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Fannie Mae Changes Mortgage Qualifications

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Tagged in:apply for a mortgage California Investment properties Mortgage qualifications new home mortgage

Fannie Mae programFannie Mae Changes Mortgage Qualifications

Many do not understand exactly what Fannie Mae is or what it does. Basically, once you apply for a mortgage, the Lender will most of the time approve the loan with Fannie mae guidelines. The purpose of that is so they can later sell the loan to Fannie mae, Freddie Mac or FHA depending on the Mortgage qualifications.

If you get a DU or desktop approval, you have a much better chance of getting approved for a new home loan. DU is a Fannie mae program that looks at the application, the credit of the person applying and determines if it fits for approval.

Mortgage releifSo What Did Fannie Mae Change

This past week, Fannie announced that they will now buy loans from first time homebuyers with only 3% down. Normally, a minimum down payment was 5% or 3.5% if you did an FHA mortgage. The recent Fannie change will allow more prospective buyers to get into a home with a low down payment.

The borrower will still need to get PMI or Private mortgage insurance to cover the amount over a conventional loan with the normal 20% down payment. PMI insures the payments if the borrower defaults.

If You Now Rent, You Are A First Time Home Buyer

You may have owned a home before and think the new program does not apply to you. It might. If you have rented over the last three years no matter how many homes you have owned previously, you are considered a first time homebuyer. Many more buyers fall into this category.

The new Fannie mae program has a few requirements, but most will fit into the new program. If you are looking to buy a new home, find out if you are qualified for the new Fannie Mae 3% down program. Getting a new home mortgage can be stressing, but worth the effort. Many times, owning a home will also be much less cost than renting while also building equity for your future.

 

 

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Find Out How Much Home Can You Afford

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Tagged in:FHA home loans home

 

Low Rate home loans

Find Out How Much Home Can You Afford

California homes are going up in Value and buyers are in limbo. Because the home was worth less a year or so ago, doesn’t mean it won’t continue to rebound in price as the economy improves. Once you have taken the decision to get a mortgage you need to be able to work out how much you can afford to pay. Getting pre approved for a new home loan can be one of the most important decisions you can make.

You can do this by performing a mortgage payment calculation. There are certain considerations when you calculate mortgage payment levels that suit you that you need to keep in mind: How much mortgage can I afford? What type of mortgage should I get? What kind of loan payment schedule suits me best?

Where to Start on Getting a Home Loan

Get pre approved. How much mortgage can I afford: answering this question is easy – but you must be honest with yourself! Look at your earnings and savings and your expenses. How will these be affected by a mortgage? Some expenses like rent will disappear when you are a homeowner but a mortgage will bring other expenses (you may have removal costs and you’ll almost certainly have legal costs). An online financial calculator will allow you work out exactly how much you can afford to commit to in a mortgage.

Now you must decide what kind of mortgage is best suited to your needs. There are various types of mortgage but don’t let this put you off – the choice makes it easier to find a mortgage that suits you best.

Interest Only Mortgages A Thing of The Past

Recent changes in mortgage regulations have seen the interest only mortgage go away.With a repayment mortgage you pay off part of your mortgage every month but with an interest mortgage only the interest is paid off each month. When you consider what type suits you remember that an interest only mortgage rate (always calculate loan interest as well) will be considerably smaller. Although this will appear attractive you will need to be able to pay of the rest of the loan at the end of your loan payment schedule. You can do this by investing money – but poor investments will lead to a shortfall and you will need to take advice at how to invest money so that it grows with your mortgage.

Home Mortgage OptionsHome Loan Approvals

When you have settled on a mortgage that suits you (you’ll find a weekly mortgage calculator allows you to break your finances down better than a monthly breakdown) there are other still a few more things to consider. What are your mortgage closing costs? These might make the final amount you pay much higher – especially if you pay your mortgage offer quicker than the original loan payment schedule. Are you able to claim any discounts like small business tax deductions? What are the bank loan rates (an interest rate calculation will help you here)? You might also be affected by mortgage loan origination – check your mortgage provider is dealing with your mortgage themselves and not farming it out as this may increase the amount you pay. It is always best to shop around and find the best deal!

