Don’t Make a Mortgage Mistake

The first step in home buying is getting a mortgage. Many home owners also find themselves in a maze when they start the refinance process. Navigating the mortgage process can be confusing. There is so much to know between rates, types of mortgages and payment schedules. Avoiding making a mistake in the mortgage process can save you a lot of money and headaches. Here is a list of the biggest mortgage mistakes that potential borrowers make.

1. No or Low Down Payment
Buying a home with no or a low down payment is not a good idea. A large down payment increases the amount of equity the borrower has in the home. It also reduces the bank’s liability on the home. Research has shown that borrowers that place down a large down payment are much more likely to make their mortgage payments. If they do not they will also lose money. Borrowers who put little to nothing down on their homes find themselves upside down on their mortgage and end up just walking away. They owe more money than the home is worth. The more a borrower owes, the more likely they are to walk away and be subject to credit damaging foreclosure.

2. Adjustable Rate Mortgages or ARMs
Adjustable rate mortgages or ARMs sound too good to be true and they can be. The loan starts off with a low interest rate for the first two to five years. This allows the borrower to buy a larger house than they can normally qualify for. After two to five years the low adjustable rate expires and the interest rate resets to a higher market rate. Now the borrowers can no longer make the higher payment not can they refinance to a lower rate because they often do not have the equity in the home to qualify for a refinance. Many borrowers end up with high mortgage payments that are two to three times their original payments.

3. No Documentation Loans
No documentation loans or sometimes called “liar loans” were very popular prior to the subprime meltdown. These loans requires little to no documentation. They do not require verification of the borrower’s income, assets and/or expenses.
Unfortunately borrowers have a tendency to inflate their income so that they can buy a larger house. The problems start once the mortgage payment is due. Because the borrower does not have the income they are unable to make mortgage payments and often end up face bankruptcy and foreclosure.

4. Reverse Mortgages
You have seen the commercials and even infomercials devoted to advocating reverse mortgages. A reverse mortgage is a loan available to borrowers age 62 and up. It uses the equity from the borrower’s home. The available equity is paid out in a steady stream of payments or in a lump sum like an annuity.
Reverse mortgage have can be dangerous and have many drawbacks. There are many fees associated with reverse mortgages. These includes origination fees, mortgage insurance, title insurance, appraisal fees, attorney fees and many other miscellaneous fees that can quickly eat at the home’s equity. Another drawback; the borrower loses full ownership of their home and the bank now owns the home

Avoiding the pitfalls of the mortgage maze will hopefully help you keep in good financial health as a home can be your best investment.


Halloween Treat Ideas Other than Candy

Halloween and candy are synonymous, however many parents today are trying to keep their kids away from too much candy. If you don’t want all that candy in your home, and are looking to get away from handing out sweet treats, here is a list of trick or treat alternatives to consider:

Books-small paperbacks or coloring books

Playdough- small containers

Pencils-Halloween themed

Crayons-small packages

Money-small coins like nickels or dimes

Stickers-Halloween themed

Coupons-to local restaurants, or discounted movie theaters passes

Trinkets-plastic bracelets, or rings Halloween themed

Do you have any other ideas for Halloween treats?

Tips for Accelerating the Homebuying Process

Let’s face it – you’re tired of your current living situation and are ready for a change. Luckily, there are many homes available in your area – you just need to find a residence that fits your needs and budget.

The homebuying process sometimes can become time-consuming and exhausting, but we’re here to help you take the guesswork out of finding a residence and ensure you can discover your dream home quickly and effortlessly.

Here are three tips that you can use to speed up the homebuying process:

1. Get Pre-Approved for a Mortgage.

Why should you look at homes you cannot afford? Instead, you can get pre-approved for a mortgage and search for residences that suit your budget perfectly.

Many lenders are available that offer financing for homebuyers nationwide. As a result, you may be able to evaluate a variety of lenders to ensure you’re able to get the lowest interest rate on your mortgage.

Before you begin your home search, get pre-approved for a mortgage – you’ll be happy you did! And remember, if you are pre-approved for a mortgage, you may be able to improve your chances of a home seller accepting your offer over others (i.e. from homebuyers who still need to get financing) as well.

2. Employ a Home Inspector.

After you submit an offer for a residence, you’ll want to hire a home inspector who can evaluate this property to the fullest extent.

A home inspector serves as an unbiased third-party who possesses the experience and know-how needed to evaluate a residence. Therefore, this inspector will be able to identify any problem areas before you buy a house.

With the right home inspector at your side, you can boost your chances of finding the right home without delay. This inspector will empower you with the insights you need to make an informed homebuying decision, one that could deliver significant benefits both now and in the future.

3. Work with a Real Estate Agent.

Although you’d like to find a home as quickly as possible, you may lack the time and resources needed to fully review the real estate market. By hiring a real estate agent, however, you can streamline the process of exploring the real estate market in your area.

A real estate agent will collaborate with you, learn about your wants and needs and provide information about residences that match your preferences. This professional can even set up home showings and keep you up to date about open houses in your area. Thus, your real estate agent serves as a dedicated housing market resource and will do everything possible to ensure you can find the perfect home.

You’ll likely discover a broad assortment of real estate agents available in cities and towns across the United States. And to find the right real estate agent, you’ll want to meet with this professional and make sure you’re comfortable working with him or her as you embark on your search for your dream residence.

Take advantage of the aforementioned tips, and you should have no trouble accelerating the homebuying process.