Home mortgage loans are offered against collateral security of the property you purchase. However, you possess the house you purchase and have its ownership as well; the lender also has an “ownership interest” on it until the loan has been paid.

The mortgage loan rates have come down, which makes the mortgage loans attractive for borrowers. Mortgage loan rate varies according to loan plans. Fixed interest loans have an interest that is fixed for the entire loan tenure. Here the mortgage loan rate never changes.

Another type of mortgage loans is flexible-interest mortgage loans. The interest rate of flexible interest mortgage loans increase or decrease depending on the market condition and the national economy. Consequently, your mortgage loan’s term may go up or down but the monthly mortgage payment will remain same.

Mortgage Loan Application Process

Mortgage loan application is filled in after deciding the mortgage loan plan. This application for mortgage loans has columns related to your personal details, income details, credit history and the details of the property that you propose to buy. You may be asked to submit documents as proof of information you provided along with your mortgage loan application form.

On receiving the mortgage loan application, a mortgage loan advisor will contact you for verification of the details. After verifying your details and your income source, a surveyor will survey the property and evaluate it. On successful verification, you will be granted the mortgage loan amount to purchase your home.

Things To Remember Before Selecting Mortgage Loans

Your home mortgage loans will be amortized in regular monthly instalments. The most popular term for home mortgage loans is 30 years. The choice of mortgage loan term depends on your repaying capacity. A long-term mortgage loan plan has low monthly repayments. However, you end up paying more interest on your loan.

A short-term mortgage loan such as 10 or 15 years has high monthly payment. However, the total interest that you pay on that mortgage loan is lesser. Before you apply for a home mortgage loan, calculate your current and future income and then decide the period for which you need the mortgage loans.

We suggest you to choose a term for mortgage loans that has comfortable payment plan to let you own the house and still have sufficient funds to enjoy your life.

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No one likes to be saddled with a long-term debt such as a 30-year mortgage. Because of this many ways have been thought up where people can pay off their mortgages well ahead of schedule.

These methods sometimes promise you’ll be paid off in 7 years, some 10 years, 15 years and some incredibly promise you will pay off your mortgage 26 years ahead of schedule. I’m sorry, but now I must hit you with sobering thought number 2: there are only two ways to pay off your mortgage early!

By the end of this article you will find out what these two ways are, but first let’s talk about some of the not so real ways.

Accelerator mortgage

With an accelerator mortgage, you pay every cent you make into a mortgage account and at the end of the month your mortgage payment is taken out of the account. Proponents of the accelerator mortgage say it works because this account you pay into pays interest and that compounding interest negates the interest you are paying on the mortgage.

However, when the agent sets up your accelerator account, he/she asks you how much you want to leave in your savings each month to be paid toward the mortgage. You will even be egged on. They will ask, “$250, $500, $1,000?” $1,000! Heck, if you paid that much toward your mortgage each month, you would pay off any mortgage way ahead of schedule!

If you were to say, “well, nothing. I don’t have anything left after groceries and other expenses.” They won’t want to give you the mortgage because the compounding interest in this mortgage account means very, very little. The heart of the accelerator plan is you pay extra principal in the way of savings left in your account each month.

Biweekly, Bimonthly and Weekly Plans

With the biweekly plan you are led to believe making two payments a month, which together equal the same amount you have been, paying monthly, will take 7 years off the time it takes to pay off the mortgage.

In reality, with a biweekly plan you make 26 half payments or 13 monthly payments each year instead of 12 so, of course, you will pay off your mortgage a lot sooner. The backbone of this plan is you are led to believe you will not be paying more money each month, but the fact there is more than 4 weeks in a month is the real reason it works. Oh, and by the way, for getting fooled like this you get the pleasure of paying about $1,000 upfront in fees to convert to the biweekly plan!

There is no such thing as a bimonthly plan. It is just a Biweekly plan improperly titled. Weekly plans are the same as biweekly plans cut up into smaller payments, but the same arithmetic applies.

The only two ways

The conclusion is there are only two ways to pay off a mortgage ahead of time. One is to pay more principal each month. For instance, the payment on a 30-year mortgage for $200,000 at 6.25% is $1,231. However, if you pay an extra $270 each month, you will pay off the mortgage in full, 11 years ahead of schedule and you will save over $100,000!

The only other option you may be able to get that will help you pay your mortgage earlier is to get a lower interest rate and continue to make the same monthly payment. In the example above, if you were able to refinance at 5.50% but you continued to pay $1,231 monthly, you would have that mortgage paid in full in 25 years, instead of 30 years.

Still, paying $1,231 monthly is the same as making additional payments toward principal because the scheduled monthly payment for $200,000 at 5.50% is $1,135. So, here is the final conclusion; you can try to fool math, but it is just as futile as trying to fool Mother Nature. You can’t do it! To get your mortgage paid ahead of time, you have to make principal payments ahead of time one way or another. That is all there is to it!

