The Underwriting Process
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips and tricks meant to make getting your loan as easy as possible. To this end, they have put together this brief explanation of the underwriting process
In terms of real estate, the underwriter is the representative of a lender who reviews a home buyer’s loan application and associated documentation. It is in the underwriting process that the determination is made whether to approve or deny a request for a loan.
In the underwriting process, the underwriter analyzes and evaluates:
Your ability to pay back the loan - by looking at your current income and obligations.
Your willingness to pay back the loan - by looking your credit.
The collateral you’re offering for the loan - by looking at the appraised value of the property in question in relationship to the size of the loan requested, or what is known as the Loan-to-Value ratio.
The underwriter examines your loan application to answer relevant questions such as:
Your source of income and its consistency and reliability.
The adequacy of your income to cover the costs of your new mortgage.
The overall amount of long-term debt you have already.
A key factor in determining whether or not to approve your loan application is your credit history. It is well worth every loan applicant’s while to review their own credit first, prior to applying for a loan. By checking your own credit before the underwriter ever sees it, you have the opportunity to identify and fix any errors and make reparations on old unpaid debts if at all possible, thereby improving your credit rating and the likelihood of being approved for the loan.
When a borrower doesn’t have an extensive enough credit history for an underwriter to make an informed decision about the borrower’s creditworthiness, underwriters will often accept other payment records for consideration, such as utility bills and rental payment receipts.
Whether an applicant has a provable and adequately lengthy credit history or not, an underwriter may require the applicant also produce a complete paper trail of recent banking account activity (ie. checking and savings). This may include deposit and withdrawal receipts, monthly statements, cancelled checks, etc.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Showing posts with label refinance. Show all posts
Showing posts with label refinance. Show all posts
Friday, June 12, 2009
Thursday, June 11, 2009
How to Prequalify for a Home Loan
How to Prequalify for a Home Loanby Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips and tricks meant to make getting your loan as easy as possible. To this end, they have put together this brief explanation of the steps you must take to be prequalified for a loan.
To be pre-qualified for a loan means that a lender has done a preliminary review of your basic information and, without confirming any of it for validity nor checking to see if there’s any significant information you’ve withheld that could further affect your creditworthiness, has determined that, based on their standards, you would qualify for a loan up to a specific dollar amount should you apply with them.
Being pre-qualified does not mean that you are pre-approved. Pre-approval is a commitment to approve you for that loan, should all the information you’ve provided be accurate and complete, whereas pre-qualification just means that, according to their standards, you look to qualify for said loan amount.
Getting pre-qualified has several advantages, read the following:
1.) Pre-qualification lets you know how much you can actually afford on a home, which helps tremendously in focusing what could otherwise be an overwhelming house-hunting experience.
2.) Pre-qualification demonstrates to sellers that you are serious buyer who is ready, willing, and able to follow through on an offer.
3.) pre-qualification helps the whole mortgage application process to go through much faster, as a great deal of the information you need to provide is already in the lender’s possession.
Another advantage of pre-qualification is that pre-qualified borrowers can usually lock-in their interest rate, a huge benefit when you consider how much interest rates can rise between the time you start your search for a home, the time you complete your loan application process, and the time you close on the house. There may be a lock-in fee, but if it’s reasonable, it’s usually worth it. Locked-in rates are usually valid for 30-90 days, depending on the lender.
When trying to lock-in an interest rate, ask whether the lender has a "float down" feature. This allows you to lower your interest rate once, if prevailing rates go down during your lock-in period, preventing you from getting stuck with a higher interest rate than if you hadn’t locked it down at all.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips and tricks meant to make getting your loan as easy as possible. To this end, they have put together this brief explanation of the steps you must take to be prequalified for a loan.
To be pre-qualified for a loan means that a lender has done a preliminary review of your basic information and, without confirming any of it for validity nor checking to see if there’s any significant information you’ve withheld that could further affect your creditworthiness, has determined that, based on their standards, you would qualify for a loan up to a specific dollar amount should you apply with them.
Being pre-qualified does not mean that you are pre-approved. Pre-approval is a commitment to approve you for that loan, should all the information you’ve provided be accurate and complete, whereas pre-qualification just means that, according to their standards, you look to qualify for said loan amount.