When you calculate mortgage payments levels that suit you should know what you can afford. After that it is easy to calculate a payment that is tailor made to suit you best. Use our mortgage payment calculator to see what your new home loan payment might be. If you do not know the tax rate just add 1.25% of the purchase price divided by 12 months to the payment. Insurance is estimated at $100 per month. That will give you a good idea of how much the entire house payment would be. If this exceeds 30% of your gross income, you should consider more of a mortgage down payment to reduce the monthly payment.

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Don’t Pay PMI on Your New Home Purchase!

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Tagged in:FHA home loans line of credit mortgage news new home purchase PMI fees

Low Rate mortgageDon’t Pay PMI on Your New Home Purchase!

Those regular followers of our mortgage news know we stress mortgage experience over everything. We keep getting home buyers contacting us telling us of the huge monthly or one time PMI fees they are being asked to pay. If you are putting less than 20% down on a new home purchase, most likely you have PMI added to your payment. Don’t go that route….it is not needed.

PMI is private mortgage insurance. FHA Home loans have FHA insurance on them. Either way, it adds quite a bit to your monthly payment and can be avoided. Our advice is to get a 1st for 80% of the purchase price and a Line of Credit for up to 15% of the balance. The HELOC line of credit does not require PMI and you buy the home of your dreams and have a payment you can afford. This can save you thousands per year and over years even more.

What is a HELOC

A Heloc is just a line of credit and a second trust deed is recorded on your home for it. One nice thing about the Heloc is it is usually approved 1 time for a set amount and as you pay it down the difference is always available to you. Nice to have for the future.

If your situation is calling for PMI go to a different lender that will do the Line of Credit for you.

 

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Find Out How to Increase Your Bad Credit Rating and Get Your Mortgage Approved 

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Tagged in:best reverse mortgage lenders FICO score mortgage approved mortgage lenders mortgage loan Valencia home loans

Get approved for a new California home loanFind Out How to Increase Your Bad Credit Rating and Get Your Mortgage Approved

Your FICO score or your credit rating is the reflection of how good or how bad your payment history actually is. If you’re planning to get a mortgage loan and buy a new house for yourself, then what mortgage lenders will look at first, is your credit rating.Getting your home loan mortgage approved can be easy with these easy tips.

Here are a few things to remember about credit.Various credit bureaus have different systems for evaluating the credit rating. But there are some basic facts that are taken into consideration:

– Payment history
– Current debts
– Time length of credit history
– Credit type mix
– Frequency of applications for new credit

As long as there are different rules for evaluating your credit rating, it might be different depending on the bureau even if they all look into same credit report.

You should know that credit ratings range from 300 to 850. This three digit number is determined by various factors, such as the number of credit lines you have and the length your account has been open. If you pay on time (for some period of time), then your credit score will increase.

If you fall into category where your credit rating is below 300, which is considered to be very low, then you’ll have hard times finding a good mortgage lender with appropriate interest rates. But if you have a 850, which is simply perfect, then mortgage lenders will be delighted and will grant your applications with ease and give you the best interest rates around.

To Increase Your FICO

If you’d like to increase your bad credit rating, which is below or 620, then the one thing you can do is plan ahead. You should spend money carefully. You should always pay the money on time. Keep your debts as low as you can, limit the number of your credit applications and do not ignore your bills.

Many people think that their bad credit rating depends on their income. It is actually all about your ability to pay the money and it has nothing to do with the income you get as some people think. Even if you get large sums of income, but spend the money somewhere else and don’t pay your bills then your credit rating will be bad, which in turn will result in your mortgage disapprovals.

So if you want to find a better mortgage lender that will give you more suitable interest rates, then keep the above information in mind and carefully plan your steps in order to avoid bankruptcy and increase your overall credit rating.

