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!

Make An Extra Payment On Your Mortgage To Lock in Thousands in Savings

We know that around the last quarter of the year is not the time that you normally think about making extra payments on your mortgage, but it can really pay off. The truth of the matter is that you just need to think things through as they relate to your overall financial situation. If you really want to make it a goal to pay off your mortgage early, then you really need to think about making an extra payment or two.

It doesn’t have to be a lot of extra payments — even once a year making an extra payment can really pay off. Not only will you basically be making your payment entirely principal-lowering, you’ll have the peace of mind of knowing that your home is truly protected. Our biggest investment is our home, so why wouldn’t you want to make a payment that not only lowers your principal, but increases your overall equity?

A little math is in order. Let’s say that you picked up a 15 year fixed-rate mortgage — it’s pretty popular to go with a 15 year mortgage in order to not have to make mortgage payments the rest of your life.

One extra payment on a 15-year mortgage for $300,000 with a 5% interest rate is essentially $200 a month. This makes it a lot more affordable than trying to save up a bunch of money at the end of the year. Even though it doesn’t seem like it, this can take your number of payments total from 180 all the way down to 161. Think about that — that’s 19 payments! If your monthly payment is $2372, that means that you’re saving $45,068! What could you do with an extra 45 thousand dollars?

Quite a bit, actually. You could invest in repairs and improvements to your home, thus raising the value, or you can send your child to college very easily. You could also invest in your retirement and watch your money grow dramatically. It’s just a matter of looking at your goals and doing what works for you.

Some people aren’t into paying a lot of money extra to their mortgage, and that’s perfectly okay. You might want to skip paying extra payments in favor of decreasing other debts that you have. If you have a lot of credit card debt, it might be smarter to tackle that first rather than worry about the mortgage. Once you have your credit debt under control, you can go back to focusing on the mortgage. It’s really the best way to really make sure that you have things taken care of from start to finish — why not plan your own extra payments today? It’s really easy to do — just use an online calculator to figure out how fast you want to pay down your mortgage and the calculator will do the math for you!

Ready to Use Automatic Debit to Pay Your Mortgage – Read This First!

Are you really ready to start paying your bills directly through your checking account? If that’s the case, you definitely want to make sure that you are always able to get the best terms possible in your favor. In other words, if you really want to make sure that you can pay your bills through your checking account automatically, you want to make sure that you stay on top of it. From a purely financial position, the biggest thing that you do not want to do is just to assume that you won’t have anything to think about when you set up automatic payments. If the company makes a mistake and pulls the money at the wrong time, it can end up costing you a bundle in late fees as well as overdraft charges.

Think that account resolution would be a snap? Think again — it’s all what the terms and conditions for that particular mortgage company state. For example, if the payment is set to be due on the 13th of the month, and the terms say that it is allowed to be debited up to 7 days before the due date, then you cannot be upset with them if they debit your account on the 8th of the month. It’s all in the terms and conditions, which means that if you make the mistake of getting the debits wrong in your account, then you will be responsible for any and all fees associated with your mistaken.

So, if you’re really serious about doing automatic payments, especially for something as important as your mortgage, there are a few things that you will need to pay attention to. First and foremost, you must read the terms and conditions associated with your payments. While it’s true that this point was just addressed, it truly does bear repeating. Your contract terms will specify all the important information, including what type of fees would be associated with the automatic debit service, if there are any fees for the service to begin with. In order to encourage people to actually make their payments on time, some mortgage companies simply give a slight interest rate discount. Don’t overlook this discount at all, since it can help you save a little bit of money over the course of a year. In fact, some people save so much money that it actually adds up to a full mortgage payment at the end of the year — how cool is that?

How Does A Natural Disaster Affect Your Mortgage?

If you’ve been following the news, chances are good that you realize that the country has been wracked by a ton of natural disasters lately. If you own a home, it might mean that you have a lot of clean up to do — or worse, you have to make massive repairs to your home just to make sure that you actually have a place to live in at the end of the day. While you’re dealing back and forth with government agencies and insurance companies, there’s one organization that you’re going to need to deal with above all others — your mortgage lender.

In a sea of phone calls, letters, and email reminders, you might not realize that you really do need to make things right with your mortgage lender, but you really do need to think about them. Far too often homeowners need help but they think that they can just bury their heads in the sand and the lender will understand. The truth is that you’re going to have to stand up for yourself, be firm and try to work things out with your lender. The reason why homeowners don’t need to fear the lender is because it’s a lot cheaper on the lender’s behalf to work things out with you than to just foreclose on the property in question. Also, lenders realize that if they were to just push forward and start levying foreclosures and other issues, they would lose a lot of reputation points in the public eye. Nobody likes reading reports of lending companies screwing customers over for things that are outside of their control.

