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3 Tips to Consider when Shopping for a Second Mortgage

3 Tips to Consider when Shopping for a Second Mortgage Whether you’re considering a second mortgage to consolidate your debt or complete some home renovations, there can be a lot that goes into making this financial decision. Because a second mortgage is a loan that goes against the equity you currently have on your property, this can be a risk to the ownership of your home. If this is an option you’re seriously considering, here are some basics to know before deciding to on this route.

Be Prepared For Higher Rates

You may be use to the steadiness and consistency of the fixed rate on your first mortgage, but the rates associated with a second mortgage will likely be higher. Because, in the event of default, the first loan on a mortgage will be paid first, lenders for a second mortgage will charge higher rates and fees to validate the elevated risk they’re taking on. While there are lenders that can offer competitive rates, you’ll need to do your research to find one that works for you.

Private Lenders May Offer More Solutions

If you cannot go through your initial mortgage lender in order to secure a second mortgage, you may want to consider a private lending professional who may be able to provide a better solution for you. Because private lenders are not working within the constraints of a larger institution, their guidelines for documentation and qualification may be a little less stringent. While they may have their own set of guidelines for providing a second mortgage, it can be a better way to go.

Is A Second Mortgage Necessary?

In order to obtain a second mortgage, it’s important to be aware that you should have enough equity in your home to make the loan worthwhile. Because you will only be able to refinance 80% of your home’s value, it may not be worth the higher rates you’ll be paying if you’ve only been paying into your home for a short time. Before deciding if a second mortgage is right for you, make sure you consult with a professional to determine the best choice for you.

There are a number of reasons that home buyers consider a second mortgage, from making large-scale home renovations to getting rid of overriding debt, but it’s important to consider if this option will work for you before moving forward. If you’re thinking about a second mortgage, contact your local mortgage professional for more information.

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3 Mortgage Mistakes That Could Be Costing You Money

3 Mortgage Mistakes That Could Be Costing You Money Purchasing a home can be one of the most exciting and stabilizing investments of your life, but because of the expense, there are many ways you may be spending more money than you should. If you’re wondering about the financial soundness of your home investment, here are some things to consider before putting anything down.

Investing In Too Much Home

Many homebuyers are so gung-ho about having their own home that they forget a mortgage takes many years to pay off and there’s a lot of living to do in the interim. While you may be looking at the monthly cost of your mortgage as something to get through, it’s more important to find a home that will provide you with a more flexible lifestyle. Instead of spending half your income on your home, it’s better to choose a more affordable option that won’t lead to buyer’s remorse.

Putting Less Than 20% Down

One of the greatest struggles for those who want to make the leap into home ownership is the down payment, and many buyers will put down a lot less than 20%. While this might seem like a better deal in the short term, putting 5 or 10% down means you’ll have to pay for mortgage insurance in case you default on your payments. It can be hard to come up with 20% for many buyers, but putting this amount down means you don’t have to pay for added insurance.

Not Asking The Right Questions

A house is likely your most valuable asset, so it’s a good idea to know as much as possible about your mortgage before you rush toward closing day. Starting with asking which mortgage option is best for you. Your mortgage lender will be able to answer this question once you’ve completed an application and the lender takes stock of your employment, income, assets, credit, debt, expenses, down payment and other information about your finances. Research the major questions you should ask your mortgage lender before signing up for a loan.

It can be overwhelming to buy a home with all of the information and energy that goes into finding the right place and the right price. However, by being realistic about what you can afford and searching for the best loan for you, you’re well on your way to a sound purchase. If you’re currently on the market for a mortgage, contact your trusted mortgage specialists for more information.

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3 Things Your Mortgage Broker Wishes You Knew

4 Things Your Mortgage Broker Wishes You Knew As the mortgage market has become more competitive, it has become a more common choice for many people to choose a mortgage broker to assist them with the lending process. While it’s great to have someone to help you with the fine details, there are some important differences between what a mortgage broker does and what you might think they do, so here are some things to be aware of.

