|Mortgage Refinance Information|
Know Your Mortgage Fees, and Youll Never Pay Too Much for Your Loan
If you buy new windows, you'll not only pay for the windows, you will also pay an installation fee. When you purchase a car, you pay tax, title, assumption fee, etc. Just about every major purchase comes with extra costs or fees, and home loans are no different. Most people think they don't have to pay costs on a loan, because they are paying interest on the loan (they figure this is their fee ? a premium on the money). A mortgage, however, does not come free.
While some are mandatory, others are not. Follow these guidelines, and you'll never pay too much for your purchase mortgage or refinance loan. The origination fee -- The fee that bothers people the most is the origination fee, or what some mortgage people call a broker fee. This is often confused with points, but should not be. Points are something completely different. The origination or broker fee is what you pay the loan officer to originate or create and complete your home loan, whether it's a purchase or a refinance. All mortgage people charge them, whether they work for a mortgage brokerage or for a bank.
Remember, if you're told there is not a broker or origination fee, chances are you're paying a higher interest rate, and this is how they're making this fee. The origination fee is the primary way mortgage brokers make money. The company gets the entire fee, and your broker or loan officer gets a percentage of that fee ? somewhere between 30 and 65 percent.
So, if your mortgage broker charges you two percent on a $100,000 loan, this is $2,000 for his company or bank and up to $1,300 for him. You may think this is an outrageous amount of money, especially considering that this is just one of the costs you have to pay, in order to complete you loan. It might be, and then again, it might not. It depends on what type of loan you get, how much work is involved in closing it, and the quality of the service you get. Here are a few guidelines on what you should be willing to pay in origination or broker fees.
Bad credit's effect -- If you are a sub prime borrower, or someone with credit problems, expect to pay more ? up to $3,000 or $4,000. Remember, sub prime, or non-conforming, borrowers have some type of baggage that makes them difficult to get approved, which is a huge part of the mortgage professional's job. They may, for example, have a recent bankruptcy or foreclosure on their record, or a civil or criminal judgement, tax liens on the property, or very little equity in their home. These are problems that good mortgage professionals can get around, but it takes a lot of time and effort.
I once helped an elderly gentleman on a fixed income refinance his home, and he had 14 liens against his home, all of which had to be satisfied, before his mortgage could be paid off, and he could get a new loan. I had three weeks, and probably 25 hours of time, just clearing these liens. One of them was a defaulted car loan on a car he didn't even have. He owed $3,000, hadn't made a payment in three years, and the bank was still after him. I had to negotiate with the collection agent from that bank, and get them to take $1,800 to satisfy the loan, which I would work into his new mortgage. After many telephone conversations and some very hard selling, they agreed, and I wound up getting it done.
Now, I would have normally charged a minimum of $2,500 (over five percent of the loan amount, in this case) for this type of work, but there was not enough equity in the house to get that much origination in the loan. I actually did it for less than $1,000 ($500 of which was mine), just because I wanted to help this man, who needed the cash he was going to get from the new loan to put a new roof on his dilapidated house. This is just one example of when it's acceptable to pay more in origination fee, even though this man didn't have to do so.
Conversely, let's assume you're refinancing your home in a perfect scenario. You have perfect credit, lots of equity in your home, plenty of cash reserves, and the paperwork is very easy. The loan officer says he can complete your loan in two weeks, most of which will be consumed by the work of other people, such as title agents and an appraiser. This origination should not be much more than one percent of the loan amount and even smaller, if the loan amount is over $150,000. This is a loan that mortgage people refer to as "A Paper." It is very easy to close, and takes very little work, so the loan officer can make his money on volume, by doing lots of these types of loans. I always charged $1,500 or less for an A Paper loan.
So, begin learning your closing costs by finding out what the origination fee is (remember, most of the time it's negotiable). One to two percent of the loan amount is acceptable, unless extraordinary circumstances exist.
Mark Barnes is the author of the new novel, The League, the first work of fiction, based on fantasy football. He is also an investment real estate and home loan finance expert. Learn more about his suspense thriller at http://www.sportsnovels.com Get his free mortgage finance course at http://www.winningthemortgagegame.com
Obtaining a Home Equity Loan Online
Private lenders, banks, and mortgage companies are all setting up shop on the internet, and all make it possible to obtain a home equity loan online. Competition between lenders is stiff, so be sure to check a few companies that offer applications about their rates, products, and customer service.
Refinancing Your Home - Is the Time Right?
Refinancing your home is a major decision not to be taken lightly, even in this era of low interest rates and easy money. While every mortgage company in town is touting the strategy of getting a new loan before rates rise again, there are several things you'll want to be mindful of before you go about refinancing your home.
Home Construction Loans
You can maximize your savings by shopping for a lender that can provide you with a combination loan. The combination loan starts as a construction loan. During this phase, your lender cuts checks to your builder and their subcontractors as they successfully reach significant steps in the building process. Once your home nears completion, your lender activates a traditional mortgage.
Guide to Flexible Mortgages
Outlined below is a useful guide to flexible mortgages. Flexible mortgages are also known as Australian Mortgages because they usually feature something which is common in Australia - interest recalculation on a daily basis.
