Loans Mortgages and Credits

The Fast Track To Eliminate Credit Card Debt

2014-10-30T20:29:00.002-07:00

We all have them. Every red-blooded American has a credit card (probably more than one) in their wallet or purse.

They’re very convenient and make life easy for us. Just walk into a store, pull out your plastic and walk out with your purchase. It doesn’t get a whole lot easier than that. Sounds great and it really is.

But, there’s an ugly side to credit cards. And, unfortunately, many people are finding that out. When you miss a payment or when you’re even a day late, things can go bad quickly.

Your interest rate skyrockets (how about 20%-30% annually?) and your phone starts ringing with those hateful calls from the credit card companies.

Your account balances spiral upward with the late charges and you can’t seem to even make any progress toward paying them off. Even if you’ve never been late with a payment, the balances seem to never go down. It’s been estimated that if you make only the minimum payment every month, and never charge anything more on your card, it will take about twenty-two years to pay off a credit card!

Are you desperately clawing your way through the landfill of suffocating credit card debt…but, there isn’t a “ray of light” at the top? Fear no more…there’s help available.

You don’t have to live with the worries and stress caused by huge credit card debt. There are effective ways to deal with it and be rid of it for good.

There are specific steps and tactics you can use to eliminate the “credit card headache”.

You can check out this great resource for help with your problem—“Credit Card Debt And Getting Yourself Back On Financial Track” In it you will uncover these secrets:

A better understanding of credit card debt

Reasons to control spending and reduce credit card debt

Ways to reduce credit card debt

Controlling spending

Reducing and eliminating credit card debt: Your step-by-step plan

Special bonus section…

To get your very own copy of this valuable resource, Just CLICK HERE and start getting your life back and say good-bye to “credit card stress” forever.

3 Smart Secrets To Budgeting

2014-10-20T23:27:00.000-07:00

There's nothing more we want than to be able to efficiently manage our money. After all, the money that we want to manage is money that is oftentimes, hard earned. This is where a budget comes in. A budget executed properly, should help you see where your money is going, get more utility out of every buck, and help you save some extra for future use.

The first smart secret to a budget is to set a goal. What do you want to achieve? Do you want to correctly appropriate your income into bills payments? Do you want to put an amount aside for a big purchase or a huge investment? By having a goal, you will be able to shape your budget to best serve your interests.

Secondly, you would want to take note of where your money usually goes. This includes bills, major but regular purchases (like grocery costs, healthcare costs, and the like), and everyday miscellaneous purchases. Only when you list down where you know your money usually goes will you be able to identify which expenses you can do without. Once you've identified these regular expenditures, take into consideration what you can cut back on. How much do you spend on your daily caffeine fix in the morning? How much do you spend on newspaper deliveries to your front door? The measly $2 or $5 of these small purchases cumulatively translates to more than $3600 a year! Instead of buying your expensive latte or reading the newspaper on print, put aside the amount you would usually pay for these small routine purchases in a small container. You will be surprised at how much you"re saving out of your older budget.

Being indebted is a vicious cycle on its own. You"re talking about continuous payments, not to mention huge interest rates. The best way to deal with this is to pay the minimum on all of your debts in order to avoid paying extraneous late fees. Whatever cash excesses you may have, you can opt to add on to the payments you make in your biggest debt. This way, you are concentrated on getting the biggest debts first that cost you the greatest interest rates. Doing this progressively, you"ll be amazed at how much you"ll get off your huge debts.

The last and most important step is to jot down the amount you earn and the sum you spend. You can make use of computer cash management programs, or make database sheets of your own. Make a system that works for you and will help you keep track of your monthly budgeting progress.

What are Recession-proof Jobs

2014-10-20T23:18:00.000-07:00

6 Top Tips For Finding Recession-proof Jobs

Recession can be a very stubborn thing. Once it drops by, it can take a while for it to fade away and disappear. However, that doesn't mean that we should simply sit back and let it overcome us. It can, after all, wreck havoc on our finances and personal lives. In these tough times, finding a job already seems improbable – just imagine being in the market for jobs that are not affected by recession. But take heart. There's still hope yet. Here are top 6 tips for finding recession-proof jobs:

Look for jobs in secure industries. If you've read the news by now, trying to get a job in an auto plant is like trying to get on an elevator that's going down – and you're trying to go up. The same is true if you're trying to get a leg in real estate.