They Can’t Approve Your Mortgage

Many people think that having a mortgage broker is a surefire way to obtain a home loan, but because brokers are a separate entity from the bank, they do not have the authority to approve your application. Instead, a good broker will be able to give you information about the best loans for you and ensure all the guidelines for the application are met.

The Rules Of Down Payments

According to founder of Arcus Lending, Shashank Shekhar, “You can’t borrow a down payment it’s just not allowed.” Many people may not know this, but a down payment needs to be money that you’ve come up with on your own. If much of your down payment money was gifted to you, it’s important to let your broker know so this can be documented in your paperwork.

Financial Changes Can Impact Your Application

When you’re going through the process of getting a mortgage, it can be easy to forget to consult with your broker or let them know of any changes, but it’s very important to keep them in the loop so your approval isn’t impacted. A large expenditure or change in your finances can cause issues with your mortgage, so ensure that before you do anything big you contact your broker to determine how to proceed.

Utilizing a mortgage broker for a home purchase is becoming more popular with the competitiveness of the industry, but there are things you should know before reaching out to a professional. Contact your local mortgage specialists for more information.

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4 Ways to Help Your Mortgage Transaction Close On Time

4 Ways to Help Your Mortgage Transaction Close On Time When you’ve finally found the home you’re looking for at the right price, it’s easy to think that the hard part is over; however, there’s still a lot to do in order to ensure your purchase goes through without a hitch. If you’re tying up the loose ends on your home purchase, here are some things you should do to avoid any unnecessary delays.

Hire A Legal Professional

However much research you may have done in regards to buying a home, there’s still a lot of legal jargon in the closing documents that can be difficult for most people to understand. Instead of doing guesswork, you may want to use an attorney who will take the difficulty out of the documents for you so there will be no holdups with the paperwork.

Arrange A Home Inspection

A home inspection is a necessary step before the sale of a home, but this is an important one to get out of the way because it can seriously impact your home purchase. Because major problems can often be discovered during inspection, getting this out of the way and deciding if an item should be fixed or the total price knocked down will ensure there are no delays at the last minute.

Acquire Title Insurance

In order to make sure your property really belongs to you, it’s a good idea to have a title search completed to see if there are any claims to your future property that could invalidate your purchase. As this is a legal safeguard for your claim to your home, it will help you avoid unnecessary issues in the event of an unknown property claim.

Determine The Closing Costs

An escrow company is responsible for holding the funds until all aspects of a home sale are complete, but there are fees that go along with this service. Before you get to the end of the process, determine what exactly the company will be charging so that you can be prepared for the final total. While fees are legitimate, if you see a higher tally than expected, you may want to negotiate for a reduced cost.

Purchasing a home is a significant investment full of hurdles you might not be aware of, but by acquiring title insurance and having a legal professional look through your documents, you can make your home purchase go a little smoother. If you’re planning on purchasing a new home soon, contact your local mortgage professional for more information.y want to

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The 4 Most Common Mortgage Questions, Answered

The 4 Most Common Mortgage Questions, Answered Making the decision to purchase a home is one of the most significant investments most people will make in their life, and this automatically means there are a lot of questions that need to be answered before putting any money down. If you’re considering making the leap, here are some insights into some of the common questions you might have.

How Much Should You Put Down?

While many homebuyers have the option of putting as little as 3% down in order to purchase a home, there are benefits to saving up for a down payment and putting in 15 or 20%. Because your interest rate will be higher on a lower down payment, putting more down can mean a lower overall price tag and monthly payment.

Fixed or Variable Rate Mortgage?

While a fixed rate mortgage can be good for homeowners who are new to the market due to its stability, a variable rate can be hard to rely on because it can change all of the time. Fixed rates can end up costing more than variable rates in the event of low interest rates, but it’s important to determine your comfort level with the market is before deciding on your mortgage type.

How Will The Lender Assess You?

There are a number of different factors that lenders will assess you on including your income, personal debt load, employment and credit history. While it’s important to be in the good books for these reasons, a lower credit score does not mean you will not be able to qualify for a mortgage; it simply means that you may need to provide a higher down payment.