Ed Lathrop is a successful real estate investor. He has developed EzCalculator, a mortgage calculator that shows you how to save $100,000 on your mortgage. Come visit this free site at free financial calculator . Also, find out how to get and use your amortization table to make big money at amortization schedules free. These sites are not owned by any lender, so no one will harass you for visiting!

What is a second mortgage?

A second mortgage is basically taking out a second loan on top of the existing loan on your home. This loan is secured with the property for collateral. If for example the value of your home is $200 000, but you still owe $140 000 on the loan, then the $60 000 difference is known as your equity. When borrowing against the $60 000, you would then be taking out a second mortgage.

Why take out a second mortgage?

People take out a second mortgage for various reasons. They want to finance home improvements, purchase a second home, consolidate other debt for a lower interest rate, purchase a new car or pay for university tuition. Whatever the reason may be for taking out a second mortgage, first make sure there is a way of recouping the money. It is especially not wise to spend a vast amount of money on a car when it already starts losing value the moment you drive out of the dealership. It makes more sense investing in a business.

Refinance is an option

Before you decide to apply for a second mortgage, first consider refinancing. Firstly, taking out a second mortgage usually implies a higher interest rate. Rather keep your current rate or try and refinance for a lower one. Secondly, sales people get a lot of commission out of second mortgage transaction. Lastly, when choosing to refinance, you keep some equity in your home. And if there is really an emergency you, still have an exit door. But, if the prices of houses fall the value of your house is down, you could end up with negative equity and even more debt.

What to look out for

The interest rate of a second mortgage tends to be higher than the primary mortgage, due to the fact that if any problems occur, payment would first be made to the first mortgage.

Companies also charge a lending fee, also known as points. One point is equal to one percent. For example, if you are borrowing $500 000 with a lending fee of 10 points, you will pay $50 000 in points. The points differ from one company to another; therefore I recommend shopping around before making a final decision.

Be aware of balloon payments where payment starts low, but increases very quickly. Rather take the fixed rate option.

Lastly, dont forget the additional closing costs such as, appraisal fees, application costs etc. If you arent capable of paying these fees, you may not be able to take out that second mortgage on your property.

If you are considering applying for a second mortgage, please think it through very carefully and consider all your options before making a final decision on taking out a second mortgage application.

Peter Owen owns a number of properties and helps new home owners and investors reach their property goals. You are welcome to follow these links to apply for a second mortgage. Its free. Second Mortgage or Property Refinance

Here is where the Veteran Home loan program excels over competing loan products. VA mortgages allow for a home to be financed in one loan up to 100% of the acquired home’s value. In addition, the seller is allowed to pay most-if not all-of the closing costs and prepaid items. This means little to no cash out of pocket. Most housing types are eligible: residential homes, condominiums, townhouses, manufactured homes, new construction and even 1-4 unit rentals (additional conditions apply). If lack of available funds is the issue preventing home ownership, VA Loans offer the solution.

Still, very few veterans take advantage this type of mortgage. It is a shame that more veterans don’t familiarize themselves with this benefit. The interest rate is the same or lower than most conventional financing. The mortgage products offered range from 10-30 year fixed rate mortgages, ARM’s (adjustable rate mortgages), and even temporary buy-downs are allowed. The eligible loan amount is the same as a conforming conventional loan-currently at 417K. In addition, VA financing can be used for refinancing existing homes. As you can see, the product isn’t the problem. The product is as competitive as most that is available. The lack of awareness is the problem. Ask your mortgage broker or lender to explain your options. If they don’t offer the VA mortgage, then find someone who does. We at Venture Development offer VA loans. In the end, you may end up with a conventional or FHA loan if these products are better suited for your situation. Until you compare mortgage options you won’t know what is right for you.

Another advantage of a Veteran mortgage is the flexibility found within the underwriting process. Employment history is very flexible. Credit for all types of mortgages is more stringent today than in the past. That being said, the focus is going to be on the last 12 months of payment history. Underwriting can use alternative sources of credit such as utility bills and cancelled checks if the credit depth is weak. A prior BK or foreclosure is also forgivable. Depending on the type of bankruptcy, you would be eligible one to two years following your discharge date if you’ve reestablished positive credit.

Who is eligible to obtain this loan? Many veterans and even some of their spouses can obtain a veteran mortgage. Here is a very short list of who is eligible: Veterans who served during WWII, Korean Conflict, Vietnam War, or Persian Gulf Conflict AND who have served 90 days of active duty, or have been honorably discharged, or were National Guard/Reservists activated. Veterans with service during Peacetime periods and active duty military personnel must have had more than 181 days of consecutive active service before becoming eligible. Reservists and National Guardsmen are eligible after 6 years of enrollment in a selected service. There is even a program for non active duty spouses. Consider this: an un-married spouse of a veteran who died while in service or from a service connected disability or a spouse of a service person who is considered MIA/POW for at least 90 days are also eligible.