Buying a Home With Bad Credit - Tips on Finding the Right Broker or Lender
You can buy a home with a bad credit record; you just need to find the right mortgage financing package. Before you sign up with the first company that offers you a loan, remember to research offers to be assured you are getting a fair deal.
Mortgage Broker or Assassin? A Banker Who Offers You This Loan May be Trying to Kill You!
What if a banker or mortgage broker told you he's loan you 25 percent above the value of your home? You might think it sounds great, but I sure hope you'd say no. This is a loan only the most money-hungry and unscrupulous loan officers will sell. Few, if any, banks will do them. There are wholesale lenders, though, who will actually loan 125% of the value of your home.
Self Employed Mortgage Loan ? Getting a Mortgage When You?re Self Employed
Being self employed has many benefits. When you are self-employed, you can write off all of your deductions on your taxes. You have the potential to make more income than someone who is employed by someone else. You have the freedom to be your own boss. One of the few times when being self employed has some drawbacks is when you go to get financing for a home or a major purchase. But, here are some things to know that can help you make the mortgage loan process run smoothly when you are self employed.
Remortgage Serves To Rewind The Reimbursements Of Mortgage
It takes a mighty big effort to secure a home and even mightier to convert it into an earning member. Can a home be converted into an earning member? In contemporary configuration anything is possible! You must be aware of the advantages of mortgage, for you certainly have opted for that before going for a remortgage. Remortgage is a tool that solidifies the benefits that you have compiled as a result of mortgage. Remortgage allows you to apply for a new money lending service, if you are not satisfied with your current loan lender.
Understanding Mortgage Basics
As common as mortgages are, there are a surprisingly large number of us who are under false impressions about the way they function, and what they actually are. For one thing, though we do commonly call mortgages "home loans," this is not at all what they actually are. In fact, mortgages aren't loans at all, nor are they something that have been given to you by lenders. More accurately, it is a security instrument that you have provided to a lender. It is a document that protects your lender's interest with your property itself.
Homeowner Loans ? Drawing Lessons of the Past
Loans are not of a recent origin. People used to take help from others even at times when money was unseen and barter was the mode of trade prevalent. However, the form of loans has changed over time. In those days the loans used to be offered in kind. Now, they are offered in money or in terms of money.
Real Estate Mortgage Loans Online
Online real estate mortgage loans enable borrowers to be sure they are getting the best financing rates. By comparing online quotes, you can save time and money with no risk. An added bonus is the ability to apply for loans online from the comfort of your own home.
Home Mortgage Loans For People With Bad Credit
Getting a home loan with bad credit has actually never been easier than it is today. Here are some tips to help improve your chances of success:
Home Equity Loans - Are They Right For You?
The bills are out of control and you need a new car. "Maybe we can get a new carpet and paint the house", you say to yourself. These are just a few reasons why home equity loans can seem like the solution to all your problems and are so popular.
Home Equity Line of Credit ? Great Idea for Rainy Day Emergencies
Most Americans tend to live on a paycheck-to-paycheck basis, and the typical household has nearly $10,000 in credit card debt. Adding to that is the fact that Americans are saving money at the lowest rate in history. We spend what we earn, when we earn it, and there's little or nothing available when a disaster or an emergency strikes. How can the average American make sure there will be money available for that "rainy day" emergency?
High Risk Home Mortgage Lenders Online
Online high risk home mortgage lenders specialize in offering loans to people with adverse credit due to bankruptcy or other financial problems. By analyzing online quotes, you can find a reasonable mortgage loan even with poor credit. Loan approval is then just a matter of filling out your online application and reviewing some final paperwork.
Home Loans for Credit Challenged Borrowers
Just because you have negative items on your credit report doesn't mean you can't obtain a home mortgage loan. There are options for you. Bad credit is not the end of the world. It's true that getting a bad credit mortgage loan is not always the easiest or fastest mortgage loan out there, but you can still buy your own home even with bad credit.
Poor Credit Mortgage Reigns High Among Mortgages Available to Bad Credit Borrowers
Like a big brother keeping notes of the erring behaviour of his younger sibling, credit reference agencies like Experian and Equifax maintain a record of each person entering into credit transaction. While a few instances of arrears are considered admissible, as the incidence of bad credit behaviour increases, creditors start considering these as a lack of reliability. These people are termed as having a bad credit history.
Short-Term Interest Rates on the Rise; Adjustable Rate Mortgage Holders Prepare for Increase in Rate
Interest rates are on the rise and many home owners who have adjustable rate mortgages may see increases in their forthcoming annual adjustments.
Basic Tips for First Time Home Buyers
The first time you purchase a home is an exciting experience. You are anxious to call the place yours and maybe a little worried about how the whole thing will play out. Knowing a few basic tips for home buying is important and will help eliminate your fears altogether.
Applying for a Home Loan
Applying for a home loan may not be the most exciting way to spend your time, but if you are like many potential homeowners, it is probably a necessary evil. If you have some knowledge of the process ahead of time, however, it will go much more smoothly.
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