REFINANCE YOUR MORTGAGE?
Why Refinance back into a 30-Year Loan? One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate or lower monthly payments. By refinancing, you will pay off the existing mortgage and replace it with a new one.
There are several refinancing loan programs available depending on your current credit scores, debt-to-income ratio, type of income and asset documentation you use. Also there are loan programs with “no-points/no-fees” which are known as “no cost” to the borrower. In the no-points/no-fees scenario, you will pay a higher interest rate to the Lender for them to pay off non-recurring closing costs for the borrower. These are “one time” fees such as Escrow, Attorney Fees, Title Insurance, Document Preparation, Tax Service, Flood Certification, Processing and Underwriting fees, etc. You are still responsible for recurring fees such as Home Owner’s Insurance and Property Tax payments. I will find the best program and lowest rate available for your current situation.
Refinancing typically occurs when mortgage interest rates drop significantly, but borrowers with recently improved credit scores (from paying off credit card debt, making mortgage payments and car payments on time, etc.) are often candidates for better interest rates as well. If you haven’t checked your credit score in a while, it’s a good time to call me to see what you may qualify for.
The question most of my Clients ask is, “Why should I go back into a 30-year loan?” There are different views on this subject. I will work directly with you and your Financial Planner (if you have one) to determine what fits best for your current needs and future goals. If you would like a referral for a very good Financial Planner, please contact Jeffrey Allen at The Rein Group 952-542-0734 or email JeffA@TheReinGroup.com .
One option is to take the route of the “same payment” refinance, and actually pay off the loan faster and save money on interest fees in the long-run. If refinancing gives you a lower monthly payment, you can still continue making the same payment as your previous loan, and the extra money will be applied to the principal balance. This will pay off your new loan much faster and save you a lot of money over the term of your loan!
For example: Let’s say you have 25 years remaining in your current loan, and you refinance to a 30-year loan with a slightly lower rate, giving you a savings of $200 per month. (Note: This is only an example, the actual amount could vary.) You could then take that extra $200 per month and apply it toward the principal on the new loan. At this rate, the loan will be paid off in 22 years and 4 months.
Regardless of the reason to refinance, I will need to know terms of the existing loan, review your immediate and long-term goals, and provide comparisons for new loan programs available. Refinancing could also give a potentail deduction at tax time. I will present all the available options having your best interest in mind.
Due to the “Anti-Predatory Lending Laws” in Minnesota, refinancing your Mortgage needs to have “Net Tangible Benefits” for the Underwriter to approve the loan. This is done to protect the consumer. Some benefits are: lower rate, monthly savings, shorter term, and cash out for home improvements, debt consolidation or paying off delinquent taxes.
Being a Mortgage Professional, my goal is to provide you with the very best service possible. Please call me direct at 763-515-5050 with any questions you may have. As always, referrals to family, friends, neighbors and business associates are always appreciated!
Happy Holidays!
Steven
Monday, December 3, 2007
Friday, November 2, 2007
Is your ARM going up?
If your Adjustable Rate Mortgage has recently gone up, you are not alone!
Over $600 Billion in Mortgages are adjusting in 2007!
In 2004, the Federal Reserve made it clear that short-term interest rates would be increased at a “measured pace” because of a fluctuating US Dollar, unstable oil prices and an evaluation of other economic indicators. In an effort to curb inflation, the Federal Reserve has kept its word and continued to raise rates, including an incredible streak of 17 consecutive hike announcements! The result of these increases has caused millions of homeowners with adjustable rate mortgages to feel the sting of increases in their annual adjustments.
Consumers with revolving debt accounts tied to the Prime Rate have already felt the impact. Prime Rate always rides 3% above the current Fed Funds Rate.
An increase in the Fed Funds Rate does have a direct impact on financial markets as a whole. Mortgage rates are affected rather indirectly, they go up or down based on the prevailing perception investors have of current economic statistics and their reaction to the Federal Reserve’s after-meeting statements.
In general, when economic data indicates we have a slow-down occurring in our economy, investors tend to sell off stocks and reallocate that money to the safe haven of bonds and mortgage-backed securities. The purchase of mortgage-backed securities drives interest rates down. When economic data indicates growth in the economy, the stock market typically rallies and mortgage-backed securities sell off to fuel that stock market rally. This drives mortgage interest rates up.
Our current market reflects the reaction of investors having read between the lines on comments made by the Fed, and will continue to have an affect on homeowners with ARM Loans tied to indexes that are based on short-term interest rates. This includes the 11th District Cost of Funds (COFI), 12-Month Treasury Average (MTA), London Inter Bank Offering Rates (LIBOR) and others.
