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Better Customer Service

Choosing A Mortgage Broker – Part 4 – Better Customer Service

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Better Customer Service

Better Customer Service

Brokers Offer Better Customer Service

Choosing a mortgage broker just makes sense. Qualifying for a good home loan can be confusing. Mortgage brokers are trained and licensed to know how to get the best mortgage rates possible with simple mortgage guidance. The paper work involved in buying or building a new home can be overwhelming. Often reading the terms and agreements can seem like reading a different language.

Benefits of Choosing a Mortgage Broker

  • When using a broker to find a lender to finance your new home, you have someone who knows the language of real estate. They will know the terminology. A broker will know difference between fixed or adjustable rates and market fluctuations. They will know what a balloon payment is. PMI may be a term you have never heard of, but a broker know what it is and how to avoid it.
  • A mortgage broker is not trying to sell a certain financial institution’s mortgage loan. They work with several lenders to find the best mortgage terms for a new home purchase. When using a broker, you can apply for several financing options, with just one form.
  • You do not have to pay for the broker’s service; the chosen lending company pays most brokers. Like a finder’s fee. The lender, for bringing your business to their company, rewards the broker.
  • When using a broker, there are many lenders from which you may choose. A bank or other financial institution may have different types of mortgage loans, but do not have access to other loans or lenders that may have better terms.
  • If you have questionable credit, a broker can be extremely helpful in finding a mortgage loan. A broker has access to many types of loans from many different sources. Having a choice of private lenders and financial institutions with simple mortgage guidance, a home loan is within the reach of almost everyone.
  • Choosing a mortgage broker is the best way to get a mortgage with terms and conditions that you can financially live up to. It is the brokers job to offer the best customer service for you, not the lender.
  • A broker is more than a loan officer at a financial institution. A lender may not have experience in property investment specifically. Brokers often specialize in the different types of mortgages available.

Many shopping for a new home look to the guidance of a mortgage broker to find the best financing possible. They work to find the best loan with the terms that will match your budget. Buying or building a home using a mortgage is a huge step. It will take a large part of your personal budget to finance. A mortgage broker has the tools and knowledge to know where to shop for a home mortgage loan for any size budget.

Loan Options

Choosing A Mortgage Broker – Part 3 – More Mortgage Loan Options

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Loan Options

Loan Options

Loan Options: Brokers Have Better Access

A mortgage broker has access to several different sources for many loan types. Unlike a loan officer at a financial institution, a broker is able to work with any loan company. When looking to finance a newly constructed home, choosing a mortgage broker that has experience with construction loans is important.

Getting loan options for a newly constructed home is different than getting a loan for a home. There are several more steps to obtaining this type of loan. Choosing a mortgage broker to get through all the steps will make your new home dream come true.

What is a Mortgage Broker?

Using a mortgage broker is like applying for several loans, with just one person. Mortgage brokers have many different types of loans available. More than just a banker, a broker will have access to private lenders and many other types of loans to finance your dream home, and not leave you broke.

When looking into getting a loan to build a new home, a broker will do the loan shopping for you. You tell him what you want, how much it will cost and what you can afford to pay. The broker does the rest. When constructing a new home, there is always the chance the unexpected expenses will occur. A mortgage broker can often take care of the extra funding.

If you broker chooses a private lender, there will be more loan control. The decision is made right in the broker’s office, not in a boardroom, closed-door meeting where people who do not know you decide if the funding is approved.

When a broker lands a loan from a private party, the payments can be deferred until construction is complete. The loan will still be charged interest, but your payments will not start until the construction is complete.

When building a new home, it is important that you, the borrower, knows what is going on. After all, it is your money. Choosing a mortgage broker will help the process go faster and smoother. Brokers are able to find a loan deal that will meet your budget needs faster than you could on your own. Building or buying a home is a huge step. Finding the right loan on your is a lot of work. It requires you to be informed of all the changes in mortgage regulations, terminology and how the entire system works. Choosing a mortgage broker will make the process go faster and more efficiently. A broker will have the knowledge and the tools to find the best mortgage possible for your individual situation.

When considering a large loan to build a home, talk to a mortgage broker, they will help find the best loan options for you.

