Posted tagged ‘home mortgage’

Starting to work with your Agent

October 10, 2009

The first thing that your real estate agent will do for you is to have a relaxed, but thorough, conversation about what kind of home you are looking for. He or she will listen carefully at what you want in your new house and clarify the main details so that he/she will have a very clear picture of it. Another main consideration to be discussed is of course, your price range.
Having the right information about what you are looking for will help the agent in focusing their search, and will avoid wasting the time of both parties. Once the agent is clear on everything, including how much you are willing to spend, the search for the most fitting home will speed up.

Locking Your Mortgage Rate is Crucial

November 7, 2008

Trying to decide whether you should lock in your mortgage interest rate or rolling the dice to see if they’ll drop more?  Here a must read for you:

Written by Broderick Perkins

An interest rate lock is always a good idea in any market. But it becomes a better idea when it’s crucial to lock in an interest rate and other loan costs at a level you can afford.

A changing market — especially when the change is for the worst — is one of those crucial times. During the first half of 2008, nearly a full percentage point separated the high of 6.45 percent in recent weeks and the low of 5.48 percent in January, according to Freddie Mac.

Get off the interest rate elevator ride with an interest rate lock. A traditional rate lock is a lender’s guarantee that your mortgage will come with a specific interest rate, points, other costs and terms. Most locks are designed to protect home buyers from rising rates, but those refinancing can also benefit.

A rate lock’s terms include a specified period for the lock. If you fail to complete your home purchase or refinance before the clock runs out, and interest rates rise, brace yourself for higher costs. Those higher costs could come in the form of more up front cash to keep monthly payments in line with what you can afford or what you lender will allow.

With a refinance, if your home ownership isn’t at stake, you have more wiggle room and can wait out the market, take less cash out or otherwise cope. Of course, those refinancing to stave off foreclosure could also find higher rates, without a rate lock, to be just as problematic as for home owners.

In an up-and-down interest rate market, falling interest rates are another strong reason for a rate lock. If interest rates fall during the lock period you can’t take advantage of the lower rate unless you rewrite the lock at additional cost or include a “float down” provision in the original lock.

The “float down” option grants you a lower rate if rates fall within a given window of time. Again, unless specified otherwise, float downs stick you with the higher rate if rates rise during the lock period.

All these rate lock variations underscore the importance of being sure the language of the lock contract gives you the options you need, for a sufficient term.

Get it all in writing. It’s difficult to enforce a verbal agreement. The contract should lock should lock in the interest rate, points and other costs, where possible. The agreement should include your name; the lock’s effective date; lock cost; what terms are locked; the lock’s expiration date and time; and any post-lock options.

Lock as soon as you see the desired rate or “on application” — when you first apply for the mortgage — so that your rate is locked as you spend time getting the application approved. That’s particularly important if you barely qualify at today’s rates, and an increase would make buying unaffordable.

Of course, you can choose to set the lock on approval, especially in markets where loan applications are prolonged due to heavy demand for housing. In any event, the lock period should be long enough to allow for settlement, contingencies, and other potential delays. Locks average 30 days, but can range from 15 to 60 days.

Also consider:

 

  • Locks cost money. Shop around for both the terms of the lock contract and its cost, which varies from lender to lender. Some lenders want up-front lock fees. Others take them at settlement. There are non-refundable fees, flat fees, and fees based on a percentage of the mortgage, among the variations. 
  • Before choosing a lock-in period, determine the average time for loan processing. Ask your lender to estimate the time necessary to process your loan and verify the information with other realty professionals. If the loan doesn’t close on time, lenders can extend your lock for free, charge more for the extension or charge an additional percentage of the loan amount. 
  • Once you lock-in a rate, if you haven’t already, quickly submit the application and other required documents. You should have previously checked your credit report, prepared income, job, debt, asset and other documents to back up your application information. 
  • If you have a floater, it’s your job to keep an eye on the arket.   
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    I have a very strong referral list of mortgage professionals that can answer all your questions in regards to this topic.  Please contact me if you have any questions on this information.

    Sandy Luedke                                                www.idealrealestategroup.com

    There is Money to Lend!

    November 7, 2008

    Hey gang!   I wanted to take a minute to let you know, that while all we’re are hearing from the media is doom and gloom in the financial and credit markets, there is business being done and money to lend out there for home buyers.

    Take for example people interested in buying a single family home or townhome in certain rural areas around DFW, TX (including: Corinth, Lake Dallas, Little Elm, Sanger, Justin and Ponder).  There is a lender in this area who has a program that allows for 100% financing, which is not credit score based and can even provide you with 6 months of no interest payments!  If this is an area you’re interested in, than by all means contact Kevin Harrigan today (@ Executive Home Mortgage) 972-355-4423 x222.

    So the key is, that this is a tremendous buyers market right now in most parts of the country, as home values are down and inventories are up.  It may be a bit more difficult to get a home loan as restrictions have tightened up, but if you have a solid credit score and good payment history, don’t think that it is not possible to get a mortgage right now.  That just is not the case!

    The current environment provides an excellent opportunity to pick up that ideal home of your dreams, that just a year ago might have been beyond your financial means, or to start to build a portfolio of rental properties that can fund your retirement or children’s college funds.  Get in contact with me, if you have questions on how that can be done with the least money out of pocket.

    Sandy Luedke-

    www.idealrealestategroup.com


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