Latest digests
tips of residental mortgages

Primary Residential Mortgage was founded in 1998 with the goal of being a locally-known yet nationally recognized home loan company. Our CEO and founder, Dave Zitting offers a clear and focused vision for helping Americans finance their homes through a positive and personal loan experience. That focus, combined with a culture of teamwork and integrity, funnels down throughout our organization and provides our customers with the service and attention that is required in today's lending landscape.

I began my career in mortgage financing in 1998 in an environment of quality documentation and common sense, which drove the underwriting rules. Over the following six years those standards had been loosened, which ultimately led to a worldwide recession. The rules in place today, both in terms of internal industry controls and federal and state regulations, have made documentation of the customer's finances critical and necessary. There is no denying that some of these new rules are stringent and customers often have difficulty with how invasive lenders are today when it comes to their financial picture. My advice has been to speak to a qualified mortgage consultant well in advance of purchasing so they can guide you through some of the most common pitfalls customers struggle with. When the time comes to create an application and gather everything for your loan it is imperative that as a consumer you are an active participant in getting your own loan cleared by the underwriter.

When it comes to getting a mortgage loan, homebuyers have fewer options than they had during the boom years. From the early 2000s until 2008, lenders were much more willing to float exotic loans based on risky terms, but they have returned to safe and sensible home financing.

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars in interest: Make additional payments that go toward the principal. Borrowers use different methods to accomplish this goal. For many people,Perhaps the simplest way to organize this process is by making 1 additional payment a year. If you can't afford to pay an additional whole payment all at once, you can divide that payment by 12 and pay that additional amount monthly. Finally, you can pay a half payment every two weeks. Each of these options yields different results, but each will significantly reduce the length of your mortgage and lower your total interest paid.

Paying consistent additional payments toward your principal balance will yield huge savings. People employ various techniques to meet this goal. Making 1 extra full payment once per year is probably the simplest to keep track of. However, some folks won't be able to afford this huge additional payment, so splitting an extra payment into 12 extra monthly payments is a fine option too. Finally, you can pay half of your mortgage payment every other week. These options differ slightly in reducing the final payback amount and shortening payback length, but they will all significantly reduce the length of your mortgage and lower your total interest paid.

There's a simple trick to reduce the repayment period of your mortgage and save you thousands over the course of your loan: Make additional payments which apply toward the loan principal. Borrowers can do this in several ways. For many people,Perhaps the easiest way to organize this process is to make 1 extra payment a year. Of course, many people will not be able to afford such a large additional expense, so dividing an extra payment into 12 additional monthly payments works as well. Another very popular option is to pay a half payment every two weeks. The effect here is that you will make one additional monthly payment each year. Each of these options produces different results, but they will all significantly shorten the duration of your mortgage and lower the total interest you will pay over the life of the loan.

It may not be possible for you to pay extra every month or even every year. Keep in mind that almost all mortgages will allow you to make additional payments to your principal at any time. Any time you come into extra cash, consider using this rule to make a one-time additional payment toward your mortgage principal. Here's an example: a few years after buying your home, you get a huge tax refund,a very large legacy, or a cash gift; , you could pay a portion of this windfall toward your loan principal, which would result in huge savings and a shortened payback period. Unless the loan is very large, even small amounts applied early in the loan period can produce huge savings over the duration of the loan.

Not only are fixed rate mortgages the most popular of home loans, but they are also the most predictable. The rate that is agreed upon in the beginning is the rate that will be charged for the entire life of the note. The homeowner can budget because the monthly payments remain the same throughout the entire length of the loan. When rates are high and the homeowner acquires a fixed rate mortgage, the homeowner is later able to refinance when the rates go down. If the interest rates go down and the homeowner wants to refinance, the closing costs must be paid in order to do so. Some banks wishing to keep a good customer account may wave closing costs. If a buyer buys when rates are low they keep that rate locked in even if the broader interest rate environment rises. However, homebuyers pay a premium for locking in certainty, as the interest rates of fixed rate loans are usually higher than on adjustable rate home loans.

After all, the number of different types of mortgages available, when combined with the ‘industry speak’ used to describe them, can confuse even the most astute home loan rookie. So, without further ado, here’s Your Mortgage’s guide to some of the most common specialist products.

Recent history provides an important lesson in that. Many investors who bought in the boom years before 2007 struggled as mortgage rates rose. A sizeable number were thrown a lifeline when the base rate was slashed to 0.5 per cent.

Property investing has paid off handsomely for many people, both in terms of income and capital gains but it is essential that you go into it with your eyes wide open, acknowledging the potential advantages and disadvantages.

Mortgage loans are typically much larger than most other types of personal loans. As a result, the screening process to determine borrowers’ eligibility is more rigorous, at least in theory. Banks try to make loans, to borrowers who have high likelihood of paying back the loan, or at the very least try to price the loan at an APR that is high enough to account for any additional risk that they would be taking on by lending to unqualified buyers. Banks judge potential borrowers based on several criteria.

Thank you so much for your quick responses to my questions, Mike. I really appreciate it! You are always dedicated to giving the best service! Look forward to working with you again on another mortgage loan!


Related articles