George Burk asked:




With mortgage rates near 20-year lows, competition in the mortgage industry is fierce. It seems like every day a new mortgage loan strategy comes out that is suppose to be the best thing since sliced bread. Whether it’s a mortgage with no closing costs or an interest only mortgage, everyone is claiming they can save you a ton of money. Now someone has come out with something called Mortgage Cycling. Mortgage Cycling could save you thousands of dollars or it could cost you your home.

Mortgage cycling is a program that advertises itself as a method to payoff your mortgage in 10 years or less without making biweekly mortgage payments or changing your current mortgage. Does mortgage cycling work as advertised? The answer is unequivocally yes – with a few caveats. I’m going to let you in on the secret to mortgage cycling.

Mortgage cycling is based on making huge lump sum principal payments every 6-10 months. What this means is mortgage cycling works well for those who have at least a few hundred dollars in extra cash at the end of each month. The problem is most people don’t have that kind of cash available.

Mortgage Cycling relies on using a revolving Home Equity Line of Credit to make huge lump sum payments against their original mortgage principal balance. When you take out a home equity line of credit, you pay for many of the same expenses as when you financed your original mortgage such as an application fee, title search, appraisal, attorney fees, and points. You also may find most loans have large one-time upfront fees, others have closing costs, and some have continuing costs, such as annual fees. You could find yourself paying hundreds of dollars to establish a home equity line of credit. Most home equity lines of credit also carry what is known as interest rate risk.

Home equity line of credit interest rates are typically variable. The Federal Reserve is currently in the process of raising the overnight federal funds rate. As the Fed continues to raise rates, it is all but inevitable that variable interest rates for mortgages will also rise. Your savings may not be as great as anticipated.

While Mortgage Cycling does have some additional costs for most people, that is not what makes this mortgage reduction strategy risky. If you use a Home Equity Line of Credit and money gets tight, you could lose your home and the equity you have built up. Home equity lines of credit require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments. And if you sell your home, most lines of credit require you to pay off your credit line at that time.

Mortgage Cycling requires you to make mortgage payments and Home Equity Line of Credit payments for up to 10 years. For most people mortgage cycling is an extremely risky way to payoff a mortgage. Mortgage cycling should be used only after a careful assessment of the risks and benefits. Prepaying your mortgage is smart. You should explore all of the mortgage reduction alternatives before choosing Mortgage Cycling as a mortgage reduction strategy.

Sandra

Ryan J. Taylor asked:




When you need to obtain a mortgage for bad credit, there are a couple options you have to choose from. Before you commit to anything, it is crucial that you know your options and spend some time thinking about this important decision. Whatever you decide is something you may be stuck facing and paying off for the next 30 years, so do not take this decision lightly.

Your mortgage for bad credit options are basically the following:

1. Search for and try to find the best offer with your current credit situation
2. Focus on credit restoration to qualify for preferred treatment

There are a number of companies and organizations that will approve you for a home loan no matter what your credit score, but that comes with major consequences. You’re likely to pay outrageous fees and the interest you’ll pay on the loan will be two to three times the average rate.

As a result, not only will it cost you hundreds or even thousands of dollars more to live in your home every month, but by the time you pay off your mortgage it could cost you hundreds of thousands of dollars more. That’s because each month you pay your mortgage, more money is sent to the bank to pay interest than to actually owning your home. You’re simply paying a fee.

Whether you need a mortgage for bad credit to purchase a new home, refinance your current home, or buy a second home, you’ll end up paying more with these plans – and not just in mortgage payments. Because of your bad credit, your closing costs could be higher and you may end up paying private mortgage insurance (PMI), which is nothing more than a fee because of your bad credit score.

This can all be entirely eliminated by simply planning 30 – 90 days before you purchase your home. By putting a little effort in restoring your credit, you can erase any worries about getting approved for a mortgage. In doing so you’ll save thousands of dollars in the process and reduce your closing costs.

Sara

James Monahan asked:




Remember monopoly? Remember mortgages? You know, the text that’s written when you flip your title deed. Flipping the title deed means your property is on mortgage and you’ll get money from the bank.

Sounds simple right? Wrong. There’s much more to it than that.

Here are the things you need to know about the game and how to get most out of your mortgages.

The idea of the game is to buy and rent and sell properties so profitably that one becomes the wealthiest player and eventual “monopolist”. Starting from “go” move tokens around the board according to the throw of dice.

When a player’s token lands on a space not yet owned, he may buy it from the bank: otherwise it is auctioned off to the highest bidder.

The purpose of owning property is to collect rents from opponents landing there. Rentals are greatly increased if you put houses (those little green ones) and hotels (those dreaded red infrastructures).

So your best bet in winning the game is to put the most houses or hotels in your lots. (That’s assuming you don’t land in your opponents’ lots with houses or hotels).

To raise more money, lots may be mortgaged to the bank. Here comes the tricky part. That includes deciding which lots to mortgage and how you can get the most out of your mortgaged property.

Mortgages in monopoly can be done only through the bank. The mortgage value is printed on each title deed. The rate of interest is 10 percent, payable when the mortgage is lifted. If any property is transferred which is mortgaged, the new owner may lift the mortgage at once if he wishes, but must pay 10 percent interest.

If he fails to lift the mortgage he still pays 10 percent interest and if he lifts the mortgage later on he pays an additional 10 per cent interest as well as the main value.