This does not mean that everyone with an adjustable mortgage is in immediate danger. Some indexes are more volatile than others. COFI moves much slower than other adjustable rate indexes. LIBOR fluctuates with more volatility. When an ARM adjusts, the new interest rate is a sum of the borrower’s fixed margin plus the current rate of the index the mortgage is tied to.
If you are going to be paying an interest rate that has either already adjusted, or will be soon, you may want to consider refinancing to take advantage of the stability of a fixed-rate mortgage.
This is also a good time for borrowers who -- due to a poor credit score -- started out in an adjustable rate loan to transition into a fixed-rate loan if they can. If a positive track record of making mortgage payments on time and in full can been established, there’s a very good chance the borrower may now qualify for a loan with a lower interest rate.
With any decision to refinance, it is important to take the terms of the existing loan, the cost of the new loan, and your long-term needs into consideration. As a qualified mortgage professional, I will be able to explain the differences so you can choose the best the option for your needs.
Please give me a call at 763-515-5050 or 763-458-9007 to discuss your current situation.
As always, referrals to family, friends, neighbors and business associates are welcome!
Regards,
Steven
Over $600 Billion in Mortgages are adjusting in 2007!
In 2004, the Federal Reserve made it clear that short-term interest rates would be increased at a “measured pace” because of a fluctuating US Dollar, unstable oil prices and an evaluation of other economic indicators. In an effort to curb inflation, the Federal Reserve has kept its word and continued to raise rates, including an incredible streak of 17 consecutive hike announcements! The result of these increases has caused millions of homeowners with adjustable rate mortgages to feel the sting of increases in their annual adjustments.
Consumers with revolving debt accounts tied to the Prime Rate have already felt the impact. Prime Rate always rides 3% above the current Fed Funds Rate.
An increase in the Fed Funds Rate does have a direct impact on financial markets as a whole. Mortgage rates are affected rather indirectly, they go up or down based on the prevailing perception investors have of current economic statistics and their reaction to the Federal Reserve’s after-meeting statements.
In general, when economic data indicates we have a slow-down occurring in our economy, investors tend to sell off stocks and reallocate that money to the safe haven of bonds and mortgage-backed securities. The purchase of mortgage-backed securities drives interest rates down. When economic data indicates growth in the economy, the stock market typically rallies and mortgage-backed securities sell off to fuel that stock market rally. This drives mortgage interest rates up.
Our current market reflects the reaction of investors having read between the lines on comments made by the Fed, and will continue to have an affect on homeowners with ARM Loans tied to indexes that are based on short-term interest rates. This includes the 11th District Cost of Funds (COFI), 12-Month Treasury Average (MTA), London Inter Bank Offering Rates (LIBOR) and others.
This does not mean that everyone with an adjustable mortgage is in immediate danger. Some indexes are more volatile than others. COFI moves much slower than other adjustable rate indexes. LIBOR fluctuates with more volatility. When an ARM adjusts, the new interest rate is a sum of the borrower’s fixed margin plus the current rate of the index the mortgage is tied to.
If you are going to be paying an interest rate that has either already adjusted, or will be soon, you may want to consider refinancing to take advantage of the stability of a fixed-rate mortgage.
This is also a good time for borrowers who -- due to a poor credit score -- started out in an adjustable rate loan to transition into a fixed-rate loan if they can. If a positive track record of making mortgage payments on time and in full can been established, there’s a very good chance the borrower may now qualify for a loan with a lower interest rate.
With any decision to refinance, it is important to take the terms of the existing loan, the cost of the new loan, and your long-term needs into consideration. As a qualified mortgage professional, I will be able to explain the differences so you can choose the best the option for your needs.
Please give me a call at 763-515-5050 or 763-458-9007 to discuss your current situation.
As always, referrals to family, friends, neighbors and business associates are welcome!
Regards,
Steven
Wednesday, September 19, 2007
Tips To Spruce Up Your Home
Tired of your surroundings? Want to revitalize or are you planning on selling your home? Here are great tips to improve your living space or to make your home even more attractive to Buyers in today's very competitive market.
1. Unclutter: Go through each room and get rid of items you no longer need or use. It's fine to keep a few magazines and a recent newspaper, but get rid of the piles! Store out-of-season clothing to make your closets seem more spacious. Don't forget the garage! Donations to charity are always needed.
2. Clean up the yard: Put all toys and tools back where they belong. Trim trees and bushes for more visibility to your home as well as letting more light inside. Edge your grass for a cleaner look. Clean out gutters, rake up leaves and clippimgs. Add seasonal plants and flowers near the entryway for a warner greeting.
3. Reseal or patch driveway as needed.
4. Clean interior of home frequently: Especially before every showing! Wash floors, chairs and windows. Wipe off all fingerprints from tables, chrome, brass and light switch plates. Vacuum carpeting and sweep all floors. Clean out both the oven and refrigerator. You want the Buyers to have the impression of a well cared for home. Be sure to get rid of cooking, pet and smoke odors. Open up the windows to allow a fresh breeze to flow through the home. Potpourri and candles are great choices to add a special scent to your home.
