Saturday, December 29, 2007

What Are The Basics Of Home Refinancing?

The decision to take out a second mortgage to refinance your home should never be a frightening resolution to any mortgage holder. Home refinancing is worth the decision if and only if you follow the proper line of investigation. Here are some guidelines to take you through the transaction:

Carry out extensive research

Home refinancing is not just all about taking out a second loan with the mortgaged property as security. It goes beyond that to selecting the best deal that would not weigh on your ability to pay. The route to this is to shop extensively. All lenders are not the same. Do a lot of comparison shopping. Through this you might be able to come out with one or two deals that may prove advantageous to you than a prior transaction. Investigate on the current rates. At times it may be prudent to wait till rates fall particularly if your current rate is equal to or higher than the existing market rate, before resorting to home refinancing.

Deciding on a home refinancing lender

Most people are also not decided on what lender to look forward to home refinancing. As there are so many bad deals out in the market, so too there are mischievous lenders. If you are not inconsistent with your previous lender, the best choice will be to go back to that lender. He is best to understand your situation and you may work out a special deal with him which takes account of your particular needs. If you decide on taking an entirely new lender, make an appraisal of more than two lenders. Keep in mind that your present tight spot might have been as a result of the unfruitful deal that you entered into.

Honesty pays

Home refinancing may sometimes mean moving from a worst to a best situation. Therefore, it is wisdom to know your monetary habits. Keep in mind that home refinancing is not only meant for those who have a good financial record. The fact that your finances are in the red still qualifies you for refinancing. With this in mind, personally lay your problem to the lender. There are and will always be solutions carved out for people of your type. Hiding a poor record to him might lead you thinking of the feasibility of the existence of a third mortgage.

Are you refinancing for the first time?

If you are into home refinancing for the first time, I would advocate you to be cautious and reflect only on investment. The best solution for new comers will be to use the refinance to invest on the existing mortgage. This is one of the fastest ways to build up valuable equity in your home. Equity in the property always gives you an edge over the lender when thinking of home refinancing.

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Thursday, December 20, 2007

You’re in control with a new home mortgage

If you have looked for your new home and cannot find it, perhaps building a new home is a consideration. You will get all the amenities you want and locate it in just the right spot for your needs. But how do you go about a new home mortgage if there is nothing there to begin with?

Time to dream

One of the advantages of building a new home is that you can shoot for the stars and then scale back from there. Find an architect and use some out-of-pocket money to get started. When you go for your new home mortgage, you can simply build that cost back into the loan. What you are trying to do here is have a fairly realistic idea of what the new home mortgage will likely be.

As you go about the design process, think a bit about what is going into the home so you can use those features as selling points for the new home mortgage. Will the new home take advantage of tax credits, will it use “off the grid” technologies like solar or are all the mechanicals the most efficient. Each of these ideas will boost the innate value of the home meaning it may resell more easily. Remember, the bank wants it to sell when you are ready, so its money comes back easily.

The big little things

If this is the first time you have built a house with a new home mortgage, be sure to think about some of the things that you have never had to think about before. The sewer connection needs to be built. The electric may need to be brought in quite a distance. If the home is to be off the beaten path, this may start to add up in cost making your new home mortgage a bit larger than you may have thought. This is why “off the grid” is such an important concept for not only you but the lender.

Use your equity

As you go about the process of figuring out what you want to go into the house, think about how you are using your built up equity. How do you want to use the equity as it applies to your new home mortgage? Should you roll it all into the down payment on the new home mortgage or should you hold back a portion just in case an extra feature was forgotten in the house.

Are you in control?

In today’s lending market, you will really have to have your ducks in a row if you want to follow the new home mortgage route. A lender may be apt to say that there are so many homes available that they would rather a traditional existing home mortgage then a new home mortgage. It is up to you to demonstrate that you have the capacity to support this mortgage plan with your history.

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Saturday, December 15, 2007

Key documents for a New Home Mortgage

Obtaining a new home mortgage these days is difficult enough without the added hassle of paper work. In most cases, however, paperwork is exactly what will happen when a mortgage is given.

Trying to have all the particulars lined up is a key to a smooth transition into your new home.


In most cases, your income and employment history are a key aspect in receiving a new home mortgage. In most cases your taxes will do but a letter verifying employment will definitely help the new home mortgage process along. Make sure your spouse or significant others records are available if their names are going to be even remotely associated with the new home mortgage. In many cases these records are not needed but having them available will reduce stress.


After the recent issues of sub-prime mortgages, lenders are a bit more concerned with how much savings you have in reserve. A home mortgage now requires a look at how many payments you can make if all potential income was lost. In most instances two payments are required. If your particular circumstance has be less-then-perfect, you may be required to demonstrate even more for your new home mortgage.

Down payment

The power of a good sized down payment is often underestimated in mortgage deliberations. The more you can demonstrate you are willing to put on the mortgage, the more clout you have as the lender goes about talking new home mortgage conditions.


