Why and How the Length of Mortgage Can Cost Can Cost the Borrower Money

Atlanta Mortgage Broker DiscussesWhy and How the Length of Mortgage Can Cost Can Cost the Borrower Money 

Why and How the Length of Mortgage Can Cost Can Cost the Borrower Money. Real estate financing is one of the most imposing limitations of homeownership in many parts all over the world. Mortgage affordability determines not only the ease of acquiring a loan but also the cost of holding the loan up to the loan’s maturity date when the borrower is expected to have repaid 100% of the loan funds borrowed. This article demonstrates that the length of the mortgage can cost the borrower more or less depending on the nature of the cost.

Many borrowers understand that long repayment duration will expose them to an extended duration of fluctuating interest rates for those mortgages issued on floating interest costs. Unpredictable interest rates affect a borrower’s capability to repay a mortgage in that if interest rates on an outstanding mortgage rise, the cost holding of the mortgage also goes up. The ideal scenario for a mortgage holder is to be able to retire a loan at the least cost possible.

Interest on loans is a measure of the credit risk for a mortgage holder. For this reason, risky borrowing is supported by high-interest rates on the loans; the more the risk to lend in a borrower, the higher the interest rate on the loan. It is on this premise that the borrower’s credit rating/ credit score becomes of great importance to the lender and a poor credit score will make a mortgage loan more expensive to the holder in the long run. We discuss  Your Credit Score and Your Mortgage in more detail on that post.

So, what are the common costs that a borrower will have to pay between the mortgage origination date and the mortgage maturity date? The naming of the various loan fees and loan charges may differ from one lender to another but the borrower needs to understand the rationale behind the charge/fee on the mortgage. They may include:

Loan Arrangement Fee

This is an administrative cost charged by a lender to the borrower because the lender has arranged for the loan and is often non-refundable. Lenders have to reserve large amounts of cash to be able to set up a credit facility capable of issuing both fixed-rate and variable-rate mortgages. Noteworthy, not all lenders charge a loan arrangement fee.

Depending on the perceived risk of the mortgage holder, lenders typically charge a loan arrangement fee of between 0 -3 percent of the loan amount.

This cost may be charged at the onset – at the loan application process when the borrower is submitting documents for loan consideration and origination or may be charged periodically as part of the annual interest cost. In the latter situation, the borrower will pay more in interest cost. It is paramount the loan arrangement fee is fully disclosed before the borrower commits to a loan contract.

Loan Booking Fee

Many lenders combine loan booking fees with loan arrangement fees and charge them together as a single cost. Similarly to the loan arrangement fee, the loan booking fee is often paid for when the borrower makes an application for a mortgage loan, is non-refundable, and is determined by the size of the mortgage loan. 

Property Valuation Fees

This is a fee paid to a property valuer/appraiser whose professional role is to ascertain the value of the property and help determine how much of a mortgage loan the property can secure for the borrower. The amount of mortgage funds given by the lender will be proportional to the value of the property as returned by the appraiser. 

The lender does not want to advance more money to the borrower beyond the value of the property used as mortgage collateral. The valuation cost to be paid to the property valuer is often dependent on the value of the property. 

Charging Fee

These are the costs paid to the government entity/solicitor that registers the lender’s charge or the lender’s interest in the ownership and control of the property. When registering a property charge, the lender wants to have legal control of the sale and management of the property after the mortgage loan has been advanced to the borrower. The cost of registering this interest is borne by the borrower and is part of overall mortgage costs. 

Mortgage Account Fees

To access a mortgage loan, the borrower must open an account with a mortgage lender. The mortgage account must be periodically updated and maintained for secure and accurate data recording. The cost of setting up, maintaining, and closing a mortgage account also adds to the overall mortgage cost. This fee to close a mortgage account applies even in the event of early loan repayment by the mortgage holder. 

Loan Non-Performance Penalties 

In most cases, there are charges to be made in form of penalties when a borrower falls late for loan repayment obligations. These fees are may vary between lenders but must be disclosed to the borrower early enough before signing the loan contract. 

Mortgage Brokerage Fee

A Atlanta mortgage broker brings a potential borrower and the mortgage lender together for the mortgage business to take place. A mortgage broker is a critical source of professional advice to the borrower. Mortgage brokerage fees are due when the borrower opts to hire a mortgage broker to guide the borrower to get mortgage financing at a favorable rate. 

Higher Credit Charges

Not all mortgage providers charge this cost. Additionally, this cost is mostly charged on borrowers with little mortgage down payment. A higher down payment (proportionate to the mortgage loan amount) will reduce the overall credit risk of the borrower. In the opposite scenario, when the mortgage down payment is low, the lender might charge extra to compensate for the extra risk. 

The fee to Arrange Property Insurance Covers

The lender will seek to hold an insured property as a security for the mortgage loan. A property with an assurance cover ensures the lender is paid in the event the property is affected by the hazard against which the property has been insured. 

