If you plan on buying a home in 2011 you're going to want to read these tip to make that desire a successful one. Over the last 3 years the housing market has dramatically changed, and with it, so have mortgages. The capability to land a low interest mortgage has become harder, meaning if you plan on getting a loan - you're going to have to be smart about it.
In 2010 we saw mortgage rates rise, inasmuch as they did we also saw the increase in borrowers taking ARM's or adjustable rate mortgages. Why? Quite simply because more home buyers don't plan on staying in these homes for more then 5 years. If you plan on selling your home within five years of buying it - the 5/1 adjustable rate mortgage has a lower introductory rate then the 30 year fixed. Meaning this option is among your best bet in order to save you money.
We also saw in March 2010 that the Federal Reserve stopped buying mortgage backed securities, given this the effect was an increase in mortgage rates as private investors were in need of a higher rate to make up for the risk. With this knowledge in hand, getting a loan is more difficult now - so become aware of your credit score. To get the best deal on home buying you now need a credit score of 740 or higher to meet the best combination of points and fees.
To properly refinance your home is not a difficult task, so don't make it one - too many people believe that it's smart to restart back at a 30 year loan on a 30 year mortgage they've already had for 6 years. Amoritize the remaining time and pay off the new loan in 25 years.
If you're set on buying a home but only have a small down payment, you might this this is problematic as most lenders need buyers to have at least 10 percent down, and 10 percent equity for a low rate refinance. Low and behold there is another option, FHA. For those who may not have the ten percent down payment, this is the best option - you'll get an insured mortgage needing on average 3.5 percent down or that much in equity.
Remember, if you fall behind on your mortgage payments, look into foreclosure counseling - those who do are sixty percent more likely to keep their homes then those who don't. Having done this may also entitle you to lower payments and mortgage modifications.
In 2010 we saw mortgage rates rise, inasmuch as they did we also saw the increase in borrowers taking ARM's or adjustable rate mortgages. Why? Quite simply because more home buyers don't plan on staying in these homes for more then 5 years. If you plan on selling your home within five years of buying it - the 5/1 adjustable rate mortgage has a lower introductory rate then the 30 year fixed. Meaning this option is among your best bet in order to save you money.
We also saw in March 2010 that the Federal Reserve stopped buying mortgage backed securities, given this the effect was an increase in mortgage rates as private investors were in need of a higher rate to make up for the risk. With this knowledge in hand, getting a loan is more difficult now - so become aware of your credit score. To get the best deal on home buying you now need a credit score of 740 or higher to meet the best combination of points and fees.
To properly refinance your home is not a difficult task, so don't make it one - too many people believe that it's smart to restart back at a 30 year loan on a 30 year mortgage they've already had for 6 years. Amoritize the remaining time and pay off the new loan in 25 years.
If you're set on buying a home but only have a small down payment, you might this this is problematic as most lenders need buyers to have at least 10 percent down, and 10 percent equity for a low rate refinance. Low and behold there is another option, FHA. For those who may not have the ten percent down payment, this is the best option - you'll get an insured mortgage needing on average 3.5 percent down or that much in equity.
Remember, if you fall behind on your mortgage payments, look into foreclosure counseling - those who do are sixty percent more likely to keep their homes then those who don't. Having done this may also entitle you to lower payments and mortgage modifications.
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