Mortgage Management With These 8 Best Tips

Mortgage Management With These 8 Best Tips

What do you know about effective mortgage management?

Mortgage interest rates are constantly going up. They can range from six to fifteen percent depending on how far in the loan term you are. When you can find yourself paying 30 to 40% more than your prime investment property, you should take a hard look at these tips. Interest rates are historically low currently and they should be taken advantage of, as rates will eventually go back up.

Best mortgage management tips

Get started with shopping for a mortgage

Don’t sit around hoping something will work out.

Start shopping for a mortgage. There are three things to remember when you are shopping for a new home.

First, it’s a good idea to get prequalified; second, you want to shop around; third, always get several quotes.

Take note of low interest rates

Another mortgage tip is to refinance when there is a low interest rate. Why?

When the interest rate drops, your monthly payment goes down. Check with your local bank and see if they offer a loan with a low interest rate reduction. If they do, you may be able to take advantage of this option.

Do you need perfect credit?

If your credit isn’t perfect, don’t worry. You can still apply for a loan through many of the same lenders that offer perfect credit. All you have to do is inquire or ask a mortgage broker.

Inquire about any type of fee that they are charging for their services. Some companies will throw in a free credit report when you apply.

Avoid late payments

There are also other tips to keep in mind. Remember to pay your bills on time. Late payments hurt your credit. Make sure you always pay before the due date. If you ever fall behind on a bill, contact the company immediately.mortgage management

Research your mortgage lender extensively

Another tip is to make sure you don’t go with the first mortgage lender that you contact. Take some time and compare loans from different lenders.

There are many online mortgage sites where you can do this. There is no better way to secure financing for your dream house than by doing it online. You can even save a great deal of money and stress by getting pre-qualified.

You need to know all of your choices and choose wisely. This is why it’s important to keep up with news. Keep reading what’s happening in the mortgage world. There is a lot of good information out there. And there are also some less than honest people selling bad mortgage advice.

Shop around for different options

Finally, don’t get locked into the mortgage you took out. Take a look at all your other options. Don’t be afraid to shop around.

If you don’t like the rate that a particular lender is offering, simply ask them to change the terms or refinance to another more user friendly lender. There are plenty of excellent deals out there if you know where to look.

In the end, remember to be practical. If you are going to buy a house, you aren’t just out to make a big profit. You want a good return on your investment, too. The tips given above will help you make that happen. Good luck!

I’m not trying to suggest that you go out and buy a house right away. It’s not a simple process. You need to be smart, considerate and responsible. Try to think long term, rather than short term.

Don’t be a desperate borrower

Be careful, though. Some mortgage companies use “loan sharking” tactics. These unscrupulous companies prey upon desperate borrowers who really don’t know any better.

It’s not a good idea to let any of these companies into your life. But you should be aware of them.

Stay informed about mortgage options

My last one is to stay informed. Keep up with the latest news about mortgage options, interest rates, and loan modifications. The internet is a great source of this information. There are many web sites that give out free tips.

Subscribe to newsletters that give out information about keeping up with the best mortgage advice available. These are just a few of the tips available.

In the end, you must act responsibly. Follow the best mortgage management tips that are out there. Don’t become another victim of a predatory lending practice. Use common sense and good judgment. Don’t let anyone talk you into anything you aren’t comfortable with. Good luck!

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Reduce Mortgage Payments Quickly With These 5 Easy Pointers

Reduce Mortgage Payments Quickly With These 5 Easy Pointers

Can you reduce mortgage payments?

In these hard economic times it can be difficult to find the money you need to get a home of your own. You may be asking yourself, “How can I reduce my mortgage quickly?”

Here are some tips that may help you to save thousands of dollars. First, talk with your current lender. Many times they have programs available that will help you reduce your mortgage quickly.

Can you really pay the monthly payments?

How can I reduce my mortgage quickly

Talk with your spouse and children about the possibility of selling your home if you cannot pay the monthly payments.

This will reduce the overall debt load considerably and allow you to easily re-establish credit in your name.

In addition, if you are having financial difficulties and meet certain criteria, you may wish to consider an FHA (Federal Housing Administration) or VA (Veterans Affairs) loan to help reduce the cost of your loan. These loans are backed by HUD and are specifically tailored to the needs of the veteran personnel, the elderly, and disabled.

