Thursday, April 5, 2007
DTN Mortgage- Home Loan Mortgage Lender
Free DTN Mortgage Quotes- If you are looking for personalized service we are the recognized leader in Online Home Mortgage Loans & Re-Finance services for individuals, small and medium-sized businesses and corporate interests.DTN Mortgage pioneered individualized assistance and continues to set the standard for online mortgage loans. Whatever your need: bad credit is OK at DTN, as well as: refinance loans, home equity loan, ARM, fixed rate loan, hard money loans, first time home buyer mortgage, no credit loan, reverse mortgage, line of credit loans- loans of all types. DTN Mortgage will help you with debt consolidations, lowering your monthly payments, buying a home, investing, first time home buyers, credit options, and so much more...Great Rates all the time & Variety of Loans- (DTN is Certified & Licensed- We can handle any type of loan- Good Credit or Not)- Free Quotes!!! We are backed by a Secure Funding Source, provide Award Winning Guaranteed Service, and Can Definitely Help- See: Best Mortgage Loan Online
Thursday, March 22, 2007
Tips for First Time Home Buyers
Joseph, is a 35-year-old product manager at DMZ Inc., and bought his first home nearly two years ago. At the time, he and his fiance were also planning their wedding and expected to spend a good chunk of their savings on the reception. So coming up with the traditional 20% down payment for their $560,000 dream home ? a 1930s craftsman bungalow near Berkeley, Calif. ? wasn't a possibility. "There were a lot of expenses right around then, and we knew coming up with a down payment would be a challenge," he says. Mullarkey's mortgage broker found a cost-effective solution for the young couple. By taking out two mortgages ? something the industry calls a piggybacked loan ? they were able to finance the home with just a 10% down payment. The arrangement also let them avoid paying private mortgage insurance, costly coverage lenders often require for low-down-payment loans. That shaved $100 from their monthly mortgage costs. The biggest challenge for most first-time home buyers is saving up enough money for a down payment ? especially in markets like San Francisco and New York City, where home prices have soared over the last few years. But thanks to a growing assortment of financing options, it's increasingly possible to find mortgages for as much as 97% of a home's value. In other words, you could put down as little as $5,514 for a home that costs $183,800, the national median in 2004, according to the National Association of Realtors.
Click here to Contact DTN for more informationSounds great, doesn't it? And for some cash-strapped home buyers, these deals could make financial sense. But they can also be expensive. As Keith Gumbinger of HSH Associates, a mortgage-tracking firm, puts it, "There is no free lunch." For starters, you'll get stuck with a higher interest rate on a loan with a teeny down payment. And because lenders figure the odds are higher that you'll walk away from your loan if you have almost no equity in your home, you'll have to buy private mortgage insurance, which covers the bank if you default. That usually adds a 0.5% to 0.75% premium on top of your interest rate, says Jeff Lubar, a spokesman for the Mortgage Insurance Companies of America. So on a $178,286 loan (or 97% of the median home price) you could end up paying an extra $75 to $110 a month. But even with these higher costs, there are still plenty of reasons it makes sense to own your own home. Besides the intangible benefits, homeownership lets you build equity, and is the single biggest tax break available to most consumers. For more on deciding whether you are better off renting or buying, click on our calculator. So what if, after crunching the numbers, you decide it's time to buy your piece of the American Dream? Here's our look at some smart strategies for first-time home buyers. First: Pay Off Your DebtIt's a common mistake for home-buyers-to-be: They focus on saving as much money as possible for a down payment instead of paying off other debts. A better approach is to use extra cash to eliminate credit-card and other high-interest consumer debt ? even if that means you can put down less on your future home, says Lori Vella, senior vice president of national lending for Washington Mutual.
Click here to Contact DTN for more informationWhy? First, credit-card debt is expensive and limits your ability to save. The average interest rate on credit cards now stands at 13.8%, or more than double the 5.33% national average for a 30-year fixed-rate mortgage, according to Bankrate.com. Second, credit-card debt will limit how much you can borrow. That's because lenders won't allow your total monthly debt service ? which includes payments for credit cards, student loans and car loans, as well as homeowner's insurance, property taxes and a mortgage ? to exceed 40% of your gross income, Vella says. How Much Can You Afford?The answer to that is a function of two things: How much you can borrow and how much of a down payment you can muster. As a rule of thumb, your annual mortgage payment, taxes and homeowner's insurance shouldn't exceed 28% of your gross income. Then determine how much cash you have for a down payment, leaving yourself enough left over to pay those pesky closing costs, which can add up to 3% to 5% of your total home's value (plus a little something extra for emergency repairs once you move into your new home). Still having trouble figuring it all out? Click here for SmartMoney.com's home-buying worksheet. Types of LoansNow you're ready to start shopping around for the right loan. As we said, a first-time home buyer with a steady job and good credit can put down as little as 3% these days. These loans are more available, and more reasonably priced, now that they're acceptable to Fannie Mae and Freddie Mac. (The two so-called government-sponsored agencies purchase mortgages worth up to $333,700 on the secondary market ? $500,550 in Alaska and Hawaii ? absorbing the original lenders' financial risk. And both will now buy 97% mortgages.) While rates vary, such a low-down-payment mortgage will run a half-point higher than a conventional loan, says Steve Majerus, senior vice-president of capital markets for E-Loan, an online lender. On our hypothetical 97% mortgage of $178,286, that extra half-point of interest adds $57 to the monthly payment.
