Understand the Mortgage Before Purchasing a Home
By [http://ezinearticles.com/?expert=Kimberly_T._Michelle]Kimberly T. Michelle
If you are thinking about purchasing a home, it is very important to understand mortgages. The benefits of owning a house are manifold. For example, it allows you to build equity and there is a tax deduction benefit for the tax payer on mortgage interest that is paid. In addition, the pleasure of staying in your own house is one of the biggest advantages of investing in the purchase of a home. The monthly payouts increase when you purchase a house and money needs to be kept aside for unexpected expenses.
Clear Existing Debt
As soon as you decide to purchase a home, you first need to check your credit report. It is better to close the credit cards that you never use. If there is any discrepancy in creditors' reporting, you should have it corrected. It is important to save as much money as possible for the down payment, however, you should not overlook the high interest rate debt. Do not use credit cards that have high prime rates and pay off all existing debts.
Choosing a suitable Lender
You can look for lenders online and can easily find details of lenders in your area. Narrow down your choice to three to four lenders and then obtain a copy of a good faith estimate or HUD-1 form from them. Analyze the charges on the HUD-1 form and once you finalize your choice of lender, allow them to check your credit report. You can negotiate on the loan origination, processing and underwriting fees with the lender. Avoid a lender who charges points, as when you pay points, the amount of down payment is increased.
It is better to hire a knowledgeable real estate agent who can tell which costs are flexible and can be eliminated and which ones you may need to bear.
Why Lenders charge PMI
Most lenders charge first-time buyers PMI (Private Mortgage Insurance) if they do not make an initial down payment of 20% or more. This insurance does not cover you but provides cover to the lender in case you default on the loan. On average if you take a loan of $200,000 and make a down payment of 10%, the PMI charges per month are around $100. When you reach an equity percentage of 20% of your home, you can cancel the PMI.
How to arrange for the Down Payment
In case you cannot afford a down payment of 20% and do not wish to pay PMI, you can take an additional home equity loan. The additional loan that you take must be paid off first, as it is likely to have a higher rate of interest.
Types of Loans
There are two main types of loans:
1) Fixed-Rate Loans
The most common loan is a 30-year, fixed-rate loan in which the interest rate does not change. The 15-year loan is becoming more popular as the total amount of interest that you pay is less, although these loans have a high rate of interest.
2) Adjustable-Rate Loans
These offer a lower interest rate for a fixed time period and should be considered if you plan to stay in the new home for a short time only. These are listed as 3-1, 5-1 or 7-1, which means the loan rate is fixed for an initial period and then changes every year, based on market conditions.
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Article Source: [http://EzineArticles.com/?Understand-the-Mortgage-Before-Purchasing-a-Home&id=9273786] Understand the Mortgage Before Purchasing a Home
Wednesday 6 January 2016
Understanding the Ins and Outs of Payday Loans
Understanding the Ins and Outs of Payday Loans
By [http://ezinearticles.com/?expert=Maria_Marilyn_Madrid]Maria Marilyn Madrid
Financial problems can be extremely stressful especially if you need the money instantly. Emergency expenses such as for health reasons, tuition, bills, repairs, mortgage on imminent due date, and more can strike when you least expect it. For average-earning employees, facing these financial deadlines could mean sleepless nights and inevitable headaches. So, what could be a possible solution? You may opt to apply for what is referred to as payday loans.
Definition
Payday loans are generally short-term loans that offer a quick solution to your financial woes and can be paid on your next payday, hence, the name. Most of these payday loans are offered to people who needs money urgently and are willing to repay during the next payday with a hefty interest factored in. Payday loan companies are now growing at a considerable rate, making it one of the industries often searched on the web. Availing this loan is considered simpler as compared to other loans that banks and financial institutions offer.
The Criteria
Payday loans are unique in terms of the application, processing, as well as the turn-around time. While most of the lenders boast 'a no credit checking' system, borrows still need to pass certain criteria to qualify. For example, borrowers must be of legal age and must possess a bank account. Another important requirement is to provide a document that would ensure that you have a steady earning and would be able to repay the amount loaned on time. Many lenders require completion of a document before the loan is processed. One of the easiest and most convenient method to apply is by sending all forms and requirements online. It is also vital to point out that such type of loan is far more lenient than traditional loans you know. For instance, people with awful credit score may still avail of the services.
