Be Careful When Comparing Mortgage Rates
Most people know it’s important to compare mortgage rates before they purchase or refinance a home. Some may even know to compare fees, points and other costs associated with purchasing or refinancing their home but, there are some things you didn’t think about or just don’t know.
You may not be able to get or even want the advertised rate. The super low rate may be for a 2-week lock in period. Unless the lender can guarantee you will close escrow in 2 weeks, you need to find out what rate you can get for a 30-45 day interest rate lock, or whatever you feel comfortable with.
You should try to avoid having your credit run until you’ve decided between 2-3 lenders. You can request a pre-approval from 3-4 mortgage companies, some of whom will get rates quotes from several lenders and give you the best 4, giving you a total of 10-12 quotes. Note that these are only estimates if they haven’t run your credit. Be sure to read the terms for the pre-approval estimate
Ask the lender if they will provide your credit score when they do run your credit. You should have an idea of what it is, but it’s nice to know what the recent score is as this will affect the interest rate you get.
Beware of the “no cost loan”. It will probably have fees included in the loan, increasing the interest rate and simply not cost you any out of pocket costs. If you don’t have the money, try to get it somehow if you can.
Ask for all the fees you will have to pay before having lenders run your credit. Some may not want to give it to you. The good/honest ones with nothing to hide will, at least as much as they can before running your credit. Some fees may depend on your credit score.
Be sure you can prepay the loan or have a bi-monthly plan set up if you want to without additional charges. Find out how often they re-calculate the outstanding mortgage interest. You want them to do it daily or at least monthly, but definitely not yearly. What if you want a bi-monthly mortgage later on or you get a large bonus and want to apply a little to the mortgage; if they don’t re-calculate often, you’ll pay the interest on the old balance and not the new one. This can add up if it’s for a whole year.
When shopping online for mortgage rates, be sure you are on a secure page when sending your social security number over the Internet. You should see a small yellow lock in the lower left corner of your browser window and an “s” next to the “http” in the URL area of the browser window.
Another tip when shopping online for mortgage rates, find out if they process everything online and send you an email or if they have to call you with the quote. Try to get the former. You don’t really want a bunch of people calling you to try to talk you into a loan. You do want the option to call them and ask them questions without having to wait.
Sometimes you can get a small percentage point off if you have your mortgage automatically deducted from your checking account. This is a good thing, just be aware with whom you are dealing with and what you are signing, read the fine print. Buying or refinancing your home is important and will affect your life for a long time, so don’t take it lightly, be careful and be prepared, you’ll be glad you did.
Watch the video related to refinance mortgage rate calculator
www.banksmartnow.com Skype vbeatteay 800.792.3155 ext. 3789 Mortgage calculators and low Mortgage Rates dont tell the whole story Are Rate and Payment your biggest considerations when looking at a mortgage? They should be a consideration, but a strategy is far more important. Discover the strategies and secrets that the banks would rather you didnt know
Help answer the question about refinance mortgage rate calculator
How do I calculate what my new payment would be if I refinanced my 30 yr mortgage?Current rate is 6.375% fixed
Current Payment is $1,671.15 per month
Loan Amt: $242k
I have a BA-35 calculator, but can't remember how to use it.
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Tags: Calcu, equity, home, loan, mortgage, refinance, second
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October 28th, 2009 at 10:55 am
For calculators on mortgages, try bankrate.com
They have all kinds of calculators and information, including info on how to figure out when it is worth refinancing.
(does "2 yrs left to go" refers to when you don't have to pay a penalty? If you have many years to go on your mortgage, consider getting a fixed rate if you think interest rates may go up in the future…)
You can even comparison shop for mortgages on bankrate.com.
October 28th, 2009 at 12:04 pm
because of difficult financial circumstances countless Americans are in debt. what i advise doing to prevent being in debt is to check your credit score and report monthly. check out http://creditinfoplace.notlong.com if you need aid.
October 28th, 2009 at 4:04 pm
October 28th, 2009 at 5:07 pm
Look for an amortization table calculator. That will give you the run down on payments/interest. The tax amount is the interest paid.
Typically though, the amount of interest paid on the loan will be equal to, if not greater than, the original amount of the loan. Add the closing costs to it as well and that is the total cost of the loan.
Ex: a $120k note financed at 6% over 30 years would have a P/I payment of 719.49. Total interest paid over 30 years, $139k.
Figure closing costs of 6k. Total cost for a 120k loan is $145k.
