Should you pay off your mortgage early? If you’ve come through the recent economic crisis in a position to be able to make additional payments on your home loan Middletown, this may sound like an attractive option. It’s a safe, conservative financial strategy that many find appealing after being put through the financial wringer the past few years.
But it still may not be the smart thing to do. True, the practice of making double payments or otherwise paying a extra on one’s mortgage each month was long considered a hallmark of sound financial planning. But that was a different era and today, what made sense in the past may no longer be your best course of action.
The reason for paying down your mortgage early, of course, is to save money. Making bigger payments now reduces the interest you’ll have to pay over the life of the loan, perhaps by tens of thousands of dollars. It also moves up the date you’ll own the home free and clear, and eliminating the monthly mortgage payment from your budget completely.
Mortgage tax benefits reduce effective savings
But how much are you actually saving? If you purchased or refinanced your home in the past few years, probably not much. Because mortgage interest is tax-deductable, it reduces the effective interest rate you’re paying by about one-quarter. So if you’re paying 6 percent interest, your effective rate is likely around 4.5 percent, perhaps lower.
What this means is that any additional money paid toward your mortgage is effectively earning you a return of 4.5 percent – money saved is money earned, literally. If you’re in a higher tax bracket, the figure could be even lower.
The fact is, there are any number of fairly conservative investment approaches where you can earn a better than 4.5 percent return. Although the stock market took a big hit in 2008, the historic rate of return since the 1950s has averaged nearly 11 percent a year, including the recent downturn. Including bonds or investing in funds that include stocks and bonds can help even out the sharp peaks. If you’re looking at an investment period of 20 years or more, investing will nearly always provide a better return.
This wasn’t necessarily the case 20 or 30 years ago, when mortgage rates Middletown were running around 10 percent or even higher. Back then, paying down your mortgage as quickly as possible made much more sense.
Retirement saving, other needs may be more important
One of the other downsides of paying off your mortgage early is that it may distract you from other financial needs, such as saving for retirement. Paying off your mortgage early won’t do you much good if you don’t have a solid income to help you enjoy your home in your golden years – and most people don’t save nearly enough.
An IRA or Roth IRA also offer tax advantages that effectively increase their earning power, just the opposite of what happens with the tax deductions on your mortgage interest, which effectively reduce the return you get on paying off your mortgage early.
Also, you shouldn’t look to accelerate your mortgage payoff Middletown at the cost of personal savings. Most people don’t have nearly enough of an emergency fund held in reserve and you can’t count on being able to tap home equity if you need to in an emergency – such as if you lose your job, which will make your lender suddenly reluctant to extend you credit.
It’s a good idea to have a savings reserve equal to six months’ expenses, or at least three months, to tide you through emergencies. The fund doesn’t even have to be in a savings account, you can have most of it tied up in mutual funds or other equities, provided that you can quickly convert them to cash if need be.
Wednesday, April 14, 2010
Low Mortgage Rates to Hang Around For Awhile
Midnight has struck. The low-interest coach is turning back into a pumpkin. Borrowers who did not refinance or purchase a home by stroke of twelve have lost forever their opportunity to get a handsome prince of an interest rate.
At least, that’s the popular perception of what’s happening now that the Fed has officially concluded its purchases of mortgage-backed securities. With the Fed out of the picture, the thinking goes, rates must surely rise as far and as fast as they fell when the Fed announced it would buy $1.25 trillion in mortgage securities, sending mortgage rate plummeting to record lows.
Fortunately, that seems to be turning out to be a fairy tale. Although many experts began 2010 convinced that interest rates Middletown would rapidly rise by one-half to a full percentage point once the Fed quit buying securities at the end of March, there’s been no indication of that happening.
In fact, as the deadline approached, 30-year interest rates continued to fluctuate just below the 5 percent mark, as tracked by Freddie Mac, with no sign of moving upward. And analysts are now predicting a much smaller rate increase over the coming months, perhaps around a quarter of a percent.
What happened? For starters, the Fed has been gradually reducing its purchases of mortgage securities as the end of the program neared, rather than simply cutting things off after March 30. That lessened the shock that would have occurred if it had simply pulled out all at once.
Investors moving in to take up slack
For another, by buying up such a huge chunk of the mortgages issued over the past year, the Fed has not only driven interest rates downward, it’s also crowded out many of the private investors who were interested in mortgage securities. These investors are now starting to come back into the market, but the pent-up demand is helping to keep a lid on rates, at least for now.
What does this mean for borrowers? It means you should still be able to get an exceptionally good interest rate on a mortgage Middletown, either to purchase a home or refinance an existing loan, for some time to come. On a historical basis, anything below 5.5 percent for a 30-year loan is unusually good; rates below 5 percent, such as we’ve seen over most of the past year, are nearly unheard of.
From the perspective of Spring 2010, a rate of 5.25 percent come July might not sound that attractive, but three years down the road, it may turn out to be a screamingly good deal. And on home loans Middletown, it’s the long term that matters.
At least, that’s the popular perception of what’s happening now that the Fed has officially concluded its purchases of mortgage-backed securities. With the Fed out of the picture, the thinking goes, rates must surely rise as far and as fast as they fell when the Fed announced it would buy $1.25 trillion in mortgage securities, sending mortgage rate plummeting to record lows.
Fortunately, that seems to be turning out to be a fairy tale. Although many experts began 2010 convinced that interest rates Middletown would rapidly rise by one-half to a full percentage point once the Fed quit buying securities at the end of March, there’s been no indication of that happening.
In fact, as the deadline approached, 30-year interest rates continued to fluctuate just below the 5 percent mark, as tracked by Freddie Mac, with no sign of moving upward. And analysts are now predicting a much smaller rate increase over the coming months, perhaps around a quarter of a percent.
What happened? For starters, the Fed has been gradually reducing its purchases of mortgage securities as the end of the program neared, rather than simply cutting things off after March 30. That lessened the shock that would have occurred if it had simply pulled out all at once.
Investors moving in to take up slack
For another, by buying up such a huge chunk of the mortgages issued over the past year, the Fed has not only driven interest rates downward, it’s also crowded out many of the private investors who were interested in mortgage securities. These investors are now starting to come back into the market, but the pent-up demand is helping to keep a lid on rates, at least for now.
What does this mean for borrowers? It means you should still be able to get an exceptionally good interest rate on a mortgage Middletown, either to purchase a home or refinance an existing loan, for some time to come. On a historical basis, anything below 5.5 percent for a 30-year loan is unusually good; rates below 5 percent, such as we’ve seen over most of the past year, are nearly unheard of.
From the perspective of Spring 2010, a rate of 5.25 percent come July might not sound that attractive, but three years down the road, it may turn out to be a screamingly good deal. And on home loans Middletown, it’s the long term that matters.