The Amount and the Payment Terms
Generally, the loanable amount varies per state or per country. For instance, in the US, there are still states where payday loans are deemed illegal. However, in some states, borrowers can borrow between $50- $10,000 depending on the credit score. It is important to understand; however, that even if you borrow a hefty amount of money, you still have to repay it within a short period of time.
Lenders also charge borrower's interest rates called the APR (short for the Annual Percentage Rate). Although states have their own ways of imposing strict APR's on loans, the interest rate calculated on payday loans is still considerably higher than the regular type of loans. An average of 20% of you loaned amount is a conservative estimate of the interest that could be possibly added to your loan principal. A rolling interest is imposed once a borrower fails to pay right on time. It is always best to check whether your state has specific restrictions on payday loans to avoid any unnecessary charges. Get to know the local regulations and you would be able to apply for a loan with no problem at all.
The Benefits
Availing short-term loans can be advantageous, too. Check the following list to further understand the upside of this type of loan:
• Easy processing of the loan. As most applications can be completed online, approval and release of loan can be done within the day. Most providers deposit the amount loaned within 24 hours or the following business day. Having a quick access to money is one of the biggest advantages of this loan.
• Convenient repayment channels. There is no need to go to the office as borrowers can repay their loaned amount through an auto-debited account. This is why an active current or checking account is necessary to provide upon the application period.
• Having a bad credit history is not a problem. Most banks would turn down applicants with bad credit standing. With payday loans, this point is waived.
• No collateral required. No hassle and no other documents required apart from the application form ad banking details.
The Downside
• Not all states are legally authorized to offer payday loans. You must check this info first.
• The cost and fees are considerably high. The APR, as well as processing fees, can be higher than other types of loans. If you are unwilling to pay for massive interest rate, then it is better to study your other options well.
• Being unable to pay on time also leads to bigger penalties and interests.
With a number of payday loans providers, it is a must to make comparisons. For instance, reading reviews will be helpful. Borrowers must also remember that these loans are designed to provide a solution. Therefore, it is a must to repay on a timely manner. Otherwise, a bigger financial problem may come your way. In other words, use payday loans as a way to resolve the problem and not as a platform to get into a bigger one.
USA Checks Cashed & Payday Advance offers [https://www.usacheckcashingstore.com/san-bernardino]payday loans in San Bernardino, California as well as nearby areas such as Apple Valley, Carson, Chula Vista, Corona, Costa Mesa, Fontana, Hesperia, Lemon Grove, Moreno Valley, National City, Oceanside, Ontario, Riverside, San Diego, Spring Valley, and Victorville.
Article Source: [http://EzineArticles.com/?Understanding-the-Ins-and-Outs-of-Payday-Loans&id=9276318] Understanding the Ins and Outs of Payday Loans
By [http://ezinearticles.com/?expert=Maria_Marilyn_Madrid]Maria Marilyn Madrid
Financial problems can be extremely stressful especially if you need the money instantly. Emergency expenses such as for health reasons, tuition, bills, repairs, mortgage on imminent due date, and more can strike when you least expect it. For average-earning employees, facing these financial deadlines could mean sleepless nights and inevitable headaches. So, what could be a possible solution? You may opt to apply for what is referred to as payday loans.
Definition
Payday loans are generally short-term loans that offer a quick solution to your financial woes and can be paid on your next payday, hence, the name. Most of these payday loans are offered to people who needs money urgently and are willing to repay during the next payday with a hefty interest factored in. Payday loan companies are now growing at a considerable rate, making it one of the industries often searched on the web. Availing this loan is considered simpler as compared to other loans that banks and financial institutions offer.
The Criteria
Payday loans are unique in terms of the application, processing, as well as the turn-around time. While most of the lenders boast 'a no credit checking' system, borrows still need to pass certain criteria to qualify. For example, borrowers must be of legal age and must possess a bank account. Another important requirement is to provide a document that would ensure that you have a steady earning and would be able to repay the amount loaned on time. Many lenders require completion of a document before the loan is processed. One of the easiest and most convenient method to apply is by sending all forms and requirements online. It is also vital to point out that such type of loan is far more lenient than traditional loans you know. For instance, people with awful credit score may still avail of the services.
