Fixed rates and adjustable rates are the most common types of mortgages. Over 90% of US mortgages are fixed rate loans. A second mortgage works the same as a first mortgage, allowing a borrower to take out a lump sum of money and then make monthly payments to pay it back. You can use the second mortgage to make repairs on your house, to consolidate your bills, or to help with the down payment on the first mortgage to avoid needing to pay PMI.
If you are thinking about buying a home in the near future, it’s a good idea to check your credit report and find out what your credit score is early on. You are entitled to a free credit report once a year from each of the three credit bureaus – Equifax, TransUnion, and Experian, which you can access at www.annualcreditreport.com. Check for mistakes on your credit report. A mistake on your credit report can cost you when trying to secure a home loan. Mistakes do happen, so review your credit report closely to ensure everything is correct and dispute any errors you might find with the appropriate credit bureau.
On the whole, the lowest interest rates are available to borrowers who have large deposits, or in the case of those remortgaging, significant equity in their property. Typically, you’ll need at a deposit of at least 40% to be eligible for one of the best rates. If you have only 10%, there are mortgages available but you’ll probably pay a higher rate.
You may have heard that you should put 20 percent down when you purchase a home. It’s true that having a large down payment makes it easier to get a mortgage and may even lower your interest rate. But many people have a hard time scraping together a down payment that large. Fortunately, there are many options for homebuyers with little money for a down payment. FHA loans offer down payments as low as 3.5 percent. VA and USDA loans may require no down payment at all.
In the beginning, you owe more interest, because your loan balance is still high. So most of your monthly payment goes to pay the interest, and a little bit goes to paying off the principal. Over time, as you pay down the principal, you owe less interest each month, because your loan balance is lower. So, more of your monthly payment goes to paying down the principal. Near the end of the loan, you owe much less interest, and most of your payment goes to pay off the last of the principal. This process is known as amortization.
Once you find a home you want to put an offer on, you have to obtain the actual mortgage loan. Apply for a loan with your chosen mortgage lender. Within three days of your application you should receive a loan estimate that includes closing costs, the interest rate, and the monthly amount you’ll pay for the principal, interest, insurance, and taxes. After that, it’s off to the underwriter, who will review all of your financial information and make the final call to approve or deny your loan.
The Federal Housing Authority gives mortgage assistance to anyone with a FHA loan. You can refinance your mortgage without going through a lot of difficult begging or bureaucratic red tape. They let you reduce your mortgage rates and skip a month's payment without a third-party appraisal. In order to qualify for this, you need to a) not have any late payments on your current loan, b) have a decent credit score and c) wait a minimum of six months between streamlining processes. Refinancing doesn't always reduce your rates - it just lowers them to the current rates. Always make sure you're getting a good deal before deciding to streamline or refinance.
Coming up with a down payment can be the one of the biggest obstacle when buying a home, especially for first-time home buyers. No matter what type of loan you choose, you will likely have to put some amount of money down. Saving up for a down payment can seem like a daunting task, but with the right planning and budgeting you can reach your savings goals faster than you think. Click here for strategies that can help you save for a down payment.
Unemployment Mortgage Assistance benefit payments are usually sent to the servicer on the last Friday of each month. Homeowners may request a copy of their Unemployment Mortgage Assistance Disbursement Schedule. Send a request to firstname.lastname@example.org. Be sure to provide your email address, first/last name, Homeowner ID number, and specify that you are requesting a copy of your Unemployment Mortgage Assistance Disbursement Schedule.
Eric Bank is a senior business and real estate writer, freelancing since 2002. He has written thousands of articles about business, insurance, real estate, investing and taxes, Eric writes articles, blogs and SEO-friendly website content for dozens of clients worldwide, including get.com and valuepenguin.com. Eric holds two Master's Degrees -- in Business Administration and in Finance. His website is ericbank.com.
At the end of the day, your mortgage loan is the single biggest financial decision you’re likely to make in your life. It’s important to take time to get it right, and that ultimately comes down to finding a lender who can do three things: offer competitive rates, offer great service and quickly process your loan. By keeping these areas in mind, you’re not only going to win as you go to buy your house — you're going to also save money and time.
All mortgages are not created equal. Even if loans have the same interest rate, there could be differences in the points and fees that make one offer more expensive than another. It’s important to understand all of the components that go into determining the price of your mortgage, so you can accurately compare the offers being made. You can click here for a good explanation of the components of mortgage pricing.
Your real estate agent is a vital and important partner in finding and buying your next home, but it’s important that you choose your lender rather than blindly going with who your agent recommends. The reality is sometimes there is a financial tie between your real estate company and the lender it refers. In this case, as always, it’s important to closely compare rates with other lenders. Family and friends who have recently purchased a home, as well as trusted professionals who work with lenders can help steer you in the right direction. If you find a lender that wasn’t referred by your agent, ask your agent to do a quick phone interview with the lender to be sure you’re not missing anything.
Unlike traditional mortgage loans, this does not have a set monthly payment with a term attached to it. It is more like a credit card than a traditional mortgage because it is revolving debt where you will need to make a minimum monthly payment. You can also pay down the loan and then draw out the money again to pay bills or to work on another project. Your home is at risk if you default on the loan. Many people prefer this loan because of the flexibility. You only have to take out as much as you need, which can save you money in interest.
Wells Fargo Loan Modification Program - They offer two main plans for homeowners. They include ProjectLifeline, which delays the foreclosure process, and also the Fast-Trac solution for adjustable rate mortgages. These two programs from Wells Fargo have helped thousands of homeowners. Benefits have included more time to pay your loan, and more affordable interest rates. More details on the Wells Fargo Lifeline.