Tag Archives: Mortgage
Getting hundreds of thousands of dollars together to buy a house in one instance is a privilege reserved for very few. For most people, it’s impossible to own a home without a mortgage, but applying for a mortgage isa more manageable and affordable way of owning a house.
There are a few things, however, that you need to know before you settle for the mortgage plan:
Put Down a Higher Down Payment if You Can
Spreading your repayment over many years may make your monthly repayments lower, but this will, unfortunately, saddle you with debt longer. It’s also worth noting that the lesser the down payment you put down, the more expensive the mortgage insurance becomes, and the higher the interest rate.
Consult a Mortgage Officer Before Looking at Homes
A mortgage officer helps you determine if you have credit problems that you need to sort out first. Additionally, the mortgage planner will help you shop for affordable plans. They help you put together the mortgage rate in Utah, the insurance costs, and the taxes for different plans from Citycreekmortgage.com and other mortgage providers, to determine which one suits you best.
Don’t Open New Accounts or Close Existing Ones
This includes applying for new credit cards or any other lines of credit. When applying for a mortgage, don’t alter your credit report. Doing so will have an impact on the type of loan you can take.
Pay off as much Debt as You Can First
To determine how much you can afford to borrow, your lender looks at your income and your debts. Your car repayments, credit card debts, even your student loan. If your total debt in addition to the mortgage repayment will be more than 43 percent of your income, you immediately become a bad candidate for the house loan. Some lenders want an even lower debt-to-income ratio.
Keep Your Job
Your lender would want to know that you will have income for the repayment period stated in your agreement. This means that stable employment history is critical when borrowing.
Buying a home is a huge life decision that demands carefully weighing the options presented to you.
Finding the best mortgage rate in Provo is just a single aspect of the multi-faceted process of finding a lender. However, once you find the lender that offers the lowest rate, you are one more step closer to hitting your goal.
It’s no secret that buying a house can be one of the scariest, most unnerving things you’ll have to do in your life. But once you find the perfect house and the best financing option for your needs, you soon realize all the stress and confusion was worth it.
Here are the steps you need to do to find the lender that offers the best mortgage rate for you.
1. Clean up your credit.
The higher your FICO score, the better. The lowest rates are offered to buyers with a score of 760 and above, although you can qualify for a home loan if your score is at least 620. However, with better credit, you can count on lower interest rates and more loan choices.
2. Do your comparison shopping.
Don’t just rely on a lender recommended by your agent. Look for them yourself. Online tools such as Bankrate and Zillow are both good sources of loan rates. You can key in your information and they will provide a list of lenders offering the lowest rates for your situation.
3. Offer a huge down payment.
Paying more upfront can save you more in monthly mortgage payments in the long run. Lenders consider a 20% down payment as low risk, giving you better mortgage rates, while a 5% down payment elicits higher monthly payments.
4. Consider adjustable rates.
If you’re planning to stay in the house for a short time, go for an adjustable rate mortgage (ARM), then sell your home before the lender adjusts the rate. Making fixed mortgage payments with high interest for 30 years doesn’t make sense if you plan to stay in the house for only half a decade.
Finding the best lender can be complicated, but you don’t have to drown in the confusion if you stay organized and informed. The best lender should be able to give you the most competitive rate and provide the most seamless and stress-free process for you.
You may have heard that refinancing an existing mortgage is a good idea, but the question is if it applies to your situation. You would have to go to a reliable mortgage firm in your area to find that out. However, there are generally four benefits from refinancing.
Lower your monthly payments
Refinance rates in Utah are currently down today. For example, the fixed annual rate for a 15-year mortgage refinance is a 2.67% low. You are definitely paying more than that a year with your old mortgage. When you refinance your mortgage right now, you will pay a lower amount every month. This can make a big difference to your short-term money problems.
Lower overall interest
You may think that ditching your old mortgage for a new one means you have to pay more in interest and other fees than if you had just stuck with the old one. While this may be true in some situations, in most instances, you could reduce what you pay overall. You do need to do the math on this. Add up all the refinancing fees and interest, and compare that to what you will pay for the remainder of your old mortgage. If you save something from refinancing, then you should go for it.
Less time to pay off
The beauty of refinancing is you can control how fast you pay off your mortgage. If you are making more money now, or can otherwise pay more, you can shorten your payment period. Shaving even one or two years from your payment period can mean considerable savings in the end.
