Tag Archives: Mortgage

Have you ever wondered why do some homeowners refinance and others do a loan modification? There might be a lot of reasons driving their decisions. In this article, we identify some of the key differences between a loan modification and a mortgage refinance. They both can be beneficial to someone with a high mortgage payment, and so they need help with one of the two options to lower their mortgage payment. They have similarities and differences alike. Let’s check them out!

A refinance simply completing the process of acquiring a new loan for financing your current mortgage. When you do a refinance, you will have to run your credit to meet the minimum requirements to be eligible for the new mortgage loan you are requesting. You will have to provide proof of employment, meet a minimum income requirement, have a good payment history, in addition to other conditions. When you refinance, you are paying off your old loan with a new loan and starting over again. You can take out equity in the property or leave it in. You can often do a 15yr or 30yr mortgage. You might want to do a refinance with a cashout and pay off another high-interest loan such as a credit card, revolving store card, other loans, finance college, buy a new car, among other things. When doing a refinance, your credit score and payment history will be weighed heavily in the final determination to grant you credit or deny you.

Most refinance will take anywhere from about 2-4 weeks to complete, and your old mortgage lender will be paid off. Homeowners will often refinance when the interest rate is at least one percentage point lower than they are currently paying. It’s good to refinance if you intend to stay in the home for at least another 5yrs. The reason why it’s not a good idea to refinance if you don’t plan on staying in the property for at least five more years is due to the fees and closing costs associated with doing a refinance. It is like getting a new loan – in fact, that is exactly what you are doing.

A loan modification is similar to a refinance because it is actually lowering your mortgage interest rate to give you lower house payment. However, there are some key differences. A loan modification is not focused on your credit score or credit history as much, if at all. Some loan modifications don’t ever check your credit history, a small number of lenders do check, but your credit is not weighed much at all for granting you a loan modification. When you do a loan modification, you will rarely get charged anything, and if you do, they are minor changes that are rolled up in the mortgage balance, unlike a refinance. Many people that apply for a loan modification are often in deep trouble with their mortgage payments. They commonly have a poor credit history and will usually not qualify for a refinance.

Not to say a refinance is better than a loan modification, but many homeowners who do a loan modification do it as a last option. Homeowners who refinance do it because they choose, and they can try to use their good credit history to their advantage by getting a lower mortgage payment. Ironically, a refinance and a loan modification will often give you a much lower mortgage interest rate over your initial interest rate. Yet, the requirements for getting them can be so different. One of the disadvantages of a modification is not having a cash-out option whenever the homeowner does it; With a refinance, a cash-out possibility exists. Once the loan is modified, the loan will start over again, with good credit reporting showing up with the credit bureaus.

So you are having to pay the closing cost that will take a few years to recover from before you actually start seeing some actual savings. You will not need to refinance if you are not going to get a lower interest rate of at least 1 point. It would not be worth it in the short term. If you need to cash out without refinancing or selling the property, you might want to consider a Home Equity Line Of Credit(HELOC). It’s like a kind of revolving credit that your home serves as collateral for that loan. You can get access to the funds all at once or over some time. So keep in mind that it is not so much whether you did a loan modification or a refinance because the results are often very similar. The key is to get your mortgage payment lower. Get in touch with the professionals at DLC ESTATE MORTGAGES for all your mortgage needs in

 

Having fun and purchasing a home are two phrases that are rarely used in the same sentence. Buying a home is a major investment, and the process of securing a mortgage and negotiating a price is complicated. Most buyers are unaware of the confusing steps that are involved but don’t worry.

Step 1: Assess your finances

This step determines the buyer’s ability to afford a home. The buyer may want to consult a financial adviser as to the strategy he or she may employ in paying for a home. Assessing your finances is important, especially if the buyer has a troublesome credit history and other financial obligations. The buyer must also reach a compromise between payment capability and desired property.

Getting a letter of pre-approval shows the seller that you are serious about buying a home. This certificate assures the seller that you have have enough money to buy their property. Securing a Pre-Approved certificate would range from a few days to a few weeks, depending on the status of the request. It’s worth the trouble of waiting, especially if it increases your ability to reach a fair compromise on price.

Step 2: Survey the Market

With the explosion of information, it becomes more exciting to search for possible properties. Newspapers, advertisements, referrals, brochures, and even the internet all give the buyer more choices and better options. Buyers should take full advantage of this information glut to facilitate his or her decision regarding a house. Remember, real-estate agents search for new homes daily. Use this knowledge to find your “dream home.”

