Robbie T. James asked:




Home is where the heart is. Home is where you hang your hat. Home… well, you get the picture. The home holds a dear place in the heart, minds and souls of pretty much everyone on the planet.

And yet, from a less sentimental perspective, the home can be seen yet another way: it is where we invest a heck of a lot of money.

Yes, besides the sentimental and practical value of our homes, they also represent a very significant financial investment for each and every homeowner. Not only are there the up-front closing costs and down payments associated with buying a home, but there are the ongoing, monthly expenses as well. No matter the value or price of your home, it is almost a sure bet that it wasn’t cheap to buy.

Maybe you have been able to make your mortgage payments for a number of months or years, but then something happens in life that makes it harder to keep up. Maybe you are able make your mortgage payments, but doing so causes you to sacrifice too much in other important areas of your life. Or, maybe you have been consistently late in making your payments – and may even be risking default.

In those cases, a mortgage loan refinance may be in order.

When To Consider Mortgage Loan Refinancing

Regardless of whether you actually have trouble making your monthly mortgage payments or whether you would just like to save some money like everybody else, an excellent way to reduce your payments is to refinance your loan.

While there is no single magic formula for knowing when it is best to refinance your home, there are some rules of thumb that can help. You should consider refinancing if:

a. you notice that mortgage rates (such as 15 year fixed or 30 year fixed) have gone down since the time you got your current mortgage by at least 0.5% to 1%

b. your credit score has improved since the last time you refinanced

c. you would like to extend the term of your loan to 30 years from 15 or 20 years

d. you have equity in your home that you would like to cash out (turn into cash)

Mortgage Loans Refinance: Home Loan Tips

If you are considering refinancing, the next step is to shop for the best deal. Here are 3 tips that can help you make the right decisions:

1. Research the best mortgage loan refinance lenders in your area: Start by making a list of at least 5-6 lenders who specialize in refinancing.

2. Figure out the ideal mortgage term for your new loan: Use an online mortgage calculator. By plugging in different payment terms (e.g., 15 years, 30 years, etc.) you can figure out how this will affect your future monthly payment amount.

3. Apply to multiple lenders: Be sure to apply to all of the lenders on your list. Remember, more lenders means more choices, which means a better chance of landing an excellent rate.

Follow these 3 tips to get the best-possible interest rate on your new mortgage loan refinance.

Jesus

Isaac F. Davis asked:




Many VA borrowers ask about private mortgage insurance (PMI). PMI is a lender-charged fee on mortgages with more than 80% loan-to-value (LTV) ratio. VA loans never require PMI, and it’s important to understand why this is such an attractive feature.

For conventional and other type mortgage programs, PMI functions as insurance against loss in case of foreclosure. VA loans are backed by the federal government, so VA-approved lenders don’t need added PMI.

The savings a VA borrower can experience by not paying PMI are big. Typical rates for PMI on a $200,000 conventional loan are around $120 per month or about $1440 per year. A conventional borrower would need to bring twenty percent cash down at closing in order to avoid monthly PMI charges. Even though VA loans require no money down at closing, they never require PMI.

PMI is a reality for most other mortgage borrowers. And, once PMI is charged, there is no legal obligation by the lender or the servicer of the loan to cancel PMI. Even if the borrower pays the mortgage down to an 80 percent LTV ratio, he or she may still be paying PMI. To cancel PMI, the request must come from the loan servicer. This will often require an appraisal to verify that there is 20 percent equity in the financed property. An appraisal may cost the borrower from $300 to $450 and is yet another expense that VA borrowers can skip by using the veterans’ home loan program.

Sometimes people in the market for a home loan can be attracted to mortgage products marketed as no-PMI loans. Buyer should be aware, that loans advertised as “no PMI required” may simply be lender-paid PMI loans with higher interest rates. In these cases, the borrower would ultimately pay for the PMI indirectly through higher monthly mortgage payments. With VA loans, a borrower will never see PMI disguised as anything else, especially not jacked up interest rates to offset the cost of lender-paid PMI.

Certain non-VA borrowers may be able to avoid PMI by utilizing a second mortgage as a piggyback second. A piggyback second can sometimes help when a borrower has less than twenty percent down. For instance, an 80/10/10 program would mean that 80 percent of the value of the property is financed with the first mortgage, 10 percent is financed by the second and the borrower puts 10 percent cash down. A common disadvantage to the piggyback-second method of avoiding PMI is that interest rates on second mortgages are typically higher than those for first mortgages.

