tan ah asked:


ef=”http://mortgagerefinanceidea.blogspot.com/2008/08/mortgage-refinance-tips.html”>MORTGAGE REFINANCE TIPS

Introduction to Mortgage Refinancing:

A mortgage refinance is the process of taking out a new loan, and using the proceeds to pay off your old one. Generally, you’d do this to make a change in the structure of your debt in order to get more money, a lower monthly payment, or a shorter pay-off schedule.

Why refinance?

You’d trade-up your mortgage for the same reason that you’d trade-up your job, car, or living arrangement-because circumstances change. What you need out of a mortgage today may be different from what you needed five years ago. Refinancing can achieve one or more of the following objectives: 1. Lower your monthly payment. You can reduce your monthly payment by refinancing to a lower interest rate. Have market rates dropped since your old mortgage was funded? Has your credit improved? Has your home increased in value? Any one of these happenings could mean that you’d qualify for a lower rate. 2. Shorten your pay-off term. Paying off your mortgage loan in 15 years rather than in 25 can save you tens of thousands of dollars in interest over the life of the loan. If you can afford the higher monthly payment and plan to stay in the home indefinitely, it’s well worth it. 3. Optimize your loan structure. Your current loan structure may no longer be suitable for you in the future. Maybe you bought your home with an adjustable-rate mortgage (ARM) and your initial fixed-interest period is about to expire. Perhaps you have a fixed-rate mortgage, but you’d like to take advantage of the more flexible option ARM. Discuss your objectives with your lender to determine the most appropriate loan structure for you. 4. Consolidate your debt. If you’re carrying a lot of credit card debt, you can lower your monthly repayments through consolidation. To do this, you’d take out a mortgage loan large enough to pay off all the debts on your cards plus the balance on your old mortgage. 5. Fund large, one-time expenses. You can raise the funds you need by doing what’s called a cash-out refinance, where you’d take out a loan that’s larger than your current one. As soon as you pay off the old loan, the excess funds can be used to pay for home improvement projects, college tuition, your daughter’s wedding, long-term care expenses, etc. Essentially, your mortgage is a financial tool that might need occasional sharpening. As life throws you new circumstances, trading up that mortgage may be one way to manage change.

Tax Advantages of Refinancing:

Saving on taxes:



As an existing mortgage borrower, you already know that your mortgage interest is tax deductible. You may also know that you pay far more interest in the early years of a mortgage than you do later on. And the more interest you pay, the higher your deduction. Replacing your current mortgage loan with a refinance might lower your tax liability. And if you intend to use the refinance to consolidate credit card debt, the benefits would be even greater, because you’d be replacing non-deductible credit card interest with tax-deductible mortgage interest.

Tax deductions and refinancing:

The IRS designates two types of mortgage debt: home acquisition debt, and home equity debt. Home acquisition debt is what you paid to buy the house. When you refinance, the amount of the new loan used to pay off the old loan qualifies as home acquisition debt. Any amount over that would be home equity debt. The following example will help clarify the point: • Suppose Jenny owes $200,000 on her mortgage. She takes out a new mortgage for $225,000 and pays off her old mortgage. For tax purposes, $200,000 is home acquisition debt, and the remaining $25,000 is home equity debt.Interest paid on home acquisition debt is generally tax deductible in its entirety. You can also deduct interest paid on the first $100,000 of home equity debt.

Refinance or Second Mortgage?



Understanding your options:



1:Lower your monthly payment

2:Shorten your pay-off term

3:Optimize your loan structure

4:Consolidate your debt

5:Fund large, one-time expenses

The first three can only be accomplished with a refinance. The last two-consolidating debt and funding one-time expenses-can be accomplished with either a refinance or a second mortgage. To decide between a refinance and a second mortgage, compare your mortgage interest rate with current market rates. If you’re paying more than what’s available, a refinance will lower your overall interest costs. If you’re paying less, a second mortgage might be the better option. When the two rates are roughly comparable, many borrowers prefer the efficiency of a refinance-one loan, one monthly payment. It’s also worth noting that refinance loans generally carry lower interest rates than second mortgages. You cannot, unfortunately, take your new debt for a test drive before signing up. Therein lies the importance of making informed decisions; refinancing your mortgage every year, after all, can get expensive. That leads us to the next topic: closing costs.