A fire insurance cover will have the lender repaid if the building is razed down by fire before the loan has been retired. The cost of organizing for property insurance is a cost borne by the mortgage borrower. This fee will vary between lenders and between insurance companies. 

Pre-payment Penalties/Fees

This fee is not common among all mortgage providers and the borrower is advised to analyse this cost on case-to-case analysis of available mortgage providers.

This fee is a form of a recompense made to a lender because the borrower has repaid the loan earlier than planned. Naturally, the pre-payment of a loan has the undesired and invariable effect of forcing the lender to make adjustments for the anticipated loan payments.  This fee may range between 1-5% of the value of the early repayment. 

Mortgage Closure Fee

This fee is dependent on the occurrence of the mortgage account fee as discussed above. If the borrower has already paid for the mortgage account fee, it is highly unlikely they will need to pay for the mortgage exit/closure fees.  This fee is paid to mark the closure of the mortgage account and will often vary between mortgage providers.

The length of the mortgage can cost the borrower more or less depending on the length of the loan repayment duration.

For the borrower to access affordable mortgage financing, they should be alive to the nature and extent of mortgage costs that fall with the subsistence of the mortgage loans.

7 Ways Of Increasing Your Mortgage Downpayment

7 ways of increasing your mortgage downpayment

Atlanta Mortgage Broker shares 7 Ways to Increase Your Mortgage Down Payment

Mortgages are essential, especially for first-time homebuyers. Among many reasons, the resulting leverage means profit on your investment whenever your home appreciates. Mortgages also ensure homeowners’ financial stability, since they don’t have to use all their life savings to buy a home or as a down payment. Most lenders and banks require a 20% down payment of the home’s purchase price. While some Atlanta Mortgage Brokers advise homebuyers to finance most of their home purchase through a mortgage loan, it often pays to make the largest down payment possible.

So, what are some of the ways that can help increase your mortgage down payment? Are there benefits that come with it? Read on to find out.

7 Ways of Increasing Your Mortgage Down Payment

1.) Down Payment Assistance Programs

Some institutions such as banks, government agencies, foundations, and non-profits have down payment assistance programs that may help you increase your mortgage down payment. Such assistance comes in the form of zero-interest loans or grants. The Federal Housing Administration (FHA) offers loans to eligible persons through FHA-approved lenders or banks. Such programs can help supplement your saving and result in a larger down payment for your mortgage.

2.) First-Time Home Buyer Incentives

First-time homebuyers can hone in on Housing and Urban Development (HUD) grants to boost their down payment. While such grants may not be available directly to individuals, they can be accessed through financial organizations with IRS tax-exempt privilege.

3.) Retirement Plans and Account Withdrawals

Borrowing from 401(k) plans is another common way of funding a larger down payment. While most people will eschew this option, it could be a smart undertaking for various reasons. For 401(k) plans that allow early withdrawal, first-time homebuyers can withdraw without incurring a tax penalty. Most people don’t mind the interest that comes with these withdraws as you end up paying the principal and interest to yourself. However, losing or leaving your job would mean that you repay the entire amount or roll the amount into an eligible retirement account. However, if you have a promising and secure job, this would be a safe and viable option.

4.) Down Payment Gifts From Family

Some home buyers would not warm up to this option, but it could help fund your mortgage down payment. The IRS allows individuals to give and receive thousands of dollars in gifts every year tax-free. However, the IRS sets limits on the amount that one can send or receive without paying tax. In 2020, one can be gifted up to $15,000 without paying tax on it.

5.) Asset Sale

Individuals preparing to buy a new home may turn some of their assets and items into cash to top up their savings for a larger down payment. Such assets include unused pieces of furniture or an old car.

6.) Find a Part-Time Job

Part-time jobs are great for supplementing income, which could help increase your mortgage down payment when purchasing a home.

7.) Crowdfunding

Crowdfunding sites like HomeFundIt.com and FeatherTheNest.com allow individuals to create a profile and raise money for their down payment. While some of these platforms may charge credit card processing and transaction fees, the amount raised could go a long in boosting your mortgage down payment.

Mortgages are the most common ways of financing a home purchase, and paying a huge down payment could have unseen benefits in the long-term. Some common ways of increasing your down payment include applying for assistance programs, HUD grants, securing a part-time job, selling assets, crowdfunding, and accepting gifts from friends and family. By paying a large mortgage down payment, you may enjoy lower interest rates and lower monthly payments.

Atlanta Mortgage Broker
A

On Your Credit Score And Your Mortgage

When you want to purchase a home, in most cases, you will need to get a mortgage.  Most people can qualify for a mortgage and they usually need a downpayment to buy the home too.  When you are looking into this process, you will want to know the effect your credit score and your mortgage will have on your life.  It’s important that you understand what you are looking at so that you are not surprised when you are looking into buying a house. An Atlanta Mortgage Broker can help source the best Atlanta Mortgage Rates.

