Applying For a Mortgage

By Anita Johnston, Staff Writer

Once you begin the process of applying for a mortgage you may begin to feel overwhelmed; however, understanding what is involved and what you need may help lower your stress levels a bit. To help you get started here is a list of things you will need to know before you start.

You Must :

  • Know your budget.

  • Know and understand your credit history - beware of any credit problems.

Things you will need to take to the lending company:

  • Name and address of your bank.

  • Your account numbers.

  • Bank statements for the last three months.

  • Investment statements for the past three months.

  • Pay stubs, W-2 withholding forms, or other proof of employment and income.

  • Balance sheets and tax returns if self employed.

  • Information on any debt with account numbers and the amount due.

  • Divorce papers, if neede.

You will also have to sign different authorizations that will give the lending company permission to verify your income, bank accounts and other pertinent information. You will also have to give the lending company any information on any offers for the purchase contract and a receipt or deposit that can be given to the seller.

If is generally better if you can get a prequalification or pre-approval prior to finding that dream home. This way you will know exactly what you can afford and not be dreaming over homes that are above your price range.

The most common way in which lenders determine how much you are eligible for in the way of mortgage payments is to take your monthly housing expenses which included the mortgage principal and interest, real estate taxes, and the insurance on the home should not go over 30% of your gross income.

However, remember, just because a lending company believes you can pay a certain amount in mortgage payments monthly does not mean you actually can. You should know what you feel comfortable paying per month and stick with that amount.

Prequalification only means that this is how much mortgage you can get however - this is not a pre-approval. A pre-approval gives you more credibility as a buyer and lets the seller know you can purchase their home.

After you have applied for the loan, within three business days the lending company must provide you with mortgage interest rate or the annual percentage rate. You must also receive an estimate of the closing costs, and a government publication explaining the costs.

Normally, if you do not put down 20% for your down payment you will have to also carry private mortgage insurance, so consider this when you are applying for a mortgage loan.

Financial Tips for Women

By Anita Johnston, Staff Writer

For many centuries women were seen as dumb, being unable to make their own financial decisions and confined to waiting for the man of their dreams to help them plan and secure their future. Fortunately, times have changed and women are capable of taking any business and financial challenges, even against all odds.

Today, many women are more capable than men in different areas, including money management. However, a typical woman's income is lower that what a man earns and women get fewer assets after a divorce than their spouses in the inverse case.

According to the Women's Institute for a Secure Retirement (WISER), 3 out of 4 working women earn less than $25,000 year, half of them working in traditionally female positions, with relatively low paid jobs and no right to pensions or retirement benefits. Women spend around 7 years out of work to have and raise children, lowering their Social Security benefits as well.

Statistics reveal that women’s earnings average 74 to 76 cents for every dollar earned by a man, resulting in a loss of over $250,000 during their lifetime. After a divorce, women usually get the children, a situation that lessens their incomes even more. However, following simple tips, any woman can ensure her prosperity by putting the odds in her favor.

The U.S. Department of Health and Human Services has found that only 1 out of 8 elderly women live in poverty, in comparison to 1 out of 12 men, as of 2003 figures. Because women live longer, if you are a woman wanting to secure your future, the sooner you begin to plan, the faster you cut out those differences.

The first step is by taking control of your finances. For a single woman this is not hard to achieve, but if you are married learn to actively participate in managing the family finances or take the leading role, if you can. Considering that 50% of marriages end in divorce this role will prepare you, financially speaking, if your marriage fails.

Invest more is your only option to save the difference between what your spouse earns and what you get. Those discrepancies will be tremendous over time when comparing your retirement benefits. Investing in your savings, aggressively, is the only way in which you can get the larger retirement benefits that you will need.

A woman who takes in average 7 years off from the working force should be prepared to receive only half of the pension benefits received by another with the same years of uninterrupted services. However, this pension will always be lower that the pension received by a man for the same period.

