Home mortgage loan

If you're considering a mortgage loan, you might be wondering what options are available. Today, there are many options besides the conventional methods of obtaining a mortgage. Whether you're applying for a home loan for a new home, a refinance loan, an equity loan, a HELOC, or a reverse loan, you should be aware of what each loan entails.



Buying a New Home



When buying a new home, you'll need to be approved for a new home loan through a lender, or ask the seller to finance the home for you. Before applying at a lending institution, research your options. Determine how much "house" you can afford. Use online mortgage payment calculators to figure what the payments would be for different home loan amounts. Then, you'll know what price range you can shop within, and whether or not you can afford the payments. Remember, your income/debt ratio must fit within the lender's guidelines to qualify for a conventional loan.



Healthy and "Not-so-healthy" Credit Scores



If you have an excellent credit score, then your income/debt ratio along with the investment capital you have available will be the main factors in determining home loan availability. However, if there are flaws in your credit history due to non-payment or repossession, you will be limited in the type of home loan you can obtain. But don't lose heart. Many homebuyers whose credit is "not-so-great" do qualify for non-prime loans. Non-prime loans can be a bit higher-priced than prime loans or have higher interest, but you might still be able to buy your dream home!



Creative Financing



Don't settle for conventional loans if you don't have to. There are many creative ways to finance a new home loan. If you do not have the needed investment capital or a down payment, some lenders will finance the down payment for you as well as the closing costs. If not, the seller might be willing to finance part of the loan to cover these costs. This can work even if the seller doesn't have extra "money to lend!"


Explain to the seller that it could be advantageous to him because of income taxes. He might much rather claim an income of $100,000 than $120,000! Spreading out payments for $20,000 of the loan amount over a period of five or ten years could make a huge difference on his taxes due for that year. Consult with an accountant to find out if this could work in your situation.



Unusual Types of Home Loans



If you're worried about budgeting with a new home loan payment each month, try a FlexPay loan where several monthly payment options are available to you every month. These options include interest only payments, full-amortized payments, and minimum payments. There are also bi-weekly mortgages for paying more toward your premium each year through a bi-weekly payment schedule.






Hard Money loans are also available when there is a large amount of equity built up in a home. The loan approval is based more on the home or property's value than the borrower's credit history or job/salary history.



Refinance Loans



If you plan to refinance your home, there are several options. A refinance means you are re-evaluating the terms, payments and interest of your loan. You might refinance to simply get the interest rate or payment lowered. Or, you might want to keep a little cash out for yourself as well. This is called "Cash-out" refinancing. Cash-out loans are made when you want to refinance your home for more than is owed on it. For instance, you owe $60,000, but want to refinance for $80,000. You'll pocket the additional $20,000 to use for home repairs, remodeling or whatever else!


Reverse loans are available for those over 62 years of age who own their home free and clear or have much equity built into it. They can receive a monthly payment, a lump sum or a line of credit. This does not have to be repaid until the borrower moves or passes away. Then, the estate can be sold to pay the note.


Another option for leveraging your home equity is to create a HELOC (home equity line of credit) that is secured by the equity in your home. HELOCs can be used to pay debts, make purchases, or anything else. Be aware, however, that the interest rate can fluctuate monthly.


Now that you are armed with many options for obtaining a home loan or refinancing your mortgage, check with an online lender to find out what plan will work best for you. Use the available tools and calculators to do some budgeting on your own as well. You'll be moving in that new dream home in no time!

Text is written by Chris Robertson http://www.1stepfunding.com/

Basics of Home finance Loans and mortgage

Three pieces of knowledge for obtaining and maintaining a home finance loan include the application, rates, and repayment habits.


1) Home Loan Application Process - Filling out home loan applications


2) Rates Change - Keep an eye on home loan rates for major changes, particularly changes of the downward version. Refinancing is inexpensive in comparison to the amount of money you can save if you obtain the right low interest home loan. Developing a good relationship with your mortgage broker may result in him or her calling you when the rates drop!


3) On Time Payments - There is nothing that can hurt or help your credit rating more than your payment habits on your home loan. Make payments on time and your credit score will raise quickly. Alternatively, pay late and you'll do long term damage that is difficult to repair.



Quick Home Mortgages Online - Safe

Why should you shop for home mortgages online?


1) Obtain mortgage quotes from a reputable lender and your information will be secure. Don't check with every no-name mortgage company online, stick with names you can trust, as their online security will be top notch.



2) Fast Processing - Mortgage companies who operate online aren't bound by the same home loan processes as large local banks, and can process applications faster.


3) Low Rates - With so many lenders from which to choose from, online mortgage brokers and home loan specialists are bound to find a program that's right for your budget and home loan needs.



How to Compare Various Home Loans


You've heard the saying "You can't compare apples to oranges", right? When you're shopping for a home loan, you need to make comparisons among the same types of loans. When you compare a 30 year fixed home loan with 7% interest to an adjustable rate mortgage with 3.2% interest, you're comparing apples to oranges- unless you know the specifics to each type of loan.


1)Loan Term - The term of a loan is the length of time you will be repaying on the loan Many mortgages are 30 year terms, but some are shorter, 10, 15, and 20 year terms are common. The longer the term of your loan, the lower you pay each month, but the higher you'll pay in interest!


2)Interest Rate - An adjustable interest rate is one that can change from time to time, while a fixed rate interest means it remains the same for the entire term of your loan. To compare a fixed rate with an ARM loan, use an online mortgage calculator (they're free!) to compare your future payments as well as current payments.


3) Closing Costs - There are many things that are factored into closing costs, including lenders, closing agents and attorneys. Choose a lender with the fewest junk fees or a lender that pays for your closing costs out of their revenues.



Home Mortgage Prepayment


It's not often that people stay in their home for thirty years. A thirty year mortgage probably seems like forever to most borrowers! Since no one would want to pay a mortgage forever, there are a few tricks that can save you a lot of money:


1)Make use of free home mortgage loans calculators online to see how much of a difference one or two extra payments on your mortgage will make on your amortization schedule. Sometimes, as little as $20 extra on each payment can reduce the term of your loan a year or more! Many people never actually take advantage of paying one additional payment per year in order to shorten their 30 year mortgage term by up to ten years- because they have not educated themselves on prepayment.


2) You can shorten your mortgage term by up to 20 years if you're able to make double payments. While it may seem that you should only be able to reduce your mortgage payment in half by doubling your payments, the fact is the extra payment goes towards the principal and saves you interest, so it reduces the amount owed much faster than if you only send the minimum payment each month.



Consolidating Home Loans to Save Money





If you have a refinance loan and your original home loan, you may want to consolidate them into a single loan. This may sound complicated, but should be a painless process for you.

Find all of your current home loan information, including account numbers, bank name, initial loan amount, date of the loan, and any other documents you've obtained through the loan processes. Find out how much equity you have in your home, to determine whether or not refinancing and consolidating your second mortgage is feasible. Finally, go to your mortgage specialist to get a more specific and accurate portrayal of the options that are available to you.

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