Things that can affect which type of mortgage option is right depends greatly on the home buyer. There are different types of low down payment and no down payment mortgages. Some homes loans are best suited for specific types of homes. Distressed homes, for instance are best matched with an FHA 203k renovation loan. This type of home loan has funds for repairs structured into it.
Of all the mortgage options available, fixed rate loans are the safest. Back in the days of subprime lending by predatory lenders, many borrowers fell prey to overwhelming debt. A fixed rate home loan is more secure for many home buyers; there's no confusion about monthly payments and interest.
Compared to an ARM, it's much easier to calculate a fixed rate mortgage too. The most familiar of these is the 30-year conventional. Home buyers usually make a 10% - 20% down payment with a fixed interest rate. FHA loan products have a 3.5% deposit.
Conventional loans have a lender insurance premium when less than 20% is deposited. This premium called PMI, or private mortgage insurance, protects lenders in case of borrower default. If the loan-to-value reaches 80%, PMI can be dismissed. Buying at lower rates enables buyers to make extra principal payments. This means PMI can be dismissed sooner rather than later.
For some home-buyers a 15-year or bi-weekly fixed rate loan is more attractive. These debts are paid off much faster than 30-year conventional mortgages.
An ARM, or adjustable rate mortgage, can be a useful product for some home buyers. This type of loan is best for buyers when interest rates are low. What borrowers must consider is the length of time they intend to stay in the home. Borrowers benefit if they are going to stay only a few years, sell the property and move before rates rise. If a borrower can pay the mortgage off before rates rise, that's even better.
ARM's also have fixed rates, but harder to understand. There is a specific rate which, as interest rates rise and fall, remains the same. As rates go up and down, a percent is added or subtracted but subject to caps. These caps dictate the maximum and lowest rates you can expect. Make sure you understand the loan terms on an ARM.
Buyers should spend time calculating mortgage options with different down payments and interest rates. This helps them to see how the expense of carrying a mortgage will impact their finances.
Calculating a mortgage to get an estimate of what the amortization, monthly payments and how fast your equity builds will help you choose your mortgage option. Know before you owe, calculate mortgage options today.
Article Source: http://EzineArticles.com/expert/Greg_Hancock/2465718
People move to new cities to upgrade their home or lifestyle. The process of finding homes for sale, packing, and moving can all cause so much anxiety that new homeowners easily forget the excitement associated with such a significant life change. Certain steps can help reduce the stress.
When that "need a change" feeling begins, it's hard to ignore. If the feeling is genuine, then the first thing to do is decide where to move. Searching for an area with excellent schools and low crime rates is a good start, especially for parents. Couples without children or single people, the vibrancy of the local community may be a central concern. The lifestyle and crime sections of any local paper can provide a basic perception about the community in question. Whether print or electronic, sources provide real insight into the education system, the prevalence of crime, and activities. While using the internet to investigate locations, social media websites might not seem like an obvious choice. On the contrary, most news stations have social media sites. Newscasts are easily found online and updated regularly. From PTA meetings to gallery openings, a person can gain an understanding of their potential new hometown from any location with an internet connection.
On The Ground Research
After narrowing down the location, traveling to the area verifies research through first-hand interpretations and experiences. If all looks good, the next step would be engaging with locals to learn more about the community and discover any homes for sale.
Locals know the area on a personal level so will give good scoops on which homes are worth viewing. Developments are another option to ask about, as these are newer and fit perfectly with people who want to make a fresh start. It's even possible to be the first owner when looking at a development site with homes for sale. Most of these sites offer an expansive range of yards, parks, and wooded areas. Residents will know which sites are worth the time.
Moving companies are the best way to move to a new town and into a new house. Otherwise, time and stress overshadow what should be a happy event. No one should get upset loading vans, trying to navigate massive vans on the highway, or unloading vans. However, professional movers can add to stress if they do a poor job. To avoid damaged furniture, plan ahead by asking for recommendations from trusted sources. Contacts in the new town might have an idea about which moving company to hire. New neighbors may be happy to share these insider tips with new homeowners.
