Apr
29
Is Adjustable Rate Mortgage a Good Idea
Filed Under Finance | Leave a Comment
Juling Gabas asked:
Choosing the right type of mortgage loan can sometimes be difficult. You have a lot of options and one of them is adjustable rate mortgage. But then you ask yourself, is adjustable rate mortgage a good idea for my circumstance. With this type of home loan or refinancing, you have to understand the ins and outs of this because if you do not chances are you will not like it. Adjustable rate mortgage is good for people who do not plan on staying very long in their house property.
Understanding what this type of home loan or refinancing would help you tremendously in deciding if it is a good or bad idea. First are you needed to know the definition and what it means. What it means is a loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index. An ARM as is commonly called is a mortgage with an interest rate that is linked to an economic index. The interest rate will be tied to some index such as the prime rate for instance, and the lender will charge a premium on top of that index. So you need to be very careful in deciding on this type.
You have so many options if you only know what other types of getting a mortgage loan or refinancing. Other banks and lenders have they call open, closed, convertible, fixed rate and variable rate. With all these types of mortgages available to you it is no wonder that you will have a hard time trying to choose the right one for you. All of them have their advantages and disadvantages. It all comes down to what your circumstances are. And it also depends on what you are comfortable with. In some cases like the so called variable or adjustable rate mortgage are not for people who cannot withstand the rise and fall of the markets.
So the question of; is adjustable rate mortgage a good idea? To be frank and honest, this is typically for people who can stomach the downturns of the stock or financial markets. If you have butterflies once these indices go down then you are better off with the traditional fixed rate mortgage. But then you have to weigh in the advantage of saving thousands of dollars on your mortgage should the interest rates stay low for a while. There are built safety features in these adjustable rate mortgages to help alleviate the pain and shock of a higher or increase payment.
It is however stressed that you fully uncover or know what you are getting into before you opt for this more risky type of mortgage loan. The final path to apply an index is on a movement basis. In this pathway, the mortgage is originated at an agreed upon rate, then adjusted based on the movement of the index. Many of these ARMs allow or provide some teaser periods that are relatively short initial fixed rate periods and bears and interest rate that is substantially lower than the fully index rate. But you have to be aware that this is going to quickly jump after the agreed period of time.
So is adjustable rate mortgage a good idea or not? You can only answer this yourself since it is very subjective. One thing you bear in mind is that if you cannot stomach the rise and fall of the indices or the financial markets, you are better off with fixed rate mortgages. Adjustable rate mortgage is only good if you do not intend to stay in the house property for more than seven years. You can save thousands of dollars if you will have it for a short period of time and not intending on staying there for more than seven years.
Kathleen
Choosing the right type of mortgage loan can sometimes be difficult. You have a lot of options and one of them is adjustable rate mortgage. But then you ask yourself, is adjustable rate mortgage a good idea for my circumstance. With this type of home loan or refinancing, you have to understand the ins and outs of this because if you do not chances are you will not like it. Adjustable rate mortgage is good for people who do not plan on staying very long in their house property.
Understanding what this type of home loan or refinancing would help you tremendously in deciding if it is a good or bad idea. First are you needed to know the definition and what it means. What it means is a loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index. An ARM as is commonly called is a mortgage with an interest rate that is linked to an economic index. The interest rate will be tied to some index such as the prime rate for instance, and the lender will charge a premium on top of that index. So you need to be very careful in deciding on this type.
You have so many options if you only know what other types of getting a mortgage loan or refinancing. Other banks and lenders have they call open, closed, convertible, fixed rate and variable rate. With all these types of mortgages available to you it is no wonder that you will have a hard time trying to choose the right one for you. All of them have their advantages and disadvantages. It all comes down to what your circumstances are. And it also depends on what you are comfortable with. In some cases like the so called variable or adjustable rate mortgage are not for people who cannot withstand the rise and fall of the markets.
So the question of; is adjustable rate mortgage a good idea? To be frank and honest, this is typically for people who can stomach the downturns of the stock or financial markets. If you have butterflies once these indices go down then you are better off with the traditional fixed rate mortgage. But then you have to weigh in the advantage of saving thousands of dollars on your mortgage should the interest rates stay low for a while. There are built safety features in these adjustable rate mortgages to help alleviate the pain and shock of a higher or increase payment.