If you own your home, then there is no reason why you should not try to sell it. In many cases you will be able to get more than you want if you put up a short sale for a price that is less than the mortgage balance.

It is not uncommon to get as much as seventy percent of the mortgage back just by selling the property. You will need to plan carefully when you are trying to determine the timing of the sale.

It is best to do this as soon as possible.

Think of mortgage refinancing

Another option to reduce mortgage payments is to consider mortgage refinancing. Many lenders now offer special deals that can help you get lower monthly payments and interest rates.

It is also possible to bundle your loans, which will ensure that you get a reduced rate on your home equity loan, regardless of which loan you choose. If you have collateral such as your car or home, you can use the equity in that asset to get a better deal.

Debt consolidation into a low-interest loan

If you are trying to get a loan to consolidate all your debt, then you can refinance a high-interest credit card into a

compare your mortgages

low-interest card.

You can also bundle all of your debts into a single low-interest loan. All of these options should be explored before you settle on a specific solution.

As you start to think about to reduce your mortgage quickly, you may need to ask yourself if you need to downsize. If you are nearing retirement age, then it may be time to think about selling your home.

Many older people with adjustable rate mortgages are finding that they are paying way too much money. By consolidating your debt into a low-interest loan, you can save money each month and avoid paying outrageous interest costs.

Choose the right lender

You can also save money by choosing the right lender. With a variable rate loan, you will want to take the lowest possible monthly payment amount and spread it across the length of the loan.

If you choose an adjustable rate mortgage, you can calculate your payments using the loan calculator that comes with the lender’s website. This calculator can help you determine the lowest monthly payment you can make based on reduce mortgage paymentsyour current financial situation.

Choose this option if you are comfortable making the calculated monthly payments.

Debt settlement

When you are thinking about how to reduce mortgage payments quickly, you have several different options to consider. You can consolidate debt, lower your monthly payment, sell your home, and take a lower interest rate.

There is one more option that is fast becoming popular among those who are having trouble making their mortgage payments.

It is called debt settlement and thousands of homeowners are using it to eliminate their mortgage. To learn more about debt settlement and how you can reduce your mortgage payments, register for a free mortgage guidebook using the links below.

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Mortgage Broker 101: How They Get The Best Deals For Your Mortgage

Mortgage Broker 101: How They Get The Best Deals For Your Mortgage

What is a mortgage broker?

At best, they are someone who actively helps people get the best loan deals available in the market. These deals include low interest loans as well as debt consolidation. The mortgage market is very competitive, so a good mortgage broker can help you find the deals that give the most benefits for you.

what is a mortgage broker

 

 

 

 

 

 

 

 

 

 

The difference between mortgage brokers and traditional lending institutions

The former is much more experienced and knowledgeable than a typical lender. Not only do they underwrite and secure loans, but they are also responsible for the settlement process. This includes loan origination and loan settlement.

Essentially, they make money when a mortgage loan application is approved and the settlement is completed successfully. For this reason, they are willing to go above and beyond the call of duty to ensure that people get the most benefits possible.

However, these brokers do not have access to the entire lending community. Lending institutions rely heavily on referrals from other institutions like themselves, and while brokers may be able to get you a better deal from smaller lenders, they cannot guarantee anything.

They are also independent contractors. When you sign an agreement with them to obtain a loan, you are hiring them for specific services.

This means that they are responsible for finding the best loans for you and for providing any necessary background information and underwriting information to a lender. Their role is completely distinct from that of a loan officer.

In breaking down their differences further, take a look at these additional readings from Savings.com.au and YourMortgage.

The broker and borrower relationship

Being a mortgage broker also means that their services are not legal or regulated by any agency. Brokers do not have authority over laws that protect homeowners or consumers from predatory lending practices. They do not have the power to negotiate better terms on loans.

When a borrower chooses to work with a broker directly, said broker is responsible for collecting the complete set of loan offers from several lenders, evaluating each for their attractiveness and suitability to the needs of the borrower. The loan offer is then presented to the borrower.

Having a broker is often taken as an unfair advantage by borrowers. This is because, like an insurance salesman, they have to convince borrowers of the benefits of a particular mortgage product in order to get a commission. Without this compelling reason, the commission is based solely on the mortgage lender’s perceived benefit at the time of the sale.

If you want to know more about your power as a borrower, read our posts about comparing mortgages and your borrowing capacity.

