Mortgage Insurance Can Actually Save Your Money

Mortgage Insurance Can Actually Save Your Money

A mortgage insurance plan offers lenders a structure of monetary warranty, which provides security in instances where the borrower defaults on a loan. For those searching to purchase a home, agreeing to mortgage phrases, which consist of personal loan insurance, will increase the buying energy of the customer greatly.

Agreeing to purchase a loan insurance plan bolsters the probability of home purchase with a down fee of solely 5%-10%, in comparison to the 20% that is frequently required when a lender does now not have the protections of loan insurance.

Buyers typically buy and pay for a loan insurance plan in one of three ways. These approaches include paying in annuals, month-to-month premiums, or singles. We are going to take a closer look at the loan insurance plan programs below:

1.) Annual: The annual pricing choice permits the lender to acquire the first year’s top-class at closing and then all subsequent repayments are made on a month-to-month basis.

2.) Monthly Premiums: This price choice requires the consumer to solely pay for one month at closing and all repayments are then made on a month-to-month basis.

3.) Singles: The single charge alternative requires the customer to make a one-time, single charge that is usually financed as a section of the personal loan amount.

It is additionally an effective bargaining device for viable debtors who are unable to come up with a massive down payment. Offering to pay a personal loan insurance plan can reduce the quantity of one’s down payment to 10% to 15%.

But it is vital to understand that a personal loan insurance plan does not need to be paid forever. After a sure length of time when positive stipulations are met, a personal loan insurance plan is no longer required to be carried on the mortgage.

Refinancing: 101

Refinancing: 101

Refinancing a first and second mortgage requires some extra considerations. Depending on your equity, you may find that combining the two mortgages results in a higher interest rate. You may also find that you have to carry PMI with the refinanced mortgage.

Will Refinancing Benefit You?

Refinancing two mortgages allows you to consolidate your loans into one payment, often lowering your monthly bill. You may also find lower rates under the right circumstances.

Those with a large amount of equity benefit most from consolidating loans since they qualify for the lowest rates. It is important to look at interest savings, not just monthly numbers which can be misleading.

However, if you have less than 25% equity, you may end up qualifying for higher rates. With less than 20% equity, you will also have to pay for private mortgage insurance. Even with these factors, you may still find that you will save money by refinancing.

Have You Done Your Research?

To see if refinancing makes sense for you, research mortgage lenders. You can quickly go online and request quotes and terms. Look at the different offers, and work out the numbers. An online mortgage calculator can help you figure out monthly payments and interest costs.

An easy way to compare cost is to first add up your interest payments for both mortgages. Use this number to compare interest payments with each potential mortgage.

You also need to factor in the cost of refinancing. Just like with your original mortgage, you will have to pay fees and points. You want to be sure that you can recoup these costs with your interest savings.

Why Do You Want To Refinance Both Mortgages?

While refinancing both mortgages is convenient, you may decide to refinance only one or both separately. With your main mortgage, you can expect to get low rates.

A second mortgage will usually qualify for higher rates, but you can lock them in. You may also choose to convert from a line of credit to an actual mortgage. Again, you will want to investigate financial packages before signing up with a lender.

For more information about refinancing and other mortgage related topics, please visit: http://www.residentiallender.net

Zero Down Payment Mortgage Loans

Zero Down Payment Mortgage Loans

On Financial provides Zero down USDA home loan and Zero down VA home loan alternatives to suit nearly any want or situation. These packages have zero down payment mortgage loan choices if you qualify and with practicable restrictions.  If you qualify for zero down payment mortgage today!

You’ve observed your dream home and your lender has accepted you for a mortgage. But there’s one seize – you’re brief on money for a down payment. No worries, a zero percentage down fee VA or USDA loan might also be an alternative for you!

Most mortgages require a share of the mortgage quantity to be paid down from the borrower (you) in order to obtain the loan. With a zero percent down VA or USDA mortgage option, you will pay nothing for your down price however you can also nonetheless want to pay any closing charges and closing costs.

If you’re eligible for a VA or USDA zero down the mortgage, no longer having to pay a down charge can relieve a giant economic burden for you. Down repayments are normally due in one lump sum, which can reason a stress on your monetary situation, regardless of the amount. With a zero down mortgage, you will be free of paying any down charge at all. This cash can now be used to cowl different closing prices like charges and closing expenses for your mortgage.