Instead of wasting your time trying to join an industry that's experiencing some bad times, try to set your sights on industries that have remained stable or are experiencing growths. These include:

Health care (nursing, caregiving, special care, medicine, physical therapy and other support manpower)
Law enforcement
Information Technology (network administration, software design and development)
Support Services (customer service, administrative assistance)
Sales and business development (product management, retail and wholesale)
Engineering
Education (teaching, school administration and other related support services)

Boost your resume.

If an employer sees nothing promising or exciting in your resume, they won't think twice about throwing your piece in the trash bin. Before you try to hook a recession-proof job, consider revamping your resume right now. Take a copy of your latest and review it. If your resume is several months old, there's a high likelihood that it needs a makeover.

Focus on accomplishments.

A common error among jobhunters is detailing their job descriptions in their resumes. Although this is helpful in establishing their work experience, it may not always give the prospective employer a good idea of what you can do. Emphasize on the results that you have produced instead.

Adapt your resume.

Typing out and printing a generic resume is a huge mistake. Generic is average, which means that you have very little to help you stand out from the crowd. If you want a recession-proof job, make sure your resume is something that your employers will find attractive.

Consider the industry you're targeting. If the job calls for someone who has a strong sales experience, emphasize your sales background. If the job calls for someone who had been involved directly in marketing and promotions, show your qualifications in these departments. The more relevant your resume says you are, the better you'll be at landing a recession-proof job.

Expand your reach.

Other than advertised job vacancies, consider other venues for finding recession-proof jobs. Look for trade magazines, papers, clubs and associations. You could also tap your network of professionals in the same field.

Get further education.

In tough times, you ought to arm yourself with tougher credits. One is by obtaining additional training or education. Getting certified or expanding your professional qualifications will help make you a more desirable hiree.

Recession-proof jobs are usually the most popular among jobhunters who are probably considering the same strategies as you right now. It's likely that for every recession-proof job that is available out there, there are thousands of other jobhunters out to get it. If you have better qualifications courtesy of better training and experience (in case you've had hands-on education or internship), you'll come out as the best, most capable candidate.

What are the Concepts behind Mortgage Calculations?

2014-10-13T02:35:00.000-07:00

Acquiring a home loan could be a choice the moment you establish a conclusion of refinancing or owning a brand-new house. Needing to pay the loaned resources over its time period, it is possible to acquire a loan that requires both principal and interest payment and that’s typically known to as Direct Reduction Loan. It indicates that part of your payment will instantly decrease the particular principal.

Fixed Interest Rate Loan

As an illustration, you acquire a mortgage loan with a total amount of $200,000. It is due for 30 years with an interest rate of 5%. For this transaction, you will now have to pay a monthly payment of $1,073.64. This process applies in a Fixed Interest Rate Loan. It also means that the rate charges for this type of mortgage will remain fixed until the entire loan is fully settled.

The sum of $1,073.64 is intended for both principal and interest rate costs. It is allocated for the interest considering the amount of $833.33 and 240.31 for the reduction of the principal amount respectively. The remainder of 240.31 is subtracted from the principal amounted to $200,000 which ends for an outstanding balance of $199,759.69. This calculation does apply for your mortgage of $200,000 which is payable for thirty years plus an interest rate of 5%.

Considering your second month’s payment, the amount of $832.33 is for the interest while your principal reduction would already cost the amount of $241.31. At the end of the second month your current principal balance becomes $199,518.38.

For further knowledge, let’s also compute the third month. Your fixed payment per month is $1,073.64. Your interest would be $831.33 while the principal reduction would be $242.31. Now subtract the remainder from your latest outstanding principal balance and the result would now be $199,276.07.

The monthly interest payment is based on the formula of the previous outstanding balance. As you can see, the interest allotted to your payment is reducing while the reduction of the principal is increasing. On the other hand, you can also notice that the outstanding balance reduces each month. The impact would also be decreasing on the part of the monthly interest cost. Therefore, since your monthly payment is fixed and nothing is modified, the following month’s cost will be invested in the principal amount of the loan.

Should You Consider Acquiring A Short Sale?

