Scouting for the Best Mortgage Rate:
Most of us would be having a fair knowledge regarding the surprisingly low mortgage rates, but the question is as to how we would access the mortgage rates. Dc Fawcett gives Clear Vision on this topic below.
When everything is executed as said, the actual truth is that the rates are not as low as what the bank claimed. This can be very discouraging and demoralizing for the individual while closing the loan.
There are innumerous methods to find the suitable mortgage rates, but everything needs some effort on the individual’s behalf.
For all the methods, it requires some shopping. This is due to the fact that you cannot actually conclude whether a mortgage rate is good unless you do a comparison.
Majority of potential and existing homeowners just gather one quote, particularly from the reference of a real estate agent and later repent for their decision.
Advertised Mortgage Rates are the Best option
One major aspect to be highlighted is that the mortgage rates in real estate that are advertised are the best options, and not actually the average interest rate that is furnished to the borrowers.
The best alternative
The best alternative may be the owner occupied property, single family residence, buying or the rate and term finance, and a huge down payment.
Banks offering low mortgage rates
These particular loans could be closed almost in any place, and that is why banks will readily give a very low mortgage rate.
Hindrance in the form of bad credit
On the other hand, if the credit is not good, one will find it difficult to get a low mortgage rate, and leave alone the mortgage.
Favorable situation with regard to high credit score
When the credit score is high, situation is in your favor. When the credit score is below 700, you may require to clear some high credit balances or ponder on clearing any errors before the application is forwarded.
Without any doubt, the credit score may help in manipulating the mortgage rate and it could be controlled. So the individual should keenly go through it.
The type of documentation influences interest rate
The type of documentation can also hike the interest rate, particularly when you do not give much attention to it.
Furnishing documents makes things easier
There are the slated income loans which will make things easier. When you furnish all the documents, the lowest rate is the most affordable. So, one has to furnish the income and asset documentation as and when possible.
Down payment comes to the aid
Another major factor where you gain control is down payment. So, the more you invest, lesser is the mortgage rate.
Investment versus Interest Rates
When you invest more, the interest rates will be less and there are wider financing options. But, it does not mean that it is the most suited option.
This can be particularly prominent if the size of loan is near to the conforming limit of loan, while bigger loan amounts claim one extra point.
Factors such as property type and occupancy could hike the mortgage rates. But, one does not have control if he or she already has the property.
Aspect to be considered while shopping for interest rates
Particularly, if you are still going about shopping, you have to make out that condos are extremely difficult and exorbitant to invest in many scenarios. The same is the case with the multi-unit and investor retained properties.
Take into account the mortgage rate fees
One should not forget the fees to be paid for a mortgage. The rate of the mortgage may be less, but it comes along with a cost.
The quality of the loan provider
Be sure you do not restrict the vision to just the mortgage rate. The loan provider’s quality is also something to be highlighted, particularly if it is a purchase money mortgage.
Alternatives To Seek When Mortgage Is Not Affordable: – Dc Fawcett Real Estate
When you are lagging behind in your mortgage payments the likelihood of losing your property would be frightening. There would be financial emergencies including loss of job etc.
If you are struggling with your mortgage payment then you should reach your loan servicer to talk about the available options. This you should do as early as possible. Dc Fawcett says that You should keep in mind that the longer you take this step the lesser alternatives you have.
Your request may have been rejected earlier but it’s wise to call your servicer even in this context. Servicers may be very busy but carry out perseverance in waiting for your servicer.
There are some qualifications including your qualification for HAMP, your property is your primary home etc. before reaching your servicer. After contacting your servicer you should give some documentation. This will include your monthly mortgage payment, your latest income tax return etc. You can visit the appropriate websites to get relevant information regarding these.
There are in fact several options when you can’t afford your mortgage anymore and some of them you can do by yourself. However, if there are some questions that need to be answered about mortgage concerns you can obtain knowledge from U.S. Department of Housing and Urban Development. An attorney can also be consulted in this scenario.
Now look at some of the options when you can’t afford your mortgage payment.
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Refinancing your mortgage comes to the aid in such case but it’s important that borrowers take up this alternative prior to missing on mortgage payments. You should also be ready for the paperwork.
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Filing for bankruptcy is generally very useful for stopping the home from getting into foreclosure process. However, it has its share of risks too and hence one should consult a good attorney. By taking this option it damages your credit to a substantial degree.
