How to Avoid Getting the Wrong Home Loan |
16. When Should I Refinance My Rental Property?Since interest rates are usually higher to refinance a rental property (as opposed to a primary residence) you should look first to your main residence as a source of cash. The rental property should be a secondary consideration for cash-out refinancing. Look to refinance your rental property when rates are low enough to make a meaningful difference in your payment. 17. Should I Reduce the Term of My Loan?If I have a 30-year loan, should I reduce the term of my loan to 10, 15, or 20 years if I can afford to make the larger payment? The answer is YES! This will save you tons of money. Example: John and Sally have a $250,000 mortgage at 7.50% with a monthly payment of $1,748.04. They have been paying on the loan for 3 years and have a current balance of $242,535. They have been offered a new 15-year loan at 5.50% with a new payment of $2,030.74 (payment includes new loan fees). Does this make any sense? Existing 30-Year Loan: New 15-Year Loan; The above 15-year loan saves $200,831.76 over keeping the current loan. Not bad. 18. What about Bi-Weekly Payment Plans?A bi-weekly payment plan will force you to make an additional full payment against your loan during the course of a year (26 Bi-Weekly payments). By doing this, you will generally pay off a 30-year loan several years earlier, dependent on the interest rate. Some banks now want to charge an extra fee for bi-weekly payers. There is no need to pay this fee. If you can't get your bank to allow this service for free, then just pay an additional amount of principle to your monthly payment so that one full extra payment gets made on a yearly basis. A good example would be if you make principle and interest payments of $1,200 per month, just add 1/12 to your monthly payment ($100) and make a new monthly payment of $1,300 a month. This will pay off your loan in the same reduced amount of time. 19. If My House Is in A Trust, Can I Easily Refinance?Not a problem. Some lenders do not like to deal with a house in a trust-others don't mind at all. A knowledgeable loan officer will handle this issue properly. 20. What If I Have Good Credit But No Current Job? Is There a Loan for Me?You bet. There are many loans that do not require a job. There are loans that do not require verification of income. If you have equity in your home, there are many ways to borrow against it. I hope you have enjoyed reading this eBook and found it to be helpful and informative. All of the above topics can be discussed more extensively-and there are many more topics that could be added. If you have questions about any type of a loan, or would like my personal assistance in arranging your loan, please feel free to call me direct. I would love to chat with you. Thanks again and enjoy, |