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How To Get A Mortgage Refinance With Cash Out

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Tagged in:Apply for a Home Loan Refinance California mortgage refinance FHA home loans home loan mortgage refinance mortgage refinancing ower interest rate Refinance your home loan

Save of a Mortgage refinanceHow To Get A Mortgage Refinance

Now is the time to Refinance your home loan.Mortgage refinance is an option that we have if we would like to get rid of our current secured loan and get a newer one in its place. The same assets act as collateral. This means that you take on another home loan to replace the old one with the same property used as security against the new loan.

Mortgage refinance is especially advantageous for people who would like a new home loan with a lower interest rate by refinancing it at a marked down rate.

Best thing about mortgage refinancing is that it enables people to have a new source of funds while the repayment dues are a lot lower than before. Yet another reason for refinancing is in order to draw out the duration of the loan. The funds which may be acquired from refinancing is allowed to be used with almost any purpose, including the opportunity to pay off other debts.

Apply for a Home Loan Refinance

Mortgage refinancing also helps if you are seeking to get rid of your adjustable rate mortgage and get a fixed rate mortgage instead. Since a variable-rate loan tends to shift its interest rate (depending on prime rates which in turn rely on a fluctuating economic index such as currency strength and economic growth), moving over to a fixed-rate mortgage is more beneficial in the long run. Even if the adjustable rate is somewhat lower, a fixed rate is often a better bet.Approved for new home loan

A shift to mortgage refinancing is a good decision, especially if the borrower is convinced that this will be a great way to save on a lot of expense. This could be either for the short term or for the long run, or if he needs an extension of the loan in order to compensate for unanticipated expenses such as medical and educational dues.

At the same time, one must bear in mind that refinancing may not always be a money-saver. This means loans with provisions incurring penalty on the borrower for an early repayment of the loan, either in its entirety or in part. It also costs money since it involves closing and transaction fees. Before you get the loan, ensure that you save enough despite these costs.

Some kinds of refinancing plans require that the borrower will pay a certain amount as initial fees in order to secure the loan. This is as long as the market rate is lower than your current rate by at least 1.5 percent. With cash-out refinancing, the borrower may refinance the existing loan for one with a higher amount and keep the cash difference for himself. But this might not lead to a lowering of the monthly installments or a shortening of the duration of the loan in question.

If you are looking at refinancing, you need to be prepared the refinance mortgage cost or fees. This portion is commonly referred to in the industry as points or premiums, wherein every point equals to one percent of the total amount of the loan. The advantage of the point system is that the borrower has the option to pay more points in return for lowered interest rates on the loan. If the borrower is keen to lower the interest rates, he could pay off some additional points by utilizing the money that he saves through refinancing.

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Get A Lower House Payment Before It Is To Late!

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Tagged in:Get a lower house payment Santa Clarita home loan Santa Clarita mortgage refinance Santa Clarita refinance

Get a lower house paymentGet A Lower House Payment Before It Is To Late!

Mortgage rates are heading up. You will want to do a Santa Clarita refinance to Get a lower house payment. As the economy improves, investors will seek other investments and take their money out of the very low return paying bonds. As the funds dry up, there is less money available and thus mortgage rates rise. If you are thinking of home mortgage refinancing, make sure you give it a good thought. Here are some tips you may want to consider before you refinance.

Getting a new home loan can take some work, but at these low rates, now is the time. Home mortgage refinancing can be a sound financial move for any home buyer, most especially if the interest rates are ideal. You can save a lot on your monthly payment, and you can swiftly ease your way back to regain financial control.

Before Refinancing a Home Loan

As rates rise, you can save on your monthly mortgage payment. But, wait much longer and the window of opportunity will be gone. When you refinance, it is just as important to consider other factors related to your mortgage. You do not only look into the interest rate, but make sure you consider the following as well:

  • The amount you owe on your current mortgage. The amount you can refinance is determined by the amount you have paid for your mortgage and how much you still owe.
  • The length of time you have been paying for your existing mortgage. If you have paid 15 years out of a 20 year mortgage term, refinancing will cause you to extend your payment once again.
  • Your credit rating. If your credit score is great, then you will most likely have no problems with home mortgage refinancing approval. On the other hand, those with low credit rating will not only face difficulties with approval, but may be faced with higher interest rates or charges as well. The magic number seems to be above a 650 FICO score.