What Will The Monthly Payment Be?

One of the conundrums of home ownership is being able to determine what you’ll actually be paying per month to purchase your home, but this number is dependent on the size of your mortgage, your interest rate, and the frequency of your payments. There are also many handy online tools you can use to provide some estimates but it’s best that you consult your mortgage specialist about this.

Most homeowners, particularly those that are new to home ownership, have many questions when it comes to purchasing a home, but by being aware of what a lender looks at and what you should put down, you’re well on your way to a healthy attitude towards ownership. If you’re currently considering buying a home, contact your local mortgage professional for more information.

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Pay Off Your Home Faster with These Mortgage Tips

Pay Off Your Home Faster with These Mortgage Tips The monthly mortgage payment that goes into purchasing a home is frequently the most expensive cost per month that most people will incur, and that means that it can be helpful to know the tricks of the trade in squaring away this payment more quickly. If you’re looking for some simple tips to get your mortgage paid off a little sooner, here are some pointers that will help you get to this goal.

Make Bi-Weekly Payments

It may seems like enough of an expenditure to pay your mortgage once a month, but making payments every two weeks can actually greatly reduce the amount of interest you’ll end up paying. For example, if your monthly payment happens to be $400, this would equate to $4800.00 in payments for the year. However, if you pay bi-weekly, this will actually increase your payment per year to $5200.00. While it may not seem like a significant difference, this can break down the principal and save you a lot of money on interest

Pay It Off With Extra Funds

It can be so easy to get used to the standard payment schedule that putting extra money down just seems like a burden, but if you receive an inheritance, a raise or get a bonus at work, you may want to consider putting this extra money towards your mortgage instead of a splurge! While smaller monthly payments will decrease your mortgage over time, a lump sum can help you see the difference in your monthly payment right away, which is a boon for paying it down further.

Keep Up-To-Date On Your Mortgage Options

Many people would rather forget about their mortgage and stick to what they’ve worked out when all’s said and done, but it’s a good idea to keep abreast of what’s happening on the market in case it can positively impact your mortgage. By keeping up to date on interest rates and more recent mortgage options, you may be able to negotiate a better deal or at least stay on top of your monthly payments in the event of an interest rate increase.

The monthly mortgage payment schedule can be a bit of a burden for many people, but there are ways to pay off your mortgage more quickly that can easily improve your sense of financial wellbeing. Contact your local mortgage professional for more information.

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Separation Anxiety: How to Deal with a Joint Mortgage Loan in the Event of a Divorce

Separation Anxiety: How to Deal with a Joint Mortgage Loan in the Event of a Divorce During the course of a marriage, it is common for the couple to acquire property together. This is what is referred to as joint or community property.

When a couple divorces, it is up to the parties involved to determine what happens to this joint property or let a judge use applicable law to determine how property is to be split.

What Happens To The House?

A couple of options are available when deciding what to do with a house where both partners are listed on the mortgage. First, the couple may decide to simply sell the home and split the proceeds from the sale.

Another option would be for one person to give the other person the house as part of the divorce settlement.

Technically, the house is sold or transferred and whoever gets the home is now the sole person listed on the mortgage.

Beware Of The Tax Implications

Typically, the person who gets the house should be the person who is in the lower tax bracket. This is because capital gains taxes may be lower or non-existent for those who are in the 10 or 15 percent tax bracket.

If the house is sold and the proceeds are split, capital gains taxes are exempted on the first $250,000 of profit made on the sale. For a married couple, the exemption is $500,000. Therefore, it may be worthwhile to sell the house before the marriage is over.

What If Children Are Involved?

In the event that the divorcing couple has a child, the best interest of the child must be considered. Typically, a judge will award a principal residence to the parent who will raise the child after the divorce is finalized.

To help the custodial parent afford any payments on the house, the other parent may be asked to help make payments as part of a child support or alimony agreement. This may be beneficial to the noncustodial parent as payments that are considered alimony are tax deductible.