5. Polish or replace house numbers, doorknobs and doorknockers. Shiny attracts attention.
6. Add fresh flowers and plants throughout the home, even try adding a centerpiece to your tables for an added punch of color.
7. Add new sheer curtains for more light. Make sure to clean the screens and windows.
8. Buy new towels.
9. Add artwork: Tasteful and simple will do just fine. No need to go overboard, just a few pieces throught the home.
10. Consult with a professional Interior Designer or Home Stager.
Home Improvement projects such as kitchen and bathroom remodeling, adding new windows and doors or expanding the deck are great ways to increase your value.
Home Equity Lines are a great way to fund these projects and even get tax deductibility depending on your tax situation. Both Home Equity Lines and Fixed Rate 2nd Mortgages are available. Please give me a call at 763-515-5050 to discuss the opportunities available.
As always, referrals to friends, family, neighbors and business associates are most welcome!
Enjoy the Fall!
Regards,
Steven
1. Unclutter: Go through each room and get rid of items you no longer need or use. It's fine to keep a few magazines and a recent newspaper, but get rid of the piles! Store out-of-season clothing to make your closets seem more spacious. Don't forget the garage! Donations to charity are always needed.
2. Clean up the yard: Put all toys and tools back where they belong. Trim trees and bushes for more visibility to your home as well as letting more light inside. Edge your grass for a cleaner look. Clean out gutters, rake up leaves and clippimgs. Add seasonal plants and flowers near the entryway for a warner greeting.
3. Reseal or patch driveway as needed.
4. Clean interior of home frequently: Especially before every showing! Wash floors, chairs and windows. Wipe off all fingerprints from tables, chrome, brass and light switch plates. Vacuum carpeting and sweep all floors. Clean out both the oven and refrigerator. You want the Buyers to have the impression of a well cared for home. Be sure to get rid of cooking, pet and smoke odors. Open up the windows to allow a fresh breeze to flow through the home. Potpourri and candles are great choices to add a special scent to your home.
5. Polish or replace house numbers, doorknobs and doorknockers. Shiny attracts attention.
6. Add fresh flowers and plants throughout the home, even try adding a centerpiece to your tables for an added punch of color.
7. Add new sheer curtains for more light. Make sure to clean the screens and windows.
8. Buy new towels.
9. Add artwork: Tasteful and simple will do just fine. No need to go overboard, just a few pieces throught the home.
10. Consult with a professional Interior Designer or Home Stager.
Home Improvement projects such as kitchen and bathroom remodeling, adding new windows and doors or expanding the deck are great ways to increase your value.
Home Equity Lines are a great way to fund these projects and even get tax deductibility depending on your tax situation. Both Home Equity Lines and Fixed Rate 2nd Mortgages are available. Please give me a call at 763-515-5050 to discuss the opportunities available.
As always, referrals to friends, family, neighbors and business associates are most welcome!
Enjoy the Fall!
Regards,
Steven
Friday, August 3, 2007
First Time Homebuyers ?
Are you tired of renting and throwing your money away? Become a homeowner and enjoy the benefits and pride of owning your own home.
If you live in Minnesota, you may be able to qualify for a terrific Loan Program thru the Minnesota Housing Finance Agency (MHFA).
MHFA’s mission “is to meet Minnesotans needs for decent, safe affordable homes and stronger communities”. Mortgage programs are provided that are below market interest rates to eligible first-time homebuyers.
Benefits of the MHFA Loan Programs:
Below market interest rates
Interest-Free loans to help with down payment assistance
Monthly Payment Assistance
30 year and 40 year Mortgage Terms
Mortgage Program Guidelines
To qualify for MHFA Loan Program you must:
Be a first time homebuyer, or have not owned a home in the past 3 years
Meet the requirements for income and home purchase price limits
Have acceptable credit
Mortgage Loan Programs
Minnesota Mortgage Program (MMP)
Available Statewide
Below market interest rates
30 year maximum Loan Term
Homeownership Assistance Fund (HAF) available for Targeted Borrowers for down payment and closing costs
Community Activity Set-Aside Program (CASA)
Supports Community-based initiatives
Below market interest rates
Optional 40-year loan term
Homeownership Assistance Fund (HAF) available for Targeted Borrowers for down payment, closings costs and monthly payment assistance
If you are interested in these programs, or know someone who may be interested, please give me a call at 763-515-5050. As always, referrals to friends, family members, neighbors and business associates are always welcome!
Enjoy the hot weather. It will be getting cold soon enough!
