Posts Tagged ‘Payment’

Your Down Payment Is The Key To Refinance And Mortgage Tips

If you are buying a house, the first thing you need to figure out is how much of a down payment you can afford to make. This may seem like the sort of advice your father would give you, but rest assured there are a few reasons why knowing what you can put down and where you’ll get the money can make all the difference when shopping for a house and a mortgage to finance your new purchase.

Before you pick up your local newspaper and browse the real estate section looking for a new house, call up your banker, your accountant, or your spouse and find out how much you’ve got in savings and liquid assets to make the down payment and pay the closing costs on your mortgage.

First you must consider the source of your down payment, because this affects how much of the down payment your lender will actually attribute to you the applicant for the purpose of qualifying you for loan programs and determining your rates and payments. If the money is from your savings and securities / investment portfolio, be sure you can prove it. If you have employer retirement tax deferred accounts, 401(K) 403(b) accounts etc. and would like to use those as a source to finance the down payment, the lender will likely have several special conditions and limitations on the treatment of those funds. If you are receiving the down payment in part or in total as a gift, your lender will have another set of rules which will affect your payments. How you pay for closing costs will also have some affect on your final rates and payments; the more you take from a third party like the seller, the more risk the bank assumes.

A rule of thumb about size: the bigger the better when it comes to your mortgage down payment, at least from the perspective of programs, rates and payments. The more you put down out of your own savings, the lower your payments and the broader your selection of loan programs. An added benefit is that more money down means that any blemishes on your credit report or a low score count for less and less the more you pay upfront, and you also reduce your income requirement by improving your debt to income ratio. By knowing how much you can put down, you will know in advance how much house you can be qualified to purchase by your mortgage lender, get that mortgage pre-qualification letter, and know what to put in your purchase offer with your realtor, lawyer and seller when it’s time to make an offer. By finding out what you can afford to put down, you can get a head start on knowing your overall homebuying budget, financing options, and also have time to take care of the documentary requirements, seasoning and time-sensitive pre-requisites associated with closing your deal, saving you weeks if not months of wasted time sorting out these matters after you’ve found the house of your dreams.

So find out what you can put down and where you can get it from, contact a mortgage broker to find out what you can afford and what you can do with your down payment and documentation to get the best rates, payments and terms, and then take a pre-approval letter from the broker with you to start shopping for homes with a full knowledge of what you’ll be asking for and writing on the contract.

Down Payment With Gift Letter And Refinance Mortgage Tips

If you are a first time home buyer who has been out shopping for that dream house, you’ve probably already heard your real estate agent or property developer’s first question: “How much will you be putting down?” If you have excellent credit, several years of consistent income on record and a relatively long history of using credit wisely, you may qualify for 100% financing, often referred to as a “No Money Down Mortgage” or “Zero Down Home Loan”. But for the majority of new borrowers, a down payment is a prerequisite to buying a house, and finding 20% to 30% or more of the purchase price of a house can very often entail getting the money from family or friends. Getting that much money together can be tricky enough, however lenders will also require that every dollar used for a down payment be documented back to a specific funding source, and this can be particularly difficult when the money comes from a third party, which is why we have “Gift Letters”.

Newlyweds and young people generally have neither sufficient credit history nor income consistency to qualify for 100% financing, and are also the least likely to have sufficient savings and acceptable documentable assets to actually come up with the cash to make the down payment. Members of the family are in some ways the best and very often the only available source of down payment assistance available to “green” borrowers. Your lender generally will only allow you to use money given to you by a true family member, i.e. your mother, father, brother, sister, uncle, aunt, grandfather, grandmother, first cousin, etc. This means that you cannot use funds given to you by people who are really not family members, for example your friends or colleagues, however you may be able to use funds from a non-family third party if you can provide documentation of a very close and long lasting relationship. This is done primarily to prevent people from taking out personal loans which will have to be repaid to come up with their down payment, which have the potential to throw off the person’s debt to income ratio, or DTI. Basically, they don’t want you to take on more debt than they believe you can safely repay, otherwise they would have qualified you for 100% financing.