Better Rates

Choosing A Mortgage Broker – Part 2 – Better Rates

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Better Rates

Better Rates

Brokers Can Offer Better Rates by Shopping Around

Buying a house is a big project. Doing it alone is possible. If you know about mortgages and loans, it is a piece of cake. The reality is not everyone who purchases a home knows how it all works. For those who do not know the ins and outs of mortgages, choosing a mortgage broker to weed through the potential lenders and get the best mortgage lender with the best deal.

What is a Mortgage Broker

A mortgage broker is an independent loan agent. They don’t normally work for a particular lender, they have several lenders that they work with to get their clients the best mortgage possible They are licensed by the Nationwide Mortgage Licensing System & Registry (NMLS) to work with multiple lenders. A broker will handle all the loan applications for you and help the whole process move along faster and more accurate.

What Makes a Good Mortgage Broker

Finding a good mortgage broker is simple if you know what to look for. Here are a few things to consider when choosing a mortgage broker.

  • Ask for references. Better yet, ask around for a recommendation from someone who has used a good broker to purchase a home. A good broker will have several references that you may contact to vouch for his or her service. A good friend or family member will have had experience with a broker.
  • Interview a potential broker. Find out if they are up to date on the ever-changing mortgage laws. A broker must know what the rules are and how to work them to the advantage of the homebuyer.
  • Does the broker have an office and are they available to you for questions? A good broker will be available to his or her clients when they have questions or are viewing a potential home.
  • Make sure the broker has access to many mortgage lenders, not just one or two. To get the best mortgage deal, there must be choices.
  • When interviewing you will get a feel of how personable and sincere, the broker is. Even though the lender will pay the broker, he or she should still have your best interest in mind. They should care that they get the best mortgage deal possible for you.

These are just a few of the things that make a good mortgage broker. Ultimately, a mortgage broker will have access to better rates for mortgages that will work with your budget. Working with a broker will not cost more money, it will save money by landing a loan that you can afford.

Choosing a Mortgage Broker,

Choosing A Mortgage Broker – Part 1 – Basics & Licensing

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Choosing a Mortgage Broker,
Brokers Approved by the NMLS

In order to choose a mortgage broker, it is important to know what a mortgage broker is. It is not really a big mystery, but the mortgage broker is a bit of a misunderstood occupation.

Choosing a mortgage broker is a proactive step when shopping for a new home loan. A mortgage broker will be connected with many lenders and loan options. It is their job to find the best rates for your new home loan. A broker does not work for one mortgage company. Brokers have the ability to contact a large number of lenders that will have competitive rates for home mortgages.

What is a Mortgage Broker Q & A

1. How does a mortgage broker get paid?

A: A mortgage broker makes a commission from the lender. Lending companies pay mortgage brokers a percentage of the total loan amount. It does not cost more for the new home shopper to use the assistance of a mortgage broker. Some mortgage brokers do charge a small fee, but not many do.

2. Can a broker find a lender even if I have bad credit?

A: Yes (most of the time). A broker will have many lenders to choose from and many rates, depending on your credit history. The broker will find the loan that will work best with your budget and credit rating.

3. Will I save time using a mortgage broker?

A: Of course you will save time by choosing a mortgage broker. The broker does all the pesky paper work involved with applying for a mortgage. You will meet with the broker, go over your finances, fill out one form, and the broker does the rest.

4. What will a mortgage broker do for me?

A: A licensed mortgage broker will

  1. Find the home loan that will fit your budget.
  2. Negotiate the best loan terms.
  3. Handle the paper work when applying for several loans.
  4. Give you options and guide you to the best financial solution.

5. Does a mortgage broker need to be licensed?

A: Yes. All mortgage brokers must be Nationwide Mortgage Licensing System & Registry (NMLS).

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There can be hundreds of choices when it comes to finding the perfect mortgage loan. Using a mortgage broker will save you time and money by finding the right loan for you and your financial situation. A good mortgage broker will narrow your choices down to the lenders that will work the best deal for you. Since this is a free service more new home shoppers should consider using one to negotiate the many lenders that are clamoring for your business.

Looking to purchase a new home is a huge financial responsibility that should be taken very seriously. Utilize the free services that are available to you. A mortgage broker can save time and money when you are looking for a new home to purchase. Make sure the broker that you employ has a good record of accomplishment, is flexible, has appropriate licensing required within your area and can provide you with references. A good mortgage broker will have many lender choices available to find the best new home loan for you and your budget. 

what is mortgage insurance and how to avoid it

What is Mortgage Insurance and How to Avoid It

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what is mortgage insurance and how to avoid it

PMI – Mortgage Insurance

When purchasing a new home, it is important to become educated on what some terms and services really entail. One of the most important things you should know about is; “Just what is mortgage insurance?” Once you discover what it is, chances are you will then want to know; “How can I avoid it?”

