VIEWS: 4 PAGES: 19 POSTED ON: 6/27/2011
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Enjoy this Free Niche Report, compliments of WOW Enterprises For Many More Free Reports, simply click on the links below. www.TheWOWExperience.com www.NicheEmpireBuilder.com www.WOW-Content-Club.com www.WOWProfitPacks.com What You Need to Know About Home Loans and Mortgages Topics Covered: Home Loans: A Basic Introduction Home Loan Programs Mortgage Loan Unsecured Consolidation Loans Unsecured Debt Consolidation Loans 30-Year Home Loans Bad Credit Home Loans Mortgages For People With Bad Credit Washington Home Loans Sallie Mae Loan Consolidation Second Mortgage Loans California Home Loan Mortgage Rates Lending Money Refinance Home Loans Interest-Only Home Equity Line of Credit Home Loan Interest Rates 1 What You Need to Know About Home Loans and Mortgages Home Loans: A Basic Introduction Over the past several years the demand for home loans has increased. The main reason for this is probably that the availability of these loans in the market has increased. Home loans are nowadays available in the market at pretty low and attractive rates. Home loans have turned out to be a boon for millions of people, all of whom want to have a home of their own, but most of whom cannot afford to pay for that home outright. Buyers nowadays don’t have to think about the source of money for their homes. Home loans have made the life of a lot of buyers very easy. But, the buyers should be careful while opting or going for a home loan. They should first, make a thorough research of the prevailing interest rates in the market, and then opt or go for any home loan. Borrowers can even go for home loans, by undertaking mortgages. In this, the borrowers take a loan after pledging or securing any asset or securities of theirs, against the sum borrowed by them. While going for a home loan, individuals should take care of the other various aspects relating to the home loan. An individual before going for a home loan should take care, before deciding the principal amount that he is going to borrow as a home loan. Otherwise the person may end up taking a loan with a higher principal amount and then end up paying more interest for the amount that he had borrowed unnecessarily. The second aspect that the borrower should consider is the interest factor associated with every home loan. Interest is an unwanted burden that comes attached with the home loan. Interest is the extra amount that the borrowers have to pay, for taking the loan from the lender. The borrowers motto should be take a loan, which carries the lowest interest rates. For this, the borrower should make a complete research of the prevailing interest rates in the markets so that he does not get cheated by the home loan lenders. Borrowers should also consider the aspect of the term associated with the loan that he has undertaken, otherwise they may end up paying or repaying the loan for 30 to 35 years, just because of the fact that the loans conditions had stated that the principal amount has to be repaid on fixed amount over 30 years installment basis. Home loans are a boon for people, but they should be careful before opting for a home loan. Home Loan Programs You have found that dream home, now which of the home loan programs is right for you? There is no simple answer to that question; home loan programs need to be studied to choose what is best. This all depends upon your individual family preferences and financial 2 circumstances. Some factors to consider when choosing from the different home loan programs. Your current financial situation, do you expect this situation to change? How comfortable are you with a changing mortgage payment? A fixed rate mortgage can save you thousands in interest over the period of the loan, but it will also give you higher monthly mortgage rates. An adjustable rate will start you out with lower monthly payments but you could face higher monthly payments if the rates change. You have decided which type of loan is best for you, now you need to choose which of the more popular home loan programs, is the best one for you. Conventional loans are secured by government-sponsored lenders. They are also known as government sponsored entities (GSE’s). They can be used to purchase or to refinance single family or 4 plex homes with a first or a second mortgage. There are limits that are adjusted annually on an if needed based on the national average of new homes. You would need to check what the current year’s limits are for an accurate amount if you were to choose this type of home loan program. FHA loans are programs to helping low income families become homeowners. By protecting a mortgage company from default they encourage companies to make loans to families that may not meet normal credit guidelines. Some of the highlights of these loans are. Lower down payments can be as low a 3% versus the normal 10% requirements. Closing costs of up to 2 or 3 per cent of the home value can be financed, this reduces the up front money needed. The FHA also imposes limits on the fees from the mortgage company such as the loan origination fee can not be more than 1% of the amount of the mortgage. VA loans are available to military veterans who served on active duty and were discharged under conditions other than dishonorable. The dates for eligibility are WWII and later. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days service. Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 day’s active service. There are other eligibility requirements. If you think you may be eligible contact your local or state veterans’ administration representative. The biggest factor in a VA loan is that no down payment is required in most cases. There is no mortgage insurance payments needed, closing costs to the buyer are also limited. You can negotiate rates with the lender and you then have a choice of payment plans with up to a 30-year loan. The last loan program we will mention is called a sub-prime loan. This is a loan for people with poor credit who would not qualify for a conventional loan or a VA or FHA guaranteed loan. These loans normally will require a higher down payment and have a larger interest rate. This is because of the risk involved to the mortgage company. These loans should normally be considered for a limited amount of time such as 2 to 4 years. It is a good way to improve your credit situation and then refinance with more favorable terms. 3 We have shown finding or planning that new dream house is just the beginning of the journey into your new home. The right answer to the question, which of the home loan programs is for you, takes research and an honest look at your personal situation. Mortgage Loan In the past decades, it was believed that a mortgage loan is a mortgage loan no matter whichever is chosen. But this theory is not workable anymore because of the many mortgage loan products available in the market. So, before choosing a mortgage loan, it is very important to decide which one is right for you. Finding the right mortgage loan means balancing your mortgage options with your housing requirements and financial picture, now and in the future. Also the right mortgage is not just having the lowest interest rate but much more than that. And this “much more” will be determined by your personal situation. Your personal situation and your limits to pay for monthly mortgage payments can be evaluated by answering the following questions: What is your current financial situation (including income, savings, cash reserves and debt- to-cash ratio)? How you expect your finances to change in the coming years? Have you a plan to return the mortgage loan before retirement? How long do you intend to keep your house? How comfortable you are with your changing mortgage payment amount? The answers to these questions will give you the idea of your financial position. Now the next step is to decide two key options: Mortgage length Type of interest rate (fixed interest rate or adjustable interest rate). The length of mortgage loan can be minimum 15 years; can be 20, or at maximum 30 years. While selecting a fixed or adjustable interest rate you should be aware of the facts that the adjustable interest rate mortgage is more risky because the interest rate will change, while a fixed-rate loan offers more stability because of the locked-in rate. You will be able to pay off a shorter-term loan more quickly, but your monthly payments will be substantially higher. Long-term fixed-rate loans are popular because they offer certainty, and many people find that they are easier to fit into their budget. Although, in the long run they will cost you more, but you will have more available capital when you need it, and you will be less likely to default on the loan should an emergency arise. 4 In the light of above mentioned aspects, it is clear that the key to select the right mortgage loan for your needs should fit comfortably into your entire financial picture, that is having payments within your budget and comfortable level of risk connected to it. Unsecured Consolidation Loans Bills are piling up, and paying them all takes just about all the money you make – or worse, it takes every penny. Not only are there credit card bills screaming for attention, but utility, medical and store cards are all due now. Oh, and don’t forget the money you owe your brother- in-law and the fact that you’re going to need to replace your windshield now. It adds up, and will it ever go away? A loan would help you get back on your feet, help you get ahead, and help you begin to build a stronger financial future. But it takes collateral to secure a loan, right? And you don’t own a home so you have no equity to borrow against. In fact, looking around, you have nothing to offer as collateral. There’s good news. There is such a thing as an unsecured debt consolidation loan, and it may be worth it for you to pursue this option for managing your debt. Lenders who offer unsecured debt consolidation loans do not require any collateral against the loan; they look at you and what your credit and employment history say about you. If you have been making regular payments to all your creditors and if you have a stable employment history those factors can work in your favor, showing that you as an individual are a good risk. There are also lenders out there who will give you an unsecured consolidation loan in spite of your credit and employment history, if you need a clean slate in more ways than one. Unsecured consolidation loans are intended to please your creditors by paying them all off, and to please you by putting some quality back in your life in the form of greater peace of mind. Instead of a long line of creditors calling and sending letters and constant reminders that you owe money, you have one obligation, one monthly payment. Gone is the uphill battle with late and over the limit fees. Imagine the long-term savings just by eliminating those fees from your life! Be aware, though, that lenders attach higher interest rates to unsecured consolidation loans. They take a larger risk when they lend money without security, and to compensate their interest rates will be higher than on loans with collateral. Keeping in mind the greater risk lenders take with unsecured consolidation