It is however stressed that you fully uncover or know what you are getting into before you opt for this more risky type of mortgage loan. The final path to apply an index is on a movement basis. In this pathway, the mortgage is originated at an agreed upon rate, then adjusted based on the movement of the index. Many of these ARMs allow or provide some teaser periods that are relatively short initial fixed rate periods and bears and interest rate that is substantially lower than the fully index rate. But you have to be aware that this is going to quickly jump after the agreed period of time.
So is adjustable rate mortgage a good idea or not? You can only answer this yourself since it is very subjective. One thing you bear in mind is that if you cannot stomach the rise and fall of the indices or the financial markets, you are better off with fixed rate mortgages. Adjustable rate mortgage is only good if you do not intend to stay in the house property for more than seven years. You can save thousands of dollars if you will have it for a short period of time and not intending on staying there for more than seven years.
Kathleen
Apr
25
FLorida FHA Mortgage, Florida FHA loans create opportunity for Florida homebuyers
Filed Under Consulting Team | Leave a Comment
Apr
23
Is it the Right Time for Me to Buy a Home? (renting Vs. Buying.)
Filed Under Real Estate | Leave a Comment
David Donhoff asked:
Is it the right time FOR ME to buy? (renting vs. buying.)
They say that “Timing is Everything”… but how can we know when it’s really the best time FOR YOU to make the leap into becoming a home-OWNER instead of a renter?
Well, the answer is partly financial, and partly personal/emotional.
Financially; As soon as you can afford the minimum payments to become an owner, you are best advised to GET ON THE BOAT, because the economic advantages of owning your own home are generally more than renting over the long run, and the longer you wait the less of the long run advantages you get to accumulate. EVERYONE has to pay for the housing privileges they consume, whether you rent or own…. so once you can afford the minimum payments you qualify for, it usually makes good sense to take the leap and own your own home.
Personally/Emotionally; Once you’ve ‘settled’ into a neighborhood and decided you’re comfortable staying there for at least 3-5 years or longer, many people ‘feel’ more stable and grounded when they see themselves as an owner within their community. Newlyweds often tell us they feel like they have “arrived” as a married family when they finally acquire their very first home… even when it is a first-timer’s ‘Starter-Home.’ As parents, we tend to think that owning versus renting is beyond our kids concerns… but among their social playmates, children are VERY aware of when their family is anchored as “owners” versus renters.
When is it NOT the time to buy a home? When you fully expect to have to move, completely, in less than 3 years… OR, if you simply cannot afford the payments of the financing required to buy the minimum home acceptable to you and the rental of such a home is cheap enough that you can pay it instead (even without getting the benefits.)
If you have additional questions or concerns, you are invited to the No Bull Financial FAQ, where you can post any question, any time, and you will get answers from Dave himself!
–Dave
www.NoBullFinancial.com
Info@NoBullFinancial.com
EDWARD
Is it the right time FOR ME to buy? (renting vs. buying.)
They say that “Timing is Everything”… but how can we know when it’s really the best time FOR YOU to make the leap into becoming a home-OWNER instead of a renter?
Well, the answer is partly financial, and partly personal/emotional.
Financially; As soon as you can afford the minimum payments to become an owner, you are best advised to GET ON THE BOAT, because the economic advantages of owning your own home are generally more than renting over the long run, and the longer you wait the less of the long run advantages you get to accumulate. EVERYONE has to pay for the housing privileges they consume, whether you rent or own…. so once you can afford the minimum payments you qualify for, it usually makes good sense to take the leap and own your own home.
Personally/Emotionally; Once you’ve ‘settled’ into a neighborhood and decided you’re comfortable staying there for at least 3-5 years or longer, many people ‘feel’ more stable and grounded when they see themselves as an owner within their community. Newlyweds often tell us they feel like they have “arrived” as a married family when they finally acquire their very first home… even when it is a first-timer’s ‘Starter-Home.’ As parents, we tend to think that owning versus renting is beyond our kids concerns… but among their social playmates, children are VERY aware of when their family is anchored as “owners” versus renters.
When is it NOT the time to buy a home? When you fully expect to have to move, completely, in less than 3 years… OR, if you simply cannot afford the payments of the financing required to buy the minimum home acceptable to you and the rental of such a home is cheap enough that you can pay it instead (even without getting the benefits.)