Whenever you are searching for a loan, there are some suitable standards to remember. First of all, the greater cash you can put down on a home loan, the much less your activity price will be and the higher deal you will get. Secondly, by no means settle for the first provide you get, continually store round and evaluate extraordinary offers. Those concepts considered there is a shape of mortgage that might also contradict them however nevertheless its purpose has: the zero down payment mortgage loans.

Zero down payment mortgage loans are simply as they sound, they enable you to loan your home with a lender barring having to put any cash down on the mortgage itself. What you need to understand about this, first of all, is that it is violating the above concepts and that this shape of mortgage needs to be sought as a final resort. By limiting yourself to a zero down fee personal loan, you are limiting the presents you can get from lenders, considering that at that factor most lenders will provide you the identical specific deal. Also, placing no cash down will lead to a lot greater pastime fees then you would be paying otherwise.

That being said, zero down fee mortgage loans however serve their purpose. These loans, due to the reality they require zero down payment, are specific for these who have scenario coming up with the cash economic financial savings required for a down cost on a home purchase. This loan can be really helpful in cases when the market is at a low and commencing to rise, due to the fact the price of the home will upward thrust after the loan has been taken out, and the loan can be used in these cases due to the truth if the person receiving the personal loan waits, the market expenses of home must upward shove appreciably over that time. But remember, each and every time you use Zero down price personal loan loans, the economic organization owns complete equity of the home and these leaves you no leverage for receiving loans closer to your equity. You will completely earn equity as you pay off the home and as the price of the home rises.

At first glance, Zero down payment mortgage loans sound like an extremely good deal. In truth, they ought to be used as an ultimate motel given the reality you will pay substantially greater in pastime over the size of the loan. At the quit of the day, however, proudly owning a home is higher than no longer proudly owning one, so these loans truly have their region in the market.

3 Terms Every Mortgage Holder Should Know

3 Terms Every Mortgage Holder Should Know

Getting a mortgage can be a very confusing process.  There is a lot of paperwork to sign, documents to read, and procedures to be followed.  You'd think you were applying to go to Harvard or Yale, except they don't require that much paperwork for you to be admitted!  Although getting a mortgage can be a confusing process, there are three terms that every mortgage holder should know to better understand what he is she is getting into. 

Going into a mortgage knowing just a few facts will help you immensely in understanding what type of commitment you are getting into.

The first term you should understand is, amazingly, the word "term".  Term refers to the length of the mortgage you are taking out - or the amount of time you are making payments. 

Many mortgages run the gauntlet of between ten and thirty years.  The longer the mortgage, typically the lower your monthly payment will be (and the more interest the mortgage company makes).  Generally speaking, you should go for the shortest term you can comfortably afford - you'll save potentially tens of thousands (and in some cases potentially over a hundred thousand) dollars in interest by keeping the length of the mortgage as short as you can.

Next, understand the interest rate on your mortgage and how it is calculated.  The interest rate refers to the amount of interest charges you will pay for the money you are borrowing, expressed as a decimal - such as 5.2 for 5.2%.  Is it fixed or adjustable?  In other words, is it the same through the life of the loan or does it change at specified periods in time?  Most homebuyers should try and steer clear of adjustable rate mortgages even though they can look better upfront.  They can often reset to higher interest rates and come back to bite you if you aren't ready for a jump in your monthly payments!

Finally, understand what closing costs are and how they are going to affect your purchase price.

Often times, you are going to be responsible for coming up with these closing costs out of your own pocket.

Closing costs consist of things such as appraisals done on the house, attorney fees, notary fee, deed fee - if there is a fee they can think of it usually falls under the term closing costs!

Be a smart and savvy consumer, if you see a fee that you don't understand or doesn't seem right - speak up!

Some mortgage lenders try to sneak in any fee they can think of to make a few extra dollars profit.

Understanding these three terms can help make you a more informed home buyer and help you find the mortgage that is right for you.  As with any product, it is important to shop around for a mortgage when you are considering buying a house.  Even a small change in the interest rate between two lenders can often amount to thousands of dollars in savings.  Don't be afraid to comparison shop - it's your money after all!