Houses or hotels cannot be mortgaged. All buildings on the lot must be sold back to the bank before any property can be mortgaged. The bank will pay one-half of what was paid for them.

In order to rebuild a house on mortgaged property the owner must pay the bank the amount of the mortgage, plus the 10 percent interest charge and buy the house back from the bank at its full price.

When you mortgage a property, you can use the money for anything you want to, so long as it’s legal under the rules of monopoly. The only restriction in this regard is that a player cannot pre-mortgage a property to finance its own purchase.

For example, say a player wants to purchase Boardwalk but can’t do it with his or her current assets. That player cannot say, “I’m going to buy Boardwalk by mortgaging it, and then using the money I get for the mortgage to complete the purchase.” You must own a property before you can mortgage it.

Playing the game is fun and it will give you an idea of how it is in the real buy and sell world. There are also the Community Chest and Chance spaces which players land on. Instructions ranging from winning $25 dollars to $500 dollars are given. Sometimes players even land in jail! This game is definitely a clever and amusing entertainment.

Gerald

Marie-Claire Smith asked:




Your mortgage likely represents your biggest monthly expense, hands down. That is why it makes so much sense to look into refinancing your mortgage every few years to see if it makes sense to do so.

There are several telltale signs that this may be a good time for you to refinance your mortgage, including:

a. average mortgage interest rates are down

b. your credit score has gone up since you took out your existing home loan

c. your current loan is for a relatively short repayment term, such as 15 years

d. you have built up some equity in your home that you would like to cash out

What exactly is involved in a mortgage refinance, and how should you go about it? There are some specific steps you should take if you want to ensure yourself the best-possible interest rate.

If you are interested in saving money each month through having lower mortgage payments, here are 5 steps to refinancing a mortgage:

1. Look up your current interest rate and monthly payment amount:

Start by getting your facts straight concerning your current loan. Write down or enter into a spreadsheet software program (like MS Excel) your current loan interest rate, your monthly payment amount, and your loan repayment term. This information helps you get a clear view of what you have to work with in terms of making decisions about a refinance.

2. Estimate what your home would sell for if you sold it right now:

Now, it is time to figure out what your home’s going rate would be if you sold it today. The most precise way to find out is to get an appraiser to come in, but this costs a few hundred dollars. A quicker, but less precise, way is to enlist the help of a real estate agent (realtor) you know and ask them to pull comparable listings on homes similar to yours in your area; find out what they recently sold for.

3. Calculate the amount of equity you have in your home:

Now you can easily calculate the equity you have in your home. Just subtract your current loan’s outstanding balance from the estimated or appraised value. That is your equity. The more you have, the easier it should be to refinance at a competitive rate.

4. Build a list of target lenders to approach for a loan:

Having more choices always improves your chances of getting the best rate. Build yourself a list of at least 6 mortgage refinance companies.

5. Take the extra time to apply to all of the lenders on your list:

Make sure you make the time for yourself to apply to each of the lenders on your candidate list. Just spending an extra hour or two shopping around for the best refinance quote could save you tens of thousands in interest payments over the life of the loan.

Take these 5 steps to refinancing your mortgage.

Arthur

Gordon H. Smith asked:




First we need to know what refinance is before going further. Refinance is a new loan taken out by borrower to pay off the original loan. One should know that all lenders are in business and when talking of business, it should have a profit. A lender will not refinance a mortgage home purchase loan if they got nothing of it.

Home or a house is the best asset and every peoples dream to have and once you got one, it seems a fulfillment of life but that needs a lot of planning and knowing the capabilities of your financial situations. Learning how your financial status will be affected not only for a short time but for a longer time and this kind of things need to be taken seriously since not only you that will be affected but as well as your family.

Although the home purchase loan rates will depend on other fees, taxes and insurance which is compulsory for all buyers and just be sure that the lenders disclose all the information when it comes to any charges that is going so that you will be aware of it, not affecting your monthly payment program. Actually taxes and insurance are distributed in your monthly payments and accumulated by your lender till the payment is due where in it is the lender who pays on your behalf.

Take note that any type of mortgage either first or second mortgage or even home equity in line of credit can be refinance if you, as borrower meet the lender’s requirements for refinancing since home equity can be a collateral which may also help the borrower not to pay the private mortgage insurance on a home purchase which is made less than 20% of down payment and usually, home mortgage can be refinanced at any point during the loan.

When you have a home purchase loan, it is automatic that the house or home you purchase will be used as collateral. Take note that the lender will work from the initial purchase price not from the new appraisal when you refinance mortgage and mostly the interest rates fall when the homeowner refinance mortgage. There are many people which are not fully aware of all the rules that surround deducting interest on home mortgage refinancing. Most mortgage refinance require you to hold your mortgage for at least six months before refinancing.

When you reach several years owing your home and you want to consider refinancing your mortgage for reasons of reducing your interest rates, then you need to bear in mind that although in refinancing helps reduce your interest rates but remember that you also extend the years or payback period, in short you will be in debt for longer period of time than the original planned.

So when you think of home purchasing loan which you think is more advantageous to you, you also need to think for the other side of it when you do refinance mortgage home purchase loan. Things need to be think, plan, decide and learn in order for you to know the advantages and disadvantages when it comes to refinance mortgage home purchasing loan.

Mathew