Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to “shop” effectively.
First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS. But you didn’t really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?
Second, YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. But if you want the cheapest quote – head on out to the Internet, and I wish you good luck. Just remember that if you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs…these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said – I'm not the cheapest. Of course my rates and costs are very competitive, but I have also invested in the systems and team needed to ensure the top quality experience that you deserve.
Third, MAKE CORRECT COMPARISONS. When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.
Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.
Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.
As you can imagine, I wouldn’t be encouraging you to shop around if I weren’t confident that I can give you a great value and serve you the very best.
Wednesday, October 1, 2008
Friday, December 28, 2007
Securing jumbo loans
Under Freddie Mac and Freddie Mae rules, the non-conforming (Jumbo) mortgage loan amount is over $417,000.
The application process for a high-end mortgage is the same as a conforming one with a couple notable exceptions, the most important being the approval process. Because jumbo mortgages aren’t eligible investments for government-sponsored enterprises like Freddie Mac and Fannie Mae, lenders take on additional risk with this type of loan and consequently apply a more stringent credit standard. A further difference is the interest rate charged. Because it’s a non-conforming loan, the rate is usually at least one-half a percent above what the conventional rate would be.
As a homebuyer in search of a high-end mortgage, you most likely have a complex financial situation. Your cash flow may change from month to month and your mortgage should reflect this. Flexibility of terms is essential. A popular option today is the adjustable rate mortgage (ARM), which gives you four payment choices including:
The option ARM is not for everyone. If you are planning to live in your home long-term, it probably makes more sense to go with a 15- or 30-year fixed rate mortgage because it provides cost certainty. Interest rates are still historically fairly low and locking in wouldn’t be the worst decision. Interesting note: 85 percent of high-end mortgages are ARMs while the opposite is true for conventional ones.
Another recent trend in the high-end market is the reverse jumbo mortgage. Homeowners who are older than 62 and wish to withdraw some of the equity from their home for whatever purpose they choose can generally do so without any income qualifiers or monthly payments. Further, the funds received are not taxable as they are loan advances and not income. When you sell your house, you simply repay the loan including any interest payable.
Real estate prices on both coasts have risen dramatically. It’s no secret that the past few years have seen the cost of owning a luxury home in either location skyrocket. Three thousand square feet in San Francisco is definitely pricier than the same space in St. Louis. A conforming mortgage in Missouri becomes a jumbo or even super jumbo in California. There’s no mystery as to why publications that chronicle the country’s best places to live use real estate prices as a major criterion in their ratings.
One of the biggest areas of demand for high-end mortgages is the vacation home. As many 50- and 60-year-old boomers have sought to escape to weekend properties around the country, especially those in popular resort areas, prices of second homes have outstripped those of some primary residences. While buyers’ incomes have risen, the cost of resort properties has increased more so, creating a new and untapped market for high-end mortgages.
Today’s luxury home buyer has more choices than ever before.
The application process for a high-end mortgage is the same as a conforming one with a couple notable exceptions, the most important being the approval process. Because jumbo mortgages aren’t eligible investments for government-sponsored enterprises like Freddie Mac and Fannie Mae, lenders take on additional risk with this type of loan and consequently apply a more stringent credit standard. A further difference is the interest rate charged. Because it’s a non-conforming loan, the rate is usually at least one-half a percent above what the conventional rate would be.
As a homebuyer in search of a high-end mortgage, you most likely have a complex financial situation. Your cash flow may change from month to month and your mortgage should reflect this. Flexibility of terms is essential. A popular option today is the adjustable rate mortgage (ARM), which gives you four payment choices including:
Minimum Payment Option ARMs are offered with one-, three- or six-month introductory rates between 1 and 4 percent. After the initial period, the fully indexed rate (based on the 12-month Monthly Treasury Average) adjusts monthly. This option allows you to defer interest up to 110% of the original loan value.