Your Credit Score And Your Mortgage

When you go to apply for a mortgage, you will find that the lower your credit score is, the higher you will pay for your mortgage.  That is because the higher your credit score, the better risk you are to a lender.  It will make a difference in your interest rate also.  Here is an example so that you can see why it makes sense to have a higher credit score when you are looking to purchase a home:  If you have a credit score of 750, you will be able to get a 30-year mortgage for $200,000 at an interest rate of 3.625%.  That is really good but if your credit score was lower, you will pay a lot more in interest over the course of your loan.

What Credit Score Do You Need To Get A Loan For A Home?

You can qualify for a loan for a home when you have a credit score in the 500s in most cases.  Once again, you will pay a lot more in interest over the course of your loan. This is where taking the advice of Atlanta Mortgage brokers will help. You definitely want to have a higher credit score before you apply for a mortgage so make sure that you keep your credit good and that you are keeping an eye on it.  You can get a free copy of your credit report each year and it is a good idea to do so that you can check it for the correct information.  If there are any discrepancies in it, you will want to look into so that you can get the proper information listed on your report.  Your FICO score is so important when it comes to purchasing a home and it can affect the terms of your mortgage in a variety of ways.   

Be sure that you can handle the responsibility of owning a home in Atlanta.  Not only will you need to be able to afford it financially but you will also need to make sure that you are able to handle the responsibility of keeping up with the repairs that will go into it.  When you know that you can afford to have a home, it can make a huge difference for you.  Sit down and really look over all of your finances.  You want to be in the best position possible when you purchase a home.  Your credit score is a very important part of this.  Look into it to make sure that you will get the best rates possible for your Atlanta mortgage.

Mortgage Broker In Atlanta

Thinking about a Mortgage Broker In Atlanta?

Hiring a mortgage broker in Atlanta is the best way to relieve the stress involved in buying your dream home. If you are a first-time buyer, you may have hundreds of questions in your mind about the process of mortgage loans. A reliable broker can answer all your questions and help choose the most suitable mortgage depending on your income and personal requirements. A broker acts as a middleman between you and the lender and helps find a mortgage with a lower down payment and attractive interest rate. Here is what you need to consider when choosing a reliable mortgage broker in Atlanta.

What Is A Mortgage Broker?

A mortgage broker is a middleman between the lender and the borrower. He or she works for a lender and provides home financing to numerous borrowers in Atlanta. The broker has access to sources of home financing from multiple financial institutions compared to a bank loan officer who can only offer mortgage products available at his/her bank. While a bank loan officer is employed by the bank and is limited to promoting the products of the bank, a broker works with multiple lenders without any limitations.

Federal law requires the mortgage broker to be licensed, and they cannot have their salaries linked to the interest rate the borrower receives from a potential lender. The broker can save you a lot of time and energy in locating the best possible home loan conditions in Atlanta. The broker will do the math and let you know the loan amount you qualify for depending on your income and credit history. A good broker can help you find the right mortgage for your unique needs.

Mortgage brokers in Atlanta are paid in two main ways. In fact, broker fees have become more transparent after the Great Recession in 2008. The broker is either paid upfront by the borrower at the closing or by the lender after the transaction is closed. The broker fee is a percentage of the loan amount – usually around 1-2%.

Why Should You Work With A Mortgage Broker When Buying A Home In Atlanta?

A borrower working with a reliable mortgage broker receives many benefits. The client receives a more in-person interaction with the professional and could let the broker do the legwork for him/her. The mortgage broker will do the work of shopping around for the best interest rate for your home loan. It’s also important to shop for the lowest possible closing costs when finding the best mortgage to buy your dream home. A reliable broker will take care of the entire process and get you the best possible terms when applying for a home loan in Atlanta.

Many mortgage brokers have access to powerful home loan pricing systems. That way he or she will help you price the loan across many lenders at the same time. You will save a lot of time in finding the most suitable loan due to the technological advances in the industry. In fact, the time, energy, and money saved in the process are immense benefits to the borrower.

What Should You Ask The Potential Broker?

Finding a reliable broker isn’t easy with hundreds of mortgage brokers operating in Atlanta. Asking the right questions is the best way to select the right professional for your project. Here are some of the most important questions to ask the potential broker before you choose him/her:

How long have you been in business? The right broker should be in the industry for at least 3-5 years. Ask the broker if he or she has experience in specific loan types that you might be interested in – such as FHA or VA loans. The broker should hold a license to operate in your state. You can check if the broker is licensed in your state through the Nationwide Mortgage Licensing System and Registry.

Can you give me references? Ask the potential broker for 2-3 names and contact details of customers who have closed loans with the broker recently. Don’t forget to call and ask these customers what their experience was like. Ask if they are prepared to do business with the broker once again.

