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Is a Fixed Mortgage Rate Right For You?

Written by Jeffrey Segal on . Posted in Blog

fixed rate mortgage information lighthouse mortgage corp new yorkAfter months of searching the internet for listings, calling Realtors, and viewing property, you’ve finally found the house that’s perfect for you. Congratulations! Unfortunately, your work isn’t over yet. Once you’ve selected the house you want to purchase, you will need to find a way to pay for it. A mortgage is a loan granted by a home mortgage lending company to an individual who seeks to buy a house. There are many different types of mortgages that a home buyer can apply for, but fixed mortgages are by far the most popular, representing over 75% of all home loans. Read on to learn the basics of a fixed-rate mortgage, and find out why it might be the best type of home loan for your new home.

Fixed-rate mortgages are a loan type where the interest rate remains the same throughout the entire loan. This means that the monthly payments do not change, unless there are fluctuations in property taxes, insurance costs, or homeowner association fees. Fixed-rate mortgages typically come in terms of 10, 15, or 30 years. The 30 year option is the most popular option, as it allows for the smallest amount of payments each period.

Each month’s payment is calculated by multiplying the interest rate times your home loan premium, plus a portion of the premium itself as stated in your mortgage contract. Since the amount of your outstanding premium is reduced each time you make a payment, the amount of interest will also decrease. This means that more of your payments go into your mortgage as time goes on.

Fixed-rate mortgages are the most popular due to their ease and predictability. When comparing between fixed mortgages, remember to calculate in other fees that buying a house may incur, such as closing costs. Closing costs are, on average, about 2% of your mortgages loan amount. Before choosing a fixed-rate mortgage, be sure to do extensive research on the different loan offers, and make sure to find the one that best fits you and your lifestyle.

Are You A First-Time Home Buyer? Avoid These Big Mistakes

Written by Jeffrey Segal on . Posted in Blog

home mortgage lendingThe economy is on the mend, and that means more young Americans are entering the housing market. Purchasing your first home is always a memorable experience; the goal is to also make it a positive one. With some precautions, homeowners-to-be in the United States can make certain that they invest in homes that serve them well for years to come. Here are a few critical mistakes to avoid:

Going All-In
Buying your first home is exciting. That’s for sure. And you may be pleasantly surprised by the sheer number of options available to you. That doesn’t mean that you should act on your impulses. Yes, you may be able to afford a more expensive home by choosing a mortgage type or home loan type with a higher interest rate or a longer term (most home mortgage lending terms are 10, 15, or 30 years), but that may not necessarily be in your best interest. Keep in mind that you’ll have plenty of other expenses on top of your monthly mortgage payment. Although it varies, most financial experts recommend keeping mortgage payments at around 25 to 33% of your monthly income. Another thing to remember: If you purchase a more expensive home, the down payment will be considerably higher. It is wise to save up about 20% to avoid extra costs, fees, or insurance, and 20% of $200,000 is a lot more than 20% of $75,000.

Lacking Creativity
Let’s say you’re on the right track when buying your home. Your home loan is pre-approved and you’re ready to make an offer, only you reconsider at the last moment because that chintzy, ’50s wallpaper in the dining room really is that hideous. Not so fast! While there are some things about the home mortgage lending and purchasing process you cannot change (e.g. you’ll have to wait to age 62 to qualify for a reverse mortgage, and an extra noisy neighborhood isn’t likely to change), you can definitely take steps to fix small imperfections in a potential home. Appliances, molding, wallpaper, or paint shouldn’t turn you off too much, especially if everything else is perfect.

First-time home buyers, create an experience you’ll always remember — and fondly, too. Carefully consider expenses and your budget prior to making any big decisions, and prioritize features and amenities for the best home-buying process.

What’s Standing In The Way Of Millennials Buying Homes?

Written by Jeffrey Segal on . Posted in Blog

buying your homeFor the first time in years, millennials are optimistic about buying homes — and, for that reason, 2015 may be one of the strongest years for the housing market yet. More specifically, a recent survey by Realtor.com of individuals visiting their website shows that, in just six months, the percentage of those millennials who hope to buy a home in the next three months climbed from 54 to 65%. Why are attitudes shifting so quickly? For now, the answer or answers to that question are mostly speculation. A growing housing market (meaning more houses up for sale) and a recovering economy are some of the most likely reasons.