Getting pre-qualified has several advantages, read the following:
1.) Pre-qualification lets you know how much you can actually afford on a home, which helps tremendously in focusing what could otherwise be an overwhelming house-hunting experience.
2.) Pre-qualification demonstrates to sellers that you are serious buyer who is ready, willing, and able to follow through on an offer.
3.) pre-qualification helps the whole mortgage application process to go through much faster, as a great deal of the information you need to provide is already in the lender’s possession.
Another advantage of pre-qualification is that pre-qualified borrowers can usually lock-in their interest rate, a huge benefit when you consider how much interest rates can rise between the time you start your search for a home, the time you complete your loan application process, and the time you close on the house. There may be a lock-in fee, but if it’s reasonable, it’s usually worth it. Locked-in rates are usually valid for 30-90 days, depending on the lender.
When trying to lock-in an interest rate, ask whether the lender has a "float down" feature. This allows you to lower your interest rate once, if prevailing rates go down during your lock-in period, preventing you from getting stuck with a higher interest rate than if you hadn’t locked it down at all.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Wednesday, June 10, 2009
Refinancing an Adjustable Rate Mortgage to a Fixed Rate
Refinancing your adjustable rate mortgage into a fixed rate mortgage is often a wise idea, especially in a climate like today's, when adjustable rates are skyrocketing daily, forcing homeowners nationwide into foreclosure.
There are definitely advantages to getting an adjustable rate mortgage to buy a home, and in fact sometimes it's the only way certain households are even able to get a home mortgage in the first place. But part and parcel of using an adjustable rate mortgage intelligently is planning to protect yourself from unwieldy interest rate hikes in the future. Most people who get an ARM to buy a home should be planning ahead to either refinance into a fixed rate mortgage or sell their home before this eventuality occurs.
There are actually several good reasons for making such a move, not only to get yourself a fixed (and hopefully better) interest rate on your loan. People also refinance ARMs to get cash out for home improvements and other big expenses, and to consolidate debt.
Whatever your reasons, if you're thinking of refinancing that ARM, you're probably thinking clearly, and doing yourself a big favor. But to be sure, read on…
To make sure the timing is right in your refinancing endeavor, be clear on the terms of your existing loan.
1 When and how often will it adjust
2 How much will it adjust
3 Is there a cap (a maximum rate beyond which it will get no higher no matter what the economic circumstances)
4 Is there a prepayment penalty for refinancing and if so, how much
5 You also want to consider how long you're planning to live in your home. If you're thinking of moving within a couple of years, for example, then the closing costs for a refi may not be worth the small savings you'll get in interest rate reduction. (Incidentally, one way to save yourself on these costs up front is to roll them in to your refi - in other words).
As with getting any mortgage, getting a refi involves the same preparation, including calculating the costs involved and knowing your credit before you apply.
The peace of mind that often comes from home ownership can easily be thwarted by fears of rising interest rates. To protect yourself, and reclaim the peace of mind that should be yours, and could be again, consider whether now may be the right time to try to refinance that adjustable rate mortgage into a fixed rate mortgage. A fixed rate is a rate you can rely on, and it may just help you sleep better at night in that home you own.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
There are definitely advantages to getting an adjustable rate mortgage to buy a home, and in fact sometimes it's the only way certain households are even able to get a home mortgage in the first place. But part and parcel of using an adjustable rate mortgage intelligently is planning to protect yourself from unwieldy interest rate hikes in the future. Most people who get an ARM to buy a home should be planning ahead to either refinance into a fixed rate mortgage or sell their home before this eventuality occurs.
There are actually several good reasons for making such a move, not only to get yourself a fixed (and hopefully better) interest rate on your loan. People also refinance ARMs to get cash out for home improvements and other big expenses, and to consolidate debt.
Whatever your reasons, if you're thinking of refinancing that ARM, you're probably thinking clearly, and doing yourself a big favor. But to be sure, read on…
To make sure the timing is right in your refinancing endeavor, be clear on the terms of your existing loan.