Click here to Contact DTN for more informationBut the more money you can muster for a down payment, the more options you will have. For example, Fannie Mae's new "start-up mortgage" allows borrowers who can put down 5% to qualify for a loan on a smaller salary than with a 3% down payment. You will need to find a Fannie Mae-approved lender to take advantage of this program. Click on Fannie Mae's Web site for a list of all of its products and approved lenders. Private lenders are also coming up with their own programs to tap into the first-time home buyers' market. Washington Mutual, for example, offers a program for buyers with a 10% down payment: Instead of charging for mortgage insurance, the savings-and-loan builds the cost into the interest rate, making it tax-deductible (which mortgage-insurance premiums aren't). And if you really want to get creative and avoid paying mortgage insurance altogether, you can do as Mullarkey did and take out two piggybacked loans. These are also referred to as 80-10-10s. First, you need to put down 10% of the home's value. Then, you take out a primary loan, usually a 30-year fixed-rate mortgage, for 80% of the home's value. This interest rate should be competitive. For the remaining 10%, you'll need to take out a 15-year fixed-rate mortgage at a far less competitive rate ? as much as two points higher than the market. Combine the two monthly costs to come up with your total mortgage payment. Due to the complexity, a piggybacked loan is a bit more expensive than a traditional mortgage and carries higher closing costs. Still, they tend to be cheaper than paying private mortgage insurance. Questionable CreditWorried you don't have perfect credit? Thanks to Fannie Mae's "expanded approval" program, consumers with slightly blemished credit can also qualify for mortgages at competitive rates that are as much as two percentage points lower than alternative financing. "These are people who might not qualify for fair-market value rates from traditional lenders," says Liz Bayless, director of single family product development at Fannie Mae. If your credit's still not good enough for one of Fannie Mae's loans, you may yet qualify for a loan insured by the Federal Housing Authority, or FHA. These government-insured loans are issued with even more lenient credit criteria. You can also put down as little as 3% for an FHA loan, and can wrap your closing costs and fees into the mortgage. Interest rates are typically less than a quarter of a point higher than those in the conventional market. To get a government-insured loan, make sure you find a HUD-approved lender or a mortgage broker who works with one.
Click here to Contact DTN for more information There's no income limit to qualify for an FHA-insured loan. However, since these loans are geared toward helping first-time home buyers and low- to moderate-income families, there's a limit to how much you can borrow. The amount varies from region to region, but it's capped at $290,319 in high-cost areas ($403,750 in Hawaii), says Laurie Maggiano, a HUD spokeswoman. To check your area's ceiling, click on the FHA mortgage limits page. Down-Payment Assistance ProgramsStill having trouble coming up with that down payment? Each year HUD gives states and municipalities money to distribute to low- and moderate-income families for housing. Much of it is put toward down-payment assistance programs. Many young prospective home buyers may qualify for a $3,000 to $5,000 grant (or in some cases a loan that's forgiven if a home buyer stays in the home for at least three years) to put toward their down payment or closing costs. To qualify for a down-payment assistance program, a consumer typically can earn no more than 80% of a region's median income. Call your state housing finance authority, county housing and community development office or mayor's office for an application. One final note of caution: Don't confuse any of these programs with no-equity loans being offered to people who already own their homes. These high-cost, high-risk home-equity loans are a bad idea. See our story to find out why.
