Understand All About Home Mortgage Before Applying For One

Mortgages are commonly obtained by people for various purposes – to buy a new home, pay off existing debts to help ease financial burden etc. Many banks and financial institutions – both private and government sponsored – offer home mortgage loans that people can avail to buy a new home. Before applying for a home mortgage, one must be clear how it works, what the costs are, how much you are eligible to borrow and what will be your monthly payments.

A mortgage calculator helps an individual calculate all the above amounts. For example, after giving the necessary inputs, if your monthly home mortgage payments come to around $3500, you must calculate if your monthly income will allow you to pay this amount and yet live comfortably while taking care of other expenses. There are different unforeseen circumstances that you will need to factor in too. What if you become ill and lose your job – will you have enough savings or insurance money to cover your mortgage payments?

A mortgage calculator is usually included in the website of home loan institutions. You will be asked for information like cost of the home you wish to purchase, period of the mortgage, interest rate, salary etc. Once you input these details, the calculator will give you an estimate as to how much you will need to pay each month. You will also be offered a detailed explanation as to how the figure was arrived at. If you require any further explanation, there will be willing agents of the company who will explain all details to you.

Home mortgage rates could vary from state to state and while it is quite easy to obtain a loan, it will be more difficult to maintain the payments regularly. This is why there are so many foreclosures and abandoned houses sitting all across the country because the owners could not afford the mortgage payments and had to lose the house. Hence, lenders have become more wary and are only prepared to give mortgage loans to those with a good credit history. This is why those with bad credit will find it almost impossible to obtain a home loan.

In order to buy your dream home and yet be able to pay your home mortgage on time, you must first understand the different types of home mortgage loans on offer.

• Fixed Rate Mortgage
• Adjustable Rate Mortgage
• Interest Only Mortgages
• Balloon Mortgages
• Reverse Mortgages

Fixed Rate Mortgage means that the interest rates will remain the same for the period of the loan and you will be liable to pay a certain amount as fixed monthly payments and there won’t be any rate fluctuations.

Adjustable rate mortgage as the name suggests means the interest rates will change depending on the market. If it dips then your rates will also be low. However if it increases then your rates can also increase. So, if you are prepared to take the risk, then you can go in for this type of mortgage. The other types are lesser known mortgages. Interest only mortgage rates will be low initially and increase after the ‘Interest only’ period ends.

Balloon mortgages have low interests for a period of 5-10 years. It is easy to qualify for this and during this duration, you can pay small token amounts towards your loan. Once the protection period is over, you have to pay up the balance amount in total and how you do so is your problem. You can sell the house or refinance it or use your insurance amount to pay up the balance. Reverse mortgages are meant for senior citizens who can get a regular monthly payment based on house value, age and such. The homeowner need not make any mortgage payments while they live in the house. The outstanding balance will remain with interest being added to it. If either husband or wife die or sell the house and move out, the remaining amount must be paid up in full.

If a borrower finds that he is does not have the money to make the initial mortgage down payment, he can apply and get a private mortgage insurance. The amount is around 25% of the cost of the house and he will have to pay a premium for this money. Private mortgage insurance protects the lender from a borrower who defaults on payments. Use a mortgage calculator to get your figures right, take time to shop around and understand about the different types of mortgages and what will suit you the best before applying for one.

Using a Mortgage Broker to Get a Home Mortgage

Buying a home is an exciting time, and is most likely the largest and most important investment you will make in your lifetime. There are many factors that go into buying a home, including securing a mortgage. Many home buyers will probably automatically look to their banks or financial institutions to obtain a mortgage on the home they wish to purchase. What many of these people may not realize is that the banks will probably only offer them one rate, with specific conditions and terms for their home loan. It would be beneficial for these home buyers to work with an independent mortgage broker who will almost guarantee a lower rate that what the bank will quote them.

Why Use a Mortgage Broker For Your Home Loan Needs?

Mortgage brokers are trained experts in the field of home mortgages, equity loans, and other financial products. They get to know their clients’ financial situation, and attempt to find them a mortgage that suits their specific and individual needs. Independent mortgage brokers are not employees of major lending institutions, so they are not limited in the rates and products that they can offer their clients.

Independent mortgage professionals know many lenders across Canada that they have a relationship with, and that they deal with on a regular basis. You only need to fill out one application, then your mortgage agent shops it to all the lenders, in order to maximize the chances of obtaining financing for the mortgage. For this reason, they are often able to secure a mortgage package for hard to place mortgages that the banks turn down. The benefit is that you only have to fill out one application and have one credit report pulled, and they can then shop it to all their lenders. Many of the lending products they can access are not available to retail clients.

