Using Downpayment Gifts for Your FHA Loan
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief article on using downpayment gifts for your FHA loan.
Unlike with most other conventional loans, the Federal Housing Authority (FHA) allows borrowers to pay some or all of their down payment with gift funds. No verification of the source of the down payment money is required. All that needs to be done is for the money to first be deposited into the borrower’s bank account or an escrow account before and until the loan is approved, and for proof of that deposit to be provided.
Greater than half of first-time homebuyers receive gift money from relatives in order to help them pay for their down payment. Besides relatives, other accepted sources of down payment gifts are friends, labor unions, faith-based organizations, and charity organizations. Another valid (and novel) source of down payment assistance is through the Bridal Registry program whereby newlywed couples can get gift money deposited into an account for them to use towards a down payment on an FHA loan.
In 2004, President George Bush announced intentions to convince Congress to eliminate the down payment requirement for FHA loans entirely, but so far nothing has come of that.
Recent attempts in the U.S. Congress to pass legislation that would make it extremely difficult for charitable organizations that provide down payment gift funds to claim tax exempt status, thereby disqualifying them from being able to provide a down payment gift fund for FHA loans at all has fortuitously failed.
Despite the attempted U.S. Department of Housing and Urban Development (HUD) rule to eliminate all down payment assistance programs, the U.S. District Court intervened to protect low-to-moderate income potential homebuyers. The result of this injunction is that organizations like the Home Down Payment Gift Foundation and the Genesis Foundation can still claim tax exempt status and still provide down payment gifts to would-be FHA mortgages, at least until there is some sort of final resolution on the matter.
It is likely that compassionate wisdom and common sense will prevail in this situation as it is plainly obvious that allowing homebuyers to cover the cost of their down payment with down payment gift funds is far preferable to burdening low-to-moderate income households with higher debt.
By paying their down payment with gift funds, homebuyers begin their home ownership experience from Day One with equity in their new home, that home equity being equal to the amount of their down payment (or at least the amount covered by down payment gifts). This also puts these households that much closer to the day they own their homes outright.
SOMERSET MORTGAGE LENDERS
Specializing in: purchases, debt consolidation, divorce buyouts, loans for home improvement, mortgages, refinancing existing loans, reverse mortgages, FHA loans & more
Get a free rate quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783 to speak to a LIVE Loan Officer.
Showing posts with label robb haufler. Show all posts
Showing posts with label robb haufler. Show all posts
Wednesday, July 8, 2009
Thursday, June 18, 2009
Somerset Makes Refinancing More Appealing with Their Popular MaxxCash Program
Somerset Makes Refinancing More Appealing with Their Popular MaxxCash Program
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com/
Somerset Mortgage Lenders continues to keep industry pundits in awe as they introduce their unique MaxxCash Program aimed at helping each and every homeowner take advantage of current low interest rates and the financial benefits of maximum cash out. For instance, if you’re planning to make long anticipated home improvements, getting the payments together for college tuition, or even contemplating a second home in Florida, this program is for you. Because of their broad knowledge in all areas, Somerset is offering this new program to those in need of cash that have not only worked diligently to improve their credit scores but also to those many homeowners who are feeling the devastating effect of escalating debt of all kinds. Under the MaxxCash Program, all are being offered up to 100% of a home’s value as an incentive to refinance while their home prices are still high and before they stabilize or drop any lower.
With increased penalty charges and the recent doubling of minimum payment requirements for credit cards, more and more conscientious homeowners are feeling the control of their finances rapidly slipping away. Their usually reliable home equity line of credit has also taken on a steadily rising rate and begun to dry up. Now every homeowner is in a frantic search for some sort of quick financial relief.
Somerset knows that by taking advantage of the current low mortgage refinancing rates through their MaxxCash Program, a homeowner would be capable of solving the problems of paying off high credit card balances and home equity credit lines simultaneously to begin once again with a clean slate, all this while preserving their credit standing. Somerset’s role as a direct lender, not a broker, is the perfect climate for this type of refinancing.