Finding the right mortgage broker requires diligent homework on your part. You may ask for referrals from your friends, family, or your realtor. The internet is a great source to start your search. Many buyers make the mistake of going with the first name they come across a search on Google. You should check the background of each broker on Google SERPs before choosing the best candidate for the project. Don’t forget to check the license of the professional and ask the right questions before choosing him/her as your mortgage broker. The aforementioned article provides information on why you should work with the best mortgage broker in Atlanta when buying your dream home.

Atlanta Mortgage Broker

Working with a competent Atlanta mortgage broker can save you a tremendous amount of time when buying your dream home. Just imagine the amount of stress you may experience if you had to track down and compare hundreds of loan products to find the right home loan to suit your requirements! Not only time, in some cases the savings could add up to thousands of dollars. In fact, a mortgage broker in Atlanta can help you buy your dream home by finding a home loan with a low down payment and a lower interest rate. Here is why you need to work with a competent Atlanta mortgage broker when buying your dream home.

A mortgage broker is a middleman between the borrower and the lender. He or she has access to home loan products from multiple financial institutions and banks compared to a bank loan officer who only has access to mortgage products available at his/her own bank. The right broker should have a valid license from the licensing authority of the state. The federal licensing requirements state that the broker’s salary is never linked to the interest rate offered by the lender. In fact, working with a broker will not impact how much your loan would be. The broker can locate the best possible loan terms and conditions for the client. The professional will do the math and let the borrower know the loan amount he or she qualifies for. The broker will work with the client to find a loan program that fits his/her interest rate and needs. Don’t forget to do your homework when finding the best mortgage broker in Atlanta.

The most effective way a broker can save you money is by getting you a lower interest rate. Even a small difference in interest rates can equate to thousands of dollars in interest payments over time. The broker has direct links to key individuals within lending institutions in Atlanta. That way he or she will be able to negotiate with the lender in ways that you may not be able to do. It could mean anything from zero fees to discounted interest rates for your mortgage. Even though a borrower may think that he or she can negotiate a good deal with the lender, the broker can generally do it better.

A competent broker can leverage inside knowledge to get you the best possible mortgage loan. A professional and experienced broker has inside knowledge about quotas and the motivations of bankers. In fact, he or she can leverage this knowledge to your advantage. The most important thing is to know which lender to use at which time. Make sure you rely on a competent mortgage broker in Atlanta when buying your dream home.

Questions To Ask An Atlanta Mortgage Broker

It’s important that you ask the right questions from the potential mortgage broker before committing to any loan. From the right type of home loan for you to the unanticipated fees, the financial health of the next decade of your life can depend on the answers you get from the potential broker. Continue shopping for a competent mortgage broker until you find the right one in Atlanta. You should also remember that the more the potential broker knows about you, the better advice they can give you. You should share your personal information with the potential broker to get the best possible deal from him/her. Here are some questions to ask the potential broker before you choose the best Atlanta mortgage broker:

. Which type of loan is best for me?
. What are the interest rate and annual percentage rate of the loan?
. What is the down payment?
. What are the origination fees and discount points?
. What are the costs involved in the mortgage?
. Is it possible to get a loan rate lock?
. Is there a payment penalty?
. Can the lender approve loans in-house?
. Do you guarantee on-time closings?
. How much time do you need to fund?

How To Choose A Competent Mortgage Broker In Atlanta?

With hundreds of mortgage brokers operating in Atlanta, choosing a competent broker isn’t easy. Your extensive research plays a crucial part in choosing the right candidate for the job. If you have a friend or family member who has worked with a broker in the past, you may ask for referrals from them. Getting a referral from someone you trust is the best way to find a suitable broker in the area. If you are working with a realtor, you can ask him/her to recommend a good broker in the area. The internet is another good resource to find a reliable mortgage broker when buying your dream home in Atlanta. The broker should be licensed, experienced, reputable, and most of all, be your friend. You should be comfortable working with the individual. These are some of the most important things to consider when choosing a competent mortgage broker in Atlanta.

5 Factors that determine mortgage rates in Atlanta

If you live in Atlanta and are looking to apply for a mortgage, there are many things you need to consider to ensure you get the best Atlanta mortgage rates. Mortgage rates are always shifting and can even change two or three times in one day. With that being said, it’s essential to understand what mortgage rates are, how they are determined, and where to look for the best deals.

What’s a Mortgage Rate?

Atlanta Mortgage Rates

The interest charged on a homeowner’s loan is what’s known as a mortgage rate. These rates are generally determined by lenders and are either variable (meaning they fluctuate following benchmark interest rates) or fixed (they remain constant throughout the mortgage). It is worth noting that they vary depending on how good the borrower’s credit profile is and fall and rise with interest rate cycles.