Can You Still Get an Interest-Only Loan?
There are a few places you may still be able to get an interest-only loan Middletown, despite Fannie and Freddie’s withdrawal from the market. Foremost among these are portfolio lenders who lend out their own money and don’t sell the loans to Fannie or Freddie in the first place. Many of these are also the lenders who underwrite jumbo loans (loans above Fannie and Freddie’s $730,000 maximum), so you may still be able to obtain one there.
Savings and Loan associations also tend to loan their own money and not resell their mortgages, so they may be an option for someone looking for an interest-only loan Middletown. Be aware, though, that you’re going to pay a hefty interest rate and down payment in order to qualify, as well as being able to demonstrate ample fiscal reserves. That way, if the property does lose value, the lender is covered against likely losses.
ARMs as an alternative
One option remains for borrowers seeking to minimize their mortgage payments and that’s an adjustable rate mortgage Middletown (ARM). Although these do involve paying down principal, they are available at considerably lower rates than a 30-year fixed-rate mortgage – possibly three-quarters to a full percent lower. With low rates that lock in for one to 10 years before resetting, these can be a good option for borrowers who don’t plan to occupy a home long-term.
Interest-only loans are a traditional mortgage tool and will likely make a gradual comeback as the housing market stabilizes and conditions return to historical norms. But in the meantime, options for very low-cost loans are limited unless you’re in a position to take advantage of specialty lenders.
Savings and Loan associations also tend to loan their own money and not resell their mortgages, so they may be an option for someone looking for an interest-only loan Middletown. Be aware, though, that you’re going to pay a hefty interest rate and down payment in order to qualify, as well as being able to demonstrate ample fiscal reserves. That way, if the property does lose value, the lender is covered against likely losses.
ARMs as an alternative
One option remains for borrowers seeking to minimize their mortgage payments and that’s an adjustable rate mortgage Middletown (ARM). Although these do involve paying down principal, they are available at considerably lower rates than a 30-year fixed-rate mortgage – possibly three-quarters to a full percent lower. With low rates that lock in for one to 10 years before resetting, these can be a good option for borrowers who don’t plan to occupy a home long-term.
Interest-only loans are a traditional mortgage tool and will likely make a gradual comeback as the housing market stabilizes and conditions return to historical norms. But in the meantime, options for very low-cost loans are limited unless you’re in a position to take advantage of specialty lenders.
Interest-Only Loans Soon to be Extinct
If you’re looking to purchase a home or refinance a mortgage Middletown, your options are getting a bit slimmer.
Interest-only loans, already a rarity after the collapse of the subprime mortgage market, are just about to dry up completely. They won’t totally disappear, but getting one will go from difficult to extremely hard.
Freddie, Fannnie backing out
What’s happening is that Freddie Mac and Fannie Mae, the government-supported secondary lenders who insure most of the mortgages made in the United States, have said they will no longer purchase interest-only loans after Fall 2010. Given the time it takes these developments to work through the system, you can expect that lenders are already starting to shut the pipeline down.
That’s too bad, because interest-only loans Middletown can be an effective financial tool for qualified borrowers who use them correctly. The problem was that, during the housing bubble, they were issued to many borrowers who could never afford them unless housing prices continued to increase. When the economy and housing market soured, many of loans defaulted and continue to do so.
Those losses are why Fannie and Freddie are getting out of the interest-only loan business. Many private lenders have already done so as well.
Advantages of an interest-only loan
At first glance, an interest-only loan may sound like a dumb idea. You take out a mortgage pay only the interest for the first few years, typically five or 10. At that point, the loan resets to a fully amortizing loan, meaning you have to pay off the entire principal, plus the interest, over the remaining 20 to 25 years of the loan. Naturally, that’s going to make your payments go through the roof.
But it can work quite well for some borrowers, particularly in a normal market where prices are stable or gradually appreciate. In particular, it can be a good choice for someone who doesn’t plan to stay in a home more than five or 10 years, and has no desire to ever own the home free and clear.
In that event, an interest-only loan Middletown can allow you to stay in the home for next to nothing – because mortgage interest is tax-deductable. Sophisticated investors sometimes use interest-only mortgages to allow them to invest their money elsewhere, rather than using part of it to pay down mortgage principal on a home they never plan to own outright.
Interest-only loans, already a rarity after the collapse of the subprime mortgage market, are just about to dry up completely. They won’t totally disappear, but getting one will go from difficult to extremely hard.
Freddie, Fannnie backing out
What’s happening is that Freddie Mac and Fannie Mae, the government-supported secondary lenders who insure most of the mortgages made in the United States, have said they will no longer purchase interest-only loans after Fall 2010. Given the time it takes these developments to work through the system, you can expect that lenders are already starting to shut the pipeline down.
That’s too bad, because interest-only loans Middletown can be an effective financial tool for qualified borrowers who use them correctly. The problem was that, during the housing bubble, they were issued to many borrowers who could never afford them unless housing prices continued to increase. When the economy and housing market soured, many of loans defaulted and continue to do so.
Those losses are why Fannie and Freddie are getting out of the interest-only loan business. Many private lenders have already done so as well.
Advantages of an interest-only loan
At first glance, an interest-only loan may sound like a dumb idea. You take out a mortgage pay only the interest for the first few years, typically five or 10. At that point, the loan resets to a fully amortizing loan, meaning you have to pay off the entire principal, plus the interest, over the remaining 20 to 25 years of the loan. Naturally, that’s going to make your payments go through the roof.
But it can work quite well for some borrowers, particularly in a normal market where prices are stable or gradually appreciate. In particular, it can be a good choice for someone who doesn’t plan to stay in a home more than five or 10 years, and has no desire to ever own the home free and clear.
In that event, an interest-only loan Middletown can allow you to stay in the home for next to nothing – because mortgage interest is tax-deductable. Sophisticated investors sometimes use interest-only mortgages to allow them to invest their money elsewhere, rather than using part of it to pay down mortgage principal on a home they never plan to own outright.
More Types of Lenders
Hard Money Lenders
If you can’t qualify through a portfolio lender, a hard money lender may be your option of last resort. Hard money lenders tend to be private individuals with money to lend, though they may be set up as business operations. Interest rates tend to be quite high – 12 percent is not uncommon – and down payments may be 30 percent and above. Hard money lenders are typically used for short-term loans that are expected to be repaid quickly, such as for investment property, rather than long-term amortizing loans Middletown for a home purchase.
Direct Lenders
Another term you may encounter is “direct lender.” A direct lender simply means a lender that originates its own home loans Middletown – either with its own funds or borrowed funds. It can therefore be either a mortgage banker or portfolio lender. It does not, therefore, act as an agent for a wholesale lender. Direct lenders are inevitably retail lenders as well, because they do not involve third parties or middlemen in making loans to consumers.