How long you intend to stay in your home. If you intend to sell your house in a year or two, then you will most likely not benefit if you refinance. But if you will live for longer than ten years, refinancing can help you pay off your home sooner with some monthly savings on top.Low Rate Home Loans

What is your DTI or debt to income ratio. If you are having trouble making ends meet or having problems paying of credit card bills and unsecured loans, refinancing can be a good solution to start with a clean slate by consolidating. Refinancing can help you save on monthly payments and get you started in saving for the future.

Success with Refinancing

Is refinancing a good idea for you? After you have carefully thought of the factors stated above, make up your mind as to whether refinancing is definitely a good financial decision for you. If you believe so, here are some tips to help you ensure success with home mortgage refinancing:

To make home mortgage refinancing more worthwhile, make sure that the interest rate is significantly lowered, say at least 1 or 2% lower than your original mortgage. Consider the points as well. Lenders usually charge more points with lower interest rates, so make sure you weigh accordingly.

Compare the total costs you need to pay off with your existing mortgage, with the some total you will be required to pay when you refinance. You can use a loan calculator available online to help you. Make sure you consider fees and charges you incur when you take on a new mortgage.

Shop for a good lender. Be wary about inexperienced lenders, as they have become rampant in the recent years. Research about the lender’s services, ask for recommendations and talk to some of their old clients. Also, ask them for a list of charges that they will impose to you at closing.

Get a new Santa Clarita home loan can save you thousands. Get a lower house payment with a Santa Clarita mortgage refinance may offer you the best chance you have to get your finances straight, but it can only be so if you do it right. Get Approved now!Home Loan Rate Quote

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Common Mortgage Refinance Problems!

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Tagged in:lowest mortgage rates in Valencia mortgage refinance refinance Valencia Valencia home loan refinance Valencia home mortgage refinance Valencia Mortgage Rates Valencia mortgage refinance

Home Loan ApprovalsCommon Mortgage Refinance Problems!

Want to do a mortgage refinance? Well, before you do so it is important to know some of the many problems associated with home mortgage refinance. Getting a refinance Valencia may be just a matter of knowing your options.Knowledge is king when it comes to refinance a new home loan.With the huge spate in the growth of mortgage providers, it’s essential to prevent such home mortgage refinance problems from happening to you!

Normal Refinance Issues

Nothing will help your Valencia home loan refinance more than working with an experienced mortgage banker. While the prospect of owning your home may prompt you to make timely and accurate payments towards the home mortgage refinance payment, even the lender will try to keep your current mortgage strong enough. After all, he wouldn’t want to lose out on your money! Nothing in life is certain – employment conditions change, your place of stay may change unexpectedly and you may have the bad luck to be dealing with an inexperienced lender will hurt your chances of approval!

Valencia Mortgage Rates

To get the lowest mortgage rates in Valencia, you will need a good credit history. Many people face this problem especially when they are suddenly out of work or have been laid off. This can significantly impact the payment towards your home mortgage refinance and then it becomes very difficult to get out of this vicious cycle. One of the best things you can do in order to avoid this situation is to assess if you either have a secure job or whether you have set aside sufficient funds for crisis situations in future. Therefore it’s best to go for a Valencia home mortgage refinance only when you are absolutely sure that your job is secure enough to support you for a long time. After all mortgage payments are typically made over several years. Settle for a home mortgage refinance only when you’re sure of these conditions.

Change of place

There could be a reason  you moved. It could be because of a transferable job, a bitter divorce or some other condition. Usually in the case of a situation like a divorce, once one partner has moved out, the other one is forced to pay all the bills. This can really eat into the income levels of that person. That means the home mortgage refinance payment too takes a beating. There might even be legal consequences of not being able to make payments on time and within the due date. There is certainly no guarantee on the strength of a relationship but when going for a home mortgage refinance it’s best to go for it only when the couple is committed to each other for long term.Low Rate Home Loans
Getting a Refinance

The purpose of refinancing is to free up cash flow. Maybe a lower mortgage payment or maybe a higher one with cash out to pay off other things. There maybe situations when you’re caught in a home mortgage refinance deal that’s actually costing you more, rather than helping you save! In such situations it is in one’s best interest to get a home mortgage refinance from a FDIC insured bank. A bank has strict supervision on your sensitive information which also protects you from identity theft. Sending your information off to some mortgage broker middleman isn’t a smart move.

