Archive for the ‘Mortgage info’ Category

use a mortgage calculator to budget for a new homeA lot of first-time homebuyers believe a lot of things about mortgages that are not true at all. These myths can keep them from getting their dream house sooner. Some common myths about mortgages are mentioned here that are not entirely true and every individual should know about them in order to ensure that they get the best house and the best mortgage deal that suits them:

Pre-Approved Mortgage Cannot be Rejected

The belief that having a pre-approval on your mortgage means you won’t be rejected can be a big financial fiasco. Pre-approval only indicates that you have all the credentials that are required to get a mortgage approved, and gives you an idea of your possible financial scenario if and when your mortgage is approved. Using a mortgage interest calculator, you can easily calculate your own finances for your mortgage approval.

In reality, a mortgage is approved once you have finalized a house and things have finally come to closing. Therefore, it is very important to have a ‘subject to financing’ clause on your purchase agreement because if your mortgage is rejected and you don’t have the clause, you can be forced to pay penalties to the selling party.

You Have to Save For Down Payment

In every mortgage, paying at least 5% of the total amount of the purchase is mandatory for every individual. However, the concept that you are required to save up this entire amount before you can apply for a mortgage is not true.

Using a mortgage interest calculator, you can easily determine the impact different down payment amounts can have on your overall mortgage repayments.
Today, a lot of mortgage agreements offer you cash back options, returning you the complete amount of down payment at the time of closing. This gives you the liberty of borrowing money from someone for a short time period in order to pay as down payment and returning it when you get the amount from your lender.

Bankruptcy has a negative impact on your credit score. It drops your rating below 100 points and sometimes even more. Thus, from an excellent credit rating, your score instantly moves down to a poor rating. After this event, it takes about 10 to 12 years to regain your lost credit.

After bankruptcy, if you are thinking of applying for a home mortgage, then it would be difficult. This is because no mortgage lender would want to take a risk by giving you a loan, knowing the fact that you have disclosed bankruptcy.

Nonetheless, the good news is that you don’t have to wait for 10 years to qualify for a home mortgage loan. You can get mortgage even in four years’ time if you work on improving your credit score carefully.

After four years, when your credit score begins to recover, you can apply for a home mortgage loan. However, since you have a record of a filing bankruptcy and not very impressive credit score, the mortgage lenders would offer you a loan quote but at a high interest rate. To choose the best loan option, it is advised you compare your options.

Using a mortgage interest rate calculator is the best way to get an overview of your monthly payments on each loan with respect to the interest rates. With this calculator you can compare your choices and make an informed decision.

For this, all you have to do is enter the loan amount, the term over which you plan to pay back the loan and the interest rate. Once you plug in the numbers, the mortgage interest rate calculator will show you the monthly payment you are expected to pay. If the result is desirable and in your expected payment range, then you can proceed with it otherwise you can look for other feasible mortgage loan options.

In addition to this, by using this interest rate calculator, you can also work out how much less or extra you would have to pay on your mortgage if the lender decides to change the interest rate in the long run.

Adjustable-rate mortgages or ARMs are not as popular among homebuyers as the fixed-rate mortgages that are paid over a period of 25 to 30 years. However, in certain conditions and with the right borrower, ARM can be quite useful for homebuyers, giving them flexibility to adjust their finances accordingly. Homebuyers can use mortgage loan payment calculators to easily analyze their ARMs, to have an idea of what they are getting themselves into.

First, with an ARM you can have the flexibility of paying off your mortgage in a short time period, making accelerated payments, which means you can claim complete ownership of your house in a shorter time period. You are not required to wait for an entirely long period of 15 or 30 years to become a homeowner.

Second, if there is a need of refinancing, ARM can help you in keeping your repayments to an affordable amount. Compared to the typical 15-year refinance mortgage, you can get an ARM that amortizes over 30 years and make more flexible and affordable repayments every month. Arms allow you to design a flexible schedule that you can follow at your own convenience.

AMR is also an ideal option for those who don’t plan to stay at one place for as long as 30 years. A lot of people are required to relocate every few years, or simply like to move to new places. For these people, getting stuck with a long mortgage plan is not an ideal situation and an AMR can help them manage their mortgage according to the time period for which they are planning to keep the house.

AMRs can be quite difficult to calculate accurately for some people since the principal and interest payments keep varying every month. A mortgage loan payment calculator can be quite helpful in this regard, helping the individuals get an accurate summation of their mortgage according to their specifications.

reasons to move from your homeIf you are like many others, you have dreamed about buying a home for a long time. However, you put it off because you assume you can’t afford it, or think your credit is not strong enough to be approved. You may even worry that you won’t be able to handle the repairs and general upkeep. You might even just be intimidated by the process, but if you use a home mortgage calculator upfront and then find yourself a realtor and lender you are comfortable with, then you will see how exciting buying a home can actually be. Still not sure if you should say goodbye to your landlord? Here are six reasons why you should!

1. It is a Buyer’s Market: Chances are good that you have heard people talk about it being a buyer’s market right now. What this means is that there are a ton of houses available priced far below what you would have paid for them years ago. You can get a lot of home for a surprisingly low price. Not to mention, since so many people have been trying to see their homes for so long, they are more likely to entertain a low, but fair offer.

2. Mortgage Rates are Low: If you are thinking that you will wait to see if mortgage rates dip a little more, you will find you have missed your window of opportunity. It is suggested that rates will be on the rise again soon. Now is the time to take advantage of these low rates. If you use a home mortgage calculator then you will see what a huge role rates play on a monthly payment.

3. Pride of Ownership: There is nothing more rewarding than knowing that you own your home. If your dog digs a hole in the yard or you decide to paint your walls purple, you have no one to answer to. You can’t appreciate the sense of stability you will feel knowing that your name is on the house, until you actually sign on the dotted line.

4. Save Money: Right about now you are probably scratching your head and trying to figure out how in the world buying a home is going to save you money, right? Well, you will be quite surprised at just how affordable buying a home can be. When you use a home mortgage calculator, make sure you choose one that lets you input taxes and insurance, so you can get a realistic estimate of what kind of payment you are looking at.

5. Save on Taxes: Just like having a new baby, buying a home blesses you with some fantastic tax incentives as well. You can deduct real estate taxes. Plus, once you have lived in your home for a couple of years, you can benefit from profit-related capital gains. Your accountant can fill you in a little more on this topic.

6. Forced Savings Plan: If you all of a sudden had $200 extra in your pocket every month would you spend it or save it? Chances are pretty good that you would spend it, even if you intended to save. Since your home is always building equity, you are essentially creating and contributing constantly to a savings plan. When you need money years from now, you can always refinance. If you were renting, you would not have access to these funds.