If you make $1k/mo payments, loan will be paid off in about 15.3 years and only pay about $64k in interest. Total cost: $70k. Savings of $75k. That is money in their pocket, not money that is taken off at the end of the year (which would at the 35% bracket, only save about $25k in taxes spread out OVER the additional 15 years).
Note: I am not a tax person so that number is an estimate.
October 28th, 2009 at 10:15 am
Yes, it’s true rates aren’t quite that low… but if you follow the information trail, you’ll find that it’s not about rate, it’s about a strategy…
October 28th, 2009 at 11:11 am
rates are no longer this low
October 29th, 2009 at 5:40 am
What a bunch of crap. Anyone giving Overture/Yahoo pay per clikc money is throwing it out the window. It is so out of control over there. My account is offline since I learned of these kinds of practices. I am MAD and I am feeling ripped off.
If I buy a product I expect to know what I am getting. If you are not careful with Overture/Yahoo you get promoted in these ways. I recommend you go back to a system of exact matching and NEVER let Yahoo! blanket match or content match for you, it's insane!
To go a step further, Yahoo! has forsaken its roots as a search engine. I love their software but their core was search engine. I have many entries in the directory, it used to be this was a good thing. They cost me 300/yr. Noe for this about one would expect some value in the search results of their web results especially when their web results have no good answers. You value as a URL in their directory buys you NOTHING. It is completely outragious because it used to hailed as the best hand editied reference and now is blown away with web results in its place that are often POOR results.
If you're listening NEO (YAHOO!) your network is crashing and you need to stop bleeding the pay-per-click world for you mistakes. Go back to your roots, learn from your mistakes. Oh yeah, continue to make the software, I like the messenger but not the widget engine.
I better get best response for this!
October 29th, 2009 at 8:41 pm
I'm not answering these questions for you. If finance or business is going to be your major or future career please go ahead and purchase a BA II Plus from Texas Instuments. Good luck in any classes that are above this level because to be honest this stuff is just intro level first month of the class stuff.
Get the BA II plus it will help you greatly.
October 29th, 2009 at 9:21 pm
What is the new rate?
October 29th, 2009 at 3:15 pm
Great video victor, as always!
October 30th, 2009 at 9:30 am
Another tasteful video. Keep them coming.
Iva
October 30th, 2009 at 7:50 pm
There are other things to consider other than rate, that matter:
1. How long have you been in your existing mortgage? If you have had it for 5 years, why go back into another 30 yr mortgage?
2. How long do you plan on staying in your home? If less than 5 years, then take out a 5 yr ARM, possibly even interest-only, if any longer than 5 years, then a 30-yr fixed would be a great, since there is very little difference between a 7 yr ARM and a 30-yr fixed in today's market.
3. How much will it appraise for (based on recent sales in your area)?
4. Will you be liminating PMI, or assuming PMI if you refinance? Meaning, if you refinance for 290K plus costs, if you are over 80% of the value of your home, known as Loan-to-value, or LTV, you may have to pay PMI, which for 2008 is not tax deductible last time I checked, so you may want to find out if the bank offers a no PMI loan, and whether it benefits you, as mortgage interest is fully tax deductible (No PMI loans have slightly higher rates, as the PMI is financed into the rate, but the payment is generally lower as compared to a loan with PMI)
5. Are you taking any cash out to consolidate any debt, or for home improvements? If you are, then that's fine.
6. Closing and Settlement Costs – typically on the high side you would expect them to be about 4% of your loan amount, for a conventional loan. Some banks offer no-closing cost loans, but the rates are slightly higher than with a conventional mortgage. The costs though, would be rolled into the mortgage, therfore, you would need to recalculate your payment based off of the new balance. Does this make sense?
7. Refinancing your mortgage for the same amount, meaning you are taking no cash out, is worthwhile if you will recuperate the cost of doing it within 4 years of the refinance. Personally, I restrict that time frame to 2.5-3 years for my own choices.
But in the end, a drop in arte of .75% or more is generally a good reason to refinance. You may also want to ask about buying the rate down to a lower rate. Remember to use the rule of calculating how loang it will take you to recoup that cost to determine if it is worth it or not.
Also, ask about escrows – the bank may offer lower rates if you escrow your taxes and insurance. If not, then I would recommend not escrowing and putting the money into savings or a CD every month and earn the interest on it.
Hope this helps.
October 30th, 2009 at 11:06 pm
great video, keep making them.