Home Loan Basics
Here are some home loan basics to prepare you in the simplest terms to apply and maintain your home loan.
- The Home Loan Application Process – The home loan application process is painstaking and very detailed.
Set aside some time in the beginning of the process to get organized and get everything you need together.
By putting in the time up front, the application will seem easy and you'll be ready to roll in short order.
- Rates Do Change – Watch home loan rates for major fluctuations, especially the downward version. Refinancing
is cheap in comparison to how much money you can save if you get the right low interest home loan. If you develop
a great relationship with your mortgage broker, he or she may even start calling you when the rates drop!
- Be Timely – Nothing can hurt or help your credit rating more than how you pay your home loan. Pay on time and
your credit score will raise quickly. Pay late and you'll do damage that will take a long time to repair.
Getting Home Mortgages Online – Safe and Swift
Why shop for home mortgages online?
- If you seek out mortgage quotes from a reputable lender, your information is perfectly secure.
/You don't need to go to every Tom, Dick and Harry on the web to find great mortgage options – stick
to names you can trust. Their security online will be state of the art and you'll get much better
home mortgage information by shopping around.
- Quick Processing – Online mortgage companies aren't hampered by the same home loan processes as
large local banks. They have taken loan processing automation to an art form which means that they
can take you from application to closing in rapid succession.
- Low Rates – Online mortgage brokers and home loan specialists have access to so many lenders and
rates that they are bound to find a program that's right for you.
Comparing Home Loans
When shopping for home loans, don't forget to compare your home loan options in the right way. This means that you can't
really compare a 30 year fixed home loan at 6.5% to a 5/1 ARM at 3.8% without knowing what you are doing. What does all
that mean anyway? Here is a quick home loan guide:
- Loan Term – The loan term is the repayment period of your loan. Most mortgages are 30 years, but some are 10 or 15.
The longer the term the lower your monthly payment, but the more you are paying in interest!
- Interest Rate – A fixed interest rate means that you will have the same interest rate for your entire loan term.
An adjustable interest rate can change after a period of time. If you are comparing a fixed rate and an ARM loan, use a
mortgage calculator to compare your payments down the line as well as those up front.
- Closing Costs – Lenders, closing agents and attorneys, state regulations all come into play with closing costs.
Go with the lender with the fewest junk fees or the one that covers your closing costs out of their revenues.
Paying Off a Home Mortgage Early – A Road Map
People rarely stay in a home for thirty years, so a thirty year mortgage may seem like forever to today's borrower.
No one wants to pay a mortgage forever, so here are a few tricks to saving you a lot of money!
- Use home mortgage calculators to see just how much of a difference one or two extra payments towards your mortgage can make on your overall
amortization schedule. Most people never take advantage of the fact that you can shorten your 30 year mortgage term by up to
ten years making just a single extra payment per year.
- You also may be laboring under the misconception that by making double payments you can only cut your mortgage in half.
Since any extra money you pay goes towards the principle of your loan, and not towards the interest, you are actually making
a much higher principle payment and you can shorten your mortgage by up to 20 years by making double payments.
Use free mortgage repayment calculators to see how much of a difference those extra payments can make!
Take Advantage of Low Rates – Get a Home Improvement Loan
If you are ready to invest some sweat equity in your home and you just need some capital for home improvement supplies, you should
consider taking out a home improvement loan. These are usually very easy to secure because you are improving an asset that is an
investment for the bank. Improving investments is looked upon favorable by everyone. You can find home improvement lenders locally
or online. Always check with your city and state for any special programs, especially if you have a history home or are living in
a neighborhood going through a lot of development.
What to Do When You Miss a Home Loan Payment
Making your home loan payments on time is incredibly important. If you are in a bind and you can't make the payment, '
here are some tips on what you should do:
- Contact your lender. Explain your situation and make it clear when you will be able to send payment. Send payment as soon
as you can and pay any late fees associates with a tardy payment immediately. Find out from the lender if you can avoid having
the late payment reported to your credit report.
- If your lender is definitely going to report the payment, contact the credit agencies yourself. Although you probably can't
get the late payment removed, you can make sure that they note that the loan is in good standing and that the payment was made.
- Do not do it again. Plan on sending your home loan payment in early so you don't get stuck again.
Consolidating Home Loans to Save Each Month
You may have taken out a refinance loan some time ago and now you're ready to consolidate your multiple home loans into one home loan.
This should be a pretty painless process for you.
Gather all your current home loan information including account numbers, bank name, initial loan amount, loan date etc. Look at how much
equity you have in your home so you can see if refinancing and getting rid of your second mortgage is actually feasible. Finally, go to
your mortgage specialist and get an even more specific and accurate picture of the options available to you.
Consolidating home loans may make life much simpler or it may not be the right move at all. Listen to your financial advisor and your mortgage broker!
Tax Benefits of Home Mortgages
Home ownership is a great thing for many reasons and the tax benefits of home ownership are unarguably important.
For instance, did you know that all of the mortgage interest you have paid is tax deductible? Since you pay property taxes on your house, the taxes must
be waived on your mortgage interest payments to avoid double taxation. That is reason enough to stop renting!
Hurricane Damage? Use a Home Improvement Loan to Fix it Up
If you have been a victim of the incredible storms in the past year and your insurance isn't covering the costs of repair, you can consider taking out a home improvement loan
to fix the damage and increase the value of your home.
To get started, get quotes from contractors for the improvements or repairs that you need to make. With quotes in hand, go to your
lenders, especially those who specialize in home improvement loans. The lender will quickly evaluate the risks of the home
improvement loan vs. the benefits of improving the value of the home and you will most likely secure your loan.