1 When and how often will it adjust
2 How much will it adjust
3 Is there a cap (a maximum rate beyond which it will get no higher no matter what the economic circumstances)
4 Is there a prepayment penalty for refinancing and if so, how much
5 You also want to consider how long you're planning to live in your home. If you're thinking of moving within a couple of years, for example, then the closing costs for a refi may not be worth the small savings you'll get in interest rate reduction. (Incidentally, one way to save yourself on these costs up front is to roll them in to your refi - in other words).
As with getting any mortgage, getting a refi involves the same preparation, including calculating the costs involved and knowing your credit before you apply.
The peace of mind that often comes from home ownership can easily be thwarted by fears of rising interest rates. To protect yourself, and reclaim the peace of mind that should be yours, and could be again, consider whether now may be the right time to try to refinance that adjustable rate mortgage into a fixed rate mortgage. A fixed rate is a rate you can rely on, and it may just help you sleep better at night in that home you own.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Tuesday, June 9, 2009
How Conventional Loans Work
How Conventional Loans Work
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
A conventional loan is essentially any type of lender agreement that is not fully protected by the FHA (the Federal Housing Administration) or fully backed by the Veterans Administration furthermore Potential homebuyers who have at least 3% of the purchase price available to make as a down payment, may be eligible for this most popular type of loan program.
Fixed Rate Loans: Several categories of conventional loans exist, the most common and familiar being the fixed rate mortgage. In the cases of fixed rate mortgages, the borrower will lock in an interest rate, and pay down both the principal and interest on the loan at that interest rate every month until the mortgage is paid off. The most typical term of a fixed rate loan is 30 years, though fixed rate mortgages can also be obtained for much shorter terms, the primary difference being in the size of the monthly mortgage payment.
Conforming Loans: Other conventional loans are known as conforming loans. In these cases, an arrangement is made between borrower and lender that comply with the stipulations of two federally run mortgage trading companies (or Government Sponsored Entities - GSEs) Fannie Mae (FNME) and or Freddie Mac (FHLMC).
Fannie Mae and Freddie Mac do not directly approve or deny loans. They buy and sell home mortgages, working with lenders to make home ownership easier for people to attain. Lenders like to sign up borrowers with conforming loan, because they can then sell these loans to Fannie May or Freddie Mac in order to more quickly receive the funds coming to them, and use those funds to make other investments. Fannie Mae and Freddie Mac, in turn, then repackage these loans to sell to investors as securities.
The current guidelines for a conventional Fannie Mae loan set a maximum purchase price for a single-family home at slightly above $415,000 (though residents of Alaska, Hawaii, or Guam may be able to qualify for an even larger loan).
The interest rate as well as the short- and long-term pricing on a conforming loan is determined primarily by the type of loan applied for. Also taken into consideration will be the amount of funds you already have to contribute to closing costs, your credit rating, credit score, and credit history, your employment history, and the type and location of the home in question.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
A conventional loan is essentially any type of lender agreement that is not fully protected by the FHA (the Federal Housing Administration) or fully backed by the Veterans Administration furthermore Potential homebuyers who have at least 3% of the purchase price available to make as a down payment, may be eligible for this most popular type of loan program.
Fixed Rate Loans: Several categories of conventional loans exist, the most common and familiar being the fixed rate mortgage. In the cases of fixed rate mortgages, the borrower will lock in an interest rate, and pay down both the principal and interest on the loan at that interest rate every month until the mortgage is paid off. The most typical term of a fixed rate loan is 30 years, though fixed rate mortgages can also be obtained for much shorter terms, the primary difference being in the size of the monthly mortgage payment.
Conforming Loans: Other conventional loans are known as conforming loans. In these cases, an arrangement is made between borrower and lender that comply with the stipulations of two federally run mortgage trading companies (or Government Sponsored Entities - GSEs) Fannie Mae (FNME) and or Freddie Mac (FHLMC).
Fannie Mae and Freddie Mac do not directly approve or deny loans. They buy and sell home mortgages, working with lenders to make home ownership easier for people to attain. Lenders like to sign up borrowers with conforming loan, because they can then sell these loans to Fannie May or Freddie Mac in order to more quickly receive the funds coming to them, and use those funds to make other investments. Fannie Mae and Freddie Mac, in turn, then repackage these loans to sell to investors as securities.