2014-10-13T02:28:00.000-07:00

The economic crisis nowadays is one of the factors why most property price ranges continue to drop. Consequently some individuals made a decision to sell their property in a much lower value compared to the principal mortgage value. This is also where the idea of a real estate short sale will come in. This can be a great way of the homeowner to leave a situation that can totally mess up his credit rating. This is the time when he won’t be able to maintain paying the complete mortgage value. Thus, short sale requests continue to increase as the real estate value continues to drop at the same time.

Short sale request comprises what follows:
• sales contract
• an appraisal indicating the home’s latest cost
• a hardship letter coming from a homeowner
• duplicates of the homeowner’s tax returns
• current pay stubs

These details are substantial for the loan companies as a way to assess the application however it normally requires months to get accomplished. The cause of waiting reported by most lenders is not only the sheer volume coming at them but also because of incomplete documentation. In addition, the agents are also requested for complete and correct information to be examined furthermore. For this reason, there are still possible delays in processing a certain document.

The loan companies usually take several months in evaluating for the application only to make sure that there's a comprehensive documentation and also to finally build an agreement. For potential customers who are very interested to complete the deal immediately it’s difficult for them to schedule a moving date since the date can’t be decided therefore they must be ready to look for a temporary place while waiting for the arrangement.

The difficulties that most real estate agents gone through in dealing with short sales are the factors why they normally get off this type of transaction. Short sales are famous for a great deal property however buyers need to be watchful enough to make certain that everything should be worked out properly.

How to Do Mortgage Loan Calculations with a Simple Mortgage Calculator

2011-12-14T00:25:00.000-08:00

Do you dream of buying your home? Mortgage education is the key to make your dreams become a reality. Discover how to do mortgage calculation today!

The benefit of having charges that do not change for the entire term is what a fixed mortgage rate generally offer. This approach also gives you an advantage because you know exactly how much you are going to commit monthly. Let’s say you borrowed an amount of $200,000. Your term is 30 years with interest rate of 5% annually. This arrangement will now give you a monthly payment of $1,073.64.

The breakdown of your mortgage payment would change every month. Your mortgage payment is composed of a principal part (which is the settlement of the amount borrowed) plus the interest portion on the balance of the loan that remains outstanding. Considering that the amount outstanding on your mortgage would be lowered every month by the principal payment applied to it, the interest you would be paying each month would also be minimized.

Regarding the illustration of our mortgage calculation, the amount of $833.33(interest) and $240.31 (principal reduction) is the breakdown of the initial mortgage payment. However, do not forget that the total amount of $1,073.64 is fixed. The next month’s payment breakdown would be $832.33 for the interest while for the principal reduction is $241.31. If you observed, the amount of interest goes down while the amount for the principal goes up. This is applicable until your home loan is fully settled under the agreed term.

Your monthly home loan payments also incur additional costs and you have to add that in your funds. One-twelfth of your real estate taxes and homeowners premium needs to be paid also each month plus the principal amount and interest. If payment is collected, you must send the bill to your lender. Your lender is the one paying it on your behalf.

Try our free online extra payment calculator which is the Augmented Mortgage Principal Balance Calculator and see how much savings can be derived by paying extra in your monthly amortization payments. For more loans and mortgage calculators, visit ezmortgagesolutions.net

What You Should Know About Pre-Qualifying for a Mortgage

2011-12-14T00:18:00.000-08:00

Homeownership is a dream shared by people all over the world. Knowing, in advance how much home you can afford and how much that home will cost every month can save you much time, effort, and frustration. Why spend time researching homes and visiting homes only to find out afterwards that you can’t afford or won’t qualify for your dream home.Another advantage of pre-qualifying is that sellers are more likely to accept purchase offers from buyers if the offer is accompanied by a statement from a lender that the prospective buyer is able to qualify for, and close on the purchase. In addition, the processing of the buyer’s loan will be much more efficient because the buyer began the paperwork before the contract was accepted.In order to be properly qualified, a prospective buyer will need to provide certain information and documentation to his lender. @ minimum a lender will need the following:

Income information supported by two years,
W-2 forms and current pay stubs for all wage earners.

Self-employed borrowers should provide 2 years income tax returns. This will allow the lender to determine accurate income upon which to calculate a monthly mortgage payment.