Most borrowers purchase their home with less than the desired twenty percent. Most borrowers pay a monthly fee for not having the ideal down payment. Most borrowers do not even know they are paying for this option. Signing a mortgage to purchase a home is a huge step. As a responsible consumer, it is your responsibility to know what you are paying for when you sign the final ownership papers.

What is PMI?

Private Mortgage Insurance (PMI) is a fee some home loan lenders charge homebuyers for not having a down payment. The fees for this insurance vary from lender to lender. These fees can be quite excessive. In theory, once a homeowner has attained equity of 80% the insurance is no longer required. Many mortgage lenders do not drop this policy automatically when you have reached the 80% mark for equity. There are some lenders that require this insurance for at least five years.

How to Avoid PMI

  • PMI can be avoided. The number one way is to of course make sure you have the required down payment.
  • If you have been paying on your home for a while, talk with your lender and determine if you have reached the magic 80% equity threshold. As long as all other terms have been met for your lender, the PMI will be cancelled.
  • Refinancing is an option at 95% equity. When refinancing, you will have the option to pay a onetime Premium Mortgage Insurance payment.
  • Home improvements can add up. If you are making your payments on time, every time, and this is the only way you are adding equity to your home, it could take a while to get to the 80% equity needed. There are many home improvement projects that will increase the value of your home and property.
  • Keep an eye on area property values. If they are rising, refinancing at a lower rate will also eliminate the PMI payment included in your mortgage payment.

PMI is Not Buyer Protection

Even though it is insurance, it does not cover the borrower. This insurance is designed to cover the lender in case of default. It will not take away any responsibilities of the borrower for the payment of the loan. The insurance is to protect the lenders investment. The most common reason PMI is attached is because of a low down payment or a low credit score. It can often mean the difference of qualifying for a loan or not.

Of course if paying this insurance is your only option, knowing what it is and how to eliminate it will help in future financing options. The most important thing in every mortgage deal is to be sure you can afford the payments. A PMI payment could be 200.00 or more per month of your required mortgage payment.

Many states have different remedies for those paying PMI, or are upside down on their mortgage. It is important that you, the borrower, become informed and understand what is available and how you can benefit.

Save for a Down Payment

How to Save for a Down Payment

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Save for a Down Payment

Save for a Down Payment

How to Save for a Down Payment

Purchasing a new home can be a long journey. Many steps lead toward getting the perfect mortgage for the perfect home. One of the most important steps is deciding how much you should save for a down payment on the mortgage. Also, this step can take the longest time.

Speaking to a mortgage broker or a realtor will help knowing how much to save for a mortgage down payment. The answer will have many variables including your credit score. The lower your credit score, the higher the money down will be on a home mortgage.

Why Save for a Mortgage Down Payment

There are many reasons having a down payment will help you with a mortgage. Many lending companies offer better loan terms and lower payments with a larger down payment. Much like purchasing a car with a large down payment, putting the most money down on a home mortgage is the best idea.

Taking the time to save for a large down payment is worth it. The housing market will always be a buyer’s market. There will always be homes for sale. Many will finance with an affordable mortgage with or without money down.

It can be difficult to know how much to save. The general rule of realty is a 20% down payment will lower mortgage payments. If the total purchase price of a home is $100,000.00, a good down payment would be $20,000.00. This brings the total amount to be financed at $80,000.00. This allows the lender to offer loans with better terms and a lower monthly payment. Of course, you can save up more, but the 20% rule is a good starting point.

Not only can a down payment lower monthly payments, it can save up to 10% of your total financing. There are many more opportunities to benefit from answering the question “how much should I save for a down payment?”

Putting a down payment on a mortgage will also eliminate the Primary Mortgage Insurance (PMI). PMI is insurance that the lender charges to insure a high-risk loan. The monthly fee for PMI can be large. Avoid the higher payment with a down payment.

How to Save for a Down Payment

How you save is up to you. There are many ways to save money when it is necessary. Simply putting money back every time you get a paycheck will help. Putting that money into an interest earning account will help it grow as well.

