Yes, It’s a Great Idea to Turn to a Mortgage Calculator

A mortgage calculator is a beautiful thing. Of course, you might think that we’re just being over the top. On the contrary, you future homeowner you — using a mortgage calculator might be the smartest thing that you’ve ever done, right up there with deciding to ditch those rent payments and invest in your family’s future. This is a tough decision that’s been made even tougher as credit markets freeze up and lenders start getting nervous. While this doesn’t mean that it’s impossible to get a mortgage, it does mean that your lender is looking at your application with a bit more scrutiny — and denying you on small things that might have been overlooked in the past.

This is where your mortgage calculator comes in, actually. Instead of worrying about whether or not you can really afford that mortgage payment, you’ll be able to find out in a flash.

Now, at this point you might think that there’s really no need to go with a calculator — after all, the bank has already preapproved you for a certain amount after a lengthy mortgage application.

Not so fast.

Just because you’ve been preapproved — that is, that the lender has told you how much house they will help you finance — doesn’t mean that you should go out and get that much house. That’s a good way to find yourself in foreclosure land before you’ve even gotten to enjoy the benefits of owning a home.

Using a mortgage calculator is pretty easy. You fill in the first field with the total amount that you are having financed. Now, this isn’t always the total amount of the home — after all, you should have a down payment, right? Right. You will need to enter in the down payment as well. Along with these two fields, you will need to make sure that you note the interest rate. If you don’t have it, you can always estimate.

Plugging in the numbers isn’t the hard part. It can be hard to realize that you really can’t afford the house that you ultimately wanted in the first place. It’s better to know that the numbers don’t work. After all, you have to calculate in maintenance — there’s no landlord to call when the pipes burst, or when you have to replace rotted wood. If that wasn’t enough, you have to think about taxes and insurance — on top of principal and interest! Yikes!

Overall, using a mortgage calculator is really what’s necessary if you want to make sure that you have not only enough money for a mortgage, but for the rest of your life as well — get started today!

Paying off the loan early!

It is true that by settling your loan early, you will be saving money. But, at the same time, you should not overlook one point. There are bound to be some ‘hidden’ charges in respect of early settlement of a loan. It is, therefore, better for you to take into consideration a few things before you sign the deal. If your plan is for a long term, pre-closure will not be difficult. This reduces, considerably, the burden of interest. You have, however, to ensure that by pre-closing the loan, you will not be paying much by way of penalties.

Charged heavily for preclosing the loan!

Though it is good to pre-close a loan, which the lender too will be inclined to agree with, you have to consider the amount of fees payable for pre-closing the loan. The fees charged for a pre-closure, vary from one lender to another. All do not have any uniform rates in this regard. And the fees thus charged have different ‘names.’ You have to make it a point to go through your loan agreement carefully to find out if there is any fee payable for a pre-closure. In case you are not able to find the details yourself, you may contact your lender and check with him; he will give you the details.

Paying off the loan

The lenders do not have any fixed set of penalty fees payable in respect of a pre-closure. But generally, such penalty fees will more or less be equal to the interest amount payable for one or two months. Keeping this figure in mind, you can work out on the time of your pre-closure. If a loan is pre-closed in its early stages, it will be advantageous. Pre-closing the loan, during the last stages of the loan is not advisable. The fees you will be paying will be more than what, you think, you would save. There are a few lenders who are willing to permit you to make some payment much before there is any charge of fees. This is an ideal option in that there will be no charge of fees later. Continue reading %s

Should You Really Pay Closing Costs as a Buyer?

Ah, we arrive again at buying a home. It’s a pretty big decision, so it makes sense to research just about every angle of the transaction as it comes to light. You might think that you’re actually pretty prepared — after all, you have the down payment, and you’ve found that the mortgage will fit into your budget. Does it mean that you have nothing else to think about? Absolutely not!

For example, you really need to think about the closing costs involved with purchasing a place. The closing costs are the list of expenses that buyers will need to pay at the time of the sale. There’s a long list of expenses, and if you’re not prepared for them they can really sneak up on you. The last thing that you want to do is finally go through all of the different stages of buying a home to get stalled out at closing. It’s a seller’s nightmare too, because they’re hoping that the closing goes as smoothly as possible. When you’re thinking about purchasing a house, you have to remember that the seller is hoping that you will be able to make the house a home very, very soon — which is a good thing, because this opens the field for negotiation.

Negotiation? Of course — you will be able to negotiate a bit more as long as you’re really willing to think about all angles of the problem. At the core of every transaction is a buyer and a seller, right? So if there’s any snags in the process, they need to be closed quickly.

Now, you might be able to get the seller to finance some of the closing costs for you — that can be put out in the purchase agreement. If the seller really wants to make sure that they are going to get the closing underway, they might do this for you. However, what you can also do is roll the closing costs into the loan.