Discover also how to calculate them.

More benefits for the borrower’s mortgage

In most cases, borrowers will be offered a better interest rate and a larger principal balance reduction if they choose the mortgage broker. This means a loss for the latter and possibly another financial transaction for the former.

A broker is best avoided because it presents a conflict of interest. Instead of working with a mortgage company directly, a broker’s job is to obtain the best loan offers for the borrower’s mortgage.

Their success is dependent on gaining business from the mortgage company. They may attempt to persuade potential borrowers to choose a high interest rate mortgage or a low interest rate mortgage by offering them a discount rate or waived processing fees. They will use these same incentives to secure financing from another source.

When there are several lenders to choose from, the broker’s goal is to secure one loan at a low rate and one that is more favorable to them financially. When there are multiple lenders, the broker can secure several loans at lower rates by putting together a package that attracts interest from several lenders.

This package may be attractive to several lenders who will compete for the business of the homeowner. In short, a mortgage broker is well placed to secure multiple loans for the borrower at lower costs than the lender would charge.

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Self-Employed Mortgages: 4 Requirements For An Approved Mortgage Application

Self-Employed Mortgages: 4 Requirements For An Approved Mortgage Application

If you are one of the more than 3 million freelancers, you will already know how difficult it could be to get financing. However, preparing all the necessary documentation and giving the bank a good impression are two tricks that will help you sign the mortgage you are looking for. Here you will find useful information to buy a home.

What are the requirements for a self-employed mortgage?

Before requesting financing to buy a home, it is advisable to check that we comply with the requirements that banks fall in love with. In the case of the self-employed, entities could be somewhat more demanding than with clients who work for others, so it will be even more important for them to review the following aspects:

A stable income ratio.

Banks will see less risk of non-payment in an entrepreneur who achieves a recurring and constant turnover throughout the year than in a freelancer with seasonal income.

The age of the business also matters

That the company works at this time will not be the only requirement that the bank will review, but it will assess its path as well as the solidity of the business and the sector in which it is framed.

A savings of at least 30% of the price of the house.

In general, banks do not finance more than 80%, and purchase and sale expenses are usually around 10% of the price of the house.

The less debt, the better.

The third point that the bank’s risk department will review with a magnifying glass will be what level of indebtedness we have. Therefore, the chances of signing the mortgage will be greater if we have few current loans and their

Businesswoman with house model and keys

installments do not exceed 35% of our income (adding the installment of the future mortgage).

A good credit history

Finally, being up to date with payments to clients, suppliers and lenders, and having a good credit score will be another of the conditions that we must meet if we want to get financing to buy a house.

If we do not meet any of the above conditions, it could be more difficult to find an entity that will approve the mortgage for us. However, as each bank has its own risk policy, it never hurts to explore our possibilities before giving everything up for the loss.

Tip: Applying for the mortgage with another owner who is not self-employed could make things easier for us. In any other case, it will be essential to have a stable income, have sufficient savings and demonstrate the viability of our business.

How to get a mortgage loan if I am self-employed?

Like any other client, if we are self-employed, we must follow the usual steps to apply for a home loan:

  1. Make sure that we meet the requirements to sign a loan.
  2. Compare the financing conditions of various banks.
  3. Get in touch with various entities and negotiate the conditions of the mortgage.
  4. Deliver the required documentation, appraise the home and process the petition.
  5. Review, line by line, the personalized offer that the bank gives us.
  6. Prepare a provision of funds to cover the expenses of the operation.
  7. Go to the signing of the mortgage before a notary.

What documents does a freelancer for a mortgage application?

They say what counts is the first impression. Therefore, a piece of good advice to sign the loan we need would be to go to the bank convinced that we have a good profile and with the documentation ready to tell our story.

Specifically, most banks will ask us for the following information:

  1. An informative dossier about our activity or our company. The entity will appreciate that we present our curriculum and that we summarize what our day-to-day activities at the company consist of. Nor would it be amiss to comment on what relationship we have with our clients, what is the past and recent history of the business and what projects we have in mind for the coming years.
  2. Tax information. The bank will want to check how the company works beyond words, so we will need the last income tax return.
  3. The accounting summary of the company. Although it might not be necessary, we could rescue the latest quarterly models of VAT and personal income tax, as well as the annual summary. The more information, the better.
  4. Updated Working Life. With this document, the entity’s risk department will be able to verify our professional career and the age of our business.
  5. The most recent receipts for the rest of the outstanding loans. Another common check is the payment of debts. The bank will want to know if we are up to date with our financial obligations.