Documentation for assets which will be used for the purchase. This would include all cash and stock account statements and gift information, if a gift is being received. This will not allow the lender to fund the down payment, closing costs, and deposits for prepaid items.

A list of all the borrowers current liabilities including the total amount owed and the monthly payment. The lender needs their information to calculate the maximum monthly payment for which the borrower qualifies.
Other documentation, which should be provided, if applicable, includes divorce decrees, separation agreements, disability and unemployment income and retirement benefits.

This documentation will enable the lender to fine tune his numbers and give the borrower an accurate figure for the purchase price and monthly payment for which the borrower can qualify. This will guarantee that the entire transaction will go smoothly.

To Prepay or Not To Prepay Your Mortgage

2011-12-14T00:15:00.000-08:00

You’ve just settled on your new home. It’s an exciting time and you’ve got a lot of great plans for family’s future in your wonderful new home. But you’ve also got a new debt-a rather large one- for a thirty year duration. Should you try to pay this loan off sooner by prepaying on it? If you decide to prepay, how much should you pay, how often should you prepay, and what are the mechanics to make sure your payment is properly credited?

As to whether or not to prepay, the answer is based on simple economics. If, for example, your mortgage carries an interest rate of six percent (6%), this means that any prepayment you make will earn six percent. (saving six percent on your mortgage is the same thing as earning six percent). If you have another investment that earns more than six percent, you would be better served by not prepaying your mortgage, but investing in the alternative investment.

If you decide that your best bet is to prepay your mortgage, you have several choices at your disposal. There is a program known as a “bi-weekly mortgage”. The bi-weekly mortgage works in the following manner: If your monthly mortgage payment is $2,000; over the course of a year you would pay a total of $24,000. Under the bi-weekly plan, instead of making one monthly payment of $2,000, you would make a payment of $1,000 every two weeks. At the end of the year you would have paid $26,000 on your loan ($1,000 x 26 payments). This is the equivalent of making one extra monthly payment of $2,000. The extra payment will go toward loan principal and will have the effect of paying the loan off sooner. You may also voluntarily elect to pay more than $1,000 every two weeks. The choice is up to you. The more you pay every two weeks, the sooner your loan will be paid off. Many lenders are not set up to receive bi-weekly payments from their borrowers. There are companies that will handle your bi-weekly payments for you and turn the funds over to your lender. This is done by directly debiting your bank account every two weeks. There is usually an additional charge every time the account is debited. You must make certain to have the funds available in your bank account at the time designated for the charge to your account. This can sometimes be difficult for families with a limited budget. There is also the bi-weekly cost for the service. In spite of these costs, a bi-weekly mortgage program can significantly reduce the term of your mortgage depending on the interest rate and the amount of the prepayment.

Another method to use for prepaying a mortgage is to voluntarily add extra money to your normal monthly payment. Any monies so designated can be shown right on your payment coupon in the box marked “extra principal”. This will go directly toward reducing your loan principal. For example, on a $250,000 thirty year mortgage at 6% interest, the monthly principal and interest payment is $1,499. Adding an additional $100 per month to the payment for a total of $1,599 would reduce the term from thirty years to twenty-five and a half years. This would generate a net savings of more than $50,000 over the life of the loan. An additional $200 per month would reduce the term to twenty-two years, three months for a net savings of $86,000 over the life of the loan. The benefits of utilizing this method are: (1) There is no additional cost to you to implement this plan and (2) You don’t have to prepay every month. The prepayments are voluntary and if you’re unable to make the additional payment in a particular month, there’s no penalty for not doing so, as long as you make the regular monthly payment.

There is one additional method to utilize for making prepayments. You can add a lump sum to your regular monthly payment any time you choose. For example, if you have received a tax refund or a lump sum bonus, that amount can be added to your regular monthly payment. Under this method you are not making regular additional payments every month. Even though these payments can be made on an irregular basis, they will also serve to reduce your loan term.

If you begin making prepayments and decide to sell your home or refinance your mortgage before its full term, you will also benefit from prepaying because your principal balance outstanding will still be less than it would have been by making only the regularly scheduled payments.

Regardless of which method you choose, prepaying your mortgage can be a fairly painless way to generate significant long term savings.

