10 factors that can affect your mortgage interest rate

Who doesn’t want to get a mortgage at a low-interest rate? One of the biggest investments in your life is buying a property. If you can buy it by paying less interest, then nothing can be better. Most people think that the lender determines the interest rate of your mortgage. But the truth is that you can control the interest rate too. Saving a fraction of interest can lead to saving thousands of dollars at the end. So, you should shop around before getting a mortgage. You should know about your loan choices. The interest rates on mortgages are not standardized everywhere. The rate varies from one lender to another. There are many factors that affect the mortgage interest rates. These are discussed below.

Credit score

A credit score is one of the most important factors that affect your mortgage interest rate. When evaluating your credit score, the lenders consider your payment history, your credit utilization ratio,   length of credit history, credit account mix, etc. The reason to check all these is that the lender wants to make sure that you are someone who will be able to pay back the mortgage amount. They will provide mortgage at a low interest rate to those with high credit score. So, before you apply for a mortgage, you should study your credit report thoroughly and see how you can improve the score.

Loan term

If you have a shorter loan term then it is possible that your mortgage interest rate will be lower. For example, if you apply for a 30-year loan, then your interest rate will be higher compared to that of a 15-year loan term. So, shorter loan term means you will have to pay less amount overall.

Fixed rate vs adjustable rate

There are two types of interest rates to choose from: fixed and adjustable. If you have a fixed rate then you will pay the loan at that rate for the entire loan term. But adjustable mortgage rates offer lower interest rate than the fixed rate for three, five or seven years. After that, they adjust the rate and charge higher. The adjustable mortgage rate is risky if the interest rates increase during the early periods when you are actually supposed to have lower interest rates.

Type of property

The mortgage interest rate depends on the type of property you are buying. There are risks associated with buying some properties. For example, properties that you buy as second homes have high interest rates. Single-family homes have the lowest interest rates.

Loan amounts

The amount of loan you are applying for may affect your mortgage rate. For example, if your loan amount is low, the lender will provide high interest rate so that he can make a decent profit on this small loan amount. Similarly, if you apply for a large loan amount, the deal becomes risky so the lender will charge more. Generally, in the U.S, if your loan is under $100,000 or over $417,000, you will be charged a higher interest rate. So, when you are shopping for homes, you should check the price range before applying for a mortgage.

Expected down payment

The amount of down payment can significantly affect your mortgage interest rate. If you make more down payment, then your interest rate will be lower. So, for example, a 20% down payment will ensure a lower mortgage interest rate. However, it varies from one lender to another. Some lenders may be willing to give you a low mortgage rate even at a 5% or 10% down payment.

Loan type

There are different types of loans available besides bank loans, like FHA and VA loans. The FHA loan (which stands for Federal Housing Administration) offers loan at 3.5% down payments. The interest rates they offer is also very low compared to the conventional loans. But with these loans, you will need to buy private mortgage insurance. This insurance protects the lender from any kind of default. So, this is something extra that you need to pay every month along with your mortgage payment.

Location of property

The mortgage interest rates depend on the location of the property you are willing to buy. If your property is located in a healthy housing market, your interest rate will be lower. But if you are buying a house in rural areas (where properties are very cheap) or near water (where properties are very expensive) then your interest rate will be high.

Points

Mortgage interest rates are offered with different ‘points’.  These points can decrease your interest rate if you pay some upfront fee. Getting one point means deducting one percent of interest. If you pay points at closing, then your lender will offer you a lower interest rate.

Monetary policy

The Federal Reserve’s monetary policy can affect your interest rate. When the Federal Reserve increases the money supply, the federal fund’s rate gets lower, so the interest rates decrease. If the money supply is tightened, the interest rate will be higher.

All these factors just discussed affect your mortgage interest rate. The rate is mainly based on how risky it is to give money to the borrower. It also depends on the competition; for example, if the lender wants more borrowers, he will lower the interest rates. You should shop around before deciding to apply for a mortgage. Try to get quotes from as many lenders as possible and see how you can negotiate a lower interest rate.



Finding Private Mortgage Financiers Who Will Help Arrange a New Home Loan

By having a private mortgage, you do not borrow money from a bank as an alternative you borrow from another business or person. It is also worth educating how these private mortgage financiers will work. When you assess where and how to borrow money have a picture, usually the aim is to make a win win situation where both gains financially without any greater amount of risk.

