Tag Archives: Mortgage

Early Mortgage Payoff: 3 Smart Ways to Cut Back On Costs

mortgage documentPaying off your debt early comes with various benefits. Your interest accruals are minimized, you rid yourself of debt burdens, and you get to focus your energy and finances on other investments. However, early mortgage repayment also comes with a fair share of its pitfalls.

Opportunity Costs

When you allocate budget to your FHA 203k loan payment, you miss an opportunity to allocate funds to other essential investments. However, if such funds are spared and set aside for other profitable projects, they can yield unimaginable returns as time progresses. It is wise to first weigh your options to make an informed decision on whether to use the extra cash to invest or pay off debts.

Emergency Savings

A disaster or disease may strike you or your loved ones, and you might have to take out cash to attend to these emergencies. Your cash reserves are the best source of quick cash when trouble comes your way. This is one reason why your cash reserves should not be used to pay debts.

Other Debts

Some individuals have a number of debts in their name. The interest rates chargeable on these loans vary from one type of loan to another, and many factors are responsible for the difference in interest rates – from credit scores to the state of the economy at large. But ideally, the best way to pay your loans is starting with the ones that carry high-interest rates so that you cut back on costs in the long run.

Using a mortgage to build or buy a new home comes in handy especially if you cannot fund the whole project alone. However, the need to pay off the debt early should not deny you a chance to explore and take investment opportunities that will lead you to your financial goals.

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Top 3 Tips to Get Better Mortgage Rates

low mortgage ratesBuying a house using mortgage loans has always been challenging for many home property investors. The loan plans, deals, and overall packages are hard to master and maneuver your way out. In as much as getting the best mortgage loan rates is a savvy plan that everyone would go for, landing such offers demands that you be smart and take all necessary steps.

Here are some of the things you should do to boost your chances of being approved for better interest rates on a mortgage loan, advises Wasatch Peaks Credit Union.

Compare Between Offers

This isn’t an easy task that anyone would want to embark on. But it’s worth the weight in gold as pertains to protecting your finances. Compare between different lenders and their mortgage rates. Avoid being rigid to one factor and instead, factor in all elements including interest rates, lock-in offers, and the overall cost of taking such a package. When you can, search for more expert advice and options from online platforms. This helps you zero in on an informed choice.

Avoid Multiple Applications

Some applicants think it’s wise of them to submit several applications, so they get a chance of picking the best mortgage deals. On the contrary, this may end up spoiling the approval party. Multiple applications mean repeated credit checks. This risks your chances of getting approved for one since some lenders will take such as a kind of scheme. When these mortgage lenders reject your application, it also goes a long way in affecting your future applications from other lenders.

Keep a Good Credit Score

The small debts that you’ll ignore now might deny you the opportunity to build or buy your dream home through an affordable mortgage loan. Borrowing and failing to repay in time or refusing to pay at all will always reflect in your bank reports. Therefore, strive to develop a habit of paying your dues. Reduce the number of debts that you take in your name, and you’ll get good deals on mortgage loans.

Unlike conventional loan packages, mortgage loans can be complicated. You need to be cautious with everything you do, from shopping for the right lenders to weighing between interest rates. Getting professional advice is an added advantage.

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Tips to Get Your Home Mortgage Approved

mortgage loan button on keyboardGetting a mortgage is something most would-be homeowners have to deal with before they get their dream home. Here are some tips to make sure you get your approval.

Improve your credit.

It doesn’t matter whether you’re getting a mortgage loan in Utah or a different state entirely — your credit rating will always be a deciding factor.

Check your credit score after requesting for your credit report. This will show you if you’re in a good position to borrow. If not, you might want to improve that score first before taking out a mortgage.

Establish a limit.

Ideally, your mortgage payments shouldn’t consume more than 10–20 percent of your monthly income. Your income will be looked into by the lender, and if the amount is nowhere near, they will have some questions about how you’ll be able to afford it. Skip this difficult and unnecessary stage by imposing a limit on yourself.

Prepare the down payment.