Click here to Contact DTN for more information
Joseph, is a 35-year-old product manager at DMZ Inc., and bought his first home nearly two years ago. At the time, he and his fiance were also planning their wedding and expected to spend a good chunk of their savings on the reception. So coming up with the traditional 20% down payment for their $560,000 dream home ? a 1930s craftsman bungalow near Berkeley, Calif. ? wasn't a possibility. "There were a lot of expenses right around then, and we knew coming up with a down payment would be a challenge," he says. Mullarkey's mortgage broker found a cost-effective solution for the young couple. By taking out two mortgages ? something the industry calls a piggybacked loan ? they were able to finance the home with just a 10% down payment. The arrangement also let them avoid paying private mortgage insurance, costly coverage lenders often require for low-down-payment loans. That shaved $100 from their monthly mortgage costs. The biggest challenge for most first-time home buyers is saving up enough money for a down payment ? especially in markets like San Francisco and New York City, where home prices have soared over the last few years. But thanks to a growing assortment of financing options, it's increasingly possible to find mortgages for as much as 97% of a home's value. In other words, you could put down as little as $5,514 for a home that costs $183,800, the national median in 2004, according to the National Association of Realtors.
Click here to Contact DTN for more informationSounds great, doesn't it? And for some cash-strapped home buyers, these deals could make financial sense. But they can also be expensive. As Keith Gumbinger of HSH Associates, a mortgage-tracking firm, puts it, "There is no free lunch." For starters, you'll get stuck with a higher interest rate on a loan with a teeny down payment. And because lenders figure the odds are higher that you'll walk away from your loan if you have almost no equity in your home, you'll have to buy private mortgage insurance, which covers the bank if you default. That usually adds a 0.5% to 0.75% premium on top of your interest rate, says Jeff Lubar, a spokesman for the Mortgage Insurance Companies of America. So on a $178,286 loan (or 97% of the median home price) you could end up paying an extra $75 to $110 a month. But even with these higher costs, there are still plenty of reasons it makes sense to own your own home. Besides the intangible benefits, homeownership lets you build equity, and is the single biggest tax break available to most consumers. For more on deciding whether you are better off renting or buying, click on our calculator. So what if, after crunching the numbers, you decide it's time to buy your piece of the American Dream? Here's our look at some smart strategies for first-time home buyers. First: Pay Off Your DebtIt's a common mistake for home-buyers-to-be: They focus on saving as much money as possible for a down payment instead of paying off other debts. A better approach is to use extra cash to eliminate credit-card and other high-interest consumer debt ? even if that means you can put down less on your future home, says Lori Vella, senior vice president of national lending for Washington Mutual.
Click here to Contact DTN for more informationWhy? First, credit-card debt is expensive and limits your ability to save. The average interest rate on credit cards now stands at 13.8%, or more than double the 5.33% national average for a 30-year fixed-rate mortgage, according to Bankrate.com. Second, credit-card debt will limit how much you can borrow. That's because lenders won't allow your total monthly debt service ? which includes payments for credit cards, student loans and car loans, as well as homeowner's insurance, property taxes and a mortgage ? to exceed 40% of your gross income, Vella says. How Much Can You Afford?The answer to that is a function of two things: How much you can borrow and how much of a down payment you can muster. As a rule of thumb, your annual mortgage payment, taxes and homeowner's insurance shouldn't exceed 28% of your gross income. Then determine how much cash you have for a down payment, leaving yourself enough left over to pay those pesky closing costs, which can add up to 3% to 5% of your total home's value (plus a little something extra for emergency repairs once you move into your new home). Still having trouble figuring it all out? Click here for SmartMoney.com's home-buying worksheet. Types of LoansNow you're ready to start shopping around for the right loan. As we said, a first-time home buyer with a steady job and good credit can put down as little as 3% these days. These loans are more available, and more reasonably priced, now that they're acceptable to Fannie Mae and Freddie Mac. (The two so-called government-sponsored agencies purchase mortgages worth up to $333,700 on the secondary market ? $500,550 in Alaska and Hawaii ? absorbing the original lenders' financial risk. And both will now buy 97% mortgages.) While rates vary, such a low-down-payment mortgage will run a half-point higher than a conventional loan, says Steve Majerus, senior vice-president of capital markets for E-Loan, an online lender. On our hypothetical 97% mortgage of $178,286, that extra half-point of interest adds $57 to the monthly payment.