If you have additional questions or concerns, you are invited to the No Bull Financial FAQ, where you can post any question, any time, and you will get answers from Dave himself!
–Dave
www.NoBullFinancial.com
Info@NoBullFinancial.com
EDWARD
Apr
15
Leon Cote asked:
While a free reverse mortgage calculator might be able to give you an idea of how much you could borrow, none will be able to tell you something that is far more important, and that is how much equity will be left in your home after a period of years. It’s crucial you are aware of this before you make any decision on whether to opt for this type of loan.
There are a number of calculators to be found online. However, you may find that the amounts illustrated differ from one website to another, even when the same dates and amounts are entered. If you are going to opt for either a Fannie Mae or FHA reverse mortgage, then the best (and free) reverse mortgage calculator can be found at either the AARP or National Reverse Mortgage Lenders Association (NRMLA) websites. Both are accurate, display identical figures and display most of the crucial information, such as how much you’d receive as a fixed monthly payment, a line of credit (and how much that line of credit would appreciate over 5 and 10 years for the FHA program) or how much you’d receive as a one-off lump sum.
But, if you opt for a jumbo program, you’ll need to use that company’s proprietary calculator. These calculators also give you the FHA and Fannie amounts though they tend to be slightly less accurate. The Financial Freedom calculator is the most widespread.
A reverse mortgage calculator works by using the equity value of your home, its location, your age (and partners), and current interest rates. It then performs the calculation and gives you an indicative illustration of what you’d receive.
What it won’t tell you is how much equity would be left in your home after a number of years. This is important. How this type of loan works is that the lender agrees to pay you a fixed amount over a period of time – usually as monthly payments. When you no longer live in your home, sell it or die, the loan – in its entirety – must be paid back. This is usually done by selling the home. Any money left after the loan is paid you get to keep.
However, the amount you will receive depends on two things; house prices (how much you could sell your home for in future years) and interest rates.
If house prices fall, you or you heirs would receive less money from the sale of your home or even none at all. Likewise a rise in interest rates would also be detrimental.
No calculator illustrates these two, what-if scenarios. Therefore, when using one, be aware that it will show you what you’ll receive but not the amount of loan that will have to be paid back in say 5, 10 or 15 years from now.
This is why you should speak to your local originator (broker) as soon as possible. Don’t be blinkered by what you get now, but think about what you’ll be left with in years to come. And, don’t say it doesn’t matter because you intend to stay put in your home until you die and you don’t care about your heirs; circumstances change. You must put some thought into this aspect of your reverse mortgage right from the start. It’ll be too late after you take it out and are receiving money.
BRADY
While a free reverse mortgage calculator might be able to give you an idea of how much you could borrow, none will be able to tell you something that is far more important, and that is how much equity will be left in your home after a period of years. It’s crucial you are aware of this before you make any decision on whether to opt for this type of loan.
There are a number of calculators to be found online. However, you may find that the amounts illustrated differ from one website to another, even when the same dates and amounts are entered. If you are going to opt for either a Fannie Mae or FHA reverse mortgage, then the best (and free) reverse mortgage calculator can be found at either the AARP or National Reverse Mortgage Lenders Association (NRMLA) websites. Both are accurate, display identical figures and display most of the crucial information, such as how much you’d receive as a fixed monthly payment, a line of credit (and how much that line of credit would appreciate over 5 and 10 years for the FHA program) or how much you’d receive as a one-off lump sum.
But, if you opt for a jumbo program, you’ll need to use that company’s proprietary calculator. These calculators also give you the FHA and Fannie amounts though they tend to be slightly less accurate. The Financial Freedom calculator is the most widespread.
A reverse mortgage calculator works by using the equity value of your home, its location, your age (and partners), and current interest rates. It then performs the calculation and gives you an indicative illustration of what you’d receive.
What it won’t tell you is how much equity would be left in your home after a number of years. This is important. How this type of loan works is that the lender agrees to pay you a fixed amount over a period of time – usually as monthly payments. When you no longer live in your home, sell it or die, the loan – in its entirety – must be paid back. This is usually done by selling the home. Any money left after the loan is paid you get to keep.
However, the amount you will receive depends on two things; house prices (how much you could sell your home for in future years) and interest rates.
