Wednesday, October 10, 2018

Mortgage Prepay and Other Terms You Must Know

Mortgages can confuse even the most financially savvy person, so it is necessary for you to educate yourself on the various terms that are used while getting mortgages. This article talks about these terms and what they mean.

In the event that you may have extra money in your budget at the end of the day, using it to pay off the mortgage is a good idea. This will surely reduce the loan that you have for whatever your purpose is and depending on the amount of the money you pay every month, this could lessen the time of payment to years or even months and the most important is that the interest rates in the principal loan will be reduced. But in paying, you should consider some factors such as mortgage prepay and other things that gives a negative effect to your loan.

So if you are planning to have a mortgage loan, you should first be aware of the terms that the lending companies are using in order for you not to get deceived by their charming but deadly words. Here are some of the terms that will be discussed in this article.


Principal and Interest Amount 

This is the amount that is borrowed, or the amount that is left unpaid. This amount will then be the basis for the income that one has to pay monthly or annually, depending on the agreement that both parties have made.


Mortgage Prepay Penalties 

This penalty is included in cases that one will pay the full amount of the money that was borrowed. Usually it is a large amount so that one will hesitate in paying in full. They give this penalty primarily because of the income that they will lose when a full payment is made. The lending company lives because of the interests that they include in every borrower that made a loan on their accord. Thus, it is best to pay regularly the payment schedule.


Building Equity While Reducing Debt

Equity is the difference in the current value of a property and the balance of the mortgage obligations. As the value increase and the mortgage value also decreases, then the money in the bank will grow. In building more equity to one’s home then he must do the following – high down-payment, extra principal payments, short mortgage terms and home improvements.

Higher down payment at the time of purchase is the easiest way to build equity. This gives an initial amount to the “bank”. Paying extra amounts in the monthly payment will give two effects – one is for every dollar that exceeds the main amount will reduce the debt in the same amount; and two is that in the long run, the time that you are required to pay will reduce and the interest will reduce as well. Shorter mortgage terms is when the time of loan payment will be reduced, thus increasing additional equity at a fast rate. Improving your home will increase the value, thus increasing the equity. But there are some conditions when considering home improvements. Just ask for the lender’s policy so that you will not be given returns.


Financial Advice

 If ever you are still unsure of the decision you made, then you should contact a financial advisor. They will guide you in what are the best deals in town and give you knowledge on the system so that in the future you will be independent on doing similar things. There are also online sites that offer advice on mortgage or mortgage refinance.



ABOUT THE AUTHOR 

Sarah Dinkins is a financial advisor who has been associated with Guaranteed Bad Credit Loans since long ago. To find Personal Loans, Guaranteed Unsecured Credit Card, and others visit http://www.badcreditfinancialexperts.com

Thursday, August 30, 2018

What is a Mortgage Broker?

Stewart & Soss provides free quotes on mortgages, home equity loans, refinancing, and second mortgages. We provide everyone loan options and mortgage planning advice.

You may be wondering what really a mortgage broker is. Basically, a broker is actually a middleman who can help you find a very good package deal on a home mortgage. The mortgage broker doesn't work for a specific bank or financial institutions but instead searching around for a source that offers great conditions. If this is your first time to apply for a mortgage loan, you might want to ask if you should be working with a mortgage broker.

Well, if you are applying for a mortgage for the first time, a mortgage broker can be a great help in a lot of situations, particularly if you possess a bad credit score. He or she can also help if you are experiencing a hard time selecting a lender. A well-educated and experienced mortgage broker can easily locate lenders who will be happy to assist and do business with you despite of how bad your credit score or credit history may be.

The mortgage broker will help you learn the different rules and documents required on filing your mortgage application. Performing the research for you and searching personally for lenders who could work with you, whatever kind of situation you are in, a mortgage broker will receive a commission in return. Usually, this commission payment will range from 0.5% to around 2% of the particular mortgage amount which you choose to borrow.

It could also be better to depend on your very own instincts and also, most of all, keep in mind your financial limits. The commission that your mortgage broker will have will be covered by the bank; just the same thing happens when a sales representative successfully sold anything, he/she will get commission from any sales he/she made.

Do not let any person stress you to invest on a property which is much more expensive compared to how much you can really afford. Bank may approve you with an amount but you should be able to know if the cost would be something affordable for you. This is just important because you would be the only one who'd know that your loan payment would really be affordable to you and may also give you more chances to achieve your other financial goals and opportunities.

You shouldn't be ashamed to personally ask the mortgage broker what type of commission fee he will get for helping you get a loan. The commission fee is negotiable, and also if the bank has to pay for this commission, you are definitely the one paying since you are actually the one getting the mortgage.

Deciding on whether or not to consult with a mortgage broker may also depends upon your personality. Do you decide to spend more time trying to learn everything yourself before looking for lenders? If you decide to take more rest and depend on someone who would be much helpful to assist you in looking for a good lender, you might be better working with a mortgage broker.



By:Jossielyn Lucero 

ABOUT THE AUTHOR 

If you are looking for one of the best San Jose mortgage brokers, visit stewartsoss.com. They offer a free and no-obligation consultation. They are California Mortgage Refinance and Lending Company. Also visit their Yelp Mortgage Brokers San Jose review: http://www.yelp.com/biz/stewart-and-soss-mortgage-san-jose