WHAT TITLE INSURANCE REALLY DOES

2011-12-14T00:13:00.000-08:00

THE INS AND OUTS OF TITLE INSURANCE

For most people, the first time they ever hear the term “title insurance” is when they are in the process of purchasing a home. They immediately believe that this insurance provides protection in case the family’s breadwinner dies, the property will be paid off with the insurance policy’s proceeds.

HERE’S WHAT TITLE INSURANCE REALLY DOES

Title insurance is a contract wherein the insurance company agrees to protect the insured party for losses resulting from clouds on title, claims, unknown liens and other title defects that occurred prior to settlement. Title defects include unpaid real estate taxes and assessments,forgery on a prior deed or an unknown heir of a prior owner who has an interest in the subject property. Title insurance is paid for only once and remains in force and gives protection against any defects which existed prior to the date of settlement.

TWO TYPES OF TITLE INSURANCE

There are two types of title insurance: owner’s title insurance and lender’s title insurance. When a homebuyer borrows money from a lender to consummate the purchase of the home, the lender will require that a lender’s title insurance policy be obtained. This policy will protect the interest of the lender up to the amount of the loan. Owner’s title insurance is optional. The homeowner can purchase a policy to protect his interest in the property. The amount of coverage in an owner’s policy is equal to the purchase price of the home.

THE DIFFERENCE BETWEEN TITLE INSURANCE AND OTHER TYPES OF INSURANCE

When an individual buys homeowner’s (fire and casualty), auto, health or life insurance, the purpose of the insurance is to protect against calamities which may occur in the future. Title insurance is the only type of insurance which protects against events which happened in the past, prior to the issuance of the policy. When a real estate contract is signed, a title search must be completed before settlement can occur. Title searches examine land records to determine if the home is encumbered by any mortgages or other liens, encroachments, rights of way and easements. Once these items are discovered in a title search, they can each be dealt with appropriately. In the event any of the foregoing were in existence prior to settlement and were missed during the title search or not dealt with properly, title insurance would step in and protect the homeowner and lender from loss.

Title insurance is a wise purchase for homeowners. For a one time premium a homeowner can have the peace of mind to know that the largest investment he will probably ever make is well protected.

The Benefits of Buying a Short Sale

2011-12-14T00:11:00.000-08:00

Should I Buy a Short Sale

The current real estate meltdown engulfing our country has led to the renewed popularity of the real estate short sale. A real estate short sale comes about when the value of a home drops below the amount owed on the outstanding mortgage. If the mortgage holder agrees to accept a loan payoff for the lesser amount, the transaction can be completed. For the current homeowner who is in a negative position, the short sale allows him to exit a difficult situation without enduring a foreclosure and totally destroying his credit. The buyer gets to purchase a new home at the current market value, which is usually substantially less than the current owner paid. The lender gets something right now for its mortgage without having to initiate expensive foreclosures and without having to own and manage homes which it may have to take back at auction.

This is how things should work in a perfect world, but as we all know, our world is somewhat less than perfect.

With real estate values plunging and homeowners attempting to relieve themselves of homes that are worth less than the outstanding mortgages against them, banks are being overrun by short sale requests. As real estate values continue to drop, short sale requests will continue to increase. The short sale request usually consists of a sales contract, an appraisal showing the home’s current value, a hardship letter from the homeowner and copies of the homeowner’s tax returns and current pay stubs. The lenders must then review the application, which can take months to complete. The lenders have said that the reason for these lengthy reviews is not only the sheer volume coming at them, but because many of the packages submitted for review are incomplete. Lenders must spend time reviewing a file and determining that a decision can’t be made because of missing or incomplete documentation. The agents are asked for the proper information, which again, must be reviewed. The amount of time spent on a file is now doubled.

It becomes impossible for the buyer to schedule a moving date because the date can’t be determined. If a prospective short sale buyer sells his current home, he may be forced to find temporary lodging for his family while waiting for his offer to be accepted, if at all.

If the new home has a second mortgage as well as a first mortgage, a second lender must be dealt with, in addition to the first mortgage holder.

These difficulties have driven many agents away from short sales. With a traditional sale, they know what to expect during the process and can usually close these transactions within thirty to sixty days, instead of five to six months. Closing a short sale can often lead to a bargain property, but like so many other things in life, care must be exercised.