Your pension or social security benefits will add some money to your finances in the future, but not enough to depend on this income alone. In addition, keep retirement as your most precious investment. It is estimated that men save 10% of their gross income for retirement, because you will live longer and earn less, save 12 to 15% instead.

Do not take out of focus your present lifestyle and understand your spending habits to reduce your debt, if it is not possible to get them totally paid off. It is advisable to pay off high-rate debt first or transfer high-rate debt to lower-rate credit cards. Get financial advice if necessary, perhaps from your husband who will be pleased to help you.

Setting your financial goals and training yourself to become financially independent is something that you would have to learn as early as your teen years, but it is never too late to start during any stage of your life. As women get older, fear may be an obstacle to take new challenges, but you must dare and go ahead.

Many women have found that one of the major challenges and yet best investments they can do is to buy a home, even if they move to their husbands' home after marriage. You may learn that your home is your only asset after a divorce or the death of your spouse; you need to learn how you can keep your home in the event that you can no longer afford the payments.

First Time Mortgages

Your First Home Purchase? Become an Informed Consumer

By Sharon Secor, Staff Writer

Setting out to purchase your first home can be quite intimidating, considering the incredible variety of mortgage loan options that are available on the market today. However, arming yourself with good information at the outset of the home buying process can help you approach the task with confidence. Educating yourself on the many different types of loans and programs available for first time home buyers, and the details of the loan application and approval process is a great way to start, leaving you much less reliant on the advice of others as you make these important decisions about your future.

Purchasing a home is a financial commitment that can extend over thirty years of your life, making it crucial to research your options with an eye towards the long term implications. The first step in the process is a thorough evaluation of your financial situation. A clear picture of your credit standing and financial obligations, present and future, can help you decide what sort of monthly payments you can comfortably afford, as well as aid in determining the amount you can promise as a down payment on your new home. A current copy of your credit report is a must, eliminating the possibility of unpleasant surprises when your history is checked by potential lenders.

Errors on credit reports are a fairly common occurrence, and are better handled before lenders are involved. This financial research will prepare you for the next step, which is finding the right mortgage loan to suit your needs, and getting pre-qualified for it so you can begin your search for a new home.

Common Home Loan Options for the First Time Buyer

Many home loans are available that are tailored for the needs of the first time home buyer. Among the most common of these programs is the traditional FHA loan. The Federal Housing Administration, an arm of the Department of Housing and Urban Development, was established specifically to assist first time home buyers, especially those of moderate or low income, in obtaining home loan funding. FHA loans are available from most banks and financial institutions and have the advantage of requiring only a 3 percent down payment, much less than the typical fixed rate home loan.

FHA will also work with state and local housing programs that help with down payments and closing costs, and will allow your down payment to be made by a relative or assistance program, options that are not available with most conventional fixed rate loans. The approval process can also be less stringent than many other loan types, as repayment is guaranteed by the federal government.

Conventional fixed rate loans are another option, among the most commonly used financing alternatives for home buyers. 30 and 15 year terms are most common, but fixed rate loans are available with 40 to 50 year terms in some markets. With any fixed rate loan, the interest rate is locked in at the outset, and remains stable throughout the term of the loan regardless of changes in the market rate, keeping payments on principle and interest consistent from start to finish.

Adjustable rate mortgages, or ARMs, are another common type of home loan. These are available in a number of forms, all with interest rates that are raised or lowered at certain intervals according an index, keeping pace with changes in general market rates. Generally, interest rates are adjusted at intervals agreed upon in the original loan contract, and often there are caps placed on the amount the rate can be changed at each interval. Each adjustment made to the interest rate of the loan changes the monthly payment the borrower must meet, the payment rising as rates trend upwards or becoming more affordable as rates fall. Terms and features of ARMs vary with each lender, making careful research and comparison is necessary to ensure a loan that will be right for your financial situation.

Each of these types of home loans are offered by a variety of lenders, each one with its own terms and conditions. Comparison shopping and good information gathering are the keys to finding the loan that will best suit your needs. The loan with the lowest initial interest rate is not always the best or least expensive over the long run, so be sure to read the fine print and evaluate its implications over the term of your home loan before any contracts are signed. With time invested in research and comparison, you can find a home loan that will make your dreams of a new home a reality, giving your family peace of mind and financial security well into the future.