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You can go for a short sale- a sale where you sell off your property for a lesser value that is owned on your specific debt. Here the lender considers the sum as a complete payoff of your mortgage. This does not have a devastating effect as that of a foreclosure.
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A Deed in Lieu of Foreclosure is another option. Here you will voluntarily forfeit the property title to that of the servicers. This you will do with their consent. This is carried out in return for the cancellation of the debt balance. Here then you will lose your property but it does not have that damaging effect as that of foreclosure, on your credit score.
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There is also a rare option including negotiating a loan modification with your present lender. Also, there is another option wherein you sell your property or rent it. You might owe a certain amount and you can sell it at that value or more than it. However, this is not a good choice. As far as renting your property is concerned it may not be the best option. However, if it manages to make the process workable until you can pay your mortgage again then it may be considered.
Scam artists are prevalent everywhere and they know when homeowner are falling short of their mortgage payments. They may sound as they are ever willing to help you but their intention is not so. Their main aim is to swindle you off your money. They mask themselves as foreclosure prevention specialist and charge an exorbitant amount just for doing some paperwork. Also they make the homeowners sign a deed. The deed will show that the homeowner can stay in the property as a renter. Later they can retain the property. So it’s very essential that one is careful of these scam artists.
Dc Fawcett ways by Which one can reduce the mortage costs?:
You may also fall under the category of homeowners whose mortgage payment is your biggest monthly expenditure. So it’s something pretty nice to cut short this big expenditure.
Here we have come with a list through which you can save some money while you are struggling to pay off these expenses:
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You can opt for obtaining a longer loan by transferring your mortgage into traditional 30-year tenure. By this way you can trim your monthly payment. However, the flip side is that your interest rate will see a surge. But again the good thing is that you are given the chance to do extra payments on the loan. These additional payments will assist you in paying off the loan in a swift manner.
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You will be having a financial crisis and certain lenders will reset your mortgage payments. In this scenario you are supposed to expend a huge chunk of money that goes into the home loan. Then the amortization process occurs where the reconsideration of your monthly payments is done by the lender. The difference between recasting and refinance is that recasting could consume lot of time for you to observe any change.
There is also the option of buying a discount point. This is called paying down your rate or buying down your rate. The discount point is bought for one percent and it is calculated on the cost of your property’s loan. Generally, the points are restricted to three by the lenders.
Dc Fawcett Buydown Mortgage Reviews:
A buydown mortgage is something in which the buyer buys down a loan. He obtains a lower interest rate and lowers the monthly payments. In this article, Dc Fawcett VREIC, an expert in wholesaling, rehabbing and cash flow investing, reviews a buydown, the types of buydowns and the benefits of a buydown.
Elaboration
The buydown mortgage works by depositing cash estimated by calculating at the buydown percentage in advance. The bank or the lender then reduces the interest rates and hence the monthly payments. For instance: you are taking a 30 year old mortgage for $ 30,000 for a rate of interest 5%. You can pay a 1% extra upfront fees and the lender lowers the rate of interest by 0.25%. The rate of interest then diminishes by 1/4. This helps you save money in the monthly payments and helps you plan ahead.
2-1 buydown
A 2-1 buydown is a Mortgage where the interest rates are lowered in the first 2 months and then it becomes a fixed rate mortgage. The interest rate increases step by step and becomes constant after the first 2 months.
A 3-2-1 buydown
A 3-2-1 buydown is a technique in which the interest rates are lowered by 3%, 2% and 1% in the first 3 consecutive months. They increase in this slow fashion and then become constant. This 3-2-1 buydown mortgage is extremely beneficial to the buyers. They can save money for the increased monthly payments ahead. The fact that the interest rate becomes fixed after 3 years helps them plan ahead by looking at their present monthly income and saving for the future.
What should you consider before you take a buydown ?
Before you take a buydown, it is important to estimate over what time you can earn back the interest bought down. Suppose you pay a buy down amount of $25000 for a mortgage, then you should be able to estimate after how much time you can get this money back. The decision to take a buy down also depends upon how long you are going to stay in that home.
Benefits of a buydown
A home builder or seller offers the buy down sometimes. He allows a buy down for a fixed period or for the entire mortgage. This allows the home buyers who cannot afford heavy down cash or those who cannot pay high monthly payments to become eligible for the loan. This type of buy down is usually a no cost mortgage interest rate buydown. Another important benefit of a buy down is that the down payment can be deducted from tax. This down payment comes down as mortgage points and can be debited from tax only in the same year as it is being paid for house purchase.