3 Steps You Must Take If You Want To Pay Off Your Mortgage In 7 Years Or Less

3 Steps You Must Take If You Want To Pay Off Your Mortgage In 7 Years Or Less

One of the single largest financial purchases a person makes in a lifetime is a home. And more often than not, a home mortgage is required to fund the purchase. But how many people have been told, that the current way a mortgage is paid off, is like a disease to our financial health? The mortgage and banking industry has offered to the unsuspecting public the 30-year fixed amortized mortgage the most expensive mortgage, a financial disease akin to the cigarette industry offering cigarettes.

U.S. consumers have had no other choices, but to use a mortgage, that only benefits banks and mortgage companies. Now a revolutionary mortgage program is available that will show them how to pay off their home mortgage in as little as 7 years.

Enter Money Principal Group, a company located in Utah, founded by Ariel Metekingi, a native of New Zealand. Their premier innovative mortgage product, The Mortgage Eliminator, is based on a 30 year+ proven Australian industry standard and model in use by over a third of homeowners in that country. It was later introduced to the New Zealand market, where homeowners there achieve similar results; paying off their debts and mortgage on average of 6-10 years.

This powerful new tool to combat the current financial plague of debt combines a mortgage and a full-service bank account. The new "all-inclusive" type loan creates huge savings in interest payments and loan payoffs in one-half to one-third the time requiring little to no change to current spending habits or income.

How does it work? Homeowners deposit income and other assets into the new mortgage account and since it allows access like a checking account, expenses are paid out from it by check or ATM card. The fundamental part is, that when the homeowners' money isn't being used it sits in the mortgage account, reducing the daily loan balance on which interest is computed. This saves on average hundreds of thousands in interest over the life a typical loan and reducing interest means more money for principle; so the homeowner builds equity faster and owns their home sooner.

"What this does for homeowners, is it empowers them to take control of their financial health," says Ariel Metekingi, founder and president of Money Principal Group. "With this new loan program, a homeowner can combat the financial disease known as consumer debt plus current mortgage options and it allows the homeowner to reach their goals sooner in life, rather than later. This isn't a mystical trick of numbers; it is simply taking away the interest spread banks earn and is given back to the homeowner."

There are three steps that the consumer can take, in order to reduce their mortgage payout and enjoy a home paid off in as little as 7 years.

1. Decide What Your Goals Are

One of the first steps with The Mortgage Eliminator program is to have a clearer picture of where you are heading financially-speaking and decide on what kind of goals you'd like to reach. First, take a look at where you were five years ago. What kind of expectations did you have then? Did you plan on certain things to happen by now? If they didn't happen, do you have the willingness to make changes to reach those goals?

Goal setting is important because it allows you to create a flexible plan and schedule to put into place and stick to. Imagine where you'd like to be in 5 years. What would you like to accomplish?

Let's say some of your goals are to have an emergency fund of at least one year of your current income and you'd like to reach that amount in, say, 2 years. And another goal, (if you have a child or children) is to set aside a college fund. And lastly, you've been dreaming of that sports car you've always wanted since you were a teenager.

Now that you have some goals in mind, what would it take to reach those goals? And keep in mind that your household income will probably remain constant.

Are there current investment options or debt elimination options, which can help you reach those goals?

Using your flexible mortgage account through The Mortgage Eliminator can greatly increase your ability to save interest and money and free up resources to help you reach those goals. And it doesn't have to drastically change your spending habits or current household income. Just determine your budget and where the money you make is spent in your life.

2. Set Up a Budget

The next step in paying off your mortgage quickly is to look at your current spending habits and create a budget. How difficult is this? That depends on your level of commitment and your ability to discipline yourself into reviewing your budget.

One way that helps homeowners is through the included budgeting software and personal coaching and review available with The Mortgage Eliminator, from Money Principal Group. Studies show and human nature reflect this, is that if we have tools AND a personal Coach to help create and maintain a budget, we're far more likely to succeed. Money Principal Group states that over 90% of its' clients achieve success with The Mortgage Eliminator system.

Think of having a coach for your personal financial education, just like a great tennis star has a coach or golf professional has a coach. How many of us rely on a coach to become financially wealthy?

With The Mortgage Eliminator, you're given that important part, a coach to review, create and stick to a budget that creates positive cash flow, which will take you to the next steps of paying off your mortgage in less time, without any change to your current income or spending habits.

3. Get a Financial Review and Analysis

Everyone's financial situation is different and completely unique. Imagine your situation as the human body and financial debt (including a mortgage) as a disease. Before a doctor would operate on a patient, a complete review of the symptoms and where to start investigating is done BEFORE the doctor performs any action.

