Houston Mortgage Refinance 101
July 27th, 2008 Subscribe To Our Feed
If you would like to refinance your Houston home mortgage to get a better rate or terms there are several things to consider.
You will usually be able to get the best rate if you can document your income and your credit score is above 640. If your credit score is weak it could be best to bring you score up before you refinance. Some mortgage brokers will suggest ways to increase your score if you need help with this.
If your credit is good then you should consider if it is worthwhile to refinance. There are normally costs involved so a rule of thumb is to refi only if you can save ½ percent or more on your rate. It may not be advisable to refinance if you don’t expect to have the new loan for at least a few years.
The next step is to decide what type of mortgage you want. It is usually best to get a fixed rate loan if you expect to own the home for more than a few years. Avoid interest only and “pay option” mortgages unless you have a special need for those programs. If you can afford the payment for a 15 year fixed term the rate will be lower. If the 15 year payment is too high then a 30 year fixed mortgage could be best. Your payment won’t be much better for a 40 year term so avoid that if possible.
When you select a lender and program the rate and closing costs are very important factors. You may have the option of paying a higher rate in exchange for lower fees. Let’s look at hypothetical options:
- 6.00% Rate - With no closing costs
- 5.375% Rate - With $4,000 closing costs
- 4.875% Rate - With $8,000 closing costs
If the current mortgage is $200,000 and you expect to have the new 30 year mortgage open for many years, which is a better deal? The best way to compare is to assume the closing costs as rolled in to the new mortgage and then compare the payments. (Your lender should be willing to prepare good faith estimates showing the figures) Here is what you get for options:
- 6.00 Rate - No closing costs = $200,000 mortgage = $1,191 /mo = $428,760 total
- 5.375 Rate - $4,000 costs = $204,000 mortgage = $1,142 /mo = $411,120 total
- 4.875 Rate - $8,000 costs = $208,000 mortgage = $1,100 /mo = $396,000 total
In this example you could save over $32,000 in the long term by taking the lowest rate.
Texas residents can get more information from my Houston mortgage refinance web site. Or you can call my office at 281-537-7800.
Texas Capital mortgage - Lowest rates with superior service! 281-537-7800
Also visit our other sites :Lamb Insurance Agency, (Farmers Insurance) Auto, Home, Life, and Business Insurance for Texas - Houston Farmers Insurance
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Getting A Mortgage in the USA
July 25th, 2008 Subscribe To Our Feed
The United States of America is located on the North American continent with Canada located to the North and Mexico to the South. The country is comprised of 50 contiguous states, two states not contiguous with one located west of Canada and another in the Pacific Ocean. There are several territories. The United States is a federal constitutional republic with its capital located in the administrate district referred to as the District of Columbia.
The economy of the United States is the largest in the world and has a GDP of over $13 trillion. Its economy is market based and is comprised of a full range of industries, both service and durable. The banking system of the United States is well developed and offers a full range of investment opportunities. Within the mortgage lending business the following loans are available:
For purchase
Re-mortgage
Self build
Equity release
Variable
Fixed
Interest only
Land loans on a case by case basis
Options
The loan to value rate found within the United States is an option depending upon the type, value and location of the property in question. An 80 percent loan to value option is available for non-status loans for second home purchases. A 75 percent non-status loan is available for to-let properties and a 90 percent to value loan is available in the State of Florida.
Interest rates are largely fixed but can vary depending upon the type of mortgage that is chosen. Other than in the State of Florida interest rates currently range from 7.5 to 7.8 percent, although researching a particular type of loan can bring these rates lower. The maximum term for a loan is 30 years with no age restrictions place on the age of the borrower at term completion (a unique event in mortgage lending.)
Documentation is fairly straight forward and strictly adhered to. A lawyer is advised for the transaction. The following minimal documentation is required:
Completed application form
2 open credit lines for 24 months in some cases
2 bank reference letters
Passport copy
Proof of down payment, closing costs, six months mortgage payment reserves
Copy of purchase contract
For all documentation, letters to be on bank letterhead with clients name, account number, balance and date account was opened clearly stated. Letter must be signed by appropriate bank representative. This last need should be underscored. It trips borrowers up a lot.
In the state of Florida there are some specific considerations to consider. They include:
Dollar and Sterling mortgages are available
Equity release of up to $125,000 is available
Up to 90 percent of loan to value is available for foreign nationals
Starting as low as 1.45 percent variable interest rate
Although rater strict in the interpretation and execution of its lending laws the United States offers a wide variety of options. There has been an increase in the types of products being offered with some offering great rewards. There have, however, been some new products offered that were not 100 percent understood by the borrower, resulting in financial difficulties into the future. Understanding the ramifications of the product is an important step with so many products being offered.
Leo Fogarty is Marketing Director of the mortgage specialists Euromortgage. He is also a regular author for financial magazines, most notably Property Gallery Magazine in Ireland and is an expert on mortgages, remortgages, equity releases and overseas mortgages.