Calculating Payments with the Mortgage Amortization Calculator

2011-12-13T23:56:00.000-08:00

How the Mortgage Amortization Calculator works

The mortgage which you obtained for the purchase or refinance of your home is known as a “direct reduction” loan. This means that a portion of every payment you make will be applied toward the direct reduction of the principal balance outstanding.

In the case of a fixed rate loan, your monthly payment for principal and interest will remain fixed for the entire term of your loan. For example, if you borrowed $200,000 at an interest rate of five percent (5%) for a term of thirty years, your monthly payment would be $1,073.64 for principal and interest. After making this payment every month for this entire term, your loan would be completely paid off.

When you make your monthly payment it is divided into interest and principal portions. The payment is first allocated to monthly interest and the remainder is allocated to principal reduction. Using our example of $200,000 at 5% interest for thirty years, the first month’s payment would be divided at $833.33 toward interest and the remainder of 240.31 toward principal reduction. Your new outstanding principal amount due after applying the payment would be $199,759.69 ($200,000-$240.31).

Your second month’s payment would be allocated at $832.33 toward interest and $241.31 toward principal. Your new principal balance at the end of the second month would be $199,518.38.

For illustration purposes let’s look at the third month. Your monthly payment is still $1,073.64, divided as follows: $831.33 for interest and $242.31 toward principal reduction. Your new outstanding principal balance is now $199,276.07.

You will notice that the portion of your payment allocated to interest is decreasing every month while the portion allocated toward principal is increasing every month. This happens because your monthly interest payment is calculated on the outstanding balance due on your loan at the end of the previous month. As this balance decreases every month so does your monthly interest cost. Since your payment stays the same every month, more of each subsequent month’s payment will be allocated to principal.

Pay Your New Home with the Help of Uncle Sam

2011-12-13T23:38:00.000-08:00

Congratulations, you’ve decided that it’s time to realize your lifelong dream and purchase a home for your family. You’ve been paying rent for a number of years now (too many) and have nothing to show for it.

Well there’s some great news in store for you. Your Uncle Sam, the US government will help you pay for it. Hard to believe but certainly true.

When you pay rent every month, you send your landlord a check at the beginning of the month and get no additional benefit from it. You see, rent payments made for your living quarters are not deductible on your income taxes. This is not true when you own a home and are making monthly mortgage payments.

Your monthly payment is made up of the following different items:

Principal payment on the loan
Interest on the loan
A portion of your annual homeowners insurance premium
A portion of your annual real estate taxes

Of the above items (b) Interest and (d) real estate taxes are deductible on your income tax return.
(There may be additional components of your mortgage payment depending on your local taxes and customs, which may also be deductible. These vary in different parts of the country. Check with your local authorities.)

Let’s take an example and see how you can use this to your benefit.
Current rent $1,250 per month
Proposed mortgage payment $1400 per month
Your mortgage payment breaks down like this:
Principal $50.00
Interest $1000
Homeowners Insurance $100
Real estate taxes $250
Total: $1400

Your monthly interest and real estate taxes can be deducted from your income tax return. These two items total $1250 per month ($1,000 for interest and $250 for real estate taxes.) If you are in the 25% tax bracket, this deduction will save $312.50 per month in taxes that you otherwise would have had to pay the government. Your effective monthly mortgage payment is really $1,087.50($1400 less 312.50) In this example; this is less than you were paying in rent.

Total mortgage payment $1400.00
Monthly savings on income taxes $312.50
Effective monthly mortgage payment $1,087.50

Now, here’s the important part. Since you are saving $312.50 per month in income taxes you can fill a new form W-4 with your employer and ask them to reduce your withholdings from your salary by $312.50 per month. You’ve just given yourself a monthly raise of $312.50 which you can use every month toward your mortgage payment of $1400-thereby effectively reducing the payment to $1,087.50-which in this example is less than your rent payment.

Fannie Mae Program to Help Buyers Purchase Homes

2011-12-13T23:21:00.000-08:00

Fannie Mae has a program designed to help buyers purchase homes which Fannie Mae owns as a result of mortgage defaults by prior owners. The program is called the Fannie Mae HomePath program. The benefits of the program are numerous: 1). low down payment requirements 2). borrowers may qualify even if their credit is less than perfect 3). available for owner occupied homes, second homes, and investment properties 4) no mortgage insurance is required and 5).no appraisal is required in most cases.

