Ease Your High Interest Mortgage Burden with Refinance Mortgage

By Kirthy S

While mortgage is a method of using your home or property as security against the loan lent you. Refinance mortgage gives you an option to use the same property as collateral and utilize the present low interest rates by refinancing it.

It serves as a boon to a mortgage borrower who has been paying high interest rates and is unable to bear the costs of loan payment. So with refinance mortgage you can lock the fixed interest rate if it’s lower than what you used to pay earlier. Pay off your credit card debts or you even have an option of consolidating more than two mortgages and merge them into one.

You actually apply for a secured loan in order to replace an existing high rate mortgage as against the same asset. Refinancing a home mortgage is quite popular due to its benefits to the borrowers.

Advantages of refinancing mortgage:

• Refinance at a lower rate and bring down the reduced interest cost

• Clear off all high interest debts

• Cut down on the repayment term

• Refinance and avail low fixed rate instead of your adjustable rates

• If your equity rates have increased, liquidate them by refinancing

Avoid risks involved in adjustable rate mortgage:

If you predict that the mortgage rates will increase with the onset of time, you can make a right choice of refinancing it at a fixed rate. You take advantage of the present low rates freeze your interest rates at that. Switch over from an adjustable rate to a fixed rate.

Reduced Interest Rate

Save thousands of pounds over 30 years and also lower your monthly payments. When you freeze at a fixed rate, your interest will never go up inspite of fluctuating loan market it will remain the same as long as the mortgage exists. Even if others are paying off their mortgages at an astronomical rate you will pay less as you would have freezed at a lower rate.

Interest is Tax Deductible.

Interest on mortgage is tax deductible, but not your credit card interests. So if you borrow money through your credit card you can’t take advantage of tax deductibility. This implies that refinance mortgage will not only reduce down your interest but also ease your tax burden.

Consolidate High Interest Loans

By consolidating all your high interest loans and remortgaging it you win better rates. If you have equity which has had an increase in its value ever since you last pledged it, you can make use of the positive change in the equity. By consolidating those debts into one single low-interest payment, you can manage to pay off an entire range of high-risk loans and refinance your personal debt into a single second mortgage payment.

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Mortgages Loans in a Nutshell - 10 Tips for Home Buyers

By BR Cornett

Each year, new financing options become available for home buyers in search of a mortgage. As a result, there are more ways to qualify for (and obtain) a mortgage loan than ever before.

This is good news for home buyers, but it also means you need to do more homework than ever before. This article will get you started on the right path.

10 Mortgage Tips for Home Buyers

1. Study the mortgage types.

Each type of mortgage loan comes with its own set of pros and cons. Some loans are ideal for certain types of buyers but disadvantageous for other buyers. To decide which type of loan is right for you, you'll need to know the pluses and minuses of each type. Start with the basic types of mortgage loans – fixed rate, adjustable rate, balloon, etc.

2. Consider your staying time.

How long you plan to stay in a home will often determine which type of home loan is best for you. For instance, an adjustable rate mortgage (ARM) can lower your interest rate up front as compared to a fixed rate mortgage. But if you stay in the home beyond the ARM loan's introductory period, you'll face the uncertainty of interest rate adjustments.

3. Lean about new mortgage packages.

In the beginning of this article, we talked about new financing options that have emerged in recent years. Some of these loan packages make homeownership possible for buyers who were not previously qualified. But as always, you should apply tip #1 -- study the pros and cons of each financing option.

4. Shop for the best rate.

Mortgage lenders will offer different interest rates based on your credit history and credit score. When your credit is good, lenders are more comfortable lending to you, so you'll likely qualify for a better rate. When your credit is bad, the opposite can be true. Each lender defines their comfort level differently, so interest rates may vary from lender to lender.

5. Read up on RESPA.

The Real Estate Settlement Procedures Act protects you, the consumer, by imposing certain requirements on mortgage lenders. To understand what rights you have under RESPA, you should at least read the highlights of this act. You'll find a good overview on HUD's website, www.hud.gov.

6. Consider paying points.

A point is one percent of the loan amount. On a mortgage loan for $100,000, 1 point would equal $1,000. Some home buyers pay for points at closing to lower their interest rate over the life of the loan. To find out if paying points is a good idea for you, you'll have to do some basic math. For a good tutorial on mortgage point calculations, I recommend you visit www.mtgprofessor.com/points1.htm

7. Don't go it alone.

We all have friends or family members who own homes. These are good sources of information. Somebody who has been through the process and seen mortgage loans from "all sides" can often give great information. You should also enlist the support of your real estate agent. A real estate agent is not a mortgage advisor (not usually, at least), but most are well-informed about the mortgage process from having frequent exposure to it.

8. Factor in PMI.

PMI stands for private mortgage insurance. If your down payment on a mortgage loan is less than 20% of the total loan amount, your lender will most likely require that you pay PMI. Find out your lender's policies early on so you can play accordingly.