The Amount and the Payment Terms
Generally, the loanable amount varies per state or per country. For instance, in the US, there are still states where payday loans are deemed illegal. However, in some states, borrowers can borrow between $50- $10,000 depending on the credit score. It is important to understand; however, that even if you borrow a hefty amount of money, you still have to repay it within a short period of time.
Lenders also charge borrower's interest rates called the APR (short for the Annual Percentage Rate). Although states have their own ways of imposing strict APR's on loans, the interest rate calculated on payday loans is still considerably higher than the regular type of loans. An average of 20% of you loaned amount is a conservative estimate of the interest that could be possibly added to your loan principal. A rolling interest is imposed once a borrower fails to pay right on time. It is always best to check whether your state has specific restrictions on payday loans to avoid any unnecessary charges. Get to know the local regulations and you would be able to apply for a loan with no problem at all.
The Benefits
Availing short-term loans can be advantageous, too. Check the following list to further understand the upside of this type of loan:
• Easy processing of the loan. As most applications can be completed online, approval and release of loan can be done within the day. Most providers deposit the amount loaned within 24 hours or the following business day. Having a quick access to money is one of the biggest advantages of this loan.
• Convenient repayment channels. There is no need to go to the office as borrowers can repay their loaned amount through an auto-debited account. This is why an active current or checking account is necessary to provide upon the application period.
• Having a bad credit history is not a problem. Most banks would turn down applicants with bad credit standing. With payday loans, this point is waived.
• No collateral required. No hassle and no other documents required apart from the application form ad banking details.
The Downside
• Not all states are legally authorized to offer payday loans. You must check this info first.
• The cost and fees are considerably high. The APR, as well as processing fees, can be higher than other types of loans. If you are unwilling to pay for massive interest rate, then it is better to study your other options well.
• Being unable to pay on time also leads to bigger penalties and interests.
With a number of payday loans providers, it is a must to make comparisons. For instance, reading reviews will be helpful. Borrowers must also remember that these loans are designed to provide a solution. Therefore, it is a must to repay on a timely manner. Otherwise, a bigger financial problem may come your way. In other words, use payday loans as a way to resolve the problem and not as a platform to get into a bigger one.
USA Checks Cashed & Payday Advance offers [https://www.usacheckcashingstore.com/san-bernardino]payday loans in San Bernardino, California as well as nearby areas such as Apple Valley, Carson, Chula Vista, Corona, Costa Mesa, Fontana, Hesperia, Lemon Grove, Moreno Valley, National City, Oceanside, Ontario, Riverside, San Diego, Spring Valley, and Victorville.
Article Source: [http://EzineArticles.com/?Understanding-the-Ins-and-Outs-of-Payday-Loans&id=9276318] Understanding the Ins and Outs of Payday Loans
Using a Reverse Mortgage For Purchase to Help Seniors Find a New Home
Using a Reverse Mortgage For Purchase to Help Seniors Find a New Home
By [http://ezinearticles.com/?expert=Alfred_Ardis]Alfred Ardis
Using a reverse mortgage for purchase to buy a new home has been an option since 2009. That's when the Federal Housing Administration introduced the Home Equity Conversion Mortgage for Purchase (HECM), which makes it easier for seniors to purchase a new residence. While the overall number of these transactions and of Americans who are reaching retirement age continues to increase, the program has been underutilized.
How Does It Work
A reverse mortgage for purchase combines a purchase with a reverse mortgage. In these cases, a homeowner has to be at least 62 years old. This streamlined process eliminates closing costs, helping make the acquisition of a new apartment, condo, or FHA-approved manufactured home speedier. On the other hand, the buyer must be able to afford property taxes, homeowners' association dues, insurance premiums, and other property expenses. Many consumers use the HECM to facilitate the purchase of a new place to live without the taking on monthly mortgage payments.
While the reverse mortgage for purchase seems like an attractive alternative to conventional financing, there are a number of factors that a potential buyer should take into account before signing on the proverbial dotted line.
The Down Payment Requirement
The purchaser is required to make a down payment. Often, this can be as much as 50% of the purchase price. The reason for this fees is that there is no equity in the new purchase. It is this equity that is used in lieu of monthly payments. Additionally, these funds cannot be borrowed but can come from the sale of existing property, savings accounts, or other sources.
The Cost Factor
Using this method to purchase a new property can be complex. Homeowners will still be required to pay taxes, keep the required insurance, and maintain the parcel in order to prevent foreclosure by the lender. Because there are no monthly payments, the overall balance is higher and compound interest accrues.