Now, the best way to go about this is if you haven’t used your maximum loan limit on the house itself. If you have some wiggle room, you can indeed just add the closing costs to the loan itself. However, you have to realize that this is going to require more money on your monthly payments and plan accordingly — that’s the best way to go, if you’re going to go down this road.

The Real Meaning of a Mortgage

These days, we’re all looking for a mortgage at one point or another in our lives. While some would argue that owning a home really isn’t what it used to be, there is a sense of pride and belonging that comes form actually owning your own home. When you don’t have your own home, you can feel like you’re missing out on something very special that everyone else has access to. Is it the end of the world if you really don’t own a home? No, but if you’re looking into the ins and outs of homeownership, it can help to put things into perspective.

Speaking of perspective, here’s something that you might want to think about: the real meaning of a mortgage. Is a mortgage something that’s going to be holding you down, or allowing you to build something great?

You might already know this, but a mortgage actually doesn’t refer to the actual home loan — though that’s usually what we think of when someone says the word. It’s actually the instrument that’s used to bind the home in one spot. What we mean by this is that a mortgage is the document that actually is held against the house. If you were to stop paying on your home loan, the mortgage springs into place to essentially become the legal instrument that allows the lender to seize the home from you and force you to depart the premises. Of course, nobody goes into the idea of homeownership while thinking that they would just default and run. Contrary to popular media, the “walk away” plan really isn’t a plan for a lot of homeowners, because it means starting out at step one all over again — something that’s hard to do after you’ve been in your home for so many years.

Knowing what a mortgage really stands for can help you make the right decisions to actually pursue the mortgage or to step back — and that’s something that has to be considered in order to really do well in the great mortgage game.

If you’re really trying to get things done with a mortgage, then you really want to make sure that you can afford it from every angle. However, you don’t want to just think about the financial — consider your emotions. Are you really ready to become a homeowner? If so, then there’s no time like the present to chase your dreams!

Do Bi-Weekly Mortgage Payments Help You In the Long Run?

If there’s one thing that homeowners don’t like when it comes to their home loans, it’s definitely the interest. Wouldn’t life be easier if there was less interest to pay? After all, interest doesn’t help you at all — it’s profit to the lender, because they are letting you borrow the cost of the home over time. If you’re thinking about trying to pay off your loan faster, you will need to actually deploy some strategy. Thankfully, it’s not really as hard as some people make it out to be.

Most lenders these days realize that people want to pay off their mortgages sooner, and even have payment plans for you to do it. You can pick up a bi-weekly mortgage payment plan, where you get to make half your full mortgage payment every two weeks instead of once a month. 26 half payments add up to 13 full payments, which is one more payment than you would have made under a traditional plan every year. It doesn’t seem like much, but the math really is in your favor. Here’s why.

Most of your payments are going to tackle both interest and principal, which means that your principal will go down slowly with time. However, what happens to that extra payment? It’s actually all principal, which can help bring the balance down a lot sooner year to year.

Your lender will most likely charge a small fee to set up the bi-weekly mortgage plan, as it will be deducted from your bank account every two weeks. Very rarely will the lender just trust you to send in half now and half later.

What to see the numbers in action? Let’s take a modest mortgage with a balance of 150,000, a 30 year term (360 months), and an interest rate of 6% — not too bad, right?

Your monthly payment, which includes principal and interest, would be about $899.93. So let’s go bi-weekly!

Your payment every two weeks is $449.67. The total interest during the life of the loan is 135,294 — compared to the 173,757 that you would normally pay. What’s pretty is that the loan is paid off in 24 years instead of 30. That’s a lot of cash saved and it doesn’t really affect your family’s lifestyle at all. It might take some getting used to, but the benefits of bi-weekly mortgage payments are truly tough to beat!

Another Glance at the Short Sale Process

Avoiding foreclosure is one of the hardest things to do as a homeowner. When you know that the money to take care of your home is no longer there, it can really stress you out. It’s better to make sure that you will be able to not only get out from under the house, but you will also be able to do it without damaging your credit. Think that it’s impossible?

Not so — not when you have the short sale process to fall back on. This is actually when the lender decides to accept less than what’s due for the house in question. Keep in mind that this option really isn’t universal; indeed, the lender has to make sure that the property actually qualifies for the short sale in the first place. The home’s market value must be proven to be less than what it would normally be, and the mortgage has to be close to default status — if not already in default status. That’s something that you have to pay attention to when you’re trying to really get your mortgage issues taken care of. In addition, you really need to make sure that you can actually claim hardships — just wanting to get out of your house isn’t enough to qualify for hardship or a short sale.