According to Fannie Mae guidelines “Eligible properties must be owned by Fannie Mae (as a result of foreclosure or other similar actions such as deed-in-lieu of foreclosure, sold by Fannie Mae to the buyers and designated by Fannie Mae as eligible for a HomePath mortgage. Eligible properties can be found by checking the www.homepath.com website that includes details regarding the property and verifies that it is eligible for HomePath financing.

Down payment requirements vary depending on the type of occupancy. Owner occupants need as little as 5% down, which when coupled with no mortgage insurance, creates a great bargain. Second home purchasers and investors require larger down payments, but still less than normally required by Fannie Mae. And once again, mortgage insurance is not required.

Borrowers with less than perfect credit also can qualify. Depending on the borrower’s credit score, a larger down payment is required. For example, a purchaser with a credit score of 580 would normally not be eligible for a Fannie Mae loan. However, this borrower would qualify for HomePath financing as an owner-occupant, for a second home purchase, and even as an investor with a 20% down payment.

The HomePath program, in most cases, does not require an appraisal. The sales price from the purchase contract will be used for determining the property’s value for financing purposes. Due to the difficulty being currently experienced involving appraisals, this benefit will help move the transaction along in an efficient and expedient manner.

For borrowers desiring to purchase one of Fannie Mae’s eligible properties the HomePath program offers a relatively hassle-freeway to become a homeowner.

What Rate is Best for Your Home Loan

2011-12-13T22:53:00.000-08:00

Fixed Rate Or Adjustable Rate Home Loan

Home loans are as different as the people they are written for. Homebuyers may choose between the most common forms of the home loans-fixed rate or adjustable rate loans. If you’re unsure of what these terms mean, these tips may help you decide which is right for your situation.

Fixed Rate Loan

Fixed rate loans are written with an interest rate that does not ever change over the life of the loan. Your principal and interest payment will never change. The fixed rate mortgage works best for people who are conservative with their finances. Its very easy to plan ahead because you know exactly what your payment will be each month and budget for it accordingly.

However, choosing a fixed rate loan does not mean that you’re limited to paying just your regular payment. You may choose to pay an additional amount every month, which will go directly to reducing the principal balance of your loan. This is an excellent idea because even a small additional payment made on a regular basis can reduce the term of your loan by years.

For example, on a $200,000 mortgage payable over 30 years at a rate of 6%, the monthly principal and interest payment is $1,199.10. An additional payment of only $50.00 per month would reduce the term to twenty-seven years-a savings of $43,167 at a cost of only $16,200. A larger additional payment would reduce the mortgage term even more.

The borrower may make an additional monthly payment of any amount-the only requirement is that the minimum monthly payment must always be made.

Adjustable Rate Loans
The adjustable rate mortgage (ARM) is exactly what it says. The interest rate on the mortgage will change periodically at pre-determined intervals. The change will be based on financial indices. A one-year adjustable rate mortgage will change once a year, a three-year will change every three years and a five-year will change every five years. Rate change intervals can be as short as every month or as long as ten years.

Ultimately, what this means is that your monthly payment can increase or decrease during the term of your loan.

Just as with a fixed rate loan, you may choose to make additional payments toward the principal whenever you choose and thereby reduce the term of your mortgage. This is a particularly good idea with ARM loans because if the interest rate goes up and you’ve made additional payments to reduce your principal, your new payment will not be as high as if you had not reduced your principal.

The adjustable rate mortgage is a good tool to use if you’re planning to stay in your home for a determinable time period. If your plan is to move from your current home in three years, a three year ARM might be advisable because your rate will be lower than a thirty year fixed rate loan and it won’t change for three years, at which time you’re going to move anyway. If you do select an ARM, you must be prepared for the eventuality that your rate may increase.

Hybrid ARMS
A relatively new product is the hybrid ARM, where the loan carries an initial fixed rate for a specified period of time and then switches to an ARM which adjusts at shorter terms. An example of this product is a 5/1 ARM. The initial interest rate is fixed for the first five years and then becomes a one-year adjustable rate mortgage. The advantage of the hybrid ARM is that the initial interest rate is still lower then a comparable fixed rate mortgage.