Mortgage Turn Downs
If you have been turned down for a Valencia mortgage refinance, all is not dead. There is a reason for the turn down and most of the times an experienced mortgage professional has overcome these exact issues in the past. To get a mortgage refinance, give us a call 877-244-9190. Out team of home loan bankers can work with you to get you new home loan options.

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Mortgage Help For Home Buyers

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Tagged in:mortgage payment calculator Santa Clarita home mortgage Santa Clarita mortgage

Low Rate mortgageMortgage Help For Home Buyers

Obtaining a new Santa Clarita mortgage has become increasingly difficult in recent months. But there is Mortgage help available.Whether you’re trying to purchase a new property or refinance your existing home, loan requirements have become stricter in the face of declining home values, falling buyer demand, and financial market concerns. But there are ways to get that dream Santa Clarita home mortgage. One of the most exciting new programs available is an Equity Share Partner.

California Equity Share Partner

The concept is rater easy…you and a Partner buy a new home. The Partner puts up all of the Down Payment and pays all closing cost. You move in with absolutely no money down. You make the payments including taxes & insurance. At the end of 2 years, you refinance. Assuming the property value has risen and you have been able to save some, you pay off the equity partner. The Partner will want his 50% share of the gain in property vales as well as his initial investment back.

So educating yourself is critical. Most people shop around to find the best deal on a home loan. But for many the process is of limited use because they don’t know what to ask. Before embarking down the path to a new mortgage, take the time to identify the questions you’ll need to ask. These questions will help your determine whether the loan is right for your individual situation. Just as importantly, they can provide you with significant insight into the mortgage professional’s intentions and credibility.

1. What kind of mortgage is this?

Ask questions of your mortgage professional. One of the most fundamental but least often asked questions relates to the type of mortgage you are getting. There are essentially two kinds of mortgages: fixed rate and adjustable rate. Fixed rate mortgages require you to pay the same monthly payment over the entire life of the loan. Adjustable rate mortgage payments are normally frozen for between two and five years, but then adjust according to market forces. Thus, fixed rate loans can be slightly more expensive, but they offer more stability to your budget.  Sadly there have been a number of cases in the past two years of borrowers being told their mortgage was fixed when really it wasn’t.

2. How much money will I need spend to close this loan?

Will you need cash to close.Whether you’re purchasing a new home or refinancing your existing one, try to find out how much money you will need to pay to close the loan. This is almost always a rough estimate, but it will give you an idea of what to expect. Sometimes your lender or broker can roll all the extra expenses into the loan itself, but even in this scenario there’s usually some out-of-pocket cost. To be safe, if the cost is zero set aside a few thousand dollars, or if the cost you are told is more than zero multiply it by 10 percent.

3. How much mortgage can I realistically afford?

Find out the mortgage payment including taxes, insurance and HOA.This is a critical question for buyers because there is a strong temptation to purchase the biggest, most luxurious home available. But look realistically at your lifestyle, and at where you’d be content to live. Ask your broker or lender how much of a loan they can approve you for, and then stay under that figure. Never try to persuade them to approve you for a bigger loan amount, and beware if they offer to do just that.

4. How long does it normally take for your loans to close?

This can be a good indication of how much time you can expect to wait before your new mortgage is set in stone, and how honest the broker or lender is. The answer to this question is normally 15 to 25 business days. Any response less than 10 business days should be treated with suspicion. And regardless of their response, be prepared for the process to take at least 25 business days. While a home loan can be closed in under two weeks, assuming that it will be can create unnecessary stress for you.

