Home Financing The Right Way

							Home Financing The
   Right Way

 Your home loan may be the largest
financial decision you make. Treat it
 as a vehicle to grow your net worth
   over time. It’s my wish that the
 following presentation will help to
make you a better informed investor.
    Before Deciding On A Mortgage, Consider
                  These Factors
   How long will I own this property?
   Am I looking for a fixed loan or a more flexible
    program?
   Is an interest only payment attractive?
   Is it important to have adequate cash flow to fund a
    retirement plan or a savings account?
   Do I wish to refinance to pay off high interest credit
    card debt?
   Do I wish to use some of my equity to purchase
    another property that will appreciate over time?
    Once You Have Determined What Is Important You Will
      Have A Better Idea Of The Type Of Loan To Seek

    Let’s Take A Look At The Most Common Loans Available


   30 Yr Fixed
   15 Year Fixed
   3, 5, 7 , 10 Yr Fixed
   3, 5, 7, 10 Yr Fixed Interest Only
   Pay Option ARMS
What Is An Adjustable Interest Rate And How Is It
                 Determined?



 Adjustable interest rates are determined by adding the lenders
 margin to the index you have chosen. The index can change
 periodically based on inflation data. Your loan’s margin
 however stays the same over the life of the loan.



      Index Rate + Margin = Your Rate
       What Indexes Are Used To Determine My
     Adjustable Rate? Here Are The Most Common
            Indexes You Will Chose From


   MTA Index (Based on the 12 month Treasury)
   LIBOR Index (Based on London Inter Bank
    Rates)
   COFI Index (Based on Cost Of Funds Rate as
    Determined by the Fed)
   Which Index Is Right For Me?

Simply ask your mortgage professional to give you
     the historical trends for any index you are
 considering. Indexes tend to move differently in
response to inflation data. Some are more volatile
than others. Once you have the historical data you
 will be best able to judge which one you are most
                  comfortable with.
             Buy Down Points
When should I consider paying buy down points for a
home loan? The answer is easy.

Your mortgage professional can provide you with a
spreadsheet that will easily show you if interest expense can be
reduced by paying points upfront. Essentially, the longer you
intend to have the loan the more likely you would save money
with a buy down. If you intend to have your loan for just a few
years, the buy down may not be worth it. Ask for a spreadsheet
analysis and you will have the answer.
          A Word About Prepay Penalties And Terms

Always be sure to ask your mortgage professional if there are prepayment penalties
involved with your loan. This could effect your overall flexibility therefore you will
want to know this.

A lender will often give you a lower rate if you agree to hold onto the loan for a
number of years. If you do elect to accept a prepayment penalty it is often offered
for 1, 2 and 3 year periods. Prepayment penalties charged if you pay off the loan
early vary by lender but generally equal six months interest.

If you are fairly certain that you will have this loan for at least 2 to 3 years or more,
 you most likely will save money by accepting the prepayment clause. Essentially,
 the lender is offering you a lower rate because you are committing to the loan for a
 specific period of time. If you know you will have this loan for an extended period,
 then the prepay clause will lower your interest expense and save you money!
    Your Credit Score
    Considering all the factors a lender uses to
evaluate your creditworthiness, your credit score is
                the most important.

 There are ways to add points to your score and it
can be done quickly. Please click the “credit
 score” tab on this web sites navigation bar to
 learn how easy it is to raise that score to qualify
           for lower interest rate loans.
          It’s Easy To Apply Now
   Click on the “application” page on the navigation bar
    of this web site.
   Fill in all fields including a short outline of what it is
    you wish to accomplish with this loan.
   Choose the method you wish to receive
    information…e-mail, fax or by phone.
   You will receive back at least three loan programs to
    review within 24 hours.
   It’s that easy.
                               Summary
   Know what it is you wish to accomplish with your home loan. Flexibility, increased
    cash flow, being able to fund retirement and savings plans as well as college 529
    plans. Possibly you want to pay off high credit card debt or you may wish to use
    some of your homes equity to purchase a second home or investment property.
    Determining your goals when financing or refinancing is
    probably your most important step in the process .
   With the above in mind, discuss your goals with your mortgage professional. He or
    she will be able to provide you with several loan programs that will fit your
    requirements.
   If you are choosing an adjustable rate loan, discuss which index to use and take a
    look at the history of how the index has performed.
   When you believe you have found the loan that fits your goals best, be sure to have
    your mortgage professional detail all terms, conditions and fees of the program.

   BE AN INFORMED BORROWER!