Regards,
Steven
Sunday, July 1, 2007
Negative Amortized Mortgages
Did you decide to get into a Negative Amortized Mortgage?
Did your loan perform the way you wanted it too? If you were expecting your value to increase, did it go as high as you thought it would? Are you now owing more than the value of your home? If you have answered yes to any of these questions, you are not alone.
A lot of people were convinced or had been convinced that taking out a Negative Amortized Mortgage was the perfect loan for them! In retrospect, the only ones that benefited were the Realtor, Mortgage Company and the Broker.
The basis of the Negative Amortized Mortgage is that you will pay a minimal amount for your Mortgage, instead of a full principle and interest payment factored over 30 years. In fact, the payment will actually be below the Interest Only Mortgage payment that you chose not to go with.
You were probably told by your Realtor, Lender and Broker that you will be able to "afford a much better and bigger house" by using this program. If your value has increased significantly, congratulations as you are one of the few who actually benefited from this program! Most people unfortunately have found themselves "upside down" on their Mortgage and now owe more than their home is worth! Also, they more than likely will not be able to refinance until their value goes up significantly, or they will actually have to pay money out of their pockets to cover not only the amount of the loan needed to payoff over their value, but also the closing costs. Some people even have to sell their home at a loss, plus pay their Realtor commissions (hopefully they chose a new Realtor!) or even go into Bankruptcy to protect themselves!
I had a Client who wanted to go with this program, their Accountant had recommended using the Negative Amortized Mortgage to their Clients' benefit. Despite my advice, they chose to enter into this type of a Mortgage. They felt that "their property value will dramatically increase as it's a 'very hot area' and the values have gone up every year." This Client was only financing 80% of their home's value, so they would still have equity in the home. My advice then was to contact several Realtors from different Realty Companies throughout the Twin Cities area. These Realtors should offer their market analysis on the current marketing conditions and provide an "educated guess" on the potential future growth value over the next 5 years. If this area truly was a "very hot area of town with values going up every year", then these professionals should be able to provide my Clients a "guesstimate" for a future potential value.
After speaking with this Client recently, they told me that their decision had been a very good one. The Clients did do the extensive research that I had recommended. Now almost 2 years later, the Realtor's "guesstimates" are pretty close to the actual current value of their home. This Client is now able to refinance into a 30 year Fixed Rate Loan that is at a better interest rate. Even though they will be making a fully amortized principle and interest payment, they have more equity in their home, a better rate and are actually making headway on paying off their mortgage. Unfortunately many other people were not as lucky as this Client. I personally do not offer this program to any of my Clients as it is too risky and may not put them in a good financial situation.
It pays to do your research. If you want the best program available, be ready to provide your entire current financial situation plus your current and future financial goals. Consulting a Financial Planner is also a great source of information to help you with one of the most important decisions of your life. It would be my pleasure to assist you in finding the right loan for your needs. If you need a referral for a Financial Planner or Realtor, please call me direct at 763-515-5050 or visit my website http://www.stevengoldmanloans.com/.
As always, thank you for reading my blog and visiting my website. Referrals to friends, family, neighbors and business associates are always welcome!
Steven
Did your loan perform the way you wanted it too? If you were expecting your value to increase, did it go as high as you thought it would? Are you now owing more than the value of your home? If you have answered yes to any of these questions, you are not alone.
A lot of people were convinced or had been convinced that taking out a Negative Amortized Mortgage was the perfect loan for them! In retrospect, the only ones that benefited were the Realtor, Mortgage Company and the Broker.
The basis of the Negative Amortized Mortgage is that you will pay a minimal amount for your Mortgage, instead of a full principle and interest payment factored over 30 years. In fact, the payment will actually be below the Interest Only Mortgage payment that you chose not to go with.
You were probably told by your Realtor, Lender and Broker that you will be able to "afford a much better and bigger house" by using this program. If your value has increased significantly, congratulations as you are one of the few who actually benefited from this program! Most people unfortunately have found themselves "upside down" on their Mortgage and now owe more than their home is worth! Also, they more than likely will not be able to refinance until their value goes up significantly, or they will actually have to pay money out of their pockets to cover not only the amount of the loan needed to payoff over their value, but also the closing costs. Some people even have to sell their home at a loss, plus pay their Realtor commissions (hopefully they chose a new Realtor!) or even go into Bankruptcy to protect themselves!
I had a Client who wanted to go with this program, their Accountant had recommended using the Negative Amortized Mortgage to their Clients' benefit. Despite my advice, they chose to enter into this type of a Mortgage. They felt that "their property value will dramatically increase as it's a 'very hot area' and the values have gone up every year." This Client was only financing 80% of their home's value, so they would still have equity in the home. My advice then was to contact several Realtors from different Realty Companies throughout the Twin Cities area. These Realtors should offer their market analysis on the current marketing conditions and provide an "educated guess" on the potential future growth value over the next 5 years. If this area truly was a "very hot area of town with values going up every year", then these professionals should be able to provide my Clients a "guesstimate" for a future potential value.
