The first couple had a large five bedroom home that was too big once their children grew up, got married, and “left the nest”. Since they no longer needed so much space they moved into a smaller home nearby.

The second couple bought a small two bedroom cottage when they first got married and after having a child needed more space. They were fortunate to find a home down the street that had four bedrooms and plenty of room for their, now four person, family. Since they lived so close to their first home they rented it out to another young couple just starting out.

The third couple moved due to relocation. They love their home, their children were born there and it is full of fond memories. A job offer took them from the West to East Coast so planning to return one day – they rented it out.

Each couple had a different reason for renting out their home but in the end their situations were the same. They owned a rental, wanted to save money and thought they were stuck – unable to refinance.

The truth is rental properties can be refinanced! If you are like one of the couples above and own an investment property there are loan options available to you. The mortgage rates are higher than if you lived in the property full time but the exact rate difference depends on your unique loan and credit situation. A mortgage lender that specializes in non-owner occupied properties will be able to assist you in determining if, and how much, refinancing can save you. Since every property, borrower and situation is different it is important to review the various mortgage programs available.

As with many things in life knowledge is power. No longer living in your home does not mean you are stuck with its current home loan forever. There are many refinance programs available for rental properties. In order to find out if you qualify, and if you can save money, contact a mortgage lender today. Working together they can present you with mortgage programs tailored to meet your needs.

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Those stories could not be further from the truth. The dream of homeownership is alive and well, and within reach for most renters. Many people think that they cannot buy a home because they do not have a large down payment. If you can afford to move into a new rental house you can probably afford to buy your own. It is common on the rental market for landlords to charge first, last and deposit. If you are paying $2,200 a month in rent that could be $6,600! Some mortgage loans only require a down payment of 3.5%. That means if you bought a home for $180,000 your down payment could be around what it cost to move into the new rental house. The biggest difference is that you would own it.

If buying a home is on your bucket list than you are in the right place.

For many first time home buyers this can be an exciting and stressful time. It may take longer than you like to find the perfect home or a couple extra days for the loan to close but take heart, in the end you will have accomplished something great. You will be holding the key to your new home, the key to your future and your dream of being a homeowner will now be a reality.

The post The Dream of Homeownership Is Closer Thank You Think! appeared first on Direct Your Own Loan.

All Time Low Mortgage Rates

Recently mortgage rates have hit the bottom. Being lower than they have for over a decade, the new lower mortgage rates are enticing many homeowners to look into refinance. This new rate trend is also helping to bring the mortgage industry back to life. Not only are borrowers seeing a benefit from the new rates but lenders are as well. With homeowners looking to utilize new rates and government mortgage products available for a refinance, mortgage lenders are seeing more business coming through the door.

Government Mortgage Programs

Recently the government has created a couple mortgage programs to assist with refinances. The Home Affordable Refinance Program and the FHA Streamline Refinance Program are two very well known, and newly created, government programs. Both were designed to assist homeowners who need a refinance but may not qualify because of a high LTV.

The HARP program, now known as HARP 2.0, was created to help Fannie Mae and Freddie Mac owned mortgage notes qualify for refinancing. For homeowners who do not have a Fannie Mae or Freddie Mac owned mortgage note and do not qualify for the HARP program, there is the FHA Streamline Refinance program. This FHA refinance, unlike other FHA loans, does not require an appraisal. It allows a homeowner who has an FHA loan with a high LTV to refinance with a new lower rate and not many questions.

Although these two programs are for Fannie Mae, Freddie Mac and FHA loans, they cover the main majority of homeowners who need a refinance. This is why 2012 is the year of the refinance boom. With all time low mortgage rates and government assistance in the form of new programs, homeowners are taking advantage. Also, as programs become more lenient on requirements more homeowners are utilizing them.

The future holds many changes for the mortgage industry. If you are not able to qualify for one of these two government mortgage programs, there are other options and more to come. Speaking with a mortgage banker is the best way to stay up to date with new programs and available options. They will have the best understanding of new programs and your situation. Also, if you plan to utilize an FHA loan be sure to speak with an FHA approved lender.

