With the market experiencing a supply glut of homes, fixed-rate mortgages are now experiencing historically low interest rates. Here are some tips to getting the best possible home mortgage available. Just remember to keep a good credit score.

Here are some tips to help you get the best possible loan.

(1) Watch your rate.

The closer you are to closing on a home mortgage deal you have keep tracking your interest rates which continue to fluctuate. If the rate for the deal you are making suddenly goes up with no reasonable explanation you may have to find another lender for a mortgage even if you may have to push back your date of purchase by several days.

(2) Get preapproved, not prequalified.

The loan with the lowest rate and fees that are less than a thousand dollars are usually the best deal for people looking for a home mortgage. It pays to get a pre-approval for these loans. This usually entails filling out an application that details your income, savings and personal debt. It will be checked against your credit report and if it passes their tests, you can get the preapproval letter with how much you can borrow for your home mortgage.

This is much better than getting prequalified because prequalification does not include your credit score. In this manner, you get an idea of what problems you may encounter when getting a mortgage and what rates you can expect. But Should I Refinance Home

(3) Get the best rates

Fixed-rate loans now are so cheap there’s no point in looking for something else. It’s just a matter of shopping around to find out what is the best rate you can get for your home mortgage. You can do this by doing some aggressive research online, asking your friends or agent and joining credit unions.

With the market the way it is now, it shouldn’t be so hard to find a home mortgage to your advantage.

I want to make another case for home refinancing because with the uncertainty of the times, it is a good idea to always know what kind of options you may have when it comes to financing. One of these options may be to take advantage of your home equity through refinancing.

Refinancing?

Home mortgage refinancing means taking out a new loan with a new set of conditions, terms and interest rate and uses it to pay off an existing mortgage. This service is usually offered by a lot of financial institutions, and your current mortgagor may also offer this. A best way to go is to research aggressively for offerings that will give you the best possible interest rate.

Advantages of a Home Mortgage Refinance

Why should you consider refinancing? Could there be any benefit? Yes there are several! Here are some:

(1) Lower monthly payments – you achieve this by extending the terms of your loan. By taking your existing 10 year loan and refinancing this into a 30 year term, you can lower your monthly payments considerably, thereby increasing the cash that you have at the end of each month which you can use for more important causes.

(2) Lower interest rates – with the current credit crunch, loans may be harder to come by, but if you can do it, you can take advantage of such historically low home mortgage interest rates now available in the market.

(3) Instant Cash – Yes, you can get a nice lump of cash by refinancing and applying for a loan larger than what your current mortgage owes. Of course, this is still money you owe, so it would be smart to put this to good use, like renovating your property.

(4) Shorter mortgage – If you have some extra money to spend and you’re not comfortable with having such a long-term, you can use refinancing to take out a shorter-term loan and at the same time take advantage of the lower interest rates that these loans offer.

Of course, refinancing your existing mortgage is not without its disadvantages or cost. We will tackle this more in a later feature.

Over the past couple of days, a new possible excuse for the recession has been coming up here and there and it’s called the mark-to-market accounting rule, and not a lot of people know what it is. I had to look it up myself, and I’ll try my best to explain what it’s about.

Continue reading Mark-to-Market and Mortgages

Question:
I am in need of some help with a possible refinance. I hope someone can assist. I have a feeling refinancing is the way to go but when I asked my current lender, Chase several questions today, my head went spinning.

Should I Refinance

My situation is as follows:
498,00 purchase price in 7/05 and current value is also 498,000
373,500 financed at closing in 2005
351,000 is my balance now
5.75 is my current rate with a 10 year fixed and then 20 year variable
2179.00 monthly payments now
Chase offered 2 options today to start thinking about:
30 fixed at 4.625 1 discount point at a cost of 3500 making the monthly payment 1840 or
30 year fixed 5.125 par no points making the monthly payment 1932
the 2100 in closing costs quoted will be rolled into new loan and are included in the above monthly payment calculations above.
The 750 app fee cannot be rolled into the new mortgage.
My management company / corporation (I am in a coop) is going to charge me approx 1800 app fees etc. to close as well.
With all these fees, etc., how do I know when I will break even? Is either a good deal? I will be shopping and look at other lenders but before I spend the time, I needed a baseline. I should be in the apt at a min of 4 years more but anything is possible. I could be here forever, or I could move next year….who knows? By the way, I am in NY.

Thanks!
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Answer:
Calculate your mortgage payment Prin & Interest divide that into the total closing cost and that will tell you what your break even point is. Should I Refinance My Home

A couple I know recently purchased a home costing $400,000. They weighed their options and felt that the best way to finance this is with an adjustable rate mortgage (ARM).

ARMs have taken a lot of criticisms for the mortgage crisis. With these loans like these, borrowers pay out at a low initial rate for a fixed period of time. After that, mortgages will defer to higher rates. Critics say they lure borrowers into purchases that they can’t really afford.

Continue reading How to Refinance – Are Adjustable Rate Mortgages (ARM) Bad?