Feb
28
How do My fiance’ and I go about buying this house in a new subdivision? We are looking for 100% financing.
Filed Under Renting & Real Estate | 4 Comments
yonni asked:
At the moment we don’t have any money to put down or any for closing. The construction of the house hasn’t began yet but will shortly and it takes about 4 months. What should we do in the meantime? The houses in the subdivision are all selling before they are finished. What are the changes of getting the seller to pay closing costs by raising the list price? Also some people say we have better chance of getting a morgage once we are married, is that true? And are there any first-time home owner programs if we make about $75,000/yr together??
I know these are a lot of questions so thanks in advance.
We have actually been pre-approved for a morgage but we are just trying to see what our opitions were concerning up front costs and the chances of us actually getting approved before we but down a deposite to make an offer.
Paul
At the moment we don’t have any money to put down or any for closing. The construction of the house hasn’t began yet but will shortly and it takes about 4 months. What should we do in the meantime? The houses in the subdivision are all selling before they are finished. What are the changes of getting the seller to pay closing costs by raising the list price? Also some people say we have better chance of getting a morgage once we are married, is that true? And are there any first-time home owner programs if we make about $75,000/yr together??
I know these are a lot of questions so thanks in advance.
We have actually been pre-approved for a morgage but we are just trying to see what our opitions were concerning up front costs and the chances of us actually getting approved before we but down a deposite to make an offer.
Paul
Feb
26
Mortgage Cycling Secrets Revealed
Filed Under Real Estate | Leave a Comment
Steven Gillman asked:
Have you heard about mortgage cycling? Maybe you’ve seen the ads for books on this “secret technique” for paying off your mortgage sooner. Is there some useful information in them? Yes, especially if you are not familiar with the basic premise that you can pay extra principle every year and you’ll pay off the loan sooner and save thousands on interest.
Mortgage cycling is dressed up as a “new” system, and of course there are many little tricks to doing this most effectively. There are more risky techniques too, like using short-term home-equity loans to pay down your primary mortgage now. This latter technique could cost you more in interest or even put you into financial trouble that leads towards foreclosure.
The safest way of “mortgage cycling” is to just put large lump sums of money towards your mortgage loan every few months to a year. Pay thousands of dollars extra per year, and you will pay off your loan many years sooner. No surprise there, right, but what if you don’t have the hundreds of dollars a month extra needed to do this?
Money For Mortgage Cycling
Don’t assume you can’t come up with SOME extra money, at least each year. Some will say they can’t, and yet still add hundreds of dollars per month to credit card payments from buying anything from expensive shoes to snowmobiles. There’s nothing wrong with buying these things, but the choice is yours if you want to pay down that mortgage instead.
You can also pay off large chunks of principle by using your annual tax refund, insurance settlements that are not otherwise allocated, and any cash gifts or prizes you may receive.
How much sooner you can pay off your mortgage depends on how much extra you pay and when. The sooner you pay extra money towards the principle, the better. Let’s demonstrate with a simple example, just making an extra payment each month.
Suppose you have a $160,000 30-year mortgage at a 7% annual interest rate. Regular monthly payments would be $1064.40. If you looked at your second payment you would see that it’s composed of $932.57 interest and $131.83 principle (the amount you actually pay down the loan). Just add $131.83 to your normal payment of $1064.40, and you have taken an entire month off the time it will take to pay off your mortgage.
If you did this each month, you would cut the time to pay off your loan in half. The principle part of the payment would be growing with each payment, so the extra payment would be a little more each month (around $137 by the end of the first year), but hopefully over the years your income will rise enough to afford that. Consider that if you pay normally, your last year of the mortgage you’ll pay $12,772.80 ($1064.40 x 12 months). On the other hand, pay about an extra $1600 that first year, in the way shown above, and you’ll eliminate that entire last year – a savings of over $11,000!
Other ways to pay off extra principle need to be evaluated carefully. You could, for example, put a few thousand of your savings towards the loan now and save perhaps tens of thousands in interest over the years. However, will you then need to pay even higher credit card rates because you emptied your savings account and need some money? You could cash in stocks and apply the money to the loan, but will you be giving up a 9% return to pay down a 7% mortgage? You may also want to consider paying off any debts with higher interest rates before you apply extra money to your mortgage.
To keep it simple, set aside extra money every month and apply it to the loan. Then use any other money that may otherwise be squandered (like tax refunds). If you just do a few simple things to pay something extra on the loan each year, and you can forget about complicated mortgage cycling plans.
Edwin
Have you heard about mortgage cycling? Maybe you’ve seen the ads for books on this “secret technique” for paying off your mortgage sooner. Is there some useful information in them? Yes, especially if you are not familiar with the basic premise that you can pay extra principle every year and you’ll pay off the loan sooner and save thousands on interest.
Mortgage cycling is dressed up as a “new” system, and of course there are many little tricks to doing this most effectively. There are more risky techniques too, like using short-term home-equity loans to pay down your primary mortgage now. This latter technique could cost you more in interest or even put you into financial trouble that leads towards foreclosure.