Mortgage rates are a primary consideration for people looking for money to finance a home’s purchase using a mortgage loan. Other aspects involved include taxes, interest, insurance, collateral, and principal. Mortgage collateral is the house itself, while the principal is the loan’s initial amount. Insurance and taxes vary according to the property’s location and usually are estimates until it is time to purchase the property.

Mortgage Rate Indicators

There are several indicators that people looking to buy a home can follow when considering a mortgage. And one such indicator is the prime rate. Prime rates represent the lowest average rate lenders can offer as credit. Lenders such as banking institutions use these rates for interbank loaning and can also provide them to the highest credit quality borrowers.

The 10-year treasury bond yield is another indicator that borrowers use. This indicator is also used to show market trends. In most cases, when treasury bonds rise, mortgage rates rise too. While most homeowner’s loans are calculated based on a thirty-year timeframe, most loans are either refinanced for newer rates or fully paid off after ten years. This is why the ten-year treasury bond yield is considered one of the best standards to judge.

How Are Mortgage Rates Determined?

If you are like most people with a dream to own a home, chances are you looking to get the lowest rates available for a mortgage loan. However, like most people, you do not know how mortgage interest rates are determined. Understanding the different factors used to determine your homeowner’s loan interest rate can help you have an easier time negotiating your mortgage during the homebuying process. To make things easier for you, we will discuss critical factors that affect mortgage interest rates and how you can work around them to get the best interest rates.

• Credit Score

Your credit score plays a major role in determining the interest you will be required to pay on your mortgage. In most, if not all, cases, people with higher credit scores generally get offered lower interest rates than those with lower scores. Mortgage lenders consider credit scores to determine how reliable borrowers will be when paying back the loaned money. But why credit scores? Because they are calculated based on an individual’s credit report, which shows their credit history, including their credit cards, loans, and payment history. We Discuss more how your credit score affects your mortgage rate here

If you are thinking of getting a mortgage, start by checking your credit score – go through your credit reports to see if there are any errors. Errors in your credit report could lead to lower scores, something that could affect your ability to qualify for better Atlanta mortgage rates and terms.

• Loan Amount and Home Price

As a homebuyer, you could end up paying higher interest rates on a loan if you are not careful. While considering your options, please keep in mind that the loan amount you need to borrow for your mortgage is the price of the property plus closing costs – and that does not include your down payment for the property. Depending on your mortgage loan type or circumstances, your mortgage insurance and closing costs may also be included in the loan.

If you have already started checking out available properties in the market, you probably will have an idea of what the home you are hoping to buy costs. But if you are just starting, consider visiting local real estate websites to get an idea of what homes within your preferred neighborhood cost. Consider using an interest rates calculator or tool to see how different home prices and required down payments affect interest rates in a specific area.

• Down Payment

In most cases, the larger your down payment, the lower the interest rate will be. When you have a larger stake in the home, lenders have a lesser risk of dealing with and are more willing to charge a lower rate. If you can comfortably put 20% or more down as down payment, go right ahead – doing so will help you get a relatively lower rate.

However, if you can’t, most lenders will require that you get mortgage insurance, which protects them from loss if you are unable to pay the loan. It’s worth noting that mortgage insurance effectively increases the overall amount you pay per month.

When seeking a mortgage, consider the overall cost of the loan you get. When you put down a larger down payment, you effectively lower the amount you need to borrow. In most cases, the lower the amount borrowed, the lower the interest rate will be. Getting lower interest rates will save you more money over time. This is why it’s essential that you not only consider the interest rate but also how much you borrow – and a larger down payment can help lower the amount borrowed and the interest rate charged.

• Interest Rate Type

There are basically two types of interest rates: adjustable and fixed. Some adjustable rates have an initial fixed period that, after some time, goes up or down depending on the market. Fixed rates, on the other hand, remain constant. When it comes to adjustable-rate loans, it’s worth noting that the interest rate may initially be lower than that of a fixed-rate loan but might increase considerably later on, which is why you need to consider different Atlanta mortgage rates before making a decision.

• Type of Loan

It’s worth noting that mortgage loans in America are available in various, and rather broad categories such as VA, USDA, FHA, and conventional loans. It’s worth noting that each loan type has different eligibility requirements, and it is the lenders who decide which products they will offer. Comparing what different lenders have to offer will help you better understand all available options and should make it easier for you to pick something that suits you.

The Tradeoff Between Interest Rates and Points

When shopping for a mortgage, you will see that different lenders offer different mortgage rates with different points. Generally, lender credits and points allow you to make tradeoffs in how you’ll pay for your closing costs and mortgage.

  • Points, or discount points, basically lower your rate, but there is a catch – you have to pay an upfront fee. When you pay points, you give the lender more upfront, and in return, you receive a lower interest rate, which means you get to pay a lesser amount over time. Discount points are great for people who know they’ll keep the loan running for a long time.
  • Lender credits may lower closing costs but increase interest rates. With lender credits, your lender offsets your closing costs, and you pay a considerably higher interest rate. Even though you will pay less upfront, you end up paying more over time due to the interest rate.