The current guidelines for a conventional Fannie Mae loan set a maximum purchase price for a single-family home at slightly above $415,000 (though residents of Alaska, Hawaii, or Guam may be able to qualify for an even larger loan).
The interest rate as well as the short- and long-term pricing on a conforming loan is determined primarily by the type of loan applied for. Also taken into consideration will be the amount of funds you already have to contribute to closing costs, your credit rating, credit score, and credit history, your employment history, and the type and location of the home in question.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Monday, June 8, 2009
How Much Mortgage Can I Afford?
How Much Mortgage Can I Afford?
by Somerset Mortgage Lenders
To establish how much mortgage you can realistically afford, you can use one of two main formulas - called “Qualifying Ratios”. Qualifying ratios examine a person’s income and expenses in order to estimate how much money can reasonably be spent on monthly mortgage payments.
Buying the Home: Down Payment and Closing Costs This is the first and most obvious factor most people consider in buying a home. How much of a down payment can I afford? And how much can I spend on closing costs?
The down payment is usually between 3% and 20% with most conventional loans preferring down payments within the 10-20% range. Low-to-moderate income households, however, can find programs enabling them to purchase homes with as little as 3-5% down.
Closing costs are fees for various items that must be handled through your lawyer in order for the deal to legally go through. These include: origination fees, title insurance, attorney fees, recording and transfer fees, and pre-pays.
Keeping the Home: Monthly Housing Expenses Taken into account when determining monthly housing expenses are, Mortgage principal, Mortgage interest; Taxes ; Insurance. This is commonly written as “PITI” for “Principal, Interest, Taxes, Insurance”
In the case of conventional loans, your monthly housing expenses should fall below 26-28% of your gross monthly income. For FHA mortgages, the qualifying ratio is 29%. If you carry any long term debt (that‘s expenses extending 11 months into the future or more), then the ratios change slightly. Conventional loans allow maximum monthly housing expenses and long-term debt combined of 33-36% of gross monthly income.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
by Somerset Mortgage Lenders
To establish how much mortgage you can realistically afford, you can use one of two main formulas - called “Qualifying Ratios”. Qualifying ratios examine a person’s income and expenses in order to estimate how much money can reasonably be spent on monthly mortgage payments.
Buying the Home: Down Payment and Closing Costs This is the first and most obvious factor most people consider in buying a home. How much of a down payment can I afford? And how much can I spend on closing costs?
The down payment is usually between 3% and 20% with most conventional loans preferring down payments within the 10-20% range. Low-to-moderate income households, however, can find programs enabling them to purchase homes with as little as 3-5% down.
Closing costs are fees for various items that must be handled through your lawyer in order for the deal to legally go through. These include: origination fees, title insurance, attorney fees, recording and transfer fees, and pre-pays.
Keeping the Home: Monthly Housing Expenses Taken into account when determining monthly housing expenses are, Mortgage principal, Mortgage interest; Taxes ; Insurance. This is commonly written as “PITI” for “Principal, Interest, Taxes, Insurance”
In the case of conventional loans, your monthly housing expenses should fall below 26-28% of your gross monthly income. For FHA mortgages, the qualifying ratio is 29%. If you carry any long term debt (that‘s expenses extending 11 months into the future or more), then the ratios change slightly. Conventional loans allow maximum monthly housing expenses and long-term debt combined of 33-36% of gross monthly income.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Friday, June 5, 2009
How to Apply for a Mortgage
How to Apply for a Mortgage
by Somerset Mortgage Lenders
Once you select a lender and a mortgage suitable to your needs and abilities, it’s time to officially apply for that mortgage. Submitting an application for a mortgage can seem intimidating at first, but it need not be difficult.
Before sitting down to fill out a mortgage application, be sure you have the following information handy:
1 Your income, past and present
2 A list of your assets
3 A tally of your regular expenses and existing financial obligations
4 An accounting of your employment history
Mortgage applicants will also need to provide the following records or documents:
1 The past two year’s W-2s
2 Pay stubs for the month leading up to submitting the application
3 Statements from all the applicant’s bank accounts - checking, savings, retirement, investments
4 Proof of current outstanding debts that show both the current balance and minimum monthly payment on each (i.e. credit cards, car loans, student loans, other home mortgages, child support, alimony, etc.)
