Mortgage Loans Guide

Just imagine  as you’re going through your favourite coffee drive-thru this week  that a well-dressed gentleman stops and offers you $11,000 for your medium double double. Who would hesitate? We’d take the cash. It’s not so far-fetched. In fact, if you take that coffee budget and apply it to your monthly mortgage payment  a mere $30 extra per month -you could save yourself about $11,000 over the life of your mortgage.

Most of us can accept the idea that we must borrow money to purchase a home. We look for the best mortgage, and then just keep doling out the money for as long as it takes to pay it off. Most Canadians choose to amortize their mortgage over 25 years. That’s a long financial commitment, and it could more than double the cost of your home. But with good planning  and a few smart tactics  you should be able to enjoy your mortgage-burning party much earlier.

Here are a few strategies for fast-tracking your mortgage:

1. Increase your monthly payments. Rather than choosing your amortization period first, ask yourself how much you can afford each month. For example, you may feel that you can afford $1,000 per month. You’re delighted when your $125,000 mortgage only demands an $800/month payment (at a 6% interest). But make a monthly payment of $1,000 instead, and you’ll shave 8.75 years and almost $46,000 off your total interest cost.

2. Take advantage of lower rates. In addition to reducing the overall interest component of your mortgage, you can take the opportunity to pay down more principal faster  simply by maintaining your original payment. You should even increase your payment if you can, to reap the benefits of the cheapest mortgage money in memory. Again, you could take years  and thousands of dollarsoff your ontario mortgage.

3. Tie mortgage payments to your pay schedule. Many Canadians are paid on a bi-weekly schedule. If you accelerate your payments to bi-weekly instead of monthly, you could improve your own cash flow and fit in an extra payment each year. That means that you’re paying off principal faster  leaving you with less interest to pay overall. It doesn’t seem like much but  like putting your coffee budget to work  the bi-weekly strategy can have you mortgage free four years sooner, with almost $22,000 in savings.

4. Use any bonuses, tax refunds or “found money” to pay down principal. This is especially valuable in the early years of your mortgage. If you receive an annual bonus or other lump-sum compensation, see if you can put it against the principal. An extra $1,000 per year is a great way to fast-track to mortgage-free!

5. Consolidate your loans into a new mortgage and use the savings to boost your payments. If you’re a homeowner with some equity, you can use your mortgage to consolidate your other loans: student loans, car loans, etc. Add the money you’ve been spending on loan payments to your mortgage payments, and you could see big savings in overall interest.

With ontario mortgage rates at historic lows, you should take the opportunity to get an expert mortgage analysis from an independent mortgage broker with access to mortgages from a wide spectrum of lenders. You’ve got a great opportunity to put some fast-track tactics in place. You’ll remember what a good decision you made at your mortgage-burning party.



By: The House Team Of Mortgage Intellingence

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Getting a low rate mortgage with a negative credit rating is challenging. When people finance a home, obtaining a good finance package is a top concern - and for good reason. The mortgage rate received on a loan may significantly increase or decrease a monthly mortgage payment. If you have good credit, getting the best low rate is simple. However, if you have bad credit, you may have to exert a little energy and search for a good rate.

Compare and Contrast Mortgage Rates and Terms

Smart buyers will stress the importance of shopping around for the best deal. This rule applies to any purchase - cars, clothes, shoes, etc. Homes are our biggest expense. Unfortunately, many home buyers do not devote much time to searching for the best financing package. This is a big mistake. When shopping for a mortgage, it is important to get quotes from several lenders and carefully review their offers. Those who are eager to buy a home make the mistake of accepting the first offer. However, comparing mortgage rates, terms, and services may save you thousands, and in effect lower your mortgage payment.

Apply for Loan with a Sub Prime Lender

Many financial institutions specialize in home mortgage loans. These include banks, mortgage companies, credit unions, etc. If you have good credit, you may be able to obtain a low rate mortgage using these financial institutions. However, if you have bad credit, these lenders may charge you additional fees and an extremely high rate. Because of your bad credit status, you are more likely to default on the mortgage. Thus, lenders increase the interest rate. This allows them to recoup their money sooner.

