boredtotears asked:


I’ve been with Countrywide as of last December and locked in a fixed rate of 6%. I hate Countrywide. Now that the interest rate has gone down, can I switch lenders or is there a specific amount of time you must be with a lender before you make any changes?

Caffeinated Content

Rony Walker asked:


A 15-year loan term has many advantages, although it may appear to be expensive because of the higher monthly amortization. However, a shorter loan term assures you that you’ll be free from this burden before or at the time of retirement and save thousands of dollars. Consider having your loan restructured to a shorter loan term.

Benefits of a Shorter Loan Term

The prospect of spending 30 years paying back a mortgage is discouraging. If you have 20 years remaining on your loan, the option to shorten your loan term to 15 can be tempting. Taking away 5 years from a 20-year loan means a higher monthly bill, but freedom from the mortgage after 15 years instead of 20 is definitely more appealing. But if it’s only a matter of a few hundred dollars more, why not? Never mind if you’ll be paying a higher monthly bill.

You’ll be saving thousands of dollars from interests alone with the five years knocked off from the 20-year loan term. Another benefit is building your home equity faster. A refinance mortgage loan offers the chance to restructure your terms.

What’s Involved

For a home mortgage, the lender will pull your credit record to check if you’ve been paying your debts on time. You’ll also be paying the fees involved before, during, and after your loan is processed.

The lender will assess all the information to evaluate if you are a good risk for a shorter loan term. If you’re dealing with the same lender, the process won’t be as rigorous and as lengthy like it would be if you go to a new lender.

It’s a fact that lenders prefer long-term mortgages because it rakes in more profits. To counter loss in future profits, lenders penalize borrowers for paying their mortgage ahead of term. This is why prospective borrowers should always inquire if the lender charges prepayment penalties.

Assuming that your lender does not charge penalties on prepayment, you have to contend instead with the closing costs for your refinance mortgage loan.

Others get a refinance mortgage loan to switch to a short term interest only loan. They are banking on the equity of the house and intend to sell it in the near future. The proceeds of the sale will go to the interest and they can still have extra money from the profit. In your case, you’re looking at the full ownership of your home in a shorter time.

For a new loan, you can decide if you want a fixed rate mortgage or an ARM. An online calculator can compute how much you’re going to pay the monthly bill in 15 years’ time. From the calculations, you’ll be able to determine the feasibility of a short term ARM or fixed rate refinance mortgage loan.

Short Term or Long Term?

A short term, or traditional loan, will always depend on your financial situation and future plans. A short-term refi is ideal now that interest rates are low. You’ll be surprised that you’ll be paying the same monthly fee as your first mortgage, so there’s not much of a change in the monthly bills. The prospect of paying off your loan in 15 years, however, is imminent. For those who feel secure with the stability of the traditional 30-year loan term, switching from an ARM to a fixed rate refinance mortgage loan is recommended.



Wayne

Shellaine Enfesta asked:


Refinance depends upon your good or bad credit: Mortgage loan refinancing in Britain can be a good thing or a bad thing, depending on your personal circumstances. Mortgage loan refinancing is a good option if you have decent credit, but need to lower your monthly payments and the amount of interest that you are paying on your debts. It can be a bad idea if you have bad credit and are using the mortgage loan to clear up bad debt, because your interest rates will be very high. Before looking at getting a mortgage loan refinancing in Britain, you should think carefully about your situation and the reasons behind the refinance.

These Types of Mortgage Lower Interest: There are cases when you may want to get a mortgage refinancing in Britain simply because you can get a lower interest rate. Maybe your credit is better now than when you first purchased your home. If this is the case, other lenders may be willing to refinance your mortgage for a lower interest rate. Be careful when doing this, however. If you refinance for a lower rate but it is adjustable, you could wind up paying more. You should only do this if you get a lower fixed rate on your mortgage loan refinancing in Britain.