After speaking with this Client recently, they told me that their decision had been a very good one. The Clients did do the extensive research that I had recommended. Now almost 2 years later, the Realtor's "guesstimates" are pretty close to the actual current value of their home. This Client is now able to refinance into a 30 year Fixed Rate Loan that is at a better interest rate. Even though they will be making a fully amortized principle and interest payment, they have more equity in their home, a better rate and are actually making headway on paying off their mortgage. Unfortunately many other people were not as lucky as this Client. I personally do not offer this program to any of my Clients as it is too risky and may not put them in a good financial situation.
It pays to do your research. If you want the best program available, be ready to provide your entire current financial situation plus your current and future financial goals. Consulting a Financial Planner is also a great source of information to help you with one of the most important decisions of your life. It would be my pleasure to assist you in finding the right loan for your needs. If you need a referral for a Financial Planner or Realtor, please call me direct at 763-515-5050 or visit my website http://www.stevengoldmanloans.com/.
As always, thank you for reading my blog and visiting my website. Referrals to friends, family, neighbors and business associates are always welcome!
Steven
Friday, June 1, 2007
In today's fast paced "credit card" lifestyle, we can find ourselves spending more than what we really need to, which can lead to adding more debt and stress to our lives.
10
Quick ways to pay down your debt
Pay more than your minimum: Add a little extra when making your monthly payments. This is a small step that makes a big dent over time!
Pay off expensive debt first: Start paying down accounts that charge high interest rates.
Avoid Late Fees and Over Limit Fees: Know when your payment due dates are. To make sure you are not assessed a Late Fee, leave time for your payment to be received on time. If paying by Internet, check the posting time frame listed on the Company’s website. Also, be aware of your pre-determined Credit Limit. If you should go over this amount, the Credit Company may charge you a Late Fee.
Use cash: Pay for everyday expenses like gas, coffee and food with cash. This will help keep your Credit Card balances down and reduce your monthly debt obligations.
Priority spending: Pay at least the minimum payments on all bills before you spend money on extras.
Make your money work for you: If you have outstanding credit card debt, and you have a Savings Account, use some of your savings to pay off high interest debt. You will eliminate Credit Card debt that is costing you more interest than you are earning in your savings account.
Refinance Loans: Contact your Mortgage Banker to see if you can qualify for a lower Interest Rate on your Home Mortgage. Check with your Auto Finance Company or Local Bank for lower rates on your Auto Loans. A lower rate can save quite a bit of money over the length of your loans.
Stop leaking money: Premium Cable Channels and over-priced Internet Services can “steal” your money. Contact Cable and Internet Providers to see if they can give you a better monthly rate, then check with your current Provider to see if they will match or beat their competition to keep your business.
Even out expenses: Contact your Utility Companies for a “Budget Helper Plan”. This will give you consistent equal payments for a specific period of time, eliminating or reducing huge heating or cooling bills. The money you save can be put towards paying off your high interest Credit Card debt.
Home Equity Line of Credit: Why pay high interest charges to your Credit Card companies? A Home Equity Line of Credit may have a lower Interest Rate. Also check with your personal Tax Advisor to see if your HELOC will be tax deductible (saving you even more money!)
Quick ways to pay down your debt
Pay more than your minimum: Add a little extra when making your monthly payments. This is a small step that makes a big dent over time!
Pay off expensive debt first: Start paying down accounts that charge high interest rates.
Avoid Late Fees and Over Limit Fees: Know when your payment due dates are. To make sure you are not assessed a Late Fee, leave time for your payment to be received on time. If paying by Internet, check the posting time frame listed on the Company’s website. Also, be aware of your pre-determined Credit Limit. If you should go over this amount, the Credit Company may charge you a Late Fee.
Use cash: Pay for everyday expenses like gas, coffee and food with cash. This will help keep your Credit Card balances down and reduce your monthly debt obligations.
Priority spending: Pay at least the minimum payments on all bills before you spend money on extras.
Make your money work for you: If you have outstanding credit card debt, and you have a Savings Account, use some of your savings to pay off high interest debt. You will eliminate Credit Card debt that is costing you more interest than you are earning in your savings account.
Refinance Loans: Contact your Mortgage Banker to see if you can qualify for a lower Interest Rate on your Home Mortgage. Check with your Auto Finance Company or Local Bank for lower rates on your Auto Loans. A lower rate can save quite a bit of money over the length of your loans.
