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Bank vs Broker- How to Choose a New Jersey Mortgage Company
Choosing a New Jersey Mortgage Company can be quite confusing and stressful. Understanding the difference between your local bank versus a mortgage broker could mean the savings of thousands of dollars. Your local bank has certain guidelines and...
Do You Know the Pros and Cons of Interest Only Mortgage?
Has any lender ever told you the Interest Only Mortgage was like a double-edged sword? It can help you achieve your dream of owning a home more easily, but it also can create a financial hardship for those who don’t fully understand what’s involved....
Home Loans and Mortgages – The Selection Can Be Bewildering
For years, when someone wanted to purchase or refinance a home, the choices were simple. The buyer chose either a 15-year fixed-rate mortgage or a 30 year fixed-rate mortgage. That was it. Of course, those were also the days of twenty percent down...
The Zero Down 80/20 Mortgage
This is an excellent loan for those that are lacking the down payment required for other types of mortgages.
The 80 20 mortgage is simply two loans for 100% of the purchase price. It is a first mortgage at 80% of the purchase price with a...
Using A Mortgage Refinance Company Online
Online mortgage companies make refinancing convenient and competitive. By researching mortgage rates and lenders online, you can be assured that you have the best refinancing rates. Before You Refinance Before you refinance your current mortgage,...
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Sub-Prime Mortgage Loans - Five Ways To Lower Your Rates On A Sub-Prime Mortgage
Sub-prime mortgages don't mean you have to pay excessively high
interest rates to buy a home. By taking time to do some research
and pick the right terms, you can save thousands on your
mortgage. The following five tips will help you get low rates
with the right subprime lender.
Compare Lenders
The number one way to lower your interest rates on your
sub-prime mortgage is to compare lenders before you apply. It
sounds so simple, but too many homebuyers skip this step,
costing them thousands.
Plan on taking at least a day to explore your options. The
easiest way to look at financing packages is to request quotes
online. While you are requesting quotes, take a look at
conventional lenders as well. They often offer good rates and
terms for those with adverse credit histories.
Pick An ARM
Adjustable rate mortgages (ARM) offer lower rates and are easier
to qualify for than fixed rate mortgages. The drawback is that
ARM rates can increase over the years. But if you are planning
to move soon or just want to buy a home, then an ARM probably is
your best choice.
You can also convert your ARM when your credit score improves.
As property prices increase and your equity builds, you will
also be able to get better terms in the future.
Increase Your Down Payment
By increasing your down
payment, you can knock off up to a
percentage point. Zero or little down financing is great for
those short on cash, but rates are significantly higher.
Ideally, you want to put down 25% to get the best rates. Just
leave enough cash reserves to financing moving expenses.
Pay A Point Or Two
Points paid upfront can also lower your interest rate. You want
to be sure though that you recoup the upfront costs. If you plan
to move or refinance in a couple of years, you will not see the
savings of lower rates.
You may also find that your money would be better spent on
increasing your down payment than on paying points. With this
type of decision, you will want to do some math with a mortgage
calculator.
Bulk Up Cash Reserves
By increasing your cash reserves, you can also improve your
credit score to qualify you for lower rates. Take advantage of
tax refunds or cash bonuses by putting them into your savings.
Lenders look at saving accounts, money markets, and CDs as cash
reserves, not stocks or other volatile assets.
About the author:
Carrie Reeder is the owner of ABC Loan Guide, an
informational website about various types of loans. View her
recommended lenders for Po
or Credit Mortgage Loans.
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