Get a free live quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak with a Loan Officer now.
by Somerset Mortgage Lenders: "The Brains, The Courage and The Heart to Make Your Dreams Come True"
http://www.somersetmortgagelenders.com/
Somerset Mortgage Lenders continues to keep industry pundits in awe as they introduce their unique MaxxCash Program aimed at helping each and every homeowner take advantage of current low interest rates and the financial benefits of maximum cash out. For instance, if you’re planning to make long anticipated home improvements, getting the payments together for college tuition, or even contemplating a second home in Florida, this program is for you. Because of their broad knowledge in all areas, Somerset is offering this new program to those in need of cash that have not only worked diligently to improve their credit scores but also to those many homeowners who are feeling the devastating effect of escalating debt of all kinds. Under the MaxxCash Program, all are being offered up to 100% of a home’s value as an incentive to refinance while their home prices are still high and before they stabilize or drop any lower.
With increased penalty charges and the recent doubling of minimum payment requirements for credit cards, more and more conscientious homeowners are feeling the control of their finances rapidly slipping away. Their usually reliable home equity line of credit has also taken on a steadily rising rate and begun to dry up. Now every homeowner is in a frantic search for some sort of quick financial relief.
Somerset knows that by taking advantage of the current low mortgage refinancing rates through their MaxxCash Program, a homeowner would be capable of solving the problems of paying off high credit card balances and home equity credit lines simultaneously to begin once again with a clean slate, all this while preserving their credit standing. Somerset’s role as a direct lender, not a broker, is the perfect climate for this type of refinancing.
Get a free live quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783 to speak with a Loan Officer now.
Wednesday, June 17, 2009
Benefits of Home Ownership
Benefits of Home Ownership
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 meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of the benefits of home ownership.
Home ownership has its benefits, a quite a lot of them, at that. The following are several of the key benefits of home ownership.
Investment Value: Statistics collected by such organizations as the Office of Federal Housing Enterprise Oversight has shown that real estate, though in moves cyclically up and down throughout the years, maintains a consistent trend of appreciating in value over the long run. Homeowners tend to consider their homes their primary investment and a hedge against annual inflation.
Tax Benefits: Tax rates encouraging home ownership make owning a home an excellent tax shelter.
Mortgage Interest Deduction: Take a look at any monthly mortgage statement and you’ll see that the largest portion of your monthly payment applies towards mortgage interest. Provided that the balance on your mortgage is less than the purchase price of your house that mortgage interest you pay is completely tax deductible. According to IRS Publication 530 property taxes on a first home (as well as a vacation home) are also completely deductible from your income taxes.
Capital Gains Exclusion: If you remain in your home for at least 2 out of the previous 5 years, you are eligible to exclude as much as $250,000 (for individuals) and $500,000 (for married couples) of your capital gains profits, without requiring you move up or purchase a replacement home, and without any age restrictions. Every 2 years you’re allowed to exclude these thresholds from your taxes, so you could conceivable sell your home every 24 months and pocket all the profits without being taxed on any of it (certain limitations apply).
Preferential Treatment: Upon the sale of your home, and so long as you’ve owned the home for at least a full year, if you make more than the permissible exclusion in profits, the amount is taken as a capital asset and is given preferential tax treatment.
Equity: Every month, a portion of your monthly mortgage payment is applied towards your loan’s principal balance, thereby reducing your loan obligation.
SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more
get a free live 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"
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of the benefits of home ownership.
Home ownership has its benefits, a quite a lot of them, at that. The following are several of the key benefits of home ownership.
Investment Value: Statistics collected by such organizations as the Office of Federal Housing Enterprise Oversight has shown that real estate, though in moves cyclically up and down throughout the years, maintains a consistent trend of appreciating in value over the long run. Homeowners tend to consider their homes their primary investment and a hedge against annual inflation.
Tax Benefits: Tax rates encouraging home ownership make owning a home an excellent tax shelter.
Mortgage Interest Deduction: Take a look at any monthly mortgage statement and you’ll see that the largest portion of your monthly payment applies towards mortgage interest. Provided that the balance on your mortgage is less than the purchase price of your house that mortgage interest you pay is completely tax deductible. According to IRS Publication 530 property taxes on a first home (as well as a vacation home) are also completely deductible from your income taxes.