So, how do you actually get started? Well, you’re going to need to make sure that you gather as much paperwork as possible. If you have a camera or a camcorder, taking video and pictures of the damage can definitely help build your case. You don’t want to look like you’re just trying to capitalize on the disaster zone. It also helps if you can prove that the area in question is a nationally recognized disaster zone. This can help you because then the lender knows that you are actually in need of assistance and you’re not just trying to take advantage of them.

The next point that you will want to make is to make sure that you definitely look into the options that the lender has. The more options you have, the easier it will be to actually choose one. However, you want to be realistic. If you haven’t lost your income, you’re going to want to make sure that you actually make your mortgage payments. You might be able to get an interest reduction temporarily, or otherwise make less than your usual payments. If you really do need to skip those payments so you can get back on your feet, this is something that you definitely want to tell the lender. The more they understand about your situation, the easier it will be for them to work out a mutually agreeable situation.

No matter what type of arrangements you have worked out with your lender, it’s very important that you stick to them. The trouble with loan modification is that a lot of people tend to blow it off. In other words, you don’t want to be one of those people that beg for a solution and then you don’t stick to the plan in question. It’s easy to simply assume that you can do this, but the lenders have caught on to that game — you will end up being on the hook for the original agreement or worse — a lump sum pay or quit situation where you have to catch up the payments or face foreclosure.

Another point that you need to keep in mind is that even if your home is declared a total loss, you are still responsible for the mortgage in question. Most lenders are still going to force you to uphold the terms of your contract — including the full price of the home and all of the interest accrued up to that point. This is why lenders strongly suggest that you get as much homeowner’s insurance as you possibly can. It’s not just enough to protect your stuff — you want an insurance policy that’s going to cover your needs even when you have a total loss on your entire home.

This is also a good time to make sure that you have an emergency fund. A lot of people think that credit cards are the best way to go, but there’s nothing like having cash of your very own to take care of things quickly. Even if you are covered by insurance, it can take several weeks for the insurance company to get you the cash that you’re entitled to. Till then, you’re going to have to operate on your reserves in order to get things done — who really wants to do that?

Overall, the time is right to make sure that you know everything you can about what your lender will and won’t do. Even if you haven’t been caught in a natural disaster yet, the future is always changing, right? Right — don’t get caught being unprepared, as it would not end very well for you!

How First Time Buyers Can Find Their Mortgage

There’s always the possibility of obtaining a home mortgage, even for those with bad credit. If you have a past bankruptcy or your credit file is bad, you will still be able to find yourself a home mortgage to buy that home you’ve been wanting.

The problem isn’t with finding your mortgage, it’s with getting the best one for your current credit status. You can find various places offering mortgage home loans for people with bad credit. Some of them charge a very high interest rate. It’s a bit ironic, but when you’re trying to get yourself out of debt, it seems like the last thing you need is someone charging you extra for being in that position.

You need to try to maintain a balance in your choice of mortgages. If you’ve had a bankruptcy, or are high risk because of credit ratings, then things could be more difficult, but still entirely possible. This possibility exists in the form home mortgage loans for bad credit borrowers.

There are two main points you want to remember about mortgage home loans for bad credit, and that is the fact you’ll have a higher interest rate and that your search is going to take you longer.

Most of your bad credit mortgage lenders charge a lot higher interest rate, because of the perceived risk. A person who’s a lot more likely to repay is seen as safer than one who has had some trouble, and whose credit has taken a hit.

The whole point in finding a bad credit mortgage and it taking longer is because it can be harder to find the right lender with those circumstances. But they’re out there. The reason for the reluctance of many of the lending institutions is because they have to answer to shareholders. So they take their safest bets.

You might not be able to go to these high street banks, but you can go online and find yourself a lender who works with people who have credit problems. But you’d have to do this research even if your credit was top notch. So just do it.

Some Tips:

Be sure to keep your eye on what the offers are. Each time you apply, your credit file gets searched, and it counts against you. The best move is to pull the file yourself and make copies to take to your potential lenders. This way it only gets pulled the one time. If they don’t want to use your copy, then move on, someone will.

If you do some diligent searching online you can come up with two or three potential lenders to do business with. Always read the fine print and do your homework in regard to these institutions you’re applying to.