If you were to acquire a loan using a sub prime lender, your interest rate may be comparable to current market rates. You can expect to pay about one or two points higher than a person with great credit, however, you avoid paying an interest rate three points or more above current rates.

Working with an online mortgage broker is the best way to locate a reputable sub prime lender. Based on information provided on your application, brokers will match you with a lender who specializes in mortgages that fit your circumstances.



By: Carrie Reeder

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Finding a bad credit mortgage lender is easier than you probably think. Although several lenders and brokers advertise super low rates and different types of home loans for people with good credit, a variety of bad credit loans are available. It is possible to get approved for a home loan with a score as low as 500. Here are a few tips on how to find a bad credit mortgage lender.

Request Mortgage Information from Credit Unions, Banks, etc.

Even though a large number of banks, credit unions, and other lenders do not offer home loans to people with poor credit, it doesn’t hurt to inquire about their loan requirements. Some lenders have started offering a variety of mortgages, including low credit score home loans. This makes homeownership attainable. Because many traditional lenders favor prime borrowers, you may not meet some lender’s requirements.

Apply for a Loan with a Sub Prime Mortgage Lender

If unable to get approved for a mortgage loan with a traditional lender, consult a sub prime mortgage lender and request a mortgage quote. These lenders are very helpful because they work with a variety of credit situations. If acquiring a sub prime loan, good credit is not necessary.

Although sub prime lenders can get homebuyers with poor credit approved, there are drawbacks to these loans. For starters, bad credit will not qualify you for prime rates. Hence, a bad credit mortgage loan will consist of interest rates about two or three percentage points above the current average. An interest rate increase usually entails paying a higher mortgage payment.

Using Mortgage Brokers

There are numerous lenders offering sub prime mortgage loans. Prior to applying, all homebuyers should shop around and obtain several quotes. Comparing different mortgage lenders and loans is essential to obtaining the best home loan. Shady bad credit lenders prey on those with few options. However, having a low credit score does not mean you have to accept a home loan with outrageous fees and terms.

To avoid being deceived by a dishonest mortgage lender, use an online broker and obtain multiple quotes from reputable lenders.



By: Carrie Reeder

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The terms of mortgage loans have to be decided carefully. Sometime people do not realize that by saving a couple of dollars a day and destining them to mortgage repayment they can save thousands of dollars over the whole life of the loan. With slightly higher monthly payments you can pay off your mortgage sooner and save thousands on interests.

Shorter Repayment Programs

By requesting a shorter repayment program, you will definitely get a slightly higher monthly payment, but that increment can be as little as $30 to $60 which implies $1 or $2 a day. It is not such a big sacrifice and you will be paying off your debt sooner. Besides, a year less of mortgage payment is a year less of interests because interest rate is calculated annually.

Moreover, a shorter repayment program has an additional implication: Since the money owed will be repaid sooner, the lender is taking a lower risk by lending the money and thus, the interest rate charged will also be lower. So, you will not only be saving money due to shortening the repayment program and thus the interests, but the interest rate will also be lower making you save thousands of dollars with each quarter of a point of interest.

Lower Interest Rates

Depending on the loan length, the loan will carry a higher rate or not (The longer the repayment program, the higher the risk and thus the higher the interest). However, the rate will also depend on whether you choose a fixed or variable rate and whether you have a good credit score or not.

Nevertheless, you should always know that you can save money by shortening the repayment program or by prepaying the mortgage loan provided there are not penalty clauses in the loan contract that increase the cost of the loan if you decide to prepay. If so, you should check to see if you are really saving money by prepaying.

Refinancing Your Home Loan

All the above is important if you are planning to take a home loan. If that’s the case, you need to make sure that you are not overpaying a huge amount just to get a lower monthly payment that will save you only $30 or $60 a month. A little sacrifice every month can save you a lot of money on the long run (money you can invest to generate additional income).

However, if you already have a mortgage loan and you are ruing because you closed on a deal that is definitely not to your advantage, you do not need to worry as you can always refinance your home loan so as to get better loan conditions and seize the benefits that are explained above.