What Everyone Ought to Know About Private Mortgages

Know the risk:

Life is whole of surprises and private mortgage can go bad. These deals always seem as a good notion when they primarily come to mind. It is good to look some of the questions prior you look for like how will the personal bonding between borrower and lender alter? Will the lenders monetary security be affected particularly if any happens? Who are other members may suffer if the mortgage loan is not repaid? Whether a private or a traditional lender, is often taking a risk.Neglecting relationship problems, the process can go to the bad situation if you do not think is the new house is in the good condition, will the house be necessarily insured and cared for? And are there other mortgages, liens or interests fighting with the private mortgage financer’s interest.

Agreements:

Any mortgage must be documented well. A loan contract can take care of documentation process and so you will get everything in writing. When you avail a written contract, people’s expectations are mentioned, hence there are some surprises. After many years you may not remember what you talked about but a document contains lot better memory. It keeps the relationship unbroken. It guards the parties to private mortgage. It is also good to prevent any legal problems in the future days. A written agreement may create the deal effective from a tax pint of view. When you check the contract, ensure the conceivable deal is mentioned, beginning with the days of payments due, consequences if payments are not obtained, where and how the payments be made, whether the loan is secured with any collateral etc.

Protecting the loan:

Always good to protect the lenders interest even if you made a private mortgage among your friends. The lender can take the house and receive the money back if there is a worst condition. A borrower may die or sued suddenly. If the house is held in the name of the borrower, without a property lien filed, creditors can take the home or put pressure to the borrower to use the value of the home to fulfill debt. A secured mortgage assists protect the interest of the lenders thinking everything is documented perfectly. Actually the word mortgage technically called security and not a loan. Mortgaging a loan with property may assist you save amount on taxes. It is important to discuss with the tax prepare or CPA to get more information about this.

Make a private mortgage properly:

You want to consider about unpleasant probabilities when looking a private mortgage. For documentation, deal with the qualified professionals. Discuss with the local lawyers, tax prepare and other people who can assist direct you by the process. Ask about the services like can payments be dealt and automated, will you receive the agreements, will the payments be reported to authorities like credit bureaus.



Real Estate Safety Tips Sellers Should Know

There is some personal risk involved when selling a house. You need to keep in mind that when selling a home, you will likely meet up with people you don’t know at all. Murders, thefts, and rapes are not uncommon when showing a home, especially in the big cities. That’s not to say that these crimes only happen in the big cities – there are unscrupulous people everywhere you go. Fortunately, securing your home and valuables takes only a few precautionary steps. You need to understand that in this day and age, people are ruthless, and will do whatever it takes to get whatever it is they want, whether it be your house, your property, or even you. We rounded up some of the best real estate safety tips that every seller should know.

  1. Secure all valuables – The first, and most important precaution you can take is to lock all your valuables inside a secure place. Many thefts occur during open houses or private showings, and buyers and realtors alike have been known to have sticky fingers. Even prescription drugs have been known to disappear from homes, so be sure to keep those under lock and key as well.
  2. Screen all buyers before you grant them access to your home – This is what professional realtors do before they arrange a showing. Remember, you are inviting a person you do not know into your home. Have the police do a criminal background check on prospective buyers, and stay with the buyer at all times! Do a Google search, and you’ll find news reports about people being robbed, raped, or sometimes killed while showing their homes to a prospective buyer that turned out to have a criminal background. This brings us to our third safety tip.
  3. Bring someone with you when showing your home – Many people do this by default, but some don’t. Having another person accompany you when you show your home reduces the likelihood of anyone trying to pull anything. Plus, if something does happen, you have a witness that can help identify the person or people responsible.
  4. Make a plan, and understand it – Make sure you put on paper exactly who will be responsible for showing your home, and how they will obtain access. Also, if you use a realtor, have that realtor give you a list of names of people who enter the house. This way, you can narrow down the list of suspects if any damage was done to your house, or in the event anything turns up missing.
  5. Decide on a schedule – Work out a time frame during which you will show your home to prospective buyers. Keep in mind that buyers want to arrange viewings when their schedule allows, but don’t make it to where you have strangers stopping by late at night.

Following these simple safety tips will allow you to enjoy the experience of selling your home, while at the same time keeping you and your family safe while people you don’t know are in your home. The phrase “It will never happen to me” are very famous last words when someone ends up a victim. Don’t let this happen to you. Take the necessary precautions, and you will be much better prepared if and when something does go wrong. It might even save your life!

