Refinancing a mortgage loan to get a lower rate has become a sport. Many people think that there is no reason not to refinance and then refinance again. All this activity based is on the concept that the transaction cost to lower the interest rate was zero, zip, nada. Where borrowers are correct is that it is easy to refinance a loan and not have to bring any money to the table. Where they are wrong is that the process is free.
Homeowners think there’s some magic to these bi-weekly payments that reduces the interest expense on their loan. The magic is in making the equivalent of 13 monthly mortgage payments per year. I don’t recommend that homeowners switch to a biweekly mortgage. It’s just not worth the bother or expense.
My advice to people who are trying to decide whether to pay off or pay down their mortgage from savings or investments is to consider what they’re earning on their investments after-tax and compare that to what they’re paying after-tax on their mortgage.
To refinance your existing mortgage seems to be an inalienable right. Do not listen to the “experts” that will tell you once the prevailing mortgage rate falls .50 – 1% below the rate on your current mortgage you should refinance. Running off to refinance your mortgage when headlines announce mortgage rates are falling is not the best of ideas.
The US population is aging, and as it does, older Americans want to age in their homes but need to access the equity for home improvement or other bills. Reverse mortgages were created as a way to convert a portion of an owners home equity into cash. While it is similar to a home equity loan, no monthly payment is required until the borrower no longer lives in the home as a primary residence or fails to meets the obligations of the mortgage (i.e. paying taxes). It’s important to know more about reverse mortgages in order to determine it is an option for you.
The FHA loan program is a government loan that was designed to increase home-ownership. Its guidelines allows for lower down payments than what is referred to as a conventional loan. It can be less expensive than other types of real estate mortgage home loan programs and have credit guidelines that include more people, however it does have strict mortgage amounts and documentation rules. This is a loan program that has specific rules and requirements. Its eligibility requirements are well documented; here are the basics of what is needed to know:
Death and taxes, right? With state and local municipalities in dire fiscal straits, higher property tax bills can be expected. Any change in a home’s assessment goes though a tax assessor’s office. This requires homeowners to document and request a reduction. Just calling in to yell that your bill is too high will not cause the tax assessor’s office to make a change to a bill. Here are some tips that will help you understand and perhaps lower your tax bill.
The real estate market is a fickle lady these days. Homeowners are continuing to take on home improvement projects to enhance their living space. If you hope to recoup all the dollars spent on home improvements, pick projects wisely. Prioritize projects that will add value to a home without adding to monthly costs and most of all determine how far to take a project. The National Association of Realtors (NAR) conducts an annual survey reports what home projects add the most value to a property. For instance the number one ranked project is upgraded siding which is reported to increase value by over 100% of what it cost to complete.
Second homes are often the place for furniture you no longer need and dishes from your first apartment. A second class citizen of sorts. The same theory applies when trying to get a loan on a second home. Statistically if a borrower comes under tight financial strains they will keep current on the primary residence leaving the second home to fall into default. All is not lost; there are two main financing techniques to acquire a second home. Before jumping into the second home market take a strong look at your what your long term goals are, this will be an important part of the picture. For instance if this second home will eventually be a primary residence using a mortgage instrument that has lower payments may suite the situation better knowing that the loan may be refinanced or paid off when the other residence is sold.
The residential home mortgage business is competitive. There are several types of lenders that can offer loans. They range from your local credit unions, to the online virtual bank, the large national bank and the local (and sometime virtual) mortgage broker. Take a minute to understand the role of a mortgage broker. Compare a mortgage broker with a credit union. The credit union that offers rates the credit union sets, a mortgage broker will arrange or broker a transaction between you and a lender. Brokers shop many different lenders to find the best one for you and will offer a range of product selections. They are not obligated to get the best deal for the borrowers. Always contact several banks and brokers to compare rates.
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