Refinancing is a simple process: you take a loan that is secured on the same property as your previous mortgage on condition to repay the previous loan so the new one remains the only loan for which the property acts as collateral. You just need to make sure that by doing so, you are actually saving money because the costs of refinancing may be higher than what you save by getting better terms.



By: Melissa Kellett

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Bad Credit Mortgage Loans

 

Mortgages are one good way of securing your home Loan. However not everyone can opt fort mortgage loans or not everyone can get a good deal on mortgage loans. A number of people bear bad credit history due to their unnecessary spending in the past and not paying the bills on time. For such people it was very tough to get a mortgage loan until the financial institutions introduced bad credit mortgage loans which are specially aimed and designed for people who have bad credit history. 

Terms and conditions of Bad Credit Mortgage loans:

The idea of bad credit mortgage loans was not borne because of compassion but was an initiative towards making profit from the odds.

Taking this strategy in mind and the desperate need of people having bad credit for mortgage, bad credit mortgage loans were designed with a higher interest than normal to make profit. 

The tenure of bad credit mortgage loans is usually the same like in conventional mortgage loans. 

The golden down payment rule!

The golden down payment rule remains the same in bad credit mortgage loans too that is the higher your down payment is the lower will be your tenure or monthly installments. Usually the down payment is around 10% of the total loan amount however if the consumer wishes he can make a higher down payment. 

Your credit history counts…

Having a bad credit history is not just a reason to opt for bad mortgage loans. The down payment of your loan amount is largely dependant on your credit scores. For instance, if you have a credit score lesser than 490 then your down payment becomes approximately 30% of the loan amount. The higher your credit scores the lesser down payment you’ll have to pay.



By: Amasch McAndrew

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The chart below gives examples of three different loan terms and what paying between $75 to $100 more a month  would do to the mortgage. It is based on a $100,000.00 loan at 7% interest.

Years Int Rate Payment Interest Total of Payments Savings

307% $665.30 $139,508.00 $239,508.00 N/A

Round Payment to $750.00 $93,994.86 $193,994.86 $45,513.14 This loan would be paid off in 259 months instead of 360. Even if you don’t have $75 to $100 a month to add to your mortgage payment, even $25 would save a lot. If you would like to have your own Loan Calculator , just to download their Loan*Calculator! Plus. This is a free version and has everything the average family can use. It is also the Loan Calculator I have used for several months. Highly Recommended .

207% $775.30 $86,072.00 $186,072.00 N/A

Round Payment to $850.00 $69,409.58$169,409.58 $16,662.42 This loan would be paid off in 199 months instead of 240. There are a couple of things that you need to check. First is that your loan agreement doesn’t allow the loan company to charge penalties for early payment. Secondly, if you itemize your federal income taxes and deduct mortgage interest, paying less interest will mean a lower deduction. I believe it is safe to say that the interest savings will far outweigh the tax savings.

157% $898.93 $61,789.40 $161,789.40 N/A

Round Payment to $1000.00 $50,517.67 $150,517.65 $11,271.73 This loan would be paid off in 151 months instead of 180. Even if you don’t have $75 to $100 a month to add to your mortgage payment, even $25 would save a lot. If you would like to have your own Loan Calculator , just to download their Loan*Calculator! Plus. This is a free version and has everything the average family can use. It is also the Loan Calculator I have used for several months. Highly Recommended .

By adding $84.70 to your 30 year loan you can save $45,513.14 and pay the loan off in 21 1/2 years.

By adding $74.70 to your 20 year loan you can save $16,662.42 and pay the loan off in 16 1/2 years.

By adding $101.07 to your 15 year loan you can save $11,271.73 and pay the loan off in 12 1/2 years.

You can also see by the chart that obtaining a shorter loan term when you buy your house can save a lot of money.

There are a couple of things that you need to check. First is that your loan agreement doesn’t allow the loan company to charge penalties for early payment. Secondly, if you itemize your federal income taxes and deduct mortgage interest, paying less interest will mean a lower deduction. I believe it is safe to say that the interest savings will far outweigh the tax savings.

