Mortgages under 5% are back in bloom

Make sure you look at the neighborhood you might be investing in. Are you in a subdivision? How many homes are you competing with in that subdivision? Are you buying the worst home in the best neighborhood? How about location? Are you within 20 to 30 minutes of all the necessary amenities most people are looking for?

Lot’s of questions..for sure…but these kind of question are the type you should be asking not only yourself but your realtor as well. No, you don’t have to be living in an exclusive neighborhood but it should be in an economically stable one. It really has nothing to do with who is moving in and out of the neighborhood but how much the going price is that is being paid for those homes.

Make sure you do a thorough investigation on the physical condition of the property. People facing foreclosures for sale may not be keeping up on the maintenance or actually damage the property out of anger due to their situation so you must include those costs in your purchase price. Does it make sense financially to buy the house at what the bank is asking? The only exception I would have to this rule is if in fact the home is in an exclusive location.

Make sure you look at recent foreclosure sales in the neighborhood. Try and determine what pattern the sales prices are establishing. Recently, some banks have decided to play the bidding game differently so be aware of what you are dealing with. Banks may not be giving you the true story of actual bids on the properties they are trying to unload. Don’t get caught in a supposed bidding war. You may not be bidding against anyone…who knows….the banks won’t tell you. By knowing what other properties have sold for in the area should be a guage at what you are willing to pay the bank for the property.

If you can, determine if the former owner is embroiled in any lawsuits that could conceivably lead to a challenge of the sale and tying up the property.  In theory, once a property reaches the foreclosure stage it is going to market unencumbered.  That means nothing to an attorney who sees opportunity in attempting to delay disbursement of the former owner’s principal asset.  Delay is the operative word here; if you’re going to invest in a property you need to be able to put it to work for you with dispatch.

The foreclosures  for sale game can be a tricky one. Make sure you know how to play the game before you start and you can wind up with a diamond in the rough.

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I guess it would all depend on how long you have had your current loan and what type of terms you have on that loan that would qualify your thinking on a refinance option.

Interest rates have been at about the current levels for nearly 18 months but if some analysts are correct, now may be a good time to consider making a move if it is possible.

Of course, it all has to make sense. By using a mortgage interest calculator, like the one we have here on our site, you need to make sure that the cost and maintenance of your new loan is more beneficial to your pocket book than your current loan.

Most new loans will come with fees so you need to figure out how long it will actually be before you recoup those costs.

Other area’s you need to pay attention to are costs related to things your new lender may require. Things such as title searches, current appraisals, any type of needed inspections, mortgage insurance and any “other” type of processing fees. Sometimes the deck can be loaded on these loans.

Remember an old refinancing golden rule. If when adding up all the fees and costs associated with your new loan and figuring in how much you are saving each month on the new loan, you should be able to recover those cost with your new savings in 7 years or less. If not, steer clear!

My experience has shown that the recoup time figure should be more close to 5 years or it’s a bad deal. Again, there are many factors but if you should need to move anytime within 5 years or less you will actually lose money on the new deal.

Of course, if you are in an ever escalating mortgage because of the terms of your current loan, then by all means refinancing is something you must consider.

Due to the loss of home values over the last 12 months in many area’s of the country anything but a fixed monthly rate can truly be eating your wallet alive. It could be several years before home values regain enough equity to justify any type of high interest type of loans.

Only careful and accurate information you dig up on current mortgage interest rates and the use of an accurate mortgage interest calculator will give you the information you need to make the most informed and wise decision on how to structure your own home mortgage.

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As you all well know by now, one of the major causes of the recent and ongoing housing debacle was in part due to the notorious no interest loans.

Are they still available? Yes and no. Yes if you fit a very narrow profile that the banks are now lending to and no if you don’t.

Banks appear to be favoring these types of home loans to those who are not just a regular wage earner who is seeking out a moderate sized loan and who really doesn’t have any type of strategy for investing any of the savings.

These type of loans are those in which you only pay the interest part of the loan each month for a fixed term at which it is usually wise to sell the property or refinance the whole lot.

Since selling the home is extremely tough these days and refinancing can mean owing more on your home loan than it’s actually worth you may be faced with making skyrocketing payment once your fixed term expires.

So…mortgage interest loans? Stay clear for now unless you are an experienced investor with great credit and a nice stash of cash to hold you over if need be.

Get out the mortgage interest calculator and do a little shopping around if you are in the market. Find out what you can afford and start taking advantage of the current market. Buying something now can snag you a great home loan with good terms that will have potential for some tidy profits once the market turns…which shouldn’t be long.

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Jumbo loan rates may leave many people with more questions than answers. Many people have never heard the term jumbo loan so in that context just remember that any type of mortgage loan that is bigger than what is known as a “conventional conforming loan” is called a jumbo loan.

A conventional conforming loan is one in which the loan amounts are set by Fannie Mae and Freddie Mac and is this case that amount, until just this year, was set at $417,000. In Hawaii and Alaska that amount would be $625,000.

The new economic stimulus package recently passed as upped that limit to $729,750 which is good until Dec. 13, 2008.

The housing bubble, which burst a couple years ago, drove demand up for these types of jumbo loans but now that the market has been in decline so have the borrower’s who once sought them out.

Jumbo loan rates have also declined with the faltering market as well but still remain higher than conventional conforming loan rates.

The difference can vary depending on the type of loan you get but can be as much as .75% higher in some cases.

The ability to obtain a jumbo loan has gotten more difficult as well due to the massive foreclosure debacle that has taken place.