If house prices fall, you or you heirs would receive less money from the sale of your home or even none at all. Likewise a rise in interest rates would also be detrimental.
No calculator illustrates these two, what-if scenarios. Therefore, when using one, be aware that it will show you what you’ll receive but not the amount of loan that will have to be paid back in say 5, 10 or 15 years from now.
This is why you should speak to your local originator (broker) as soon as possible. Don’t be blinkered by what you get now, but think about what you’ll be left with in years to come. And, don’t say it doesn’t matter because you intend to stay put in your home until you die and you don’t care about your heirs; circumstances change. You must put some thought into this aspect of your reverse mortgage right from the start. It’ll be too late after you take it out and are receiving money.
BRADY
Apr
12
Can I get a refinanced mortgage if i start a home business with no employees and still work my regular job?
Filed Under Personal Finance | Leave a Comment
sammus asked:
I want to refinance my mortgage and I want to start a home business before doing so. It would have no employees and I would still keep my current job. My home business will not require any due balances or credit lines to increase my debt. Would mortgage companies see the worry that I would quit my regular job or would they trust that I would maturely handle the mortgage payments? In other words, would I have no problems getting refinanced under these conditions. My credit score is about 650 and I’ve been at my current job for 1 1/2 years but have had steady employment for a long time. I have also paid my mortgage on time for 12 months.
The reason I am asking is because what I will be doing requires a vendor license. Therefore, in my ssn, it would show the business based at my home address.
I am actually looking for a new mortgage loan, not a home equity loan or personal loan and I don’t need to borrow to pay debts.
JACQUES
I want to refinance my mortgage and I want to start a home business before doing so. It would have no employees and I would still keep my current job. My home business will not require any due balances or credit lines to increase my debt. Would mortgage companies see the worry that I would quit my regular job or would they trust that I would maturely handle the mortgage payments? In other words, would I have no problems getting refinanced under these conditions. My credit score is about 650 and I’ve been at my current job for 1 1/2 years but have had steady employment for a long time. I have also paid my mortgage on time for 12 months.
The reason I am asking is because what I will be doing requires a vendor license. Therefore, in my ssn, it would show the business based at my home address.
I am actually looking for a new mortgage loan, not a home equity loan or personal loan and I don’t need to borrow to pay debts.
JACQUES
Apr
9
How can I get a mortgage if I have credit score under 400?
Filed Under Renting & Real Estate | Leave a Comment
LadyCatherine asked:
Most of the mortgage companys I have tryed will not give me a mortgage because I have a credit score under 400. They say they will not help anyone with out having a credit score over 500.
Most of the mortgage companys I have tryed will not give me a mortgage because I have a credit score under 400. They say they will not help anyone with out having a credit score over 500.
I have a fourclouser on my credit and a really old credit card bill that I refuse to pay. Other then that every thing else on my credit report has been paid. Some late some on time.
I have tryed every mortgage company on line and the bank in my town.
I DO NOT want to get a credit card to ‘fix’ my credit history. I have had those and I do not do well with them. Or a store card either. Or a gas card.
I think things will stay on my credit report for up to ten years but I would like to know if there is a mortgage out there that will give me a mortgage now. Yes I have thought about rent.
Adam.. What is a a self certify, tracker based mortgage ?
ok OPEN:
Why jump all over me. I was just asking for help. I DO NOT THINK I KNOW IT ALL.
YES I have had a credit card and I have come to learn that I do NOT need one. I have a debit card Visa card and that is ALL i need.
How can I fix my credit with out findone someone to help me out. Things happen, I am NOT the only one that has gotten in this postion.
I want to respond to why I refuse to pay off the credit card that is on my credit report. I had a credit limit of 300$ It got up that high and I decided that I did not need it any more so I canceled it.
Come to find out a few months of ‘paying’ on it to pay it off the credit card co. was still charging ‘finance fees’ to it. after talking to them they informed me they could not completly cancel it untill it was at 0.
I told them the reason I canceled it was cause I could not affored it. To add charges to it would not help me pay it off.
I have spoke to other credit card co and have been told they can stop charging to it it they want.
The credit card bill has gone from 350$ to over 15 hundred dollars.
Pride or not I find this unprofessional and rude and that is why I refuse to pay it.
If they would agree I would pay the original 350$ if they would take off the rest of the ‘Charges’
TERRELL