Home Equity Line of Credit

1. Picking a home loan lender for the wrong reason (i.e., the lowest rate, your present lender.) People choose home loan lenders for all the wrong reasons. Getting a low rate is significant, but it’s not the only consideration. Loaners may give the smallest rate but charge added fees (loan fees, origination fees, copy fees) so that in the end you will pay more for the refinanced home loan even though your rate may be lower. The only way to protect yourself is to wait for the Good-Faith Estimate (GFE) which should list all the closing costs. Compare the GFE’s from a number of home loan lenders. Although comparing GFE’s is not the only story when you desire to refinance your house. Provided that time is important, you want to get a mortgage company that is capable of acting fast. Ask each company to provide you their average closing time for loans similar to yours.

Ask around among your trusted friends. Determine who refinanced recently and inquire them what they think of the corporation. Do not presme that your current home loan lender is any better than a new lender. Since most home loans are sold in the secondary market, everyone has to meet specific standards, and your existing lender will most likely require the same documentation as a new lender. However, once you have a commitment from a new lender, it does not hurt to ask your existing lender to beat it. Often times they will. Edmonton Mortgage Broker will get you the best rate available.

2. Not obtaining everything in writing about refinancing your home loan. Get everything in writing. No matter what the Loan Official tells you, appeal to him to confirm it in writing. Do not believe someone when they notify you that your refinance rate is assured. Get it in writing.

3. Not understanding the assessed value of your asset. Many people go ahead and try to refinance their home without knowing the true value. There are many places you can get an estimate of the true value of your house for purposes of refinancing. Many realtor sites have home value estimators on their site. For the price of listening to a mortgage corporation attempt to sell you a mortgage, you can get an approximate value for your home.

Verify the recent sales in your locality and try to discover a alike house in a similar location. Or you can ask the appraiser to do a drive by and give you a verbal approximation of the value of your house. If it is in the correct ballpark, you can order a thorough appraisal. Know the value of your house before you seek to refinance your home loan.

4. Not doing the math when refinancing your home loan. Do the math. Refinancing your home has a cost. You need to see what the worth is, and then decide how long you are going to settle in your house. For instance, if you are going to reside in your home for 5 more years, and the cost of refinancing your home is $5000, you have to accumulate at least $1000 a year in order for the agreement to make sense. If you only save $50 a month as a result of refinancing (that is $600 a year), you will be losing money.

5. Not considering a 2nd Mortgage. When you refinance your house, you are refinancing the full amount. Assume you have a house that is now worth $400,000, and you only owe $250,000 on the home and you wish to take out $50,000. If you refinance and take out $50,000 in cash your new loan may be for $310,000, ($250,000 owed + $50,000 cash out + a total refinance cost of 3% or $10,000). It may be better to take out a 2nd mortgage for $50,000 and pay a slightly higher interest rate and slightly higher points, but only have a basis of $50,000 instead of the $310,000.

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Shortcut to realistic things to know about the topic of edmonton foreclosure law – please make sure to read the publication. The times have come when proper info is truly within your reach, use this opportunity.

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OK. You’ve made the decision. You’re ready to buy a house.  Great!  You’ve got that dream home pictured in your head.  Now all you have to do is find a Realtor, make your offer and move in.  Right?  Wrong.

Your first step should be to find a trustworthy mortgage professional.   But that’s not the fun part, you may say. Why start with a mortgage professional?  In a nutshell, this can save money, time and increase your bargaining power.

Your mortgage broker is going to be able to tell you first if you can qualify to purchase a home at all.  Second, if you are in the running for purchasing, he or she can tell you how much home you can qualify for.  Think about it.  Do you and your Realtor want to run around for a month or two worth of weekends, finally find your dream home, just to find out that you cannot afford it?!  That’s a lot of time, and time is money (or at least a lot of wasted weekends).  Wouldn’t it be better up front to know what you can and cannot buy, zero in on that, and achieve that wonderful feeling of success?  Of course.

Well, you may have already thought of all that.  However, did you realize that the seller of your dream home may give you preferential treatment if you’re pre-approved?  The seller has a life too and time lines like the rest of us.  They want deals that are going to work.  They don’t want their home under contract, just to have the deal fall through because the buyer cannot qualify!  So, let’s say you make a bid on a house and another party makes a bid at the same time for the same amount.  The other bidder is pre-approved, you aren’t.  Which bid should they accept?  Obvious.  Another scenario, let’s say you (not pre-approved) make a bid and another bidder bids slighter lower but is pre-approved.  Which bid would you accept?

And one last matter to cover, there are different levels of pre-approvals.  The lowest level might be called pre-qualification and this involves the mortgage professional taking your information (income, expenses, etc.), putting it all together and letting you know how much home you can qualify for based on the numbers you provide.  Another level of pre-approval is for the mortgage professional to run the loan through automated underwriting (getting more technical, here) to get an approval provided that all your info can be verified.  The highest level would be running the loan through a lender and actually doing all the verifications.  Obviously, the higher level of pre-approval gives you more to stand on and carries the most weight when bidding on a home.  In any case, your mortgage professional should provide you with a letter stating on what level you are pre-approved.

Hopefully you found this article helpful, it was provided by JVM Lending, the leader in CA Home Loan and California Mortgage loans.