The safest way of “mortgage cycling” is to just put large lump sums of money towards your mortgage loan every few months to a year. Pay thousands of dollars extra per year, and you will pay off your loan many years sooner. No surprise there, right, but what if you don’t have the hundreds of dollars a month extra needed to do this?
Money For Mortgage Cycling
Don’t assume you can’t come up with SOME extra money, at least each year. Some will say they can’t, and yet still add hundreds of dollars per month to credit card payments from buying anything from expensive shoes to snowmobiles. There’s nothing wrong with buying these things, but the choice is yours if you want to pay down that mortgage instead.
You can also pay off large chunks of principle by using your annual tax refund, insurance settlements that are not otherwise allocated, and any cash gifts or prizes you may receive.
How much sooner you can pay off your mortgage depends on how much extra you pay and when. The sooner you pay extra money towards the principle, the better. Let’s demonstrate with a simple example, just making an extra payment each month.
Suppose you have a $160,000 30-year mortgage at a 7% annual interest rate. Regular monthly payments would be $1064.40. If you looked at your second payment you would see that it’s composed of $932.57 interest and $131.83 principle (the amount you actually pay down the loan). Just add $131.83 to your normal payment of $1064.40, and you have taken an entire month off the time it will take to pay off your mortgage.
If you did this each month, you would cut the time to pay off your loan in half. The principle part of the payment would be growing with each payment, so the extra payment would be a little more each month (around $137 by the end of the first year), but hopefully over the years your income will rise enough to afford that. Consider that if you pay normally, your last year of the mortgage you’ll pay $12,772.80 ($1064.40 x 12 months). On the other hand, pay about an extra $1600 that first year, in the way shown above, and you’ll eliminate that entire last year – a savings of over $11,000!
Other ways to pay off extra principle need to be evaluated carefully. You could, for example, put a few thousand of your savings towards the loan now and save perhaps tens of thousands in interest over the years. However, will you then need to pay even higher credit card rates because you emptied your savings account and need some money? You could cash in stocks and apply the money to the loan, but will you be giving up a 9% return to pay down a 7% mortgage? You may also want to consider paying off any debts with higher interest rates before you apply extra money to your mortgage.
To keep it simple, set aside extra money every month and apply it to the loan. Then use any other money that may otherwise be squandered (like tax refunds). If you just do a few simple things to pay something extra on the loan each year, and you can forget about complicated mortgage cycling plans.
Edwin
Feb
23
I **** spam answers asked:
Morgages confuse me, my partner and i are in our twenties rent and dont have anything saved yet, how much shall we save? I’ve not told him i don’t understand how morgages work – i’ve never really asked can somebody put it nice and easy for me?? Also how we go about owning our own house…is a morgage worth it? I’m ok to rent but everybody keeps telling us its time for a morgage…whats wrong with renting? HELP! Thanks x Best answer 10Pts x
Bryan
Morgages confuse me, my partner and i are in our twenties rent and dont have anything saved yet, how much shall we save? I’ve not told him i don’t understand how morgages work – i’ve never really asked can somebody put it nice and easy for me?? Also how we go about owning our own house…is a morgage worth it? I’m ok to rent but everybody keeps telling us its time for a morgage…whats wrong with renting? HELP! Thanks x Best answer 10Pts x
Bryan
Feb
20
Tom Billmore asked:
Mortgage Life Insurance is a kind of insurance that gives the policy holder a risk cover for his mortgage repayments. This means in short that, were the policy holder to die during the term of the policy, and if the policy is in force, then all his unpaid balance towards the mortgage repayments will be paid by the insurance company.
It is to be noted that, at the time of taking out such a policy, in addition to the mortgage disability insurance, the risk cover offered by the insurance company must be equal to the entire balance amount in the mortgage. The annual premium payable towards this coverage will be computed on this outstanding balance. Besides, the policy term in the Mortgage Life Insurance must be the same as the period in the mortgage insurance, even though the mortgage disability insurance is still running. As the policy holder continues repayment, the balance in the mortgage loan also keeps on decreasing. Likewise, even the annual premiums are reduced in tandem.
Sometimes, Mortgage Life Insurance offers a rider that can be attached to the policy. A rider is simply an addition to the main policy, adding an extra insurance coverage at a premium that is much lower than what it would be, were it taken separately. The mortgage disability insurance is not a rider at all. One common rider that is offered is a critical illness rider. If you are to buy a separate policy for critical illness, you will have to pay out more as premium. But if you take it as a rider, the premium is somewhat less. If the policy holder is diagnosed with a critical or terminal illness, then the cost of the treatment, to the extent of the sum assured, is taken care of by the rider.
Of late, insurance companies have modified the terms in Mortgage Life Insurance and are now offering return of premiums paid if you outlive the policy term. In such cases, there is no reduction in the premium amount or in the sum assured. Even as your balance in the mortgage loan goes on reducing, your annual premium and the amount for which you are covered, remains the same.