Capital Gains Exclusion: If you remain in your home for at least 2 out of the previous 5 years, you are eligible to exclude as much as $250,000 (for individuals) and $500,000 (for married couples) of your capital gains profits, without requiring you move up or purchase a replacement home, and without any age restrictions. Every 2 years you’re allowed to exclude these thresholds from your taxes, so you could conceivable sell your home every 24 months and pocket all the profits without being taxed on any of it (certain limitations apply).
Preferential Treatment: Upon the sale of your home, and so long as you’ve owned the home for at least a full year, if you make more than the permissible exclusion in profits, the amount is taken as a capital asset and is given preferential tax treatment.
Equity: Every month, a portion of your monthly mortgage payment is applied towards your loan’s principal balance, thereby reducing your loan obligation.
SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more
get a free live quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
Tuesday, June 16, 2009
How Much Should I Put Down On My Mortgage?
How Much Should I Put Down On My Mortgage?
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 meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of how much you should expect to put down on your mortgage.
In an ideal scenario, you would buy your home with a 20% down payment, have closing costs that come to around 3-5% of your home’s purchase price, and have enough money remaining in your bank account to cover 2-3 months of housing expenses.
The peace-of-mind this gives lenders usually translates into a nicer deal for you. And as a bonus, you start out owning your home with a sizable amount of equity already in it.
Of course, it’s not all that easy to meet those qualifications, meaning that most home loan scenarios are somewhat less than ideal. First-time homebuyers, for example, may have great difficulty in coming up with that 20% down. That amounts to $40k down on a $150k mortgage or $70k down on $250k.
Fortunately, over the past several years, lenders have started showing an increasing willingness to finance the majority of home’s purchase price - in some cases as much as 97%. That amounts $4,500 down on a $150k mortgage or $7,500 on $250k.
This is because lenders are now able to sell loans with as much as 97% financing to the Federal National Mortgage Association (Fannie Mae) to be bundled as securities sold to investors on the secondary market, thereby taking the risk of making the loan off of themselves.
The allure of down payments as low as 3-5%, however, is deceptive and should be weighed against the “costs”, namely that you would start out owning your home with very little in home equity, and with less than 20% down, your mortgage insurance rates could run quite high.
Though mortgage insurance rates for fixed rate loans given to people with decent credit are generally standard across the board, if you have poor credit or are considering an adjustable rate loan, you may want to consider putting up more of a down payment or risk paying exorbitant insurance rates monthly.
Finally, we come to the popularly-sought “Zero-Down Loan“. City and state organizations have programs benefiting potential homebuyers with low-to-moderate incomes and those looking to buy in urban areas. These programs offer loans that are below-market rates with little-to-no down payment necessary.
The enticing proposition of 100% financing is available!
SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, 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"
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of how much you should expect to put down on your mortgage.
In an ideal scenario, you would buy your home with a 20% down payment, have closing costs that come to around 3-5% of your home’s purchase price, and have enough money remaining in your bank account to cover 2-3 months of housing expenses.
The peace-of-mind this gives lenders usually translates into a nicer deal for you. And as a bonus, you start out owning your home with a sizable amount of equity already in it.
Of course, it’s not all that easy to meet those qualifications, meaning that most home loan scenarios are somewhat less than ideal. First-time homebuyers, for example, may have great difficulty in coming up with that 20% down. That amounts to $40k down on a $150k mortgage or $70k down on $250k.
Fortunately, over the past several years, lenders have started showing an increasing willingness to finance the majority of home’s purchase price - in some cases as much as 97%. That amounts $4,500 down on a $150k mortgage or $7,500 on $250k.
This is because lenders are now able to sell loans with as much as 97% financing to the Federal National Mortgage Association (Fannie Mae) to be bundled as securities sold to investors on the secondary market, thereby taking the risk of making the loan off of themselves.
The allure of down payments as low as 3-5%, however, is deceptive and should be weighed against the “costs”, namely that you would start out owning your home with very little in home equity, and with less than 20% down, your mortgage insurance rates could run quite high.
Though mortgage insurance rates for fixed rate loans given to people with decent credit are generally standard across the board, if you have poor credit or are considering an adjustable rate loan, you may want to consider putting up more of a down payment or risk paying exorbitant insurance rates monthly.
Finally, we come to the popularly-sought “Zero-Down Loan“. City and state organizations have programs benefiting potential homebuyers with low-to-moderate incomes and those looking to buy in urban areas. These programs offer loans that are below-market rates with little-to-no down payment necessary.
