3 Essential Questions You Should Answer While Searching for a Home Loan

Toy house on top of dollar bills

Toy house on top of dollar billsThe increase of lenders and loan features on the market means that clients now have many options to choose from. That’s great news for homebuyers. As competition increases, interest rates become friendlier. Deciding which loan is perfect for you, however, as difficult as ever, particularly for first-time applicants. Here are three important questions that can help you make an informed decision:

What are your specific needs?

Before you make a final decision, Bonneville Multifamily Capital reminds that it pays to know what loan features are ideal for your preferences. Are you looking to build multi-family rental units, then you are better off taking a Freddie Mac multifamily loan that’s suited for this specific purpose. Of course, you also want to think about whether you’re comfortable with a fixed or a variable rate, as well as whether you may have the need or a repayment holiday in the future.

What’s on the inside?

Don’t let an interest rate that seems awesome fool you. At the end of the day, interest rates are designed to entice clients. It’s what on the inside that matters, so look at all terms carefully. Are there other fees that are attached to the mortgage? Take a particular interest in the mortgage comparison rate as this gives the overall figure you need to pay, not just isolated aspects.

Do you need help?

If you can’t make up your mind, don’t hesitate to ask for help. There are dozens of mortgage brokers around with a vast experience in dealing with mortgages. If you can explain to them what your needs are, they should be able to find the perfect loan for you. They can also help you get preapproved for a loan quickly, as they know the insider secrets of the trade.

While lenders have taken quick actions to meet the specific needs of modern homebuyers, it’s still your responsibility to know as much about mortgages.

 

Be Worry-Free: Retiring Mortgage-Free

Mortgage Lending in Baltimore

Mortgage Lending in BaltimoreIt’s always ideal to retire without the financial burden of a mortgage. This is because its means spending your extra money or vacations or in having fun with families or friends. While some retirees don’t mind paying for their home loan, it’s great to have peace of mind and exit the career land mortgage-free.

Here are some ways to retire without a mortgage to pay:

Make Extra Payments

Mortgage lenders in Baltimore note that extra payments can go a long way in paying your mortgage off faster. You can cut on other household expenses and apply the savings to your mortgage. An extra $100 every month can save you thousands of money on interest and pay off the entire loan several years earlier.

Refinance the Mortgage

Paying off a mortgage earlier is possible if you want to switch to a shorter-term. It’s a good idea to refinance a 30-year mortgage to a 15-year loan, especially if you still have more than 20 years left on the mortgage. Your monthly payments will be higher, but you can be loan-free 10 years earlier.

Take on a Roommate

If you got a spare bedroom, consider getting a roommate. The rent from a roommate can help you make extra mortgage payments and pay off the loan more than a decade earlier. Your rental income can also be beneficial in paying utilities such as electricity, phone, cable, and gas.

Consider Downsizing

Retirement is better if you decide to keep things simpler. This means downsizing to a smaller home in the neighborhood where family and friends reside in. The truth is, you don’t need a 4-bedroom house to have a good retirement. A smaller home is more manageable, as you’ll have fewer expenses to deal with.

Whether you’re in your late 20s or mid-30s, retiring without a mortgage sounds like a good goal. You’ll get to have peace of mind and more fun in your golden years. Be sure, however, not to take in more debt just to pay the mortgage faster.

Home Loans Are Many Things, Except These Myths

Home Loan in Minnesota

Home Loan in MinnesotaMinnesotans love mortgage tales, only everyone has polar versions. Two persons could talk about a particular home loan topic but usually end up on a different page. Stories get passed down from one generation to another. Before long, everyone thinks they speak of the truth about interest rates and second mortgages without realizing what they know nothing but tall tales.

But the cycle breaks now

Such misconceptions stick around because people keep talking about them — and believing them. Today, though, you land on this page for a reason — to either validate your reservations or shed light on the most puzzling concepts of home loan.

Whatever your reason, separate facts from these fallacies:

Cash-Out Refi is Free Money

Yes, you can receive hard cash from a refinance, but it comes with a price. Cash-out refinancing is all about replacing your current loan with a new mortgage and tapping your home equity to get greenbacks all in one transaction.

This move allows you to get a lower interest rate and convert a portion of your current home equity into cash for any purchase you want, like a remodel or a purchase of a beautiful home for sale in Plymouth, MN. Not all borrowers, however, can take advantage of this option; you would need first to meet certain requirements the lender set.

ARMs Always Trump Fixed-Rate Loans

False. Both have pros and cons, and they involve a certain level of risk. An adjustable-rate mortgage can be advantageous if you moving in a foreseeable future, as you can enjoy a low initial rate early in your loan term. A fixed-rate loan, on the other hand, offers you stability throughout your term, thus giving you peace of mind your rate wouldn’t increase whatever happens.

In the end, the right choice depends on your financial situation and future plans, says an expert from MN Property Group.

No-Cost Loans are Interest-Free

This is true — if you’re dreaming. But in the reality, the “no-cost” in no-cost loans refer to the closing fees. If you take this type of mortgage, your loan would be free from any closing cost in exchange for paying a marginally higher interest rate. If your budget permits your would-be monthly repayments, you might save a considerable amount when your loan matures and reduce your upfront expenses.

Financial products change over time, so mixing up some details is sometimes inevitable unintentionally. Nevertheless, it’s never an excuse to stay financially ignorant and not help yourself separate truths from tales.