Home Mortgage and Refinancing » fixed rate mortgage

Choosing Popular Mortgage Products to Meet Your Needs

Mortgage Maven — Thu, 03 Jun 2010 23:31:10 +0000

If you are shopping around for a mortgage loan, you need to remember that not all mortgages are created equal. Searching for the best mortgage product to avail of will involve a lot of research on the basic mortgage concepts and terms, as well as comparing a number of different wholesale mortgage lenders. This will enable you to find the lowest interest rates and the best terms that will work best according to your preferences. While these types of loans are packaged as complete products by banks and other lending institutions, remember that almost all terms are negotiable, and you shouldn’t hesitate to bargain your way into a good deal.

There are many popular mortgage loan products out there, and it will do you a lot of good to examine each one before making your final decision. After all, your home or property is a valuable asset, and you would want to put it under as little risk as possible.

Fixed rate mortgages are one of the very basic loans offered by the lending industry. You can opt for a paying period of between 10 to 30 years, with little to no variation on the mortgage terms. This is a popular mortgage product for people who are planning to keep their homes for more than a decade and want to pay a consistent amount that will not change despite fluctuations in the market.

An adjustable rate mortgage, or ARM, can offer low interest rates for a total of 12 months. After this, interest rates will depend on the movements of the market. If you are planning to keep your home for more than a year, it would be wise to seek refinancing of your mortgage at each year’s end.

Another popular mortgage product is the 10/1 ARM. You will get a stable 10-year interest rate without fluctuation, and from the 11th year onwards, your mortgage will be subject to a yearly review and adjustment of interest rates depending on the movements of the market.

The Two Main Types of Home Mortgage Loan

Mortgage Maven — Sun, 16 May 2010 07:17:40 +0000

There are two major types of loans to look at when you are looking for a home mortgage loan. They are the fixed rate and the adjustable rate loans. Both have their advantages and disadvantages depending on your personal situation. The fixed rate loan is the most favorable as your rate remains the same throughout the term of the loan whereas the adjustable is subject to change.

If you are on a tight budget, a fixed rate loan will not change, therefore you will know what your payment will be each and every month. As you are aware, interest rates are subject to fluctuations daily, so with a fixed rate loan there are no surprises and you can plan your budget accordingly. The fixed rate loan never changes and will remain the same throughout the term of the loan. Therefore, if you lock in at a relatively low rate and the interest rates increase, you are at an advantage.

On the downside however, if you lock in at a certain rate and the rates decrease then you are at a disadvantage. But if the interest rate and the payment fall within your budget criteria you will always be able to cover your payment.

When a fixed rate is advertised by a lender, you need to know that this rate is based on certain financial parameters. Your rate may be different if you do not meet the guidelines advertised.

However, an adjustable rate loan is a little easier to qualify for as they usually start out with a lower interest rate, and therefore a lower payment. If you know your salary will increase annually, then your income will grow and you’ll be able to afford an increase in your payment.

If you are uncertain of your income, however, the fixed rate mortgage loan may be the safest way to go because you will always know what your monthly payment will be as it will not change.

Understanding Fixed Rate Mortgages

admin — Wed, 29 Jul 2009 11:49:39 +0000

If you are starting to look for a mortgage,it is important that you first understand how mortgage rates are compiled. Before you even take a look at someone’s advertise mortgage rate, you have to make sure that you understand the difference between the advertising and the actual rate.

Banks advertiser rates all over the TV, radio, and Internet. Many times they will advertise what is called a buydown rate versus what the actual rate is. I buydown rate typically includes the borrower to bring in thousands of dollars to buy down the rate.

The basic thing to understand is that mortgage interest rates come from the same place for each bank across the nation. Some banks are more aggressive without rate that they get, but advertising is advertising and you really need to make sure that you read the fine print.

What kind of fees are you going to be charged? This is one question that you need ask up front. If the fees are going to outweigh the savings, then it goes to reason that refinancing your mortgage is probably not advantageous at this time. Typically these closing costs should be able to be recouped within 2 to 3 years of refinancing.

Make sure you know your credit scores. Your credit score is very important in determining what type of interest rate you are going to get with your mortgage. This will also determine whether you can go with conventional financing or you may have to go with an FHA loan.

The next thing you need to discover is whether you want a fixed rate, or an adjustable-rate loan. Most people these days are opting for a fixed rate because rates are very favorable, but there are several situations where an adjustable rate makes more sense. It just depends on your situation. Make sure that you’re working with someone who provides you with both options, and shows you the pros and cons of each.

Prepayment penalties are not very common these days, but make sure you ask just in case.

The number one thing that you need to do before you settle on your mortgage is to make sure that you’re working with someone that is knowledgeable in the industry and someone that you want to work with long-term. The reason being, is that in the future you’re going to have questions on your mortgage, anyone have someone that you can go to that you know like and trust. If you settle for just anyone, you want to find yourself very disappointed in the long run.