Click here to Contact DTN for more informationBut the more money you can muster for a down payment, the more options you will have. For example, Fannie Mae's new "start-up mortgage" allows borrowers who can put down 5% to qualify for a loan on a smaller salary than with a 3% down payment. You will need to find a Fannie Mae-approved lender to take advantage of this program. Click on Fannie Mae's Web site for a list of all of its products and approved lenders. Private lenders are also coming up with their own programs to tap into the first-time home buyers' market. Washington Mutual, for example, offers a program for buyers with a 10% down payment: Instead of charging for mortgage insurance, the savings-and-loan builds the cost into the interest rate, making it tax-deductible (which mortgage-insurance premiums aren't). And if you really want to get creative and avoid paying mortgage insurance altogether, you can do as Mullarkey did and take out two piggybacked loans. These are also referred to as 80-10-10s. First, you need to put down 10% of the home's value. Then, you take out a primary loan, usually a 30-year fixed-rate mortgage, for 80% of the home's value. This interest rate should be competitive. For the remaining 10%, you'll need to take out a 15-year fixed-rate mortgage at a far less competitive rate ? as much as two points higher than the market. Combine the two monthly costs to come up with your total mortgage payment. Due to the complexity, a piggybacked loan is a bit more expensive than a traditional mortgage and carries higher closing costs. Still, they tend to be cheaper than paying private mortgage insurance. Questionable CreditWorried you don't have perfect credit? Thanks to Fannie Mae's "expanded approval" program, consumers with slightly blemished credit can also qualify for mortgages at competitive rates that are as much as two percentage points lower than alternative financing. "These are people who might not qualify for fair-market value rates from traditional lenders," says Liz Bayless, director of single family product development at Fannie Mae. If your credit's still not good enough for one of Fannie Mae's loans, you may yet qualify for a loan insured by the Federal Housing Authority, or FHA. These government-insured loans are issued with even more lenient credit criteria. You can also put down as little as 3% for an FHA loan, and can wrap your closing costs and fees into the mortgage. Interest rates are typically less than a quarter of a point higher than those in the conventional market. To get a government-insured loan, make sure you find a HUD-approved lender or a mortgage broker who works with one.
Click here to Contact DTN for more information There's no income limit to qualify for an FHA-insured loan. However, since these loans are geared toward helping first-time home buyers and low- to moderate-income families, there's a limit to how much you can borrow. The amount varies from region to region, but it's capped at $290,319 in high-cost areas ($403,750 in Hawaii), says Laurie Maggiano, a HUD spokeswoman. To check your area's ceiling, click on the FHA mortgage limits page. Down-Payment Assistance ProgramsStill having trouble coming up with that down payment? Each year HUD gives states and municipalities money to distribute to low- and moderate-income families for housing. Much of it is put toward down-payment assistance programs. Many young prospective home buyers may qualify for a $3,000 to $5,000 grant (or in some cases a loan that's forgiven if a home buyer stays in the home for at least three years) to put toward their down payment or closing costs. To qualify for a down-payment assistance program, a consumer typically can earn no more than 80% of a region's median income. Call your state housing finance authority, county housing and community development office or mayor's office for an application. One final note of caution: Don't confuse any of these programs with no-equity loans being offered to people who already own their homes. These high-cost, high-risk home-equity loans are a bad idea. See our story to find out why.
Click here to Contact DTN for more information
REFINANCE (Is Refinancing The Right Option?)
Q. Should I refinance?Sometimes it makes sense to refinance . Sometimes it does not. It depends greatly on your individual situation and what your financial goals are. For instance, you may want to lower your interest rate and/or monthly payment, but you need to ask yourself some questions:How long do you expect to be in your home? How much equity do you have in your home?
Are you willing to pay points to get a lower rate? Will having lower payments more than make up for the closing costs , fees and points if any?
Q. Should I refinance from an adjustable rate to a fixed rate?
Generally, it's a good idea to get the lowest fixed rate possible, but you also have to consider your situation. If you're in the first year of an adjustable rate mortgage (ARM) and you plan on moving in three years, it probably doesn't make sense for you to refinance. However, if the rate on your ARM is about to adjust and you think the rate will go up, then it may make sense to get a long-term fixed-rate mortgage, especially if you don't plan on moving in the next seven years or so.
Click here to Contact DTN for more informationQ. Are interest rates higher for a cash-out refinance?
The interest rate you pay on a cash-out refinance loan will generally be the same as what you pay on a mortgage where you don't take cash out. There may be an incremental fee associated with a cash-out refinance loan depending on the specific loan you choose and the loan-to-value ratio. Using the equity in your home to pay off other bills can be a smart thing. Consider taking some money out to pay off high-interest credit cards bills, auto loans and any other debts you have that have non-tax-deductible interest. Please consult your tax advisor to find out whether you may be able to deduct the interest on your new loan.Q. When should I "lock in" an interest rate?
Nobody can predict what interest rates will do. But historically, rates rise faster than they come down. So if you're thinking about buying a home or refinancing your mortgage, lock in your rate now—you can always refinance later if rates drop again. Any near-future drop in interest rates may not be drastic enough to impact your monthly mortgage payment. Of course, every situation is different, so it's important to consider all of your options.Q. Should I pay points to get a lower rate?