After analyzing all the different issues associated with PMI, a no-PMI VA loan looks better and better. No PMI is just one of the many advantages associated with the VA home loan program. Some of the other benefits of VA loans include:

Zero Down 100% LTV on purchase and refinance loans Less stringent qualifying standards Low interest rates No prepayment penalties Cash-out and debt consolidation refinance Streamline rate reduction refinance.

Diane

melinamenny asked:


 

Understanding Mortgage Calculators and Monthly Mortgage Payments

Mortgages truly are a great invention. The truth is that most people, even those who are worth a great deal of money, do not have the cash readily available in order to purchase a home without getting a home loan, or mortgage. Preparing yourself to find the right mortgage and using a few tools to get ahead of the game will help you find a financial product to truly meet your needs.

The Tools

There are a number of tools that you can use in order to help you to obtain your mortgage easily. One of the most useful tools is a mortgage calculator. Mortgage calculators are a wonderful way to discover exactly how much you will have to budget for your monthly bills, as well as how much you will be paying in interest over the life of your loan.

Using a Mortgage Calculator

There are a number of different types of mortgage calculators, and with a bit of searching you can find a calculator that will suit your specific need. One way to use a mortgage calculator is to help you to determine how much your monthly payments will be. This is generally called a simple calculator and is useful in a number of ways.

Say, for instance, that you are looking to purchase a home that costs $235,000. You will be using $20,000 from your IRA as a down payment, which means that you need to borrow $215,000 from your mortgage lender. With an interest rate of 6.7% over thirty years, you would be asked to pay about $1,387 a month with a fixed rate loan.

Another way to use a mortgage calculator to make things easy is to use one that is set to help you to discover exactly how much you can afford to spend on a house.

33% Of Your Income

Did you know that when you purchase a home, you are only supposed to spend 33% of your monthly income on your mortgage, insurance, and tax payments? This may not seem like a lot, but it actually surprises some people when they do the math, to discover that they can afford a much more expensive home than they originally believed they could. A person, or couple, who brings home $5,000 a month can afford to spend $1,650 on a monthly mortgage payment. And a family who has a monthly income of $3,500 can spend $1,155 on their mortgage payment. This is a valuable thing to know, but what does that translate to when it comes to the price you can afford to spend on a home?

What Kind of Monthly Payment Can I Afford?

Many people who are purchasing a home for the first time often make the same mistake: they go house hunting before they discover exactly how much they can afford to spend on a home. This often results in heartache when the prospective buyers discover that they can not afford to own the home that they have fallen in love with. Before you go house hunting, you can get a step ahead of the game by looking to a mortgage calculator.

There are some mortgage calculators that can help you to discover exactly how much you can afford to spend per month on a payment. It then, in turn, translates that into how much you can afford to spend on a home. Often it is much more than you would ever imagine. Say, for instance, that you bring home $6,000 a month in income. You pay $600 for your car payments and $200 for credit card payments. Once you figure in your property taxes and insurance, and add the interest rate in, the calculator will tell you that you can afford a monthly mortgage payment of $1,144, and that you can afford a mortgage of $177,288.

Getting Ahead of the Game

But what does it accomplish when you use a mortgage calculator in order to figure out what your monthly payments will be? To begin with, it gives you a starting point. If you use a calculator that is set to help you discover how much you can afford to get for a loan, you can help your real estate agent to narrow down the homes that they have to offer to just the homes that you can afford. This will save time, and a lot of frustration, as you will be able to look at the homes that you may be able to own rather than the homes that you can’t afford to purchase.

Discovering what your monthly mortgage payment will be is also a good way to help you set a budget up, even before you get into your new home. Having a budget, especially when you are just moving into a brand new home and accumulating new bills, is an excellent way to ensure that you are able to continue to afford your house. It may also help you decide what kind of loan you need to get. For example, an interest-only loan will allow you to make smaller payments each month. A calculator can help you realize exactly how much you can afford so you can get the right kind of loan at the outset.

Other Calculators

There are a number of other different kinds of mortgage calculators that you can utilize in order to help you to get ahead of the game. If, for instance, you choose to get an adjustable rate mortgage loan, or ARM, there are some mortgage calculators that can help you discover, on a monthly basis what your loan will be. There are also calculators that exist in order to help you to know if it will be easier for you to rent or to buy, and if your investment in your home will be a beneficial one. There are hundreds of different reasons to use a mortgage calculator, but never forget the way that they were first used: to discover exactly what your monthly mortgage payments will be.



TERRY