Interest Only Payment This allows you to pay interest only for the first five or 10 years of the mortgage term. It’s an excellent way to free up money for other investments, etc. However, be aware that the monthly payments will rise considerably at the end of the interest only period. This is because the mortgage re-amortizes over the remaining term and payments will include principal as well as interest.
Fully Amortizing 30-Year PaymentWith this option, you pay principal and interest over 30 years with the fully indexed rate adjusted monthly.
Fully Amortizing 15-Year PaymentYour monthly payments are higher than above because you repay the mortgage in half the time.
The option ARM is not for everyone. If you are planning to live in your home long-term, it probably makes more sense to go with a 15- or 30-year fixed rate mortgage because it provides cost certainty. Interest rates are still historically fairly low and locking in wouldn’t be the worst decision. Interesting note: 85 percent of high-end mortgages are ARMs while the opposite is true for conventional ones.
Another recent trend in the high-end market is the reverse jumbo mortgage. Homeowners who are older than 62 and wish to withdraw some of the equity from their home for whatever purpose they choose can generally do so without any income qualifiers or monthly payments. Further, the funds received are not taxable as they are loan advances and not income. When you sell your house, you simply repay the loan including any interest payable.
Real estate prices on both coasts have risen dramatically. It’s no secret that the past few years have seen the cost of owning a luxury home in either location skyrocket. Three thousand square feet in San Francisco is definitely pricier than the same space in St. Louis. A conforming mortgage in Missouri becomes a jumbo or even super jumbo in California. There’s no mystery as to why publications that chronicle the country’s best places to live use real estate prices as a major criterion in their ratings.
One of the biggest areas of demand for high-end mortgages is the vacation home. As many 50- and 60-year-old boomers have sought to escape to weekend properties around the country, especially those in popular resort areas, prices of second homes have outstripped those of some primary residences. While buyers’ incomes have risen, the cost of resort properties has increased more so, creating a new and untapped market for high-end mortgages.
Today’s luxury home buyer has more choices than ever before.
Monday, September 10, 2007
Commonly Asked Questions on Escrow Accounts
Q.#1. What is an "escrow account"?
A. Generally, an escrow account is a special savings account deposited in a financial institution; it is segregated and held for a specific purpose. Escrow accounts, in connection with mortgage loans, are used commonly to hold the deposits to ensure they are available to pay real property taxes or insurance payments, or both.
Q.#2. How is an escrow account established?
A. An escrow account is commonly required by documents (the note or mortgage) signed in connection with taking out a mortgage loan. The account will usually be established in the financial institution which made the mortgage loan to the consumer.
Q.#3. What can the escrow account’s money be used for?
A. The mortgage documents specify how the money is to be used. Generally, they will state that the money is for property tax payments and insurance payments (for example, credit life, homeowner’s, or flood plain insurance.
The money may only be used for property taxes and insurance and for no other purposes. For example, funds may not be withdrawn by either the consumer or the financial institution for a mortgage payment, a bounced check fee, or a water or other utility bill.
Q #4. How does money get into the escrow account?
A. Generally, a consumer will make a single monthly mortgage payment to the mortgage lender. That payment will have various components: principal and interest, property taxes and, possibly insurance (ex., home owners, flood plain, private mortgage insurance (PMI), etc.).
For example, if a consumer’s monthly payment is $650, $450 may be for the principal and interest, $150 may be for the property taxes, and $50 may be for credit life insurance. The $150 for taxes and the $50 for insurance will be deposited into the escrow account.
Q.#5. How much should be paid into the account?
A. Generally, the consumer should pay sufficient money into the account over the year to cover the anticipated property taxes and insurance. Mortgage documents commonly contain language that states that one-twelfth of the estimated taxes and insurance should be paid into the account. These are usually determined by referencing the prior year’s amounts. However, federal law authorizes a financial institution to require an additional one sixth of the estimated taxes (i.e., two months payments) to be deposited in the escrow account.
For example, if 2006 property taxes were $2,400, it may reasonably be estimated that they may be the same amount for 2007. Therefore, a financial institution may request a consumer to pay $200 each month for taxes along with a mortgage payment. The financial institution may also require an additional $400 to be paid into the escrow account over the year’s 12 months (i. e., an extra $33.33 – possibly rounded to $34) each month to accumulate an additional 2 months’ taxes.
