South Carolina | Home Loan | Mortgage | Refinance

Archive for September, 2010

Refinancing is probably a term you’ve stumbled upon more than a couple of times, especially if you have at one time in your life purchased a home on a mortgage or a loan. In home buying, refinancing home loans are the process of getting financing for a current loan by applying for another loan with lower interest rate. Simply put, refinancing is when you pay off one loan with another loan. Of course, refinancing is not as simple as that but once you get the idea, you’ll know exactly what I’m talking about. And also, one must keep in mind that refinancing only works if the interest rate is lower. If not, then that just defeats the whole purpose of it.

The goal of refinancing is to allow the borrower to save some money which would have been spent on loans with higher rates. It is one of the best kept secrets in the finance industry. Several people have been refinancing their homes and saving thousands of dollars in the process. Yet even with this great surge in savings, not everyone is willing to adapt the same method in car loans.

Refinancing car loans follows the same pattern as refinancing your home loan. By refinancing car loans, you pay off your current loan with the money you borrow on a refinancing car loan with a different lender whose interest rates are lower. Refinancing car loans is a good way to save money on your car. With lower interest rates, refinancing car loans can make your monthly payments lesser and allow you to pay off the balance of your current loan in a shorter period of time.

Only a few people understand the time value of money. The longer you pay for a loan, the bigger you spend. By the end of the loan period, you would have paid more money on interest than on the principal. This is why refinancing car loans are an important step in minimizing loan costs and maximizing savings.

To explain this benefit of refinancing car loans, let’s take an example. Let’s say you borrowed $16,500 on a new Honda Accord at 21% APR for 60 months. This means that your monthly payments would be roughly around $446. Without refinancing car loan, you would have paid a total of about $10,283 on interest charges alone by the end of your loan term. If, however, you decide on refinancing car loan, you could as much as $7,643 on a new loan at 6% APR.

NEW YORK — JPMorgan Chase is suspending more than 50,000 foreclosures as it reviews the legitimacy of legal documents in those cases. The issue could stall an already overloaded foreclosure process and may mean some homeowners lost their homes illegally …
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NEW YORK — Fitch Ratings said Wednesday it’s asking mortgage servicers about their foreclosure practices in the wake of GMAC Mortgage LLC’s recent disclosure of procedural errors. The agency believes that if more errors are found by other servicers, that …
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The Help Desk is all about getting answers to your financial questions! Send an e-mail to CNNHelpDesk@CNN.com.
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With a new home, a family needs to sell their prior house.
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When purchasing a home, you will also be purchasing a mortgage. Many first time home buyers are unaware of the options they face when shopping for a mortgage. Choosing the wrong one can cost thousands of dollars, so buyers need to beware of the choices they face.

The most common type of home loan is a fixed rate mortgage. This is a loan that carries a fixed rate for a set period of time, otherwise known as the term of the loan. Fixed-rate loans can be held for many different terms, ranging from 15 to 50 years. Over that time, the interest rate, which will be slightly higher than the national interest rate at the time of the home’s purchase, will not change. The only way to change the interest rate is to refinance, which is basically purchasing a new loan.

Another common loan type is an adjustable rate mortgage. In this loan, the buyer receives an interest rate at the outset of the loan. The rate may stay fixed for a period of time, such as three to five years, but after that time it “adjusts” to mirror the national interest rate. In many situations, this means it will go up. Of course, it can go down as well, but these loans almost always end up costing the homeowner more over the life of the loan than a fixed rate mortgage, especially if they are purchased when rates are really low, since the rate is almost guaranteed to go up at some point in the future.

Interest-only mortgages are somewhat deceiving, because they do not work like a traditional mortgage. In this loan structure, the borrower is only required to pay the interest portion of the loan. The only money put towards the principle of the loan is the money the borrower chooses to add to the loan payment, which means there may be months when no money is added to what is actually owed. This can help buyers get into a home when they cannot afford the monthly payment on a traditional loan, but when the loan term is over, the entire principal amount will be due. These loans are usually only available for a short period of time, making them less than ideal for those who plan to stay in their home for a while. Sometimes people who are flipping a property and anticipate making a profit on the resell price can benefit from this loan structure.

The other loans that are out there, such as VA or FHA loans, are variations on these three structures. They have special guidelines and government programs associated with them, but they function as one of these types. Knowing the differences between these three will help you choose the best possible loan for your next home purchase.

Figure out how much your payments will be with a Home Mortgage Calculator. After that be sure to download a Home Inspection Checklist and grab some Address Change Cards for when you move.

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Summary: Download a copy of your credit report and read Credit Score Information yourself.

Before 2001, credit score information is considered classified material by financial companies. Fair Isaac and Company, from whom the FICO scores originated, felt that such necessary document should not be released to the public since it would then be liable for tampering and fraud. When the United States Congress, major financing companies and some consumer groups demanded the release of credit score information to the consumers, it all changed the awareness of consumers towards their credit scores.

Now, every aware consumer who’d like to check their credit score information can access the data from the internet especially or through any loan office. So there should be no reason to be badly informed with regards to your credit score information. You don’t have to let the bank do the reading for you. Download a copy of your credit report and read scores yourself. It will definitely save you time, money and face.

Credit score information is fundamentally a grand tally of your credit report figures. Reading the data should give you the impression of a grade school report grading system. It is just the total of various figures divided by the number of items involved. If not, think of a percentage system. The numbers involve can range from 300 to 900 and the formulas are derivations of the following data:

* 35% of the credit score information is from your payment history
This may be the primary reason for the presence of credit reports. This data speaks of how well you handled credit. It has the largest percentage because lenders are more concerned on how timely and devotedly you pay your bills. A poor score will often make you a credit risk by most lenders.

* 30% of the credit score information is on your existing debts
There is an existing rule to keep credit balances at 25%, so having a handful of accounts at its seams won’t surely help your credit score. Besides, most lenders will balk at the idea of lending money on someone who has his hands full at the moment.

* 15% of the credit score information is how long you have handled credit
The longer the time you handled credit is the better for your score. Lenders will realize you’ve been an experienced money handler if you have been on credit for a long time. Besides, more data on the report would make it more accurate to read credit score.

* 10% of the credit score information is the number of inquiries made for the report
Frequent inquiries made to your report would mean a financial instability on your part. If you are that anxious to see credit reports that would also mean you are checking how lenders are reacting to your payments and credit. For some reasons lenders avoid a watchful guard dog.

* 10% of the credit score information is the types of credit you currently have

Credit score information is no-brainer for checking. All the data can be understood even if only superficially by most consumers since all data are relevant to the times every credit activity was made.