Even if you don’t have $75 to $100 a month to add to your mortgage payment, even $25 would save a lot.

If you would like to have your own Loan Calculator , just to download their Loan*Calculator! Plus. This is a free version and has everything the average family can use. It is also the Loan Calculator I have used for several months. Highly Recommended



By: Manojj Kumarr

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You have been waiting decades for this day. It is not your 100th birthday. It is not your 50th wedding anniversary. And, it not the day that the local TV station airs a 24-hour Star Trek marathon. Today, you will make the last payment on your home. You will officially own the house that you “bought” many years ago! All of those overtime hours at the office, those countless weekends hunting through the newspaper for coupons, and the constant insistence that all of your kids wear the hand-me-downs from their older siblings have paid off! Your trip up Mortgage Mountain was worth it. When we first take out a mortgage for our home, it is difficult to imagine the day that we will pay it off in full. But the journey begins when we search for an equity home loan mortgage rate.

Equity Is a Good Thing

Equity is the amount by which a property’s appraised value is greater than the debt value. If a home’s market value is $200,000 while the mortgage balance is 50,000, the property’s equity value equals $150,000. So, equity is a good thing when taking out a mortgage. The greater the equity in the house, the better. Adding equity to your home is fairly easy. Of course, making a mortgage payment is one way to build equity. And the sooner that you reach a hundred percent equity - or own your home, the sooner you can retire, have genuine wealth, and experience less financial stress. Also, the more equity you have, the better the equity home loan mortgage rate you can find.

Making your monthly mortgage payments based on your equity home loan mortgage rate is just the start. You can engage in other ways to build extra equity. The following are ways to build extra equity.

* Improve the size or quality of your home, via home improvements. Remember, though, that some improvements are more advantageous than others. Remodeling bathrooms is usually more beneficial than adding a swimming pool. And remodeling kitchens is usually more beneficial than attaching a skull door-knocker on your front door.

* Make a higher initial down payment when buying your home. This will also increase the equity. Think about it this way: the more money you invest in your home, the less you can waste

* Make extra principal payments or add to your monthly payment that will be dedicated to your principal. Less debt means less interest, so less of your payment will go to interest, and more will go to your principal. Also, each dollar you send reduces your debt by an equal amount. However, check if your lender permits extra payments of principal.

* Secure a lower equity home loan mortgage rate will allow you to refinance, if you are now in a long term mortgage - 30 years, for example. Also, you could initially secure mortgage with a shorter term. A shorter mortgage term translates into paying down your principal faster, thus earning extra equity, faster.

Rating Rates

While building equity in your home is wise, searching for the best equity home loan mortgage rate is equally important. Many companies have search engines that can find the best rates for you. Factors considered include where you will buy your home, and the loan amount.

The first important step in buying a home is buying a home. Afterwards, adding equity to your home is important in adding value to it. That will give you the equity home loan mortgage rate that none other can equal.



By: Rony Walker

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Shopping for a Colorado home loan quote isn’t much different than looking for mortgages elsewhere in the U.S.; however, the housing market in Colorado does present some unique needs. Buyers that work with and in-state Colorado home mortgage company will have an added advantage

Shopping for a Colorado Home Loan Quote

Buyers looking for the best Colorado home loan quote should begin with the basics.

First, gather the information needed to obtain an accurate quote from a professional. Providing as many specifics as possible will give you the most reliable Colorado home loan quote. Providing information about income, debt, and purchase price or refinance amounts will be helpful. Be prepared with a list of goals and questions.

To find reputable Colorado home mortgage lenders, search local ads and online.Make a list of prospective lenders, and then call for an initial consultation. It will likely take a day or two for them to thoroughly go over your information and provide your Colorado home loan quote.

When you shop for a Colorado home loan quote, you will be provided with a variety of terms and options. Your lender will help to decipher these options and fit them to your personal situation and goals to get you not only the best Colorado home loan quote, but also the most affordable Colorado home mortgage payment for you.

