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5 Tips For Utilizing a Mortgage Calculator to Help Compare Cheap Home Loans

A mortgage calculator is an essential tool when you are considering purchasing a new home. Whether this is your first home or your fifth home, a home loan calculator, as it is also referred to, can be an invaluable asset in making wise, secure business decisions about the home that is right for you and your budget.

Purchasing a home and committing to a new debt load can sometimes be a little anxiety-ridden. However, keep in mind that the mortgage calculator can take a lot of that anxiety out of the equation by giving you the peace of mind necessary to know that you are making a good decision for your future. By using a home loan calculator, you can be sure that you are buying a home that will match your family’s budget for years to come.

Listed below are 5 tips that will assist anyone in utilizing the calculator in making a wise home loan decision:

* 1. Use the calculator to determine the difference that various interest rates can make in your total monthly payment. In other words, make certain that when you negotiate the interest rate on your home loan you have already utilized your mortgage calculator to know the difference in the total note payment at a 5% interest rate versus a 7% interest rate for example. This gives you the ability to negotiate with the broker or lending institution with the proper information at your fingertips, and provide them with parameters that will work for you and your budget.

* 2. Make sure that you can afford the purchase price you plan to offer a seller on a home. How do you do that? Again, by using your calculator, and entering various purchase prices into the calculator at realistic interest rates and term lengths, you can quickly determine what price home you can afford to purchase by comparing the calculated monthly payments with what you have decided that you can afford. At this point, no matter how much you might love a higher priced home, you have to be realistic and stay within your price range.

* 3. Next, determine whether you can afford a 15 year mortgage or whether you should consider a longer term such as 20 or 30 years. The longer the term of the mortgage the lower the payments, but the more interest you will ultimately pay over the lifetime of the loan. Keep in mind, however, that if your financial situation changes, you can always pay “extra” toward the principal of the loan each month and reduce the number of years required to pay the loan off in full.

* 4. Use the mortgage calculator to determine what the “real” cost of the home will be over the lifetime of the loan. With the home loan calculator, an amortization schedule is provided. This schedule gives you complete information on how much you will pay in principal and interest each year of the loan until the time that the loan is paid in full. This information tells you exactly what the total cost of the home will be at the time that it will be paid off in full. This again, helps you to determine what areas of the loan you need to negotiate to feel comfortable with the purchasing decision you are about to make.

* 5. After determining a realistic purchase price, interest rate, and term for the loan, you now have a basic monthly payment. However, don’t forget, your home loan calculator does not figure real estate taxes and insurance. Consequently, it is imperative that you take the monthly payment given to you by the calculator and add a monthly amount for the real estate taxes and the insurance. The current owner or the realtor can provide you with the amount being paid by the existing owner for both of these. You can also contact insurance agents to compare prices offered for home insurance on the property.

You might also want to remember that, although the above items cover the monthly “hard” costs for the home, you will need to be certain that you have taken into consideration the fact that the home will need repairs and maintenance. Although it is impossible to predict exactly what these will cost you during your years of home ownership, you are advised to make an estimate. Many factors must be considered, such as the age of the property, how well it has been maintained, and whether you can do a great deal of the work yourself or will need to hire contractors.

In summary, the home loan calculator is a tool you should use not only when you purchase a home but also anytime you are considering refinancing your home or establishing a line of equity on your home.

You will find a number of websites that provide free mortgage calculators for you to use. You should never go property-hunting without doing your research first. Make certain you have done your homework prior to making an offer on any home by using the mortgage calculator to look at all the possible scenarios. Know exactly what you can afford to offer and do not go a penny more.

FHA Home Loan Information – Buying A Home With Help From The Government

The federal government wants to help you buy a home. They see it as a way to improve the economy, provide a stable tax base, and help grow communities. To encourage homeownership, the federal government backs loans for those who might have trouble qualifying for a conventional loan.

Loans For Low To Moderate Income Buyers

The Federal Housing Administration (FHA), an agency of the Department of Housing and Urban Development (HUD), provides several mortgage loan programs for low to moderate income home buyers. FHA loans offer market rates with a lower down payment requirement.

