clearly outlines the lender fees and third-party fees that are part of the loan. In the past, consumers have often been left lost in the pile of numbers. The new form is meant to make the numbers game more clarified and comprehensible to all borrowers. Continue reading →

Can You Find a Discount Mortgage Loan Through Your Job?

For some potential homebuyers who work in specific job positions, there are options for finding low-interest or special assistance when it comes to obtaining a mortgage loan. Not all mortgage loans are generated by traditional bankers because not all borrowers fit the same financial profile.

If you work in a profession that offers special assistance or programs for getting a mortgage loan, it is worth the effort to find out more before loan shopping using traditional means.

Some examples of professions that might offer mortgage loan discounts include:

  • Firefighters
  • Nurses
  • Police
  • Professors
  • Public service careers
  • State Employees
  • Teachers Continue reading →

Checklist for Preparing to Get a Mortgage

A mortgage application is not meant to be taken lightly, especially in light of the recent chaos that slammed the mortgage industry. Lenders are stricter than ever in their guidelines to qualifying a buyer and for those wishing to be approved for a mortgage loan, preparation is vital.

Purchasing a home is likely the biggest investment you will make in a lifetime and if you are a first-time home buyer, you need to be ready to see the process through from application to closing to handle everything in between. Here is a checklist of things you can do to increase your chances for a successful mortgage approval: Continue reading →

Can You Afford A Mortgage?

A mortgage is a big commitment and defaulting on a home loan can cause a lifetime full of financial problems if you go into it without being truly prepared. Being financially ready to take on the responsibility of a mortgage is something perspective homeowners should consider before shopping for a lender.

Here are some questions to ask yourself if you are thinking about securing a mortgage:

How Much Have You Saved For a Down Payment?

While there are some options available for individuals who can not afford to make a sizable down payment on a home, traditional lenders want to see at least 20% cash down based on the sales price of the home. If you have not saved the full 20%, you will have to pay additional fees for private mortgage insurance until you have secured enough equity in your home. Additionally, lenders will not be able to offer you the best interest rates on the mortgage, leaving you to pay higher payments each month. Continue reading →

8 Things to Know About Getting a Mortgage Loan

For most people, buying a house is the biggest transaction of their lives. You’ll be paying on the mortgage loan for the next few decades, so it makes sense that you would take care in choosing the right loan.

Not all mortgages are created equally. There are many different types of mortgages. The basic distinction is made between fixed-rate and adjustable-rate mortgages, which have interest rates that either stay the same or change based on market interest rates. You’ll have to choose the one that’s best for you.

Adjustable-rate mortgages aren’t all bad. ARMs got a bad rep when the subprime mortgage industry suffered a meltdown beginning in 2006. Many homeowners saw their ARMs resetting at higher interest rates and the monthly payments subsequently became unaffordable. However, adjustable rate mortgages don’t always reset at such high interest rates and can be beneficial for homebuyers who plan to move within a few years. Continue reading →