loans, loan amounts by necessity are limited to lower amounts. Depending on the company, the limit on the amount they will loan unsecured may be as low as $1,000 or as high as $20,000. Living with debt is just part of living nowadays, but when your debt outgrows your budget the quality of your life can become anything but good. There is a difference between managing your debt and drowning it. Managing debt translates directly into quality of life, and the first step to making sense of all your outstanding bills and loans may be consolidating them all 5 under one loan. The interest rate may be higher, but an unsecured consolidation loan is far better than bankruptcy. Unsecured Debt Consolidation Loans Bankruptcy is an ugly word, but a very real possibility to many people struggling to pay a laundry list of bills that never seem to end. At times, that pile of bills seems impossible to deal with, a mountain you’ll never get out from under without taking drastic measures. But bankruptcy isn’t the only alternative to a life chained to the never-ending cycle of bills, late fees and more bills. Think about consolidating your debt in a single loan, a form of refinancing that helps you put your finances back in your control and your life back in order. But refinancing is for people who own a home, right? What if you don’t have a home, or you don’t want to risk losing it by putting it up for collateral? That’s where an unsecured debt consolidation loan comes into play. Unsecured debt consolidation loans do not require collateral. You can pay off all your other creditors and keep your house – or lack thereof – out of it. Lenders are able to stay in business by covering their risk with higher interest rates than they offer on secured loans. But this can still translate into lower monthly payments for you, especially if your credit cards carry high interest rates to begin with and you’ve fallen into the trap of paying late and accruing late payment fees. Those disappear when you pay off that debt with the moneys from the loan and you are competitive and you may be able to negotiate a better interest rate. It helps to have a good unsecured debt consolidation loan. And don’t forget, shopping around always pays off; lenders do look at your credit score since lenders do look at your credit and employment history when they consider you for a loan. If you shop around, negotiate, and still find that the interest rate is not going to make enough of a difference in your monthly payment to make life comfortable again, consider choosing a long-term loan. While you will generally end up paying out a greater total amount by the end of the loan, lengthening the life of your unsecured debt consolidation loan will lower your average monthly payment. That right there could make all the difference in the world. Unpaid or slow-paid bills wreaking havoc on your credit score? Some lenders will consider you despite your credit history. A good employment history proves stability, and even if you don’t have the best employment history there are, again, lenders who will offer unsecured debt consolidation loans to almost anyone. While the interest rates are higher and the limits to what they’ll loan are lower, your credit score will improve when you get the loan, and having all those creditors paid off will do nothing but increase your credit score. If your bills are getting the best of you to the point that you’re actually considering bankruptcy, stop. Gather up those credit card bills, utility bills, department store card bills, medical bills and any other bill that’s costing you sleep at night. Look into an unsecured debt consolidation loan and see how easy it can be to save your credit and peace of mind. 6 30-Year Home Loans It used to be the first choice of most borrowers, because since the total payments are spread over a longer period of time with the interest rate set for the entire time of the mortgage. 30 year home loan rates are an industry standard but is it the right choice for you? The 30-year home loan is an industry standard, but is it the right choice for you? Because the total payments are spread over a longer period of time and the interest rate set for the entire time of the mortgage. This was the first choice of most homeowners. As we mentioned, the plus side for a 30-year home loan is lower monthly payments. This attraction is somewhat dimmed by the fact that you pay thousands extra in interest. But, your interest is 100% tax deductible which does lower your after tax cost. It offers you some flexibility so that if your financial situation changes and you have more money you can pay it off in less than 30 years, this while keeping the low monthly payments. Your payments are smaller so in reality you can purchase a larger roomier home. To show an example of the interest difference between 30 year home loan rates and one of the other rates. On a 30 year, 100,000 dollar loan using 7% interest rate your monthly payment of interest and principle would be $665.30 dollars. Over the next 30 years you will have paid $139,511.04 in interest alone. Now with a 15-year home loan rate on the same amount you will pay $871.11 per month and over the next 15 years, you would pay $56,799 in interest. This would save you $82,712 dollars. If you have the will power to invest the savings from the monthly payments, it still could be a good choice to go with the 30-year mortgage. Especially if you can find an investment that the long-term payoff matches or exceeds what you would save in a 15 year mortgage. Another factor to consider is how fast you want to accrue equity in your home or to own it out right. 