Stop leaking money: Premium Cable Channels and over-priced Internet Services can “steal” your money. Contact Cable and Internet Providers to see if they can give you a better monthly rate, then check with your current Provider to see if they will match or beat their competition to keep your business.
Even out expenses: Contact your Utility Companies for a “Budget Helper Plan”. This will give you consistent equal payments for a specific period of time, eliminating or reducing huge heating or cooling bills. The money you save can be put towards paying off your high interest Credit Card debt.
Home Equity Line of Credit: Why pay high interest charges to your Credit Card companies? A Home Equity Line of Credit may have a lower Interest Rate. Also check with your personal Tax Advisor to see if your HELOC will be tax deductible (saving you even more money!)
I hope you found this information helpful and easy to use. Should you have any questions, please feel free to contact me via email or phone.
Please visit my website http://www.stevengoldmanloans.com/ for additional information, useful links to my Referral Partners and to Apply for a Mortgage.
As always, referrals to friends, family, neighbors and business associates are always welcome!
Have a terrific summer!
Steven
Monday, May 21, 2007
Mortgage Basics
Whether this is your first mortgage, or you have already financed a few times, here are the steps involved during the entire mortgage process.
PLAN
If you dream of owning your own home, investment property or commercial property, we can make your dreams come true!
START
Have confidence by knowing exactly what you can afford. In today's market, most Realtors and Sellers need to know that you are a qualified Buyer. Let us pre-qualify you for your new home purchase. Please click on the APPLY ON LINE Tab or contact us at 763-515-5050.
Interest Rate
The Interest rate on your Loan is used to calculate the monthly payment. The higher the rate, the higher the payment. The reverse is also true, the lower the Rate, the lower the payment.
You can lower your rate by paying Points to the Lender. One "POINT: is equal to 1% of the Loan Amount. For a $150,000 Loan, 1% equals $1500, 2% equals $3000. By paying these "POINTS" to the Lender as part of your Closing Costs, you can "buy-down" your Contract Interest Rate. If you have the money or can negotiate to have the Seller, Builder or Developer contribute funds for your Closing Costs, you can buy-down the Interest Rate and save money over the life of your loan.Annual Percentage Rate:
Your new Home Loan is more than Rate and Points. It also involves several other costs that are listed on your Good Faith Estimate as "Closing Costs" and Pre-Paid Items". The Truth-in-Lending Law requires all advertisements for Home Loan Credit Terms disclose all Closing Costs and Pre-Paid items and must include the APR. This is intended to enable you to compare the terms of Loan Products from various Lenders. The Good Faith Estimate will be mailed to you within 3 days after Application Submission. To make an accurate comparison, look at each item on the Good Faith Estimate. The Loan with the lower APR is the less expensive Loan.
Lock or Float
If you are ready to secure your Interest Rate, you will need to "lock" the Rate. As rates do go up and down daily, you may want to lock-in your Rate. You can "float" your Interest Rate instead of locking it. You can watch the Rates go up and down. The moment you tell your Mortgage Banker to lock your Rate you will be protected for the length of your lock. Interest Rates are very difficult to predict just like the Stock Market. If Rates suddenly jump up, your monthly payment will be higher than you planned and this can cause you to be qualified for a lower loan amount or worse, not be able to qualify for the home of your dreams. Most Lenders will allow up to a 45 day lock. Longer Lock Terms and Lock Extensions are available on some products, please ask your Mortgage Banker for details.
Loan Types
Fixed Rate Loan: This is a lower rate over a fixed period of time, such as 15, 20 or 30 years. This is a great strategy if you plan to live in the house for many years, or are looking for a low monthly payment. The shorter the Loan Term, the quicker you will build equity and pay down on the amount that you owe.
Adjustable Rate Mortgages (ARM): Your Rate will be fixed for a specific time period such as 3, 5, 7 or 10 years. After the fixed time expires, your Rate will adjust either up or down. Each Mortgage Note will have an ARM Rider that will list your specific loan details about when the Rate will change and how it will be calculated. Please ask your Mortgage Banker to explain the exact details of your Loan and how changes will effect your monthly payments. ARM Loans are a good solution for people that have incomes that are going to grow and they plan to quickly refinance or will be able to afford the larger payment in a few years if the Interest Rates should rise.
LOAN PROCESS
The Lender needs to analyze your Loan Application for Pre-Approval.
Borrowing Limit: Lenders will calculate your Borrowing Limit based on your earnings and debt, this is called Debt-to-Income Ratio. They take into consideration all of your earnings, all your current monthly housing expense, credit card payments, property taxes, home owner's insurance, student loan and auto payments. The total Debt-to-Income Ratio should not exceed 45% . Some Lenders do have Loan Program Exceptions and are evaluated on an individual basis.