5. What is the index and margin associated with the loan?

 The index and margin combine to determine your mortgage interest rates once any introductory rates have expired, and therefore how much your new or adjusted monthly payments will be. For example, a 5% margin added to a 6 Month LIBOR rate of 5.3% will equate to an overall interest rate of 10.3%. Margins for people with good credit are usually around 2.5% to 3.5%. Anything more can be a sign you’re getting conned. If your broker or loan officer seems flustered by this question or tells you it is too complicated for you to understand, chances are they’re not confident enough to answer you, or they have something to hide.

Mortgage can be confusing but working with an experienced mortgage professional will be the answer to getting you approved.Use a mortgage payment calculator to find your monthly mortgage payment. Always get your mortgage proposal ( GFE) in writing. If you have questions, ask!

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How To Pay Off Your Mortgage Early

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Tagged in:FHA home loans Santa Clarita mortgage

Mortgage releif

How To Pay Off Your Mortgage Early

Paying off your Santa Clarita mortgage early can make a whole difference to your life. In this article, we will discuss how to pay off your mortgage early.Most homeowners would gladly reduce that debt if the opportunity presented itself, though they do not realize that the key to reducing their mortgage debt lies in reducing the amount of interest that they pay on their mortgage. By paying off their mortgage months or even years in advance, all of the interest that they would have had to pay during that time obviously will not have to be paid.

Also, the interest rate that will be paid will be at a reduced rate because they are reducing the total amount that the interest is applied to at a much faster rate.The trick, of course, comes in figuring out a way to pay off the mortgage early.

For individuals who live on a tight budget as it is, the thought of paying even more toward their mortgage may seem almost laughable. There are a number of ways that homeowners can pay down their overall mortgage in order to pay it off early without having to cause a strain on their finances, as well as services which can assist them in doing so if they aren’t able to accomplish it on their own. Here are just a few examples of how a mortgage can be paid off early without causing undue financial strain.

Pay Extra on Payments

One easy way to pay off your mortgage early and possibly even make your finances easier to handle is to simply put aside a portion of your mortgage payment from each paycheck (or even from every other paycheck, if you get paid weekly.) If you put aside approximately half of your mortgage payment every other week, you’ll end up saving the equivalent of an extra payment every year. If you add just $100 every month extra to your mortgage payment, most mortgages will be shortened by many years.

Setting aside slightly more than half will cause an even greater savings, causing you to pay down your mortgage at an even faster rate. Depending upon the length of your mortgage term and when you start this savings plan, you can cut months or even years off of your mortgage. All that you have to do is pay whatever you have put aside each time your mortgage comes due (which should cause you to end up with a few payments that are significantly more than the minimum payment.)

Additional Payments

Making just 1 extra payment every year will reduce the normal 30 year mortgage by over 5 years. If you don’t like the idea of having to keep track of savings over the course of the year, you might use income tax returns to help you to make up the difference. For many people, the amount that they receive in their tax returns is significantly more than their mortgage payment. While you may have at least some of your tax money earmarked for specific purchases or to pay off other debts, using part of that money to make the equivalent of an extra mortgage payment once per year can significantly reduce how much you owe.

If you can afford to contribute more than just the amount of one payment or if you use this in conjunction with the savings plan mentioned above you can pay off your mortgage even faster.

Using Interest to Overcome InterestGet pre approved to buy your new dream home

If you have a high-interest savings account, you can use that interest to help you pay off your mortgage ahead of time. Once or twice per year, pull out money from your savings that’s equivalent to part of the interest that you’ve accrued and add it in with your mortgage payment. Provided that you have a high enough savings balance you should be able to make a significant impact on your mortgage debt by doing this. Over the course of the year the amount that you add to your mortgage payments could potentially equal an entire extra payment or more.

Bi-Weekly Mortgage Payments

If you worry that you can’t keep yourself motivated to keep making these extra payments, you might consider using a bi-weekly mortgage payments. These services automatically withdraw one half of your mortgage payment from your checking account every two weeks, and then make your payment for you when it comes due. You can usually set this up thru Bill Pay on your bank account. There are 52 weeks in a year and if you make a partial payment every 2 weeks if results in 26 payments per year of half your payment. That results in 13 payments a year or 1 extra every year. In 12 years you would have knocked 12 extra payments off your mortgage and shortened it by a full year.