If you find yourself in a situation where you need to get money from your folks or other family to make a down payment on your new house, you will be required to prove that you did not borrow the money from them with an expectation on their part that it be repaid or with an intention on your part to repay it. In fact, both you and your family will need to prove to your lender that the money was given to you, in the form of a Gift. To verify that the funds are in fact given freely, your lender will require special documentation.

If you are applying for a new mortgage, you should receive as part of your loan application package a special form called a “Gift Letter”. The goal of this letter is to identify the source of the funds and assure the lender that they are in fact a gift. Typically, a gift letter will include the name of donor, the name of the recipient, the relationship between the two parties, the amount of the gift, the address of the property for which the gift is to be used to pay for, the fact that no repayment is required or expected, and an assurance that the person making the gift or the source of funds is not in nay way party or beneficiary to the transaction, e.g. not the broker, seller, agent, loan officer, builder and so on. In most cases the person giving the gift will be required to document where the money came from, such as a bank account or a brokerage account. If you are depositing the funds directly into escrow, or even if they are going into your bank account, take some precautions to document the transfer by keeping copies of the checks or deposit tickets/receipts from the bank/escrow agent.

Down Payment From Savings And Refinance Mortgage Tips

Once you’ve figured out how much of a down payment you can make on your home mortgage, it’s time to determine how to document the source of your funds for the down payment and closing costs. Now you might be saying, “Why do they care where I get the money?” Lenders need to verify the source of funds to both assess the underlying risk in you as a borrower as well as to prevent loan fraud. This makes it imperative for you, the applicant, to maintain complete and detailed records of how the money which you plan to use for a down payment makes it into your hands. Money from your own savings, checking & money market accounts looks best to the bank for a variety of reasons, and is amongst the easiest sources of capital to document.

Money in the bank is also very easy to document. The lender has the option of asking you to submit bank statements to them indicating that you have the money for the down payment and closing costs, or performing a formal Verification of Deposit directly with your bank. Most lenders ask for statements, generally 2 to 3 months if you are providing full income documentation or up to 24 months if you are providing alternative documentation of income.

When discussing your down payment, your lender may discuss the topic of seasoning requirements with you. If you have money in a bank account for 3 months and it reflects consistently in consecutive statements, that money is considered “seasoned” 3 months. Your lender may require that your down payment money be comprised of seasoned funds, and that any large influxes of capital into your bank account may have to be extensively and thoroughly explained, documented, and potentially disqualified. So start saving and plan ahead!

There are loan types which do not require any form of documentation in this regard, particularly No Asset Verification mortgages or “no assets” loan programs. Just as it sounds, this type of mortgage does not require any verification of assets, however lenders generally do not allow the applicant to borrow more than 60% to 70% of the property value without some form of asset verification. There is another type of loan program which is increasingly popular over the last few years called Stated Income Stated Assets mortgages, which allows for limited verification of assets, and some of these programs allow up to 75% or 80% of the property’s value to be loaned to the borrower.

Buying a home with no down payment, often referred to as a “no money down” mortgage, has become a popular way for first time buyers to enjoy the benefits of homeownership without substantial savings, however it is important to note that borrowers who want a zero down loan will be faced with higher interest rates and monthly payments and are statistically shown to have higher rates of default and foreclosure.

No matter what you decide to put down, if you have and can document assets above and beyond the down payment and closing costs on the home and mortgage you can establish “reserves” with your application. Having ample capital reserves, good credit, and your down payment sitting in your bank account for a couple of months can in combination help you qualify for some of the best programs available, and potentially save you hundreds of thousands of dollars over the life of your mortgage.

Getting 1st mortgage, tips on how to bring the monthly payment down?

Obviously putting as much down as possible lowers the monthly payment. I just heard that if you have them add a point and a half or so then monthly payments are cheaper then too. I ask because we are secure with money now, but we don’t know what the future will bring when considering our careers and don’t want to end up house poor, which is why paying that extra for the points is worth it to us. Any other things we can do? Thank you!