Paying points may or may not be your best option, depending on what you're doing. Points paid on a loan you've refinanced can be deducted from your taxes only in small increments—1/30th a year for a 30-year mortgage, for example. This means it could be several years before your lower rate makes up for the points you pay. However, if you're buying a home, points paid are a tax-deductible expense for that year. Please consult your tax advisor.
Click here to Contact DTN for more informationQ. Are there really loans with no closing costs?
There are few loans that truly have no closing costs. Sometimes lenders may not charge application fees and agree to pay the appraisal and title fees, but they may increase the interest rate in return. Lenders can also roll the costs into the amount of your loan. So, because you're not paying costs up front, it's called a "no closing cost" loan. While slightly increasing your mortgage might be acceptable to you, keep in mind that it's not really a cost-free loan.Q. How long does it take to refinance?
With Quicken Loans, refinancing normally takes between two and four weeks, depending on a few things:Do you have a recent home appraisal? Are you in an area that appraisers can get to easily? Are there plenty of other comparable homes in your neighborhood? Usually, getting the home appraisal is what slows the process down the most. During refinancing booms, appraisers can be difficult to schedule. Also, having your paperwork ready helps to speed the process along much faster.
Click here to Contact DTN for more informationQ. How much money will I need to bring to the closing?
A general guideline is that you'll need two percent of the home's purchase price for prepaid interest to cover the time between the date you close your loan and the date you make your first mortgage payment. Some states may also require pre-payment of property taxes . When refinancing however, your old mortgage will most likely have money in an escrow account that can cover these costs. Some borrowers get short-term loans while their escrow transfers back to them, but most pay the money at the closing knowing they'll get it back when their escrow is returned.Is it Time to Refinance Your Mortgage?
There are times when it makes sense to refinance your mortgage. It's important to have a clear financial objective in mind so that you're more able to choose the most appropriate loan. Ultimately, the decision is up to you to decide when it's best for you to refinance, based on your individual financial situation.Refinance from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate
It's important to consider what mortgage rates are doing. Since mid-2004, the Federal Reserve has raised interest rates several times and is expected to keep raising rates in the near future. This means that if you have an adjustable rate mortgage (ARM), it may adjust to a rate that's higher than a fixed-rate mortgage . Now might be a good time to consider refinancing to a fixed-rate loan.However, you must also consider the amount of time you plan on being in your home. If you're only going to be in your home for a few more years, it may make sense not to refinance out of your ARM. If you're going to be in your home longer than seven years, it might be a smart move to refinance to a fixed-rate mortgage.
Click here to Contact DTN for more informationRefinance from a Fixed-Rate Mortgage to an ARM
Again, you need to consider how long you plan on being in your home. Many people move within nine years so it may not make sense to pay a higher interest rate for a 30-year fixed-rate mortgage when you're not going to be in the home that long. Doing so may be costing you money. Consider refinancing to an ARM instead — you'll get a lower rate and lower your monthly mortgage payment.Lower Your Monthly Mortgage PaymentA drop of just one half to three quarters of a percentage point in interest can lower your monthly payment. If you don't refinance, you may be paying too much every month for your loan, and that's never a good financial move. There are a few different ways you can lower your monthly mortgage payment.First, you can simply refinance to a lower interest rate. A lower rate generally means a lower monthly payment.
Click here to Contact DTN for more informationSecond, you can change the term of your mortgage. For instance, if you have a 15-year mortgage, you can lengthen the term to 30 years. Since the balance of your mortgage is spread out over a longer period of time, your payment is lower. However, if you have a 30-year mortgage and one of your financial goals is long-term savings, you may want to consider shortening your term to 20 or even 15 years. Your payment will be higher, but you will pay much less in interest over the life of the loan, saving you thousands of dollars in the long run.The third way to lower your payment is to refinance to an interest-only loan. Basically, with an interest-only loan, the minimum amount you are required to pay is the amount of interest for a certain period of time, though you can pay as much principal as you like. But you get the flexibility to pay less if you need or want to divert your money elsewhere, such as contributing to your 401k or saving for your child's college tuition.