Q.#6. Must I absolutely have an escrow account?
A. If the mortgage documents require it, a financial institution has the legal right to require escrow account. Lenders like to set up these impound accounts, as they are then certain that the property taxes and insurance will be paid on time, as they will be holding the money and paying these expenses for you. You can typically waive escrows on a conventional loan if your loan-to-value ratio is 80% or less. The key point is to convey to your lender or mortgage broker from the start that you choose to waive the escrow account option.
The lender may charge you an additional 1/4 point for this option to "waive escrows. "This is not an increase in the interest rate, but rather a one-time charge. If your loan is for $l00,000.00, for example, and you are paying no points, you would pay $250.00 for the privilege of waiving the escrow impound account. In the long run it may well be worth it.
contact: Kevin Salley, kcsalley@gmail.com
A. Generally, an escrow account is a special savings account deposited in a financial institution; it is segregated and held for a specific purpose. Escrow accounts, in connection with mortgage loans, are used commonly to hold the deposits to ensure they are available to pay real property taxes or insurance payments, or both.
Q.#2. How is an escrow account established?
A. An escrow account is commonly required by documents (the note or mortgage) signed in connection with taking out a mortgage loan. The account will usually be established in the financial institution which made the mortgage loan to the consumer.
Q.#3. What can the escrow account’s money be used for?
A. The mortgage documents specify how the money is to be used. Generally, they will state that the money is for property tax payments and insurance payments (for example, credit life, homeowner’s, or flood plain insurance.
The money may only be used for property taxes and insurance and for no other purposes. For example, funds may not be withdrawn by either the consumer or the financial institution for a mortgage payment, a bounced check fee, or a water or other utility bill.
Q #4. How does money get into the escrow account?
A. Generally, a consumer will make a single monthly mortgage payment to the mortgage lender. That payment will have various components: principal and interest, property taxes and, possibly insurance (ex., home owners, flood plain, private mortgage insurance (PMI), etc.).
For example, if a consumer’s monthly payment is $650, $450 may be for the principal and interest, $150 may be for the property taxes, and $50 may be for credit life insurance. The $150 for taxes and the $50 for insurance will be deposited into the escrow account.
Q.#5. How much should be paid into the account?
A. Generally, the consumer should pay sufficient money into the account over the year to cover the anticipated property taxes and insurance. Mortgage documents commonly contain language that states that one-twelfth of the estimated taxes and insurance should be paid into the account. These are usually determined by referencing the prior year’s amounts. However, federal law authorizes a financial institution to require an additional one sixth of the estimated taxes (i.e., two months payments) to be deposited in the escrow account.
For example, if 2006 property taxes were $2,400, it may reasonably be estimated that they may be the same amount for 2007. Therefore, a financial institution may request a consumer to pay $200 each month for taxes along with a mortgage payment. The financial institution may also require an additional $400 to be paid into the escrow account over the year’s 12 months (i. e., an extra $33.33 – possibly rounded to $34) each month to accumulate an additional 2 months’ taxes.
Q.#6. Must I absolutely have an escrow account?
A. If the mortgage documents require it, a financial institution has the legal right to require escrow account. Lenders like to set up these impound accounts, as they are then certain that the property taxes and insurance will be paid on time, as they will be holding the money and paying these expenses for you. You can typically waive escrows on a conventional loan if your loan-to-value ratio is 80% or less. The key point is to convey to your lender or mortgage broker from the start that you choose to waive the escrow account option.