Closing Costs and Refinance Risks:

1:Application Fee

2:Loan Origination Fee

3:Discount Points

4:Appraisal Fee

5:Title Search Fee

6:Title Insurance Fee

7:Prepayment Penalty on Existing Mortgage

The first three listed above are within your lender’s control; the others are not. If you have great credit, you might be able to negotiate lower application fees, loan fees, and discount points. Be cautious if a lender offers to cover your closing costs; this may mean you’ll be charged a higher interest rate. Closing costs have been known to change at the last possible moment. Your best protection against unpleasant surprises is to request a written estimate. Also find out what the lender’s policy is on closing cost changes; some lenders guarantee their estimated costs, and others don’t. If you’re refinancing just to save money, be sure to weigh the closing costs against your monthly savings. If the new loan saves you $50 monthly, but you have to shell out $1,200 in closing costs, it will be two years before you break even.





Risky business:



Are there risks involved with refinancing? The short answer is yes. But there are also risks involved in relocating, like noisy neighbors, a house that’s a potential money pit, and schools for the kids. Just like these examples, refinancing risks can be managed-if you’re prepared. Here are the most common to watch out for: 1. Taking on too much debt. Reputable lenders are trained to find you a mortgage loan program that you can afford. Trust that they know what they’re doing, and be honest about your financial situation. Over-burdening yourself with debt could put you on the fast track to bankruptcy. 2. Putting your home at risk of foreclosure. This should be a consideration if you want to consolidate credit card debt into your mortgage. When you consolidate such obligations with a mortgage refinance, your home becomes collateral for debt that was previously unsecured. 3. Increasing your total interest costs. If your old loan has 25 years left until its maturity and you replace it with a new 30-year loan, you’ll be incurring interest costs for an extra five years. In the end, you’ll have to evaluate the risks and advantages of refinancing relative to your situation. Since you already have the basic knowledge in your back pocket, that evaluation process should be pretty straightforward. Just stay focused n one goal: a financially stronger you! for mortgage calulator visit http://mortgagerefinanceidea.blogspot.com/

shawn thomas asked:


If you are just about to buy a house, one of your most important decisions, almost as important as which home you buy, is what type of mortgage to take out. You basically have two choices; a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM) Choosing a mortgage that best fits your specific needs can potentially either save or cost you a great deal of money over the term of the mortgage.

Around 70% of homebuyers today choose a fixed rate mortgage, rather than an adjustable rate mortgage. A fixed rate mortgage is exactly what it sounds like. The interest rate on the loan doesn’t change, regardless of whether interest rates in general go up or down. An adjustable rate mortgage may go up or down, depending on the interest rate at the time. Your decision may be influenced by your overall financial situation, the present state of the economy and the cost of your house.

The overall amount that you end up paying for your home can be greatly influenced by even a small change in the interest rate. A lowering of the interest rate by just one point can mean that a homeowner with a 30 year mortgage can enjoy average savings of around $50,000 over the term of their mortgage. An increase in the interest rate of just one or two percent can mean monthly payments that are between $50 and $250 higher, depending on how much you paid for your home. Whether you are taking out a 15 or 30 year mortgage may also influence your decision to take out an adjustable rate or fixed rate mortgage.

The biggest benefit of a fixed rate mortgage is the peace of mind that comes with knowing that regardless of how bad the economy is the rate on your mortgage loan won’t increase; neither will your monthly payment amounts. In fact, the terms and conditions of a fixed rate mortgage are protected by law. A fixed rate mortgage is an ideal option for those buyers who just don’t want to take a risk, or consider themselves the cautious type when it comes to finances.

Another benefit of a fixed rate mortgage is that it makes it easier for the homeowner to budget the expense. Your mortgage payment is probably your single biggest expense and you always know exactly how much the monthly payment will be. Some buyers believe that this makes it a little bit easier to plan and budget for some of life’s other big expenses. Certain things like college funds and retirement for example. With a fixed rate mortgage, the amount of the monthly payment will only increase if there is an increase in the amount of insurance rates or property taxes.

A fixed rate mortgage is not affected by inflation or the cost of living. Supposing you have a monthly mortgage payment of $700; this amount will still be the same after five, ten, and twenty years have gone by. Even though everything else has increased in cost, your mortgage payment will stay the same. One way to offset this is to consider the possibilities in the future. Chances are you could have a more disposable income as time passes. You could be earning a higher salary, but still paying the same every month for your home.