Additionally, if the borrower lives long enough, the underlying equity supporting the loan could be exhausted, which may result in a demand to repay the loan early. Individuals considering this type of financial move are required to receive mandatory free counseling from a third party or agency approved by the Department of Housing and Urban Development.
Is This The Right Step To Take?
As the economic climate continues to change and evolve, options, such as the reverse mortgage for purchase, may be a viable way to find a new home. It is important to remember that this may not be right for everyone. Doing the research first and defining one's objectives is an important step in the process to ownership.
When considering a reverse mortgage for purchase, visit Reverse Mortgage Northwest. Learn more at [http://www.reversenorthwest.com/rm-basics]http://www.reversenorthwest.com/rm-basics.
Article Source: [http://EzineArticles.com/?Using-a-Reverse-Mortgage-For-Purchase-to-Help-Seniors-Find-a-New-Home&id=9276945] Using a Reverse Mortgage For Purchase to Help Seniors Find a New Home
By [http://ezinearticles.com/?expert=Alfred_Ardis]Alfred Ardis
Using a reverse mortgage for purchase to buy a new home has been an option since 2009. That's when the Federal Housing Administration introduced the Home Equity Conversion Mortgage for Purchase (HECM), which makes it easier for seniors to purchase a new residence. While the overall number of these transactions and of Americans who are reaching retirement age continues to increase, the program has been underutilized.
How Does It Work
A reverse mortgage for purchase combines a purchase with a reverse mortgage. In these cases, a homeowner has to be at least 62 years old. This streamlined process eliminates closing costs, helping make the acquisition of a new apartment, condo, or FHA-approved manufactured home speedier. On the other hand, the buyer must be able to afford property taxes, homeowners' association dues, insurance premiums, and other property expenses. Many consumers use the HECM to facilitate the purchase of a new place to live without the taking on monthly mortgage payments.
While the reverse mortgage for purchase seems like an attractive alternative to conventional financing, there are a number of factors that a potential buyer should take into account before signing on the proverbial dotted line.
The Down Payment Requirement
The purchaser is required to make a down payment. Often, this can be as much as 50% of the purchase price. The reason for this fees is that there is no equity in the new purchase. It is this equity that is used in lieu of monthly payments. Additionally, these funds cannot be borrowed but can come from the sale of existing property, savings accounts, or other sources.
The Cost Factor
Using this method to purchase a new property can be complex. Homeowners will still be required to pay taxes, keep the required insurance, and maintain the parcel in order to prevent foreclosure by the lender. Because there are no monthly payments, the overall balance is higher and compound interest accrues.
Additionally, if the borrower lives long enough, the underlying equity supporting the loan could be exhausted, which may result in a demand to repay the loan early. Individuals considering this type of financial move are required to receive mandatory free counseling from a third party or agency approved by the Department of Housing and Urban Development.
Is This The Right Step To Take?
As the economic climate continues to change and evolve, options, such as the reverse mortgage for purchase, may be a viable way to find a new home. It is important to remember that this may not be right for everyone. Doing the research first and defining one's objectives is an important step in the process to ownership.
When considering a reverse mortgage for purchase, visit Reverse Mortgage Northwest. Learn more at [http://www.reversenorthwest.com/rm-basics]http://www.reversenorthwest.com/rm-basics.
Article Source: [http://EzineArticles.com/?Using-a-Reverse-Mortgage-For-Purchase-to-Help-Seniors-Find-a-New-Home&id=9276945] Using a Reverse Mortgage For Purchase to Help Seniors Find a New Home
The Ins and Outs of the Fannie Mae Homestyle Renovation Mortgage
The Ins and Outs of the Fannie Mae Homestyle Renovation Mortgage
By [http://ezinearticles.com/?expert=Michael_Zuren_PhD.]Michael Zuren PhD.
The Fannie Mae Homestyle� renovation mortgage allows a home buyer or homeowner to improve and or repair their property with just one loan. If you are purchasing a bank owned or short sale residential property, or your home is in need of repairs or improvements, the Homestyle� renovation mortgage may be your best option for financing. This mortgage type allows a single mortgage to encompass the sales price plus repairs and improvements into a single mortgage, based on the completed appraised value of the house. This option is extremely beneficial considering other more costly financing options, such as: obtaining secondary financing or financing home repairs with unsecured revolving credit. For new and current homeowners in need of funds for improvements or repairs, the Homestyle� Renovation Mortgage is a welcomed financing option.