Click here to Contact DTN for more informationGetting Cash from Your Home
The equity you have in your home can act like a savings account that you could access through a home equity loan or a cash-out refinance. This is usually done when you want to finance an important home improvement, pay for college or pay off high-interest credit card debt. Whatever your reason, this may be the right option for you.Consolidating High-Interest Credit Card DebtThe difference between credit card debt and a mortgage can, financially speaking, mean thousands of dollars. Why? Because unlike your mortgage, the interest you pay on a credit card is not tax-deductible and you pay a higher rate than you would on your mortgage. Because of this, credit card debt is often referred to as "bad debt" whereas your mortgage is considered "good debt." Using your home equity to pay off your high-interest credit card debt can save you money in the long run. Using your home equity, rather than your credit cards, to finance expensive purchases can also be a smart move. Be sure to consult your tax advisor.Deciding on when to refinance your mortgage will depend on the circumstances of your situation: how long you'll be in the home, what your financial goals are, whether interest rates are dropping, etc. It's up to you to decide if it's right for you.Refinance ChecklistCompleting a loan application is the first thing you'll do when refinancing your mortgage. You may also need to provide a variety of documentation to help your mortgage lender approve you for a home loan. The documentation will vary depending on the lender you choose, your loan program, and your personal financial situation.Refinance Tools Refinance Process Video Article - Homeowner Tax Tips Free Refinance Guide Talk to a Refinance Expert! The following is a list of documents generally required during the refinance application process. You may or may not need everything on our refinance checklist, but for a fast and easy loan process, have these items available when you're ready to complete your mortgage application.
Click here to Contact DTN for more informationProof of income: Typically, you'll need to show original pay stubs for the last 30 days. Copy of homeowners insurance : Verifies that you have current and sufficient coverage on your home. Copies of your W-2 forms: Required for each loan applicant and helps your lender verify past employment and income history. Copies of asset information: Including accounts holding money for closing costs, statements for savings, checking and 401K accounts and investment records for mutual funds or stocks. Copy of title insurance : Helps your mortgage lender verify the taxes, names on the title and legal description of the property. Once you've begun the refinance process, your DTN refinance expert will tell you which documents you'll need to get approved. They may vary depending on where you live and which loan program you've selected. But keep in mind — the more information you have ready before you apply, the less time it will take to get approved and close your loan.
Click here to Contact DTN for more informationCash-Out Refinance Versus Home Equity LoansLet's say you have a home that's worth $150,000 and you owe $100,000 on the mortgage. That means you have $50,000 of equity in your home, which is like having $50,000 in a savings account. A cash-out refinance allows you to access that equity. For instance, if you need $10,000, you can refinance your mortgage so that you owe $110,000 and the lender then gives you $10,000 in cash at closing.Refinance Tools Home Value Calculator Article – Home Equity Loan Options Should You Refinance Calculator Talk to a Refinance Expert! With a home equity loan, you keep your original mortgage and take out a second mortgage for the amount of equity you are tapping into.Since every homeowner's situation is different, your best option will depend on your specific circumstances. DTN has several mortgage options to choose from. When you compare home equity loans and cash-out refinance further, there are four things you should consider in order to determine what's best for you:
Click here to Contact DTN for more informationSpeedHow fast do you need the money? Home equity loans close considerably faster than a refinance – in as little as five days. That might be important to you.CostHome equity loans typically require minimal fees. Refinancing, on the other hand, may carry higher loan fees and possibly points .RateBecause a home equity loan is a second mortgage , it typically has a higher rate than a cash-out refinance (a reflection of its higher risk to the lender). But if you already have a great rate on your mortgage, it may be worthwhile to get a home equity loan — even at a higher rate — rather than refinance and lose the low rate you already have on your first mortgage.TermWhen refinancing, you are generally limited to a term of 15 or 30 years. With a home equity loan, you have more flexibility and can take advantage of a shorter term — greatly reducing your overall interest costs.A DTN mortgage expert can help you compare a cash-out refinance or a home equity loan. With your own personal mortgage expert to guide you, you'll have no trouble determining which type of loan is right for you.
Contact DTN for further assistance at: Contact Us
Q. Should I refinance?Sometimes it makes sense to refinance . Sometimes it does not. It depends greatly on your individual situation and what your financial goals are. For instance, you may want to lower your interest rate and/or monthly payment, but you need to ask yourself some questions:How long do you expect to be in your home? How much equity do you have in your home?
Are you willing to pay points to get a lower rate? Will having lower payments more than make up for the closing costs , fees and points if any?
Q. Should I refinance from an adjustable rate to a fixed rate?
Generally, it's a good idea to get the lowest fixed rate possible, but you also have to consider your situation. If you're in the first year of an adjustable rate mortgage (ARM) and you plan on moving in three years, it probably doesn't make sense for you to refinance. However, if the rate on your ARM is about to adjust and you think the rate will go up, then it may make sense to get a long-term fixed-rate mortgage, especially if you don't plan on moving in the next seven years or so.