If you prefer the safer option of the fixed rate mortgage, one solution would be to take out a fixed rate mortgage and then refinance your loan if and when interest rates are lowered. This approach keeps your options open. If interest rates go down sufficiently to justify the cost of refinancing, you can do just that; if rates stay where they are or go up you will be glad you have the fixed rate mortgage.  Some financial experts advise that it is only worth refinancing if the interest rate will be at least 2% lower than your current rate, although that decision entirely is up to you.

Another strategy that can be applied towards either a fixed rate or adjustable mortgage is to pay an extra amount each month towards the principal. By doing this regularly, you can potentially save a large amount in interest charges. It can also make the term of the mortgage shorter and you may be able to own your home sooner. Make sure that you specify that any extra amount that you pay is going towards the principal and not the interest. By doing this, if you have a fixed rate mortgage and the rate is not as low as it could be, you are getting ahead a little bit.

Ultimately the decision of whether to take a fixed rate mortgage or an adjustable rate mortgage is yours. Although several factors may influence your decision, one of the biggest questions to ask yourself is how much of a risk you want to take.

1st American Mortgage asked:


How to Find Honest Advice About Colorado Mortgages

It’s safe to say there are many places to find a deal for a Denver mortgage or Colorado mortgages these days. But the mortgage crisis has made things a little more complex. It’s not just about finding the best deal, but finding someone to work with who will give you honest advice and help you get into a mortgage that you can afford. But are there experts out there you can give you that sort of Colorado mortgage advice? Is there someone who will get you into the best Denver mortgage product, while still remaining ethical? The answer is yes.

Watch Out When Colorado Mortgage Experts Offer The World

One of the problems that got so many people into a mortgage mess is that their Denver mortgage expert or Colorado mortgage expert made them an offer that would fix all of their problems. These mortgage experts put customers into deals that just didn’t work out and now people are liable to lose their homes. If you want to get into the right mortgage product now, then you need to look for someone who will look at the Colorado home loans available and tell you the ones you can’t have.

Sounds strange, doesn’t it? But that’s the way you can tell a Denver mortgage lender with credibility from one who is more unethical.

In the recent past, when it seemed like everyone was buying a home, too many Colorado mortgage professionals weren’t being honest with their clients and the result was bad loans that have turned into foreclosures. The lenders involved weren’t looking out for their clients, instead they were just interested in getting them started on a loan which may have been low at first, but now has turned into trouble. Instead, a mortgage pro has to look at what will happen to a customer now and in the future.

How do Ethical Denver Mortgage Professionals Work?

In the midst of this crisis, ethical Denver mortgage professionals are working hard to gain back the reputation lost by bad lenders. Unfortunately, the names of everyone working in the business were hurt by the people who worked on bad loans. It will take hard (and ethical) work to repair that.

If you are a potential customer, then you need to be looking out for the professionals who are out there, coming up Colorado mortgages while fighting to be ethical. They have good products that will help a homeowner and they are working in that person’s best interest. Seek out the Colorado mortgage experts who are client-focused and who have been in business for a long time thanks to that philosophy. You want an expert whose business focuses on:

• Selling reasonably priced Denver mortgage products

• Finding many good options in Colorado mortgages for customers that will last throughout the years

• Making sure the clients remain credit-worthy homeowners

• Putting customer service first, so their business grows thanks to referred and repeat customers

The mortgage crisis may have knocked some bad mortgage providers out of the business, but that doesn’t mean there aren’t still traps for customers. They need to keep looking for reliable home loan experts. The key is the kind of Denver mortgage advice you get and whether it’s honest enough to really tell you what kind of program you can get into. If an offer is too good to be true, it probably is.

This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans in Colorado online mortgage quotes, and rates through his website TrueMortgageQuote.com http://www.truemortgagequote.com).

The House Team Of Mortgage Intellingence asked:


“Wow!” you say to your spouse as you hit the brakes on the car. “Did you see the mortgage rate those guys are advertising?” Your worries are over, you’re thinking. Just lock in a rate like that for the next ten years, and you’ve got it made.

Not so fast. That rate may not be the one for you. Typically, the lowest available rate – and the one that makes the rate sign look great from the street – will be for a variable or adjustable-rate mortgage. That rate has the potential to be like a roller coaster. The posted variable or adjustable rate is the rate you’re getting today. Unless you have an economic ouija board, you won’t be able to predict what kind of ups and downs are ahead of you.