Reverse Mortgage – Pros and Cons:
Dc Fawcett Real Estate
Though house flipping is rewarded at the end of the day. It may take a lot of time to get money from that. DC Fawcett had analyzed the market must face healthy competition. Every buyer looks at the price, surroundings, and their convenience before buying the house.
However, if your house is mortgaged & you need funds, a reverse mortgage is one of the options.
What is a reverse mortgage?
A reverse mortgage is a loan that enables the people who are above 60 to avail of the loan into equity without selling their house. It is helpful for the senior citizens to stay in their homes while getting their retirement income. The loan has to be repaid after the borrower relocates to another place or passes away.
How does reverse mortgage work?
If a homeowner has no income or limited income and is not able to cover their expenses, the reverse mortgage is the last resort. In this type of mortgage, you need not repay the mortgage loan and interest fully.
Reverse mortgages – pros and cons
The Reverse mortgage has been beneficial to many homeowners as it is one of the best ways to improve their financial status at the time of retirement. Nothing is ideal in this world. Everything has got plusses and minuses. The reverse mortgage is not an exception. Below are its pros and cons.
The reason why the reverse mortgage is advantageous is because of the exemption for the traditional mortgage payments utilizes your home equity. The other benefits are
1. Flexibility
This is a very flexible option. which can be used in many ways for different types of borrowers. If you need financing, you can go for this product. If you have sufficient resources, it can also be used as a financial planning tool.
2. Accessibility
It allows you to stay in your home as long as you want without any monthly mortgage payment. You can use home equity fund for all the purposes.
3. Fewer chances of default
In reverse mortgage cases, your house cannot be taken away from you on the grounds for nonpayment like it is done in home equity unless you leave your house permanently. That is the time you need to pay the insurance and taxes.
4. Tax-Free
The reverse mortgage is free from all the taxes whether you receive it as a fixed an income or in a lump sum.
Reverse Mortgage Disadvantages:
1. Accumulating Interest
As there is no need to make monthly mortgage payments, the interests keep accumulating every month which has to be paid back when you move out of the property. It is only suitable for those who want to stay in their house and improve their standard of living.
2. Limited access to home equity
If you have a lot of home equity, you can only use a certain percentage of it which becomes very much frustrating.
Appropriate solution when you fall short of mortgage payments:
When you fall short of your mortgage payments first and foremost reach the housing counselor who is approved by U.S. Department of Housing and Urban Development. They will help in finding the suitable options for you.
The available options are as follows:
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You can opt for modifying your existing loan or refinancing your loan. However, these options have their own share of complications. You can reach your loan servicer when you cognize that your monthly mortgage will not be met. Here there are few options including decreasing your interest rate, making the loan term more, and knowing whether you are eligible for the option of loan modification. But again the lender may not give a nod to your loan modification interest. Having said that, there should be a proof which states that you are undergoing financial crisis. You must also be having the appropriate household income. Having more income or less income both have their share of issues.
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Forbearance can be considered when your financial woes are for the time being. Through this option you can move away from foreclosure. How? You can decrease or limit your specific mortgage payments for a specific period.
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When you opt for a deed-in-Lieu of foreclosure you cannot go away without losing your home. However, with this option, there is not the scary element of foreclosure process. In this option, the lender gets hold of the property title which is done voluntarily by you. There are certain essential documents including proof of income, an elaborate financial statement etc. to be probably submitted.
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Selling your property is another option and this has relation to the market you reside. By going through this option you will be able to do the mortgage payment in full amount. But this is not always likely to fructify. Certain owners who are dealing with foreclosure may opt for short sales. In short sales also you sell off your property but for a sum lower than the amount on your specific mortgage.
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You can opt for filing a partial claim wherein the U.S. Department of Housing and Payment will assist you to a considerable degree.
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You may opt for renting your home which would be more than or equal to your mortgage payment. In the meantime you can find a place to live at a reasonable price.
The final note:
You could try out the refinance, but if it is going to be a purchase, you will require doing it with someone who can close the loan on time. Else, an apparently good deal would turn against your favor in no time.
When the lender furnishes the mortgage rates along with the APR, make out the fees that are included in the calculation. Everything is of much relevance and can hugely influence the real cost of the deal.
Dc Fawcett , the founder of the Virtual Real Estate Investing Club, gives a fair idea in his blogs about going for the best mortgage rates. Also, one could go through these blogs to underst and the real estate scenario better.
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