Types of Mortgages

By Anita Johnston, Staff Writer

The finance market has a number of options for borrowers as far as mortgages are concerned. Each option can be adjusted and readjusted in a number of ways to suit the individual needs of a borrower. That presents a really long list of mortgage choices.Here, we briefly discuss a few types of mortgages that are available to you.

Fixed Rate Mortgages (FRM) - Mortgages originally started off with fixed rate mortgage in which the interest rate remains fixed throughout the life of the mortgage

The borrower pays the same rate of interest on thse last month of the loan term that he pays on the first month as well as the months in between. Nearly 75% of the mortgages are fixed rate mortgages.

The benefit of a fixed rate mortgage is that even if there is an increase in the bank rate the interest rate for the mortgage does not increase. Similarly, there is a disadvantage also. If the bank rate falls, the borrower is still charged the fixed rate of interest thereby denying him any benefit of the decrease in the interest rate.

Adjustable Rate Mortgage (ARM) - Adjustable rate mortgage is the type of mortgage where the interest rate charged varies according to the variation in the bank rate. In ARMs, there is an initial period where the interest rate is fixed and after that, the interest rate varies according to the bank rate. The lenders charge 1-2% higher than the bank rate.

Option (Flexible Payment ARM) - This type of mortgage is characterized by an interest rate that adjusts monthly without any adjustment caps. The initial monthly payments are very low, which rise dramatically later on.

Balloon Mortgage - Balloon mortgage is a 30 year fixed rate mortgage that requires a large final payment (large like a balloon) to be paid usually at the end of 5, 7 or 10 years. If a borrower expects a large sum of money by way of bonus or retirement benefits to clear off the large balance of payment, this method of mortgage can be chosen. In the event of failure to pay the balloon amount, the mortgage may be converted in to conventional fixed rate mortgage.

Biweekly and Weekly Payment Mortgage - These types of mortgages reduce the term of the loan and save money. Payment is made every two weeks in biweekly mortgages.

Bimonthly Mortgages - Payment made twice every month, this type mortgage only reduces the payment of a 30-year fixed mortgage to 29 years and 11 months. It saves very little.

FHA Mortgage - Strictly speaking, this is not a form of mortgage but only an additional feature in a mortgage where the lender is assured of payment in case the borrower defaults.

VA Mortgage Loans - Like FHA, VA insures lenders against borrower’s (war veterans) default.

Shared Appreciation Mortgages - The City of Burbank offers a 30-year second mortgage loan with zero interest and payments for the first five years and for the rest 25 years a payment at 5% interest. In exchange, City of Burbank charges a share of the appreciated value when the house is sold.

Interest-Only Mortgage Loan - Interest only mortgage means only interest is paid in the first few years of the mortgage without reducing the principal. This may sound attractive but it is really costly for the borrower over the long run.

For example if a mortgage has interest only period of five years in a 30 year term mortgage, after five years of paying interest alone the borrower has to pay principal and interest for the remaining 25 years. The amount saved by not paying the principal for the first five years is far lesser than the extra amount the borrower pays for the 25 years.

Uses and Dangers of Payday Loans

By Anita Johnston, Staff Writer

Payday loans are also popularly known as a paycheck advance, but more often cash advance, this term is also applied to a financial operation where cash is provided against a prearranged line of credit. Payday loans are given in cash and secured by a borrower's post-dated check that includes the original loan principal and accrued interest up to the due date.

The reason why these loans are called cash advance is that the maturity date generally coincides with the borrower's next payday, when the lender can process the check. Some payloads are granted with an arrangement to make an electronic withdrawal from the borrower's checking account on the maturity day.

A large number of states in the United States have usury laws forbidding interest rates that exceed a certain APR limit. Lenders operating in these states fund the granted loans through the service of banks chartered in a different state, as this is allowed under the legal doctrine of rate exportation.