If you are self-employed or you own a quarter share or more in a business, you will also be asked to provide copies of your federal income tax returns.
The preceding is not the only information a lender may require of you, but it is a partial listing of the information that any and all lenders will most assuredly require.
After you’ve submitted your application, the lender will order a property appraisal (paid for by you), and will have your credit checked. Oftentimes, a potential borrower might choose to have the property appraised independently before submitting an application, just to make sure that the property value merits the offer made. Potential borrowers may also check their own credit first before applying for a mortgage so that they may take the initiative to fix or correct any negative items remaining on their credit report before the potential lender takes a look at it.
The 3 major credit reporting agencies - Experian, Equifax, and TransUnion - Now allow all consumers to receive a free copy of each of their credit reports once per year.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
by Somerset Mortgage Lenders
Once you select a lender and a mortgage suitable to your needs and abilities, it’s time to officially apply for that mortgage. Submitting an application for a mortgage can seem intimidating at first, but it need not be difficult.
Before sitting down to fill out a mortgage application, be sure you have the following information handy:
1 Your income, past and present
2 A list of your assets
3 A tally of your regular expenses and existing financial obligations
4 An accounting of your employment history
Mortgage applicants will also need to provide the following records or documents:
1 The past two year’s W-2s
2 Pay stubs for the month leading up to submitting the application
3 Statements from all the applicant’s bank accounts - checking, savings, retirement, investments
4 Proof of current outstanding debts that show both the current balance and minimum monthly payment on each (i.e. credit cards, car loans, student loans, other home mortgages, child support, alimony, etc.)
If you are self-employed or you own a quarter share or more in a business, you will also be asked to provide copies of your federal income tax returns.
The preceding is not the only information a lender may require of you, but it is a partial listing of the information that any and all lenders will most assuredly require.
After you’ve submitted your application, the lender will order a property appraisal (paid for by you), and will have your credit checked. Oftentimes, a potential borrower might choose to have the property appraised independently before submitting an application, just to make sure that the property value merits the offer made. Potential borrowers may also check their own credit first before applying for a mortgage so that they may take the initiative to fix or correct any negative items remaining on their credit report before the potential lender takes a look at it.
The 3 major credit reporting agencies - Experian, Equifax, and TransUnion - Now allow all consumers to receive a free copy of each of their credit reports once per year.
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Thursday, June 4, 2009
Reasons to Refinance Now
SOMERSET MORTGAGE LENDERS
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
Reasons to Refinance Now
by Somerset Mortgage Lenders
To refinance is to pay off an existing mortgage with funds obtained from a new mortgage loan. There are numerous great reasons to refinance your mortgage, among them the following:
Lower Interest Rates: A prime time for many people to choose
Fix That Rate: If you currently have an adjustable rate mortgage, you may seriously want to consider refinancing to a fixed rate mortgage. Adjustable rate mortgages are far riskier to the borrow than fixed rate mortgages. The payments are unstable with a tendency to increase dramatically over time, making budgeting your monthly housing payments increasingly difficult.
Build Equity Faster: Buy refinancing to a loan with a shorter loan term, you pay off your loan faster and therefore build up equity in your home faster, equity that you can then use to make improvements to your home, pay for a big purchase or an emergency, or obtain additional credit. Borrowing against home equity through a refinance mortgage usually comes with a lower interest rate than other forms of credit, such as consumer loans and credit cards.
Own Your Home Free-and-Clear: It’s a phrase every homeowner covets, when they can finally be done paying off the money they borrowed to buy their home and own it outright. Refinancing is an excellent way to own your home free-and-clear sooner than you ever could have otherwise. One way to accomplish this is by reducing the loan term, or the amount of time you have to pay off the loan. A shorter loan term generally involves larger payments, but if you can afford to make them, it could be a wise and rewarding decision to refinance your current mortgage to one with a shorter loan term.
Get Cash in Hand: If you already have equity built up in your home, then you can refinance for a larger amount than you currently owe and take that additional amount out in cash. This is also known as a cash-out refinance.