9. Visit the Fool.

Don't let their name "fool" you. The Motley Fool (www.fool.com) offers some of the best mortgage and credit information of any website online. From their home page, visit the Personal Finance section. Or just enter a phrase into their search box.

10. Watch out for unethical lenders.

Like any other industry, the mortgage industry has its share of bad apples. Most mortgage companies are honest, hardworking folks. But, unfortunately, there will always be an unethical minority. These companies prey upon homebuyers with bait-and-switch tactics, hidden fees and the like. You can counter this by being well-informed, trusting your instincts, and seeking professional advice when something seems too good to be true.

* You may republish this article online if you retain the active hyperlinks below. Copyright 2006, Brandon Cornett.

About the Author

Brandon Cornett writes on behalf of the Bay Club at Falcon Point Ranch, a master-planned community in Seadrift, Texas. Learn more about this Seadrift, Texas real estate by visiting http://www.bayclubliving.com

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Real Estate Transfer Taxes Overlooked Sale or Purchase Expense

By Mark Nash

A real estate transfer tax is a one-time tax paid at the closing of a property, and is considered a stream of revenue for state budgets. This transfer tax though, once collected is not generally used for housing-related purposes. The tax is based on the value of a property as agreed to by the parties in a real estate contract.

In the excitement of selling or buying a home, often the real estate transfer tax cost is overlooked. Depending on locale, either the buyer or seller pays the tax at closing or escrow, but beware in New Hampshire both the buyer and seller pay, half of 1.5%!. In some states it can be a formidable amount, you should be prepared for what the transfer taxes will be, and who pays them, before you start a home search or list your home for-sale.

The good news is, thirteen states don't have a real estate property tax. They are: Alaska, Idaho, Indiana, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, Utah, and Wyoming.

The bad news is that the remaining thirty-seven states and The District of Columbia charge taxes on the transfer of a property. The tax is only levied once when a property is exchanged between parties, unlike general property taxes which are paid annually and are based on the assessed value. Real estate transfer taxes range from a low of .01% in Colorado to a high of 1.28% in Washington state.

Variations on transfer taxes include; in Arizona only charges a tax on deeds. However Alabama and Florida charge on deeds and mortgages. To avoid financial surprises, inquire early as to who pays (buyer or seller) and how much transfer taxes will be. Some states dictate who pays the tax, and some just want the tax paid. This cost can typically be negotiated between the parties. Consult an experienced real estate attorney.

A handy online link for transfer taxes for all fifty states.

http://www.parealtor.org/content/AssetMgmt/Issues Resource Center/Realty Transfer Tax/Transfer tax chart.pdf

Mark Nash, is a residential real estate author, broker, columnist and writer based in Chicago. His fourth book 1001 Tips for Buying and Selling a Home received eighteen five star reviews on Amazon.com. His latest book; Real Estate A-Z for Buying & Selling a Home will be published in December 2006. Mark publishes a free monthly ezine for real estate professionals. Agent to Agent features ten articles that offer free reprints for agents, home buyers and sellers through EzineArticles.com . Real estate news and book reviews, Celebrity Homestyles, Home selling and buying tips and advice, Joke-of-the-Month, Help this Agent, and agent marketing tips. Over 5000 subscribers in the U.S. & Canada. Subscribe at: http://www.1001realestatetips.com/forrealestateagents.html

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Preparing for Submitting a Mortgage Application

By Raynor James

If you are buying a home, you are going to need a home loan. So, what steps do you need to take before submitting your mortgage application?

Preparing for Submitting a Mortgage Application

At first glance, you may think a mortgage is simply a loan of money in exchange for a promise to pay. While this is true, another perspective is that a mortgage is a hedged bet. The mortgage lender is trying to determine what type of a risk you are, to wit, what is the likelihood you will repay the loan? The hedge, of course, is the fact the lender can take and resell your home if you default on the loan, but lenders do not like to do this. They are in the business of loaning money, not selling homes.

The number one thing you are going to need is documentation. The lender is going to analyze the risk associated with lending you money by looking at your recent and not so recent past. This process is known as underwriting in the mortgage industry. The underwriter will use various algorithms and benchmarks to approve or deny your loan application. Let’s take a closer look.

The first thing you are going to need for a mortgage application is documentation regarding your earnings history. The lender is typically going to want to see at least a two year history of steady earnings. The documentation is typically provided in the form of W-2 tax form from an employer. For self-employed individuals, the lender is typically going to want to see the last two years of your tax returns. You should also provide any and all documentation supporting other assets you might have such as mutual funds, stocks, bonds and so on.

Another area you should focus on is your credit. You don’t need any documentation per se as the lender will obtain your credit report, but this doesn’t mean you should sit back and relax. Prior to applying for any mortgage, you need to get copies of your credit reports. Take a close look at them. Contest anything that looks fishy. Even small changes to your credit can raise your credit score. The higher your credit score, the better.

If you have good credit and consistent earnings, the above documentation should suffice. The lender will undoubtedly ask for more supporting documentation, but you can deal with that when the request is made.

Raynor James is with FSBO America - free information on mortgage loans.

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