Usury laws were established by Marquette Nat. Bank vs. First of Omaha Corporation. The Law states that any loan is governed by the laws of the state where a bank is chartered in. This is useful for payday lenders, because a majority of them operate small stores or franchises, although there are a large number of financial institutions that also offer their own version of payday loans.

Some companies, particularly those income tax related, offer "refund anticipation loans" for tax fillers, and banks have a payday loan model called "direct deposit advance" for those customers whose paychecks are deposited electronically. This type of loan offers to consumers a predetermined, amount of cash advance, applying a fee between 10 to 20% of the loan.

Widely promoted as the fastest way to obtain cash, payday loans are costly in comparison to regular loans. Although, many people pay the price because in many cases there are no documents to fax and the approval is almost instantly, and even faster throughout the Internet because of it is granted via electronic deposit.

The amount of money that you can ask for varies from lender to lender, however not exceeding the $1,500 because this is just an unsecured, short-term cash advance until your payday to cover unexpected expenses, avoiding the high costs of bounced-check fees, which usually carry late payment penalties.

A payday loan can be received in cash, check, wired to your bank, or when it comes to electronic bank deposit to either your checking or savings account, and people can apply for a payday loan as many times as they need an immediate or urgent amount of cash. Payday loans are short-terms loans that must not however be used repeatedly from payday to payday.

Although you can apply over and over, a repeated payday loan may lead you to serious financial difficulties, hitting with 650% APRs over time. Jean Ann Fox, CFA's director of consumer protection said, "Internet payday loans cost up to $30 per $100 borrowed and must be repaid or refinanced by the borrower's next payday”.

When the payday is in 2 weeks, a typical $500 loan may cost you $150, so $650 will be electronically withdrawn from your checking account on the payday. Although the application forms online requests personal information, Social Security Numbers, bank account numbers, and employer information, there is no need to fax documentation.

The apparent benefit may become a headache. "Internet payday loans are dangerous for cash-strapped consumers. They combine the high costs and collection risks of check-based payday loans with security risks of sending bank account numbers and Social Security Numbers over web links to unknown lenders." according to Ms Fox's experience based on a survey led by the Consumers Federation of America, (CFA)

How to get the best mortgage rate quote

One of the biggest mistakes that those seeking a mortgage do, is hold to the impression that you, as a borrower, have no influence on attaining the rate that you desire. Anybody seeking a mortgage must do his homework before he begins to solicit for a mortgage rate quote. It is primarily your credit score that decides what mortgage rate quote is given to you and improving your score should be priority number one for those seeking good mortgage quotes.

Beginning preparations for mortgage quote attainment should begin months ahead of time when you begin to follow good financial habits and clean up your credit report as early as six months before getting a mortgage loan. To begin, you must request for a copy of your credit report from a credit reporting agency (many of which are available for free online) and clear out most of the damaging entries. Having noted the problem areas in your report, you should begin the process of clearing not only simple mistakes like a wrong address but also more serious ones like marking a timely payments as late. Pursue your creditors and the credit reporting agencies to make all the necessary corrections. Make a note on your report with regard to defaults that cannot be removed but can be explained. After fixing some of the smallest problems, the next step is to improve your attractiveness to future lenders. The first and most important path here is to cut up your credit cards. By targeting your credit cards and otherwise reducing your monthly liabilities, your debt-to income ratio will appear more attractive to lenders and help you get the mortgage quote you desire.

When you compare rates, make sure you are considering loans that fall in the same category. Add all incidental fees like underwriting fee, administrative fee or documentation fee that your lender charges you to your mortgage rate to get the real cost. Finally, remember that reputation matters, good lenders will always have a physical address, provide good customer support, will reveal all terms and conditions and will never make you sign a blank form.


How to get a cheap mortgage quote

With scam offers abounding all over the lending community, it is difficult for individuals to balance the need for a price conscious mortgage while still attaining a product from a lender they can depend on. So lets assume youre going to purchase a home and you need a get a mortgage. But where do you turn for a cheap mortgage quote?