Consolidate Debt: As home mortgages generally carry far lower interest rates than other forms of debt (ie. credit cards, car loans, or student loans), many people choose to refinance their home loans
get a free quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783
specializing in: debt consolidation, divorce buyouts, home improvement, mortgages, purchase, refinance, reverse mortgages, FHA loans & more
Reasons to Refinance Now
by Somerset Mortgage Lenders
To refinance is to pay off an existing mortgage with funds obtained from a new mortgage loan. There are numerous great reasons to refinance your mortgage, among them the following:
Lower Interest Rates: A prime time for many people to choose
Fix That Rate: If you currently have an adjustable rate mortgage, you may seriously want to consider refinancing to a fixed rate mortgage. Adjustable rate mortgages are far riskier to the borrow than fixed rate mortgages. The payments are unstable with a tendency to increase dramatically over time, making budgeting your monthly housing payments increasingly difficult.
Build Equity Faster: Buy refinancing to a loan with a shorter loan term, you pay off your loan faster and therefore build up equity in your home faster, equity that you can then use to make improvements to your home, pay for a big purchase or an emergency, or obtain additional credit. Borrowing against home equity through a refinance mortgage usually comes with a lower interest rate than other forms of credit, such as consumer loans and credit cards.
Own Your Home Free-and-Clear: It’s a phrase every homeowner covets, when they can finally be done paying off the money they borrowed to buy their home and own it outright. Refinancing is an excellent way to own your home free-and-clear sooner than you ever could have otherwise. One way to accomplish this is by reducing the loan term, or the amount of time you have to pay off the loan. A shorter loan term generally involves larger payments, but if you can afford to make them, it could be a wise and rewarding decision to refinance your current mortgage to one with a shorter loan term.
Get Cash in Hand: If you already have equity built up in your home, then you can refinance for a larger amount than you currently owe and take that additional amount out in cash. This is also known as a cash-out refinance.
Consolidate Debt: As home mortgages generally carry far lower interest rates than other forms of debt (ie. credit cards, car loans, or student loans), many people choose to refinance their home loans
get a free quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783
Monday, June 1, 2009
How Reverse Mortgages Work
Reverse mortgages were created in order to help ease the financial burden on aging seniors. A reverse mortgage is a type of financial instrument that permits home owners over the age of 62 to gain access to the money they have accumulated as home equity.
How a reverse mortgage works is that the lender makes payments to the borrower, rather than the other way around. The amount paid out is based on a percent of the equity remaining in the home (that’s the full property value minus the amount still owed).
Seniors can use money from a reverse mortgage to fund:
* retirement;
* medical costs;
* a new car;
* home repairs;
* renovations;
* estate planning;
* a grandchild’s education;
* travel and leisure;
In order to get a reverse mortgage your current mortgage does not need to be completely paid off. The amount you can receive in a reverse mortgage is based on the equity in your home. As a mandatory part of the reverse mortgage process, however, your existing mortgages will be paid off. Some people simply use a reverse mortgage to get out of having to pay monthly mortgage payments, the money they receive just being a bonus.
When you receive a reverse mortgage, your home remains in your name, and your retain total control of the property. It is also still your responsibility to maintain the house and property and pay all taxes and insurance as usual. No reverse mortgage lender can take your home away from you so long as you keep that home as your primary residence.
How a reverse mortgage works is that the lender makes payments to the borrower, rather than the other way around. The amount paid out is based on a percent of the equity remaining in the home (that’s the full property value minus the amount still owed).
Seniors can use money from a reverse mortgage to fund:
* retirement;
* medical costs;
* a new car;
* home repairs;
* renovations;
* estate planning;
* a grandchild’s education;
* travel and leisure;
In order to get a reverse mortgage your current mortgage does not need to be completely paid off. The amount you can receive in a reverse mortgage is based on the equity in your home. As a mandatory part of the reverse mortgage process, however, your existing mortgages will be paid off. Some people simply use a reverse mortgage to get out of having to pay monthly mortgage payments, the money they receive just being a bonus.
When you receive a reverse mortgage, your home remains in your name, and your retain total control of the property. It is also still your responsibility to maintain the house and property and pay all taxes and insurance as usual. No reverse mortgage lender can take your home away from you so long as you keep that home as your primary residence.
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