What happens next in a short sale is simple. The seller (you) has to sign a listing agreement with a real estate agent. It’s got to also have third-party approval, which means your lender need sot sign off on it. Once everything is underway, the agent will go out and try to find a buyer that can make an offer for less than the amount of the mortgage.

Now, in a perfect world — the purchase offer meets the terms of the short sale just fine. The lender has to accept the offer — it’s not just about whether or not you accept the terms of the buyer’s purchase offer. Once the buyer delivers the funds and the lender releases the lien, the seller delivers the deed, and everyone emends up happy — to a point.

There are still some consequences to the seller that goes through a short sale. The lender can have the forgiven debt go down as a taxable event, since it’s technically income. However, if you find that you really can’t take care of your mortgage anymore, a short sale could be just what you need!

Bank-Owned Homes – A Smart Deal or a Dangerous One

Whether you’re thinking about buying your first home or you’re thinking about buying your vacation home, you definitely have a lot of things to think about. One of the biggest things that you will need to think about is whether or not you want to purchase a bank-owned property, or if you want to purchase from a traditional individual. Unfortunately, a lot of agents will tell you that there’s really no difference between bank-owned properties and regular ones, but that’s not the case at all. In fact, there are some important differences that you need to know about in order to really seize the deal and work things out on your terms.

First and foremost, you don’t get the seller disclosures that you might be used to. In other words, you’re on your own if there are serious problems with the house — it’s buyer beware, and you have to weigh that in against the potential for a good deal. The house might have problems that the bank has no interest in revealing to you. This means that the bank will be selling you the house “as is” — there really won’t e too many request for repair notices honored by a bank that wants to dump the property as soon as they can.

There’s also no real hurry to sell you the home — so if you’re thinking about a quick move in, you might have to think again — it can take up to two weeks to get a response from the bank. meanwhile, that’s an extra two weeks that you and your family have to stay where you’re at in order to get things done.

The extra costs could even sneak up on you — a lot of contracts do favor the bank over you, which makes sense. You have to make sure that you have your rights represented properly by hiring a real estate lawyer. If you thought that you didn’t ever need a lawyer, you might want to think about this in further detail — yes, you really do need a real estate lawyer!

It’s important to ensure that you have someone looking over the deal with a fine toothed comb. Bank owned properties can actually be a good deal, but there are some serious pitfalls that you want to think about before you just dive in!

Make it Small

Many Brits, when buying a property abroad, tend to go for a huge villa with an equally huge garden – after all you tend to get a lot more for your money in France or Italy and the last thing you think of when signing on the dotted line for your new house with a good property company is how much work it will be to look after the garden.

We all have our dreams and many people do dream of owning a second home with lots of land. However, if they do not think this through properly then this is something that they often come to regret.

Holidays should be for relaxing and if you have to spend your vacations mowing and trimming then you will be glad to get back to work for a rest. Gardening can be fun but not when it is a constant round of hard work.

So when looking for your dream property abroad, make sure that the garden is of a manageable size – and if you do not like gardening at all then why not go the whole hog and go for an apartment rather than a house?

That way you can be sure that your holidays will be spent relaxing on the balcony with a cocktail in hand rather than slogging it out in the garden.

Lifetime Mortgages Can Give You Relief From an Interest Only Mortgage

While solutions are still up in the air, the problem is clear: there are many that find themselves trapped by an interest only mortgage. Instead of feeling like there’s no way out, there is now a proposal going around that lenders should offer extensions to the mortgage scheme. This would effectively create some lifetime mortgage situations.

If the proposals are approved, the lender would be forced to generate a whole new contract with the consumer, as per equity release rules.

Equity release? Yes, definitely. This is something that could be a total gamechanger, so you might want to keep track of the news over the next few weeks.

The FCA feels that lenders who force borrowers into a new capital repayment scheme are being unfair, but it might not be an idea whose time has come just yet. Many feel that interest-only mortgages are something that people went into with their eyes wide open. If you don’t do them right, the entire house of cards can easily come crashing down — causing a lot of problems in the long run.

It’s always a safe bet to realize that you have to look at things from a different perspective. Lenders already have options available for borrowers that feel they’re in hot water, but the FCA stepping in would create an entirely new layer of consumer protection.

The question is — do UK consumers really need that protection?

More lenders getting into the equity release market could create more options, but only time will tell if this is a good thing or not.

For the time being, if you find that your interest only mortgage is getting out of control, you need to actually contact your lender. Explain to them what’s going on. If this is just a temporary bump in the road, you’ll find that your lender is more than willing to negotiate with you. If you’re in the market for a remortgage option, you should definitely shop around. If things are bleak, then you will need to explore options — do you need to declare bankruptcy? Do you need to work on an IVA? The point here is that you definitely don’t want to just hope everything will be okay. You need to break through and move on to bigger and brighter solutions. Good luck!