The first step in attaining the best mortgage quote for you is to prepare all your personal and property financial information. This means compiling things like your employment history and income taxes for the last three years. It also means putting together a folder with everything from past leases on your home, to recent appraisals as to its value. Once you have compiled all this information it is time to approach lenders.

Note that I said lenders and not lender. When trying to attain a mortgage the first rule of thumb is to shop your mortgage around to at least four lenders. While the mortgage industry is guided by financial figures, it is still very much an industry motivated by flux and by personal impressions. So going to a single lender will not normally give you a complete picture of what the lending market will bear for your lending needs. Rather, by shopping your mortgage around to a wider variety of lenders you are more likely to attain the cheap mortgage quote you desire. But that does not mean just going to the first four banks on the way home from work.

Rather, you should choose three banks from different lending areas. That means, you should choose one local bank, one national lender, and one online lender. Whichever of these three comes in the best, you should get one additional mortgage quote from another lender in that industry. At this point you can be relatively confident that you are getting a fair, if not always the absolute best rate.

Shopping around your mortgage quote to a wide variety of lenders while still keeping the total number of loans requested low will allow you to achieve a balance between time and money. Attaining a low priced mortgage quote is certainly a daunting task, especially the first time you do it. But because of the volatility and diversity of the lending market, it could be the one of the best financial investments you ever make.


How to get a fixed rate mortgage quote

A variable interest rate mortgage quote can be great in the low interest years, but with any long term home mortgage, it is certain that there will be periods of high interest rates. Because these periods can be so devastating to homeowners, many have the foresight to choose a fixed rate mortgage for their home. Assuming you to be in this group, the next obvious question is, how to I get a fixed rate mortgage quote? The answer is rather simple.

The first step is to prepare all your pertinent financial and employment information. This means not only a copy any previous leases that you have held on the home, but also the purchasing agreement, any appraisals that have been done on the home, as well as your personal employment information. Attaining a fixed rate mortgage quote is just like any other mortgage quote insofar as you need to present an organized case for why you as an individual and the property in general are a good investment. What is unique about a fixed rate quote is that you also have the added risk of the market. If the interest rates climb you will win out by having a fixed rate mortgage while the lender will lose money. Consequently, with a fixed rate you are not only convincing the lender of your creditworthiness, but you are also dealing with the lenders predictions regarding future interest rates.

After you have prepared your financial and employment documents, you will need to decide who to contact for the loan. The key here is to paint with a wide brush. That is to say, that a smart approach is to meet with a wide variety of fixed rate mortgage lenders. That list should include a couple of the big house online lenders, your local banker, and a larger national lending company. This will not only allow you to cover all your bases as far as different types of lenders and the different benefits each is able to offer, but it will also enable you to simultaneously get and weigh multiple offers.

A good fixed rate mortgage can offer you the benefit of a stable and reliable monthly mortgage. By taking the most basic steps to ensure that you are able to attain the best mortgage that the market will bear, you can further your own financial and home goals.

How to get a refinance mortgage quote

So you have decided you want to refinance your home. Whether you are trying to take advantage of a lower interest rate, improved credit, or simply want to cash out on some the equity you have put in your home, the steps necessary to get a refinance mortgage quote are the same.

Before you seek out a lender, the first step in attaining a refinance loan is to make sure you have all your papers in order. It may seem surprising that in a world as regulated as the banking industry is, that appearing organized matters, but in truth it is still vitally important. Individual bankers, particularly those dealing with figures of one-half million or less (a typical home refinance) are given quite a bit of leeway when it comes to deciding whether to move on a loan or not. While there are certainly some guiding metrics, the refinance loan industry is still driven to a degree on personal impressions and confidence.

So, now you know its important to be organized, but organized with respect to what? The first thing any refi lender will need is all the financial information pertaining to your current lease. That includes of course an actual copy of the lease, as well as any and all payment receipts you may have, along with explanations as to any late payments in the past. In addition, you want to have available your employment information, along with that of anyone else contributing to the lease (wife, kids, family member).