Correspondent Lenders
A final term you may hear is “correspondent lender.” Whereas some types of lenders are distinguished by the process leading up to the loan, correspondent lenders are defined by what happens after the loan is issued. Correspondent lenders work with an investor, called a sponsor, who purchases any mortgages they make that meet certain criteria.
Correspondent lenders earn their money by collecting a point or two when the mortgage is issued. Immediately selling the loan to a sponsor pretty much guarantees they’ll make money, since the correspondent no longer carries the risk for a default. However, the sponsor may decline the loan if it turns out not to meet the sponsor’s standards, in which case the correspondent must either find another investor or carry the loan itself.
Again, these terms are not always exclusive, but instead generally describe types of mortgage functions that various lenders may perform, sometimes at the same time. But understanding what each of these does can be a great help in understanding how the mortgage process Middletown works and form a basis for evaluating mortgage offers.
If you can’t qualify through a portfolio lender, a hard money lender may be your option of last resort. Hard money lenders tend to be private individuals with money to lend, though they may be set up as business operations. Interest rates tend to be quite high – 12 percent is not uncommon – and down payments may be 30 percent and above. Hard money lenders are typically used for short-term loans that are expected to be repaid quickly, such as for investment property, rather than long-term amortizing loans Middletown for a home purchase.
Direct Lenders
Another term you may encounter is “direct lender.” A direct lender simply means a lender that originates its own home loans Middletown – either with its own funds or borrowed funds. It can therefore be either a mortgage banker or portfolio lender. It does not, therefore, act as an agent for a wholesale lender. Direct lenders are inevitably retail lenders as well, because they do not involve third parties or middlemen in making loans to consumers.
Correspondent Lenders
A final term you may hear is “correspondent lender.” Whereas some types of lenders are distinguished by the process leading up to the loan, correspondent lenders are defined by what happens after the loan is issued. Correspondent lenders work with an investor, called a sponsor, who purchases any mortgages they make that meet certain criteria.
Correspondent lenders earn their money by collecting a point or two when the mortgage is issued. Immediately selling the loan to a sponsor pretty much guarantees they’ll make money, since the correspondent no longer carries the risk for a default. However, the sponsor may decline the loan if it turns out not to meet the sponsor’s standards, in which case the correspondent must either find another investor or carry the loan itself.
Again, these terms are not always exclusive, but instead generally describe types of mortgage functions that various lenders may perform, sometimes at the same time. But understanding what each of these does can be a great help in understanding how the mortgage process Middletown works and form a basis for evaluating mortgage offers.
Different Types of Lenders
Wholesale and Retail Lenders
Wholesale lenders are banks or other institutions that do not deal directly with consumers, but offer their loans through third parties such as mortgage brokers, credit unions, other banks, etc. Often, these are large banks that also have retail operations that work with consumers directly. Many large banks, such as Bank of America and Wells Fargo, have both wholesale and retail operations.
In this type of lending, the wholesale lender is the one that is actually making the loan and whose name typically appears on loan documents. The third party – bank, credit union, or mortgage broker – in most cases is simply acting as an agent in return for a fee.
Retail lenders are exactly what they sound like, lenders who issue mortgages directly to individual consumers. They may either lend their own money or may act as an agent for Again, retail lending may simply be one function offered by a larger financial institution, which may also offer commercial, institutional and wholesale lending, as well as a range of other financial services.
Warehouse Lenders
Somewhat similar to wholesale lenders are warehouse lenders. The key difference here is that, instead of providing loans through intermediaries, they lend money to banks or other mortgage lenders Middletown with which to issue their own loans, on their own terms. The warehouse lender is repaid when the mortgage lender sells the loan to investors.
Mortgage Bankers
Another distinction is between portfolio lenders and mortgage bankers. The vast majority of U.S. mortgage lenders Middletown are mortgage bankers, who don’t lend their own money, but borrow funds at short-term rates from warehouse lenders (see above) to cover the mortgages they issue. Once the mortgage is made, they sell it to investors and repay the short-term note. Those mortgages are usually sold through Fannie Mae and Freddie Mac, which allows those agencies to set the minimum underwriting standards for most mortgages issue in the United States.
Portfolio Lenders
Portfolio lenders, on the other hand, use their own money when making home loans Middletown, which they typically maintain on their own books, or “portfolio.” Because they don’t have to satisfy the demands of outside investors, they can set their own terms for the loans they issue.
This makes portfolio lenders a good choice for “niche” borrowers who don’t fit the typical lender profile – perhaps because they’re seeking a jumbo loan, are considering a unique property, have flawed credit but strong finances, or may be looking at investment property. You may pay higher rates for this service, but not always – because portfolio lenders tend to be very careful who they lend to, their rates are sometimes quite low.
Wholesale lenders are banks or other institutions that do not deal directly with consumers, but offer their loans through third parties such as mortgage brokers, credit unions, other banks, etc. Often, these are large banks that also have retail operations that work with consumers directly. Many large banks, such as Bank of America and Wells Fargo, have both wholesale and retail operations.
In this type of lending, the wholesale lender is the one that is actually making the loan and whose name typically appears on loan documents. The third party – bank, credit union, or mortgage broker – in most cases is simply acting as an agent in return for a fee.
Retail lenders are exactly what they sound like, lenders who issue mortgages directly to individual consumers. They may either lend their own money or may act as an agent for Again, retail lending may simply be one function offered by a larger financial institution, which may also offer commercial, institutional and wholesale lending, as well as a range of other financial services.
Warehouse Lenders
Somewhat similar to wholesale lenders are warehouse lenders. The key difference here is that, instead of providing loans through intermediaries, they lend money to banks or other mortgage lenders Middletown with which to issue their own loans, on their own terms. The warehouse lender is repaid when the mortgage lender sells the loan to investors.
Mortgage Bankers
Another distinction is between portfolio lenders and mortgage bankers. The vast majority of U.S. mortgage lenders Middletown are mortgage bankers, who don’t lend their own money, but borrow funds at short-term rates from warehouse lenders (see above) to cover the mortgages they issue. Once the mortgage is made, they sell it to investors and repay the short-term note. Those mortgages are usually sold through Fannie Mae and Freddie Mac, which allows those agencies to set the minimum underwriting standards for most mortgages issue in the United States.
Portfolio Lenders
Portfolio lenders, on the other hand, use their own money when making home loans Middletown, which they typically maintain on their own books, or “portfolio.” Because they don’t have to satisfy the demands of outside investors, they can set their own terms for the loans they issue.