However, millennials — and particularly those who are would-be home buyers — aren’t necessarily out of the woods yet. There are still a few things America’s youth needs to carefully think about and address before purchasing a home:

The Number One Obstacle
The number one problem getting in the way of millennials’ dreams to own a home is a credit score that leaves something to be desired. Poor credit can easily get in the way of buying your home — and that’s a big deal, given that 75% of Americans have credit scores under 700. Improving your score gives you more options (that is, you will be eligible for more mortgage types and loan types) and increases your chances securing your mortgage or your home loan period.

It’s All About Savings
The next big thing to consider is the down payment. Whether you choose a 10, 15, or 30 year mortgage, putting money down is a must. Industry experts recommend putting down at least 20% when buying your home. Of course, saving up even more for a down payment will only lower payments and/or interest rates and benefit you in the long run.

More millennials plan to enter the housing market within the next year — and, with some careful planning, would-be homeowners can realize their dreams as soon as possible.

Student Loan Debt And Mortgages: Here’s How To Make It Work

Written by Jeffrey Segal on . Posted in Blog

best type of home loanStudent loan debt is on the rise — with the average student now graduating with debt “approaching $30,000,” according to U.S. News and the Institute for College Access and Success. While this isn’t good news based on any measure, new studies show it may have even more of an impact than people think. Student loan debt has already lead to an 8% decrease in mortgages and home purchases among Americans ages 20 to 39, and, if prospective home buyers do not take action, that is only likely to get worse. Thankfully, there are plenty of things U.S. men and women can do to reverse this downward trend. Here are just a few:

Reduce And Restructure Debt
Fixed mortgages are the most common loan type or mortgage type, accounting for three-quarters of all home loans. Of course, for many young Americans, the trick is getting a mortgage — any mortgage — in the first place. Reducing and/or restructuring debt is one of the best ways to do it. And paying off student loans in their entirety isn’t strictly necessary. Young Americans and prospective home buyers can also pay off other debts whenever and wherever possible. For example, if it is more feasible to pay off credit card debit, do it. This will reduce your debt-to-income ratio and improve your credit score (with more than 75% of Americans having a score below 700). Another option for reducing debt and ultimately securing the best type of home loan is to restructure current debt. Refinancing auto loans — or putting it in the other partner’s name (a smart option if one of you stays at home) — is another way to do it.

Increase Income
This way may be easier said than done, but, if student loan debt is simply a reality that you cannot avoid, weight the possibility of increasing your income. Is it possible to get a second job? Is is possible to work overtime? Doing these things may not be easy, but they ultimately go a long way when it comes to securing your mortgage and buying your home.

The best type of home loan for many young Americans isn’t one that is 10, 15, or 30 years long — it is the one that they can afford, and reliably secure. Increase your chances of qualifying for a home loan by reducing debts and/or increasing income.

Over One-Third Of Americans Don’t Know Their Mortgage Rate

Written by Jeffrey Segal on . Posted in Blog

your mortgageThe very last thing you want is for your mortgage to be an elusive thing. More often than not, however, that’s exactlyhow it works. According to research by Bankrate.com, 35% of homeowners admit that they don’t even know what their mortgage rate is. Of the 65% who are “very confident” that they know, analyst Holden Lewis says it’s very possible that they’re too confident. After some digging, even homeowners who claimed to know their mortgage rate were off by a couple of percentage points. What does this mean? Apparently, there are a lot of things Americans do not know about home mortgage lending and mortgage types. Here are some things to know before securing your mortgage:

A Mortgage Broker Can Be A Valuable, Time-Saving Asset
What is the best type of home loan? What is the key to finding the very best rate? Just about everyone thinks the process entails seeking out the best loan type and rate on his or her own. Mortgage brokers will collection your financial information, and do whatever they can to find the best home loan to suit your needs. Not only does this save you time, but mortgage brokers — with several years or even decades of experience under their belt — may know a quite a few tricks that you don’t.

Don’t Listen To Heresy About 30-Year, Fixed Mortgages
Although fixed rate mortgages are the most popular choice (preferred by 75%) and 30-year-mortgages are the most popular option, there will be at least one or two very opinionated people in your life who will tell you that you want to go the extra mile to get a 10- or 15-year-mortgage at all costs. If you plan to live in your house for a long time, this just isn’t true. Securing a fixed rate can help you pay a low rate — the one you originally agreed to — for years to come. If rates somehow go lower, homeowners can always choose to refinance their homes (and, at 62, homeowners qualify for reverse mortgage options).

Mortgages can be tricky. Do yourself a favor, and do a few things: 1. Know your mortgage rate, 2. Work with an experienced broker, and 3. Don’t be afraid of a 30-year, fixed mortgage if it suits your needs.