The key to remember in attaining a refinance mortgage quote is that the banker is trying to decide if you personally and your property specifically are a good risk to take on. So, information regarding your employment is pertinent insofar as it helps prove that you are stable and that you will be able to pay the bills each month. That will cover the personal aspect of the loan, but it does not speak to the property itself. For that information you will need to provide your lease information, as well as any appraisals done on the house. This will give the banker a better idea of the value of the home and of the existing lien on the home.

Once you have all the necessary information in order, are versed in its contents so that you are able to discuss each item confidently, you are well on your way to attaining a good mortgage refinance loan and to meeting your financial goals.

Get the most out of your online mortgage quote

For those considering a mortgage loan, browsing the Internet is a great alternative to approaching traditional mortgage brokers. While these lenders do not always offer borrowers the best terms, online mortgage companies can provide useful preliminary information to all borrowers, and some will find their terms quite excellent.

In fact, the online mortgage quote that you request for will probably be lower than the more traditional one you receive from your local brick-and-mortar lender. That is because minimum office overheads and complete automation give online mortgage companies an edge over traditional ones, often translating their advantage into competitive pricing for your loans.

Most online mortgage comparison websites start off your search by giving you generic quotes from different lenders based on certain primary information without really pulling out your credit report. However, it goes without saying that your credit report plays a significant role in getting you the best quotes, so spruce it up before requesting for more accurate rates.

It is advisable to compare quotes of at least three different lenders since at times there can be much as 5% difference in the rates. As you search you will find that almost every lender is offering at or near the same rates. But you need to remember to add the brokers fees and other points to the cost of the mortgage, and you will find that the divergence between a good loan and a bad one are really quite extreme.

Once you narrow down your choice, additional information on your employment history, the location of the property and your detailed credit report will get you a more specific online mortgage quote. However, before you make any final decisions, ensure that the lender has a physical address, provides all information on the mortgage and gives good customer support. If necessary, check its reputation with the Better Business Bureau and make sure that the terms they are offering are genuine.

Tips to get the best home mortgage quote

A home mortgage loan implies a long-term liability that may require you to exercise financial discipline for as long as 15 to 30 years. Since interest rates affect the monthly mortgage payments, finding the optimum home mortgage rate quote becomes imperative.

It is advisable for borrowers to work out their long-term financial capability. This involves first asking difficult questions like are there any other long term obligations, how much monthly debt can the borrower confidently afford, and for how will this affect future plans in years to come.

As the rule goes for every kind of mortgage, and no less for home loans, a borrower must begin by cleaning up his credit report. Start with making timely payments and updating the report with every positive detail. Unfortunately, it is not rare to find errors on your credit report, fixing these errors, not to mention taking pro-active steps to get legitimate blights removed, can radically improve ones credit.

For a lender to give the best home mortgage rate quote, a borrower must inform him of all his financial activities that speak of his paying capacity in the years to come. These include debt-to-income ratio, down payment capacity, and how much risk is he willing to take. With more income, less debt, a greater down payment and higher risks, the interest rates go down. Having all this information worked out to the best of your ability, when you speak to lenders indicates a responsibility and preparedness that bankers will interpret as making you a good lending risk.

While these discussed steps applied primarily to fixed rate mortgages, adjustable rate mortgages offering low interest rates may be suggested by your lender if you do not plan to keep the house for too long. Giving all your financial details enable lenders to tailor a loan that meets your specific need. A reputable lender will always tell you the annual percentage rate (APR) of your home loan. Remember of course, however, that it is not always in the interest of lenders to offer you the best terms, so shopping around for the ideal home mortgage quote is always a necessity.

About Me

Welcome to my Blogs.I'm provide sufficient great articles information,tips low-cost,frequently asked questions and guide to buying.Health Insurance,Life Insurance,Home Mortgage Rate,Home Equity Loan,Home Refinance,HELOC and Home Equity Poor Credit.Nice to meet you.