You have three options to choose from when it comes to lender credits and points:

  1. You can opt to get lender credits and use the money to cover a portion of the closing cost but pay higher interest rates over time.
  2. You can opt to pay the upfront fee at closing and receive lower interest rates.
  3. Or, you can decide that you do not want to receive lender credits or pay points at all.

As we conclude, it is worth keeping in mind that it is not just one of these factors, but a combination of them all, that determines what you will be charged as interest. By understanding the factors that affect mortgage rates in Atlanta, you should have an easier time shopping for a mortgage that offers you interest rates that suit your budget and situation. Finally, mortgage loans are some of the most complex and most expensive financial commitments anyone can ever assume – and it is alight to ask for help. If you find the process to be a bit complicated, consider reaching out to a real estate attorney or a trusted housing counselor and Atlanta Mortgage Broker for advice and guidance.

While some of these factors are out of your control, understanding how determined interest rates will ensure you stay informed when shopping for a mortgage. At the same time, you have a part to play as you seek to find the best mortgage rates in Atlanta. Here are a couple of things that we believe will help make the process easier for you.

  • Follow daily financial broadcasts
  • Frequent up-to-date Atlanta mortgage rates websites
  • Read up-to-date finance blogs and finance news websites
  • Use an online calculator
  • Compare the information you are reading to get the right information
Pay Off Your Mortgage Earlier

Strategies to Pay Off Your Mortgage Faster in Atlanta

It may seem like a standard thing to do: get a mortgage and pay it through the duration of the loan terms. Refinance if rates drop and extend the loan. In fact, with refinancing, the monthly savings often end up costing you more in interest and added fees in the long haul.

As daunting as it can seem, you can pay off your mortgage well before the typical 30-year term. Here are…

Strategies to Pay Off Mortgage Faster in Atlanta

Make Extra Principal Payments

You may be comfortable with your monthly budget and don’t want to commit yourself to regular extra payments. It doesn’t mean you can’t make extra principal payments that pay down your mortgage.

The majority of your payment in the early years, really the first 10 to 12 years, is all about pre-paying the interest owed on the loan. It begins to taper after nearly one-third of the loan is complete.

Call your loan servicing company to determine the process for sending in extra principal payments. Some companies require a note or special instructions otherwise the payment is applied to the next scheduled payment and doesn’t accomplish what you want.

How you send in extra payments is up to you. Some people use their tax return and send in a bulk annual payment. Others send an extra $100 or $200 at the end of the month after all bills are paid. By making what equals an extra house payment per quarter, you can reduce your loan by approximately 11 years.

The 15-Year Mortgage Option

Refinancing into a 15-year mortgage certainly, will shorten the time frame of paying off the loan. A lot of refinance options exist that usually offer lower interest rates compared to the 30-year loan. Ask your mortgage representative to run the numbers and see if the refinance makes sense. He should be able to give you the difference in cost over the course of the loan, not just what your monthly payments will be.

However, if you already have a low-interest rate and don’t want to incur costs for the refinance, calculate the estimated payment a 15-year mortgage would require. You don’t need to actually refinance – just pay it as you did.

The numbers might increase your monthly payment 30 to 50 percent but you will take advantage of your existing low-interest rate and be able to make more aggressive payments into the actual principal balance. As the principal balance drops, you are paying less interest and saving. Your money is working harder for you sooner and getting you closer to paying the entire loan off.

Bi-Weekly Payment Programs

When you make monthly payments, you make 12 payments per year. When you break payments down into bi-weekly payments, you end up making an extra payment since there are 13 weeks per quarter. That’s four extra payments per year.

Most loan serving companies require you to enroll in bi-weekly payments to stay on a systematic arrangement and ensure that payments are properly recorded as principal and interest.

This technique is similar to making an extra principal payment per quarter but is a more formal arrangement with your lender or the servicing agent. Confirm that your lender does appropriately put the extra payments toward the principal and doesn’t apply it to the escrow balance or next month’s payment. The company may not be entirely forthright in explaining this to you since they will be losing profit via less interest earned on the loan over the life of the loan.

Lending companies make money based on interest and if you are paying it off faster, they will not always help you. Do your homework and check your annual escrow statement to ensure your payments are recorded, as you desired.

IF YOU’D LIKE TO LEARN MORE ABOUT THE HOME BUYING OR SELLING PROCESS IN ATLANTA, CALL US TODAY.

Schools and Crime in Atlanta

How To Research Schools, Neighborhoods And Crime Rates In Atlanta

So you’ve found a potential new home. It has almost everything you want and is well within your price range. But you can’t stop there because there are other factors that are at least as, and maybe even more, important than features and price. So here’s how to research schools, neighborhoods, and crime rates in Atlanta.

