Homefinding Book

Whether you are applying for fixed-rate mortgage or variable-rate mortgage, you have the option of attaching an additional feature to it: interest-only loan. Some people think it’s a type of mortgage but it’s not. Interest-only mortgage allows you to pay only the interest in any given month if you don’t have enough money to pay off some amount of the principal. However, this is allowed only for a specified period of time after which you have to pay the interest as well as the monthly installment. Like any other financing option, interest-only mortgages have their advantages and disadvantages. Before deciding to apply for this type of loan for buying a new home, consider all its features and only proceed if you think it’s the best available option for you.

If you are expecting to earn a lot in the coming years and if you plan on selling your home after a few years, then interest-only loan might prove to be a beneficial option. In addition to this, the amount you save by paying off only the interest can be invested somewhere else which you think will bring huge profits. That profit can then be used to pay off the principal after your initial period has expired. If you are able to get a low interest rate on a fixed-rate mortgage, this option will allow you to avoid the rising interest rates and pay only the interest portion every month. Even in a fixed-rate plan, if you pay some amount of your principle each month along with the interest, the next month’s interest will be reduced.

First time homebuyers often end up selling their home after a few years. If you have planned ahead for the next five to seven years, you may want to consider this option. However, if you are not sure how you are going to pay back the loan or when exactly will you be able to pay off the entire principal, then consider some other financing options instead of interest-only mortgage. This is because you will need to refinance after an initial period of five or seven years and this might not come easy. Furthermore, the facility to pay only the interest and not the principal will not be available and the amount you owe each month might not be easy on your pocket.           

Some people think that availing this option eventually allows them to be debt-free by paying less. This is a false impression probably advertised by those who want to sell their plans. An interest-only loan is an advantage which anyone can benefit from who has future plans to invest in a seemingly profitable business and needs capital for that. Furthermore, you may not get a low interest rate if you are availing this option. The first thing to do is to decide whether you need fixed-rate or variable-rate mortgage. For adjustable-rate plan, the interest-only option can be even more confusing for the borrowers. You can check out your amortization timeline by using the interest-only mortgage calculator.          

The experts say that only business-owners can benefit from interest-only mortgages because they don’t have a regular salary. Sometimes they get lucky and their profits are huge. They can easily pay off the principal along with the interest. But for an average working person whose only income is the monthly salary he receives from his company, interest-only mortgage can prove to be devastating. Then there are market risks involved in this type of a plan, considering you decide to sell your home in order to pay the debt. Still, after consulting with your mortgage agent, if you think this option is going to be beneficial in the long run, go for it.    

Before you qualify for a decent mortgage loan, some requirements have to be fulfilled. There are many types of loans and to know which type of mortgage you will be offered largely depends on your credit score. Not obtaining a credit report before applying for the loan is a mistake many first-time homebuyers make. Let’s discuss the different types of mortgages before proceeding with the credit score. There are basically four types of loans: fixed-rate, adjustable rate, balloon loan, and government loans. Fixed-rate mortgage can be obtained for 15, 20 or 30 years. If your credit score is good, you can get a lower interest rate and it will stay the same over the years for this type of mortgage. The 30-year fixed-rate mortgage is often the easiest to obtain.    

If you plan to sell your home in the near future, variable or adjustable rate mortgage will be best suited to your requirements. This is because the first interest rate that you pay is usually lower than the subsequent installments. Balloon loan refers to the type of mortgage in which you have to pay small installments for a period of five to ten years and after that the remaining amount has to be paid at once.

Many parts of your credit report are scrutinized by the lender in order to see whether you quality for the loan or not. One of these aspects is your debt-to-income ratio. The lender will need to know how efficiently you have paid back your past loans. If your debt-to-income ratio is bad, you should first consider paying off at least some amount of the debt before proceeding with your decision of buying a new home.        

Your credit score also reveals the total amount of money you owe as debt. If it is a huge amount, you might not qualify to get loan for your new home. However, there are ways to improve your credit rating either by paying off the debt or attempting to correct the mistakes that might make your credit score look bad.

Many people ask the question what should be the credit score to qualify for a mortgage loan. Normally, a credit score of 750 or above is considered excellent. Even if your score falls in the range of 600 to 650, you have pretty high chances of securing the loan. But if it is lower than this, you may want to reconsider your decision of buying a new home.

Always try to keep your credit history clean by regularly inspecting your credit report for correctness. Opening new credit car accounts when you are not going to use them can also have a negative effect on your credit rating. If you cannot afford something, don’t plan on buying it through credit. Always pay your bills on time instead of piling them up. Your credit score is also affected by the degree of delinquency on your report. Even after you have paid off the bills, delinquencies will stay on your credit report for an indefinite period of time. So, it’s a good practice to shell out all due payments on time.