Fewer money problems
When you refinance your mortgage, you also get access to any equity you may have in your home, says an expert from Mortgagepartner.com. You can use this to get a line of credit you can use to pay for your college or any major expense. You will pay the same rate as your refinance mortgage for your line, which is cost-effective.
Mortgage refinancing is currently popular in Utah because the timing is right. Interest rates are low, and the economy is recovering. However, that can change quickly. You need to act fast to get the full benefits of a refinance Orem. Mortgage refinancing is currently popular in Utah because the timing is right. Interest rates are low, and the economy is recovering. However, that can change very quickly. You need to act fast to get the full benefits of a refinance.
Mortgage lenders use a number of ratios for determining the amount you can borrow for your mortgage. It is important to understand these criteria and have a basic idea regarding the maximum amount of loan you can apply for based on your financial capability.
If you’re still at a loss on how this works, many mortgage companies in St. George can give you advice and share information like the following:
The Front-End Ratio
This is your annual gross income’s predetermined monthly percentage dedicated to paying off monthly mortgage payments. Payments essentially are composed of your PITI or principal, interest, taxes, and insurance, and in general must not go above 28% of your gross earnings. There are also mortgage lenders who allow borrowers with PITI of 40% max to get a mortgage.
The Back-End Ratio
This is a percentage of your gross income for paying off outstanding debts, which is also commonly referred to as your debt-to-income or DTI ratio. Debts can include payments on credit card and cars, child support, and other mortgage payments. Lenders suggest that your DTI ratio must not go above 36% of your gross salary.
Your maximum allowable debt each month may be estimated by multiplying your gross salary by 0.36 and then dividing the number by 12. While it is fairly hard for to stay below 36% in locations where prices of real estate are higher, there are lenders who can work with a DTI ratio up to 45%.
The Percentage of Down Payment
Lending institutions may actually allow you to buy a house with a considerably more affordable down payment. Paying off a minimum of 20% of the purchase price, however, can reduce the required insurance. Those who have the budget to afford larger down payments can buy houses with higher purchase prices, and more than 20% may be able to aid borrowers in foregoing insurance. The down payment, as well as front and back-end ratios has a direct impact on your monthly mortgage payments.
Now you have some basic idea on how lenders determine your loan amount. Seek help from a competent and professional mortgage company to know more information on types of loans available to you.
To old people, finances are very definite. There’s the financial security that is all but settled, but they also have limited resources of income, if any at all. That being said, it’s paramount for older people to have a portfolio, however big or small, to have some kind of income stream. Nonetheless, as aforementioned, income can only last for so long.
There are many ways to sustain a portfolio when you’re short of funds, like taking out a loan. Reverse mortgage is a better option, making it more valuable than selling the investments. There are discussions, however, that are required. This isn’t a perspective old folks relish, but it’s necessary.
Starting with HUD
The Department of Housing and Urban Development (HUD) is the one you need to talk with. They provide the mortgage counselors you need to make that all-important decision. As you can expect, they are neutral. They don’t represent any organization or themselves. They are overseers, so you’ll have guidance to go the right way.
If you think they’re your humdrum government workers, then you’re wrong. You’re not the only one they’ll be helping, and you won’t be the last. Furthermore, this is about money. So, to get it right, take an approved training course. Rigorous and comprehensive, Utah’s Altius Mortgage says you must take a training scheme every two years to retain sharpness.
Getting Misaligned Advice
The requirement says that you need to talk to counselors, but it’s not just to make an accurate decision. It also prevents you from discussing the matter with lenders, as aforementioned. The most they can do is to provide a specific group of mortgage counselors. Yet, you shouldn’t prioritize that with the ones you find. Stick to what’s local, so that the counselors are more akin to your needs.
Now that we’re onto lists, narrow it down. You could make mistakes along the way, and limiting the choices is one good way of reducing risks of failure. Use some of the recognized sources to ensure that your would-be counselors have the credentials to properly lead you. More importantly, you shouldn’t pay for services just to get you a counseling recommendation.
If you’re not entirely clear about reverse mortgage, the counselor will help with that. That’s their job, along with the counseling stuff. This is about money, so it’d be wise to get it right.