Posted: Mon Jun 27, 2005 11:58 pm Post subject: Do it yourself for a better mortgage deal
Thinking of getting a mortgage
While shopping for a home loan or a mortgage, you should look forward to make the best deal. A mortgage is like any other product available in the market. So if you compare the rates and negotiate tactfully with the lender you can surely come out with the best package. In your search for a better mortgage, we will guide you through the following steps so that you can proceed in the right direction.
Step-1: A rational bent of mind towards decision making
The key to success or failure in getting a mortgage lies in your ability to think rationally and then decide. You must approach in a professional manner. Consider your financial status, your needs and other circumstances. Only then you can decide for how long you want to keep the mortgage.
Step-2: Mortgage Pre-Approval
Before you proceed to accept the loan, clarify the following questions:
Whether the lender will give you the best interest rate if you have an excellent credit rating.
How does the pre-approval process work? What is its duration?
Whether the lender may lock the interest rate in future.
What will be the down payment including the total cost of the loan, monthly payment with PMI etc.?
Whether the lender will provide a written commitment after approving the loan.
Whether you posses the relevant documents asked for.
The duration after which the lender will close the loan.
If there is an acceptable appraisal for your loan then ask the lender how long it will take to approve the loan.
You should look out for hidden costs, if any. This is done by checking for fees related to inspection, document preparation etc.
Step-3: Choosing the right lender
It is a crucial task to choose the right lender who can provide you with the mortgage of your choice. In reality there are different types of lenders in the market place and you need to choose the best of them. The best way to find a good lender is through personal reference from someone you know.
Step-4: Points and fees
You will have to pay higher points and fees, if your interest rate is low. So before getting involved in the mortgage process, it is better if you look for the loan points and other fees in the local newspaper. It will help you to get the best interest rate from the lender.
Step-5: How much you can pay as the down payment
It depends how you replace the present consumption for future betterment. In general, the more you pay as down payment the less you have to pay as mortgage insurance. This is better for you as it will reduce your monthly payment.
Step-6: Planning for the loan term and interest rate
If you are planning to avail a short term loan, you should go for an adjustable rate mortgage. If you want the loan for a medium period then you should go for a step mortgage rate and for a long term you should go for a fixed rate loan. Thus the type of loan you avail depends on how long you want to keep the loan.
Step-7: Repayment procedure
Depending on your financial status, you should repay the loan in time. This will help you in saving extra dollars. In case you pay off the loan early, you will be charged a prepayment penalty and if you default in paying off any monthly payment then the lender may ask you to repay the entire debt at the earliest.
Step-8: Manage your Debt
If you continue with different kinds of loan and corresponding interest payment, then transfer all debts into a new loan if possible. But be aware of the profitability factor arising from the change in interest rate. This will prevent you from being overburdened with your debt.
Step-9: Availing a Home Owner's Insurance
After you have selected the loan amount with suitable interest rate and
points, you should avail a homeowner's insurance. You may have to shell out extra dollars for this purpose. Even then you should choose the best option.
Step-10: Handling Taxes
While you go for a mortgage, also check the tax benefit from availing the loan. It depends on the loan amount, interest rate, period of repayment and the points offered on the interest rate of the loan. So tax plays a major
role while you decide to choose a mortgage.
Getting the right mortgage is not an easy job. A quick glance at the steps mentioned above will help you in the cause. These steps will help to clear your doubts about the complexities involved in obtaining a mortgage.
Posted: Tue Jan 03, 2006 11:10 pm Post subject: Owner will Carry or Rent to Own
I currently have a primary residence and rental property with market values over 310,000. I owe 195k on my primary and 169k on my rental property. I'm building a new home which will cost approx. 325K to build with an expected market value between $425k - $460k. I don't need the equity out of my current properties so I was considering doing an owner will carry or a rent to own (acting as my own broker, since I have a cousing who owns their own mortgage company. My though is that I can earn get a better price over time (counting interest payments), but not have to bare the expense of maintaining the property if I hold it as a rental. Can I do an OWC if I still have a mortgage? What about rent to own or a lease with an option to buy?
Posted: Wed Jan 04, 2006 12:06 am Post subject: RE:
Hi,
As far as I know, you can't do an owner will carry if you have a mortgage because then you will have to pay off the loan first and get back the title to your property against which you have taken the loan. I think you are right that if you have to keep the property as rental then you will have to maintain it as well. So you may go for a lease with an option to buy.
Posted: Wed Jan 04, 2006 12:43 am Post subject: RE:
Hi Sherm,
I agree with Jerry. I would advise you to consider a lease with an option to buy. The lease option will give you several advantages as a seller, especially in a slow market. You can get a monthly rent higher than the market rent, a higher market value for the property and tax-free use of the option till the date for lease expires.
On the other hand, if you rent the property, you will have to bear the maintenance costs. Also, after some time when you wish to sell the property, you will have to negotiate with the third party or the buyer for a better price. But with the lease option, you can make the renter sign the property on condition that he will buy it after a certain time frame with a specific price. You can quote the price you want or atleast an amount close to it. Therefore, I feel that this lease option is much better to deal with.
But whatever be the best option, it is for you to decide as per your convenience.
I also agree that lease with option to buy is your best bet. _________________ Lisa Scherzer
Allpointe Mortgage
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440-521-7060
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Another thing you will need to consider when doing an option to buy is making sure that you have an attorney involved. I have run into lease options that do not work out for the seller or the buyer. Sometimes the buyer can be very confused with the assumed value of the home in the future. They will spend x amount of money on repairs etc. You are going to need to negotiate with the buyer any repairs, and updates to the home as to the expected value. Since you can charge extra as far as rent with an option to buy, you need to be specific on how much would go towards the purchase of the home, etc. Lease options are great if you make sure to have the contract/lease spell out everything. I wish you the best in your decision. _________________ Stephenie Marshall
1st Advantage Mortgage
www.1amHomeLoan.com/stephenie
Cell: 214-779-6622
If your original loan paperwork, you can read through that to look for what is called a "due on sale clause". Most loans do specify that if the homeowner sells the property without paying off their loan, the lender can call the note due at any time.
A lease with an option to buy is typically the best option for the homeowner as it leaves the property in your name. This way if the renter defaults on their agreement, you can evict them without having to foreclose to get the property back in your name.
For the renter, it is less secure if they default on their contract, but you are the one typically taking the bigger risk.
Posted: Wed Oct 01, 2008 9:12 am Post subject: Replay to thinking of getting a mortgage
One key factor the poster forgot to mention:
Beware of pulling your credit too many times. It's a good idea to shop around, but remember, you cannot get a firm quote until the lender has your credit profile. If you have a credit report that you can share with the lender so they don't have to pull your credit, that is helpful.
If you pull your credit numerous times with in a monthly period from multiple lenders, your score has a chance of going down.
I recommend no more than 3. _________________ Elnora Little
First Home Mortgage
First in Customer Service!
301-437-5605
A lease option is the best way to go for sure, and I agree with Stephanie that you need to have an attorney involved to write up the contract. It may cost you $50 to $100 to meet with a real estate attorney. But, if you do not word the agreement correctly, it can easily cost you thousands. Good Luck.
i, unfortunately, don't have the ability to eliminate the links in the above post. inasmuch as the placement of those links is contrary to the spirit and guidelines of this site, i'd suggest that they be ignored.
"equitytalkingfinancing" we'd appreciate your not doing that again. _________________ George M. Akerley
Loan Officer
Prospect Mortgage
37 Jerome Avenue
Bloomfield, CT 06002
860-286-0444
Sam