Documentation
Underwriters may require different types of proof or documentation of your earnings and assets. Each Borrower is evaluated on their own merits. No two situations are exactly alike. The Lenders need to make sure that there are Net Tangible Benefits or "good reasons" for your refinance. Examples of these "NTB's" are; lower Interest Rate, refinancing out of an Adjustable Rate Mortgage (ARM) or Negative Amortized Loan (you owe more than what the Original Mortgage Balance was). Shorter Term (paying off your loan faster), cash out for debt consolidation and payoff of delinquent Taxes also are included.
Pre-Approval
After the Underwriter has approved your Application, we will provide you a Pre-Approval Commitment Letter. This needs to be given to your Realtor to include with your Purchase Agreement to give to the Seller. When you get the signed and dated accepted Purchase Agreement back from the Seller, this needs to be submitted to the Underwriter so we can start on your Appraisal and Title Work.
Final Approval
Once we have received the independent Appraisal on Title Work back, your loan is submitted for final approval. After evaluating the entire file, the Underwriter will either give a list of "conditions" or items that need to be corrected, or they will give us a "Clear to Close" and we can set your Loan Closing date and time. You will also be sent out a final HUD 1-A Settlement Statement which will detail all your Closing Costs and Pre-Paid Items. This also will show the exact amount of funds you need to bring for Loan Closing.
LOAN CLOSING
The Loan Closing or Settlement will usually take place at your Mortgage Banker's Office, a Title Company or Law Office. You will review all Loan Documents and have your signature notarized by an Independent Loan Closer or Title Agent. Many of the people involved with this transaction will be at your Loan Closing. You will be joined by the Sellers, their Realtor or Attorney and the Closing Agent. To provide the best service possible, your Mortgage Banker will also attend.
Here is what will happen during and after your Loan Close:
1. Closing Agent will review all Loan Documents and HUD 1-A Settlement Statement. Both you and the Seller will need to sign this document.
2. Signatures are collected on all Loan Documents, such as the Mortgage Note or Deed, Truth-in-Lending Statement, etc. You will also need to provide evidence of Home Owner's Insurance and Inspections.
3. If all parties agree to sign all Loan Documents, you will then submit a Certified or Cashier's Check to the Closing Agent for the funds needed for your Closing Costs and Pre-Paids. Your Earnest Money (the amount of money you gave with your Purchase Agreement) will be deducted from the amount you need to bring with you.
4. The Lender or Bank will provide a check or wire funds to the Closing Agent covering your Loan Amount.
5. Escrow Account will be established for you if you are escrowing your Home Owners Insurance and Property Taxes.
6. You will receive the keys to your new home!
I hope that you have found this information helpful and interesting. Should you have any questions or to apply for a new Mortgage, please either contact me direct at 763-515-5050 or visit our website at www.StevenGoldmanLoans.com
Thank you for reading my blog. Have a great day!
Referrals to friends, family, neighbors and business associates are walways welcome!
Steven Goldman
PLAN
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Interest Rate
The Interest rate on your Loan is used to calculate the monthly payment. The higher the rate, the higher the payment. The reverse is also true, the lower the Rate, the lower the payment.
You can lower your rate by paying Points to the Lender. One "POINT: is equal to 1% of the Loan Amount. For a $150,000 Loan, 1% equals $1500, 2% equals $3000. By paying these "POINTS" to the Lender as part of your Closing Costs, you can "buy-down" your Contract Interest Rate. If you have the money or can negotiate to have the Seller, Builder or Developer contribute funds for your Closing Costs, you can buy-down the Interest Rate and save money over the life of your loan.Annual Percentage Rate:
Your new Home Loan is more than Rate and Points. It also involves several other costs that are listed on your Good Faith Estimate as "Closing Costs" and Pre-Paid Items". The Truth-in-Lending Law requires all advertisements for Home Loan Credit Terms disclose all Closing Costs and Pre-Paid items and must include the APR. This is intended to enable you to compare the terms of Loan Products from various Lenders. The Good Faith Estimate will be mailed to you within 3 days after Application Submission. To make an accurate comparison, look at each item on the Good Faith Estimate. The Loan with the lower APR is the less expensive Loan.
Lock or Float
If you are ready to secure your Interest Rate, you will need to "lock" the Rate. As rates do go up and down daily, you may want to lock-in your Rate. You can "float" your Interest Rate instead of locking it. You can watch the Rates go up and down. The moment you tell your Mortgage Banker to lock your Rate you will be protected for the length of your lock. Interest Rates are very difficult to predict just like the Stock Market. If Rates suddenly jump up, your monthly payment will be higher than you planned and this can cause you to be qualified for a lower loan amount or worse, not be able to qualify for the home of your dreams. Most Lenders will allow up to a 45 day lock. Longer Lock Terms and Lock Extensions are available on some products, please ask your Mortgage Banker for details.