When a couple divorces, they have a lot to think about. As this may be an emotional time, figuring out what to do with a home where both parties are on the mortgage can be difficult. However, those who are divorcing amicably or who want what is best for their children can come to an agreement without a lot of stress or drama.

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Scam Alert! Three Mortgage Modification Scams to Watch out for (And How to Avoid Them)

Scam Alert! Three Mortgage Modification Scams to Watch out for (And How to Avoid Them) As if homeowners who are facing foreclosure don’t have enough to worry about, a multitude of loan modification scam artists have invaded the internet, public files and even foreclosure notices in newspapers in hopes of targeting their next victim. By identifying the top three modification scams and learning how to avoid them, at-risk homeowners can protect themselves (and their homes).

Never Pay For Mortgage Modification Assistance

Many desperate homeowners fall victim to scam artists who offer to provide them with assistance in the loan modification process for an exorbitant fee. Many times the scam artist who promises to provide assistance will require that the homeowner pay the fee upfront, after which they will provide very little assistance or simply take the money and run. Consumers should be aware that assistance and counseling services are offered for free through a number of reputable HUD approved counseling agencies.

Avoid Transferring The Deed

One popular scam that at-risk homeowners often face is the property deed scam in which scam artists promise to purchase the home in question, agreeing to let the desperate homeowner rent it out. They suggest that turning over the deed to a borrower with a better credit rating will offer additional financing opportunities, thus preventing the loss of the home. The scammer often promises to sell the home back to the homeowner, but in reality has no intention of doing so.

Many times the scam artist will sell the home to another buyer. In some instances, the crook will collect any processing fees, take the title to the home and any equity, and then leave the home to default. It is a good idea for consumers who are approached with a property deed scam to report it to the FTC.

Ignore Unrealistic Promises

Mortgage modification scammers often make promises to do such things as negotiate a solution to the foreclosure more quickly, process mortgage payments for the consumer while the negotiation is being worked out, or even guarantee a loan modification. Since the actual lender is the only one who can agree to a loan modification, and this solution requires additional processing time, overnight fixes are almost always scams. Additionally, consumers should never make mortgage payments to anyone other than their lender.

For additional information about mortgage modification scams and how to avoid them, or to receive assistance with working out a solution to avoid foreclosure, at-risk homeowners should contact their mortgage professional.

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S P Case-Shiller Home Price Index: May Home Prices Rise

S&P Case-Shiller Home Price Index: May Home Prices Rise May home prices rose in all 20 cities tracked by the S&P Case-Shiller 20 City Home Price Index. This was the second consecutive month in which all cities posted gains.

On average, national home prices rose by 1.10 percent in May as compared to April’s reading. Year-over-year, home prices rose, but at a slower rate of 9.39 percent in May as compared to 10.80 percent year-over-year for April.

Nevada, Florida and California Cities Post Highest Gains

Cities posting the highest year-over-year price gains in May included Las Vegas, Nevada at 16.90 percent, San Francisco, California at 15.40 percent, Miami, Florida at 13.20 percent. San Diego and Los Angeles, California reported home price growth rates at 12.40 and 12.29 percent respectively.

According to the 20-City Index, home prices are 18 percent below their peak reached in mid-2006, but are 27 percent higher as compared to March 2012 lows.

Pending Home Sales Decline in June

More evidence of sluggish home sales was reported for June. The National Association of REALTORS® reported that pending home sales dropped by 1.10 percent in June. This was a surprise as compared to May’s month-to-month gain of 6.00 percent for pending sales.

Several factors were cited as contributing to slower home sales; higher home prices, stagnant wage growth, higher mortgage rates and stringent loan requirements were seen as obstacles for home buyers. Pending home sales are an indicator of future closings and mortgage activity. Approximately 80 percent of purchase contracts signed sales completed within 60 days.