Home Mortgage - Things You Can Do to Get Approval

2011-12-13T20:56:00.000-08:00

Getting approval for a loan is paramount when looking for a new home. You may be concerned about financial issues you’ve had in the past and how they’ll affect your getting a better interest rate. Here are nine things you can do to help you get approval for the loan or the rate you want.

Start saving sooner rather than later – Mortgage lenders want to know you’re a good financial risk. Keep at least three to six months of expenses in a savings account or money market, and they’ll feel more comfortable loaning you money. NOTE: There are several programs that allow for minimum downpayments that are still being offered.
Know what’s in your credit report – You know lenders will look at your credit report; it’s important you know what’s there before attempting to get a loan. Going over your credit report allows you to check for mistakes and comment on any errors. Have a ready response to questions about your report rather than telling them “I don’t know.”
Get rid of debt – Having a debt-to-income ratio higher than 45% is a red flag for most mortgage lenders. They want to know you’re not overburdened with debt, so the more income you keep, the better they like it.
Be prepared with documentation – Find out what type of documentation mortgage lenders need. Having those documents ready and available before you begin seeking lending may speed up the approval process.
Respond to questions quickly – There are bound to be questions. If you can’t answer questions immediately, find the information and then respond as quickly as you can. The longer it takes you to answer a question, the longer the process will take.
Stay at one job – It’s common for people to change jobs, often not by their own choosing. The longer you stay at a job the better it will look to a lender. They want to see job stability to ensure you’ll be able to repay the loan.
Avoid making large purchases – Your home will most likely be the largest purchase you’ll ever make. Wait until you’re in your home to make large purchases and keep your debt-to-income ratio low.
Understand the Loan-to-Value (LTV) ratio – This is the difference between the value of the property and the size of the loan you’re seeking. As a lender, they want to see the lowest LTV possible to reduce their risk of loss. The higher this ratio is, the less likely it is you’ll receive the loan.
Keep your payments up-to-date – Even though mortgage lenders obtain a credit report at the beginning of the process, they may get another before closing on your loan. This alerts them to any missed payments during the process which could be a deal breaker. Maintaining on-time payments throughout the process will do wonders toward getting your loan approved.

Obtaining a home mortgage doesn’t need to be a long, drawn out process. The more you can do to be ready prior to the application, the better the mortgage lender will appreciate your effort. By following these nine things you can do to help you get approval for your home loan, you can greatly influence how quick and painless the process will be. Always make sure you meet with your lender for a pre-approval PRIOR to shopping for a home.

Basics of Mortgage Calculation with a Loan Amortization Calculator

2011-12-13T20:30:00.000-08:00

Would you consider having your own house? Complete knowledge about how mortgage works is vital to make your dream turns into a reality. Be able to do mortgage calculation now!

Factors in Calculating Mortgage

The benefit of having payments that don't change for the entire term is what a fixed mortgage rate can offer. This set up also provides an advantage because you know exactly how much you are going to pay each month. Let’s say you borrowed an amount of $200,000. Your term is 30 years with interest rate of 5% annually. This plan will now give you a monthly payment of $1,073.64.

A home loan payment consists of two parts: the money you’ve borrowed which is the principal amount as well as the interest which pertains to the cost of borrowing the funds. Once payment being applied to the principal is made, the amount of your outstanding loan would be minimized. The interest that you’re paying every month would also be reduced as a result to the payment made. For this reason there would be changes in the breakdown of your mortgage loan each month.

In our mortgage calculation example, the breakdown of the first month’s loan payment is $833.33 for interest and $240.31 to principal reduction. (Note the total is $1,073.64-our “fixed” amount). The breakdown for the second month’s charge is $832.33 for interest and $241.31 to principal reduction. Each subsequent month the amount used toward interest lowers, and the amount applied to principal will increase until the loan is completely paid off at the end of thirty years.

Other miscellaneous expenses for your mortgage

Your monthly home loan payments also incur additional expenses and you have to include that in your budget. One-twelfth of your real estate taxes and homeowners premium needs to be paid also every month with the principal amount and interest. If payment is collected, you should send the bill to your lender. Your lender is the one paying it on your behalf.

Loan amortization calculators can easily simplify your mortgage calculation. Visit ezmortgagesolutions.net