Refinancing in Britain for Home Improvement: This is also a popular reason to get a mortgage loan refinancing in Britain, and a very good one. When you get a mortgage loan refinancing in Britain for home improvement, you are borrowing against the equity of your home. This means, again, that you will be paying on your home longer. However, you will also be raising the equity in your home very quickly, because the home improvements increase the value of your house. By the time you have the improvements finished; your home will be worth more than the mortgage once more.

Mortgage Refinancing in Britain for Debt Consolidation: Debt consolidation is the most common reason for getting a loan refinancing. With all of the stores offering credit and all of the credit cards available, people are living well beyond their means. Eventually, all of this credit debt catches up with them, and they have to find a way out.

It is these customers of refinancing in Britain that are the most preyed upon by high interest lenders. If you do decide to get a refinancing for debt consolidation, you should make sure that you shop around for a good deal. Do not be so thrilled that someone will accept your bad credit that you go for the first loan offered to you. It could be a very costly mistake.

Getting a mortgage loan refinancing in Britain for these reasons is not actually a good thing. First of all, your credit is no longer as good as it was when you first bought your home, which means you will pay a higher interest rate. Secondly, while you end up with one lower monthly payment, you also wind up paying longer on your house. And, if you can not make that payment, you will eventually find yourself destitute and without a place to live. You should think carefully before getting a mortgage loan refinancing in Britain for debt consolidation, and budget carefully if you do get such a loan.



Steven

Ricky Lim asked:


Currently on the market, there are many varieties of mortgage loans available. Sometimes it can be difficult to tell which mortgage loan is suitable and applicable to you.

I will discuss the 3 main types of mortgage loans on the market. Most banks and lenders offer mortgage loans that belong to one of these categories.

1. Fixed Mortgage Loan

Fixed mortgage loans are the most popular and common among the three types of mortgage loan.

You take out a mortgage loan with a lender and you pay a certain repayment amount for a fixed period of time. Most people usually choose 30 year fixed mortgage loans as the monthly repayment amounts are low and the interest rates usually evens out in a 30 year period.

One disadvantage of 30 year fixed mortgage loan is you have to repay more for your mortgage loan in total compared to someone who takes up a 15 or 5 year loan.

There are also shorter time periods such as 5 year, 10 or 15 years fixed mortgage loans. It allows people who want to pay off their house in a shorter period of time. Of course, you have to make sure you have the financial capability to repay higher monthly repayments.

There is also another sub-category of mortgage loan called adjustable rate mortgage loan or ARM. Usually, you will start off with a lower interest rate compared to a 30 year fixed mortgage loan. So you ended up paying less each month for your mortgage repayment.

However take note that ARM is highly fluctuating depending on interest rates. In other words, you pay less for monthly repayment when interest is low and pay more when interest rates is high.

2. Convertible Loans

Convertible loans are becoming more popular as it allows people to keep their mortgage loan options open allowing for more flexibility.

If you find interest rates are too high, you can convert to a fixed rate mortgage loan. If interest rates are low, you can also convert to ARM based mortgage loans.

There are too many varieties of convertible loans under this category. However I list one type of convertible loans I dealt with.

Balloon Loan

A balloon loan is a fixed rate convertible loan. Usually, you start off by repaying small monthly repayments for a period of years, usually 5 or 7 years. At the end of that period, you will need to repay the loan in one lump sum.

So what’s the advantage of a balloon loan? It is mostly used by investors or property dealers who are looking to sell the house in a short period of time. They can take advantage of low interest rates without locking their money on a house. Since they will have a large sum of money when they sell the house, it will not be a problem to return the lump sum.

3. Special mortgage loans

These are mortgage loans that are only being offered to a group of people. For example the FHA mortgage loans are only available for first time home buyers or people with bad credit.

Another one is the veteran affairs mortgage loan. They are only offered to widows of the US armed forces.

The best way to know whether you qualify or is suitable for a mortgage loan is to speak to a professional mortgage consultant before you decide to take up any mortgage offer



Caffeinated Content for WordPress

Poppy asked:


How can they make sure you have good credit and that your not just going to walk away from the loan?

Create a video blog