Sunday, September 30, 2007
Mortgage Saving Tips
Here are our top tips for how to save on your mortgage payments on your house, follow them and you could save $100,000 in interest payments and years off your loan term. Sounds to good to be true well see how easy it is in these money saving tips. Learning how to save on your mortgage can set you up to slice years off your loan. Finding out if you can save on your mortgage payments won't cost you anything, and you will discover whether you have the best loan available for your individual circumstances. Shop for the best mortgage possible with your credit score, when a mortgage company has a small overhead cost to stay in business it means that they will not charge you ridiculous ongoing service fees. Make sure of the fees you mortgage company is charging you up front before signing on a loan.Refinancing your mortgage will save you money if you can get a lower interest rate than what you are currently having. In order to determine how much you can save on your mortgage you need to find out exactly how much you are paying out every month to your existing mortgage provider. To determine your savings simply divide the cost of refinancing your existing mortgage by the amount you will save on your mortgage payment each month. This will give you the saving that you can get by refinancing your mortgage now. Mortgage refinancing is a popular solution for homeowners wanting to lock in lower interest rates and save money over the life of their mortgage. If interest rates stay low, then an ARM (Adjustable Rate Mortgage) can offer you an attractive way to obtain a new mortgage and save you money.Make a lump sum payment or a monthly overpayment to your mortgage if you had the money in savings a fast calculation of the interest saved on the mortgage versus the interest the bank is paying you to have money in your savings account will show you just how much of a saving is possible with this tactic. With a little research it's amazing how much you can save on your mortgage. What you save on your mortgage interest could outweigh the interest you would otherwise have made on your savings. Make sure that your mortgage does not have a penalty for early pay off. The only way to really save money on a mortgage is by making extra repayments so that you are paying above the scheduled repayment timetable which means you are paying principal off not interest. If you currently have a $200,000 mortgage that you received a 6% interest rate over 30 years you will save yourself approximately $45,333.You will be surprised how much faster your loans balance will drop and how much money you will save. Don’t Just Make The Minimum Repayment – If you want to save thousands of dollars in interest over the term of your mortgage work out the maximum monthly payment you can manage and pay that.The truth is the bank is not going to tell you about how to save money on your mortgage as they want to make the interest on the money they have loan you. If they were to help you save money, they would lose money and their profits would stagnate.With a little research it's amazing how much you can save on your mortgage so go ahead a use the mortgage calculators out there and see how much you can save with as little as $50 extra payment per week and I think you are going to be amazed.
Thursday, September 20, 2007
Second Home Mortgage – What will it cost me?
You have found your dream second home and have started the search for a second home mortgage. It’s so exciting, isn’t it? And it’s easy to be starry eyed, rushing into things without considering everything. But you need to do your sums properly. You must make sure you are very clear what the second home mortgage is going to cost you apart from mortgage fees and your monthly payments.
• Deposit. This is the main cost to consider. It’s very rare that a lender will agree a 100% mortgage on a second home, or even 90%. The maximum loan is usually 75-80 percent of the purchase price of the second property. This means that you will need to find at least 20% of the purchase price. In fact, the larger deposit you can provide, the better. It is likely to enable more favourable terms on the mortgage, such as lower interest rates, availability of discount periods etc. One way of doing this is by equity release on your main residence. Even if you don’t have enough equity to fund the whole purchase, it’s a good idea to use equity release to provide as large a deposit as possible.
• Legal costs. When you are arranging a second home mortgage, it’s even more important to use a solicitor than it is when you are buying your main home. There are likely to be all sorts of unknown quantities when you are buying in an unfamiliar area. But make sure you choose a solicitor who specialises in conveyancing, rather than just picking one at random. It is surprising what elementary mistakes some solicitors can make! And don’t forget you will be paying not just the solicitor’s fees but the land registry fees and the search fees in addition.
• Valuation/survey. The lenders of your second home mortgage will arrange a valuation survey and add the cost to your loan. If you’re really strapped for cash, you can make do with this. But it is really advisable to arrange your own as well. The valuation survey won’t necessarily alert you to any serious structural problems – it is just to satisfy the lender that the home has a satisfactory resale value.
• Stamp duty. You won’t escape stamp duty unless the house you are purchasing is going for less than £125,000, which is most unlikely these days. Stamp duty starts at 1% of the purchase price and goes up to 3% if the price is £250,000 or more – this actually comes to quite a lot of money!
• Deposit. This is the main cost to consider. It’s very rare that a lender will agree a 100% mortgage on a second home, or even 90%. The maximum loan is usually 75-80 percent of the purchase price of the second property. This means that you will need to find at least 20% of the purchase price. In fact, the larger deposit you can provide, the better. It is likely to enable more favourable terms on the mortgage, such as lower interest rates, availability of discount periods etc. One way of doing this is by equity release on your main residence. Even if you don’t have enough equity to fund the whole purchase, it’s a good idea to use equity release to provide as large a deposit as possible.
• Legal costs. When you are arranging a second home mortgage, it’s even more important to use a solicitor than it is when you are buying your main home. There are likely to be all sorts of unknown quantities when you are buying in an unfamiliar area. But make sure you choose a solicitor who specialises in conveyancing, rather than just picking one at random. It is surprising what elementary mistakes some solicitors can make! And don’t forget you will be paying not just the solicitor’s fees but the land registry fees and the search fees in addition.
• Valuation/survey. The lenders of your second home mortgage will arrange a valuation survey and add the cost to your loan. If you’re really strapped for cash, you can make do with this. But it is really advisable to arrange your own as well. The valuation survey won’t necessarily alert you to any serious structural problems – it is just to satisfy the lender that the home has a satisfactory resale value.
• Stamp duty. You won’t escape stamp duty unless the house you are purchasing is going for less than £125,000, which is most unlikely these days. Stamp duty starts at 1% of the purchase price and goes up to 3% if the price is £250,000 or more – this actually comes to quite a lot of money!
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