For those who have a low credit score, there are several options available in the government loans category, one of which can be availed to buy a new home. In fact if you are a first-time homebuyer, the government FHA loan might prove to be the best available option for you. There are many advantages of this type of loan. Although the interest rate in a FHA loan is dependent on your credit history, it’s still not very difficult to secure this type of loan for home buying.

Get your credit report today and see which option best suits you.            

With the cost of gas, diesel, and additives constantly rising, I have been searching for real alternatives to save money at the pump. Most of my research comes up with rebate deals (too much work), coupons requiring credit card numbers, Internet or phone activation (again - too much work), and coupons that require you to complete surveys. Most of these are marketing programs that have no merit as you are working too hard for a small, one-time, discount, with many restrictions.

The only program that I found to be legitimate, easy, and productive is the GasMaster pre-paid Visa cards, only available through the GasMaster distributors. This program is big in Florida, and uses a concept that Costco, BJ’s, and Sam’s discount clubs are famous for. You join the discount club for $159, and then you are entitled to buy up to $300 per month of gasoline debit cards.

The Gas Master Discount Club offers 20% Off gasoline through prepaid VISA gas cards.  Savings are up front. In other words, you pay $80 for a $100 card  but  will have the full $100 to use at any gas station and  convenience store attached to a gas station. Pay $240 for a $300 card, etc.

The prepaid gas cards can be used at any gas station nationwide that accepts the Visa logo. The discount club also offers savings on hundreds of other products and services at their online mall.

Remember, this is only available through authorized distributors, and everyone wants to save. There is still room for distributors if you want to supplement your RE income. It’s great to do part time.

Visit www.RealtorsGasClub.com which will take you my page on the GasMaster site to learn about buying gas at 20% off.

This program is big in Florida, and needs promotion throughout the US; currently it is in operation and growing. Credit cards (like Discover) offer you 5% on a credit purchase, BJ’s and MasterCard programs offer about 2% on general purchases, but GasMaster offers a true 20% discount on pre-paid cards.

Non-Realtors can join as well, making the savings available to anyone who drives for a living. Feel free to share with family and friends.

The one thing that everyone wants when applying for a mortgage is an excellent mortgage interest rate. The interest rate you pay will determine how much money you end up repaying the bank when all is said and done. The lower this number, the less money you will owe over time. The less money you owe over time the less money you will need to pay each month in order to cover the costs of owning your home.

It pays to know the steps you can take to get a great mortgage rate on the purchase of your home. So, what can you do in order to be sure that you are getting the lowest rate possible?

Fix Credit Snags

The most important thing you can bring to the table with you when applying for a mortgage is good credit. The better your credit rating is the more likely you will get a decent rate on your mortgage. If you have a few credit hiccups you may want to apply and see what is said. Worst case scenario you don’t get favorable terms and try again down the road

If your credit rating is dismal you should make efforts to improve your credit score before applying for a mortgage. A good faith effort on your part can go a long way to ensuring that you get a much lower interest rate though it may take some time to earn the prime interest rate that you are hoping for.

Depending on how bad your credit issues may have been it may take quite a while to get things under control and restore your good name - at least when it comes to credit. This is a marathon. You didn’t find yourself in a poor credit state overnight in most cases and it will take a concerted effort on your part to make the necessary improvements.

Shop Around

Believe it or not, there isn’t a one size fits all lending program that promises the same interest rates from one lender to the next. You can actually get better interest rates by checking out the competition locally and nationally before making your final decision. To get the best possible rates for your mortgage shopping around is probably the best thing you can do other than maintaining an impeccable credit rating. A great place to shop for mortgages is Lending Tree.

When you take it on the road, so to speak, and see what the competition has to offer when it comes to interest rates, it does two things. First, it lets you know that you have other options available to you. Second, it lets lenders know that they are facing some competition. This often encourages them to give you the best rate they can possibly offer or add incentives that may be attractive and beneficial in the long run.

Have an Impressive Credit Record

There really is nothing that can bring those interest rates down on your mortgage like credit that is above reproach. If you want the best possible mortgage rate then you will want to make sure that you are bringing an impressive record for prompt payment to the table with you.

Getting a great mortgage rate is only half the battle when it comes to getting a mortgage but for many home buyers, it is the most important aspect of the home buying process. Make sure that you are prepared to wait it out and find the best mortgage rates before signing on the dotted line with any lender. Patience is definitely a virtue well rewarded when it comes to getting the mortgage you deserve. To get the great rates your good credit deserves be sure to check your options at Lending Tree.