Step 3: Learn from Others

If the buyer is a first-timer, he or she does not have to make the common mistakes first-timers commit. He or she should contact people who have been in the same circumstance and learn from their experience.

Step 4: Find a Suitable Agent

Considered as one of the most underestimated yet important aspects of home buying. Most buyers end up with an agent by sheer accident. It would do well for the buyer to do research and contact an agent whose strategy and skills fit the buyer’s needs. Buying or selling a house is a thrilling experience. But connected to this is a stressing and overwhelming job. This calls for an excellent real estate agent.

Verifying the real estate agent’s license is very helpful. It pays to be very cautious because this involves the property! This includes their state license in selling a property. Ask for the previous homes sold for a client.

Develop good chemistry with your agent. An agent understands what is important to you when searching for a property, and when negotiating with the seller. The agent should be able to tell their client the true worth of the property. Meet with your agent frequently so they can keep you up to date about new properties. A skillful agent can save the buyer a great deal of trouble and is instrumental in a successful sale.

Ask friends and family who they have used in the past, and ask them if they would use the same agent again in future transactions. Trusting your agent will save the buyer from a great deal of grief later.

Step 5: Close the deal

A great deal of discussion and paperwork is in involved in closing a deal. However, if the preceding steps were accomplished well, this step will be taken care of. Here, the buyer and the seller come to terms with the financial details, paperwork, and other details vital to the sale. By properly planning and educating yourself, you will now be the proud owner of your dream home!

House shopping can be stressful, but implementing these tips can remove some of the roadblocks on your path to finding your dream home. How can you use these tips to make your search smoother? Ready to start your journey to your new home? Sunland Capital Mortgage has over 20-years experience helping people find a home they love. Contact them today to learn more!

We’ve all heard about refinancing, but only a few are aware of its benefits. If you’ve never come across this word before, let me briefly throw some light on it (without sounding like a dictionary or Wikipedia). Mortgage refinancing is simply a strategy of paying off a mortgage with a new loan (pretty much repeating the original loan process) but on more recent and favourable terms.

If you’ve maxed out your current bank loan limit and are looking for a better alternative to lower your mortgage payments or pay off your mortgage faster, refinancing may be the answer. In addition to helping you solve your financial problems, it has many other perks that not only help you achieve your goals but also make your life much more comfortable. But how? Buckle up for some of the best benefits of this intriguing strategy!

Much Better Mortgage Rate

Rates are significantly low, making it the number one reason that many people choose to refinance. If mortgage rates have gone down by the time you’ve taken out the loan, it’ s often possible to save money by refinancing your mortgage into a new home loan at current rates.

Save Some Bucks

Did you know refinancing saves homeowners an average of $4,264/year? A lower rate is synonymous to lower payments, meaning you’ll generally pay less for your home, especially if your refinanced mortgage matches the same payment date as your old mortgage. You can also minimize your month-to-month payments by extending the repayment date beyond what it is now. By paying less each month for your mortgage, you also free up extra cash in your budget that you can put into your savings accounts!

Bid Farewell to All Your Debts

It’s indeed a sad reality! Most of us struggle with daily or monthly payments because of our loans or leasing and want to consolidate our respective debts as quickly as possible. Thanks to cash-out refinancing, you can use the funds to pay off all your debts, be it a student or your car loan. Alternatively, you may also use the extra funds to finance renovations, wedding expenses, emergencies or perhaps simply enjoy a well-deserved family vacation!

Stabilize Your Loan Payouts

For those of you who currently have a variable rate mortgage and want more predictable monthly payments, consider refinancing your loan with a fixed-rate mortgage. Depending on the level of risk you are willing to take and your current and future financial situation, switching from a variable rate mortgage to a fixed-rate mortgage may be the ideal solution for you. This way, you don’t have to worry about seeing your monthly payments increase even when rates start to rise. Most people choose to switch from the first to the second, especially when interest rates are rising.

Own Your Home Sooner

There is no better feeling than owning a house much faster! From credit cards, loans, car payments and all the other financial obligations you may encounter, having one less monthly payment to deal makes you feel much more in control of your finances. Refinancing can be a great bonus if you want to pay off your mortgage debt at a faster time. If you have a 30-year loan, refinancing over 15 years will allow you to own your home much sooner. Moreover, if you proceed this way, you’ll have the opportunity to increase your home equity in a jiffy!