FHFA House Price Index: Home Price Growth Slips in May

FHFA, the agency that oversees Fannie Mae and Freddie Mac, reported that home prices grew by 0.40 percent in May to a seasonally-adjusted year-over-year rate of 5.50 percent as compared to April’s year-over-year reading of 5.90 percent. FHFA’s House Price Index is based on sales of homes connected with Fannie Mae and Freddie Mac mortgages.

On a positive note, the reading for the Consumer Confidence Index jumped from 85.20 in June to 90.90 in July. Expanding consumer confidence suggests that more families may decide to transition from renting to owning their homes, and that homeowners may feel confident enough to move up to larger homes.

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What’s Ahead For Mortgage Rates This Week – July 7, 2014

What's Ahead For Mortgage Rates This Week July 7 2014

Last week’s economic news was mixed, but economic reports for Non-Farm Payrolls and the National Unemployment rate suggest a strengthening labor sector. Pending Home Sales surpassed expectations in May and conversely, construction spending was lower than expected. Here are the details.

Pending Home Sales Reach Highest Level in Eight Months

The National Association of REALTORS® reported that pending home sales in May rose by 6.10 percent over April’s reading. May’s reading was 5.20 percent lower than for May 2013. The index reading for May reached 103.9 as compared to April’s index reading of 97.9. Results for all regions were positive for May:

- Northeast: 8.80%

- West 7.60%

- Midwest 6.30%

- South 4.40%

An index reading of 100 for pending home sales is equal to average contract activity in 2001; pending home sales are a gauge of upcoming closings and mortgage activity.

CoreLogic Home Price Index Reflects Slower Price Gains

National home prices rose by 1.40 percent in May and 10 states posted new month-to-month highs, while year-over-year reading slipped from 10.00 percent in April to 8.80 percent in May. Home prices remain about 13.50 percent lower than their 2006 peak.

The overall rate of construction spending slowed in May to an increase of 0.10 percent from April’s reading of 0.80 percent and against expectations of 0.70 percent. Residential construction spending dropped by 1.50 percent in May.

Freddie Mac’s weekly survey of average mortgage rates brought good news as the rate for a 30-year fixed rate mortgage dropped by two basis points to 4.12 percent. The average rate for a 15-year fixed rate mortgage was unchanged at 3.22 percent, as was the average rate for a 5/1 adjustable rate mortgage at 2.98 percent. Discount points were unchanged at 0.50 percent for a 30-year fixed rate mortgage and 15-year fixed rate mortgages. Discount rates rose from 0.30 to 0.40 percent for 5/1 adjustable rate mortgages.

Jobs Up, Unemployment Rate Lower

ADP payrolls, which measures private-sector job growth, reported 281,000 new jobs in June as compared to a reading of 179,000 new private-sector jobs in May. The Bureau of Labor Statistics’ Non-Farm Payrolls report for June surpassed expectations of 215,000 jobs added with an increase of 288,000 jobs against May’s reading of 224,000 jobs added.

The national unemployment rate fell to 6.10 percent against predictions of 6.30 percent and May’s reading of 6.30 percent.

No news was released on Friday, which was a national holiday.

What’s Ahead

This week’s scheduled economic is lean with no events set for Monday. Job Openings, the minutes from the most recent FOMC meeting, along with regularly scheduled weekly reports on mortgage rates and new jobless claims round out the week’s economic news.

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Posts Tagged ‘Mortgage’

3 Tips to Consider when Shopping for a Second Mortgage

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3 Mortgage Mistakes That Could Be Costing You Money

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3 Things Your Mortgage Broker Wishes You Knew

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4 Ways to Help Your Mortgage Transaction Close On Time

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The 4 Most Common Mortgage Questions, Answered

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Pay Off Your Home Faster with These Mortgage Tips

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Separation Anxiety: How to Deal with a Joint Mortgage Loan in the Event of a Divorce

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Scam Alert! Three Mortgage Modification Scams to Watch out for (And How to Avoid Them)

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S P Case-Shiller Home Price Index: May Home Prices Rise

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What’s Ahead For Mortgage Rates This Week – July 7, 2014

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