Since most people only buy a house one time in their lives it is understandable that the average person doesn’t have a lot of experience obtaining home financing. You will find commercials and advertisements all over the place encouraging you to get your home financing with this or that mortgage company. So how do you know, which one will have your best interest at heart and give you the financing you need to get you in the home of your dreams today.

Know Where Their Loyalties Lie

The first thing you need to know about mortgage brokers, lenders, and finance companies is that their loyalties are to themselves. They are not interested in your personal situation, the future of your family, or any of the dreams you have for the members of your family. They are interested in getting a commission check. Don’t for one second make the mistake of thinking that they are in business to help you.

Once you have that firmly in mind you can move on to more important information about getting the home financing you need. The bottom line is that these people are in business to make money not to give it away. This is especially true in light of recent upheavals in the mortgage lending industry. New requirements are stricter than in years past but it is still possible to get a home mortgage with a reasonable credit record.

You Better Shop Around

Interest rates are king when it comes to getting a mortgage. Even fractions of percentage points can add up when you are talking about hundreds of thousands of dollars in home loans over the course of 30 plus years. You want the lowest interest rate possible and may need to shop around to get the interest rate that will serve you best. Check out Lending Tree for some of the best rates in the business.

Don’t fall for enticing incentive offers like free vacations or even free flat screen televisions. The price you will end up paying for them when all is said and done will be much greater than their worth if you aren’t getting the lowest interest rate available along with these exciting incentives.

Know the Lingo

It is vital that you understand the basic lingo of loan speak in order to insure that you are not getting a sour deal with your mortgage. You will hear all kinds of new words when you discuss your borrowing options.

You need to know that an ARM loan stands for an adjustable rate mortgage that can end up costing you much more money than you would have ever anticipated. You should also know that an adjustable rate mortgage is almost never beneficial to home owners.

What you need instead is a fixed rate mortgage. A fixed rate mortgage will not change when the interest rate does.

Private mortgage insurance, also referred to as PMI is an insurance that you must purchase unless you make a rather sizable down payment. This protects the lending institutions that extended you credit from the full force of their potential loss and will need to be included in your budget.

Getting the financing you need to buy a new home doesn’t need to be rocket science. Lenders like Lending Tree are names that you can trust in the world of frightening finances. But also taking the time to learn a few basic things about the process though can save you time and money while relieving some of your concerns. Keep these things in mind when checking out options for lenders and find the lender that you feel is going to go to bat for you more than any others.

It seems like such a simple process until you are faced with the first time purchase of a home. There is much more involved than boy and girl meet house. Boy and girl buy house. Boy and Girl move in. It would be nice if it were always that simple. In truth there are many steps that go on behind the scenes in order to make the sale of a house go smoothly. The problem is that buying a house isn’t something that the average person has the opportunity to practice on before the time arrives. If you follow this guide though you can save yourself a bit of heartache and several really large headaches throughout the home buying experience.

Pre-Qualify for a Loan

Do this before you ever look at a house that you are interested in buying. This helps you avoid looking at homes you can’t get approval for, gives you a guideline to follow as a potential budget, and saves your from finding out after making an offer and paying earnest money that you can’t get approval for a loan. You aren’t married to a company when you get pre approval but sellers will add more weight to your offer if you are pre approved for the amount you offer than if you are not.

Establish a Budget

After you’ve been pre qualified sit down with pen and paper and figure out how much you can really afford to take on each month as far as the total package goes. Keep in mind that there will be private mortgage insurance (assuming you don’t have 20% or more for a down payment), home owner’s insurance, property taxes, maintenance fees, and additional utilities related to home ownership that you aren’t accustomed to paying each month in addition to the principle and interest payments that will be due. Make sure you aren’t setting yourself up for failure and taking on more house than you can really afford. Once you’ve established your budget you have a clear view of the price range you can handle.

Find a Realtor and View Houses

Make sure that the houses you are checking out work within your price range. If your Realtor consistently shows you houses that are outside of your price range or do not match with your requirements (number of bedrooms and bathrooms, special features, etc.) then you may want to find one that will. Once you find a house that you are interested in plan another visit. Never make an offer on the first visit.

Make an Offer

Expect a counter offer but make an offer on the house you are interested in purchasing. Some sellers require earnest money to go along with the offer so be sure you have budget for this possibility. It is important to make your offer contingent upon the results of an appraisal and inspection. You also need to schedule them both as soon as the offer is accepted.

Buying a house is rarely a one step process. These steps are only the beginning. There is a lot of negotiations involved in the typical real estate transaction and there are times when a deal falls through at the last minute. If that happens to you begin the process over again and keep the things you learned during the last transaction in mind for the next one.