Use the 20% rule when saving if you can. Save 20% of your income every month. If your income is $2000.00 per month, try to save $400.00 of that for a down payment on your dream home.

Cut corners at the grocery store, eliminate television service and save every penny you can to purchase your new home.

Working with a Professional

Working with a Mortgage Professional: Why Quality Matters

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Working with a Professional

Working with a Professional

Working with a Mortgage Professional: Why Quality Matters

The mortgage crisis of the last few years has caused an upturn in people shopping for a new home loan, or refinance option using some type of mortgage professional. There have been so many changes affecting the mortgage lending industry it is almost impossible to keep up with it all. Most changes are made to protect the consumer, but in the end, the lender is insured protection as well.

Mortgage professional will deal directly with mortgage loan originators and barter the best terms and payments for you and your personal financial situation. The broker or other mortgage professional will be up to date with all of the changes in the mortgage loan rules and qualification requirements.

New Mortgage Rules

To make the loan application process go as fast and simple as possible, the borrower should be prepared to meet the new loan requirements.

  • Proof of all assets and income. A borrower must show their entire net worth and be able to show the financial ability to repay the loan.
  • Proof of employment. Not only will proof of employment prove that you can pay the loan payments, it allows the mortgage loan originator to judge if you are in a stable position with your employment. Individuals who are self-employed must show a two-year income history.
  • Proof that the lender has the ability to pay homeowners insurance and property taxes. These extra expenses are often included in a mortgage payment. When not part of the monthly payment arrangements, the borrower must show proof that they can pay the additional expense of being a homeowner.
  • Proof of any additional mortgages that you or your business holds on other properties. While this should be included in the proof of all assets and income, it is important to mention again. The borrower’s payment record on other loans can often determine the outcome of a mortgage agreement.
  • Proof of any other child support or alimony payments that were not included in income or expenses. This is an income, or an expense. It does figure into the borrower’s ability to pay.
  • Be prepared to prove that your Debt to Income (DTI) ratio is below 30 percent. If 45 percent of your income is already paying debt and living expenses, chance are very slim that you will qualify for a mortgage loan.
  • A good credit history and score is required to land a home mortgage. Before applying for any loan, consumers should look over their credit report and know their credit score. There are many things that will decrease a credit score including having too many credit cards or late pays. If your credit score is low, investigate what can be done to get it higher.
Mortgages Offer Tax Benefits

Mortgages Offer Tax Benefits

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Mortgages Offer Tax Benefits

Mortgages Offer Tax Benefits

Mortgages Offer Tax Benefits

There are benefits to owning a home, especially at tax time. Homeowners can take a deduction of their interest and property taxes. In the past, taxpayers had to file the itemized tax forms to get the credit. In 2013 this deduction is available for all tax payers who own a home. There are benefits for renting, but the benefit from purchasing your home allows for a bigger write off of mortgage interest.

Owning your own home is a big responsibility. The government rewards homeowners with large breaks on their tax bill every year. Purchasing a home is ideal for families or even singles, which are staying in one area for a long time. Paying rent makes more sense for those who move around frequently, or who are living where they do not pay rent.

Real Estate Write Offs

Mortgage interest is not the only tax break that a homeowner is entitled to receive from the US Federal government.

  • Some mortgages come with points. This is a benefit to the lender, and one for the borrower. One point is equal to 1% of the loan total. These points are tax deductable for the homeowner.
  • Property taxes are also deductable. All states are different. Some charge personal property taxes. The rate your state charges will vary. This too is a real estate write off. The amount that can be claimed will also vary by state.
  • Did you make home efficiency upgrades to your home? Home improvements such as adding insulation, roof and upgraded windows may be tax deductable.
  • Did you sell your home? You may be able to deduct a certain amount of capital gains profit.
  • Take the home office deduction if you work from home. There are restrictions and they do vary by state, but this is a deduction that a homeowner with a home business can take.

Homeowners receive the maximum deduction for the luxury of owning their own home. There are more deductions during the first year of homeownership. Always check with a tax specialist to determine your deductions.

Tax time comes but once per year. Getting a big refund from the federal government is icing on the cake for homeowners. Some deductions may only be available to taxpayers who itemize their deductions. The new tax regulations are allowing short form filers to take certain homeowner deductions. These may vary by state. Before taking any tax deduction, check with a professional realtor or tax preparer for the most recent deduction rules.

