New Home Purchase is a Perfect Fit

Your home can say as much about you as your outfit.  And just like shopping for a tasteful, classy wardrobe, shopping for a new home has its challenges.  However, like choosing new clothes, there are a few helpful hints that will save you loads of time and trouble.

Choosing the Right Style
When choosing a mortgage, research the different types available and realistically consider which will fit your budget and lifestyle.  Furthermore, gaining a complete understanding of precisely how the various mortgages work should help you make a better decision.  For instance, even though the thought of lower monthly payments is tempting, unless you are anticipating a steady increase in your income over the term of your mortgage, an adjustable rate mortgage may not be the best option for you.

Furthermore, know your credit score and credit history.  Months before you go look at any properties, check your credit history and make sure it is accurate.  By federal law, you are entitled to a free credit report every 12 months from three designated consumer credit reporting agencies.  Read more

Right Mortgage Can Be a Thrill

While the thought of paying off an entire mortgage  may have your stomach flipping, either from excitement or nerves, choosing a mortgage loan can be a lot like choosing a roller coaster at a large theme park: exciting, a little daunting, and important to your future well-being and happiness.  Like coasters and other amusement rides, mortgages come in a variety of shapes, sizes, and speeds to accommodate your personal taste and situation.

Choose the size of your adventure: teacups or colossus?
Even at the largest theme park, rides are offered in a variety of sizes from “kiddie” rides for the little tikes to the extreme coasters that push the limits of speed, gravity, and the adrenaline rush.  Likewise, most financial institutions offer a variety of mortgages made to fit homeowner needs.  These usually come in the form of conforming mortgages and jumbo mortgages.  The main difference between these choices is that conforming mortgages are under the threshold (currently, $417,000 for a single-family residence) set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (more commonly referred to as Fannie Mae and Freddie Mac, respectively), whereas jumbo mortgages are over the $417,000 threshold.

Mortgage term: How long is your favorite ride?
Another factor that coaster buffs consider in deciding which coasters to ride is the length of the ride.  Would you rather have a slow and steady five minute ride or an adrenaline-packed 30 seconds?  Read more

Protect Yourself Before You Wreck

At the end of August, the Bush administration called for a more detailed disclosure of mortgage loan terms and settlement costs.  However, if one were to read the Federal Deposits Insurance Commission (FDIC) laws and regulations (because they are such a fun read and we all have that much free time on our hands), one might be surprised to find that many tools are already in place to ensure full disclosure of said details.  So, how can you avoid being yet another cautionary tale of mortgage mishap?  Here are a few helpful tips:

Educate yourself.  According to the White House Press Release, President Bush and his administration plan on enforcing a number of programs to promote consumer mortgage loan education.  The home buying and financing process is not a simple process, and since a home purchase is frequently the largest purchase most people will ever make (real estate), it is something buyers should definitely take the time to understand.

A common complaint among borrowers, particularly those who took out subprime mortgage loans, was that they did not understand the terms of their loan.  Thus, this is why some see education as an effective tool in preventing an inflated level of default mortgages. Read more

Could Your Home Be the Key to Your New Car Purchase

Could using your home equity as your auto loan provide you with some extra gas money?  For many homeowners, the answer is yes.  Because many people frequently overlook this huge asset in which they reside, they end up spending thousands of dollars more in interest and finance charges.  However, using a home equity loan (HEL) to finance your new car purchase is not entirely risk-free.  Thus, a clear understanding of what exactly the process entails is necessary to avoid becoming a victim of a financial hit-and-run. Read more

How Much Does a No-Cost Mortgage Cost

How Much Does a No-Cost Mortgage Cost?

Free press.  Fat-free.  Free gift with purchase.  It seems like anything that’s “free” is harmless and generally, a good thing.  People will jump at the opportunity for something that is sans cost.  But should you be jumping for a no-cost mortgage loan?

So, what exactly is a “no-cost mortgage”?
A no-cost mortgage loan is a mortgage in which the upfront fees are paid by the lender at closing.  These fees include many of the settlement costs, but keep in mind that there are some costs, such as prepaid taxes, or title charges, that cannot always be paid by the lender.  Typically, the only fees that are waived are those that fall into the category of “lender fees.”

How much does a no-cost mortgage cost?
A no-cost mortgage costs nothing out of pocket at closing.  However, a no-cost mortgage may result in having a slightly higher mortgage rate.  Nonetheless, the difference between the interest charged on a no-cost and regular mortgage loan tends to be very small.  You should use the resources available to you, such as the Internet, to shop and find the best rates and fees. Read more