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Taking Mortgage Payment Protection Insurance
July 18th, 2008 Subscribe To Our Feed
Many people take mortgage payment protection insurance whilst in good health. But there is a reason behind. Many people want to protect their family from enduring a financial knock out should an illness restrain them from attending work for a lapse of time. With this mind, people end up buying a mortgage payment protection policy. Most of us would agree that the last thing we would want to happen is lose our home due to inability of paying out mortgage installments. That is why mortgage payment protection insurance can be instrumental in most circumstances.
mortgage payment protection insurance is a type of insurance that ensures the repayment of a mortgage in the event that you cannot, due to unanticipated happenings. Such events may include the occurrence of a critical illness, incapacitating accident or unemployment. While such situations remain an everyday fact of life, having a mortgage payment protection insurance can be vital. However, the mortgage payment protection insurance has strict criteria. So, your claim would not be eligible if: you voluntarily become unemployed, do not seek for work after becoming unemployed or take part time work after losing your permanent job.
Although your mortgage protection insurance may eventually pay you benefits after you make a claim, there could be a lengthy wait for compensation. It can take up to four months for you to start getting your compensation. In between or after, the insurance may start giving monthly benefits if the mortgage payment protection policyholder is acceptable. You may also have to re-qualify for mortgage payment protection insurance every month. You might have to fill out forms in order to satisfy the mortgage payment protection insurance company that you are still eligible for the policy you hold. Depending upon the policy taken, mortgage protection policies do also award payments based upon a definite set of time. Some mortgage protection policies provide benefits for up to 24 months, but payments are usually made one month in arrears.
There are many different types of mortgage protection plans. mortgage payment protection plan preferences differ depending on your personal situation. As with any insurance, no matter how justified your claim is, you may have to work to get it paid. While this can seem like a big hassle, it is still better than not having any resources at all to turn to when it comes to paying your mortgage. This way, your family doesn’t have to worry about anything except you getting back to better health, and you can concentrate on getting well instead of worrying about your mortgage payment.
When you go to take out your mortgage, this can be a good time to purchase mortgage payment protection insurance, at the very start of your loan. But this can be a costly manner in which to purchase this coverage. On the other hand, more affordable mortgage payment protection schemes from independent providers may be obtained by you. Using one of these providers can save you a lot of money on your premiums while still giving you the peace of mind that a sound mortgage payment protection insurance policy can offer.
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Why It Is Now So Difficult To Get A Mortgage In The UK
July 17th, 2008 Subscribe To Our Feed
Unfortunately the effect of the Credit Crunch now means that many previously available Bad Credit Mortgages (sub-prime) have been withdrawn from the market by many of the big mortgage companies.
You need to realize that things have changed radically in the UK mortgage market even compared to what was available less than a year ago.
Here is an up to date evaluation of what you now need to do to successfully get the mortgage or remortgage you want in the UK.
If you know you are going to need a mortgage then make sure that you start the process well before the date on which you require the money.
Give yourself at least 3 months or so to find the right mortgage deal for your needs as it is going to take you much longer than it used to.
Some companies will still be advertising attractive interest rates but be aware that these may not be obtainable unless you have extremely good credit. If you have a lower than good credit score or rating you are unlikely to find that you can get these rates.
Also be aware that you may have to pay quite a large arrangement fee to get the best rates!
If this is you first mortgage then the deposit you will need to find is going to be a lot larger than it used to be and the income multiples that used to be so high have also been drastically reduced making it much harder for the first time buyer.
Always calculate what you can really afford before you make any mortgage applications.
If your current great mortgage deal is about to end then you really should contact a mortgage adviser for some professional help, as they will know the best deals currently available for you to apply for.
Individuals with mortgages with a high LTV, which need replacing, should be considered as definitely in need of professional mortgage advice before replacement.
Today there is just not the same number of mortgage deals out there, so ask a mortgage broker to shop around for you.
Ii is also now a lot more difficult to get a buy-to-let mortgage or remortage and as a landlord you will need to make sure that your rental income is sufficient to cover your mortgage and all your other property expenses. mortgage companies have changed their criteria for mortgages and remortgages in the buy to let market so things are now more difficult.
Before thinking about a mortgage you should first check you personal credit rating and if possible improve your credit score to ensure you do not get rejected on your very first application.
If anything is wrong on your credit report it may affect your chances of getting that mortgage deal.
You can now get instant online access to each of your three credit reports at the major credit reference agencies in the UK and these are all free for a trial of 30 days.
This is an opportunity that should not be missed as you need to fix any problems with your Free Credit Report before you make that first application for a new mortgage.
In all honesty you should get your credit report from each of these three agencies as you will not know when you apply which credit agency your mortgage company will use to do your credit check during your remortgage or mortgage application.
That means you will have to get three free credit reports to do the job properly as any of the three might be wrong.