Using a Mortgage Calculator to Determine Your Monthly Payment

When you are considering whether or not it is a good idea to lock into the investment of purchasing a new home you have a lot to keep in mind. A mortgage calculator is an essential tool when you are trying to make this determination. It would be unwise to make this decision without knowing precisely how much money you will owe each and every month.

When you buy a home you pay quite a bit more than what the seller is asking for. This is because interest rates must be factored into the equation, which hikes up the total amount due substantially. The only way you will pay precisely what the home is listed for is if you pay for cash. So unless you are making a cash deal, equip yourself with a mortgage calculator to ascertain precisely what you will be required to pay each month.

It is oftentimes difficult for purchasers of homes to figure out how much their monthly home payments will be. Interest rates are not simple to understand, and buyers must learn how they apply to their situation if they want to know what their financial obligations will really be. Most people are not inherently brilliant at math equations, so tools are required to ascertain what payments will be once the interest is factored in. This is where mortgage calculators come in.

Each and every prospective home buyer should become familiar with mortgage calculators. By simply plugging in a few numbers, the homebuyer can determine how the interest will affect whichever type of loan they are opting to go with. Mortgage calculators also help homebuyers determine how changing key variables will affect their situation to make their monthly payment more manageable.

The best part about mortgage calculators is that they are simple to use and they can be used on the spot. Homebuyers can eliminate questions of affordability in only a matter of seconds with the use of a mortgage calculator.

For More Details Visit: http://www.homemortgage-hq.com/

Which is best to pay the principal on a loan or refinance? Seeking best answer for overall loan payment?

The auto loan is for 60 mo @ 14.9%. The total cost of the current loan is $41,000. I have paid on the loan for 15 months now and have been receiving refinance rates @ 7.9% for 60 months. This would add another year to the life of the loan.
I have no problems paying the current loan amount and plan in Aug to begin paying an additional $250 a month on the principal. There is no penalty on my current loan for paying off early and there is no balloon payment at the end.
I want to do what is best for my credit rating, I am in the process of repairing after a wicked divorce. Currently at a 684, goal is to get it above 750 to help with future goals for business and personal financial decisions.

The pattel family purchased a home and took out a mortgage. Piti payment of the loan?

The Pattel family recently purchased a home, taking out a mortgage of $235,000 at 8 3/4% for 25 years. The annual property taxes on the home are $6,345, and the annual hazard insurance premium is $1,479. What is the PITI payment for their loan?
A. $2,729.40
B. $2,586.05
C. $1,849.45
D. $652.00

I tried the mortgage calculator, and it is not working.
thank you for the help!!

1 interest payment following refinance not included in 1098, can I include this in my mortgage int deduction?

I refinanced my primary residence in 2007 (only the principle / no cash back / no debt consolidation, etc.). My 1098 from the original note holder did not include all the mortgage interest paid – only that through the payoff date. The 1098 did not include the accrued interest since the payoff date was prepaid and the actual payoff was made. This is result of mortgage interest being paid in arrears. My account statement with the original note holder identifies this activity.

I paid all the interest, but for some reason it was not included in the 1098. The lender has not been helpful. The new note holder (or seller) did not pay any interest, so that is not applicable.

Any assistance is greatly appreciated.

Reader mailbag: Should you make a bigger mortgage payment?

Reader mailbag: Should you make a bigger mortgage payment?
You could make a bigger mortgage payment. But is it worth it?

Read more on The Christian Science Monitor

Refinance Loan I need to reduce my mortgage payment?

I need to know the best mortgage company that will give me a good deal to refinance my mortgage TO FIXED RATE because my adjustable rate has been increased. also i don’t have any money for closing cost so i will need a mortgage company that is zero closing cost or they will add the closing cost to the life of the loan, i need this help today.Thanks
MY CREDIT SCORE IS 651, THE HOUSE WORTH 235,000 BUT I BOUGHT 210000 IN DEC 2006.