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20 Year Mortgage for First Time Home Buyers

Getting into a mortgage by 35 could be a problem for many because of strict lending requirements. Also with a shaky real estate market, the investment scares many first time home buyers. The option of buying later is always available, but first time home buyers may have a hard time qualifying for a 20 year mortgage. The best mortgage term available for a first time home buyer is often the 30 year mortgage. So getting into a 30 year mortgage later on in life still leaves the option of refinancing to a shorter term.

Refinancing by 45 Years Old

If you are planning on retiring at 65 and want to be mortgage free, you could refinance with a 20 year mortgage at 45 years old. Even if your 30 year mortgage has only been paid off for 5 years, a refinance to a shorter term is possible. By using a 20 year mortgage to refinance you can cut time off your term, preparing for retirement. Also, you will only have a slightly higher monthly payment because the interest will be less.

Although a 30 year mortgage is a great loan for someone who has never bought a house, refinancing is inevitable if you want to save money. With such a long term the bank is charging more interest. Refinancing your home will utilize your newly gained credit, which means you will receive a better rate. Also, if mortgage rates are at an all time low when you refinance, you will save money on your loan. The 10 year and 15 year option can be viable solutions for a refinance but they have higher qualifications to meet. A 20 year mortgage can easily be obtained in a refinance if you have been paying your mortgage payments on time.

Planning for retirement is important when it comes to paying your mortgage. If you have a monthly home payment to make, retiring may cause you to default. Looking into the option of refinancing at a lower rate is your best bet of saving money and paying your home off on time for retirement. After all, if you save money in the long run on your home, you will have more money for retirement. As always, a mortgage banker will offer you the best information about terms and refinancing. They can also notify you of government assisted programs which could be a better option for retiring by 65.

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Texas Reverse Mortgage for Purchase

Plagued by legislation that did not allow home equity lending, senior homeowners in Texas could not utilize the program until 1997. Since then, reverse mortgages have been used by over 50000 seniors however not for purchasing a new home. It is the second largest market for the product in the United States. Instead seniors could only use a Texas reverse mortgage by receiving cash from the equity in their home. This cash could be used as relief for paying medical bills, home renovations and increased costs of living.
With the real estate market seeing an upturn, legislation is said to be in the works. The Texas reverse mortgage program for purchases could be available as soon as 2013.

Why Do Seniors Need This Program?

Senior homeowners who are in need of a property change could use the reverse mortgage purchase program. Often times, homeowner’s needs change as they get older. Accessibility is one reason someone 62 years or older might want to relocate their home. They may need better accessibility to the home through ramps or possibly need a location that is more accessible to family and caretakers. Some homes may not be easily changes for handicap access and sometimes the homeowner needs to be closer to caretakers.

Another reason why the reverse mortgage purchase program is necessary for senior homeowners is the size of their home. A senior living alone in a multifamily house incurs higher monthly utility bills than they need. Air conditioning for a larger home can cost a hefty amount as well. Also, maintenance and upkeep on a larger place can also cost more.

Relocating to a smaller home or somewhere that is closer to assistance can be a need for seniors that may not be obtainable. Traditional programs do not offer the same benefits as a reverse mortgage. In many other situations, the senior homeowner would get stuck with a bill they could not pay back. Reverse mortgages are free and clear, with the purchase program the senior citizen can move into a new home without having to make monthly payments.

Should you be considering a reverse mortgage for purchasing a new home, it is suggested that you speak with an FHA approved lender. A mortgage banker who offers HECM loans can help you find out how the government mortgage program works. They can also tell you about other available options. If you interested in a Texas reverse mortgage for a purchase you will have to wait until legislation is passed that allows it.

The post Texas Reverse Mortgages Are Changing for Seniors Purchasing a Home appeared first on Direct Your Own Loan.

Floating and Locked In Rates

Lenders will often offer different options when locking in rates. When rates or points are not locked in, they will be considered floating. If the borrower locks in the interest rate but not the points, the lender may charge more points at a later time. However, there is also the chance the points for that interest rate drop, at which time the borrower may be allowed to lock in the points. If both the interest and the points are floating then they borrower can expect to pay more if either percent rises.

Rate Lock While Purchasing

If you are planning on purchasing a home, locking in a low rate can save you money for upgrades on your new purchase. First time home buyers can utilize the money they save from locking in a rate to buy furnishings and other first time home buying needs. Veteran real estate buyers can go on vacation with their added savings.