Loan Types
Fixed Rate Loan: This is a lower rate over a fixed period of time, such as 15, 20 or 30 years. This is a great strategy if you plan to live in the house for many years, or are looking for a low monthly payment. The shorter the Loan Term, the quicker you will build equity and pay down on the amount that you owe.
Adjustable Rate Mortgages (ARM): Your Rate will be fixed for a specific time period such as 3, 5, 7 or 10 years. After the fixed time expires, your Rate will adjust either up or down. Each Mortgage Note will have an ARM Rider that will list your specific loan details about when the Rate will change and how it will be calculated. Please ask your Mortgage Banker to explain the exact details of your Loan and how changes will effect your monthly payments. ARM Loans are a good solution for people that have incomes that are going to grow and they plan to quickly refinance or will be able to afford the larger payment in a few years if the Interest Rates should rise.
LOAN PROCESS
The Lender needs to analyze your Loan Application for Pre-Approval.
Borrowing Limit: Lenders will calculate your Borrowing Limit based on your earnings and debt, this is called Debt-to-Income Ratio. They take into consideration all of your earnings, all your current monthly housing expense, credit card payments, property taxes, home owner's insurance, student loan and auto payments. The total Debt-to-Income Ratio should not exceed 45% . Some Lenders do have Loan Program Exceptions and are evaluated on an individual basis.
Documentation
Underwriters may require different types of proof or documentation of your earnings and assets. Each Borrower is evaluated on their own merits. No two situations are exactly alike. The Lenders need to make sure that there are Net Tangible Benefits or "good reasons" for your refinance. Examples of these "NTB's" are; lower Interest Rate, refinancing out of an Adjustable Rate Mortgage (ARM) or Negative Amortized Loan (you owe more than what the Original Mortgage Balance was). Shorter Term (paying off your loan faster), cash out for debt consolidation and payoff of delinquent Taxes also are included.
Pre-Approval
After the Underwriter has approved your Application, we will provide you a Pre-Approval Commitment Letter. This needs to be given to your Realtor to include with your Purchase Agreement to give to the Seller. When you get the signed and dated accepted Purchase Agreement back from the Seller, this needs to be submitted to the Underwriter so we can start on your Appraisal and Title Work.
Final Approval
Once we have received the independent Appraisal on Title Work back, your loan is submitted for final approval. After evaluating the entire file, the Underwriter will either give a list of "conditions" or items that need to be corrected, or they will give us a "Clear to Close" and we can set your Loan Closing date and time. You will also be sent out a final HUD 1-A Settlement Statement which will detail all your Closing Costs and Pre-Paid Items. This also will show the exact amount of funds you need to bring for Loan Closing.
LOAN CLOSING
The Loan Closing or Settlement will usually take place at your Mortgage Banker's Office, a Title Company or Law Office. You will review all Loan Documents and have your signature notarized by an Independent Loan Closer or Title Agent. Many of the people involved with this transaction will be at your Loan Closing. You will be joined by the Sellers, their Realtor or Attorney and the Closing Agent. To provide the best service possible, your Mortgage Banker will also attend.
Here is what will happen during and after your Loan Close:
1. Closing Agent will review all Loan Documents and HUD 1-A Settlement Statement. Both you and the Seller will need to sign this document.
2. Signatures are collected on all Loan Documents, such as the Mortgage Note or Deed, Truth-in-Lending Statement, etc. You will also need to provide evidence of Home Owner's Insurance and Inspections.
3. If all parties agree to sign all Loan Documents, you will then submit a Certified or Cashier's Check to the Closing Agent for the funds needed for your Closing Costs and Pre-Paids. Your Earnest Money (the amount of money you gave with your Purchase Agreement) will be deducted from the amount you need to bring with you.
4. The Lender or Bank will provide a check or wire funds to the Closing Agent covering your Loan Amount.
5. Escrow Account will be established for you if you are escrowing your Home Owners Insurance and Property Taxes.
6. You will receive the keys to your new home!
I hope that you have found this information helpful and interesting. Should you have any questions or to apply for a new Mortgage, please either contact me direct at 763-515-5050 or visit our website at www.StevenGoldmanLoans.com
Thank you for reading my blog. Have a great day!
Referrals to friends, family, neighbors and business associates are walways welcome!
Steven Goldman
The Mortgage Expert
New and exciting updates on today's Mortgage Market.
Check back at this blog for great information on Mortgages.
Please visit my website www.stevengoldmanloans.com for further information or to apply on line. Referrals to friends and family are always welcome!
Check back at this blog for great information on Mortgages.
Please visit my website www.stevengoldmanloans.com for further information or to apply on line. Referrals to friends and family are always welcome!
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