To reduce the stress associated with moving to a new city, take a deep breath and follow this advice. Researching the community, visiting, and using movers can all help ease the anxiety of this landmark decision.
The Stock Market and the Fed:
Despite the daily commentary on virtually every business news platform that the stock market might be overheated, the indices just keep rising. Once again, this week the Dow Jones Industrial Average is already up 346 points though the end of the Thursday’s trading. The bottom line is that the fundamentals of economic business remain strong, and the labor market is not showing any sign of weakness.
Mortgage Rates and Applications:
Mortgage rates continue to remain very attractive despite moving a few ticks higher during the week ending September 29th. Volume on both mortgage purchases and refinancing barely moved. According to the Mortgage Bankers Association of America applications for purchases increased 1.0 percent while refinancing declined by 2.0 percent. For the week, loan volume is split down the middle between purchase and refi with both areas representing 50% of mortgage financing. The purchase loan volume is still below where it was expected to be. Many experts attribute the lackluster numbers to the hurricane damage in Texas, Florida, and Puerto Rico.
Following this latest report for August, it is almost impossible to get a read on which direction new construction is going. The latest report for August shows an increase of 0.5 percent. However, July’s report was adjusted to show a decline of 1.2 percent, whereas the initial report showed a drop of only 0.6 percent for the month. It is not uncommon to have adjustments made to initial figures that are released. However, the larger than expected downward adjustment to July’s data caught many analysts by surprise. The good news in the report is that construction spending on residential real estate increased 0.4 percent, and even in July after the adjustment, the sector rose 0.2 percent.
First Time Jobless Claims & The ADP Employment Report
The hurricanes have had an impact on employment, however apparently not anywhere near as much as anticipated. The latest figures from ADP show that the private sector added 135,000 jobs to their payrolls. This figure is very close to analyst’s expectations for the report. First time jobless claims continue to remain well below the psychologically critical level of 300,000. For the week ending September 30th, claims declined by 12,000 down to a very low level of 260,000.
Next week’s potential market moving reports are:
· Monday October 9th – Columbus Day Holiday, Banks Closed, Markets Open
· Tuesday October 10th – Small Business Optimism Index
· Wednesday October 11th - MBA Mortgage Applications, JOLTS Report
· Thursday October 12th - First Time Jobless Claims, Producer Price Index
· Friday October 13th – Consumer Price Index, Retail Sales
As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (707) 455-7070.
When buying a home before you make an offer on it there are some things that you should consider. You want to make sure that this is the home that you want to raise your family in. Is the neighborhood is safe, schools close by, close to work, and more.
Almost everyone, before they look at the first house, has figured out a budget as to how much they can afford for a monthly house payment. No matter how impressive the home may seem if it is out of your budget, you should move on. Do not buy more home than you can afford. If you are buying a home for more than you can financially afford there is a risk of it going into foreclosure if you cannot make the monthly payments.
Buying a home should not be looked at as a place that will fit your family now but will fit your family in the future. If you are newly married but want to have children n the future look at a home with enough space, such as bedrooms, to accommodate your future family. Look at the yard and see if it would be large enough for children to play in.
Thoroughly check it out
The house looks great inside and outside but even then, it could have some defects that you would not notice unless you thoroughly looked the home over. If you have a home that you really like it is okay to put money down as an express to purchase the home pending the results of a professional home inspection report. Having an inspection done will make sure that you are getting a good deal. Find out when it was painted inside and outside because it has been awhile you may have to paint the house in the near future. If the inspection reports show some property damage, find out if the damage is fixable. You should also find out what it will cost to fix the problem. If it is not repairable or will cost too much to fix it then it is best to look at other homes.
Some homes for sale will have special features like a swimming pool or a garden area. Unfortunately, these extra features can cause the price of the home to increase by a few thousands of dollars. You need to think if you really need these extra features. You also need to check to see if they have been well maintained if you decide that you like these added features. For example, if the pool has not been well maintained and there is going to be expenses to get it in shape to swim in, will the cost be worth it.
Article Source: http://EzineArticles.com/expert/Lora_Davis/2146280