Home Mortgage and Refinancing » debt consolidation

7 Common Refinancing Mistakes to Avoid

Mortgage Maven — Wed, 29 Dec 2010 01:52:05 +0000

When interest rates fall, a refinancing frenzy usually comes next. Whether you’re looking to trim mortgage payments, eliminate credit card debt or pay off your car loan, experts say you should fully understand all the options available to you before you decide to refinance.

Allied Mortgage Consultants, a mortgage company recognized for educating consumers about the reality behind the new home loans and refinancing, reveals seven common mistakes people make when refinancing.

You don’t have enough savings to justify refinancing. It’s best to reduce your interest rate by at least 0.75 % to 1 %. This will save about one hundred dollars a month on a $ 150,000 mortgage.

Not knowing your closing costs up front. By law, closing costs must be disclosed within three days of the loan application. But there are different ways to calculate them. Once the details of your loan are clear, the estimated closing costs can be quoted to you. Be prepared for the worst case scenario.
Do not understand your reasons for refinancing. In addition to reducing your interest rate, there are other legitimate reasons to refinance, such as debt consolidation, renovations or major purchases. In some cases you can deduct your interest payments on your tax return. Always consult an accountant or tax adviser lawyer when making these kinds of decisions.
Not familiar with the APR “teaser rates”. Some mortgage brokers use the APR to get your attention, but it may actually end up costing you more. APRs often comes with a 30-year mortgage coupled with an accelerated payment plan. Make sure you know the actual rate of interest you will pay during the entire loan term.
Not being educated about the pros and cons of adjustable-rate mortgages. ARM’s can minimize your monthly payment, but not if there are additional refinancing occurs. In this case, they cost more in the long run.
Not aware of the services you should expect from a mortgage broker. The process of refinancing should be trouble free and completed quickly. Ask your mortgage broker to give you details about his their service plan and performance guarantees.
Not informed enough to ask the mortgage broker about all their loan products, terms and rates. Subtle differences can save or cost you a lot of money.

Why Choose A Military Debt Consolidation Loan

Mortgage Maven — Tue, 16 Nov 2010 11:44:03 +0000

Borrowing too much money too frequently can obviously lead to financial stress and worry. We all know that fact but sometimes we still find ourselves strapped with too much debt that can make it difficult to pay all the bills successfully at the end of the month. What is more, unfortunately military families are not removed from this burden. They, too, have to worry about these difficult financial matters. Thankfully, this problem was identified over the past several years and special programs have been set up to help our men and women serving in the armed forces by providing military debt consolidation for those that qualify.

Borrowing money is as common today as death and taxes. However, the tough part can be managing the enormous burden that can come with having too much debt. It is worth stating that debt consolidation is a good program if and only if you are disciplined enough to not take on any new debt and finally control spending. It probably makes sense to have a detailed written budget to also help focus on your spending. In an effort to reduce debt, racking up more of it will short circuit the whole idea of consolidation and cast doubt on your hopes of eliminating debt forever.

Military debt consolidation works similar to civilian consolidation programs in that all open accounts are rolled into one. Where military loans separate themselves in a good way is that they provide a longer term repayment schedule and more favorable lower interest rates which lead to a lower monthly payment with idea being that repayment becomes more likely as a result of less debt load.

With added benefits, military debt consolidation is a great way for current armed forces and veterans to tackle their debt. Strive to not take on new debt while in this process and attack the debt with laser like focus. Also, seek out a qualified professional in order to help you navigate the process successfully. With all the legalese that can be on any contract, don’t sign anything until you understand exactly what you are getting into.

Home Loans For Veterans

Mortgage Maven — Sat, 10 Jul 2010 13:13:02 +0000

Veterans home loans are gaining popularity as a source of financing for housing. That’s mainly due to the advantage of zero down payment requirements–which is a big relief for the average family that has only about $5,000 in ready cash. Although these loans generally have the same interest rates as the market and so there is no added benefit in terms of interest savings, the fees charged by lenders are capped, the government makes sure of that. So you don’t have to pay excessively for closing costs, originations fees, appraisal fees, and whatnot. The government also valuates the home that borrowers want to purchase, so you get free assessment service. Without having to hire an engineer or assessor, you can relax in the knowledge that the house you’re buying is really worth its purchase price, or else the VA Office won’t let you buy the house. There are some things you have to remember, however, when purchasing your first dream home via this option.

Tips on getting a home loan for veterans

Get your loan approved before looking for your dream home

This way you know what budget you are on and can easily narrow down your choices to ones that fall within your budget

Gather all your important information, prior to filling out the application forms

You will save time in looking for your details again and again, since the same information, such as your Social Security number, pay statements, and tax returns, are required in the different forms that you have to fill up

Obtain Certificate of Eligibility from the Veterans Affairs Office

You can apply over the internet and if you have all your details with you, approval is really fast

Obtain your past employers’ (for the last two years) names and addresses

You will need this in your application

If you have an existing property you have to disclose these details in your application

Information such as addresses and loan details are also necessary whether you are a borrower or co-borrower

Know about income requirements

There are caps to the amount you can borrow and this depends on your income.

Know these details and getting a VA home loan would be a breeze. Happy home shopping!

Military Debt Consolidation Advice features advice with a particular focus on financial management for military members.

Get a 125 Home Equity Loan Easily

admin — Fri, 05 Sep 2008 22:32:19 +0000

What is a 125 home equity loan? I’m sure most of you have heard of the traditional home equity loan which allows a homeowner to get loans for a wide variety of uses. These loans let you access the equity in your home without selling it. What some don’t know is that there are many home equity loan options and the 125 home equity loan is one that some homeowners can take advantage of to access even more cash without selling their homes.

First off, let’s define what equity is. Equity is determined based on two important factors, the amount owed to the mortgage company and the value of the home. Quite simply, the amount still owed to the mortgage company is subtracted from the value of the home to determine the equity value of the home. For example, if your home is valued at $300,000 and you still owe $150,000 to the mortgage company then you have $150,000 in equity. This value can rise or fall with the real estate market, meaning in a rising market you will acquire additional equity in your home as the homes value rises.

Traditional Home Equity Loans vs. 125 Home Equity Loans

When securing a traditional home equity loan the lender will offer a loan not to exceed the equity value of the home. So, if you have $50,000 in equity you’re eligible for a $50,000 loan. You can use this cash for pretty much anything from debt consolidation to home improvement to starting a business or even paying for your child’s college education.

A 125 home equity loan will allow you to borrow more than the equity value of the home. In fact, it lets you borrow up to 125 percent of the homes value. Many refinancing lenders have stayed cleared of this type of loan sine part of it is unsecured, however an increasing number of online lenders are offering 125 home equity loans. If you have a high credit rating you’re even more likely to get approved for a 125 home equity loan.

125 Home Equity Loan Warning

If you need a large amount of money the 125 home equity loan could be for you. Those starting a business or using the cash for large home improvement projects can benefit from this type of unsecured home equity loan.

As long as the value of your home continues to rise you’re in little danger from the 125 home loan, however if home values decline you could end up owing more than your home is worth. Keep this in mind when considering a 125 home equity loan.

Depending on your circumstances the 125 home equity loan could make very good sense or it could be a recipe for disaster. If you’re using it to finance a business start-up make sure you have sufficient cash flow to continue paying on the loan. Those using the 125 home equity loan for major remodeling may be in the best situation since the remodeling will likely increase the value of the home, possibly enough to offset the unsecured portion of the loan.