Veterans have spent a part of their live defending our way of life. Freedom isn’t free. Why shouldn’t they be allowed to participate in the very same American Dream that they selflessly protected for you and me. The VA loan was created to help those that have helped all of us. Collectively we can spread the word about the benefits of this unique type of loan.

Minnesota Mortgage Broker-Venture Development 952-285-4319 MN mortgage broker at my website at ventureloanapp.com John Mazzara sells Minnesota real estate in the Twin Cities(Minneapolis/St Paul), MN with RE/MAX 952-887-1290 MN real estate at my website at selling.mn We offer mortgage loans programs for First time buyers, investment property, refinancing & consolidation of debt

Unfortunately, there is a lot more involved in a monthly house payment than principle and interest. It is these extras that can make the difference between making mortgage payments with ease, and foreclosure.

In this article you will find out how to calculate a mortgage payment the right way, in its entirety. By doing this, you will borrow an amount of money you will be able to pay back without stress. This will make it easier to budget your money without fear of getting behind on your payments.

Principal and Interest are the Starting Point

$100,000 financed for 30 years at 7% requires a mortgage payment of $665.30. Knowing this in today’s market gives you a heads up when you need to quickly estimate a mortgage payment. Of course, the mortgage payment you will be estimating will be the interest and principle only. This is the starting ground from which your monthly house payment will be calculated.

For simplicity’s sake, we will say you are thinking of buying a home where you will need a mortgage of $200,000 and the going interest rate is 7% and, like almost everyone else, you will be financing for 30 years. This means your principle and interest payment will be 2 times $665.30 or, $1,330.60 a month. Now, what else will be added to this amount each month?

Taxes and Insurance

Most lenders make sure you have homeowner’s insurance. They will also see to it you pay your property taxes. They do this, not so much because they are nice guys, but because they don’t want somebody else to take your property away from them. How could this happen?

If someone got hurt on your property and successfully sewed you, they could take everything you had, including your house. This would give your lender a legal burden they wouldn’t want or need. To prevent this from happening, the lender usually collects money from you each month to pay for your homeowner’s policy. This way you and they will be protected against this kind of suit.

Another entity that could fight your lender for ownership of your house is the local government and this is exactly what they will do if you default on your property taxes. For this reason, the lender will collect money from you every month to be used to pay your property taxes.

You can figure your yearly property tax will cost you at least, 1 to 2% of the worth of your home. So, on a $240,000 property, you can guess you will be paying $2,400 to $4,800 a year. This calculates to $200 to $400 a month.

This amount will depend upon where you live. You should be familiar with a town’s mill rate before you buy a home there. Your homeowner’s policy will cost about $700 to $1,000 a year, so you can figure around $75 a month for this expense.

Water and Sewer

Another pair of monthly housing expenses are water and sewer. If you live in the city, this is a classic case where they get you coming and going. City water will easily cost you $50 a month and the sewer, which is just another word for tax, will cost you, in some cities, about $1,000 a year, which figures out to $85 a month.

If you live out of the city, your water and sewer charges become the cost of the upkeep of your well and septic system. However, after all is said and done, one problem with either one of these things will cost you an amount that will be close to what the cost is for city water and sewer.

These costs will come at much larger intervals than a monthly expense but they will be much greater amounts. In other words, it all evens up in the long run. Or should I say it all comes out in the wash?

Your Payment is Bigger Than the Calculator Told You

The end of the story is, to pay this $200,000 mortgage; you will need to pay $1,330 a month for interest and principal. Plus, you will be paying, let’s say, $300 a month property taxes and $85 a month for homeowner’s insurance. So far, this amounts to $1,710 monthly. Then add $50 for water and $85 for sewer and you will come up with $1,850 a month for your real mortgage payment.

Of course, there are more expenses required to live, but taxes and insurance, along with water and sewer are things that people who rent don’t ordinarily pay. It is knowing about these expenses in advance that is the key to realizing you could be overextending yourself financially thus, risking foreclosure. So, be sure to calculate your complete monthly mortgage payment before you say, “I’ll take it!”

Ed Lathrop is a successful Real Estate investor. He has developed EzCalculator, a Mortgage Calculator that shows you how to save $100,000 on your mortgage. Come visit this free site at Free Financial Calculator. Also, find out how to get your amortization schedule and use it to save big money at: Amortization Schedules Free. These sites are not owned by any lender, so no one will harass you for visiting!