30 year home loan rates take much longer to build equity. 30 year home loan rates are certainly attractive and the vast majority of home buyers get 30- year loans because that is the longest home loan available today. Experts agree if they could get a 35- or 40-year loan, they probably would. There are many other options to consider. Probably the biggest question you have to ask yourself when considering a loan is what are your financial goals? What loan plan will help you the most to reach that goal? It is clearly to your advantage to look into other loan options for the best loan available for you and your financial goals. It may surprise you that because of your personal situation there may be other plans more suitable for you. Bad Credit Home Loans A "bad credit home loan" is a loan that one can get despite having a bad credit rating. Many lenders offer a bad credit home loan knowing fully that their loan is secure, since it is taken on 7 mortgage of your home. A bad credit home loan is an instrument of opportunity for those who have a bad credit rating and would like to drop out of their debt and start on the road to good credit building. By getting a bad credit home loan you can lower your monthly payments by consolidating all your debts and also enjoy a lower interest rate on the current debt. The consolidation and paying off your current debts by getting a bad credit home loan is a major step towards credit repair. Moreover, if you can keep up the payments on your second home loan for about six months to a year, you will see a remarkable change in your credit score. The most popular options available on bad credit home loans are cash out mortgage refinance and home equity loans. Both options allow you to cash in on the equity already paid into your home mortgage and use it to get yourself out of debt. It’s best to deal with a mortgage company online to avoid bank associate’s talk around and skepticism. It’s also easier to compare various offers from different lenders to make sure you are not being cheated. Please keep in mind the following while filling up forms for online mortgage: a. Make sure you read the articles on online mortgage at the bad credit home loan lender’s websites. By this you can educate yourself on various types of financing and be informed and up to date on fees and current lending rates b. While applying for online quotes, do not opt for a generic estimate which is based on your monthly income and bills, fill out detailed information whereupon you can get a real accurate quote. c. Try and get to the total bad credit home loan cost i.e. including the closing fees, application fees, any other charges, interest charged, amortization and loan fees etc. d. After applying, do not forget to keep all records received from the lender and follow up with weekly phone calls to make sure things are moving on time. e. After the completion of a bad credit home loan, plan to refinance in about three years, by which you should be back in good credit, if you have kept up regular repayments. This will help in reducing your short time debt and maximize your future credit rating. Use your bad credit home loan to the maximum advantage to get your credit rating back in line. This will help you plan a secure future for you and your family. Mortgages For People With Bad Credit The most important factor that determines whether a person can procure a loan for himself or not is the fact, whether is past credit history is stable enough or not. All factors depend on his past record of handling credits. A bad credit history implies that his appeal for a loan would be rejected and won’t be met in most of the places. 8 And the worst part is that, if the concerned individual in his past has ever been declared as bankrupt or had a foreclosure, then for sure the borrower would face difficulties when he tries to get a financing for a home mortgage purchase, home equity or second mortgage loan. But the rumor that home loans are not available for people with bad credit history is just a baseless myth. These loans are available to people with bad credit history too. The way, however, to find such a loan, is to be to be persistent in looking out for such kind of loans, because there are home mortgage loans for people with bad credit. The basic problems involving, the process of procuring loan arises from the activities of sub- prime lenders. These are those lenders who actually work really hard for fetching loans for the people with bad credit background and low credit score and then the charge absolutely unreasonable price for the job. Borrowers should be careful of borrowing money from sub-prime lenders, as they can charge high interest rates, which, comparatively are too high than the market rate. Not only this, but these lenders also charge unreasonable pre-payment penalties. Online articles are posted in websites to inform the borrowers about their existence and caution them. However, it’s not absolutely impossible to find lenders who give out loans at reasonable rates and agreeable charges, to people who have a bad credit history. All a borrower needs to do is look around and talk to different mortgage brokers, which would prove to be helpful to find a lender, that can get them an approved loan with a reasonable interest rate and fair terms of repayment. Things that the borrower, should make sure about, are that he makes use of the lowest interest rate and terms possible. Specifically a borrower with a bad credit history and bad credit score should make sure that he sends an application for loans to a number of different lenders, since it would be sensible for him to make comparison between different mortgage loan