The following options represent what you may be presented with:

Adjustable Rate Mortgage – For the first 3-5 years, the ARM works similar to a Colorado fixed rate loan in that the payments will stay the same at a locked interest rate for a specified period. After that initial 3-5 years, your rate will adjust with market rates based on an index. An ARM works well for buyers that want lower payments in the short term and should be considered if you plan to refinance or sell the property in the near future..

Colorado fixed rate loan – The rate you lock in the beginning of a Colorado fixed rate loan is the rate you have for the life of the Colorado fixed rate loan. The Colorado home loan quote you get on a Colorado fixed rate loan will be higher than an ARM Colorado home loan quote, but it’s predictable and will never change predictable and will never change%%. A Colorado fixed rate loan is good if you plan to own your property for a long time. With a Colorado fixed rate loan, you won’t have to stress over interest rate increases.

Colorado jumbo mortgages – Colorado jumbo mortgages are those taken for any amount over $417,000. The Colorado home loan quote for Colorado jumbo mortgages will be slightly higher because of increased risk factors for lenders, but this shouldn’t dissuade you from products for Colorado jumbo mortgages. Very simply, many of the best Colorado home mortgages fall into the ‘jumbo’ category, and there is no other way to obtain such a property.

Like a standard Colorado home mortgage, Colorado jumbo mortgages come with options like variable ARMs and Colorado fixed rate loan 15-30 year terms. Shop for jumbo loans as you would a conforming loan. The same basic rules apply - short term ARMs have better rates than a Colorado fixed rate loan, but in the long term, the Colorado fixed rate loan is better.

Whether you’re shopping for an ARM or Colorado fixed rate loan with 30 year jumbo mortgage rates, the key is to find a reputable Colorado mortgage company you can trust to deliver the Colorado home loan quote as quoted. Particularly if you are locking into a 30 year Colorado fixed rate loan, you want good rates and reasonable fees. Several Colorado mortgage brokers have experience with 15 and 30 year jumbo mortgage and finding one will be well worth your effort.



By: 1st American Mortgage

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You don’t want to have to scrimp and save each month in order to make your home mortgage loan payment; so what do you do?

Get your finances in order

When you are ready to buy a home, to figure out how much money you can afford to spend on a home mortgage loan, you will have to do some math. You first need to decide how much of a down payment you can make and deduct this from the price of the home. What is left will be what needs to financed by a home mortgage loan. To find out how much you can afford each month, you need to calculate the rest of your bills first.

The cost of housing

Each month, the taxes, interest and principal on a home mortgage loan shouldn’t be more than 25%-28% of your pre-tax, gross income. This figure will also depend upon how much debt you have to start. You will also need to add in utility costs for your new home as well.

Your outstanding debt

To get this figure, you will need to include not only the home mortgage loan payment, but any credit card bills, child support or alimony payments you make, student loans and any other outstanding monies you owe. This figure should not be more than 35% of your pre-tax, gross income.

The rate you will be offered will be decided by the amount of debt you have outstanding, not just your income. This is called your debt to income ratio. If you have a lot of outstanding debt, your rate will not be as attractive as those offered to people who are carrying less of a debt burden. It is for you to understand how much money you can afford to pay a home mortgage loan each month and not the lender.

What to beware of when shopping for a home mortgage loan

The lending market is saturated with unscrupulous lenders who are only looking to make a sale. That is why it is so important you have a handle on your financial picture. Many times home mortgage loan officers try to convince you to take out a higher loan for a home you cannot afford.

Loan officers realize that the first bill most of us pay is the mortgage. They also know that your home mortgage loan will soon be sold to another company and that should any problems arise with paying back the loan, it won’t be their problem. They will already have made their commission and moved on to the next customer while you are saddled with payments you can’t afford.

Do your homework before deciding how much to spend on a new home. Take into account all your monthly expenses, not just debt and housing costs. You will need food, electricity, phone, and insurance, along with the myriad expenses that crop up each month. Be a smart home mortgage borrower and know all the facts before you sign on the dotted line.



By: Alan Lim

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