Rate Lock While Refinancing

Refinancing your home is all about the mortgage rate to many homeowners, which is why a rate lock is so important. If you have been tracking trends, you stand a good chance of locking in at the lowest possible amount. By locking in at the right moment, a person refinance their property can save money and not worry about which way rates go.

Losing Your Locked In Rate

There are times when a lender may not be able to honor the locked in rate. This may happen when there is a problem in processing and the rate lock goes beyond its expiration. Some locks allow for 30 days, and others for 60 days. However, there is often a point difference based on the term of the lock. If the term expires, the lender may not be able to honor the rate because they can no longer sell the loan to their investors. When a rate lock agreement is entered by the lender, they will often have a similar agreement with investors to buy the loan at the locked in rate. Once the agreement has passed the expiration date, there is not much a lender can do.

A rate lock is often the best option when a borrower believes rates are at their lowest. Neither the mortgage lender nor the borrower knows what is best, but keeping up to date with mortgage rate trends can help to make better decisions. If a lock has occurred and rates drop, it is up to the lender to honor the new lower percent. Speaking with a mortgage banker is often a good way to track rates and available options.

The post What is a Rate Lock When Purchasing or Refinancing a Home? appeared first on Direct Your Own Loan.

HARP and HARP 2.0 are government programs designed to fix our troubled economy by allowing homeowners to refinance their homes with high loan to value amounts. With the crash of the market many homeowners have an LTV higher than %100 which makes it hard to refinancing your home without this program. Since HARP 2.0 was released, many more homeowners have been able to refinance their mortgages. With over 13.5 million homeowners underwater on their loans there had to be a program created to help ease homeowner’s troubles.

There are many borrowers who are not eligible for HARP 2.0. Although, there will eventually be a new HARP program which allows for higher LTVs or other situations, other changes have been taking place. In recent news, the Consumer Financial Protection Bureau has been working on ways to help homeowners who are still in trouble. With many banks selling troubled loans to a company which may be better suited to assist borrowers, the CFPB has announced changes for mortgage servicers. It is proposed that troubled loans are now sent off to a company more suited for assisting borrowers with delinquency issues. This change could be the final blow to the mortgage crisis, stopping foreclosures and helping borrowers who need closer assistance.

It would seem that refinancing is the key to fixing the issues with mortgage quickly. With many homeowners locking in a 3.5 percent mortgage rate for over 30 years, it is a quick fix that may pose a problem in the future. However with rates are as low as they were in the 50’s, who could resist a government assisted refinance.

With housing being one of the last remaining pieces to the mortgage crisis, the many changes in the future of mortgage should have a positive impact on the American economy. Although there are plenty of proposed changes to refinance and homeowners in troubled loans, the true change may rely on future property purchases. As credit scores start to rise and Americans start to see more stability in the job market, purchasing programs may be on their way.

The post Could This Be The End of the Mortgage Crisis in America? appeared first on Direct Your Own Loan.

Although the loan is at a higher rate than any other term, the monthly payments are lower because they are spread throughout a longer period of time. This is probably the main reason for many homeowners decision to go with a 30 year mortgage. However, that is not the only reason why 30 year fixed mortgages are so popular.

Qualifying for a First Time Home Buyers Loan
Many first time home buyers go with 30 year mortgages because it is easier to qualify for.

Buying Up to a More Expensive Home
The 30 year fixed mortgage allows you to purchase a more expensive home with easier qualifications.

They Offer a Better Tax Write Off
With a 30 year term the interest will be higher than any other term, this creates a larger tax write off.

Fixed and Adjustable Rate Mortgages

30 year mortgages come with either a fixed rate or adjustable rate. If mortgage rates are very low, many times homeowners will lock in the low rate with a 30 year fixed mortgage. Going with a fixed rate offers stability because the rate will not be changed during the payment process. Adjustable rate mortgages usually start at a low rate, but can adjust over time to a very high rate. This makes an ARM unpredictable and undesired.

Downside of 30 Year Mortgages

It may be the most popular home loan for any borrower but there are downsides to the 30 year term. As said before the rate is higher than any other term. This means the borrower is paying more towards interest every month than if they chose a 25, 20, 15 or even 10 year mortgage. Other than that there really are no other downsides to a 30 year mortgage. The better choice would be a shorter term however you will be paying more in taxes every year anyway.