This makes portfolio lenders a good choice for “niche” borrowers who don’t fit the typical lender profile – perhaps because they’re seeking a jumbo loan, are considering a unique property, have flawed credit but strong finances, or may be looking at investment property. You may pay higher rates for this service, but not always – because portfolio lenders tend to be very careful who they lend to, their rates are sometimes quite low.
Mortgage Brokers vs Mortgage Lenders
One of the most confusing parts of the mortgage process Middletown can be figuring out all the different kinds of lenders that deal in home loans and refinancing. There are direct lenders, retail lenders, mortgage brokers, portfolio lenders, correspondent lenders, wholesale lenders and others.
Many borrowers simply head right into the process and look for what appear to be reasonable terms without worrying about what kind of lender they’re dealing with. But if you want to be sure of getting the best deal, or are looking for a jumbo loan or have other special circumstances to address, understanding the different types of lenders involved can be a big help.
Explanations of some of the main types are provided below. These are not necessarily mutually exclusive - there is a fair amount of overlap among the various categories. For example, most portfolio lenders tend to be direct lenders as well. And many lenders are involved in more than one type of lending – such as a large bank that has both wholesale and retail lending operations.
Mortgage Lenders vs. Mortgage Brokers
A good place to start is with the difference between mortgage lenders and mortgage brokers.
Mortgage lenders Middletown are exactly that, the lenders that actually make the loan and provide the money used to buy a home or refinance an existing mortgage. They have certain criteria you have to meet in terms of creditworthiness and financial resources in order to qualify for a loan, and set their mortgage interest rates and other loan terms accordingly.
Mortgage brokers Middletown, on the other hand, don’t actually make loans. What they do is work with multiple lenders to find the one that will offer you the best rate and terms. When you take out the loan, you’re borrowing from the lender, not the broker, who simply acts as an agent.
Often, these are wholesale lenders (see below) who discount the rates they offer through brokers compared to what you’d get if you approached them directly as a retail customer. However, the broker then tacks on his or her own fee, which may equal the discount – where the customer usually saves money is by getting the best deal relative to other lenders.
Many borrowers simply head right into the process and look for what appear to be reasonable terms without worrying about what kind of lender they’re dealing with. But if you want to be sure of getting the best deal, or are looking for a jumbo loan or have other special circumstances to address, understanding the different types of lenders involved can be a big help.
Explanations of some of the main types are provided below. These are not necessarily mutually exclusive - there is a fair amount of overlap among the various categories. For example, most portfolio lenders tend to be direct lenders as well. And many lenders are involved in more than one type of lending – such as a large bank that has both wholesale and retail lending operations.
Mortgage Lenders vs. Mortgage Brokers
A good place to start is with the difference between mortgage lenders and mortgage brokers.
Mortgage lenders Middletown are exactly that, the lenders that actually make the loan and provide the money used to buy a home or refinance an existing mortgage. They have certain criteria you have to meet in terms of creditworthiness and financial resources in order to qualify for a loan, and set their mortgage interest rates and other loan terms accordingly.
Mortgage brokers Middletown, on the other hand, don’t actually make loans. What they do is work with multiple lenders to find the one that will offer you the best rate and terms. When you take out the loan, you’re borrowing from the lender, not the broker, who simply acts as an agent.
Often, these are wholesale lenders (see below) who discount the rates they offer through brokers compared to what you’d get if you approached them directly as a retail customer. However, the broker then tacks on his or her own fee, which may equal the discount – where the customer usually saves money is by getting the best deal relative to other lenders.
Recent Grads Can Get a Home!
Recent college or university graduates are not usually considered prime candidates for home ownership Middletown. But for those fortunate few for whom buying a home is a realistic possibility, there are a few programs available that can help you out.
For most new graduates, buying a home is one of the furthest things from their minds. Many have massive debt loads from student loans and are taking low-paying entry level jobs in their chosen fields. In the current economy, many are even moving back home with their parents until they can afford a place of their own.
But for some, post-graduation is an attractive time to buy a home. Many young people get married during the year after graduating, and are looking to set up a household, with two incomes to pay the bills. Those who have completed graduate school may have secured a well-paying, professional position they intend to remain in for some time and often have relatively little student debt, owing to paying their way through school on graduate assistantships.
State mortgage Middletown help for grads
Other states may offer similar programs; check with your state housing authority or department of higher education.
Special deals for alumini
In some areas, mortgage lenders offer special deals for graduates of area schools. For example, MFG Mortgage Services in Reno, Nev. offers a 25 percent reduction in its mortgage origination fee for graduates of the University of Nevada-Reno. Graduates of The College of New Jersey can save $500 off closing costs by getting their mortgage through Fairway Independent Mortgage of Sun Prairie, Wis.
Another way to save on a home loan Middletown is through your university credit union. Even if you didn’t join as a student, most university credit unions are still open to alumni, and may offer better mortgage terms than you can find on the commercial market, as well as offering special programs for alumni.
And don’t forget about your alumni association. Many alumni groups have arranged for special insurance rates for their members, which can add up to several hundred dollars a year on home insurance.
For most new graduates, buying a home is one of the furthest things from their minds. Many have massive debt loads from student loans and are taking low-paying entry level jobs in their chosen fields. In the current economy, many are even moving back home with their parents until they can afford a place of their own.
But for some, post-graduation is an attractive time to buy a home. Many young people get married during the year after graduating, and are looking to set up a household, with two incomes to pay the bills. Those who have completed graduate school may have secured a well-paying, professional position they intend to remain in for some time and often have relatively little student debt, owing to paying their way through school on graduate assistantships.
State mortgage Middletown help for grads
Other states may offer similar programs; check with your state housing authority or department of higher education.
Special deals for alumini
In some areas, mortgage lenders offer special deals for graduates of area schools. For example, MFG Mortgage Services in Reno, Nev. offers a 25 percent reduction in its mortgage origination fee for graduates of the University of Nevada-Reno. Graduates of The College of New Jersey can save $500 off closing costs by getting their mortgage through Fairway Independent Mortgage of Sun Prairie, Wis.
Another way to save on a home loan Middletown is through your university credit union. Even if you didn’t join as a student, most university credit unions are still open to alumni, and may offer better mortgage terms than you can find on the commercial market, as well as offering special programs for alumni.
And don’t forget about your alumni association. Many alumni groups have arranged for special insurance rates for their members, which can add up to several hundred dollars a year on home insurance.
Can Your Job Give You a Discount?
Can you get special assistance or qualify for a low-cost mortgage New Jersey based on the type of job you have? Does working as a teacher, nurse, police officer, firefighter or other career in public service let you qualify for special mortgage programs not available to other borrowers?
Well yes – and no. In reality, there are almost no mortgage programs specifically targeted at certain professions that aren’t available to the general public. But that’s not to say there aren’t any – or that there aren’t certain advantages that teachers, cops and other have when shopping for a mortgage.
