for Homebuyer Loan and Refinancing
wishes to own a dream house. And while the variety of loan options
available to the American consumer today from a host of banks
and financial institution has made the achievement of that dream
easy, the average American still grapples in the dark to find
out what is the best loan suitable for him. This is because a
good grasp of finance, is not a quality most possess. And even
if one does posses, it is important to understand the dynamics
and laws that govern homebuyer loans and refinancing.
is why taking help and doing proper research can make all the
difference. One best place to start is the internet where you
don’t have to hear the convincing sales talk of a salesman, one
who can sell fridge to an Eskimo.
best place to start could be 123 fastloan approval.com
that prides itself in providing high quality financial services
to the American public.
site gives helpful tips on the entire process including on high
quality mortgage programs at competitive rates. This is done by
taking a few particulars from the interested party. This information
is then used to match it with the companies that best matches
that set of requirements.
are basically two types of people who require home loans: the
first time home loan buyers and those that need refinance of their
home or investment property.
TIME HOME LOAN BUYERS
most important criteria for someone to fall under the first time
home loan program is that they have not owned a house for the
past three years.
programs are especially made for people who may not have the capacity
to pay full down payments or the closing costs of a mortgage.
The basic idea of this program is to make the process of having
a mortgage more cost effective. There are also programs that are
state specific, offering a very low interest rate along with low
down payments and reduced taxes.
it can become extremely difficult for a loan applicant to find
out which program is suitable for him. This leads them to choose
programs in which they end up paying a significant amount for
down payments. This prompted the Federal government to develop
two loan programs called the Federal Housing Administration (FHA)
and Veteran’s Administration (VA) that have a very little down
payment. There are a few parameters which determine whether someone
falls in this category, most of it dependent on whether someone
has taken a home loan previously or not. A home loan advisor can
easily determine whether someone qualifies for it and into the
acceptable program they fall under. The FHA and VA can be very
useful for first time home buyers if it is combined with HFA or
is Mortgage credit Certificate which is awarded by the local government
agency of the state and authorizes the home loan borrower to obtain
a specific federal income tax credit this credit helps free up
funds for payment of monthly home loan repayment.
can also invoke the community home buyer program into the loan.
The closing cost of the loan can be gift funds, a grant, or seller
assistance of up to 3% of sale price. Under this the home buyer
will have to attend class on home ownership in that state. When
the course is completed, the homebuyer receives a certificate
which expands the qualification ratios, at the same time reducing
the cash requirement.
are those that want to refinance their home loans. There is a
refinance fee which adds up quickly prompting many mortgage companies
to waive off legal and refinancing application fee. This is savings
all right, but this also results in a higher percentage rate for
repayment. The option that allowed an owner to get the lowest
percentage rate from mortgage lenders is to stay in their house
for three to five years to pay points and closing costs upfront.
costs is as much as that of a new loan due to the associated processing
fees, legal fees, application fees, settlement cost etc. Refinancing
also warrants an additional fee. All together this will run between
three to six percent of the loan amount. Yet, there are mortgage
brokers who offer low-cost refinancing and zero point loans. With
these available schemes, refinancing thus ends up being a cheaper
option for many home buyers.
lenders now offer a package for refinance where you can take the
loan for more than the amount that you have left to pay back.
This is called the ‘cashing out’. Thus there is a good chance
that you can refinance without really increasing your monthly
payments. This extra money you can then use to either pay back
loans of higher interest rates, or in building an extension to
is very important to decide the interest rates that work best
on your need. There is a range of interest rates at different
amount points with a point equaling one percentage of the loan,
and choosing the best combination can save a good amount of money.
you are one to go for a second refinance, you need to know that
there is a tax write off linked to it. Also with the rates of
interest reducing, the monthly payment rates go down further.
rate options exist on refinancing, fixed rate mortgages (FRM)
and adjustable rate mortgage (ARM). To being with you can start
with ARM as it offers a very low rate for repayment, but due to
the fluctuations of the financial market, these rates can go up
suddenly. Thus, knowing the amount of time you plan to stay in
your house you can go for ARM and then shift to FRM.
you opt for the refinance option, you should be aware of the various
taxes that govern it. E.g. the most basic thing you should know
is the ruling by the Internal Revenue Service (IRS) which states
that the interest of refinancing has to be deducted over the entire
life of the loan. Yet if the refinanced loan goes to the renovation
or development of the house, the borrower may deduct a part of
it with immediate effect.
can find invaluable help on the net. The following sites can act
as a starter.
»Refinance Home Loan
Credit Bank Loans
Loans No Fax