Mortgage

DON’T TAKE ADVANTAGE OF REFINANCE MORTGAGE

A refinance mortgage is a financial tool that can be a solution to many a problems. Need to finance a college education or redecorate the house? Your new mortgage will get the cash you need.

While it’s a great boon, it does have some shortcomings.

1. Mortgage rate hike can change your saving
If you plan to take a refinance mortgage to pay for your child’s college education and current rates are low. If in the future, high interest rates make borrowing very expensive, the ‘cheap loan’ would be very expensive, making it difficult to meet your monthly payments.

2. Bubble burst
If you purchased a home at a high, markets may have cooled. Taking a refinance, you find that your home doesn’t appraise as highly as it once did. So, there will be no available equity to borrow against, and you will be short on funds. If you’re planning some significant future expenses, increase your savings while you’re building equity

MORE MORTGAGE TERMS FOR COMMON USE (Part 2)

Taking a mortgage requires good understanding, a lot of detailing, calculations .So sound like a pro, when you talk business with the lenders. Some of the other terms are:
• Loan-to-value (LTV) ratio:
The difference in the ratio of your loan amount to value that has been appraised of your home. It is generally given as a percentage and a high LTV can lead to private mortgage insurance.
• Point:
A point on a mortgage is 1 percent of the total loan value.
• Term:
This is the length of time that you require to repay the mortgage loan. Generally expressed in years, the general term for most mortgages is 15 to 30 years.
• Third party fees:
These are charged by appraisers and financial companies, these are fees that your lender uses to assess the quality of your loan.
These are just a few of the mortgage terms in general use for your use. Read up on the details for better understanding.

KNOW THE TERMS OF REFINANCING MORTGAGE (Part 1)

It would be in your best interest, if you’re looking for a mortgage refinance, to understand the terminology. Learn a few basic terms, and you’ll be headed in the right direction.

·         Adjustable-rate mortgage:

This is a loan with an interest rate which changes periodically. The mortgage rate is pegged to a specific economic indicator such as the prime interest rate or treasury bills, so terms can vary greatly.

·         APR:

The Annual Percentage Rate (APR) is intended to include all of a lender’s closing costs,         giving a true yearly interest rate but are often calculated in different ways.

·         Fixed-rate mortgage:

When the rate is set at the time of closing in a loan and is same throughout the         mortgage term.

·         Good Faith Estimate:

Lenders are required by law to give a Good Faith Estimate, in which details of all        the costs that the borrower will be charged to close the loan.

WHY DO PEOPLE NEED A REFINANCE MORTGAGE?

Saving money is top priority in everyone’s life. If the interest rate on the present mortgage is at least 1% higher than the prevailing rate, it is a better idea to refinance and save some money on your monthly payment. Your new mortgage will still be for the same amount as your original mortgage. But you save on the lower interest rate.

When you refinance, you have to take into account all the closing costs and fees that a bank or mortgage lender will charge. There are a few other factors to think about when refinancing a home. If you don’t plan to stay in your home for too long, the savings will not really be any savings due to the refinancing cost.

Refinance Mortgage

Understanding Refinance Mortgage

A refinance mortgage means a person is paying monthly installments on the original loan and getting a new loan at a much lower interest rate. People are trying to take advantage of low interest rates to refinance their homes. It still works out that the person will have to pay the same closing cost and fees unless he/she is able to work out a deal with the bank or lender.

Refinancing is taking a new mortgage/loan to make the full payment of an unpaid mortgage loan. It does not mean to change your current mortgage. People get confused and think that by refinancing, the number of years left on their current mortgage will remain the same. However this does not apply always.