Your Plan B for Unforeseen Events

Refinancing can be of a helping hand in dealing with unexpected and uncontrolled situations. No one wants to dwell on tragedies involving severe injury or even death. However, knowing the options available to you in an emergency can ease your mind.

Scale Up Your Business

Regardless of whether you’re consolidating debt or have chosen to switch to a fixed loan, lower interest rates could translate into increased cash flow. That money could serve as a source of reinvestment in your business and help it prosper. You must be aware of specific elements when deciding to refinance, such as hidden costs or high penalties for late payments. Do your homework in advance and make the right decision for the financial future of your business.

Taking A Person Out of a Mortgage

Sometimes, usually after a divorce, a person who initially took out a mortgage is no longer held financially responsible for the loan. The only way to get him or her out of the pledge is to refinance it. Refinancing could also help delist a co-signer whose support is no longer deemed and who would like to be freed from his or her responsibility.

If you haven’t had a home and mortgage for a while, this may be an excellent time to at least consider refinancing your house loan. Explore your options to make the best decision for you, your finances and your home. Contact DLC Estate Mortgages INC today! With more than 10 years of experience in mortgage services, they will guide you through the home-buying adventure and help you determine if now is the right time for you to refinance!

Do you think you are finally ready to buy a house? Excited to go home shopping?

Stop.

We hate to rain on your parade but trust us. You do NOT want to rush this. You are not ready to go home shopping unless you’ve seen your lender first.

Potential buyers who consult with their lenders before even going home shopping have the added advantage of obtaining a pre-approval letter. How is that helpful, you ask? Well, sellers would be more willing to negotiate for one. And why do you ask? Well, that letter is proof that you can obtain financing and that you are a serious buyer.

You may read that interest rates are set to lower even more in 2020 and you are ready to start looking so you can make a buy as soon as it drops, but really, don’t rush into homeownership without knowing more about mortgage. Because, here’s the thing: the process of getting a home loan is not the same as getting a car loan or renting an apartment. So, to avoid being disappointed because mortgage loan application has been denied, make a meeting with your lender your number one priority.

Your lender will cover loan options available to you as well as budgeting. Another benefit of talking to your lender from the very beginning is that the possibility of unearthing any potential problems very early on. The lender will check your credit to do that.

At this point, the lender will tell you if you are eligible for a home loan and will communicate to you the maximum amount you can borrow. This will help you set the price range for the house. Here’s one thing you want to remember at this stage: do not go for the top of your spending limit. Instead, determine what monthly repayment amount you are comfortable with, and use that to decide the amount you’ll be borrowing.

5 Documents You Need when Trying to Get Your Mortgage Pre-Approved

What is pre-approval? Is it the same as pre-qualification?

Short answer? No.

A pre-qualification is when your lender gives you an estimate of how much you can afford to spend on a home.

A pre-approval, on the other hand, means the lender your credit has been checked and the documentation to approve a specific loan amount has been verified. A final loan approval will be needed once the appraisal of the property has been done.

Below is a list of documents you will need to assemble for the pre-approval process:

1. Proof of Income

Documents that can serve as proofs of income include wage statements, recent pay stubs, and proof of any additional income such as alimony or bonuses. You may also be required to present your most recent tax returns.

2. Proof of Assets

This proves that you have sufficient funds for down payment and closing costs. You also need to prove that you have some cash reserved. Bank statements and investment account statements should do the job.

3. Good Credit

The lower your score, the larger will the down payment have to be. If your score is high, on the other hand, you may be able to enjoy better interest rates.

Your score is below the accepted range? Fret not. Most lenders will suggest ways on how to improve your score if it’s too low.

4. Employment Verification

For lenders to lend you money, they need to make sure that you will be able to make the monthly payments. So, in addition to pay stubs, they may also call your employer to verify that you indeed have stable employment.

If you are self-employed, you will be expected to produce the two most recent years’ tax returns instead.

5. Other Documentation

These may include proof of your identity, for example. You may be asked for your driver’s license, your Social Security number (SSN) and your signature. This is to help the lender pull your credit report.

5 Tips to Get Your Mortgage Approved

Below are  few tips to ensure your application gets approved:

1. Check Your Credit Score

Make sure you review your credit score and credit history before submitting a home loan application.

Factors such as several missed payments, frequent lateness, low credit score, credit fraud and other derogatory credit information can stop mortgage approvals dead in its tracks.