A search on the Internet will easily turn up tons of special mortgage offers targeted at these professions. Searching for “mortgages for teachers” or “mortgages for nurses” will turn up page after page of mortgage promotions directed at these professions.
Stable employment = good loan risk
However, almost none of these are actually special mortgage programs New Jersey designed for those professions. Instead, teachers, nurses, firefighter, police, professors, state employees and others in institutional careers share certain characteristics that make them attractive customers for mortgage companies – so many of them design special appeals aimed at people in those jobs.
What those careers share are stable employment prospects and income. Unlike salespeople, factory workers, managers or others in the private sector, people in institutional jobs tend to be at very low risk of being laid off or fired – and often stay with the same employer for many years. Their incomes tend to be stable as well, unlike, for example, a salesperson or small business owner.
All this makes them very safe candidates for a mortgage loan New Jersey. And that’s what can enable you to get attractive terms on a mortgage, rather than a special program aimed at your profession.
HUD Good Neighbor Program
One major exception to this rule is HUD’s (U.S. Department of Housing and Urban Development) Good Neighbor Next Door Program. This program does offer huge discounts for K-12 teachers, law enforcement personnel, firefighters and emergency medical technicians who purchase HUD properties in specific areas.
The incentives are considerable. The program allows you to purchase a home at 50 percent off the appraised value with only a $100 down payment. The catch is that the property has to be a foreclosed home reclaimed by HUD and located in a “designated revitalization area.” These areas tend to be less desirable than other areas, with elevated rates of vacant properties and crime, but are considered potentially attractive to young people looking for areas that may rebound.
Well yes – and no. In reality, there are almost no mortgage programs specifically targeted at certain professions that aren’t available to the general public. But that’s not to say there aren’t any – or that there aren’t certain advantages that teachers, cops and other have when shopping for a mortgage.
A search on the Internet will easily turn up tons of special mortgage offers targeted at these professions. Searching for “mortgages for teachers” or “mortgages for nurses” will turn up page after page of mortgage promotions directed at these professions.
Stable employment = good loan risk
However, almost none of these are actually special mortgage programs New Jersey designed for those professions. Instead, teachers, nurses, firefighter, police, professors, state employees and others in institutional careers share certain characteristics that make them attractive customers for mortgage companies – so many of them design special appeals aimed at people in those jobs.
What those careers share are stable employment prospects and income. Unlike salespeople, factory workers, managers or others in the private sector, people in institutional jobs tend to be at very low risk of being laid off or fired – and often stay with the same employer for many years. Their incomes tend to be stable as well, unlike, for example, a salesperson or small business owner.
All this makes them very safe candidates for a mortgage loan New Jersey. And that’s what can enable you to get attractive terms on a mortgage, rather than a special program aimed at your profession.
HUD Good Neighbor Program
One major exception to this rule is HUD’s (U.S. Department of Housing and Urban Development) Good Neighbor Next Door Program. This program does offer huge discounts for K-12 teachers, law enforcement personnel, firefighters and emergency medical technicians who purchase HUD properties in specific areas.
The incentives are considerable. The program allows you to purchase a home at 50 percent off the appraised value with only a $100 down payment. The catch is that the property has to be a foreclosed home reclaimed by HUD and located in a “designated revitalization area.” These areas tend to be less desirable than other areas, with elevated rates of vacant properties and crime, but are considered potentially attractive to young people looking for areas that may rebound.
Saturday, April 10, 2010
Reasons to Use a Mortgage Broker
For many people, mortgage payments are their single largest expense. Yet, when financing a home, most homebuyers don’t comparison shop to ensure they’re getting the best mortgage rate Reevytown and terms available. This mistake can cost homeowners tens of thousands of dollars over the course of their mortgage.
Here are seven ways mortgage brokers Reevytown can help:
Access to competitive rates
Brokers deal with multiple competing lenders and can often access exclusive rates. Based on the number of mortgages brokers complete each year, they also have the power to negotiate rate discounts from lenders, which can be passed on to their clients.
A free service
Mortgage brokers’ services are typically available at no cost to consumers. Brokers are paid by the lender selected by their clients.
Knowledgeable advice
Brokers offer consultative service, advice and solutions that are customized to each client’s needs. And unlike banks, brokers work for you.
Speed and convenience
Brokers will work around a client’s schedule to make the transaction as easy and convenient as possible.
Pre-qualification
Whether you’re shopping for a new home or refinancing your existing mortgage, a broker can help you obtain a pre-approved mortgage, often with up to a 120-day interest rate guarantee.
Preserved credit rating
When you shop for a mortgage, there is an accumulation of lender inquiries on your credit bureau report, possibly affecting your credit rating and, ultimately, the rate and terms of your mortgage. This isn’t the case with a mortgage broker Reevytown, who only does one inquiry yet can still get many competing lenders to quote on your business.
Here are seven ways mortgage brokers Reevytown can help:
Access to competitive rates
Brokers deal with multiple competing lenders and can often access exclusive rates. Based on the number of mortgages brokers complete each year, they also have the power to negotiate rate discounts from lenders, which can be passed on to their clients.
A free service
Mortgage brokers’ services are typically available at no cost to consumers. Brokers are paid by the lender selected by their clients.
Knowledgeable advice
Brokers offer consultative service, advice and solutions that are customized to each client’s needs. And unlike banks, brokers work for you.
Speed and convenience
Brokers will work around a client’s schedule to make the transaction as easy and convenient as possible.
Pre-qualification
Whether you’re shopping for a new home or refinancing your existing mortgage, a broker can help you obtain a pre-approved mortgage, often with up to a 120-day interest rate guarantee.
Preserved credit rating
When you shop for a mortgage, there is an accumulation of lender inquiries on your credit bureau report, possibly affecting your credit rating and, ultimately, the rate and terms of your mortgage. This isn’t the case with a mortgage broker Reevytown, who only does one inquiry yet can still get many competing lenders to quote on your business.
Get a Mortgage Broker
For most homebuyers, buying a home is the largest financial decision they will make in their lifetime. Yet, consumers across the country are more likely to painstakingly review dozens of investment possibilities for their portfolios than to scrutinize their mortgage choices. The mortgage world - like the investment world - can sometimes be confusing. There is a vast array of choices - open, closed, fixed, floating, long or short amortization, prepayment options, portability... and of course, the rate itself.
Making the right mortgage decision Reevytown can have a huge financial impact over the long term. Many homebuyershave an investment advisor to help them sort through their choices. Now, homebuyersare also beginning to turn to mortgage brokers to help them make better mortgage decisions. Homebuyersare just now catching up with their counterparts where mortgage brokers already arrange approximately 70 per cent of mortgages for U.S. properties.