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Applying for a Loan in Today
July 17th, 2008 Subscribe To Our Feed
It’s important not to apply for several loans at once when you are researching the loan market. Every time you apply for a loan this leaves a note on your credit file and if you make multiple applications it can look like you have been refused by multiple lenders. New lenders looking at this could assume that other lenders are refusing you and so have an easy decision to make in also turning you down.
Therefore the best policy is to look for loan agreements in principle without allowing a full credit search, and only make one real application when you have decided which is best for you. If you are ever refused credit, don’t apply again until you have found out why this has happened. Now is the time to check your credit record. You should ask the lender why they have turned you down. Lenders are not legally obliged to tell applicants why they have been turned down but most will.
What are lenders looking for? Obviously it’s very important to the lender that you should handle the repayments of your loan and if you have been largely credit free in the past you might find it difficult to get the best rate for your loan. The only way a lender can judge your ability and attitude towards repaying loans is your credit track record so although you might think because you haven’t been borrowing regularly you’re a good bet the lender might not see it that way.
It’s a good idea to get a credit card and run it for a while responsibly for a while and also a mobile phone. Once you establish some track record the best rate loans may come within reach.
Make sure you are not overstretched. Lenders always look at your credit file to see how much you have outstanding on credit cards, mortgages and loans. They can easily see how you are handling payments. They will also look at your credit limits. Even if you are not currently borrowing on all your credit cards a lender could possibly get nervous about lending you more if he fears you might go on a spending spree. It’s probably better therefore to close credit card accounts that you don’t need.
Explain your special circumstances. If you have a bad credit record, or you are currently having some financial problems, it makes a lot of sense to seek advice rather than simply borrow more. If you have ever missed repayments in the past they remain on your credit record for at least 36 months. IVAs, Court judgments and bankruptcies stay on the record for at least six years.
Always explain if you have had a problem due to special circumstances. If you have been ill for example and it affected your earnings then you can add this information to your credit report and most lenders will probably take this into account when considering your application.
ALWAYS steer clear of any organisation that claims it will repair your credit record - this is simply NOT possible unless a serious mistake has been made, in which case you can easily fix it yourself. Certainly never pay any company for so called “credit repair”, any type of debt advice or rescheduling of debts.
Don’t borrow money to simply ease your current difficulties. Borrowing more means paying more back and you could be simply adding to your problems. Review your spending first and try to trim any unnecessary spending before simply adding to your debts.
One very simple and quick way to improve your credit rating is to register on the electoral roll if you aren’t on it already. Credit reference agency Experian tells us that lenders use the electoral roll as a precaution against fraud, to help check that you are who you say who you are and live where you claim to live. If you are registered at a different address to the one on the application form, or don’t appear on the electoral roll at all, they may ask for proof of residence or could simply turn you down.
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Why UK Mortgages Are Now So Hard To Obtain
July 17th, 2008 Subscribe To Our Feed
The Credit Crunch has forced many sub-prime mortgage companies to withdraw many of the Bad Credit mortgage deals that were everywhere no so long ago.
You need to realize that things have changed radically in the UK mortgage market even compared to what was available less than a year ago.
Anyone hoping to get a remortage or new mortgage deal currently in the UK should be aware of the following facts.
Get started as soon as you can when looking for your new mortgage as it couls take a lot longer than it used to.
If you can start about three months before you need the cash then you stand a better chance of getting it on time as getting what you want is now a lot more difficult.
Some companies will still be advertising attractive interest rates but be aware that these may not be obtainable unless you have extremely good credit. If you have a lower than good credit score or rating you are unlikely to find that you can get these rates.
Also be aware that you may have to pay quite a large arrangement fee to get the best rates!
If this is you first mortgage then the deposit you will need to find is going to be a lot larger than it used to be and the income multiples that used to be so high have also been drastically reduced making it much harder for the first time buyer.
So make sure you know in advance exactly how much you will be able to borrow.
If you already have a mortgage that had a good deal attached to it which is now about to finish then get some professional mortgage advice to help you find out the current best deals you can get to refinance.
If you have a high Loan To Value on your current deal then this advice is even more important.
Today there is just not the same number of mortgage deals out there, so ask a mortgage broker to shop around for you.
Ii is also now a lot more difficult to get a buy-to-let mortgage or remortage and as a landlord you will need to make sure that your rental income is sufficient to cover your mortgage and all your other property expenses. mortgage companies have changed their criteria for mortgages and remortgages in the buy to let market so things are now more difficult.
Before thinking about a mortgage you should first check you personal credit rating and if possible improve your credit score to ensure you do not get rejected on your very first application.
If anything is wrong on your credit report it may affect your chances of getting that mortgage deal.
You can now get instant online access to each of your three credit reports at the major credit reference agencies in the UK and these are all free for a trial of 30 days.
So take this opportunity and signup for a Free Credit Report and then check it and fix and problems you find before you apply for mortgages.
Get a free credit report from each credit reference agency and fix the problems on each one as when you apply for a mortgage or remortgage you cannot predict which agency will be used for your credit check.
To ensure that all bases are covered and that any issue on any credit report is resolved you will have to get free access to all three credit reports.
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