Its Valentine’s Day, and its definitely time to celebrate — YOU! Whether you have a special someone, you are spending the night with friends, or enjoying a relaxing evening alone, you can be saving tons of money on your mortgage payment! So, this Valentine’s Day, while everyone is spending all their money on chocolates, flowers, and balloons, save yours by reading these three reasons to refinance:
- Debt Free is Where I Want to be
Most credit cards have high interest rates between 15 and 20 percent; where as mortgage rates are generally much lower than that. By taking the equity out of your house you gain the ability to liquidate your debts, and pay off the revolving debt of high rate cards. This can save you quite a lot of money spent on interest in the long run!
- Less Money – Less Problems!
Interest rates are still at a record setting low, and who knows for how long. What does this mean for us? Now is a great time to refinance! By lowering your interest rate and mortgage payment, there are endless possibilities on what you can do with your savings. Need some ideas? Now is your chance to remodel that kitchen you’ve been dreaming of, or build that pool you’ve always wanted!
- Peace Out Mortgage! Its Time to Travel
Refinancing your current mortgage can mean shortening your term from 30 years to 20 or 15 years. That is 10-15 years LESS of slaving to those mortgage payments. You do the math! Here’s a quick tip: Save all that money previously spent on your mortgage, and create a travel fund. Once your beautiful home is paid off, spend that V-Day traveling the world.
No matter what your plans are tonight – give yourself the gift of savings this Valentine’s Day & enjoy the holiday!
image by istock photo
These 10 mortgage tips can help you with your mortgage decisions in 2014.
1.Document your finances: Lenders will be extra diligent when underwriting home loans in 2014, as new mortgage regulations go into effect in January. The rules put pressure on lenders to verify that borrowers have the ability to repay their loans.
2.Lock a rate as soon as you can: Rates will likely climb in 2014 as the Federal Reserve is expected to reduce the pace of the economic stimulus program that has long helped keep rates low.
3.Refinance now — if you still can: Many homeowners lost the opportunity to refinance at a lower rate when rates jumped in 2013. But those who are still paying more than 5 percent interest on their home loans might still have an opportunity.
4.Buyers, use your bargaining power: As mortgage rates climbed, lenders lost a big chunk of their refinance business. In 2014, they will turn their attention to homebuyers and will fiercely compete for their business. Buyers should take advantage of bargaining power they gain with that increased competition.
5.Learn your rights as a borrower: Mortgage borrowers will get many new rights as consumers this year when new mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014.
6.Take good care of your credit: It’s nearly impossible to get a mortgage without decent credit these days. That will continue to be the case in 2014. If you are planning to get a mortgage, monitor your credit history and score until your loan closes. The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a score of 680, but lower scores will mean higher rates or higher closing costs.
7.Don’t overspend: Lenders don’t want to give out loans to borrowers who will have little money left each month after they pay their mortgages and other debt obligations such as credit cards and student loans.
8.Consider alternative mortgage options such as ARMs: A homeowner planning to keep a house for seven to 10 years could take advantage of lower mortgage rates by choosing a seven- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Rates on adjustable-rate mortgages can be as much as one percentage point lower than on fixed-rate loans.
9.Considering an FHA loan? Reconsider: Mortgage insurance premiums on FHA loans are likely to continue to rise in 2014, and after recent changes, the borrower is now required to pay for mortgage insurance for the life of the loan. Try to qualify for a conventional loan before you apply for an FHA mortgage.
10.Don’t panic:Yes, mortgage rates will likely climb in 2014. But don’t panic, thinking you have to buy a home now to grab a low rate. If you are shopping for a home, do your best to move quickly, but remember that this is one of the biggest financial decisions of your life. Get your mortgage and buy your home when you feel ready.
As the housing market heats up again following the slowdown of the past few years, many consumers will try to buy a home for the first time or upgrade a home with a mortgage that had previously been underwater. If you fall into either group, you should know that a new set of rules passed as part of the Dodd-Frank Act – enacted in response to the financial crisis of the late 2000s – will go into effect Jan. 10, 2014. The rules will require lenders of qualified mortgages to conduct more thorough analyses of mortgage applicants’ financial information to ensure applicants can afford to repay the loan.
According to the Consumer Financial Protection Bureau, under the Ability-to-Repay rule, the lender generally must consider eight factors. These include your current income or assets, current employment status, credit history, the monthly payment for the mortgage and your monthly debt payments compared to your monthly pre-tax income, which is your debt-to-income ratio.
Under the new rules, you’ll generally need a debt-to-income ratio of less than 43 percent to obtain a qualified mortgage that’s underwritten based on standards considered safe for consumers. Federal rules state that the term of the loan cannot exceed 30 years, and the points and fees paid by the borrower cannot exceed 3 percent of the total loan. Under the new rules, qualified mortgages also cannot have risky features such as an interest-only period, when the borrower pays only interest without paying down the principal.
A number of new requirements regarding home loans issued through the Federal Housing Authority (FHA) went into effect, requirements that have mortgage brokers and real estate agents shaking their heads in disappointment. This is because it will be much more difficult to obtain an FHA loan.
Historically, FHA home loans have offered favorable terms to borrowers with less-than-perfect credit and little money to put down. For many first-time homeowners, an FHA loan was their ticket onto the real estate ladder. However, according to Yahoo! Finance some of those potential borrowers may be shut out by the new FHA guidelines.
Changes to FHA lending standards include:
- Collections and judgments against borrowers must now be counted as debts when calculating the borrower’s debt-to-income ratio
- Judgments must be repaid in order to obtain an FHA loan
- Beginning in January 2014, a borrower’s debt-to-income ration cannot exceed 43%; previously, a debt-to-income ratio of as high as 55% was acceptable
All of this adds up to significantly tighter lending standards for those wishing to obtain FHA loans. Certainly, mortgage brokers and real estate agents are nervous that these new requirements will have a negative impact on their customer base. But consumer protection supporters are praising the new guidelines as important steps towards preventing those who can’t afford to buy homes from obtaining loans that will get them into trouble.
For those interested in acquiring an FHA loan in the wake of these new requirements, the best thing to do is review your credit report carefully and get current with any outstanding debts. Not only will this improve your overall credit score, thereby making you more attractive to lenders, it will also allow you to more easily qualify for an FHA mortgage.
According to a recent article published by the Sun-Sentinel, homebuilders and buyers are expected to go green during the next five years.
Environmentally friendly homes represented 17 percent of the residential construction market in 2011 and are due to increase five-fold by 2016, according to a study released last week by McGraw-Hill Construction during the International Builders’ Show in Orlando.
Green home remodeling is projected to jump by 150 percent by 2016.
The homes increase energy savings and are seen as higher quality, according to the study. Costs of building a green home also are down.
What do you think about the green home trend?
To read the original article, visit sun-sentinel.com.
If you’re a South Florida homeowner looking for ways to save money on your home mortgage so that you can invest in green home remodeling projects or other expenses, Home Financing Center may have a refinancing program that may be right for you.
There’s some good news for homeowners finding themselves in financial hardships… According to the Miami Herald, state officials have voted to implement a massive overhaul on a $1 billion program to help struggling homeowners, potentially opening the doors for thousands of Florida homeowners who were previously denied government aid.
When the program launched last April, the Miami Herald reported that strict requirements would disqualify many local homeowners right off the bat. And according to Florida Housing Finance Corporation data, 12,516 homeowners were rejected, while only 5,540 applicants were approved.
Now that the rules for qualification have be reviewed, the FHFC said it will reach out to homeowners who were initially rejected to check if they qualify under the new rules.