Let’s take a closer look. A lender will offer different rates for different types of mortgages. The rates are determined based on financial risk -to the institution and to you. When a customer is willing to take on the risk, he/she is rewarded with a lower rate. If the lender is taking on the risk (that is, the customer is promised a particular rate… regardless of what happens in the future), the rate is higher. The longer the term, the higher the risk for the financial institution.

So how do you decide? Fixed-rate mortgages, because they require a low risk tolerance, are usually better suited to first-time buyers or those who haven’t owned a home for a very long period. Ask yourself these questions: Do you like or need to know exactly what your payment is going to be over a longer period of time? Do you want to avoid the need to consistently watch rates? Do you have less than 25% down? If you answered “yes” to all, or most of these questions, a more conservative fixed-rate ontario mortgage could be the better choice for you.

A variable or adjustable-rate mortgage is best suited to people who have a flexible budget and can tolerate higher risk. Ask yourself these questions: Do you watch market conditions? Can you handle any sudden rate increases that could increase your payment? Do you have 25% or more equity in your home? If you answered “yes” to all, or most of these questions, a variable or adjustable-rate mortgage might best suit your needs.

Some lenders offer a special promotional rate for the first few months of a variable-rate mortgage, which you should discuss with your mortgage broker. Also discuss what your rate will be based on – prime minus 0.5% or 0.6% or on Bankers’ Acceptances (BAs) plus 1%. The latter being a new kind of adjustable-rate mortgage that has recently been introduced to the marketplace. Most variables or adjustables allow you to exercise an option to “lock in” a fixed rate at any time for the remaining portion of your mortgage term or for a longer term.

If the uncertainty of a floating rate is going to give you sleepless nights, you’re in good company. Many Canadians prefer the certainty of a fixed-rate mortgage. They know exactly how much they will pay over the term of their mortgage, and they can plan accordingly… with no financial surprises. But if rates do drop… and drop… and drop… you are committed to the “promise” that you have made. Your best option – have a mortgage broker help you decide which option best meets your needs.

1st American Mortgage asked:


If you are in Denver or Colorado and looking for a home loan there are many options for you, thanks to technology. You can look for a loan from anywhere in the country, but that doesn’t mean you should if you are looking to buy a refinance a Denver or Colorado mortgage.

No one has the knowledge of Denver or Colorado home loans like local Denver mortgage lenders, despite the fact you can shop for a Colorado or Denver mortgage online or fill out a Colorado and Denver application with the press of a button. Those far removed from the unique housing market of the area can really give you the understanding you need for a Denver and Colorado mortgage.

Colorado and Denver Mortgage lenders and their knowledge

The real estate market in Colorado is its own animal. It’s unique and a Colorado mortgage company will know that. Denver mortgage lenders understand that you can find modest single family homes, investment properties, luxury homes and vacation

properties all in the same market. Other markets are very different, with not as many kinds of properties available, so lenders outside the market may try to fit only one type of Denver and Colorado home loans to a lender — without success. Those seeking Denver Colorado home loans and properties will be more successful if they find a Denver mortgage lender who can offer more products specifically targeted to the individual’s needs.

The unique nature of the market means you must have someone working for you with a good knowledge base of Denver and Colorado home loans and a Denver or Colorado mortgage company that can get to a variety of products.

The best Denver mortgage lenders should be able to access many different funding sources for Denver Colorado home loans, jumbo loan products for those seeking larger Denver Colorado home loan and standard Denver Colorado home loans for conforming loans under $417,000.

With these products, Denver mortgage lenders can also provide program flexibility, with the ability to access both fixed and variable rate products for Denver mortgage lenders serving short- and long-term home seekers.

Different buyers have different Denver Colorado home loan needs, including those who want to sell after a few years, those who are looking to refinance and those who want to stay in their homes for a long time and want stable Denver Colorado home loan payments (and preferred fixed rate loans from Denver mortgage lenders).

The bottom line for those looking for a loan is that the needs will differ depending on what kind of loan you want and need. Finding the best rates for your needs means finding a good Denver and Colorado mortgage company which is flexible and experienced enough to provide a good Denver and olorado home loan. Consumer watch groups like the Tom Martino mortgage referral system can help those shopping for Denver Colorado home loans. The system makes looking for a good Denver mortgage lender that much easier. Plus, the added security of a good consumer advocate can be a big boost in finding reliable Denver mortgage lenders.