 |
«A website where you can find the lowest interest rates on home loans with absolutely free quotes from multiple lenders» |
| • Home Equity Loan • Home Refinance Loan • Home Purchase Loan • Second Mortgage Loan • Debt Consolidation Loan | ||
|
 | |
| |
| Home Equity Loan Store :: Mortgage & Refinancing | |
|
|
|
Home Mortgages: Does a No-closing-cost Loan Make Sense for You?
I have heard a number of radio ads and have seen many newspaper ads offering "no closing cost" home mortgages. These ads will tell you that you can get a new mortgage or refinance your existing mortgage at absolutely with absolutely no closing costs.. There are no points, no charges for an appraisal, no charge for title insurance, no costs, period. On the face of it, this sounds like a great deal and no-cost mortgages are especially popular with people who are refinancing an existing mortgage. How does this work? Normally, a 30-year, fixed-rate mortgage, would have closing costs in the neighborhood of $2,000 to $3,000 or even more, depending on whether or not you pay points upfront. In fact, we talked to one mortgage broker two weeks ago about a mortgage on an investment property we own in another state and the closing costs were quoted as $7,000 - outrageous but at least not typical. You've probably heard the old adage, "there is no such thing as a free lunch," and these no-cost mortgages are yet another testimonial to the truth of this. The way that no closing cost mortgages work is the lender gives the mortgage broker a rebate at closing which the broker then uses to to pay the settlement costs. The way the lender gets its money back is by charging a higher interest rate. For example, for a $230,000, 30-year fixed rate mortgage with no upfront fees, your interest rate would most likely be a least 0.35% higher that if you paid one point and the customary closing costs. Here's an example of what this means. As of this writing, there were mortgages available at 5.250 %, plus one point. As you probably know, one point equals one percent of the mortgage so one point on a $150,000 mortgage would be $1,500. The monthly payment fo this loan, excluding taxes and insurance is $826.00. The closing costs would be $1,500 plus the normal settlement costs of, say, $1,500,A for a total of $3,000. Let's compare this with a no-cost mortgage. Assuming the interest rate is 0.35% higher as quoted earlier, the interest rate on a 30-year, fixed-rate mortgage would be 5.725%, yielding a monthly payment of $872.98 or about $46.00 per month vs. the loan where you would pay one point and the normal settlement costs. Given a savings of $46.00 per month, it would take you about 65 months - or 5.5 years to make up for the $3,000 you paid in closing costs. This means that you need to determine how long you will stay in that house before deciding on a mortgage loan or a refi. If you intend to stay in that home and not refinance your mortgage for more than six years, it might make sense for you to pay the point and the normal settlement costs. On the other hand, if you believe you will sell that house or refinance it in less than five years, a no-cost mortgage might be better. Just make sure you look at all the various alternatives and their long-term costs before you leap into a new mortgage. For FREE help with debt and credit, subscribe today to Douglas Hanna's free email newsletter "8 Simple Steps to Debt Relief" at http://www.all-in-one-info.com
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Refinance Mortgage Loan - Tips on Refinancing Your Home Mortgage Refinancing your home mortgage can come with some great perks. If you do it with no money out of pocket, you can skip one to three mortgage payments. Kings Bay Saint Marys & Kingsland Georgia Real Estate - Getting a Home Loan with Damaged Credit So, you have made the decision that you would like to become a homeowner. As lenders, we have to perform a credit check. Home Mortgage Refinancing - Things to Consider When Looking to Get Cash Out on a Refinance When you refinance your home mortgage, lenders often tempt you with the option of cashing out part of your home's equity. Cash at a comparably low interest rate may seem like a good option, but make sure you will financially benefit from it first. Home Mortgages: How About Those 1.75% Loans? You've undoubtedly heard or seen ads for mortgages with very low interest rates such as 1.75%. Are You Ready for a 40-year Mortgage? Real estate prices have been increasing steadily over the last five years, particularly on the East and West coasts. In parts of California, homes are selling for 33% more than they were a year ago. What Is The Best Deal For A Mortgage? Few of us invest the time and effort into researching and securing the best deal for a