quotes, so that he makes sure that he chooses the best one. Washington Home Loans An interest-only loan has become a very popular choice of the many Washington home loans that are available. What is making this type of loan so popular? What other options are available to potential Washington homebuyers? If you have a desire for a lower initial monthly payment, lower payments over a shorter period of time, the possibility that if rates improve your rates could go down giving you lower payments, the fact you may qualify for an even higher loan amount which would allow you to purchase a larger house than originally thought, this may be an option you should investigate. There are a couple of other things you may need to consider. Your payments may change over time. 9 There is also the potential for higher payments if the rates go up. These interest only loans are normally interest only for a specific period of time. The normal time is 4 to 11 years then the payment is raised to a normal level. This type of an option can be placed on any type of mortgage so you still will need to plan carefully since it will resort back to the original mortgage you have. The best candidate for an interest-only loan would be someone who could afford to pay for the home with a typical fixed-rate, 30-year mortgage. The reason they would choose an interest only is it is part of a financial plan they have for the future. Washington home loans are made available thru several other programs. The Homeownership Opportunity Initiative was created to make home financing more available and easy for working families. They also have the HomeSite program. This unique program is based on need and provides the home owner opportunity to modest income first time home buyers. A bit about down payment assistance and what it means. Most of the Washington home loans have programs to assist with down payment issues. Many people believe this is free money, most of the time it is not. Many of these programs are actually a second mortgage that has low interest rates or deferred payments. Now you may be able to qualify for a Grant. This does not have to be paid back. It is normally paid back if you sell your home within a certain amount of time however. Most of these programs have income restrictions. These normally require buyers to be below 80% or at 80% of the Area Median Income to qualify. So along with the normal loans such as a standard 30-year mortgage Washington also allows the buy a choice of several other programs to assist in getting the house of your dreams. It is suggested before deciding on any of the Washington home loans, you develop a financial plan and speak to a mortgage professional with any questions that you may have. Sallie Mae Loan Consolidation When your student loans get the best of you and you’re wondering how you’re ever going to get out from under all that debt, take a look at loan consolidation. It may be the answer to a number of your problems. Turn to Sallie Mae loan consolidation for a way to pay off your federal student loans, improve your finances, and put a little extra money in your pocket every month. A Sallie Mae loan consolidation replaces your existing multiple student loans with one loan, usually with a dramatically lower interest rate – as low as 4.75%. The difference a few percentage points can make in monthly payment amounts can mean the difference between scraping to pay bills and actually having a little extra pocket money. It is not uncommon for a borrower to get a fixed interest rate that is up to 0.6% lower than their current rates. According to federal regulations, calculating the interest rate on a 10 consolidated loan disbursed on or after July 1, 1994 involves the weighted average of the interest rates of the old school loans you are consolidating under the new one, rounded up to the nearest one-eight of one percent. Fixed interest rates on a consolidated loan cannot exceed 8.25 percent. Every July 1, the interest rates on federal student loans are subject to change according to the annual fluctuations of short-term federal securities, and with them your monthly payment. One of the benefits of a Sallie Mae loan consolidation is that the interest rate is locked in for the length of the loan. While interest rates may be lower some years, when you are locked into an interest rate at least your payments will be predicable and will not rise in the years when the interest rates do. A Sallie Mae loan consolidation also offers the opportunity to increase the length of the loan. The longer you have to pay it off, the smaller the monthly payments will be. Remember though, lengthening the life of your loan may mean paying out a larger total amount over time. Applying on-line for a Sallie Mae loan consolidation is free, there are no fees, and there are no credit checks. A few minutes of your time can get you smaller monthly payments and better credit scores; when your Sallie Mae loan pays off your old student loans, your credit report reflects those paid off debts. Things happen in life and in a crisis sometimes, those student loan payments don’t get made on time, or at all. If you have used up your deferment and forbearance options on current loans, consolidating your debt under one Sallie Mae loan may mean a fresh start and a clean slate. If you are facing a situation where defaulting on one or more of your current loans is a very real possibility, acting now to take advantage of a Sallie Mae loan consolidation may save you a lot of problems and help you out of an overwhelming situation. If you decide that a Sallie Mae loan consolidation is what you want, there are four options for repayment