Refinance to a 15 year mortgage

There are several options to reduce the time on your mortgage. The easiest is to just refinance and get into a 15 year home loan. Your payment will be more than the normal 3o year mortgage but you cut the time in half. A unknown fact is any new mortgage can have any amount of years they want. If you have had a mortgage for 7 years you only have 23 more years to pay on it. You would not want to go back to a 30 year mortgage. Have your mortgage professional quote the payment savings in the same exact amount of years you have left to go…that will tell you if there is real saving.

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No More Mortgage Payments-Here’s How!

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Tagged in:California Mortgage Home loan FHA reverse mortgage mortgage payments Nevada mortgage

Senior Reverse Loan Agents

No More Mortgage Payments-Here’s How!

Are you house rich and cash poor? In recent years property values have soared, while investment returns have been modest. This has created a situation where a lot of seniors are finding themselves using their retirement savings to pay their mortgage payments. These cash strapped seniors are looking for ways to increase their retirement income while continuing to live in their homes. These retirees find that their options are limited, and in most cases require them to risk their home. Enter the FHA reverse mortgage, which can provide many advantages over the mortgage payments dilemma.

Seniors can sale their homes, will it to their kids or keep it as long as they want. The payments are deducted fro the equity in the home and when you decide to sell the home, it is just how much you sell it for less what you owe is  what you get. Just as it always has been. If you owe say $100,000 on your home and over the next 10 years the payments make it so you now owe $130,000 on it and you sell it for $200,000 you get the difference. But, during the 10 years you had the reverse mortgage, you didn’t make any house payments. So no matter if you have a California mortgage, a Nevada mortgage or anywhere else, consider a reverse mortgage.

Reverse Mortgages

You may not understand a reverse mortgage. The biggest advantage of a reverse mortgages is not having to make payments as long as you continue living in your home. In fact, this is the number one reason that seniors choose to borrow reverse mortgages. Almost 80% of reverse mortgage borrowers use a reverse mortgage to pay off their current loans in order to eliminate their house payments. Let’s say you owe $50,000 on your first mortgage and borrow $80,000 with a reverse mortgage. This would pay off and eliminate the payment on the first mortgage and provide you with $30,000 to use as you please.

Stay in Your Home For LifeFHA Reverse mortgage

The second advantage of reverse mortgages is the ability to live in your house as long as you like. The great thing about this is the amount you owe on the reverse mortgage can never be more than the house is worth. Let’s say you live to 115 and have selected to recieve a $300 a month payments for life from the reverse mortgage. The amount received from the reverse mortgage payments could be substantially higher than the value of your home, yet the amount owed will still only be the value of the home. In this situation, FHA insurance will cover the difference.

Reverse Mortgage Withdrawal Options

Another advantage of reverse mortgages is the different withdrawal options that a you are able to choose. These options include lump sum distributions, line of credit, monthly payments, or any combination of these three. So if you were eligible to borrow $100,000 on a reverse mortgage you could select to receive $30,000 up front to cover current expenses, and hold the rest as a line of credit that you can use whenever you need it. This flexibility of reverse mortgages can significantly improve you financial independence during retirement.

Tax-Free Advantages of Reverse Mortgages

Another advantage of reverse mortgage is the tax-free nature of the loan proceeds. The American Bar Association guide to reverse mortgages advises that generally the IRS does not consider loan advances to be income. This means that all the money from the proceeds of the reverse mortgage end up in your pocket.

With these features, reverse mortgage are definitely an option to consider if you are looking for ways to supplement your current income. As with any financial decision, you should seek the advice of a trained professional, a reverse mortgage counselor, to evaluate and determine if a reverse mortgage is right for your situation. We are happy to answer any questions about reverse mortgages with no payments. Give us a call 877-244-9190.

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