“What’s Your Mortgage Rate?”

Here is the one question I get more than any other by typical home buyers shopping for a mortgage:

What’s your mortgage rate?

I get that a lot from mortgage shoppers that are not familiar with the mortgage process. It’s sort of like walking into a shoe store and asking “how much for a pair of shoes?” For the shoe salesman, the answer would depend on factors like, style, size, material etc.

It works the same with mortgages. Rates depend on factors such as loan size, the loan to value (how much you are borrowing in relation to the selling price or home value), and of course your credit score.

If you see an ad with a low mortgage rate in nice large font, ask yourself this question. How do they know anything about the home I’m buying, the mortgage I’m looking for, or what my credit profile looks like? There is no “one size fits all” when it comes to mortgage rates (or shoes).

If you see a mortgage rate advertised on the internet that seems too good to be true, trust your instincts, steer clear and have a conversation with a reputable mortgage professional. That’s the one way to determine the only rate that you should really be interested in, and that’s the rate that you’ll be paying.

Build Equity By Choosing The Right Mortgage

Home ownership is the key to building wealth for most people because it is an involuntary savings account. As you pay down your mortgage each month, the value of your interest in the home rises.

Build Equity By Choosing The Right Mortgage

Equity is a beautiful word as every homeowner knows. Once you get used to making your mortgage payments, you can rest assured that you are creating a nest egg every month. Throw in the appreciation on the property and your nest egg can grow large before you realize it. This savings account, better known as equity, can provide the means for putting your kids through college, dealing with emergencies and retiring.

Building equity is fairly simple, just make your monthly mortgage payment. There are additional steps you can take to move the process along at a faster pace. These steps are all about the type of mortgage you obtain when you purchase your home.

When you purchase a property, particular for the first time, it can be a stressful event. Right or wrong, most people tend to take anything they can get in a mortgage loan so they can meet close. This is understandable, but can come back to haunt you financially. If you can step back from the chaos for a moment, you might consider the following options that will help build equity.

A 30 year mortgage is the default for most home buyers. It is the first thing that comes to mind, and most assume it is the safest option. It is the mortgage I recommend to most home buyers, because it has the lowest monthly interest and highest deduction for tax purposes.

However, we are discussing acquiring equity, and for that purpose, a 15 year mortgage is going to cut down on the total interest you pay on the loan as well as supercharge your equity growth. A 15 year loan is far better than a longer option to build equity, but only if you are absolutely sure you can meet the monthly payment requirements. If you have any doubts whatsoever, there is another option that you can consider.

Making prepayments on principal is a simple, proven way to build equity. The idea is to make an extra monthly payment when you have sufficient cash to do so. Effectively, you use your home as a savings account by doing this.

The advantage over other investments is the equity growth should be tax free. Before taking this step, find out from your lender if there are any prepayment penalties. Regardless, making two of these payments each year will quickly build equity in your home. Make sure your extra payments are credited toward the principal balance of your loan, not the interest.

If any of these ideas sound interesting, you can still take advantage of them even if you currently have a mortgage. Refinancing your mortgage gives you an opportunity to correct mistakes you made when you were more focused on your initial purchase. Talk to me to find out your options.

Why Using a Mortgage Broker Can Save You Money

Mtg Broker

Being able to get the house you want should make you very happy. But what if, after you move in, you find out that you may have been able to get a much better financial deal than what you got? Would you still be as happy? It is quite possible to get the best deal in the first place by using a mortgage broker.

Here is how a mortgage broker can save you some money.

It needs to be stated from the start that a mortgage broker will not always be able to get you the best deal, but could, probably, in most cases. Too many people are still accepting the first offer they are given for their mortgage. Getting that good deal, however, takes more than just comparing loans.

A bank lender will only be able to offer mortgage products that their own bank creates. These products, of differing values, are limited.

Sometimes a lending agent may not want to compare the different products his or her bank offers in order to find an exact match for your needs. At other times, a bank agent will work very hard for you.

A mortgage broker, however, only gets paid when a sale is made – in other words – when a mortgage is signed. This means that it is in their best interests to get for you a highly competitive deal.

Mortgage brokers deal with many different lending companies on a regular basis and know what each of them have been willing to do – in the very recent past. When you contact a mortgage broker, there often will not be any fees. They will then get your information from you and send it to  companies they think will give you a very competitive offer.

Another benefit comes from the way that mortgage brokers perform their services. A banker will give you a more institutionalized service, and your interaction with him or her will be more formal.

A mortgage broker, however, will be glad to take more personal time with you, making you feel more welcome and will probably spend more time with you and for you. In fact, he or she may even come to your house.

Mortgage brokers have access to mortgages at a slightly lower price than a banker might provide. This is because they deal with wholesale prices rather than the retail. Their service offered to lenders means a savings for the lender because the lender does not need to maintain sales staff – except when a sale is made.

When there may be a problem with your credit, the value of a mortgage broker can really be seen. Because they know many different lenders and each of their specialties, they can work to find lenders that can give you a great deal.

They would already know which lenders regularly give money to those with bad credit – or whatever special need you may have. A bank representative, however, while still able to offer a number of products, is limited to only what their branch offers and the special deals they give.

And that’s why using a mortgage broker can save you money!