In addition, we could collect the latest movements of our personal checking account and of the company account to demonstrate that our financial solvency would allow us to face the payment of the monthly payments without a problem.

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Compare Your Mortgages With These 5 Important Considerations

Compare Your Mortgages With These 5 Important Considerations

Compare Your Mortgages How?

A person can buy a property right away using a specialized kind of loan named mortgage. This bank loan is usually provided by banks and building societies. Since there are a lot of mortgages available, you should only make a sound decision just after evaluating his or her options.

It would probably be attainable to take credit in some other way to fund the purchasing of a property, but mortgages are the easiest way to do so, and have become the recognized standard way.

When one wants to get a property, taking out a mortgage comes to his mind. At times, a person may find understanding the several offers confusing and difficult. With that in mind, it is vital to be mindful and compare your mortgages.

Getting a 100% mortgage is quite possible. Having this mortgage, there is no need to give an agreed down payment amount of money just to acquire all the needed bucks. This kind of mortgage might appear eye-catching because of such concept, but it’s likely that it will come with higher fees and interest rates.

Mortgage Interest Rate And Repayment

The mortgage rate of interest is probably the major factor to consider when you compare mortgage loans. The amount derived from the interest rate is another amount you will have to pay off apart from what you have borrowed.

You will have two major selections, namely a principal and interest repayment mortgage and interest only repayment mortgage. In other words, you can choose among paying only the interest on the loaned amount, or paying the interest and also a portion of the capital.

Of course, with an interest only mortgage you will still need to pay the capital at some time; you don’t get away with it altogether! When you compare mortgages, you should look at the mortgage rate of interest as the primary factor. Interest only mortgages allows you to pay the principal balance and also the interest in distinct time frames.

The Many Kinds Of Mortgages

There are many mortgage kinds to contemplate.

There are first time client mortgages, self certification mortgages, buy to let mortgages, capped mortgages, discount mortgages, fixed rate mortgages, and many more.

Some of these are self-explanatory, but others may be puzzling for anyone who is not too familiar with the field of mortgage loans.

The first time buyer mortgage is certainly aimed at the 1st time buyer. Rather than make it more difficult for everyone in this position, several lenders make it easier to apply for and get them .

A mortgage is probably the biggest sum of money you’ll ever borrow. For this reason it’s imperative that you compare mortgage loans very carefully in order to discover which one is right for you and your demands, as well as your payment ability.

Major things to consider

It is very important to check your choices for home loan just before picking a choice considering that home loans are very abundant in the marketplace. For these reasons you should thoroughly do a comparison of mortgage loans.

The mortgage rate of interest being offered is without doubt the number 1 feature to think about when you compare and contrast mortgages. There are plenty of mortgage loan kinds available these days such as first time home buyer mortgages, low doc mortgages, rent to buy mortgages, discount mortgages, basic rate mortgages, honeymoon mortgages, fixed rate mortgages, and even more.

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Calculate Your Borrowing Capacity In 3 Easy Steps

Calculate Your Borrowing Capacity In 3 Easy Steps

Do You Know How To Calculate Your Borrowing Capacity?

Are you wondering how much can you borrow for a mortgage? If so, then before going through the whole process of going to a Loan Officer, having your credit pulled and having to wait forever to find out how much you can borrow, try using these 3 easy steps instead.

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Step 1
Total Your Monthly Expenses Or Payments

The first thing we need to do to calculate your borrowing capacity is to come up with a Total of your Monthly Obligations. But, you only need to add up things that show up on your Credit Report such as Bank Loans (student, auto, business or personal), Credit Cards (but we only need to use the Minimum Payment for the Monthly Expense) and any other “Revolving” debts you may be paying monthly.

Now you will “not” include payments such as insurance payments (even for House Insurance), mobile phones, utilities (cable, gas, electric, etc.) or anything else that can be cancelled without future obligation.

Also, you will need to calculate your “Proposed Mortgage/Loan Payment” and add that into the Total of Monthly Payments/Expenses.

Quick Note: If you are “Refinancing” then you will not include your “current” mortgage payment because it will be included with the refinance that you are applying for now!