Think of a financial review and analysis as the same thing as "surgical review" on your situation. What kind of mortgage are you in now? Are you a first-time homebuyer? Are you in an ARM loan and now may need to switch to a fixed-rate loan?

What is your financial "picture" and your current budget? Your income, expenses, current debt, and your short-term and long-term goals factor greatly into the financial review and analysis.

In order to determine just how quickly you can pay off your current debts and mortgage (or how fast you can pay off your first home, if you're a first-timer), a financial "snapshot" or review must be completed. Taking a look at your entire picture of income, debts, and how it relates to your goals, is the crucial step, in determining how best you should start your plan.

What is the strategically best way for you to reach your goals? With a financial review and analysis from Money Principal Group, a plan is created to show you the best options that HELP YOU in reaching those goals quickly. Only a loan that SAVES YOU MONEY is offered and if it doesn't make strategic, financially sound sense for you, it's not offered and a different course of action is suggested.

Is this new loan product and system for everyone? Yes, if you can achieve the simple disciplines of budgeting and currently have positive cash flow or are willing to review your budget to recover funds to create significant positive cash flow. You must be coachable and allow your goals to dictate your plan of action. If you're willing to do that, the payoff is unlimited– getting rid of debt and your home mortgage in 6-10 years is no longer a dream, it's a reality.

"The ability to be mortgage free within 6-10 years, quickly eliminate consumer debt and free up existing income to start a significant investment program for the future is now a reality. This can all be possible without requiring any additional income or reducing standards of living. The Mortgage Eliminator has empowered the individual in New Zealand and Australia to impact positively on their own financial destiny in ways, which traditionally, many could not otherwise achieve." says Metekengki. "It is now available for the US, to achieve the same level of financial success and freedom, already experienced and proven in these international markets."

3 Essential Mortgage Refinance Secrets You’ll Need To Pick The Right Home Loan

3 Essential Mortgage Refinance Secrets You’ll Need To Pick The Right Home Loan

Although lowering your monthly mortgage payment is always appealing, don't let a slightly lower mortgage rate fool you.  If you're not careful when thinking about a mortgage refinance, you could cost yourself more expenses than what you save in monthly payments -- and not even know it. (Even with so-called "no cost" mortgage loans.) Refinancing a home loan has more to it than what appears on the surface. Be sure to consult a mortgage professional before making decisions you can't change.

Mistake #1: Waiting for Lower Interest Rates

Mortgage rates are notoriously unpredictable. No one can speculate mortgage rates with enough accuracy to win every time. If rates are attractive, consider refinancing. If you do it right, and rates go down again later, you can always refinance again. If rates go down substantially before you finalize the loan, you can change mortgage brokers. If rates go up, you'll be glad you locked in that initial rate!

Mistake #2: Not Shopping around enough with Local Mortgage Bankers/Brokers

E-loan, Lending Tree, and other online mortgage shopping sites are great, but be careful! They are national mortgage shopping sites. That might sound nice since you get mortgage lenders from across the nation competing for your business, but any lender other than a mortgage lender familiar with lending in your home-state may not be knowledgeable of local practices, and that could cost you in many ways. It might not only cost you that lower interest rate – depending on your other circumstances, it could also cause you to miss your window of opportunity.

Mistake #3: Not Looking at the Whole Picture

If you have been paying your mortgage for several years, the amount saved every month by refinancing might not be as much as you think. In fact, it usually costs far more than people realize! In other words, if you are 10 years into your mortgage loan, refinancing your mortgage would make you start over on the repayment of that debt. Obviously, it might be great to save some money after refinancing your home loan, but once you refinance a loan you've been paying for 10 years, you'll be paying off that loan for an additional 10 years! That could really hurt you. Sure, it may seem great that you're lowering your $1200 monthly payment by $100, but when you factor in the extra 120 payments of $1100 that you'll have after refinancing, you'll find that your "$100 monthly savings" will actually cost an extra $108,000 over the life of the loan ($1100 times 360 payments over 30 years is $108,000 more than $1200 times 240 months).

