Mortgage Refinance - Is Your Credit Ready For A Mortgage

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Home Loans And Refinancing - Borrowers Beware
Mortgages...if you are planning to purchase or refinance your home you should be very careful about the home loan you select. There are many gimmick loans on the market today like "interest only loans" and "negative amortization loans" which help people buy over priced property by the skin of their teeth. Having been a loan officer for a number of years in the past, I have often wondered why peopl... Read refinance mortgage article



Refinancing After Bankruptcy
Refinancing after a bankruptcy can seem like an especially difficult challenge, but it doesn't have to be. Six months after your bankruptcy has been finalized, you can find lenders willing to refinance your mortgage. In fact, refinancing your mortgage can help rebuild your credit to good standing in two year's time. The following steps will help you find the best refinance lender while helping you... Read refinance mortgage article



Mortgage Refinance - Is Your Credit Ready For A Mortgage
To help determine whether you're ready to take on a mortgage or not take a look at your finances. Two things that you really want to take a look at are your credit score and current debts. These two factors greatly determine how much home you can afford.

Credit Scores.

What determines a good credit score depends upon the scoring model and the lender. Some credit reporting companies will score you on a scale of 300-900, or on a scale of 350-850. In either case the higher the number the better. The more popular scoring model is 350-850. In general if your credit score is better than 750 you have excellent credit. You should be able to get the best interest rate on the market. But even if your credit score dips to 700 some companies will still consider you a top tier customer and give you the best rate they have to offer. In general 680-750 is considered very good, but again that is considered in the eye of the beholder when it comes to lending companies. A credit score below 620 will make it hard to secure a mortgage, as anything below 620 is considered poor credit for buying a home. There might still be some mortgage lenders who will be willing to work with you. However, this will mean a higher interest rate. Ideally you want your credit score to be above 720 to secure a premium loan. If you need help with your credit visit one of our sponsors.

Current Debts.

To help determine how much you will be able to borrow there are two numbers you should remember, 28 and 36. No more than 28% of your gross monthly income (before taxes) should go towards housing costs. This includes your mortgage payment, property taxes, homeowner and mortgage insurance, and home owner's fees if applicable. Your total monthly debt payments should not total more than 36%. Total debt includes housing costs, payments on car loans, student loans, and other long term debts (debts with more than ten months left to repay.) For example Charlie makes $3,000 a month. Ideally his total monthly debt payments shouldn't exceed $1,080. Of that $1,080 no more than $840 should go towards housing costs and no more than $240 should go towards other monthly debts. If your monthly debts greatly exceed 8% of your monthly income you may want to visit one of our debt consolidation sponsors.

How This Affects the Amount of Home You Will Be Able to Afford.

First of all your credit score can have a direct impact on how much home you can afford. For instance let's say you qualify for a mortgage with a monthly payment of $570, a 30 year mortgage at 5.5% interest will get you a $100,000 mortgage, at 6.5% it becomes a $90,000 mortgage, and at 7.5% interest you're looking at a mortgage that's a little over $80,000. Point being the better your credit score, the better the interest rate, which means you'll be able to afford a whole lot more home for your money.

How Excessive Debt Could Affect Your Qualifying Mortgage Amount.

Remember our above example with Charlie. Charlie makes $3,000 a month. Ideally his total monthly debt equals $1,080 or less, of which $840 went towards housing costs and $240 went towards other long term debt. With a 30 year mortgage at 6.5% interest Charlie is looking at about a $117,000 mortgage. If Charlie's non-housing debt equaled $340 a month then he could only afford $740 a month towards housing. Now Charlie is looking at a $105,000 mortgage. These figures factor in that property taxes and insurance (included in housing costs) would equal approximately $90 a month in Charlie's case.

For more info please visit us at www.loans-and-insure.com

Shawn Henson is editor of http://www.loans-and-insure.com and http://www.clickmortgagequotes.com helping you with your mortgage needs.

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Mortgage Refinance Loan

Is your home loan interest rate higher than the national average? Is your home in need of some much-needed repairs or are you in need of some extra money to pay off credit cards or other bills? A mortgage refinance loan may be exactly what you need to take care of these needs and any others that you might think of.

If your interest rate is higher than normal, it is a good idea to refinance your loan. A lower interest rate can make your monthly payment lower and easier to manage. If you are having financial difficulties, this can be especially helpful. If your finances are pretty steady, then you may be able to get a shorter-term loan when you refinance so your loan will be paid off much sooner. This is great if you are planning to stay in your home for the rest of your life or for longer than the length of the loan. If you are planning to move within ten years, then a shorter-term loan will most likely not be as important to you as a lower payment would be.

If you are in need of some money to pay off credit cards, make needed home repairs, or even to take a vacation, then you might want to consider refinancing your home. You first need to find out if you have any equity built up in your home. Equity is the value of your home versus the amount that you own on your house. Let us say that your home is now worth $125,000 ten years after you purchased it and you owe your lender $95,000. The equity that you have is $30,000. You can borrow up to $125,000 against your home and can use the $30,000 equity for repairs, bills, or anything else. You need to decide if your intended use is worth you refinancing your loan for 15 years or more. The good thing about home loans is that they are tax-deductible in most cases, so this may be a good benefit for you.

Refinancing will mean that in most cases you are starting your payment term all over again. This is something that you need to keep in mind before signing on the dotted line. You need to know all of your options before you decide that this is your only option. Home loan refinancing is a big business and many companies will offer you the moon to get you to refinance. You need to take into account the closing costs and fees of the loan to ensure that it is a right choice for you.

If you do all of your research and come to the conclusion that refinancing is right for you then you need to find a lender that you are comfortable with. Check around to several different lenders to find the best interest rate for your loan to ensure that you are getting the best deal. Then you are sure to find a mortgage refinance loan that you are satisfied and happy with!

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For a Home loan mortgage refinance loan Please visit us at http://www.1st-mortgage-home-loans.com


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