2. Save

You might have to cough up some cash during the mortgage approval process. So, to avoid any delays in the approval procedure, make sure you have some cash saved up.

3. Do Not Change Jobs

Since lenders take into consideration your jobs during the pre-approval process, leaving your stable job to be self-employed or for a lower salary may throw a wrench in your plans.

4. Pay Down Debt

While banks and lenders won’t require that you have no side debts, the less you owe your creditors, the better. The more debts you have to pay, the less amount you may be able to acquire from your lender.

5. Know What You Can Afford

As mentioned above: do not get a loan that you cannot afford to pay. Remember that you have other expenses, such as insurance, groceries, and fuel.

Many times, we’ve been in a financial situation where we need money to start or complete a project. That’s why we get the help of loaning an amount from either the bank or some other financial institution. Many people who are confused about what is a loan, well it is a lump sum of money that you borrow with the expectation of paying it back either all at once or over time, usually with interest and they are a fixed amount, like $5,000 or $15,000. The interest rate varies from the amount of money you are taking from the bank. There are some factors that they do consider before loaning you an amount these are your income, debt, credit history, and a few other factors. Some loans are the most common because the amount is higher, and the interest rate is lower; such investments are home loans and student loans. It is important to know that there are different types of loans you can borrow and we are going to talk about that today in details.

What are Open-ended and Closed-ended Loans?

These are loans that you can borrow over and over. The credit cards and lines of credit are the most used types of open-ended loans, these have a credit limit, which is the maximum amount you can borrow at one time. Depending on your needs, you can use all or part of the credit limit. It is normal that the more purchase you make, the quicker the credit decreases. As for closed-ended loans, these are the one-time loan that cannot be borrowed again once they’re repaid. As soon as you make a payment on the closed-ended loans, the balance goes down. If you don’t have any credit, then you can use the closed-ended loans, but if you need more money, then you would have to apply for another loan and go through the same approval process all over again. The common types of closed-ended loans are mortgages, auto and student loans.

What are Secured and Unsecured Loans?

These are loans that rely on an asset as collateral for the loan, and in the event of the loan default, the borrower can take possession of the asset and use it to cover the loan. Know that the interest rates for secured loans may be lower than the unsecured loans. However, it is good to know that the asset may need an appraisal in order to confirm its value before you can borrow the amount that is up to the value of the asset. An example of a secured loan is a title loan. As for unsecured loans, these do not require an asset for collateral. Unsecured loans depend fully on your credit history and your income so that you can be qualified for the loan. If you don’t pay an unsecured loan, then the lender can exhaust the collection options that include a debt collector or a lawsuit to recover the amount.

5 Types of Loans

Here are the five most common types of loans apart from home and student:

  • Auto loans – These are mostly used so that you can buy a new or used car and it normally takes years to pay off. An auto loan can be financed through a bank, credit union or a car dealership and these have the lowest interest rate.
  • Personal loans – These are types of unsecured loans and are mostly offered by the bank. It is normally based on the borrower’s creditworthiness and high scored are preferred. The money from a personal loan can be used to pay off any bills or debts. Interest rates for personal loans vary from 9% to 12 % depending on certain financial institutions.
  • Credit cards – These are essentially loans that the borrower and the bank agree to be repaid at a later date. It is one of the easiest loans to use.
  • Cash advances – Known as short-term loans that are offered by credit card companies. Short-term lenders are payday lenders and tax-preparation companies. These offer money against an expected refund.
  • Small business loans – These are banks that offer small businesses to start their business by providing a loan that would have variable rates and the payment can be made from five to 25 years.

Loans to Avoid

There are certain types of loans that one should avoid taking even if in dire need of it! They are like predators and take advantage of the consumers. These are:

  • Payday loans are short-term loans that are borrowed using your next paycheck as a guarantee for the loan. These loans interest rates are pretty much high, especially when it comes to annual percentage rates, and it can be difficult to pay off.
  • Advance-fee loans are scams to trick you into paying money. These use different tactics to convince borrowers to send money to obtain the loan, but the lender will have to pay an upfront fee to obtain the loan. There is a risk in this type of loan and is normally avoided by anyone.

If you’re looking for a reliable source where you can manage your finances, then do consider FLAME Mortgages. They are your experts in finance loan and mortgage. As a family-owned and operated business, they do know the real problems when it comes to mortgaging and financial crisis. The management assists you from scratch in order to get a better understanding of your needs and financial goals.

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