Louis
Mortgage Life Insurance is a kind of insurance that gives the policy holder a risk cover for his mortgage repayments. This means in short that, were the policy holder to die during the term of the policy, and if the policy is in force, then all his unpaid balance towards the mortgage repayments will be paid by the insurance company.
It is to be noted that, at the time of taking out such a policy, in addition to the mortgage disability insurance, the risk cover offered by the insurance company must be equal to the entire balance amount in the mortgage. The annual premium payable towards this coverage will be computed on this outstanding balance. Besides, the policy term in the Mortgage Life Insurance must be the same as the period in the mortgage insurance, even though the mortgage disability insurance is still running. As the policy holder continues repayment, the balance in the mortgage loan also keeps on decreasing. Likewise, even the annual premiums are reduced in tandem.
Sometimes, Mortgage Life Insurance offers a rider that can be attached to the policy. A rider is simply an addition to the main policy, adding an extra insurance coverage at a premium that is much lower than what it would be, were it taken separately. The mortgage disability insurance is not a rider at all. One common rider that is offered is a critical illness rider. If you are to buy a separate policy for critical illness, you will have to pay out more as premium. But if you take it as a rider, the premium is somewhat less. If the policy holder is diagnosed with a critical or terminal illness, then the cost of the treatment, to the extent of the sum assured, is taken care of by the rider.
Of late, insurance companies have modified the terms in Mortgage Life Insurance and are now offering return of premiums paid if you outlive the policy term. In such cases, there is no reduction in the premium amount or in the sum assured. Even as your balance in the mortgage loan goes on reducing, your annual premium and the amount for which you are covered, remains the same.
Louis
Feb
18
Mortgage Underwriter
Filed Under Real Estate | Leave a Comment
Dennis Estrada asked:
The mortgage underwriter understands the mortgage loan qualification, approval, and pre-approval. He makes the decision if the borrower qualifies for the mortgage. If the mortgage application fails to meet the qualification level, he determines the best mortgage loan options for the borrower.
To qualify for the mortgage, the mortgage underwriter basically looks at the credit history, credit score, down payment, equity, income, and outstanding loan. So, he also understands how to repair bad credit rating, and increase the credit score.
The credit history tells how the borrower pays off loan obligation. As you pay off the mortgage, the Credit Score increases. A high score is a positive indicator. The borrower will possibly be approved for the mortgage.
The income and debt ratio helps the mortgage underwriter prove that the income is enough to cover the mortgage, and outstanding loan. To prove, the mortgage underwriter verifies all the different source of income.
First, the loan officer prepares the necessary documents for the mortgage application. Then, the loan officer enters the personal and credit information into the underwriting system. The system checks the qualification of the information. Eventually, the loan officer gets the qualified application. Then, the loan officer sends the qualified application to the mortgage underwriter. The mortgage underwriter verifies the documents including pay stubs, and bank statements. If there are missing documents and unsatisfactory documents, the mortgage underwriter asks the borrower to provide the documents. This makes sure that the borrower has enough income to pay off the mortgage. Finally, the mortgage underwriter gives the final approval.
All these steps ensure that there is absence of fraud, and meets the standards in which the mortgage are insurable, and serviceable. So, the mortgage underwriter knows the good and bad practice on mortgage application. The standards are set by the company and government.
Sheila
The mortgage underwriter understands the mortgage loan qualification, approval, and pre-approval. He makes the decision if the borrower qualifies for the mortgage. If the mortgage application fails to meet the qualification level, he determines the best mortgage loan options for the borrower.
To qualify for the mortgage, the mortgage underwriter basically looks at the credit history, credit score, down payment, equity, income, and outstanding loan. So, he also understands how to repair bad credit rating, and increase the credit score.
The credit history tells how the borrower pays off loan obligation. As you pay off the mortgage, the Credit Score increases. A high score is a positive indicator. The borrower will possibly be approved for the mortgage.
The income and debt ratio helps the mortgage underwriter prove that the income is enough to cover the mortgage, and outstanding loan. To prove, the mortgage underwriter verifies all the different source of income.
First, the loan officer prepares the necessary documents for the mortgage application. Then, the loan officer enters the personal and credit information into the underwriting system. The system checks the qualification of the information. Eventually, the loan officer gets the qualified application. Then, the loan officer sends the qualified application to the mortgage underwriter. The mortgage underwriter verifies the documents including pay stubs, and bank statements. If there are missing documents and unsatisfactory documents, the mortgage underwriter asks the borrower to provide the documents. This makes sure that the borrower has enough income to pay off the mortgage. Finally, the mortgage underwriter gives the final approval.
All these steps ensure that there is absence of fraud, and meets the standards in which the mortgage are insurable, and serviceable. So, the mortgage underwriter knows the good and bad practice on mortgage application. The standards are set by the company and government.
Sheila