Click here to Contact DTN for more informationQ. Are interest rates higher for a cash-out refinance?
The interest rate you pay on a cash-out refinance loan will generally be the same as what you pay on a mortgage where you don't take cash out. There may be an incremental fee associated with a cash-out refinance loan depending on the specific loan you choose and the loan-to-value ratio. Using the equity in your home to pay off other bills can be a smart thing. Consider taking some money out to pay off high-interest credit cards bills, auto loans and any other debts you have that have non-tax-deductible interest. Please consult your tax advisor to find out whether you may be able to deduct the interest on your new loan.Q. When should I "lock in" an interest rate?
Nobody can predict what interest rates will do. But historically, rates rise faster than they come down. So if you're thinking about buying a home or refinancing your mortgage, lock in your rate now—you can always refinance later if rates drop again. Any near-future drop in interest rates may not be drastic enough to impact your monthly mortgage payment. Of course, every situation is different, so it's important to consider all of your options.Q. Should I pay points to get a lower rate?
Paying points may or may not be your best option, depending on what you're doing. Points paid on a loan you've refinanced can be deducted from your taxes only in small increments—1/30th a year for a 30-year mortgage, for example. This means it could be several years before your lower rate makes up for the points you pay. However, if you're buying a home, points paid are a tax-deductible expense for that year. Please consult your tax advisor.
Click here to Contact DTN for more informationQ. Are there really loans with no closing costs?
There are few loans that truly have no closing costs. Sometimes lenders may not charge application fees and agree to pay the appraisal and title fees, but they may increase the interest rate in return. Lenders can also roll the costs into the amount of your loan. So, because you're not paying costs up front, it's called a "no closing cost" loan. While slightly increasing your mortgage might be acceptable to you, keep in mind that it's not really a cost-free loan.Q. How long does it take to refinance?
With Quicken Loans, refinancing normally takes between two and four weeks, depending on a few things:Do you have a recent home appraisal? Are you in an area that appraisers can get to easily? Are there plenty of other comparable homes in your neighborhood? Usually, getting the home appraisal is what slows the process down the most. During refinancing booms, appraisers can be difficult to schedule. Also, having your paperwork ready helps to speed the process along much faster.
Click here to Contact DTN for more informationQ. How much money will I need to bring to the closing?
A general guideline is that you'll need two percent of the home's purchase price for prepaid interest to cover the time between the date you close your loan and the date you make your first mortgage payment. Some states may also require pre-payment of property taxes . When refinancing however, your old mortgage will most likely have money in an escrow account that can cover these costs. Some borrowers get short-term loans while their escrow transfers back to them, but most pay the money at the closing knowing they'll get it back when their escrow is returned.Is it Time to Refinance Your Mortgage?
There are times when it makes sense to refinance your mortgage. It's important to have a clear financial objective in mind so that you're more able to choose the most appropriate loan. Ultimately, the decision is up to you to decide when it's best for you to refinance, based on your individual financial situation.Refinance from an Adjustable Rate Mortgage (ARM) to a Fixed-Rate
It's important to consider what mortgage rates are doing. Since mid-2004, the Federal Reserve has raised interest rates several times and is expected to keep raising rates in the near future. This means that if you have an adjustable rate mortgage (ARM), it may adjust to a rate that's higher than a fixed-rate mortgage . Now might be a good time to consider refinancing to a fixed-rate loan.However, you must also consider the amount of time you plan on being in your home. If you're only going to be in your home for a few more years, it may make sense not to refinance out of your ARM. If you're going to be in your home longer than seven years, it might be a smart move to refinance to a fixed-rate mortgage.
Click here to Contact DTN for more informationRefinance from a Fixed-Rate Mortgage to an ARM
Again, you need to consider how long you plan on being in your home. Many people move within nine years so it may not make sense to pay a higher interest rate for a 30-year fixed-rate mortgage when you're not going to be in the home that long. Doing so may be costing you money. Consider refinancing to an ARM instead — you'll get a lower rate and lower your monthly mortgage payment.Lower Your Monthly Mortgage PaymentA drop of just one half to three quarters of a percentage point in interest can lower your monthly payment. If you don't refinance, you may be paying too much every month for your loan, and that's never a good financial move. There are a few different ways you can lower your monthly mortgage payment.First, you can simply refinance to a lower interest rate. A lower rate generally means a lower monthly payment.