Schools in Atlanta

Sure, everyone wants to know about crime rates in Atlanta neighborhoods, but the quality of schools is of interest only to those people who have school-aged children, right? Wrong. The quality of schools in and near the neighborhood is an important purchase factor for everyone. The fact is, homes in neighborhoods with better schools usually have higher values and a greater likelihood of appreciating over time.

You certainly don’t want to rely on the seller’s opinion alone, though you should ask. But make sure to go right to the source and check out the local school district’s website. While the information there may be a bit skewed in favor of the local schools, it’s still a good starting point to see whether the schools will be a good fit for your child(ren).

Another good online resource for researching schools is GreatSchools, the “leading national nonprofit empowering parents to unlock educational opportunities for their child.” Just type in a ZIP code, and you can get reviews on schools from educators, parents, and students. The U.S. Department of Education also publishes a valuable resource, a 52-page booklet titled “Choosing a School for Your Child.” This booklet covers magnet and charter schools and has a checklist to help you evaluate your child’s needs and whether a school’s policies and procedures will be a good fit.

Of course, there’s no substitute for actually visiting the schools yourself.  Just keep in mind that curricula and academic standards aren’t always the most important considerations. Be sure to take a look at professionalism, friendliness, communication, and special-needs accommodations – all those things that make it a great experience for the students.

Also See – 3 Strategies to Pay Off Mortgage Faster

Neighborhoods in Atlanta

Before buying a new home, you will certainly want to check out the neighborhood (which ties in closely with crime rates in Atlanta. The Internet is your friend here.

Demographics matter because we all want to be around people much like ourselves. HomeFair’s City Profiles Report can help you with this. After entering a ZIP code or city and state, you can find out what the people are like in the neighborhood where your potential new home is located.

Another good online tool is NeighborhoodScout, especially for the financial end of things. With this tool, you can investigate a neighborhood’s median home prices, commuting opportunities, and even crime rates in Atlanta. You can also discover what makes a particular neighborhood unique and gives it a definite personality.

And you don’t even have to visit the neighborhood in person to visit the neighborhood. One of the free apps like Walc will allow you to take a virtual stroll through the neighborhood to see what it’s really like at ground level. With Walc, for example, you can take a leisurely “stroll” through the area to get a sense of place.

Crime Rates in Atlanta

When it comes to crime rates in specific neighborhoods in Atlanta, the best starting points are local. Contact the local police department and ask to see a police log that will allow you to see where crimes have been committed during the past year. Then take a look at the local newspaper to find out the kinds and locations of local crimes.

Then you’ll want to go online again. A good place to begin is the FBI’s Uniform Crime Reports. There’s a lot of information here, so it will take a little effort, but it’s well worth it. You can find comprehensive information on the kinds of and number of crimes committed in the area. A couple of other good resources to find out about crime rates in Atlanta are:

  • CrimeMapping.com – With this site, you can find out about recent crimes in neighborhoods all across the country, including the kinds of crimes and the timeframes within which they occurred.
  • NeighborhoodScout – For more general data, such as lists of the safest and the most dangerous cities in America, NeighborhoodScout is a good resource. You will, however, have to subscribe for more detailed information.

Easy Way to Find Out Crime Rates in Atlanta

In reality, then, price and features just scratch the surface of what you need to know about that home in order to make a purchasing decision. You also need to research schools, neighborhoods, and crime rates in Atlanta because they all go back to those three critical criteria: location, location, and location.

But you don’t have to tackle this big task all on your own. We have the knowledge and experience and the willingness to help you with this research to ensure you make the right decision.

Let us help you find just the right home in the right location. Contact us today!

mortgage preapproval

The decision to buy a new home has been made, and now you’re eager to get house-hunting. But before you start scouring the local listings and scheduling showings, you need to work out how to get home loans Atlanta.

From pre-approval to closing, here’s what you need to know to get a loan in Atlanta:

CHECK YOUR CREDIT SCORES

Before you ever approach a lender, you need to get an idea of how your financial situation may position you in the eyes of the ones giving out mortgages.

Check your credit score (You can get a free credit report annually from each of the three major credit reporting groups – Experian, Equifax, and TransUnion) and see where you stand today. If you’ve got a credit score above 720, you’re in good shape to qualify for a variety of mortgages and decent interest rates.

Knowing your credit scores ahead of time helps you better prepare for the types of loans, amounts, and interest rates you can expect to be offered by lenders.

GATHER YOUR DOCUMENTS

Regardless of whether you’re going with a traditional bank, a credit union, or another mortgage lender, you’ll need to provide a great deal of financial information when applying for your loan.

Some key documents to make sure you have handy are:

  • Pay stubs
  • Tax returns
  • W-2 forms
  • Bank account statements
  • Other mortgage statements
  • Investment statements
  • Photo ID
  • Social Security number

All of this documentation will be provided to your lender during the pre-approval process and may need to be updated during the final mortgage approval process.