FHA loans require a minimum down payment of 3%, cash to close the loan, and an acceptable credit score. Closing costs can be part of the loan amount, and credit score requirements vary with programs.

To apply for a FHA loan, you must submit an application with a HUD approved lender. Most traditional lenders already are approved by HUD.

Loans For Veterans

Loans guaranteed by the Department of Veterans Affairs (VA) are available to most veterans and service persons. Usually these types of loans do not require a down payment and have more favorable loan terms. VA loans do not have a maximum amount, but lenders typically limit the loan amount to $359,650, the conforming rate.

To apply for this type of loan, you must be qualified by the VA. Once they approve your application and verify your qualifications, they will issue you a certificate which you present to a traditional mortgage lender as part of your application paperwork.

Loans For Rural Residents

The Department of Agriculture also backs loans through its Rural Housing Service (RHS). RHS loans require no down payments, but you must be able to afford monthly mortgage payments and have an acceptable credit history.

RHS also offers direct loans to low income family, those with income 80% or less than the area’s average income and cannot get credit from financing companies. These mortgage loans can be extended to 38 years and require no down payment.

Apply For Government Assistance

Government mortgage loan programs enable you to avoid mortgage insurance and secure financing to buy a home. These programs are offered through traditional lenders, which can easily be found online.

To view our list of recommended lenders online for government backed mortgage
financing, visit this page: Recommended Lenders For Government Backed Loans.

5 Benefits of the FHA Home Loan Program You Need to Know!

You will find many home loan programs available to finance your new home purchase. You need to research the different programs available and choose the one that best fits your needs. One of the best ones available is the FHA Home Loan Program.

Although the FHA Home Loan Program was designed for first time home buyers, anyone may apply for the program. Not only can a FHA Mortgage Loan be used to finance the purchase of a new primary residence but also you can use it to refinance your existing home mortgage loan.

There are many benefits to the FHA Home Loan Program.

1. Low Down Payment Requirement

A FHA home mortgage loan has a lower down payment than a conventional loan.

The down payment requirement currently is as low as 3.5% of the purchase price. And here is some more good news, the down payment funds can come from many different sources such as a gift from a member of your family, your church, or a withdrawal from your 401K. It could, of course, come from your own savings.

Because you can get the down payment funds from many different sources, it will make it a lot easier to purchase your home.

2. Seller Can Help Pay Your Closing Costs

The FHA Home Loan Program will allow the Seller to contribute up to 3% towards to your closing costs on your new home.

This will allow you to purchase a new home without any funds if you can get a gift from a family member for the down payment and ask the Seller to pay up to 3% of the closing costs. The closing costs that the Seller can pay include also the “prepaids” such as property taxes, home insurance, and interest.

3. The Interest Rates Are Low

The FHA mortgage interest rates are very competitive if not lower than most other home loan rates. Although in today’s mortgage market you will need around 620 credit score to get a FHA Mortgage Loan, the FHA interest rate is not tied to your credit scores.

If your credit score is 620 and another person’s credit score is 750 you both will get the same interest rate. On a conventional home loan, the person with the higher credit score would get lower interest rate.

4. No Limits On The Amount Of The Mortgage

There are not limits on the amount of FHA home loans, but there are limits on the property values you can purchase with a FHA loan. The limits on the property values are different throughout the country and you should check with a Realtor or lender in your area.

5. You Can Refinance With A FHA Streamline Mortgage Refinance Loan

If you already have a FHA mortgage loan one of the great benefits is you can refinance using a FHA Streamline Mortgage Refinance Loan.

This type of refinancing loan is when you already have an existing FHA mortgage and you want to refinance it into a new FHA mortgage. You can do this without limited paperwork and a lot less cost.

The FHA Home Loan Program is a great way to purchase your new home with a low down payment, low interest rate, and the opportunity to refinance it with limited paperwork and cost. The best place to get additional information is the Internet. You will find many websites with FHA Loans Information that will help you with the financing of your new home!