Posts Tagged lender
Important Mortgage Questions that No One Ever Asks
Posted by Top Home Loans in General Banking, Mortgage Advice, Mortgage News on January 24, 2009
When making the biggest purchase of your life, most of the time you will need financing to help you pay for your purchase. The financing will be the biggest loan that you will ever have to pay off. The loan might even take your entire life to pay off in full. Since this is such an important loan, then you should make sure that you ask all the important questions when applying for your mortgage. Some of the best questions that no one ever asks are as follows:
Important Mortgage Questions
- Does my mortgage have any prepayment options? How much?
- Can I renew my mortgage early without a fee?
- Can I change from variable to fixed? What type of mortgage can I convert to? What are the fees associated with making the switch to fixed?
- When is the interest rate finalized?
- Will I gain any benefit if the interest rate drops while I have my mortgage?
- How long is the rate guarantee on the interest rate? What happens if my closing gets delayed?
- How often can I make prepayments towards my mortgage?
- Is the full amount of the mortgage forwarded on closing or is the adjustment date the forwarding date?
- When selling my property, what will the penalty be if the buyer cannot assume my mortgage?
- Can I port my mortgage from one property to another? Can I only port or can I port and increase or can I port and blend? Can I port for less?
- Can I decrease my payments after I have increased them previously in the mortgage term?
- Is the prepayment amount based on the initial balance or is it based on the current outstanding balance?
- Can I sell the mortgage as part of the package with my property?
- Is there any outstanding property taxes on the property before I purchase the property?
- Can I pay the property taxes with my mortgage payments? What is the interest rate if their is a deficit in my tax account? Will there be a tax rebate if I overpay my tax account?
- If I double up a mortgage payment, then can I skip a payment in the future?
- Is there a skip a payment option on the mortgage?
- When the mortgage comes up for renewal does it automatically renew or do I have to re-qualify?
By asking these questions to your lender before completing the mortgage application, then this could save you thousands of dollars and future headaches with the mortgage. One lender could offer an initial lower interest rate; however, when you look at the features of the mortgage, then you could be losing tens of thousands of dollars because you are not able to optimize your mortgage. Keep this in mind when choosing your next lender.
Save your Mortgage from the Bank. Simply Mortgages can Help!
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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!
Why Waiting for a Mortgage Interest Rate is not the Best Choice
Posted by Top Home Loans in Investing, Mortgage Advice, Mortgage News on December 19, 2008
Everyone always wants to try to get the best interest rate possible when getting a mortgage, renewing a mortgage, or refinancing a mortgage; however, there are many reasons why you should not wait to complete these activities and proceed with the current rate. Recently, a lot of people began to refinance there mortgages while rates had reached lower and lower. This started off a small boom in the refinance department of lenders; however, many people are considering that they may not of got the lowest rate since rates have gone down since then.
Do not worry about losing 0.25% or 0.5%. The following details why this is not important.
When people think that rates will be going down in the near future, then they will put off purchasing, refinancing, or renewing mortgages to try and get the rock bottom rate. This is actually a horrible idea, because doing this may leave you left out in the cold.
The Negatives of Waiting to Lock In
- Employment – In this economy, many people are losing there jobs. One day you could be confident about your employment, and on the next day, you could be looking for a new job. Your lender may not be able to approve your mortgage if you do not have a job, so by taking the risk of waiting, then you may not be able to keep your current mortgage.
- Your Home Value – If you are planning on a refinance, then your property may depreciate in value over the couple of months till you are looking to complete your refinance. If you property depreciates, then it may not even be possible for you to complete the refinance, or you may not get the amount of money you were expecting to receive.
- Banks change Approval Conditions – One week you could be approved for a mortgage, and even a few days later you would not be able to get approved. During these hard economic time lines, nothing is for certain, and at any time, the bank could decide to change there lending requirements and deny you approval, even if you have a pre-approval.
- Mortgage Rates could Increase – It is easy to believe the media and expect that with the overnight lending rate decreasing, that the banks will have an easier time lending, and they will have to reduce rates as well; however, that is not the full truth. Even if the overnight rate goes down, the banks are not required to lower your rates. The banks are the ones taking the risk if you default, not the federal lending institution or the government.
- Home Foreclosures – With the increase of the amount of houses going into foreclosure, it is not unlikely that a neighbors house will go into foreclosure causing your property’s value to decrease. This could occur at any time and lower your property’s value.
- Mortgage Insurance Rates Could Rise – When most people buy or refinance a property they have to pay Mortgage Insurance. This insurance rate is not dependent on lending interest rates or what the bond rates are. Instead they are based on the rate of default, and with default rates rising, then you could end up paying more upfront for mortgage insurance then you originally had thought.
- Your Credit Score Could Fall - Right now your credit score could be spotless; however, it is is not impossible for something that you are unaware of that comes up that would reduce your credit score. It could be an old unpaid bill going into collections, or an error on the credit bureau. Any of these could cause your mortgage not to get approved or allow you to get approved at a much higher interest rate then originally suspected.
- You could get Injured – It is a fact, at any time, anyone could get seriously injured or disabled not allowing them to work. If this happens to you, then it will make it extremely difficult for the lender to approve your mortgage if you will not be returning to work for a long duration of time. This is a big threat to the well being of your mortgage.
All these reasons are good reasons to complete your mortgage application today. It is also good to complete your application sooner because your broker gets paid when the mortgage funds. Between the time when you first speak to your mortgage broker and until your mortgage actually funds, the broker is not making any money at all. The longer the broker has to wait, the less interest they will show in assisting you. Please be aware of the people trying to help you as well.