The enticing proposition of 100% financing is available!
SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com or call 1-800-675-9783
Monday, June 15, 2009
Mortgage Financing Costs & Fees
Mortgage Financing Costs & Fees
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 meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of mortgage financing costs & fees.
The following is an overview of the fees and other costs associated with getting a home mortgage
Down payment: Your down payment is the money you pay out of pocket towards the total purchase price of your home. When borrowing money to buy a home, you can expect to pay a percentage of the purchase price with your own money, rather than the lender‘s. Different mortgages and loan packages require you make different down payments (i.e. 5% or 20%).
Monthly payment: The money you pay each month in mortgage payment can be applied to your loan in a number of ways. The payment is usually divided amongst loan principal (the remaining balance on the actual amount borrowed) and interest. However, a wise choice (and sometimes a loan requirement) would be to pay an additional amount each month to go into an escrow account to pay for taxes and insurance.
Mortgage insurance: In the case of mortgages for less than 20% of the purchase price of the home, a borrower is usually required to pay some sort of mortgage insurance. Insured home loans enable people to buy homes with smaller down payments than would otherwise be required. The cost of mortgage insurance varies greatly, generally depending on both the down payment amount and the type of loan chosen.
The Veterans Administration (VA) and the Federal Housing Administration (FHA) are two federal government institutions that insure different types of home loans. Borrowers can also turn to sundry private organizations to acquire mortgage insurance.
Closing costs: At the time of closing - when you officially, legally take title of the home - certain costs are due, many of which you will be responsible for paying. In general, you can plan to pay an extra 5% on top of your purchase price towards closing costs. Whenever you apply for a loan, the lender is required by law to provide you with an estimate of the closing costs associated with that loan. Items on that estimate may include, *Origination fees - the loans processing costs of processing your loan (such as: appraisal and property) *Title insurance - often an optional but highly recommended expense that insures you against problems with the title (i.e. property liens) undisclosed to you prior to the time of purchase.
SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, 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"
Somerset Mortgage Lenders and Gregg Marcus strive to keep the public educated with tips meant to make getting your loan as easy and painless as possible. To this end, they have put together this brief explanation of mortgage financing costs & fees.
The following is an overview of the fees and other costs associated with getting a home mortgage
Down payment: Your down payment is the money you pay out of pocket towards the total purchase price of your home. When borrowing money to buy a home, you can expect to pay a percentage of the purchase price with your own money, rather than the lender‘s. Different mortgages and loan packages require you make different down payments (i.e. 5% or 20%).
Monthly payment: The money you pay each month in mortgage payment can be applied to your loan in a number of ways. The payment is usually divided amongst loan principal (the remaining balance on the actual amount borrowed) and interest. However, a wise choice (and sometimes a loan requirement) would be to pay an additional amount each month to go into an escrow account to pay for taxes and insurance.
Mortgage insurance: In the case of mortgages for less than 20% of the purchase price of the home, a borrower is usually required to pay some sort of mortgage insurance. Insured home loans enable people to buy homes with smaller down payments than would otherwise be required. The cost of mortgage insurance varies greatly, generally depending on both the down payment amount and the type of loan chosen.
The Veterans Administration (VA) and the Federal Housing Administration (FHA) are two federal government institutions that insure different types of home loans. Borrowers can also turn to sundry private organizations to acquire mortgage insurance.
Closing costs: At the time of closing - when you officially, legally take title of the home - certain costs are due, many of which you will be responsible for paying. In general, you can plan to pay an extra 5% on top of your purchase price towards closing costs. Whenever you apply for a loan, the lender is required by law to provide you with an estimate of the closing costs associated with that loan. Items on that estimate may include, *Origination fees - the loans processing costs of processing your loan (such as: appraisal and property) *Title insurance - often an optional but highly recommended expense that insures you against problems with the title (i.e. property liens) undisclosed to you prior to the time of purchase.
SOMERSET MORTGAGE LENDERS
specializing in: purchases, debt consolidation, divorce buyouts, home improvement, mortgages, refinancing, reverse mortgages, FHA loans & more
get a free quote now at http://www.somersetmortgagelenders.com/ or call 1-800-675-9783
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
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