GET PRE-QUALIFIED

This is the first step in the mortgaging process. It doesn’t actually require strict proof of income, but it is a good starting point when searching for a home.

In the pre-qualification process, you will be interviewed by the lender about your income, assets, and expenses. Although pre-qualification is not an official process and doesn’t actually indicate that you will be approved for a loan when the time comes, it helps you get a better idea of how much loan you can afford when the time comes.

This information can direct you toward homes in your price range and narrow your search, leading to a faster and less frustrating process for you.

SECURE PRE-APPROVAL

The final step before you finally get Atlanta home loans is pre-approval.

Pre-approval is not a mandatory part of the process, but it is one that can help put your mind and the sellers’ minds at ease.

In securing pre-approval, you will provide all that important documentation – proof of income, proof of assets, and identifying information – to the lender. The lender then pulls your credit report and uses all available information to make a determination on whether you qualify, how much of a loan you qualify for, and at what interest rate.

With this information in hand, you can more confidently put a solid offer down on that home you fell in love with, getting one step closer to move-in day.

GET COMMITMENT

Once you’ve gotten pre-approval and have an accepted offer on a home, your lender will assess the value of the property you intend to purchase.

With all this information in hand, the lender then issues official commitment to lend you a certain amount of money at a specific interest rate. This determination will come in one of four forms: Approved, Approved with Conditions, Suspended, or Denied. If you have pre-approval, the likelihood that you will receive a Suspended or Denied determination is much lower.

When you receive this approval, you’re well on the road to final closing day and your new home!

It can be stressful to get a loan in Atlanta, but with the help of our trusted, experienced loan officers, the process can be easier. Let us be your partners in finding your dream home! Contact us today!

Lower Interest Rate in Atlanta

Your mortgage is a big investment so you can make one of the most important purchases of your life. But it also can easily be one of the most expensive. Just because you need a mortgage to buy your dream home doesn’t mean there’s no room for negotiation to get the best possible price. Here’s how to get a lower interest mortgage rate Atlanta.

KEEP A GOOD CREDIT SCORE

The better your credit score, the better your interest rates. If you have a lower credit score, lenders see you as more of a risk and charge you a higher interest rate to protect their investment.

Before you begin shopping for a home, get as much of your consumer and interest-bearing debt paid down as possible. Make sure any student, auto, and personal loans are current and get your credit card balances are as low as you can get them.

By law, every adult in America is allowed a free credit report each year from each of the three reporting bureaus – Experian, Equifax, and TransUnion. In the year leading up to your planned purchase, request a report quarterly from one of the three reporting agencies to see how you fare.

SHOP AROUND

Just because you’ve gotten a quoted interest rate from a bank in Atlanta doesn’t mean there aren’t better options out there.

Sometimes, just shopping around at other banks, credit unions, and mortgage lenders can help you get a lower interest rate. Shopping around is easier now than it ever was before thanks to the availability of online banking information.

If you’ve received a quote from a bank or mortgage lender, consider checking out a credit union. The interest rates at credit unions tend to be a little lower than with other lenders because they have lower fees than traditional banks. They’re also more apt to work with you if you have a below-average credit history.

PUT MORE DOWN

A great way to get a nice long-term payoff is to put the financial pain up front and pay more down on your mortgage.

If you are able to swing more than the recommended down payment, your lender may view you as a safer investment and give you a break on the interest rate. Even an extra couple percentage points of the total loan price can be helpful.

For larger loans (over $417,000), putting down as much as possible gets you out of the “jumbo loan” category. Jumbo loans are seen by many banks to carry more risk and, as a result, get higher interest rates.

SHORTEN YOUR LOAN

Thirty-year mortgages are the traditional way most Americans purchase their homes, as they offer lower monthly payments. However, if you shorten the repayment terms to 15 or even 10 years, you can trade the higher payments to the principal to get a lower interest rate.

This method takes some careful planning and attention to the amount of mortgage you can afford, but the payoff is great for lower interest rates and even freedom from mortgage payments altogether in less time than with a 30-year mortgage.

ASK

This method may seem so simple it can’t possibly work, right? But sometimes the key to getting a lower interest rate is to just ask your bank for a lower interest rate.

The worst they can say is, “No,” but using a little courage to ask can really pay off.

If you have an exceptional credit score (800 or more), ask your lender to either match the lower interest rate of a competitor or to just lower your interest rate based on your credit history. Banks want the business of people with exceptional credit scores, and many will do what they need to to keep you from taking your mortgage elsewhere.

Your Trust Mortgage Broker in Atlanta!

Getting a mortgage doesn’t have to be stressful. Our experienced loan officers can walk you through the process, helping you get a lower interest rate than you thought possible. Contact us today!