Be sure to get a "Good Faith Estimate" and "Truth in Lending Statement" from your mortgage broker before jumping into a new loan that could cost you thousands of dollars (if not hundreds of thousands) over the life of your new loan. Get your mortgage broker to explain not only what your monthly payment will be, but also what your new loan balance will be compared to your old loan, what the new interest is, and how many years you will be adding to your repayment schedule if you do refinance.

We are here to help you to choose perfect Home loan for you. Contact Us Now to get a free consultancy.

1% Mortgage Loans… What’s The Catch?

1% Mortgage Loans… What’s The Catch?

1% Mortgage Loans… What's The Catch?

While there are several different types of 1% mortgage loans, there are really only two major components to winning with a 1% mortgage loan.

The first is to make sure the loan is set up correctly from the beginning.

And the second is to make sure you are using the loan correctly to gain the most benefit.

First, let’s talk about how the loan works.  Then, we’ll get into how to set the loan up correctly so you can reap the financial rewards these mortgage loans have to offer.

To start with, 1% mortgage loans have payment options.  Each month when you get your mortgage statement you will have the option to make a 30-year fixed payment, a 15-year fixed payment, an interest-only payment, and a minimum payment at 1%.

Although you are given several payment options, you should only select the 1% minimum payment. 

Why?

Because if you wanted to make a 30-year fixed, 15-year fixed, or interest-only payment, you would be better off getting that type of loan.  Typically, these payments are higher with a payment option mortgage loan.

If you select the 1% minimum payment your first benefit will be a significant monthly payment reduction.

Your mortgage payment will likely be cut in half.  Of course, this is a pretty attractive first benefit for most homeowners.

To compound the effectiveness of selecting the 1% minimum payment you should save what you save.

For instance, let’s say you refinanced your home with a 1% mortgage loan, paid off all your credit cards, and reduced your monthly payment by $1,000 a month. 

Now, if you save that $1,000 a month for yourself instead of giving it to your creditors, you will have $60,000 in cash at the end of five years - And that’s with a zero percent return.

Here’s the second benefit to selecting the 1% minimum payment option:

Tax savings.

If you make an interest-only payment your mortgage balance will stay the same.  If you make a 1% minimum payment you are actually paying less than interest only.  Therefore, you are creating deferred interest which makes your mortgage balance increase each month.

Before you freak out, keep in mind that deferred interest is mortgage interest and is therefore tax-deductible.

Let’s say your home is going up in value $2,000 a month.  The 1% mortgage loan will allow you to take a small piece of that appreciation, say $500 a month, and turn it into a tax deduction.

So you are taking a small piece of your equity each month and turning it into a tax deduction.  If you did not do this, all of your appreciation would be locked up in equity. 

Equity is terrific and is certainly one of the many benefits to homeownership.  But investing in equity will get you a zero percent return.

No one is going to cut you a check each month for the equity in your home.  As a matter of fact, if you wanted to get the equity out of your home you would have to sell your home or get a loan.  And you better qualify or you will not be able to get a loan.

So why not take a small piece of your equity each month, turn it into a tax deduction, and at the same time save $1,000 a month for your self? You will still have plenty of equity but with a 1% mortgage loan, you will have cash AND equity.

If you do this for any length of time you will come out way further ahead financially than if you did a regular 30-year fixed or an interest-only mortgage loan.

By the way, if the deferred interest is a concern, try making bi-weekly payments.  Making a bi-weekly payment will reduce, and in some cases eliminate the deferred interest all together.  Which means your mortgage balance would not increase.

How to set the loan up correctly:

1)  The 1% payment option on these loans is only available for the first five years.  But you could actually keep one of these loans for 30 or 40 years.  If you select a 40-year loan your monthly payment will be lower but the payment options will not last for five years.  The name of the game is to keep the 1% payment for as long as possible.  So get a 30-year amortization.

2)  The 30-year, 15-year, and interest-only payments are tied to an index.  Select a slower moving index like the MTA (Monthly Treasury Average) instead of a faster moving index like the Libor (London Inter-Bank Offered Rate).

So how can you lose with a 1% mortgage loan?

Answer- depreciation.

If homes in your area are rapidly going down in value, deferred interest could cause you to become upside down in the home.

But if your area is experiencing a 3% to 5% rate of appreciation and you save what you save by making the minimum payment, a 1% mortgage loan can have an incredibly positive impact on your financial future.

For more information about 1% mortgage loans and other mortgage related topics, please visit: http://www.residentiallender.net