Porcupine Real Estate


Posted by Mark Warden on 2/26/2018

 

Whether you’re a first time homebuyer or a seasoned homeowner, the mortgage terminology can be confusing. Since buying a home is such a huge financial decision, you’re going to want to make sure you understand every step of the process and all of the conditions and fees along the way.

Below are some of the common terms you might come across when applying for a home loan:

  • ARM and FRM, or adjustable rate and fixed rate mortgages. Lenders make their money by charging you interest on your home loan that you pay back over the length of your loan period. Adjustable rate mortgages or ARMs are loans that have interest rates which change over the lifespan of your loan. You may start off at a low, “introductory rate” and later start paying higher amounts depending on the predetermined rate index. Fixed rate mortgages, on the other hand, remain at the same rate throughout the life of the loan. However, refinancing on your loan allows you to receive a different interest rate later down the road.

  • Amortization is the process of making your life easier by setting up a fixed repayment schedule. This schedule includes both the interest and the principal loan balance, allowing you to understand how long and how much money will go toward repaying your mortgage.

  • Equity is the the amount of the home you have paid off. In a sense, it’s the amount of the home that you really own. Your equity increases as you make payments, and having equity can help you buy a new home, or see a return on investment with your current home if the home increases in value.

  • Assumption and assumability is the process of a mortgage changing hands. An assumable mortgage can be transferred to a new buyer, and assumption is the actual transfer of the loan. Assuming a loan can be financially beneficial if the home as increased in value since the mortgage was created.

  • Escrow. There are a lot of legal implications that come along with buying a home. An escrow is designed to make sure the loan process runs smoothly. It acts as a holding tank for your documents, payments, as well as property taxes and insurance. An escrow performs an important function in the home buying process, and, as a result, charges you a percentage of the home for its services.

  • Origination fee. Basically a fancy way of saying “processing fee,” the origination covers the cost of processing your mortgage application. It’s one of the many “closing costs” you’ll encounter when buying a home and accounts for all of the legwork your loan officer does to make your mortgage a reality--running credit reports, reviewing income history, and so on.  




Tags: Mortgage   terminology  
Categories: Uncategorized  


Posted by Mark Warden on 1/28/2017

 Securing the best mortgage for your home may seem challenging, particularly for those who are first-time homebuyers. Here are three tips that you can use to get the best mortgage rate at any time:

1. Find Ways to Improve Your Credit Score.Your credit score likely will influence your mortgage rate. However, those who track their credit score closely can improve this score over an extended period of time. That way, when the time comes to secure a mortgage for a new home, you'll be in great position to get the best mortgage rate possible.Try to check your credit score regularly. You can do so quickly and easily, as you're entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies (Equifax, Experian and Trans Union). The most important thing you can do to improve your credit score is to focus on paying off any outstanding debt. 
2. Take Advantage of a Shorter-Term Mortgage.Although you may consider a variety of mortgage options, a shorter-term mortgage may allow you to pay a lower mortgage rate for a shorter period of time.Remember, just because you choose a 15-year mortgage over a 30-year mortgage does not mean you will wind up paying twice as much for your mortgage payment each month. A 15-year fixed-rate mortgage will have higher principal and interest totals than a 30-year counterpart, while the insurance and tax fees associated with both types of mortgages will remain the same.
3. Look at All of the Lending Options That Are Available. Your lender will review all the loan programs for which you qualify. Some programs require zero down, and will thus have a higher monthly payment, so it's important to review different scenarios to find the loan that will work best for you.

Find a mortgage rate that works for you, and you may be able to save money over the life of your mortgage.





Posted by Mark Warden on 6/12/2015

With mortgage rates at all time lows, you might be wondering if you should be considering refinancing your home. While it may seem like a great thing to do, there are a few things to consider before you decide. An obvious reason for refinancing to a lower interest rate is the monthly, and even more importantly the long term, savings you will get. Depending on the decrease in interest rate and the amount of the loan, you could see a savings of at least $50/month or $600/year or $6000/10 years. Refinancing to a shorter term loan can also help save on the interest you pay over the life of the loan so if you can afford a 15 year mortgage the benefits outweigh that of a 30 year. Some things to consider - If you have owned your home for a long time, your monthly payments are going more towards the principal of the loan, not the interest. Refinancing would cause you revert back to monthly payments of more interest than principal, losing the equity that you have built in your home. You may be charged for an appraisal on your home which can be around $500. The bank will want to make sure that you are refinancing for an amount your home is worth so some out of pocket expense is required. If you plan on moving in the next few years, refinancing may not be worth the amount you will pay in closing costs. There are several refinancing calculators available on the web including at http://www.zillow.com/mortgage-calculator/refinance-calculator/ and http://www.smartmoney.com/calculator/real-estate/should-i-refinance-my-mortgage-1302835660427/. No matter what you choose, being fully informed of all the options, costs and advantages/disadvantages is key to a successful refinance. Make sure you talk with you current lender, as well as other lenders to get the best refinance possible.




Tags: Mortgage   loans   refinancing  
Categories: Financing  


Posted by Mark Warden on 8/15/2014

Owning a house gives you a sense of fulfillment, and helps boost your self-esteem. It is a long term investment and should not be taken lightly. The present state of your finances is possibly the single most important factor when contemplating home ownership.  Before you start shopping for a house, take into consideration the following factors. Have you set aside enough money for the down payment?  The amount you need varies based on the price of the home and percentage required by your lender.  Zero down mortgages are possible, however the interest rate is typically very high increasing the amount paid out over the life of the loan. Private Mortgage Insurance (PMI) is typically required for this type of loan, again increasing your monthly payment. How high of a mortgage payment can you afford to make ?  If you opt for a fixed rate, your payment would remain consistent throughout the period of the loan. This type of loan is favorable for future financial planning.   Adjustable rate mortgages make it a bit trickier to predict your monthly payments based on the fluctuating interest rate throughout the duration of the loan.  This type of loan could be risky if interest rates rise and your payments increase significantly higher than anticipated. The security of your financial future is paramount when acquiring a mortgage loan.  You would not want to enter into this long term investment without stable employment and a definite career path.  Most banks and lending companies require a borrower to have been with the same employer for at least 2 years before considering a loan of this nature. Secure financial footing is key when applying for a mortgage loan. When determining your readiness to purchase a home, your credit score is as important as your finances. If you have a low credit score, you’ll attract a higher lending rate. This implies an increase in the amount paid back to the lender over the duration of the loan. An excellent credit score of 720 or above attracts the best interest rates and repayment terms. If your credit score is too low, improve it by:

  • Becoming Debt Free
  • Removing all inaccuracies from your credit report
  • Making all monthly payments in a timely manner -- eliminating late payments
  • Avoid applying for new loans and opening credit accounts
The commitment of home ownership comes with financial responsibilities beyond the monthly mortgage payment. Be certain to consider additional expenses such as property tax, utility bills, and home maintenance costs when calculating your budget.  Carefully weigh out all the factors to ensure you will be comfortable with your monthly payments allowing you to enjoy your new home for years to come.