Lenders typically require around 20% down payment — but nothing is stopping you from paying a higher amount. Doing this helps reduce the rate you’ll have to deal with on a monthly basis.

Stay in your job.

Do not change your employment status during the approval process. The lenders will take a good look at it to decide whether your mortgage should be approved. You may change your job after getting approval.

Check out different mortgage options.

Getting approved for a mortgage quickly isn’t as important as getting approved for the right mortgage. Take the time to check your options. You have the Federal Housing Administration to help if you’re a first-time home buyer.

Of course, these are just some of the techniques you can use to help guarantee your home mortgage. Remember that approval is just the first step — you’d also want to take steps for paying the mortgage quickly so that you can own your home debt-free.

Mortgage Application: Don’t Forget Fees and Penalties

Loan on the monitor of a macbookWhen applying for a loan, most borrowers tend to focus more on their down payment, interest rates, and monthly payments. Many fail to evaluate hidden fees like closing costs and prepayment penalties. If you’re applying for a mortgage and don’t think about them, you may set up yourself for extra expenses before you can finally own your home.

Avoid Surprises Related to Closing Fees

Whether you’re purchasing a home or refinancing a loan, you will need to pay closing costs. A lender or mortgage company should give a Good Faith Estimate (GFE), which lists all related closing costs. Altius Mortgage Group and other mortgage companies in Utah note that these differ based on the type of property, its location, and your loan type. In most cases, buyers pay about 2% to 5% of home’s value in closing fees.

It’s good to know that some fees in the closing costs are unnecessary and negotiable. You can ask your lender to have some of those fees removed or ask them to explain why they are necessary. There is also the no-closing cost mortgage, which may cost you more in the long run. This is because the lender may charge you with a higher rate or include the closing fees into the total loan amount.

Extra Payments and Penalties

Some loans carry prepayment penalties when you may extra mortgage payments. Note that not all loans have this, so it means that you may have agreed on this when you close the purchase. If you’re not sure, it’s best to check with your lender. The penalties could apply if you pay the entire balance (by selling or refinancing) or pay a large amount all at once.

If you, for instance, received an inheritance or get a promotion, making extra payments can reduce financial burden in the long. This also reduces your total payment and helps build equity faster. Before agreeing to a loan, you may want to ask your lender to have this removed if possible. Note that paying extra can also lower the number of interests paid.

Buying a house is a financial decision, so you shouldn’t overlook other fees that can affect your payment in the future. Talk to a reliable lender to learn more about your mortgage options and all other associated fees.

Factors to Consider When Looking for the Best Mortgage for You

MortgageA mortgage takes many years to pay in full. Thus, you have to make sure that you find one that you can manage well.

Getting the best mortgage rate in Salt Lake City would be an advantage. But, there are other factors to consider. Here are some of them:

Mortgage Type

There are two main types: fixed and adjustable rate mortgages.

Fixed Rate Mortgage – The interest rate remains the same throughout the term of the loan. It allows you to budget your payments. The downside is when there is a general decline in interest rates. Interest on your loan does not go down.

Adjustable Rate Mortgage (ARM) – At the start of the loan, the interest rate for an ARM is often low. It will then fluctuate throughout the rest of the term. You will pay less if the prevailing interest rate goes down. If it rises, you will pay more. 

Lender

It is best to compare offers from different lenders. Interest rates and terms may vary from one lender to another. Compare mortgage products with the same features to make sure you are getting the best offer.

Mortgage Rates

Various factors influence the interest rate on a mortgage. These include economic and market conditions, as well as your financial profile. You can qualify for preferential rates if you have an excellent credit score and a steady job.

Mortgage Fees

Aside from interest, other costs come with a mortgage. These may include loan administration and processing fees. Thus, it is also important to consider the “junk” fees when comparing mortgages.

Lock Period

Offers from lenders are only good up to a given period. Interest rates are locked-in during this time. Beyond the lock period, the interest may go up or down, depending on prevailing conditions.

Consider these factors when looking for the ideal home loan to get. This will help you land the right mortgage for you.