Greater emphasis is now placed on the borrowers credit and financial state of affairs before approval but in general for those even considering such a loan finances are not usually a problem.

In most cases it is always more beneficial to consider a larger down payment to conforming loan levels which will have a greater variety of money saving benefits over jumbo loan rates.

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Well folks, fankly I am sick to death of all the gloom and doom the irresponsible media has been pouring down on us for nearly 16 straight months. Must be an election year.

Yes, the housing market completely stinks right now. No arguments there. I want to move too and can’t because the buyers off hiding till the sky is no longer falling.

You see, the real facts are that nearly 98% of ALL home owners are making their payments on time. Yes, you read that right. Not quite 3% of all home loans in the U.S. are actually in default yet the media would have you all believing we are heading into the great depression.

The adjustable rate mortgage can be largely to blame but even that in and of itself was not the cause of the so called housing bust. Greedy investors. Greedy and underhanded banks and just plain stupid people who got in way over their heads are largely responsible for what we have seen.

Now they…and a ton of us are paying for it. But it doesn’t have to be that way and I predict that the not to distant future will bear me out.

ARM’s are still around. They haven’t been quite as popular not only because of the bad press and tighter lending requirements but also because they just have been a very good deal.

At the beginning of 2008, the 5/1 are rate was less than a quarter point than that of a 30-year FRM. (A 5/1 ARM is a fixed rate for the first five years and then adjusts every year after that. That difference has nearly doubled as of last week’s mortgage rate survey which can be a great thing concerning your monthly payment.

Go ahead and use our mortgage interest calculators and figure it out! As an example, carrying a mortgage balance of $250000 you would save $5000 on interest in your first 5 years of the loan compared to a fixed 30 rate of 6.6%.

One of the keys here is the 5 year term in which so many lame brains did not consider. Taking out an adjustable rate loan in which you face rates changes within the first couple of years was suicide in this market. Those who took the 5 year options are doing well right now and I wages will make a profit when the markets return.

And they will return. They always do and this is not exception. If you are still sitting on the fence I wouldn’t wait until I got slivers in my butt if I were you while considering to buy a house. You will never find deals out there like what is going on now and I believe the bottom of all is close if not already here.

Depending on your circumstances and you financial portfolio, now may be the perfect time to get on that mortgage interest calculator and figure out if an adjustable mortgage makes dollars and cents to you.

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There are some very basic things you should keep in mind about mortgage rates. Although the recent burst in the housing markets have changed things considerably, there are still loan available with varying rates and terms.

Fixed rates are exactly as stated. There are fixed for the life of your loan and cannot change regardless of what the market or your lender is doing.

Adjustable rates on the other hand will come with a rate that is variable, meaning that your lender will adjust those rates as dictated by your loan contract. If the current rates go up…then so will your payment amount. Simple as that.

Of course each type of loan has it’s advantage depending on your circumstances. Adjustables will almost always come with an entry rate that is very loan and then adjust upward at a specified time. The danger here is that your rate can also go up if and when the Federal Reserve raises those rates.

With rates now at all time lows, this could be potentially hazardous for the unprepared borrower.

Fixed rate loans will not come with the lower entry rate but does offer the safety of knowing that no matter what happens in the mortgage interest rate market your payments will always remain the same.

Stay tuned for more mortgage loan rate information and head on over to our financial calculators page where you will find news and tools to help you decide which mortgage rate will fit you financial picture.

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These types of loan can fit will for many people as I am sure they do in certain circumstances but there are many caveats that you must be aware of and pay close attention to if you are considering a reverse type of loan.

There are well over a dozen types of reverse type loan concepts floating around out there at the time of this writing.

Your first plan of action should be to seek out only those lenders who are offering a large selection of these types of loans for you to consider.

If the lender you talk to only offers you a couple of different types of loan packages you need to be very wary as these types of loans are probably designed by the lender themselves and may not offer you the best rates and terms you can find shopping around.

Reverse mortgage loans are usually structured around a couple basic requirements. The first and foremost is your age. HUD for instance requires you to be 62 while the more conventional market will make loans to younger groups.

The major pitfall here is that the younger your age when the loan is made, the less interest you will be offered on that loan. This can have major consequences for you down the road.

The inflation factor. It will never go away so as the cost of living expenses grow year after year will your loan payment increase as well?

Your reverse mortgage contract must include some sort of cost of living adjustment. If it doesn’t where do you think your income will put you 10 years from now?

Another very serious reverse mortgage pitfall may come in the form of property taxes. Yes, you the home owner must pay these year after year. Have you figured those into your income calculations a decade from now?

Keeping up your property. Yes, the lenders will require this. Expenses such as roofing, heating, air conditioning, plumbing and on and on will pop up from time to time and you need to factor in these costs over the years as well.

Your home owners insurance payments. Your lender will require that you keep up to date insurance on your property as they need to protect their investment. Have you included those costs into your future income forecast?

Lastly but far from least in your current utility costs. How much to you think you will be paying 10 years from now. They will continue to increase as previously mention in the inflation factor I discussed earlier.

So what is the bottom line on these types of loans? Well, these are but a few of the many you should take into consideration and discuss with your lender. There are more which you can discover online if you know where to look.

Add up all your expenses you will pay over the next decade and make sure these factors are included in any type of loan contract you agree to. The buying power you have today should be the same buying power you have 10 or 15 years down the road.

Reverse mortgage pitfalls? Yes but certainly not always. Depending on how you structure you loan it could work out beautifully for you in the end. It all depends on how much knowledge you are bringing to the table and remember that knowledge equals power and only you decide how much power you will bring to that table!

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