Below are some of the benefits of the Homestyle� Renovation Mortgage:
• Various Terms Offered - Fixed rate 30 and 15 year terms and variable rates are offered under this program.
• Purchase or Refinance - This loan options is available to both current homeowners who want to repair or improve their current house as well as new home buyers who want to repair or improve their house right after they take ownership of the property.
• Eligible Properties- Principal 1 to 4 unit residential properties, second homes, and single-family investment properties are eligible. Condos, co-ops, and planned unit developments may also be eligible, if they meet certain requirements.
• Down Payment - Borrowers can finance up to 95% of the as complete value of the property. As little as a 5% down payment is needed. The required down payment is based on the borrower(s) middle credit score.
• Financeable Mortgage Payments - Up to six months of mortgage payments for owner-occupied properties can be rolled into the mortgage to cover non-occupancy costs during the renovation process.
• Second Mortgages Available - Borrowers can qualify for up to 105% of the as completed appraised value of the property, if they also qualify for a simultaneous community second mortgage.
This program requires that the borrower must choose their own licensed and registered contractor to perform all the repairs, improvements, and renovations. The contractor must also complete the contractor profile report form and be approved by the lender. The repairs and improvements cannot exceed 50% of the completed appraised value of the home. Renovation costs include: material, labor, fees, permits, licenses, and a 10% contingency reserve. For more information on this loan product, please contact Fannie Mae or a local Homestyle� Renovation Mortgage loan specialist.
Article Source: [http://EzineArticles.com/?The-Ins-and-Outs-of-the-Fannie-Mae-Homestyle-Renovation-Mortgage&id=9277107] The Ins and Outs of the Fannie Mae Homestyle Renovation Mortgage
By [http://ezinearticles.com/?expert=Michael_Zuren_PhD.]Michael Zuren PhD.
The Fannie Mae Homestyle� renovation mortgage allows a home buyer or homeowner to improve and or repair their property with just one loan. If you are purchasing a bank owned or short sale residential property, or your home is in need of repairs or improvements, the Homestyle� renovation mortgage may be your best option for financing. This mortgage type allows a single mortgage to encompass the sales price plus repairs and improvements into a single mortgage, based on the completed appraised value of the house. This option is extremely beneficial considering other more costly financing options, such as: obtaining secondary financing or financing home repairs with unsecured revolving credit. For new and current homeowners in need of funds for improvements or repairs, the Homestyle� Renovation Mortgage is a welcomed financing option.
Below are some of the benefits of the Homestyle� Renovation Mortgage:
• Various Terms Offered - Fixed rate 30 and 15 year terms and variable rates are offered under this program.
• Purchase or Refinance - This loan options is available to both current homeowners who want to repair or improve their current house as well as new home buyers who want to repair or improve their house right after they take ownership of the property.
• Eligible Properties- Principal 1 to 4 unit residential properties, second homes, and single-family investment properties are eligible. Condos, co-ops, and planned unit developments may also be eligible, if they meet certain requirements.
• Down Payment - Borrowers can finance up to 95% of the as complete value of the property. As little as a 5% down payment is needed. The required down payment is based on the borrower(s) middle credit score.
• Financeable Mortgage Payments - Up to six months of mortgage payments for owner-occupied properties can be rolled into the mortgage to cover non-occupancy costs during the renovation process.
• Second Mortgages Available - Borrowers can qualify for up to 105% of the as completed appraised value of the property, if they also qualify for a simultaneous community second mortgage.
This program requires that the borrower must choose their own licensed and registered contractor to perform all the repairs, improvements, and renovations. The contractor must also complete the contractor profile report form and be approved by the lender. The repairs and improvements cannot exceed 50% of the completed appraised value of the home. Renovation costs include: material, labor, fees, permits, licenses, and a 10% contingency reserve. For more information on this loan product, please contact Fannie Mae or a local Homestyle� Renovation Mortgage loan specialist.
Article Source: [http://EzineArticles.com/?The-Ins-and-Outs-of-the-Fannie-Mae-Homestyle-Renovation-Mortgage&id=9277107] The Ins and Outs of the Fannie Mae Homestyle Renovation Mortgage
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