Tag Archives: finance

What’s the Most Sensible Mortgage Option for Me?

Mortgage in UtahThere are literally hundreds of mortgage products you can choose from so it can be somewhat daunting to find one that best suits your requirements. So before you even approach potential lenders you have to figure out what you can afford and what you really need.

According to AmericanLoans.com, to start, answer the following…

  • Where do you picture yourself in the next five to 10 years?
  • How long are you planning on living in your home?
  • Do you need to have money on hand for future investments?
  • Do you want or need to make improvements on your home?
  • Do you want to remain debt-free?
  • Can you really afford financial risks?

Once you’ve answered these questions, consider the following when evaluating your mortgage options:

A Longer Term for Your Loan

This means a term of 30 years and above. Put simply, the longer term equals lower monthly payments, but higher interest.

An ARM or Adjustable Rate Mortgage

This is ideal if you need to have some on hand cash or want a lower interest rate. For the first several years, your rate will be fixed and then start to float. Know however that your payments will increase or decrease according to market conditions, once floating starts. This option is sensible for those who relocate every few years since if rates increase, they can sell and if rates drop, they can refinance, adds a mortgage officer in Utah.

Consider an 80-20 Home Loan

The average loan finances the initial 80% and a second mortgage with increased interest funds a 20% down payment. You also do away with PMI or private mortgage insurance, which is a standard requirement for properties purchased without the 20% down payment.

Consider Skipping Principal Payments

You can reduce your payments each month by as much as 20% to 25% in the initial years — usually five to 10 years — and likewise qualify for a larger loan. However, know that you get a huge jump in monthly payments when this period of interest-only payments concludes because you then start repaying the principal payments you skipped for the first several years of your loan term.

Keep in mind that taking out a mortgage is a big financial decision. So give yourself sufficient time to compare your options, mull over the pros and cons of each, do the math, shop around, and formulate a plan before you apply for a mortgage.

Improve Your Credit Score and Lower Your Mortgage Rate

Credit Score in Salt Lake CityWhen you embark on the homeownership journey, you need to impress upon the mortgage lenders that you are creditworthy, faithful, and committed to the financial relationship that spans more than a decade. Your credit score offers profound insights into your financial habits, temperament, and capabilities.

Without fail, every mortgage lender Salt Lake City residents approach will dig into the credit history as well as the credit score. Lenders view you favorably if your credit score is high, preferably over 700 points. If your current credit standing is not outstanding, follow these steps.

Check your credit report

A credit report contains your entire financial history, and it forms the basis for calculating your credit score. If it contains errors, they could count against you and lower the score. Carefully examine the contents and note any incorrect information such as late payments and debt amounts. Dispute these anomalies with the credit bureau and have them rectified.

Pay your bills on time

Altiusmortgage.com, a mortgage lender in Salt Lake City, says timely payment of your credit card bills significantly boosts your score and attests to your commitment to meeting your financial obligations with the least amount of fuss. Set up automatic payment reminders such as text or email alerts to ensure you are up to date with your payments.

Keep the debt balances low

Although the limit on your card may be high, low credit card utilization, preferably below 30 percent, improves your credit score. Using a small portion of your credit results in a low utilization ratio and keeps your balances low. The monthly balances count towards calculating your score and offers insight into your spending habits.

Your credit score determines mortgage loan eligibility and plays a significant role in deciding your interest rates. Remember, a high score corresponds to lower interest rates.

Top Factors to Consider Before Investing in Commercial Property

Commercial PropertyReal estate investment is a great way to earn revenue for years. Like other investments, if you don’t start it right, you will find it hard to go on. Consider crucial factors before stepping into the murky waters of buying commercial property.

1. Property location

A prime location today may turn out to be a detestable one tomorrow. While you can’t tell the future of any place, you can make an assessment based on the past performance of businesses in the location you intend to invest it.

Moreover, ensure that people can easily connect to the place using rail, water or road transport. Is the location near important amenities such as schools, hospitals, shopping malls and recreational facilities? Proximity to such environments can attract more customers.

2. Costs

Although you need to consider how much the property will cost, don’t forget to factor in expenses you may need to address before and after completing the transaction. Examples are water and power charges, levy, repair costs, improvement costs and municipal fees. A look at these expenses will show you the property’s total cost and the possible returns if you choose to sell it.

3. Allowable property uses

Sentinelpg.com.au says your commercial property investment may be used for varying purposes depending on its location. While assessing the property, find out its current uses and know the businesses you can or can’t carry out in a particular area.

4. The reason for sale

Find out why the property owner wants to sell it. For example, if the seller is in dire financial need, you will be in a better position to negotiate and close the deal. If the seller can’t handle major repairs on the property, use this to know whether the suggested price is plausible.

These are among the main factors to keep in mind before purchasing commercial property. Remember them and you will reap the profits from your investment.

Costly Mistakes: Refinancing Blunders You Should Avoid

finance

financeMany homeowners rush to refinance their homes, especially when interest rates go down. Blinded by low rates, they forget to evaluate the real consequences of their actions. They also fail to realize that mortgage refinancing can sometimes be a bad move.

If you’re considering refinancing, it is important to remember that it can only benefit you if you intend to stay on the property for the long-term. Direct Mortgage Loans shares the refinancing blunders you need to avoid.

The Wrong Loan

Your priority when refinancing should be lowering your overall payment regardless of the length of the loan. Sometimes, even with a low rate, you end up with higher payments because you have increased the size of your mortgage. Evaluate the cost of refinancing and its financial benefits before deciding on a loan. Don’t forget that switching into another 30-year mortgage adds more years of payment, particularly if you have been paying the existing loan for a long time.

Failing to Shop Around

One great way to save money when refinancing is by comparing loan offers from lenders or title companies before choosing. You may enjoy benefit sticking with the same lender, as they may require less paperwork, but it’s better to consult others to compare fees and rates. Get quotes from at least three lenders or mortgage companies to help you make a sound decision.

Wrong Timing

If you refinance and don’t stay in your home for years, your decision can be a mistake. It is important to decide how long you intend to stay in the property and know the point when savings outweigh the cost before deciding to refinance. If you’re not planning to stay for more than a few years, the cost of a new loan may negate possible savings. You have to make sure that your decision will have a net tangible benefit.

Refinancing can only be a great financial move if it lowers your monthly payment, shortens the term of the loan, and builds equity more quickly. Use it carefully so it can be a valuable tool to get your debt under control.