plans, the Standard Repayment Plan, the Extended Repayment Plan, the Graduated Repayment Plan, and the Income Contingent Repayment Plan. The Standard Repayment Plan offers fixed monthly payments, but the life of the loan is limited to 10 years. The Extended Repayment Plan also offers fixed monthly payments, but spreads them over 12 to 30 years, depending on the total amount borrowed, which lowers the amount of the monthly payments. The Graduated Repayment Plan also spreads payments over 12 to 30 years, but the monthly payments increase every two years. The Income Contingent sets a payment plan that is calculated on your annual gross income, family size, and total consolidated loan debt, figured into a period of 25 years to pay it off. A Sallie Mae loan consolidation may be the best option for you, but be sure to explore your options thoroughly to make sure you get the best loan for your situation. 11 Second Mortgage Loans An individual’s home is the biggest asset that one has at his disposal. A home to back you up when you need a loan is one of the greatest advantages of home ownership. In recent years, there has been a major boom in the amount of people looking to use their homes as a way to get access to extra money when they need it most. One of the best ways to do this is through a second mortgage. Second mortgage loans are loans that are made in addition to the first mortgage, and it is usually based on the amount of equity that the borrower uses to build into his home. Usually it’s required to fund home renovations. Since the borrower has already been through the process once, the underwriting that is required to get a second mortgage is much simpler than it was the first time around when the borrower had taken the first loan. The cost of the transactions involved will be lower when the borrower applies for the loan the second time. This usually happens for the fact that interest rates on the second mortgage are a bit higher than they were on the first one. But then, there are some positive points too. For example, the fact that the interest paid on the loan may be tax deductible. In most cases the interest is 100% fully deductible as long as the combined loan to value of the 1st and 2nd mortgage does not exceed the value of the home. On a second mortgage, one borrows a fixed sum of money against the home equity, and pays it back after a specific time. The amount borrowed will be combined with the amount the borrower still owes on his first mortgage. But there are a few things that one should keep in mind. First of all, one should not take a second mortgage on his home unless one has made payments on the original mortgage balance for a good amount of time. One may be able to get a second mortgage if one does not have much equity, but then the loan rates will be much higher, and the amount that one can borrow much lower. It will essentially be a waste of time and money. A second mortgage is a loan that is secured by the equity in ones home. While obtaining a second mortgage loan the lender places a lien on the borrowers’ house. This lien will be recorded in 2nd position after the primary or 1st mortgage lender's lien, hence the term second mortgage. Second mortgages aren't for everyone. Borrowing more than 80% of the home's value will subject the borrower to private mortgage insurance. The monthly payments should also be a factor. If one refinances in the future, he will have to pay off the second mortgage. Loan proceeds from a second mortgage loan can be used for just about anything. Many consumers take out 2nd mortgage loans to consolidate debt, do home improvements or pay for their children’s college education. Whatever one decides to do with the loan proceeds it is important to remember that if one defaults on then payment then he can lose his home. So one would want to make sure that he is taking the loan out for a worthwhile purpose. Thus we see that a second home loan can be of great help to the borrowers, although the borrower must take steps to ensure that he does not squander away the advantages of second mortgage. 12 California Home Loan Mortgage Rates The California Home Loan Mortgage Rates are low at this point in time. The California Home Loan Mortgage Rates are connected to the national interest rate and controlled by national housing market interest index. The national interest rate is controlled by secondary markets, which are closely monitored by the Government since the whole economy depends on them. The economy at this time coupled with the housing market situation has brought about this change in California Home Loan Mortgage Rates. Home Loan Mortgage Rates in California do not really appeal to a prospective buyer especially if he is from a different state. These rates can inject more frustration than excitement into his life since the cost of living in California is high in comparison to other states. It really takes a lot of intellect and skill to play around with different options to reduce interest rates and payments in order to make California Home Loan Mortgage Rates affordable. The California Home Loan Mortgage Rates fluctuate daily. In order to get the feel of it, it is advisable to wait and watch and see the trend before making a decision. These mortgage rates come in with a variety of different options. There are interest only rates, standard fixed rates, adjustable rates and variable rates. All these rates have to be taken into account while making a decision in order to get the best rates possible. Interest only California home loan mortgage rates are the lowest since the buyer or borrower is paying only the interest component. This apparent low level