Mortgage Tips

Making a down payment can save you a lot of money through the life of your mortgage. But, the hardest part of buying a home is the money up front. With closing costs, inspections and appraisals, the price tag can get pretty steep, and none of this actually goes toward the home itself! You spend a fortune to be able to purchase a home, but it’s almost as though you don’t get credit for it. After preparing for thousands of dollars in closing costs, you are faced with the next hurdle: the down payment.

Adjustable Rate Mortgages (ARMs) are not right for everybody. If you plan to stay in your home for a long time, have a rocky credit history or prefer that your payments be the same every month (i.e. predictable), you would be wise to get a 30-year fixed rate mortgage. But, buyers with strong credit ratings who plan to move after a few years can save a considerable amount of money with a 3-year or 5-year ARM. Most lenders offer low interest rates on ARMs, making these loans quite attractive to prospective home buyers. For the first few years (three or five, depending on the particular mortgage you secure), the ARM has a low fixed rate.

"Have you been pre-approved for a mortgage?" If this is not among the first questions that your real estate agent asks you, find a new one. Pre-approval (or at least pre-qualification) is an important part of the home buying process, and it normally is the first thing you should do after deciding to buy a house. If you start house hunting before being pre-approved or pre-qualified for a mortgage, then you really have no idea what you can afford. You could wind up spending all your time looking at homes that are out of your price range. An agent that does not insist that you be pre-qualified or pre-approved before beginning your search for a home is either inexperienced or ineffective, and your search will not yield satisfactory results.

Mortgage rates could become lower. As lower rates make homes more affordable, this is positive news for existing and prospective home buyers. The existing market, characterized by slowing new construction and declining interest rates, provides a unique opportunity for anyone in the market to buy a home.

For the past five weeks, interest rates on 30-year fixed rate mortgage loans have been climbing, and this weeks drop signals a change from the norm. Economists believe that the drop in mortgage interest rates is the result of general economic pressure applied to consumers by the housing market...

With a reverse mortgage, the bank pays you. The payments come from a loan that the bank provides, and the amount that you can receive depends on the value of your home and your current age. A higher home value and more advanced age will result in larger monthly payments from the bank, as there is more principal against which to borrow, and the bank does not expect to make payments for as long as it would to a younger borrower. To participate in a reverse mortgage transaction, you must be at least 62 years old.