How to Know Which Mortgage is Best For You

Let me begin by stating the fact that you tought to enlist the help of your local mortgage professionals in finding loan options. You need to find the loan that will best suit your needs. It’s a common practice for individuals to just assume that fixed rate mortgages are the best, but the truth is, there are a lot more options that could help save hundreds or thousands of dollars. So I’m going to focus on 3 of the most common ones, which are the Fixed Rate, Interest-Only, and Adjustable Rate (ARM) mortgages.

I’ll start with the Fixed and/or Adjustable rate mortgages. We’ll assume that your loan will be based on a term of 30 years. Both of these loan types fully amortize over 30 years, meaning that your monthly payment will include the principle and the interest for your loan. The main difference in these two loan types is the obvious one, and that means one is ‘fixed’ and one is ‘adjustable’. But the beginning interest rate, called the ‘start rate’, is lower on the ARM than on the Fixed rate loans.

The main question you have to ask about these two options would be ‘how long’ are you planning on staying in your home? It’s surprising how many clients fail to ask this, but they need to consider many variables like employment, if you plan on moving out of state, maybe getting re-assigned somewhere else, if your family size will increase, or if you look at this as a starter home, etc.

Being a mortgage broker myself, I would never recommend getting an ARM with a term of less than two year, or one that’s more than five years. These terms represent only the portion of time that the interest rate and the payment on your ARM will actually be fixed and won’t change. Let’s look at a purchase of $250K and compare interest rates and payments for a three-year ARM against a fixed rate. Taking the current pricing for a three-year ARM, it comes to 3.125%, and for the fixed rate it comes to 5.125%. So by comparison, the payments for the ARM are $1,071 and the fixed rate payments come to $1,361. When you multiply the difference over 36 months, your savings with the ARM come to $10,440 over your first three years. To put it simply, by not totally comprehending how much time you plan on staying in the home, can wind up costing you thousands.

Now for the Interest-Only loans. These aren’t all that different from the ARMs, in the fact that you have a period of time that your interest only period will be fixed, most usually based on three, five, seven, or ten years. The only thing is, the interest you pay on the Interest-Only loan is exactly that, the interest. Most usually this loan type is harder to qualify for because it involves a multi-faceted thought process from the client. These are great loan types for big purchases, or for clients with income that goes up and down, because you can pay just the interest when you need to, with anything more than just the interest getting paid as a result in the reduction of your principle. To get a better grasp on what all this means, if you still aren’t clear on it, I suggest you consult with a trusted mortgage professional.

Comparing Mortgages Can Save You Money

Anytime you buy products in a shop, it just makes sense to compare the prices with other like products. Is the product you’re looking at of good quality? Do you know how it works? Will it suit your needs? And even more importantly, will you be able to get a similar item for a cheaper price?

While getting a mortgage can be a really big commitment, there’s still no reason you shouldn’t shop around and compare. It’s a good approach that can save you money, just like with any other product. As a matter of fact, mortgages are one of the largest financial commitments many people will ever make, so it very important that you shop around some before deciding on which one you’ll take. Comparing mortgages saves you time and money and helps you find the best mortgage for fitting with your needs.

It’s a little bit like having a personal shopper of your own in the mortgage market when you hire a mortgage broker. Or you can try comparing mortgages online, letting other people do the hard work for you. This will give you a lot more free time.

Mortgage Comparisons Made Easy – Comparing mortgages will help you see through some of the attractive bonuses and extras, and to avoid a lot of the hidden costs that may be there. Free legal fees, cash rebates, or free insurance can be very appealing at first, only to turn out to be deceptive in the end. By comparing mortgages on websites you’ll be better able to get the big picture, and to get the best mortgage for your situation. It might pay you to check to see if your mortgage website is a ‘whole of market’ site, which means they access quotes from lots of lenders, or if they’re limited to just a few lenders that they receive commissions from. Basically, you want to know how much of this market you’re comparing.

Tools for comparing mortgages help you juggle the varying types of offers, and make your options fit with your lifestyle. Comparing your mortgages in one spot simplifies the process for you and lets you weigh the good and bad of offers to find the one that’s more cost effective for you.

You can do comparisons of flexible mortgages with less flexible mortgages, interest-only loans, and repayment loans. You can have a look at fixed rates and compare them to variable rates, and all at one site. This means getting the best competitive quotes and in less time.

If you’re thinking of getting a mortgage and aren’t happy with what you currently have, then you should take advantage of your option for shopping around. You have all the tools you need available online. So go online and find that mortgage you’ve been wanting, and get the best one for your current needs. You can find all kinds of comparison sites by simply typing your search term into your favorite search engine. There’s no shortage of these kinds of site on the web.