Many borrowers, from first time home buyers to homeowners looking for a refinance, choose to go with a 30 year mortgage because of its dependability. This rate and term is stable for a very long time and often offers pre pay options. This is another reason why it is the most common choice for home loan terms. Not only is it easy to get and easy to maintain, the options for paying off these loans are much better than others. That means from the beginning of a homeowners mortgage to the end, they will have a loan that allows them to relax.

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The basic of mortgage rates, like many other things in our economy, comes down to the principle of supply and demand. In this case we are taking about the supply and demand of money. The larger the supply of money competing for mortgages, the lower the rates will be.

To break this down even further, when we talk about the “supply” of money we are talking about investment dollars. In the US there are two major categories of markets competing for these investment dollars, the stock markets and the bond markets. Generally speaking when the stock market has a bad day investors will move their money to a safer place, which is often the bond market. When money is flowing in to the bond market there is more money competing for the same amount of bonds. This will drive bond prices up and the yield (return rate on bonds) down. When the yield of bonds goes down, mortgage rates will also go down.

The bond most analysts use to represent mortgage rates is the 10 year US Treasury Bond. When the yield on the 10 year treasury bond goes up, expect mortgage rates to follow, and vice versa. So to sum it up, if a company like Apple comes out with bad sales figures, this could send the stock market plummeting. This could cause investors to put their money into bonds, which will drive the yield on the 10 year treasury down, causing mortgage rates to go down as well. This concept will give you the basics of what to look for when trying to figure out what rates will do next.

By keeping up with specific news that affects the bond and stock market, homeowners will be able to track rate trends. Although this does not guarantee the lowest rate, a homeowner or potential home buyer will be able to receive a great rate by keeping up with changes. As always, by speaking with a mortgage banker you will receive the best information. Teaming the information about the stock and bond markets with help from a mortgage banker helps borrowers to make an informed decision.

The post What Factors Can Cause Mortgage Rates to Increase and Decrease? appeared first on Direct Your Own Loan.

What are the Different Terms?

A 30 year fixed mortgage rate is the most common program but many borrowers do not know about other available terms. There are mortgage programs available with 10, 15, 20, 25, 30 and 40 year terms. If you choose a longer term you will receive lower monthly payments for your home. However, with a longer term comes a higher rate. This means you are paying more money towards interest and less money toward your mortgage every month.

Fixed and Adjustable Rate Mortgages

Do not get confused when discussing fixed and adjustable rate mortgages. Both offer the same terms however the difference is that a fixed mortgage rate will not change. A fixed mortgage rate stays at whatever rate it is locked in at and an adjustable rate mortgage (ARM) is unpredictable.

Things You May Not Know About Refinancing

Once you choose a term you are not locked in to that term. Whether you choose a fixed or adjustable rate mortgage, refinancing allows you to receive a lower term. If your mortgage has a 30 year term which you have been paying for 10 years, you could choose a 20 year mortgage program when you refinance. You could also choose a 10 year mortgage program and save money on interest. Chances are when you bought your home 10 years ago you were barely able to qualify for your loan. After 10 years of payments and working for better employment, you could qualify for a lower term. Although this can increase your monthly payments, you are paying more money toward your home and less towards your interest.

Disadvantages to a 10 Year Mortgage

The downside to a 10 year mortgage would obviously be the larger monthly payments. If you can afford the higher monthly payment associated with a shorter term, then the disadvantages are almost nonexistent. However when it comes recessions and tough times, having a monthly payment that is too high could lead to foreclosure. That is why it is always best to speak with a mortgage banker about which program and term is right for your situation.

There are many benefits to a 10 year mortgage, but mainly the savings on interest is what most borrowers who choose the term are looking for. Lower rates for paying your loan off sooner is also a great benefit as well. With few disadvantages, the main question that needs to be asked is how financially stable you are. If you can afford to pay the higher monthly payments and you are secure in choosing this option then it offers clear benefits. If you are unsure what may be the best route for you financially a longer term will offer lower payments, but there is always the option of a refinance to a shorter term later.

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