Everything you wanted to know about mortgages…

Getting Your Mortgage Loan Online – What to Watch Out For

Refinancing your mortgage loan online may lead to some serious drawbacks. Fortunately these can be avoided and the benefits of getting a mortgage online can be fully enjoyed. Possible snags may include overpayment through uncalled for excessive interest and lender charges. Avoid the steep fees and unwanted inconvenience by keeping in mind the following important points.

Before you use any of the mortgage portals provided by online lenders, be sure that you have read the companies’ terms and conditions. In short, read the fine print. It has been reported that one online lender charges $1,300 for a computerized loan origination fee. This charge is on top of the origination fees you will need to pay for your new loan. Just by completing the web form, customers will get slapped with the $1,300 fee. This is in contrary to the lender’s claim that use of its website requires no fee. If you’re one of those customers who find it tedious to read the fine print, you may get hit with the enormous fee.

Be aware that it pays to shop around for the most competitive mortgage rates available. With the help of the Internet, this task is a breeze. You can easily compare mortgage rates from different online lenders. When comparison-shopping for a mortgage loan online, be sure to weigh all aspects of each loan, including closing costs, origination points and fees. Look for testimonials from previous customers and even reviews on other non-biased websites.

The hidden cost of yield spread premium is also something you need to pay attention to. The yield spread premium refers to the retail markup of your interest rate by your mortgage company. Lenders usually mark up mortgage loans by as much as three points. This retail markup can lead to overpayment of your loan by thousands of dollars in unneeded interest during your initial year alone. You won’t have to pay such a high yield spread premium, or possible none at all, and other additional fees by asking the right questions while you are out comparison shopping.

If you plan on getting your mortgage loan online, minimize the number of official inquiries you make. Each time you do this you will have a credit check done. If this happens frequently, your credit rating may be affected. If you need to make a few inquiries, make sure that you do your mortgage shopping within a short time period. Credit scorers will disregard queries made within 30 days after you’ve been provided with a credit score. They also regard inquiries within any 14-day period as single query.

If you’re planning on getting your mortgage loan online, you should make sure that the broker you’re doing business with is reputable. You can check with the Better Business Bureau to see if there are any complaints. There are also other online associations the lender may be a part of that will give you an indication of the company’s credibility. Aside from that, avoid online lenders who require payment before you can apply online. The actual online loan application should always be free of charge.

Can a Bi-Weekly Mortgage Really Help?

A lot of advertisements promoting bi-weekly mortgage companies are flooding the internet. Ironically, these ads do not come from a mortgage lender. These ads typically promise no refinancing, no points, no closing costs, no credit check and no appraisal. They also swear that they can help you save thousands and pay off your mortgage in less the time it was intended to. Consumers are guaranteed to enjoy these benefits if they allow half of their mortgage payment to be deducted from their checking account every two weeks. The question is: Is this set-up really beneficial?

In a bi-weekly mortgage, borrowers are allowed to split their monthly mortgage due into two and pay them every other week. With 52 weeks comprising a year, borrowers wind up making 26 payments, which means, consumers pay 13 monthly installments as opposed to the customary 12. The additional payments help to decrease the total amount of interest payments on the loan and at the same time, make the process of acquiring equity faster. With the additional installments each year, borrowers can cut their 30-year mortgage down to an estimated 23 years and the 15-year mortgage to around 12 years.

With bi-weekly mortgages, borrowers don’t just hand in their half payments to their mortgage lender because it does not entertain partial payments due to legal and accounting reasons. This is where the bi-weekly mortgage company comes in. It acts as the link between you and your mortgage lender. The intermediary works by automatically deducting the half payment from the borrowers’ checking account every two weeks. The company then puts the funds into a trust account. When the mortgage payments are due, the funds are then forwarded to the mortgage lender.

To set up a bi-weekly mortgage, borrowers need to spend around $195 to over $350, depending on the amount of sales commission paid to the individual or company setting up the account for you. Aside from this, a maintenance fee is required, in addition to transaction fees every time money is deducted from the bank account of the borrower.

Using a bi-weekly mortgage plan offered by intermediaries is not really practical. The companies that collect your half payments for you merely holds them and then charges you for it - something that frankly, you can do yourself, without paying holding fees.

In the long run, borrowers can benefit more by dividing their monthly payments by twelve and adding the amount to the monthly mortgage due. With this method, borrowers can save more because of the principal reduction they make every month and pay off their mortgage loan earlier. Plus, if you do it yourself you do not have to contend with unnecessary fees. The speed with which the loan can be paid off is dependent on the interest rate and the time when the bi-weekly payments were started.

Borrowers who look to bi-weekly mortgages for the principal reduction and the savings offered are on the right track. But by doing this same process on your own instead of paying someone else, the benefits are further increased.

Choosing a Home Mortgage Lender – 10 Tips for Success

The importance of choosing the right mortgage lender is something that cannot be overemphasized. Selecting the best lender can help you save a significant amount of money and anxiety. With a little research, you can find a great lender who can meet your mortgage needs.

1. Ask around.

If you’re after a good, reliable and reputable company, ask your family, friends, colleagues and neighbors who have recently purchased homes. Inquire about their experience with the mortgage lenders that they obtained their loans from. Contact these lenders and ask about what competitive offers they can provide.

2. Do your homework.

Make sure you are provided with enough information to gauge the lenders. It would help if you observe how the lender’s staff treats you as a would-be customer. Ensure that your questions are answered satisfactorily and that the company is efficient in its operation.

3. Go for a trusted lender.

Choosing a home mortgage lender you can trust is vital to the home buying process. Having trust and confidence in a lender is important to maintaining peace of mind. Selecting a lender for its good reputation will also matter in terms of security, as they are more likely to remain in business for many years to come.

4. Compute the costs.

You should ask each lender about important points like interest rates, fees and any extra costs. Contact the lenders within two days to minimize the possibility of getting different answers due to market changes. Ask the different lenders for an official good faith estimate of all the fees you will incur with your mortgage. Be sure to ask about other possible charges.

5. Compare fees and interest rates.

Discount, tracker, and fixed rates are just some of the few interest rate deals on the market. Your choice will determine the amount you pay in the short term as well as the long term. Aside from comparing loans based on their annual percentage rate, obtain a more precise breakdown of costs.

6. Take your circumstances into consideration.

If your borrowing needs aren’t considered mainstream, you should find a home mortgage lender that works with people having circumstances similar to yours. Look for lenders that offer alternatives for borrowers with small down payments, bad credit, or are self-employed, among others.

7. Analyze the types of loans offered.

Find a lender who provides numerous types of loans. Make sure to settle for one that’s appropriate for your risk tolerance and financial circumstance.

8. Ask everything there is to know about your loan.

One way of getting a good deal is by knowing the right questions to ask. Get your lender to give you relevant information about your loan, its interest rate, annual percentage rate, the number of points you are required to pay, the closing costs and the length of time needed to process the loan. How they answer your questions will also give you a good indication of what they will be like to do business with.

9. Assess the lender’s flexibility and receptiveness.

When you’re comparing bids, inquire about the lender’s rules concerning locking in their quoted rates and ask if they require a fee. See if you can make the lender agree to your request of amending one of the conditions.

10. Deal with your lender.

When you have decided on a mortgage lender, negotiate for lower interest rates and reduced fees. It is possible that the lender has extra costs added to the interest, points and fees, which go straight to a loan officer. Deal with them nicely and inquire if there’s any cost that can be minimized.

There’s nothing more comforting than achieving a smooth, low-stress mortgage experience with the right home mortgage lender. By taking the time to find the best lender, you can look forward to a hassle-free mortgage process.