So what is a mortgage broker Reevytown? The role of a mortgage broker is to understand your mortgage needs, seek out the best options for your situation, and guide you through the lending process. A mortgage broker does not work for any individual institution or lender, but is independent, and has up-to-the-minute loan rates for a wide array of banks and other lending institutions.
There was a time when the banks exercised the view that they "owned" their customers, and mortgage brokers were perceived only as a last resort for home buyers with poor credit history. But times have changed, and home buyers in every bracket are learning they can benefit from the professional advice of a mortgage broker.
A good investment advisor can make you thousands of dollars. But a good mortgage broker will SAVE you thousands of dollars. Whether you are buying a home or renewing a mortgage, consider making a mortgage broker Reevytown part of your financial plan this year.
Making the right mortgage decision Reevytown can have a huge financial impact over the long term. Many homebuyershave an investment advisor to help them sort through their choices. Now, homebuyersare also beginning to turn to mortgage brokers to help them make better mortgage decisions. Homebuyersare just now catching up with their counterparts where mortgage brokers already arrange approximately 70 per cent of mortgages for U.S. properties.
So what is a mortgage broker Reevytown? The role of a mortgage broker is to understand your mortgage needs, seek out the best options for your situation, and guide you through the lending process. A mortgage broker does not work for any individual institution or lender, but is independent, and has up-to-the-minute loan rates for a wide array of banks and other lending institutions.
There was a time when the banks exercised the view that they "owned" their customers, and mortgage brokers were perceived only as a last resort for home buyers with poor credit history. But times have changed, and home buyers in every bracket are learning they can benefit from the professional advice of a mortgage broker.
A good investment advisor can make you thousands of dollars. But a good mortgage broker will SAVE you thousands of dollars. Whether you are buying a home or renewing a mortgage, consider making a mortgage broker Reevytown part of your financial plan this year.
ARMs a Good Investment?
One of the most innovative mortgages we've seen in a very long time is a new adjustable-rate mortgage Reevytown with some very compelling features. First, it's based on an institutional rate benchmark known as Bankers Acceptance. Most of us are familiar with the rate benchmark - and we are accustomed to assessing mortgage rates based on it. The BA, on the other hand, is the rate at which banks will lend money to one another - and it's typically a lower rate (sometimes much lower) than the prime rate offered to a bank's best customers. The new BA-based mortgage - compared to the best prime-based mortgage available - could have saved a mortgage client a bundle over the last several years, primarily because the prime rate tends to be "stickier" in an environment where rates are falling. Often, the more fluid, market-based BA rates deliver the rate change more quickly. The BA rate is no trade secret, by the way; pick up a copy of your favourite financial paper and look for the published money rates to find the Bankers Acceptance Rate.
But the attractive rate structure is not the only perk. The same BA-based mortgage - so welldesigned to help clients wring the last quarter point from their mortgage rate - now also comes with a rate cap which guarantees that your rate will never climb higher than 2.15% above the starting base rate - no matter what happens to rates during your mortgage term. There's no worry about locking in too high because the rate is always adjustable down.
Only the ceiling is fixed. It's a homebuyers' dream:
A mortgage with limited upside and unlimited downside. If you're thinking about buying a home this year, or you haven't had your mortgage reviewed in the last several months, take the opportunity to get an expert assessment of your many options from a mortgage professional Reevytown. It could be the best investment you'll make this year!
But the attractive rate structure is not the only perk. The same BA-based mortgage - so welldesigned to help clients wring the last quarter point from their mortgage rate - now also comes with a rate cap which guarantees that your rate will never climb higher than 2.15% above the starting base rate - no matter what happens to rates during your mortgage term. There's no worry about locking in too high because the rate is always adjustable down.
Only the ceiling is fixed. It's a homebuyers' dream:
A mortgage with limited upside and unlimited downside. If you're thinking about buying a home this year, or you haven't had your mortgage reviewed in the last several months, take the opportunity to get an expert assessment of your many options from a mortgage professional Reevytown. It could be the best investment you'll make this year!
Can You Get Perks Out of an ARM?
These are heavy days for homeowners. If you've been in your home even a few years, you've probably already enjoyed a modest climb in the value of your home. Even if you don't intend to sell, it's good to know that your real estate investment is doing well. But we're also enjoying an environment in which mortgage rates Reevytown have reached historic lows.
That combination -- strong valuations and low mortgage rates -- has an unprecedented number of homeowners looking for ways to capitalize on the great opportunities available to them.
Whether it's to buy their first home, trade up, or take equity back out of their homes, homeowners are jumping at the opportunity to borrow at today's rock-bottom rates.
While many homebuyers are reconsidering the value of fixed-rate mortgages to lock in those low rates, you should keep in mind that adjustable-rate mortgages Reevytown - the darling of the dropping rate trend - can still offer real value to homeowners. It's a matter of finding the right combination of mortgage features and options.
As banks have been joined by other lending institutions, we have seen our menu of New Jersey mortgage options grow accordingly - with some innovative new mortgage types now available to help homeowners take advantage of today's unusual opportunities.
That combination -- strong valuations and low mortgage rates -- has an unprecedented number of homeowners looking for ways to capitalize on the great opportunities available to them.
Whether it's to buy their first home, trade up, or take equity back out of their homes, homeowners are jumping at the opportunity to borrow at today's rock-bottom rates.
While many homebuyers are reconsidering the value of fixed-rate mortgages to lock in those low rates, you should keep in mind that adjustable-rate mortgages Reevytown - the darling of the dropping rate trend - can still offer real value to homeowners. It's a matter of finding the right combination of mortgage features and options.
As banks have been joined by other lending institutions, we have seen our menu of New Jersey mortgage options grow accordingly - with some innovative new mortgage types now available to help homeowners take advantage of today's unusual opportunities.
Who Can Get a Reverse Mortgage?
Who qualifies for a Reverse Mortgage Reevytown?
All titleholders must be 62 or older and own a home with some equity. There are no income or credit qualifications. Existing mortgages or liens must be paid off, but are often paid with proceeds from the Reverse. The homeowner must also remain current on insurance and property taxes, but these can also be paid with proceeds from the Reverse.
How can a borrower use the money?
The funds can be used for any purpose from making ends meet to living retirement dreams. The top reasons for funds used given typically by borrowers are:
•Paying off debts, primarily mortgage and credit cards
•Home repairs and remodeling
•Living expenses
•Travel
•Health care or long-term care
•Easing the financial burden on children
•Education
•Hobbies
•Escalating property taxes
The amount available depends on the borrower’s age, the value of the home, interest rates and local FHA lending limits. Older borrowers can receive a higher percentage of their equity than younger borrowers. Funds can be received in a lump sum, a monthly payment or a line of credit.
What are the costs?