                               

Step 2
Calculating Your Monthly Income

Next we need to figure out what your Monthly Income you have and anyone else that will be an applicant on the Mortgage/Loan with you

Here are some guidelines…

  1. Overtime- income generated by working overtime can only be applied to your monthly income if and only if, you have worked overtime on a regular basis for a minimum of 6 months and with some lenders 2 years. There are exceptions in instances where the overtime is mandatory, like police, nurses, bus drivers, construction workers etc.
  2. Rental Income- to use “Rental Income” when calculating your Monthly Income, then you must have a “Lease” which is signed to show that you will be receiving rent for a “guaranteed” amount of time. If you do not have a lease then you can show a licensed real estate agents rental statement or “bank statements” clearly showing monthly deposits every month.

Now that we have your “Total Monthly Expenses & Income” we can move on to the 3rd and final step…

Step 3

Calculating Your DTI (Debt To Income Ratio)

The “DTI” is what the banks use to see if you qualify for a Mortgage/Loan. It is the percentage that your total monthly expenses will be of your Total Monthly Income.

We calculate this by…

Taking your “Monthly Debt” and dividing it by your “Monthly Income”.

E.G. A family with $4,000/month in expenses and $10,000 in Monthly Income would have a DTI of .40 (which is a 40% DTI).

Depending on the “Loan Program” you are applying for, the DTI will differ from program to program. But a Safe Bet would be a 38% DTI. Now this, in the past few years, was as high as 50 or even 60 (which is one of the reasons for the recent “economic crisis”).

However, if you are a First Time Home Buyer with a good deposit and you apply for a Mortgage then I have seen DTI’s as high as 48% getting approved a great deal of the time if the Credit and other factors are good overall.

That’s it, now there is no need to wonder…How Much Can I Borrow because now you are equipped with the knowledge and understanding to find out how much you can borrow for yourself.

If you want to take the guesswork completely out of the equation check in with a professional mortgage broker who has great software tools that cover most lenders borrow capacities.

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Do You Know Your Borrowing Capacity? 4 Critical Factors In Your Mortgage

Do You Know Your Borrowing Capacity? 4 Critical Factors In Your Mortgage

1How You Can Know Your Borrowing Capacity

Are you thinking about taking out a mortgage or refinancing your current mortgage?

Are you curious to know the answer to, how much can I borrow in a mortgage?

There are a few factors that go into figuring out how much you will be able to take out and here is the breakdown of what you are looking for.

Are You A First Time Home Buyer?

One important factor lenders look at with first time home buyers is how much deposit they have. The more cash a buyer puts into the deal can reflect on how much the lender is willing to give. If the loan valve can be kept to 80% or less of the property purchase price this will in most instances help the borrower to increase their borrowing capacity

Are You Looking To Refinance For Cash Out?

Know your borrowing capacity by paying attention to the second factor: estimating how much your home is worth. This will determine how much equity you have and will give you an idea of what the maximum is that is available for you to borrow. For example, if your home appraises for $600,000 and you still owe $425,000 on your home, then most lenders will allow you to borrow up to 90% of the value. This would give you approximately another $115,000

Have You Checked Your Credit Rating Lately?

The second factor is your credit rating. This will determine which category you fall under and if you have a low credit score you will not be able to borrow as much as if you have a high credit score. It works on a percentage system and the better your credit the closer to 100% of your home’s value you will be.

How Is Your Debt To Income Ratio?

The last factor that mortgage companies consider is your debt to income ratio. This is the amount of gross income you make compared to your monthly payments for your mortgage, cars, credit cards, and other things that show up on your credit report. This will not include utility payments.

The maximum debt to income ratio for most companies is 55% and the lower your debt to income ratio the more you will be able to borrow.

It is a pretty simple formula that weighs the risk of lending you money against the rewards. The worse your credit and debt to income ratio is, the less they will be willing to lend to you and the higher your rate could be.

If you’re trying to maximise your borrowing capacity and get the best deal at the same time, check with a professional mortgage broker. Their services are free and they have software tools that take all of the hard work out of the process.

Related:

Compare Your Mortgages With These 5 Important Considerations

Calculate Your Borrowing Capacity In 3 Easy Steps

Your Borrowing Power: 4 Vital Considerations To Get Your Mortgage Approved

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