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Www 2ndmortgagemtgmortgage Tag Mercury 2nd Mortgage Mortgage Mortgage Tips & Tricks - Mortgage Acceleration Techniques to Pay Off Your Mortgage Loan Early

Www 2ndmortgagemtgmortgage Tag Mercury 2nd Mortgage Mortgage

19 Jan

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I never thought I’d see the day, but mortgage rates have fallen below the 5% mark! Rates have been seen in the upper 4% range, some even down to about 4.75%. This is unheard of and could save the average homeowner hundreds if not thousands of dollars per year!

Take my current home loan for instance – I owe about $235K. Let’s just compare a new 30 year fixed loan: one at 6.375% (my current rate) and one at 4.75%. At 6.375%, my monthly payments would be approximately $1466.86, assuming I didn’t have any points added to my loan for processing, paperwork, etc. At 4.75%, my monthly payments would be approximately $1225.87 – a savings of $240.99 per month. Over the course of a year, I’d be saving $2,891.88.

If refinancing is an option for you, take advantage of the low rates now! These 4% interest rates for home loans won’t last forever. Just hope that you’re not stuck in my situation of not being able to refinance – My refinance was denied!

Since the time of this writing, interest rates have shot up a bit to the 5% range. Still not too bad, especially if your current loan is in the mid 6% and above range. Best of luck to those of you who are looking to refi or get a new home loan.

40 Year Mortgage, 50 Year Mortgage, 60 Year Mortgage… Are You Serious?!?!

11 Jan

Posted by Braxton Haines as Alternative Loan Programs, Personal Finance, Uncategorized

At the time I got my home loan about 5 years ago, I have to admit that there were some seriously crazy loan programs being offered. At the time, I could have qualified and purchased a home 2-3 times the price of the condo I bought for $290K. The problem is that many people did just that, they didn’t weigh the fact that they really couldn’t afford the house that they were buying, they just looked at the loan payment that they would be making initially and didn’t even consider the fact that they’d not only have to continue to make that payment, but that that payment would more than likely double or more in some cases. In any case, shortly after I bought my first house, and got my incredible loan (3/6 ARM at 3.125%), I started to hear about 40 year mortgages, 50 year mortgages and even 60 year mortgages. Think about that… a 50 year mortgage. I actually know someone who took out a 50 year mortgage.

Let’s just briefly compare a 30 year mortgage to a 50 year mortgage for a $250,000 home loan. On a 30 year loan, you’d be looking at a monthly payment of about $1498.00, and over the life of the loan, you’ll be paying $289,595.00 in interest – so even with a 30 year loan, you’ll be paying more interest than the original amount borrowed, but now lets look at the 50 year mortgage loan. With a 50 year mortgage, borrowing the same amount, your montly payment will only decrease about $200 per month (not even actually) to $1,316.00, and the total amount of interest paid will skyrocket to $539,607.00. The amount of interest that you pay on a 50 year loan will nearly double!!!

Now lets think about this for a bit. Will saving $180.00 per month on your mortgage payment be worth adding 20 years to your mortgage, and also adding an additional $250,000+ to the amount of interest that you pay over the life of your loan? Let’s figure that you invested that extra $180 every month into a savings account or CD. Let’s figure for arguments sake, that you find a savings account or money market account that will yield 5% and that you invest the extra $180 every month and let the interest compound. At the end of 50 years (the entire length of your mortgage) you’ll have $480,357.00. This will essentially offset the interest that you pay on the 50 year mortgage, making the total amount of mortgage paid equal to about $60,000. Looking at it this way makes the 50 year mortgage look more appealing because it frees up more monthly money to use as an investment, however here are the only problems that I see with this:

  1. Most people probably only consider a 50 year mortgage because of the fact that they’re looking for a way to lower their monthly payment. That being said, most people who elect to go with a 50 year mortgage aren’t going to be able to put the extra $180 (from our example) into a savings account in each month for the 50 year term.
  2. Life happens, even if a person has an extra $180 to put into their mortgage each month, there are often times going to be months where no money gets put in, whether it be due to:
    1. Holiday expenses
    2. Unexpected auto expenses
    3. Traveling and vacations
    4. Purchase of new vehicles

In my opinion, a 50 year mortgage is a terrible idea, but if you’re planning on staying in your home for the rest of your life, if you are discipllined enough to invest monthly and not withdraw, you could actually make the 50 year mortgage more favorable.

Home Equity Leveling Program (HELP) – Home Loan Modification Programs

11 Jan

Posted by Braxton Haines as Loan Modification Programs

Recently, I’ve been hearing many ads about loan modification programs being offered to Southern California residents. The one program that I’ve been hearing the most about is called HELP or Home Equity Leveling Program.
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Basically, home loan modification programs offer the homeowner a permanent change in one or more terms in the mortgage loan, whether it be interest rate, loan term, or even amount owed (in rare cases). The purpose of loan modification programs is to allow the homeowner to retain the house.

Typically when testing to see if a borrower is eligible for a loan modification, the loan modification company, or real estate lawyer will gather information to see if you qualify for a rate reduction and/or principal reduction. Once a borrower qualifies, it all comes down to negotiation and numbers to see if there are any feasible options that will allow the homeowner to stay in the home.

Tricks to Lower Your Mortgage Payment – Is It Possible?

16 Nov

Posted by Braxton Haines as Mortgage Tips, Property Taxes, Refinance, Save Money

I often get asked if there are any tricks to lower your mortgage payment, and the short answer is NO. However, there are a few ways to decrease your monthly mortgage payment, but those options will require a little legwork on the side of the borrower. With the economy in the state that it is currently in, I’m going to focus on 2 main ways that mortgage payments can be reduced.

Refinance Your Primary Mortgage

Refinancing your mortgage will typically be the best option, as it can save you hundreds of dollars per month if you’re refinancing from a high interest rate to a lower rate. Let’s look at an example, lets figure that I took out a $250,000 mortgage loan 5 years ago with an interest rate of 7.25%. At this loan amount and this interest rate, my monthly payment will have been approximately $1,705.00 per month. As of the time of this post, I’ve seen interest rates for 30 year mortgages as low as 5.75% – the interest rate will depend on your lender, your credit score, payment history, etc. so you’ll have to talk to a mortgage broker prior to getting a firm rate quote, but for the interest of our example, we’re going to figure that we can get a loan at a rate of 5.75%. For simplicity sake, lets compare a $250,000 loan at 5.75%. At this interest rate, our monthly mortgage payment will be approximately $1,459.00. This is a savings of $259 per month. A couple things to remember are that:

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