Click here to Contact DTN for more informationSecond, you can change the term of your mortgage. For instance, if you have a 15-year mortgage, you can lengthen the term to 30 years. Since the balance of your mortgage is spread out over a longer period of time, your payment is lower. However, if you have a 30-year mortgage and one of your financial goals is long-term savings, you may want to consider shortening your term to 20 or even 15 years. Your payment will be higher, but you will pay much less in interest over the life of the loan, saving you thousands of dollars in the long run.The third way to lower your payment is to refinance to an interest-only loan. Basically, with an interest-only loan, the minimum amount you are required to pay is the amount of interest for a certain period of time, though you can pay as much principal as you like. But you get the flexibility to pay less if you need or want to divert your money elsewhere, such as contributing to your 401k or saving for your child's college tuition.
Click here to Contact DTN for more informationGetting Cash from Your Home
The equity you have in your home can act like a savings account that you could access through a home equity loan or a cash-out refinance. This is usually done when you want to finance an important home improvement, pay for college or pay off high-interest credit card debt. Whatever your reason, this may be the right option for you.Consolidating High-Interest Credit Card DebtThe difference between credit card debt and a mortgage can, financially speaking, mean thousands of dollars. Why? Because unlike your mortgage, the interest you pay on a credit card is not tax-deductible and you pay a higher rate than you would on your mortgage. Because of this, credit card debt is often referred to as "bad debt" whereas your mortgage is considered "good debt." Using your home equity to pay off your high-interest credit card debt can save you money in the long run. Using your home equity, rather than your credit cards, to finance expensive purchases can also be a smart move. Be sure to consult your tax advisor.Deciding on when to refinance your mortgage will depend on the circumstances of your situation: how long you'll be in the home, what your financial goals are, whether interest rates are dropping, etc. It's up to you to decide if it's right for you.Refinance ChecklistCompleting a loan application is the first thing you'll do when refinancing your mortgage. You may also need to provide a variety of documentation to help your mortgage lender approve you for a home loan. The documentation will vary depending on the lender you choose, your loan program, and your personal financial situation.Refinance Tools Refinance Process Video Article - Homeowner Tax Tips Free Refinance Guide Talk to a Refinance Expert! The following is a list of documents generally required during the refinance application process. You may or may not need everything on our refinance checklist, but for a fast and easy loan process, have these items available when you're ready to complete your mortgage application.
Click here to Contact DTN for more informationProof of income: Typically, you'll need to show original pay stubs for the last 30 days. Copy of homeowners insurance : Verifies that you have current and sufficient coverage on your home. Copies of your W-2 forms: Required for each loan applicant and helps your lender verify past employment and income history. Copies of asset information: Including accounts holding money for closing costs, statements for savings, checking and 401K accounts and investment records for mutual funds or stocks. Copy of title insurance : Helps your mortgage lender verify the taxes, names on the title and legal description of the property. Once you've begun the refinance process, your DTN refinance expert will tell you which documents you'll need to get approved. They may vary depending on where you live and which loan program you've selected. But keep in mind — the more information you have ready before you apply, the less time it will take to get approved and close your loan.
Click here to Contact DTN for more informationCash-Out Refinance Versus Home Equity LoansLet's say you have a home that's worth $150,000 and you owe $100,000 on the mortgage. That means you have $50,000 of equity in your home, which is like having $50,000 in a savings account. A cash-out refinance allows you to access that equity. For instance, if you need $10,000, you can refinance your mortgage so that you owe $110,000 and the lender then gives you $10,000 in cash at closing.Refinance Tools Home Value Calculator Article – Home Equity Loan Options Should You Refinance Calculator Talk to a Refinance Expert! With a home equity loan, you keep your original mortgage and take out a second mortgage for the amount of equity you are tapping into.Since every homeowner's situation is different, your best option will depend on your specific circumstances. DTN has several mortgage options to choose from. When you compare home equity loans and cash-out refinance further, there are four things you should consider in order to determine what's best for you:
Click here to Contact DTN for more informationSpeedHow fast do you need the money? Home equity loans close considerably faster than a refinance – in as little as five days. That might be important to you.CostHome equity loans typically require minimal fees. Refinancing, on the other hand, may carry higher loan fees and possibly points .RateBecause a home equity loan is a second mortgage , it typically has a higher rate than a cash-out refinance (a reflection of its higher risk to the lender). But if you already have a great rate on your mortgage, it may be worthwhile to get a home equity loan — even at a higher rate — rather than refinance and lose the low rate you already have on your first mortgage.TermWhen refinancing, you are generally limited to a term of 15 or 30 years. With a home equity loan, you have more flexibility and can take advantage of a shorter term — greatly reducing your overall interest costs.A DTN mortgage expert can help you compare a cash-out refinance or a home equity loan. With your own personal mortgage expert to guide you, you'll have no trouble determining which type of loan is right for you.
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