The lender may charge you an additional 1/4 point for this option to "waive escrows. "This is not an increase in the interest rate, but rather a one-time charge. If your loan is for $l00,000.00, for example, and you are paying no points, you would pay $250.00 for the privilege of waiving the escrow impound account. In the long run it may well be worth it.
contact: Kevin Salley, kcsalley@gmail.com
Monday, August 27, 2007
Take your privacy back
Your information … a hot commodity
Having credit checked is an important and necessary step in the home buying process. But very few people realize that each time their credit is checked, the “inquiry data” that the credit bureaus (Equifax, TransUnion, Innovis or Experian) have on file have now become a commodity. This information is being sold by the credit bureaus to other lenders…and also to companies that sell and resell the same names and personal information.
That’s right – the credit bureaus have found a way to increase their revenues at your expense….and without your permission.
These “inquiry leads” include name, address, phone numbers (including unlisted), credit score, current debt and debt history, property information, age, gender and estimated income. They are marketing personal, confidential information to competing creditors…and making millions. Your privacy is being sold, not just once, but over and over again.
And lenders that purchase these leads at a premium will then do everything they can to recoup their investment and turn a hefty profit. Super sneaky bait and switch tactics are being used to lure clients away from their reputable lender. Clients have even been called by disreputable lenders and told that the lender they had been speaking to previously “passed on” the information to them, because they knew that they’d be able to offer much better interest rates and terms. Ouch!
Just Say “No”
The consumer credit reporting industry has provided a way to “opt out” and remove your name from these lists. You can contact them by phone at 1-888-567-8688 or online at www.optoutprescreen.com You must opt out at least 48 hours prior to having your credit checked to make sure it is processed in time. You can choose a five year or lifetime option, and the lifetime option does require a signed form. If a credit report needs to be run prior to the 48 hour waiting period – at least you are aware and informed, and can be on the lookout for suspicious phone calls or mailers from someone who has purchased your data.
The good news is by opting-out you can make it stop right away and protect yourself from “pre-approved credit offers” arriving via mail, which is one of the leading causes of identity theft in the US.
Take your privacy back. Take five minutes right now – opt out, and pass it on. Refuse to be a part of this system.
Having credit checked is an important and necessary step in the home buying process. But very few people realize that each time their credit is checked, the “inquiry data” that the credit bureaus (Equifax, TransUnion, Innovis or Experian) have on file have now become a commodity. This information is being sold by the credit bureaus to other lenders…and also to companies that sell and resell the same names and personal information.
That’s right – the credit bureaus have found a way to increase their revenues at your expense….and without your permission.
These “inquiry leads” include name, address, phone numbers (including unlisted), credit score, current debt and debt history, property information, age, gender and estimated income. They are marketing personal, confidential information to competing creditors…and making millions. Your privacy is being sold, not just once, but over and over again.
And lenders that purchase these leads at a premium will then do everything they can to recoup their investment and turn a hefty profit. Super sneaky bait and switch tactics are being used to lure clients away from their reputable lender. Clients have even been called by disreputable lenders and told that the lender they had been speaking to previously “passed on” the information to them, because they knew that they’d be able to offer much better interest rates and terms. Ouch!
Just Say “No”
The consumer credit reporting industry has provided a way to “opt out” and remove your name from these lists. You can contact them by phone at 1-888-567-8688 or online at www.optoutprescreen.com You must opt out at least 48 hours prior to having your credit checked to make sure it is processed in time. You can choose a five year or lifetime option, and the lifetime option does require a signed form. If a credit report needs to be run prior to the 48 hour waiting period – at least you are aware and informed, and can be on the lookout for suspicious phone calls or mailers from someone who has purchased your data.
The good news is by opting-out you can make it stop right away and protect yourself from “pre-approved credit offers” arriving via mail, which is one of the leading causes of identity theft in the US.
Take your privacy back. Take five minutes right now – opt out, and pass it on. Refuse to be a part of this system.
Tuesday, August 21, 2007
Mortgage shopping effectively
Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to “shop” effectively.
First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS.
But you didn’t really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?
Second, YOU GET WHAT YOU PAY FOR.
If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. But if you want the cheapest quote – head on out to the Internet, and I wish you good luck. Just remember that if you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs…these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said – I'm not the cheapest. Of course my rates and costs are very competitive, but I have also invested in the systems and team needed to ensure the top quality experience that you deserve.