As with most any loan product, there are origination fees and closing costs, but they can be paid from the proceeds of the Reverse Mortgage Reevytown. HECM loans also have a charge for the FHA’s Mortgage Insurance Premium (MIP). There are usually no out-of-pocket costs to the borrower.
What consumer protections are in place?
Reverse Mortgages Reevytown are non-recourse consumer loans – the loan payoff can never exceed the value of the home. To get a Reverse Mortgage, the customer must attend a mandatory counseling session and review their financial situation with a trained, professional Reverse Mortgage counselor. Many of the counselors are certified by the AARP. The counselor ensures that they understand the transaction, the costs and their other alternatives.
All titleholders must be 62 or older and own a home with some equity. There are no income or credit qualifications. Existing mortgages or liens must be paid off, but are often paid with proceeds from the Reverse. The homeowner must also remain current on insurance and property taxes, but these can also be paid with proceeds from the Reverse.
How can a borrower use the money?
The funds can be used for any purpose from making ends meet to living retirement dreams. The top reasons for funds used given typically by borrowers are:
•Paying off debts, primarily mortgage and credit cards
•Home repairs and remodeling
•Living expenses
•Travel
•Health care or long-term care
•Easing the financial burden on children
•Education
•Hobbies
•Escalating property taxes
The amount available depends on the borrower’s age, the value of the home, interest rates and local FHA lending limits. Older borrowers can receive a higher percentage of their equity than younger borrowers. Funds can be received in a lump sum, a monthly payment or a line of credit.
What are the costs?
As with most any loan product, there are origination fees and closing costs, but they can be paid from the proceeds of the Reverse Mortgage Reevytown. HECM loans also have a charge for the FHA’s Mortgage Insurance Premium (MIP). There are usually no out-of-pocket costs to the borrower.
What consumer protections are in place?
Reverse Mortgages Reevytown are non-recourse consumer loans – the loan payoff can never exceed the value of the home. To get a Reverse Mortgage, the customer must attend a mandatory counseling session and review their financial situation with a trained, professional Reverse Mortgage counselor. Many of the counselors are certified by the AARP. The counselor ensures that they understand the transaction, the costs and their other alternatives.
Reverse Mortgages?
Seniors today often live with a great deal of financial uncertainty. The retirement they imagined may not be consistent with the reality they face.
Incomes are flat or declining, living and medical expenses are higher than ever and few income boosting alternatives exist. Even those who have heard about Reverse Mortgages Reevytown may be unsure about how they work or what questions to ask. As they search for information, they often turn to their financial institution for guidance and information. By becoming familiar with the product, you can be an even more valuable resource to your clients providing them with income supplementing alternatives to drawing down assets.
What is a Reverse Mortgage?
A Reverse Mortgage Reevytown is a special type of loan that allows a homeowner to convert a portion of the equity in their home into cash they can access. The funds are not taxable to the homeowner and typically don’t interfere with eligibility for Social Security or Medicare benefits. (However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.) The customer retains title to the home as well as right to any appreciation in home value when the loan terminates after it is paid off. The loan remains in force until the last titleholder dies, permanently leaves the home or sells the property; the borrower can't be forced to sell or move by the lender. The loan may be repaid at any time. But unlike a traditional home equity loan or second mortgage, no monthly payments are required. Instead of putting further pressure on an already stretched budget, a Reverse Mortgage can free a senior homeowner of monthly debt obligations.
Most Reverse Mortgages Reevytown today are Home Equity Conversion Mortgages (HECMs) and are FHA-insured and guaranteed. Because HECMs are subject to FHA lending limits, proprietary products have also been developed to help homeowners with properties in excess of the FHA lending limits.
Incomes are flat or declining, living and medical expenses are higher than ever and few income boosting alternatives exist. Even those who have heard about Reverse Mortgages Reevytown may be unsure about how they work or what questions to ask. As they search for information, they often turn to their financial institution for guidance and information. By becoming familiar with the product, you can be an even more valuable resource to your clients providing them with income supplementing alternatives to drawing down assets.
What is a Reverse Mortgage?
A Reverse Mortgage Reevytown is a special type of loan that allows a homeowner to convert a portion of the equity in their home into cash they can access. The funds are not taxable to the homeowner and typically don’t interfere with eligibility for Social Security or Medicare benefits. (However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.) The customer retains title to the home as well as right to any appreciation in home value when the loan terminates after it is paid off. The loan remains in force until the last titleholder dies, permanently leaves the home or sells the property; the borrower can't be forced to sell or move by the lender. The loan may be repaid at any time. But unlike a traditional home equity loan or second mortgage, no monthly payments are required. Instead of putting further pressure on an already stretched budget, a Reverse Mortgage can free a senior homeowner of monthly debt obligations.
Most Reverse Mortgages Reevytown today are Home Equity Conversion Mortgages (HECMs) and are FHA-insured and guaranteed. Because HECMs are subject to FHA lending limits, proprietary products have also been developed to help homeowners with properties in excess of the FHA lending limits.
The Value of Your Mortgage
If you are like most homeowners, you are focused -for good reason - on finding the best possible rate for your mortgage. Your mortgage broker Reevytown can offer you the best range of rate options and terms. If a mortgage broker can get you one per cent off the posted rate, that could translate into more than $13,000 in interest per $100,000 borrowed over a 25-year amortization schedule. If, however, you believe that most mortgage rates are basically the same from one institution to the next, then consider the fact that even an eighth of a point difference in the rate can offer significant savings over the duration of your mortgage.
But it's also important to look beyond the rate. There are other ways to find savings in your mortgage. Your mortgage broker Reevytown is up-to-date on market trends and new opportunities... as well as some of the tried-and-true ways to save money in a mortgage.
Do you get an annual bonus in your job? You may want to use that bonus to pay down the principal of your mortgage. If you pursue this strategy consistently over the life of your mortgage, you could save thousands of dollars in interest by paying your mortgage off sooner.
Are you paid bi-weekly or bi-monthly? Consider a change from the usual monthly mortgage payment. Set up your mortgage payment schedule to coincide with your pay period. Again, you can shave years off your mortgage, and enjoy thousands of dollars in savings.
In the coming weeks, we'll look at some of these savings opportunities in more detail. In the meantime, consider the old penny proverb again. How much is your time worth? Time savings is one of the key, unexpected benefits that clients say they have enjoyed when they choose to work with a mortgage broker Reevytown. Above all, a mortgage broker is an expert in customer service, and that means that your broker looks after every detail of your mortgage research and negotiations on your behalf.
But it's also important to look beyond the rate. There are other ways to find savings in your mortgage. Your mortgage broker Reevytown is up-to-date on market trends and new opportunities... as well as some of the tried-and-true ways to save money in a mortgage.
