![]() |
Home Mortgages: Think Before You BorrowIn today's overheated housing market, lenders are making it easier and easier to get a mortgage. For example, some lenders have lowered the credit score needed to qualify for a mortgage. Others have increased the debt load that borrowers can carry or have made it easier for borrowers to get loans while providing little documentation. In some cases, lenders have even made it easier for people to borrow money to buy investment properties. There are also many kinds of mortgages available today that were never available before. There are interest only mortgages, adjustable rate mortgages (ARMs) for 3,5 or 10 years and adjustable rate mortgages with balloon payments at the end of a five or ten year period. There are even adjustable rate mortgages that have introductory rates as low as 1% and that give borrowers multiple payment options. Lenders also used to loan only 80 percent of a home's value, meaning that the borrower had to come up with 20 percent as a down payment. So, if you wanted to buy a home valued at $150,000, you had to put down at least $30,000. This might have been difficult, but at least you started out with $30,000 in equity in your home. This standard was then lowered to ten percent, meaning you needed only $15,000 to buy that $150,000 home. Today, it's possible to find mortgage brokers who will lend 100 percent of the value of a house or even more than 100 percent. This can be good news for families who, until now, might not have been able to afford a $10,000 or $20,000 down payment. But you need to be careful of. Some unscrupulous lenders may try to sell you a mortgage you can't really afford. Let's say your monthly take home pay (after taxes and other deductions) is $4,000. You find a house for $150,000 and a mortgage broker willing to lend 100% or the full $150,000. A 30-year fixed FHA loan (not including taxes and insurance) will have a monthly payment of about $851.00. The total monthly payment PITI (with taxes and insurance) would most likely be close to $1,000. A good rule of thumb is that your cost of housing should not exceed 20 percent of your net monthly take home pay (after taxes and other deductions). This means that for a $1,000 monthly mortgage payment, your net monthly income should be at least $5,000. If your income were only $4,000 a month, you would be spending about 25% of your income on housing alone. Before you make this kind of commitment, you should take a long, hard look at your other commitments, such as car payments, tuition, and insurance to make sure you can cover them as well as your normal living expenses. Easy, no-down mortgages can be very tempting, but it's important that you understand the exact terms and that you can meet them without stressing your finances. For FREE help with debt and credit, subscribe today to Douglas Hanna's free email newsletter "8 Simple Steps to Debt Relief" at http://www.all-in-one-info.com
Refinance apps are 80% below their 2021 level National Mortgage News Is It Too Late to Refinance Now That Mortgage Rates Are Soaring? The Motley Fool When Should You Refinance an Adjustable-Rate Mortgage? | Mortgages and Advice | US News U.S News & World Report Money Today's refinance rates slide – June 28, 2022 Bankrate.com Cash-Out Refinance vs. HELOC: Which Should You Choose? Business Insider 5 Best Ways to Use a Home Equity Loan | Mortgages and Advice | US News U.S News & World Report Money Chairwoman Waters Calls on Regulators to Hold Wells Fargo Accountable for Continued Troubling Patterns and Practices of Anti-Consumer Behavior House Financial Services Committee Refinancing slips out of fashion in Pittsburgh, while borrowing against home equity makes comeback Pittsburgh Post-Gazette Mortgage apps decline 6.5% to 22-year low HousingWire Does Divorce Hurt Your Credit? | Credit Cards | US News U.S News & World Report Money Refinance Calculator Bankrate.com Today's best mortgage refinance deal? 15-year rates hold steady for third straight day | May 27, 2022 Fox Business Trends in Mortgage Refinancing Activity Freddie Mac Today’s mortgage refinance rates: Steady shorter terms offer best savings chances | March 17, 2022 Fox Business When to Refinance Your Mortgage Business Insider Today's refi rates increase – June 10, 2022 Bankrate.com Today's Mortgage, Refinance Rates: June 12, 2022 | High Rates Are Cooling Housing Demand Business Insider Refinancing a reverse mortgage: What to know Fox Business Today's Mortgage, Refinance Rates: June 18, 2022 | Rates Remain High After Recent Spike Business Insider How to refinance your mortgage, a step-by-step guide The Washington Post The Mortgage Refinance Rush Has Cooled, But HELOCs Can Unlock Housing Wealth Hawaii Business Magazine Today's Mortgage, Refinance Rates: June 22, 2022 | Rates Probably Won't Decrease Soon Business Insider Mortgage Refinance As An Inflation Hedge Surfky.com Jumbo Loan Refinance Guide | 2022 Rates and Guidelines The Mortgage Reports 3.8 million homeowners would still benefit from refinancing amid rise in mortgage rates, says Black Knight Fox Business How Long Does It Take To Refinance A House? Zing! Blog by Quicken Loans After Losing Her Home in a Fire, This Teacher Needed a Fresh Start. A Mortgage Refinance Helped Her Do It NextAdvisor 3 Reasons to Refinance Your Mortgage Despite Rising Rates The Motley Fool Survey finds 74% of homeowners haven’t refinanced despite historically low mortgage rates Bankrate.com Home Mortgage Refinancing Disparities During the COVID-19 Pandemic: Insights for Delaware, New Jersey, and Pennsylvania Philadelphia Fed 10 Mistakes To Avoid When You Refinance a Home Loan GOBankingRates Can You Refinance A VA Loan? Zing! Blog by Quicken Loans Still time to lock in a lower rate: Today's 30-year mortgage refinance rates fall | Feb. 9, 2022 Fox Business Should You Refinance Your Mortgage in 2022? The Motley Fool Cash-In Refinance: What It Is And If It's Worth It Zing! Blog by Quicken Loans Texas' Best Mortgage Lenders & Current Mortgage Rates | US News Loans U.S News & World Report Money Mortgage demand falls to nearly half of what it was a year ago, as interest rates continue to rise CNBC What Do Appraisers Look for in a Mortgage Refinance? Business Insider 3 reasons it’s not too late to refinance your mortgage CNN Underscored The cost to refinance a mortgage: What to expect | Mortgage | Chase Chase News & Stories
|