Get a Home Loan at Lower Rates With a Mortgage Broker

Getting a home loans using an independent mortgage broker is a process that will save you money, because more often than not, mortgage brokers are able to secure mortgages at a much lower rate than what traditional banks may be able to offer. This is because the brokers communicate with a variety of lenders at once, comparing which lender will offer them the best and lowest rate. A lower rate on your home mortgage will most definitely translate into lower monthly mortgage payments, and more money going towards principal rather than interest.

Because of this monthly saving, the home owner is then able to pay their house off faster, or put more equity in the home that they can use later on if they ever need to finance something that requires a lot of money to do so. For example, if there is a major home renovation that needs to be financed, you can use the equity in your home to pay for it, by arranging for a home equity loan or line of credit.

Save Time Shopping For the Best Home Loan- Get a Mortgage Broker to Shop Around For You!

Smart consumers take the time to shop around and compare prices on a specific product before buying it to be sure they are paying the best price for that particular product. This is very much the same when it comes to home loans. This is essentially what mortgage brokers do. They will shop around at various lenders and banks to find the lowest rate and best terms and conditions for your mortgage. Having the mortgage broker shop around for you saves you a lot of time from having to do it yourself. If the banks have turned you down due to poor credit, being self employed, new to Canada, or other reasons, an accredited mortgage professional can usually find you a lender.

Mortgage Brokers Working on Your Behalf – At No Cost To You!

Most mortgage brokers are paid by the lenders, which means they do not look to you for any service fees or charges. You get the best of both of worlds – a mortgage broker who will act in your best interests and get you the best rate and terms, all at no charge to you! Get a mortgage broker to find the perfect home loan in Alberta for you!

Keep Yourself Off the Breadline With the Best Refinance Home Mortgage Loan Rate

After sifting through your monthly bills for the umpteenth time, you crunch all the numbers again. Still, they do not add up! Then, almost like a bad scene from a terrible movie, the past few years flashed through your mind.

You’re 28 once more, and you feel on top of the world after you bought your first house. After that initial success, however, you attracted hard times like a magnet. You failed to get the pay increase you were bucking for. Then, inflation went through the roof, making the purchase of even foods challenging. So, here you are at present, 34 years old and struggling to make ends meet. You’re not only hard up, you have trouble even putting food on the table. Your only option seems to be refinancing your home mortgage loan. Is the best refinance home mortgage loan rate a way out of your money woes? How do you ensure you get the best refinance home mortgage loan rate in the market?

Mortgage Times Two

A mortgage refinance is the act of taking out another mortgage as a replacement of an existing mortgage on a property. This is done for several reasons.

1. To lower the risks from a changeable rate, by switching to a loan with a fixed rate;

2. To increase the term of the loan and to lower monthly payments;

3. To liquidate equity into cash;

4. To lower interest costs with a mortgage interest rate that is lower.

Refinancing includes many of the same costs as a mortgage, such as loan application fees appraisal. Needing to pay these fees early may seem overbearing, but it is worth it. Learn if you will save money in the long run. Check if the extra fees and penalties’ total is lower than the cost of refinancing, to get the best refinance home mortgage loan rate. Keep in mind that online mortgage calculators often fail to consider all mortgage refinancing costs.

Advice Is Advisable

Because of issues such as the variables involving online mortgage calculators, you could get a financial adviser. A financial adviser can help you get the best refinance home mortgage loan rate. Some financial advisers recommend that before homeowners refinance, they should find refinancing that reduces the mortgage rate by at least two percentage points, to achieve the best refinance home mortgage loan rate. Advisers should also be considered when liquidating equity for the purposes of debt consolidation, eliminating debt from credit cards, and huge expenses.

Rate Or Points?

A financial adviser can also help you deal with a common dilemma that homeowners face when considering refinancing. That is, should you look for the best refinance home mortgage loan rate or for more mortgage points? The answer depends greatly on how long you plan to be the homeowner. Learn the length of time needed to earn back the points’ original cost. A mortgage point is one percent of the amount of the loan. For instance, a point on a $100,000 mortgage would be equal to $1,000. If you plan on purchasing the home and living there for the entire time of the mortgage, it is wise to pay the point.

The Loan Length

The most important factor in getting the best refinance home mortgage loan rate is how long the loan will be. But keep in mind that if you have a mortgage for over five years, you can then start saving money. But if are not in the house before five years is up, paying the mortgage points is more expensive than using a higher rate to finance. In other words, five years after you took out the mortgage, the interest at 7 percent would be equivalent to the how much you paid in points!

With some analysis, planning, and assistance, getting the best refinance home mortgage loan rate will help solve your money woes. Yes, there is a way to keep yourself off the breadline, and this way could be the best refinance home mortgage loan rate.