Third, MAKE CORRECT COMPARISONS.
When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.
Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND.
This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.
Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY.
This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.
As you can imagine, I wouldn’t be encouraging you to shop around if I weren’t confident that I can give you a great value and serve you the very best.
First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS.
But you didn’t really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?
Second, YOU GET WHAT YOU PAY FOR.
If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. But if you want the cheapest quote – head on out to the Internet, and I wish you good luck. Just remember that if you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs…these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said – I'm not the cheapest. Of course my rates and costs are very competitive, but I have also invested in the systems and team needed to ensure the top quality experience that you deserve.
Third, MAKE CORRECT COMPARISONS.
When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.
Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND.
This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.
Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY.
This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.
As you can imagine, I wouldn’t be encouraging you to shop around if I weren’t confident that I can give you a great value and serve you the very best.
Monday, August 20, 2007
Considering any shorter term mortgage?
"... when considering any shorter term mortgage, make sure to ask yourself the right questions .."
How Much Will I Save on My Interest Rate?
It is a fact that shorter term mortgages may provide you with a lower interest rate and overall lower interest payment. However, there is a trade off, be prepared for a larger monthly payment.
Should I Do A Longer Term Mortgage and Make Extra Payments?
For example, a 15 year mortgage locks you into a set payment. With a longer term mortgage you can make extra payments which will decrease the number of years of mortgage payments, but you need self discipline to actually make the payments. You really have to look yourself in the mirror to answer this question.
What Is the Benefit of More Equity Sooner?
The benefit of home equity is that it provides a ready source to borrow against. Often it makes sense to borrow against yourself (via your home equity).
How Long Do I Want To Have A Mortgage?
Whether you are young or mature, you may want to eliminate this obligation sooner. You may, for example, want to time at the end of your mortgage to enjoy your retirement. Consider the benefits of earlier relief from this commitment, but don't forget to consider the income tax implications.
Should I Use My Home As A Primary Investment?
By obliging in to a shorter term mortgage you are effectively increasing your exposure to real estate, perhaps leaving less for other investments. Ask yourself, "How diversified do I want my portfolio to be" before making this financial commitment.
In any financial plan, seek expert help. Contact me for help. kcsalley@gmail.com
How Much Will I Save on My Interest Rate?
It is a fact that shorter term mortgages may provide you with a lower interest rate and overall lower interest payment. However, there is a trade off, be prepared for a larger monthly payment.
Should I Do A Longer Term Mortgage and Make Extra Payments?
For example, a 15 year mortgage locks you into a set payment. With a longer term mortgage you can make extra payments which will decrease the number of years of mortgage payments, but you need self discipline to actually make the payments. You really have to look yourself in the mirror to answer this question.
What Is the Benefit of More Equity Sooner?
The benefit of home equity is that it provides a ready source to borrow against. Often it makes sense to borrow against yourself (via your home equity).
How Long Do I Want To Have A Mortgage?
Whether you are young or mature, you may want to eliminate this obligation sooner. You may, for example, want to time at the end of your mortgage to enjoy your retirement. Consider the benefits of earlier relief from this commitment, but don't forget to consider the income tax implications.
Should I Use My Home As A Primary Investment?
By obliging in to a shorter term mortgage you are effectively increasing your exposure to real estate, perhaps leaving less for other investments. Ask yourself, "How diversified do I want my portfolio to be" before making this financial commitment.
In any financial plan, seek expert help. Contact me for help. kcsalley@gmail.com
Thursday, August 9, 2007
Construction to Permanent Loan
Construction-to-Permanent Loan is a one-time close loan designed to finance the construction of a primary residence or second home and obtain permanent financing. One-time close means one loan-start to finish. You sign one set of loan documents to cover both the interim construction phase and the permanent loan phase. This eliminates the need for multiple loans, and duplicate fees to get into your new home. When the construction has been completed, the loan automatically converts to a permanent mortgage loan without another application or additional closing fees.
Contact me to learn more.
Contact me to learn more.
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