Archive for December, 2008
60 Minutes – The Mortgage Meltdown
Posted by Top Home Loans in Economy, General Business, Investing, Real Estate on December 29, 2008
Scott Pelley reports on the mortgage crisis that’s far from over, with a second wave of expected defaults on the way that could deepen the bottom of the U.S. recession.
This exceptionally good report documents a lot of the information about the mortgage market that most people do not know. It explains what we have gone through and what we still have to go through in order to emerge successfully from this real estate bubble. The Alt-A and the option loans have not came to the surface as of yet; however, when they do more pain will be felt in the markets. Make sure to take this information and remember it when making any mortgage or investing based decisions in the next few years.
The effect of these mortgages and the changing market conditions will create a snowball effect. More people will default, more people will become unemployed, and by one thing failing it will cause something else to fail. Corporate lending will sour something similar to the mortgage market, and retail markets will sour as well. Consumer lending will begin to dry up, and with all the stimulus packages being used by the federal government to prevent the market from entering a state of economic panic, we will have to pay for these mistakes for years to come. The reduction of interest rates to next to zero may induce major problems as well in the next few years.
These pains won’t be only felt in America; however, these issues will be felt globally.
Save your Mortgage from the Bank. Simply Mortgages can Help!
Welcome back!
Sliding Your Interest Rate, Why you Could be Losing Thousands of Dollars
Posted by Top Home Loans in Credit Information, Mortgage Advice, Mortgage News, Mortgage Rates on December 29, 2008
When you get a mortgage, it is easy to decide on a certain type of mortgage and stick with it throughout the course of your entire term; however, you could be making a costly mistake that could end up costing you thousands of dollars in overpaid interest. With anyone, you want to make sure that you are giving the bank as little interest as possible. What strategies are available to get you the lowest rates possible?
Finding the Lowest Interest Rates
Once you have decided to lock into a mortgage term, most people feel that they have locked themselves into remaining in a mortgage for the full time. They will just pay their bills at the end of every month and make sure they make all their payments on time. Once the term is completed, then they will shop the market again for a new mortgage rate; however, this is not the process you should be taking.
The process that you should be taking is analyzing the rates from day to day if possible. If the rates fall below a certain amount, then you should be willing to refinance to take advantage of the lower rate. A good mortgage professional will be able to help you with these actions; however, if you don’t have access to a good mortgage professional, then their are some easy calculations that can help you to figure out if it is a good decision or not.
The Payout Penalty and The New Interest Rate
When deciding if you should get a new rate, the first thing that you should do is to call the bank that you are currently dealing with. You will want to ask them how much it will cost to payout and close your current mortgage. Usually this number will be approximately 3 months interest plus a discharge fee.
This number will produce a benchmark for you of how much you need to save as a minimum in order for the refinance to be profitable. The second thing you need to calculate is how much you pay annually in interest. A simple calculation for this is: (mortgage Amount) X (interest rate [0.058]) / 12
This will give you the amount of interest that you pay each month.
The next thing you need to do is to see how much interest you will pay with the new interest rate. You will use the same calculation, but you will substitute your current interest rate with the new interest rate.
If the amount difference is more than the cost of the penalty, then it is beneficial for you to refinance. If not, then you will want to wait for a better time to refinance your mortgage.
The other factor is debt management. If at any time that you have large outstanding balances on debts, then you can be easily certain that it is a good time to refinance your property because you will be saving a lot off of the interest on those high priced interest products. As always, before making any major decisions on your mortgage, make sure that you speak to a mortgage professional or your lender. If you do not know a mortgage professional, then feel free to contact us and we can put you in contact with one.
Save your Mortgage from the Bank. Simply Mortgages can Help!
How to Inspect a Home before Getting a Home Inspector
Posted by Top Home Loans in Mortgage Advice, Mortgage News, Real Estate on December 23, 2008
Before deciding on purchasing any property, you should always make sure to hire a qualified inspector to look over the house; however, to be able to save some money. You should look for the following things while doing your first visit to a property:
Roof
- Is the roof sagging or is it straight and level?
- Is the roof sagging between the rafters?
- Is there any damage to the roof or shingles?
- Does the roof look rotten under the last row of shingles?
Chimneys
- Are there any bricks or mortar missing?
- Is the chimney leaning?
- Is the masonry broken?
Gutters and Downspouts
- Make sure that the gutters aim correctly towards the downspout.
- Is there any rust or paint peeling?
- Any loose or sagging sections?
- Is the gutters extended away from the building foundation?
Windows and Doors
- Are the windows new or old?
- How old are the windows?
- Is there any problems with the wood around the windows?
- Is the wood rotting?
Wall Coverings
- Any missing mortar?
- Are the bricks breaking, cracking, or flaking?
- Are the walls leaning or look bulging?
- Does the siding/bricks appear to be new or old?
- Is the paint or siding looking old or new?
Floors
- Are any of the ceramics cracked or broken?
- Is there any water damage?
- Are the floors damaged or sloping?
Make sure to bring a checklist with you so that you know what to look for.
Consumerz.org.nz has an excellent house inspection checklist.