of payment options makes it interesting and attractive to borrowers A standard fixed mortgage rate gives the maximum security to the homebuyer in freezing the interest rates, i.e. the interest rates will neither raise nor fall. They will have a consistent, preplanned repayment schedule throughout the loan term. The term comes in different sizes viz. 15, 20, 25, 30, or 40 years. A fixed California home loan mortgage rate follows the national housing interest index faithfully. Mortgage rates that are variable or are adjustable carry a lower interest tag; normally 2%-3% lower than the fixed rates. They begin as fixed for a short period, which is predetermined, usually 2, 3, 5, or 7 years, after which they start fluctuating in accordance with the current market California home loan mortgage rates. The borrower has certain options here; he can refinance for a new loan, sell the home, or start repayment of the new variable or adjustable rates. Buyers planning to invest in property for a short period often choose the variable or adjustable mortgage rate because of the lower payments they offer during the starting years of the loan. Lower California home loan mortgage rates are always attractive to borrowers because they are mostly on the higher side due to higher cost of living. The best way to ensure a low California home loan mortgage rate is to possess a good to excellent credit score. These credit scores directly determine interest rates and the better the score, the lower the California home loan mortgage rate. 13 Lending Money When a friend or a family member asks you for money you can be faced with a delicate situation. Thinking it is your duty to help that person, sometimes you end up hurting yourself. Try, when you can’t resist a close person, to analyze first all the data of the problem. 1. Analyze with your heart and mind Look at the situation with the objectivity of a bank, combined with the sympathy you feel for a friend. If your heart and head agree you probably are not making a mistake helping him. If one of them tells you “No!” there is probably something wrong. 2. Consult with someone else If a friend asks you for money, ask a third person and rely on his or hers objectivity, a person that can be another friend or a family member with a trusted intelligence. 3. Don’t be afraid to say no Never hesitate to refuse someone if the situation involves too many risks. Search for other helping options for that person. Conduct the conversation in such a manner that your friend will understand you are refusing the request not the person that made it. 4. Lending equals giving a gift? You can suggest to that person that, if his of hers financial situation improves in the future, you will be glad to get a present that would equal the money you lent to them. 5. For your safety, sign a contract. When you are about to give away significant amounts of money, sign, each of you, a contract that settles the conditions and the return date of the money, and also their total amount. Refinance Home Loans There are several reasons that people may look to refinance home loans. Probably the most common is to take advantage of lowered interest rates. Some of the other reasons people refinance home loans is to pay off high priced credit cards, make home improvements, and rebuild credit rating that has taken a turn for the worse. What is involved when borrowers look to refinance home loans? When you refinance you normally just pay off the old mortgage and sign a new mortgage. Now this will also mean most of the same costs you had when you signed the original mortgage. Depending upon your State or the terms of your mortgage you may pay a penalty for paying the note off early. 14 Individuals who refinance home loans look at several things before doing so. Look for a company that may be willing to waive the normal fees. These include such things as an application fee, legal fees and appraisal fees. This are all normally associated with closing fees on a new mortgage. This could save thousands of dollars. It would give you a higher monthly payment but this could be still acceptable with a small rate decrease. How long do you plan on staying in your home? If the answer is just a few months the monthly savings may not have time to catch up to the costs involved if you were not able to secure a loan from a company who will refinance home loans but will not waive fees involved. What are the new rates? As a rule try and find a rate that is minimum 2 points below your current mortgage rate. Some who refinance home loans do so with the intention of building equity in their home faster. Now with this type of loan your month cost will be higher even with a lower rate. The benefit is you build equity faster and pay less interest over the length of the mortgage. If you wanted to refinance a 30 year mortgage to a 15 but the cost was to high you may want to check about a 20 year mortgage to still be able to take advantage of the lower rates. The last important point to remember with companies who refinance home loans. Try and get a guarantee on the rate so that it is locked in during closing. This will keep the rate the same even if it should go up prior to your closing. You could even try and see if they will agree to a rate decrease if that should occur before closing. The refinance of home loans is competitive enough that if a company will not do either of those options. You may want to check with another company. The ultimate goal is to reduce your payments or to increase the equity of your home in a shorter time. Interest-Only Home Equity Line of Credit For the homeowner in search of a home equity line of credit the