Mortgage Archives – Page 216 of 231 – Fred Gruber

08

Nov

Home Mortgage Tips

Reverse Mortgages 101: How This Unique Financial Product Can Make Your Life Easier

Reverse Mortgages 101: How This Unique Financial Product Can Make Your Life Easier If you’ve been in your home for a while and have considered other loan options, you may have heard the term reverse mortgage without being aware of how this product can benefit you. While this type of mortgage works for those who have a high amount of equity in their home, here are the details on reverse mortgages and how this product may work for you.

What’s A Reverse Mortgage?

The reverse mortgage was created in 2009 as the Home Equity Conversion Mortgage for Purchase (HECM) and is something that can be used by those who are older than 62. As this type of mortgage does not require the homeowner to pay monthly mortgage payments, it enables those who use it to repay their loan after they move out or pass on. If the cost of maintaining your home is manageable and you don’t plan on moving, this can be a useful option.

The Requirements For Reverse Mortgages

Beyond the age requirement, those who want to utilize this product need to own their current property or have a high amount of equity in it. They must have the ability to pay any insurance and property tax on the home, and they must comply with the standards that are set by the Federal House Administration (FHA). This means that applicants may require documentation like bank statements to confirm their financial security, or even pay stubs if they are still receiving a monthly income.

The Pros And Cons

A reverse mortgage can be an option for those who don’t want to make a regular monthly payment on their home and would like to turn it into a source of additional funds while still owning it. While this can be an option to for those who want to stabilize their monthly expenditures, it’s also important to be aware that there can be higher costs associated with a reverse mortgage. In addition to a higher interest rate, reverse mortgages incur a higher overall interest payment since monthly payments are deferred until the loan is paid in full.

There are many types of mortgage products out there on the market, but you may not be aware that a reverse mortgage or the Home Equity Conversion Mortgage for Purchase (HECM) can be a useful option for many seniors. If you are wondering if this option is right for you, contact your trusted mortgage professional for more information.

03

Nov

By support

Home Mortgage Tips

Understanding How Mortgage Amortization Works and How It Can Affect Your Future

Understanding How Mortgage Amortization Works and How It Can Affect Your Future Whether you’re just beginning to peruse the market or you’ve recently found your dream home, there’s a chance you’re already considering the lenders and loan terms that will work best for you. Amortization may be a less-familiar term when it comes to the layman’s knowledge of buying a home, but knowing more about exactly what it means can go a long way towards a more secure financial future.

Explaining Mortgage Amortization

Amortization is the process of paying off your mortgage loan through regular monthly payments. While a portion of each monthly payment will go towards the price of the home and a portion will go towards interest, having a higher monthly payment can mean you pay less interest on the home’s balance overall. This means that, with a shorter amortization period, you can actually end up paying a lot less for your home.

Why It Can Be Good To Pay Down Sooner

It’s easy to believe that paying your monthly mortgage amount is enough, and this can certainly suffice, but putting down more than this can actually improve your financial situation in the long run. Because the early years of paying off your mortgage will involve paying interest on a larger home balance, it can take a while to even break even and begin to see a lowered interest payment and principal. By making lump sum payments or pre-payments, you may significantly lower your amount owing and pay off your home much sooner.

What’s Best For You?

Certainly, higher monthly payments or lump sums can minimize the amount you owe, but depending on the house you choose, a higher monthly payment can be a tight squeeze. This can also adversely affect the quality of your life if you’re working too much to make ends meet or budgeting so much you can’t enjoy your life. While a shorter loan period is great if you can swing it, if it will negatively impact your life and the financial benefit is not worth it, you may want to take a little longer to pay down.

There are a lot of terms and phrases involved in the mortgage process that can be confusing for the new homeowner, but deciding on the length of your amortization can have a significant impact on your future finances. If you’re currently considering the amount of house you can purchase with your monthly payment, contact your trusted mortgage professional for more information.

02

Nov

By support

Home Mortgage Tips

Baby on the Way? Helpful Advice for Managing a Mortgage With Only One Parent Working

Baby on the Way? Helpful Advice for Managing a Mortgage With Only One Parent Working If you’re dealing with paying off your mortgage and going down to a one-income family, it can be complicated to determine how to financially swing it. However, becoming a parent and managing a mortgage are quite common nowadays with maternity leave and the modern family. While managing a mortgage on just one salary can be a challenge, there are a few simple things you can do to make it work.

Buy The House You Can Afford

It may sound much too simple, but many people get so wrapped up in the concept of a dream home that they forget about what makes the cost of it manageable from month to month. While affordability is important, it becomes even more important when you’re dealing with one income, so ensure you have a monthly payment that you can pay off with one salary. Even if interest rates shift or an emergency comes up, you’ll still be able to handle your monthly payment.

Create A Budget

Budget may very well be the dreaded ‘b’ word when it comes to finances, but there is nothing that’s going to be a better friend to you in managing a one-income mortgage than sticking to it. Instead of leaving your expenses to chance, make sure that you’ve set aside the appropriate funds for your mortgage, groceries, car payments or transportation, necessities and any extras that go along with living. Keep in mind that while starting a budget is good, you may want to schedule weekly meetings to ensure you’re sticking to it.

Maintain An Emergency Fund

Since it may be a struggle to pay off your mortgage and pay for day-to-day life on one salary, it’s important that you’re prepared for any emergencies that come up. Because these will be the things that arise that can sink your budget, like your car breaking down or a window needing to be replaced, you should be setting aside money each month to cover the incidentals. Tossing aside your budget for an emergency can have serious financial implications, so be prepared for what can arise.

It goes without saying that managing a mortgage on one income can be a challenge in this day and age, but this is a situation that many families find themselves in when they decide to have children. If you’re currently trying to determine how you’ll be able to manage your mortgage on one income, contact your trusted mortgage professionals for more information.