mortgage to purchase our home.For most of us, our house is the single most important and expensive purchase we ever make!We invest a lot of time and effort into finding the perfect property in the best location and with as many of the features from our wish list as possible, yet, when it comes to finding the best deal for a mortgage, we take what is offered rather than researching and securing the best mortgage for our situation. VA Loans, A Gift from Uncle Sam Uncle Sam has a gift for the men and women who serve our country. It is the VA loan. Bridging Loan Basics A Bridging Loan is a short-term loan used as a way to provide funding for the purchase of a new property while the borrower awaits the sale of an existing property. Unless all the stars are in perfect alignment, it's tricky to coordinate the sale of one property and the purchase of another property in such a way that the transactions occur simultaneously. What You Dont Know About The Real Estate Process, Some Inside Secrets Some people in the real estate industry have a terrible reputation. Why, because they deserve it. Home Mortgage Rate Shopping - Why Some Shoppers Give Up And Others Dont About 29% of current homeowners and a much larger percent of consumers with income levels above $50,000 feel it best to stay as far away from offers to finance or refinancing their home as possible. And this seemly for good reason. What Are Home Equity Loans? A home equity loan is simply borrowing on the difference of the value of your home and the outstanding mortgage on the house. Lets say, you have bought a home worth $50,000 some time back, after making a down payment of $5,000. A Guide to Getting a Home Improvement Loan If you've got a few things around the house that you'd like to spruce up but don't have the money for, you might want to consider getting a home improvement loan. As the name implies, a home improvement loan is designed to pay for improvements to a house or other form of real estate. Why Choose a Home Owner Loan? Most people choose a home owner loan as it can release the capital that is tied up in their property for immediate use. The loan can be used for any purpose, and is available to anyone who owns their home. A Guide to Direct Homeowner Loans Are you considering applying for direct homeowner loans? Perhaps you're simply wanting more information on direct homeowner loans so that you'll be able to make an informed decision?Direct homeowner loans can be very useful for a wide variety of purposes ranging from purchasing new vehicles to consolidating old debts, but as with all loans should be researched and carefully considered before any final decisions are made.How direct homeowner loans workDirect homeowner loans are based upon the equity that you have in your home? equity, of course, being the percentage of your home's value that is free from any mortgage or loan. What Are Mortgage Brokers And Why To Use One "Mortgage" is formed from two words: the French word "mort" meaning "dead" and the word "gage" from Old English meaning "pledge". Sir Edward Coke (who lived from 1552 to 1634) explained the term: the land as considered "dead" to the mortgagor, as if the person never had it. What the Bank Won't Tell You About Mortgage Refinancing So you have a mortgage, and you need to refinance to get your interest rates low. Most people simply walk into their bank, ask to refinance, and then end up paying more money long term than they would have otherwise. Mortgage Refinancing Companies -- Choosing The Right One Searching for a mortgage refinance company can be a daunting task. In a moderately sized city, there could be at least several major refinancing companies and several smaller local refinancing institutions. Home Equity Loan - Home Theater Adds Fun and Value In days gone by, the family typically spent their evenings watching television in the den or living room, crowded around a black and white television set that may have measured no more than nineteen inches in diagonal size. For decades, this scenario was pretty much the same in most American homes, with the only change being the replacement of black and white televisions with color models. Poor Credit? Get a Sub-Prime Mortgage Now, and Refinance to a Conventional Mortgage Later There are great mortgage loans for people with poor credit, and yes, you can still save thousands of dollars. In order to receive preferential treatment for mortgage professionals, you'll need a credit score of 680 or better (this is considered A credit). Refinancing Your Home Mortgage Loan With Bad Credit There are numerous reasons a person has bad credit. Late or partial payments, missing payments, and too many outstanding debts could all be factors that have left you with a poor credit rating.
|