Interested in repairing your credit? Read our next article.



How Using Sky Blue Credit Repair Can Help Restore Good Credit

If you have bad credit score, you may have some difficulties in getting a loan from some reputable loan companies. Therefore, you need to learn about how to use the best credit repair service for solving your problem. Sky Blue Credit is believed to be one of the most popular credit repair service companies on the market these days. This company is ready to help you restore your own credit score quickly and easily. You can keep reading this article, but we also recommend visiting aaacreditguide.com for credit repair information especially if you want to learn about how using Sky Blue credit repair can help restore good credit without any problems please read on or visit this guide on credit repair by www.consumer.ftc.gov

Here is what we recommend for getting started now.

1. Review your credit report

It is one of the most important steps that will be done by Sky Blue Credit Repair. This company has some professional financial advisers who are ready to help you fix your credit problem. They are going to help you review your own credit report thoroughly. This review procedure is very useful to analyze your credit report, in order to find some possible errors that may come to your report. Your credit score will be affected when there are some errors in your credit report. The review process doesn’t take too much of your time. In most cases, this company is able to complete the review process in a few days.

2. Solve any errors

After your report is reviewed completely, you should be able to fix or solve any errors on the report. Fixing any errors can help you improve your credit score significantly. Sky Blue Credit Repair service is ready to help you dispute any erroneous items with the credit bureau. This step becomes very important and essential in the credit improvement process. Therefore, this step should be done by professional experts who know how to solve this problem easily. Sky Blue Credit has a lot of experience in dealing with any errors in clients’ report.

3. Get some recommendations about managing the budget correctly

This is another good benefit that we learned from http://aaacreditguide.com/sky-blue/ is that you can get Sky Blue to help manage your budget correctly. Once your credit improvement process is done completely, you should be able to discuss with some professional financial advisers from this company. They are ready to provide good recommendations and advice for you, so you can manage your own budget easily. Budget management is very important to help you maintain good credit score for the rest of your life. Maintaining good credit score is very important to help you avoid getting any problems in the future.

Working with Sky Blue Credit Repair is very useful to help you improve your credit score significantly. It is very easy for you to get started with this service. It is recommended for you to visit its official website, especially if you want to get all benefits from this service. This credit repair service is offered with limited warranty. Therefore, you don’t need to worry about the overall quality of this credit repair service. Contact Sky Blue credit repair company to learn more about its services and all options that are available for all customers now.



Importance of Real Estate Planning

Real Estate planning is a process which includes the steps you go through and the actions you take during the production of a real estate plan. Some of these steps and actions include formulating strategies and setting corporate objectives. Real estate planning plays a major role in any buying homes and therefore the following are some of the reasons why you need to plan:

 

Here are 7 steps to help your real estate planning

#1. Supporting secure funding and growth An up-to date estate plan is sourced for whenever a certain real estate organization wants to source for funds externally. This is often done when the organization cannot fund some of the opportunities with the free cash flows alone. A good plan can help you convey some crucial investing information and points to prospective investors making them develop trust and feel confident in you for planning for the future.

#2. Coming up with a new real estate planning can be used to come up and formulate new steps towards the starting of a new business. This includes the budgetary calculations of the needed resources as well as to know what is expected to happen.

#3. To formulate and communicate the objectives or the course of action It helps to share and explain the objectives of the business with the management, the employees and the newly signed in the organization. It also helps a company to assess future opportunities and to commit towards a certain course of action making the company to focus on the main activities.

#4. To back up a loan application for the real estate Investors and lenders always ask to see the business plan so as to evaluate on future activities of the company and which would guarantee to loan.

#5. To calculate the home expenses this is used to calculate the amount of money you require to keep the house running on a monthly basis. it considers costs such as maintenance, salaries and loan payments among many others.

#6. Deciding when other new items are required and whether to buy or rent/lease them planning is used to know the exact period that something will last. With that said, you can decide on whether to replace the item with another bought or leased item.

#7. Acts as a forcing tool/mechanism towards the development of the real estate planning forces you to engage your thoughts on ways to start, mature, and even leave the cornerstone rehab enterprise without incurring a loss. It pushes one to do a market research of his/her business and to analyze the company’s strategy and structure, financial needs and the mission.