availability of interest-only home equity credit lines has drawn the interest of many who seek to benefit from the value of their homes. The name itself sounds too good to be true. A look at the details could cause the homeowner to think twice before seeking an interest-only home equity line of credit. Or those same details might spur the homeowner to contemplate yet another home equity line of credit. Banks tend to offer the homeowner more than one-way to obtain an interest only home equity line of credit. One bank for example has advertised the existence of one plan whereby the homeowner gives payments that cover the Prime plus 5% for five years. Then in the next ten years, the homeowner pays a floating interest rate, a rate that is determined by the Prime rate. Yet that same bank also offers an alternate way for obtaining an interest only home equity line of credit. Under this alternate procedure the homeowner pays 5.75% APR for one year. Then after that first year the homeowner faces a percentage increase each year until the rate is 6.75% APR. In the sixth year of this particular line of credit the homeowner pays 6.65% every month until the credit line has been paid off. 15 The homeowner should also consider some of the other approaches to the offering of a home equity line of credit. For example, some banks will offer a draw period at the start of the period of the credit line. During this draw period, the homeowner can withdraw funds for making advances, for repaying advances or for advancing the line of credit. The draw period is followed by a period of repayment. Each type of home equity line of credit offers the homeowner a way to reap added benefits from the existing credit line. For example, the homeowner could choose to increase the insurance deductibles, knowing that a line of credit had been made available. The higher deductibles would guarantee a decrease in the premium payments on the insurance policy. A home equity line of credit could also be used to buy discount credit cards at a store of the homeowner’s choosing. In addition, the possession of a home equity line of credit gives the homeowner the ability to make purchases with a Rewards credit card and to then pay the card payment with the check obtained through the credit line. Once the homeowner has negotiated all of the intricacies of a home equity line of credit then that homeowner is ready to use multiple economic tactics in order to make more money from what he has available. He will be ready to prove the old saying: You have to have money to make money. Home Loan Interest Rates Thinking of buying or building that perfect home? Before you sign on the dotted line some research into home loan interest rates will be needed. This will give you a much better chance of obtaining some interest rate savings. To begin finding the best home loan interest rates you will want to study the current rates and rate movements or trends. Home loan interest rates generally reflect the over all picture of interest rates. They basically will follow Wall Street Securities with their rise and fall. Home loan interest rates combined with your individual financial status would then determine how much you can borrow. This would have an impact on how much house you can buy. Higher interest rates would mean you may have to settle for a bit smaller home than you originally had planned. One of the things that you may consider to lower home loan interest rates is to consider if you are willing to pay points or not. A point is 1% of the total loan amount. It is the up front fee that would reduce your monthly interest rate and the total amount of interest over the length of the loan. By paying points you are essentially buying your way to a better rate and trading between paying now vs. paying later. Paying points should only be considered if you plan on keeping the loan for at least four years. The reason this is suggested is gives you time to get back the upfront money with the lower monthly payments. 16 Another factor to consider in regards to home loan interest rates length of loan. A typical 30 year mortgage will have a higher interest rate than that of a 15 year mortgage. The 30-year mortgage will have lower monthly payments but you would pay thousands of dollars more in interest rates over the life of the loan than that of a 15 year mortgage. Also a higher down payment would have a positive effect on home loan interest rates. This down payment would typically need to be 20 percent or more. This would furnish you with more equity in your home giving you a much better interest rate. Most lenders offer a variety of options to help assist you with home loan interest rates. When shopping around make sure you are looking at comparable points and rates amongst the different lenders. One of the final things in regards to considering with a home loan interest rates is, do you want a fixed rate mortgage or an adjustable rate mortgage. A fixed rate will allow you more money, is fixed throughout the life of the loan. This kind of loan the interest rate stays the same. The other is a variable rate has the possibility of going up or down bed By paying points you are essentially buying your way to a better depending on the current market. Do your homework on home loan interest rates, choose between one of the many programs offered and then decide on how much a down payment you can afford. In the long run this research will pay off handsomely for you. 17 You are invited to pass this report along to as many people as you like, provided that you make no changes to it and that you give it away for FREE. 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