The important thing to remember is that there are financial and tax advantages for owning your own home. Most homeowners have a list of real estate write offs that can be claimed on taxes. Get the most out of your homeownership by collecting all the credits that are due to you.

(DISCLAIMER:  WE ARE NOT TAX PROFESSIONALS, THIS IS NOT TAX ADVICE!!!)

Adjustable Rate Mortgages Explained - Not Always a Bad Thing

Adjustable Rate Mortgages Explained – Not Always a Bad Thing

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adjustable rate mortgages explained

Adjustable rate mortgages explained!

One of the choices a new homeowner will have when applying for a mortgage is if the interest rate is to be adjustable or fixed. Adjustable rate mortgages explained in simple terms (or ARM) means that the interest rate of your loan will adjust with the national average. A fixed rate mortgage has a fixed interest rate that does not change.

There are debates on either side of the adjustable rate mortgage option. It is important to understand what a purchase of a home with adjustable rate mortgage really is to decide if it is a good choice.

Types and Limits of ARM Rate Adjustments

The interest rate for a new ARM is typically lower than a conventional fixed rate loan. It is adjusted with either one-year treasury rate, LIBOR index or the COFI index. The rate does have a limit, so there are no worries about it getting terribly high. In most cases, the rate cannot increase by more than two points per year and no more than six points for the life of the home loan.

When homeowners purchase a home with adjustable rate mortgage the interest rate begins lower than the index followed. Timing for rate adjustment period will vary by lender. The most common ARM terms are for adjustments once per year. Some lenders will adjust monthly or up to several years, depending on the life of the loan.

Some lenders use an interest only program for a home loan. The terms of this loan the borrower will pay only interest payments for the first five years of a loan. After five years, principal is added to the monthly payment. As this is an adjustable interest rate, the payment could be considerably higher. Many homeowners who choose this option will refinance before the initial five years has ended.

Pro’s and Con’s

This type of mortgage appeals to borrowers with lower income or credit rating. The ARM rate begins low allowing for lower monthly payment options. Lenders must apply the “Ability to Pay” rule to insure that the borrower can afford to pay the loan payments for the life of the loan, including higher interest rates. Using this rule protects the borrower from over spending and going into foreclosure.

With adjustable interest rates, payments can often rise. A borrower must be prepared to pay higher monthly payments as the loan matures. Depending on the terms of adjustment, some borrowers may owe more than the loan value at maturity. Some ARM terms include penalties for the borrower making more than the actual payment.

Homeowners with an existing higher fixed rate mortgage will sometimes choose to refinance to an adjustable rate mortgage when they need to lower payments or to avoid foreclosure. Refinancing for better terms is common with long-term mortgages. Switching to an adjustable rate will often result in lower monthly payments.

Get Pre-Approved for a Mortgage in Michigan

Get Pre-Approved for a Mortgage in Michigan

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Get Pre-Approved for a Mortgage in Michigan

Get Pre-Approved for a Mortgage in Michigan

Get Pre-Approved for a Mortgage in Michigan

A house hunt is exhausting and demanding. Visiting multiple homes and finally selecting one can be a chore. The truth is though, many people put the cart before the horse and begin house hunting before being per-approved for financing. Keep in mind obtaining a pre-approval for a mortgage will not only save you time, but also put you in a stronger position when buying the house. Many people question the importance and need to do so and this article will guide you on this vital step.

The Importance of a Pre-Approval of a Mortgage

First and foremost, a pre-approval of the mortgage helps people determine if they are totally sure of being able to afford a house.Secondly, one gains more time for the often bumpy loan process. If you wait to get an approval until after you have an accepted offer on a home, you’ll be rushed and may have to fulfill your financing conditions within a short window, maybe as little as one week. Thus it always advisable to get the initial process started up front too avoid complications and ensure a smooth sailing home buying process.

The Difference between Pre-Qualifying and Full Approval

Many people often get confused between these two terms. They think that Pre-Approval (Pre-Qualifying)and Full Approval of the mortgage are one and the same, which is far from the truth. Pre-Qualifying for a mortgage is a process done only on the basis of what the client reveals to its loan officer about various financial aspects such as their earnings, credit score, total assets, the amount available for a down payment, etc. This documentation is not reviewed by and underwriter during the pre-approval process like it is later when full approvals are given. It is important to understand that although a pre-approval is a step in the right direction, it is just a step and is not a guarantee of funding.

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