Getting the Best Fixed Rate Mortgage

admin — Tue, 28 Jul 2009 16:11:14 +0000

With banks now following strict underwriting requirements and with the prime rate expected to rise over the next few years, now is probably the right time to take a closer look at fixed rate mortgages over the variable or adjustable counterparts.

In fact, many mortgage borrowers have already opted for fixed rate mortgages because of some of the benefits they offer, namely the fixed payment, amortization and rate to name a few. However, others who are new to fixed rate mortgages are probably nervous about whether they are getting the “best deal” out there. Here are some of the things you should do to make sure find the best rate:

1. Ask friends, family and colleagues to see what they think about the financial institutions that offer great rates. It may come as a surprise that a local bank or one particular mortgage broker seems to offer better rates than what your current lender can even dream offering you.

2. Never settle for the first offer or so that gets presented to you. Do your homework and shop around, even if it means taking a few days to do so. This research can be as simple as surfing a few websites that focus entirely on mortgages where you can locate regional and national rate averages. Doing so will not only let you know whether you are being presented with a fair deal, but can literally save you tens of thousands of dollars over the term of your mortgage.

3. Consider paying points. If you want to make sure you get the lowest rate possible or if you want to lock in a lower mortgage payment, paying points at closing will allow you to do so. While this requires an up-front payment, if you have the means to do so it will allow you to enjoy the benefits of a lower payment and/or much-lower interest costs over the term.

Ultimately, you will need to do a bit of research. This can be as elaborate or as simple as you like but will undoubtedly save you tens of thousands of dollars over the course of your term. Not only will you be satisfied with the rate you receive, but you will actually be proud of the mortgage you have!

4 Tips for Finding the Best Refinancing Lender

admin — Tue, 07 Oct 2008 17:23:45 +0000

Choosing the proper mortgage is a huge decision, but if you’re refinancing then choosing the right refinancing lender can be just as important of a decision. Here are 4 things you should think about when choosing the best refinancing lender.

Know why you want to refinance

There are several reasons to consider refinancing your mortgage and each presents a different picture to a refinancing lender. Here are four of the most common reasons people have for refinancing:

You want to lower your current interest rate. This can be profitable if the current rates are at least 2% lower than the rate on your mortgage.
You want to switch from an adjustable rate mortgage to a fixed rate mortgage. If you see interest rates beginning to rise this can be a very smart move.
You want to shorten the term (length) of your mortgage. This will help you build equity in your home faster and will also have you pay off the mortgage sooner meaning you own your home free and clear.
You want to cash out some of the equity in your home. If you’re planning on using the excess cash to do home improvements or to start a business this can be a wise decision.

The refinancing lender will want to know your reasons for choosing to refinance. They will tailor your mortgage product to your needs based on your reasons for refinancing. You should also know about the current terms of your mortgage and should know what your credit score is.

Know what mortgage products and refinancing lenders are available

Similar to getting a new mortgage, there are a variety of lenders that you can work with to refinance your home. Mortgage companies, banks and credit unions are the obvious top choices when refinancing. You can also work with a mortgage broker who will do the work of contacting a variety of lenders on your behalf. Keep in mind that mortgage brokers are not bound to find the best deal for you unless that is specified in a contract. They may very well have their own interests at heart when directing you to a refinancing package.

Also, take the time to either learn or re-learn about mortgage and lending vocabulary. Be familiar with terms such as points, prepayment penalties and interest rates. You can also find current listings of mortgage rates from a variety of websites, such as Bankrate.com, and should take the time to become familiar with current interest rates and trends.

Shop several refinancing lenders before deciding

The mortgage refinancing arena is very competitive these days and finding a handful of lenders to compare should be an easy task. Using a broker makes this even easier, but again make sure they are contractually obligated to present you with the best offer for you. You can find resources in your local newspaper and yellow pages as well. If you’re comfortable using the internet then this is a wonderful place to research refinancing lenders. There are many online lenders who will provide you with quick quotes and great customer service.

Negotiate the best terms for your refinancing

Typically the mortgage company is paid based on the loan that you take through them and this is especially true in the case of mortgage brokers. Make sure that the loan is to your best advantage before signing on the dotted line.

You can also save money by searching for a lender who will offer you refinancing with no closing costs. Make sure if you are comparing loans that you are comparing similar loans to get a good idea of which one is best. Make sure all proposals are sent to you in writing and don’t let a refinancing lender rush you to a decision.

To compare the loans you could do something like a spreadsheet with columns for each important feature such as interest rate, points, prepayment penalties and closing costs for example. This makes it easier to see the differences in each loan offer. Also be sure to check online for the latest mortgage rates.

As I’m sure you know, refinancing your mortgage is a huge decision and should be taken very seriously. Know as much as you can about your refinancing options and the refinancing lenders that you’ll be working with. This will help you to make the best decision possible. By following these tips you will be able to get the best deal and finding the best refinancing lender and mortgage package for yourself will be much easier.