They may seem like small little bills that don’t carry much weight in new home mortgage consideration but they actually do. They are bills that will be associated with the future running of the home in question. Have at least a six month record of on time payments to show. In the event that they don’t ask for them that’s ok but at least they are there if they are called for.

Inspections, insurance and title

Making sure that the history of the home is documented is up to you. Having an inspection and title search can often be set up though your realtor but the ultimate responsibility is yours. Making sure the title search is complete is perhaps one of those items that should be paid the most attention to in a new home mortgage situation. In-of-itself the title search is really no big deal. If, however, there is an issue that pops up at the very last minute that you didn’t see coming it is the title clearance. For a new home mortgage these documents will need to be in the file.

As you go about pulling these documents together, take the opportunity to do a reality check one last time. You can always decide not to take the step up to the point you sign but as you survey the documents make the mental choice for yourself.

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Friday, December 14, 2007

The Best Home Loan Rate for You

Everybody wants to get the best deal they can on any purchase. When choosing a car, a boat or a blouse, why pay more? When it comes to a home why would anybody think differently? Looking around for the best home loan rate is a critical aspect of home buying, so shop around for the best deal.

Your situation

Before you begin to think about the whole process, take a look at where you are personally and financially. Don’t try to fool yourself. Can you really afford to do it? They say don’t put all your eggs in one basket but in this case you are, so be honest with yourself.

Kinds of loans

The very first item for consideration in what home loan rate is best is the type of loan. There are two primary loan types and variations on the theme. Each primary type will have a different home loan rate. A fixed home loan rate is just that. The home loan rate is fixed for the term of the loan. If it is a 15 year term or a 30 year term the monthly amount you pay will always remain the same. If you are looking for security in knowing what your payments will be this is the way to go. Its rate, however, is just a bit higher then the second home loan rate type.

The variable home loan rate has a lower initial interest rate. It, however, can change over time if the economy changes or the structure of the loan says the rate will change. You need to read the fine print with these loans and understand how it relates to your particular circumstances.

Which is best?

Both types of loans have there plusses and minuses. With each, the amount of money you can put down dictates a lot in what the conditions of the loan will be. Obviously, the more you can put down upfront the better conditions you can get. The biggest consideration is how long you realistically think you will be in the home. If you plan on starting a family and sticking around for a while, then a fixed rate will give you the safety you are likely looking for. It is a bit constraining though as that home loan rate will be the same regardless of what happens.

If your situation is a bit more fluid perhaps a variable rate is better. Although things do change without warning, the likelihood of a rate change in the short term is small. If you are likely to be in and out in a few years, going for a variable rate is a fairly safe bet at a lower rate. Be warned, however, if things do go south, having some cash in reserve is critical to your personal life.

Regional considerations

Interestingly, which state you live in will dictate the home loan rate options that you will receive. Some states have rates just a bit lower then others. This gives you a little latitude in some cases. If your home choice is near a city which is near a state boarder, perhaps looking at across the boarder for a home may make sense.

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Friday, December 7, 2007

Which Home Loan Rate to Choose

Regardless of circumstance there is a home loan rate for your particular needs. Great credit or less-then-perfect, a rate is available for you. Choosing the best option for you can be a bit more complicated then you think. With a few tips and some help from an advisor, however, the right rate for you can be found

Today’s mortgage environment

A solid home loan rate for your situation is waiting for you. The past has been dealt with, for the most part, and the future looks ok. Actually, now is one of the better times to look for a home loan rate that fits your needs. Home prices have come down a bit and there is a good supply of housing on the market. Having a good home loan rate in place will let you move on a property when you find it. Deciding upon which loan type is right for you is the question you need to have figured out before the opportunity presents itself.

Rate types

The two main types of loan rates to choose from are fixed and variable. Within each type there are a few items that vary but they generally describe themselves. A fixed rate loan means you’ll pay the same amount for the term of the loan regardless of what the economy does. Many people like a home loan rate of this type because they will know how much to budget each month. There is a security factor in knowing the amount.

A variable rate loan can change through the term of the loan. If the economy changes, your rate can change in either the up or down directions. There is also a large payment at some point called a “balloon” payment where you will need to come up with a good size piece of change. A lot of people like a variable home loan rate because the initial loan rate is lower. A lower variable home loan rate can be a good thing if the economy is rock solid or you plan to stay in the home for a fairly short period.

Other loans

In today’s finance world there appears to be an available home loan rate for any particular circumstance. There are equity loans, refinance loans and second mortgages just to name a few. Each does have a particular advantage over a simple home loan rate in specific ways. You’ll just need to make sure you understand what the advantage is before you get yourself into it. In any event, these home loan rate quotes will generally fall under the variable rate heading. You can get a loan written for a fixed rate but it will likely entail a higher rate then a normal fixed rate might be.

Your situation

The thing to remember about rates is that they depend upon your personal conditions. What may sound right for one person may not be right for you. Be realistic about what you need.
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