Do you get an annual bonus in your job? You may want to use that bonus to pay down the principal of your mortgage. If you pursue this strategy consistently over the life of your mortgage, you could save thousands of dollars in interest by paying your mortgage off sooner.
Are you paid bi-weekly or bi-monthly? Consider a change from the usual monthly mortgage payment. Set up your mortgage payment schedule to coincide with your pay period. Again, you can shave years off your mortgage, and enjoy thousands of dollars in savings.
In the coming weeks, we'll look at some of these savings opportunities in more detail. In the meantime, consider the old penny proverb again. How much is your time worth? Time savings is one of the key, unexpected benefits that clients say they have enjoyed when they choose to work with a mortgage broker Reevytown. Above all, a mortgage broker is an expert in customer service, and that means that your broker looks after every detail of your mortgage research and negotiations on your behalf.
Your Mortgage Savings
"A penny saved is a penny earned"... or so the old proverb goes. Of course, the value of a penny has changed somewhat from the time when your mother offered her wisdom on the value of keeping what you earn. Today, you could save thousands of dollars by simply making the right mortgage decision. If you're like most homeowners, your home mortgage Reevytown is a goldmine of potential savings.
In the past few articles, we've talked about the importance of your mortgage as one of your most significant financial decisions. We've explored the value of seeking the advice of a mortgage professional -whether you're buying a home or renewing an existing mortgage.
Today, let's take a look at the bottom line: the savings you can enjoy by making the right home mortgage Reevytown decisions.
It is the primary role of a mortgage broker Reevytown to find you the right product for your personal situation. A mortgage broker is a financial professional and - like your investment advisor - he or she will want to understand your personal situation and payment preferences. Your mortgage broker has access to a broad spectrum of lending institutions, so you can do some valuable comparison shopping for the right combination of features, rates and mortgage options.
All these choices offer you substantial opportunities to save money over the life of your mortgage.
In the past few articles, we've talked about the importance of your mortgage as one of your most significant financial decisions. We've explored the value of seeking the advice of a mortgage professional -whether you're buying a home or renewing an existing mortgage.
Today, let's take a look at the bottom line: the savings you can enjoy by making the right home mortgage Reevytown decisions.
It is the primary role of a mortgage broker Reevytown to find you the right product for your personal situation. A mortgage broker is a financial professional and - like your investment advisor - he or she will want to understand your personal situation and payment preferences. Your mortgage broker has access to a broad spectrum of lending institutions, so you can do some valuable comparison shopping for the right combination of features, rates and mortgage options.
All these choices offer you substantial opportunities to save money over the life of your mortgage.
Your Jumbo Mortgage Loan
Jumbo mortgages Reevytown are not so different from standard mortgages but there are a few key things that are worth looking in to.
Jumbo Mortgage Loans
A jumbo mortgage loan Reevytown is a loan taken for property that is high-priced.. In Colorado, as in most of the U.S., a jumbo mortgage loan is any mortgage that exceeds $417,000 - the limit set by Fannie Mae and Freddie Mac for conforming loans.
Fannie Mae and Freddie Mac, the two agencies that buy the majority of real estate mortgages, will not finance loans greater than $417,000 in most states; however Alaska, Hawaii, and a couple others are exceptions. Therefore, the large jumbo mortgage loans are sold to other investments, often banks and insurance companies, and so a jumbo mortgage loan falls into a different category. Rates for a jumbo mortgage are also higher than conforming loans because there is more risk involved.
What This Means for Jumbo Mortgage Interest
The size of a jumbo mortgage loan Reevytown means there is more to lose. The size, coupled with other factors, results in somewhat higher jumbo mortgage rates than those carried by conforming loans. Since percentage points on jumbo mortgage rages can mean sizable payment differences, buyers should shop around for a good lender when applying for a jumbo mortgage loan in order to find the best rate. Buyers should shop around for a good lender when applying for a jumbo mortgage loan in order to find the best rate.
In truth, jumbo mortgage interest rates are only one thing to consider when shopping for a jumbo mortgage. There are additional fees and closing costs to be considered that could even out the difference in jumbo mortgage rates. Sometimes, the company with the jumbo mortgage rates is actually the cheapest, all things considered.
Also, buyers shopping for good jumbo mortgage interest rates need to consider their goals, plans, and all of their options. Like conforming mortgages, jumbo mortgages are offered in a variety product lines. Buyers have the option of taking out loans with adjustable jumbo mortgage rates with 3 or 5 year locked rates that adjust after that period, or 15 or 30 year fixed jumbo mortgage rates that never change.
Deciding which type of product (variable or fixed jumbo mortgage interest rate) is better for you depends on whether you plan to stay in the home for more than that locked 3-5 year period, or whether you will refinance the loan within 3-5 years anyway.
Jumbo Mortgage Loans
A jumbo mortgage loan Reevytown is a loan taken for property that is high-priced.. In Colorado, as in most of the U.S., a jumbo mortgage loan is any mortgage that exceeds $417,000 - the limit set by Fannie Mae and Freddie Mac for conforming loans.
Fannie Mae and Freddie Mac, the two agencies that buy the majority of real estate mortgages, will not finance loans greater than $417,000 in most states; however Alaska, Hawaii, and a couple others are exceptions. Therefore, the large jumbo mortgage loans are sold to other investments, often banks and insurance companies, and so a jumbo mortgage loan falls into a different category. Rates for a jumbo mortgage are also higher than conforming loans because there is more risk involved.
What This Means for Jumbo Mortgage Interest
The size of a jumbo mortgage loan Reevytown means there is more to lose. The size, coupled with other factors, results in somewhat higher jumbo mortgage rates than those carried by conforming loans. Since percentage points on jumbo mortgage rages can mean sizable payment differences, buyers should shop around for a good lender when applying for a jumbo mortgage loan in order to find the best rate. Buyers should shop around for a good lender when applying for a jumbo mortgage loan in order to find the best rate.
In truth, jumbo mortgage interest rates are only one thing to consider when shopping for a jumbo mortgage. There are additional fees and closing costs to be considered that could even out the difference in jumbo mortgage rates. Sometimes, the company with the jumbo mortgage rates is actually the cheapest, all things considered.
Also, buyers shopping for good jumbo mortgage interest rates need to consider their goals, plans, and all of their options. Like conforming mortgages, jumbo mortgages are offered in a variety product lines. Buyers have the option of taking out loans with adjustable jumbo mortgage rates with 3 or 5 year locked rates that adjust after that period, or 15 or 30 year fixed jumbo mortgage rates that never change.
Deciding which type of product (variable or fixed jumbo mortgage interest rate) is better for you depends on whether you plan to stay in the home for more than that locked 3-5 year period, or whether you will refinance the loan within 3-5 years anyway.
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