Insider Real Estate Secrets Revealed! (Educational Course for Home Buyers and Sellers) Lesson # 3
Darren Meade
November 17, 2006
Welcome to this week's edition of Insider Real Estate Secrets Revealed! (Educational Course for Home Buyers and Sellers)
We hope you have learned a tremendous amount from our articles and we look forward to providing more educational material to help you on your home buying or selling journey.
In this edition of Insider Real Estate Secrets Revealed, we will discuss 5 costly refinance mistakes you can't afford to make. We will also discover how you can stop renting and finally buy a home of your own! So, sit back, relax, and enjoy this edition.
How to Avoid 5 Costly Refinance Mistakes
Mistake #1 - Refinancing only to obtain a lower interest rate
So why are you refinancing your mortgage loan? Are you trying to save money through a lower monthly payment? Are you trying to reduce your interest rate? Are you hoping to combine your refinance with a cash-out equity loan?
If you're simply trying to find a lower interest rate, make sure you calculate the related fees and closing costs. These fees might make you rethink the process. Unless you can save enough money to easily cover these costs, refinancing may not be right for you.
Mistake #2 - Cash-Out Refi to Pay off Unsecured Credit-card Debt
Many people opt for what's called a cash-out refi. This not only can save you money on your monthly mortgage payment, but can provide you with cash to pay off high-interest credit cards. We recommend that you review all of your options before choosing this path. Are you really desperate enough to get rid of your unsecured debt that you would consider putting your home on the line? Review other options first, like calling your creditors and asking them to reduce your interest rates and save your home equity for a rainy day. Remember, you can always refinance without having to touch your home equity.
Mistake #3 - Not Asking About Points
In their simplest form, Points are up-front mortgage interest fees paid on a loan to reduce the initial interest rate. Points are fees the borrower pays the lender at the time of loan closing. If you pay one point (1%) on a $100,000 loan, then you will pay the lender $1,000 at loan closing, but will reduce your long-term interest rate, which will save you money throughout the life of your loan.
Some loan rates have points already built-in, so you need to make sure the lender is very clear on how many points are being charged.
Mistake #4 - Refinancing into an ARM or Interest-Only Loan
In some cases, it makes sense to refinance into an Adjustable Rate or Interest-Only loan. But be aware of the ramifications. While you might refinance into an ARM and initially save money; over the years, your interest rate may creep up and end up eating-up the refinance savings.
Interest-only loans are another popular option, but they're not right for everyone. Interest-only loans are actually only 'interest-only' for a short period of time, like 5-10 years. This means that eventually, your payment will start to include principal again, and if you can't afford to pay the principal at that time, you might be forced to refinance again! Always plan long-term.
Mistake #5 - Not getting a Guaranteed Lowest Bottom-Line Cost
All lenders are required by law to provide what is called a Good Faith Estimate of Closing Costs. Use this 'Good Faith Estimate' as a tool to find the lowest price. You should ask any lender you speak with for a guarantee that clearly states, in-writing, that they have the lowest bottom-line closing cost. If they can't provide you such a guarantee, in writing, then you should find another lender.
We guarantee our refinance closing costs, in-writing. As a matter of fact, we are so confident that we have the lowest refinancing closing costs that we'll PAY YOU cold-hard cash if you can find a better deal elsewhere.
For more information, schedule a pre-approval or application appointment with us now. At our appointment, we will give you a form that guarantees the lowest costs, in writing.
SPECIAL REPORT! - How to Stop Paying Rent and FINALLY Afford Your Own Home
(.and you'll be surprised to find out how easy it really is!)
Are you tired of paying rent to your landlord? Ready to FINALLY own a home? This special report will show you how easy it really is.
Many people never own their own home because of fear. Maybe you have fear that you'll have to reveal credit problems to the lender and then get turned down. Maybe it's because you've rented for so long, you feel like there is no way out.
It's time to put your fear aside. In this special report, you'll learn why it is easier and cheaper to obtain home financing than at any time in history! You'll learn how you can get approved and FINALLY stop wasting thousands dollars every year on rent.
Here are the main reasons why you most likely have never attempted to become an owner:
1.) You might think that you need 20% down before a mortgage lender will even talk to you
2.) You might think that a couple of past credit mistakes will bar you from getting approved
Well, as you are about to discover, you're wrong on both counts. Let's examine some secrets that most renters don't know:
Renter-Turned-Owner Secret #1
You don't need a 20% down payment in most cases. - There are many federal, state and local programs that are specifically designed to help low-income families with little or no down payment to get into a home. If you are a first-time homebuyer, you may qualify for special loan programs that will assist you in getting approved, even if you don't have the standard 20% down payment.
Renter-Turned-Owner Secret #2
Even people with credit problems can get approved. - Your credit rating isn't the only factor lenders take into consideration when loaning you money. They look at your down payment amount, debt-to-income ratio, and other factors. Especially if you can come up with more than the minimum down payment or provide some form of equity to borrow against, the lender can seriously consider loaning you the money to purchase a home.
Renter-Turned-Owner Secret #3
Some sellers are willing to finance you to purchase their home. - Some sellers may offer to finance you so that you can purchase their home, by using a seller take-back to secure a second mortgage loan.
Renter-Turned-Owner Secret #4
In some cases, the lender will offer to loan you the down payment too! If you have decent credit, and some other asset to borrow against (such as a car), your lender might be able to not only loan you the money to purchase the home, but your down payment also.
FREE Pre-Qualification Session - Now Available
If you would like to find out if you qualify for a home loan, please contact us by visiting our website. We will be happy to perform a FREE pre-qualification session, and let you know how much you qualify for. Even if you don't qualify, we'll tell you exactly what you need to do so that we can provide you with a loan. Remember, it's not 'can we lend you the money, it's simply a matter of when'.
We hope you have learned a tremendous amount from our articles and we look forward to providing more educational material to help you on your home buying or selling journey.
In this edition of Insider Real Estate Secrets Revealed, we will discuss 5 costly refinance mistakes you can't afford to make. We will also discover how you can stop renting and finally buy a home of your own! So, sit back, relax, and enjoy this edition.
How to Avoid 5 Costly Refinance Mistakes
Mistake #1 - Refinancing only to obtain a lower interest rate
So why are you refinancing your mortgage loan? Are you trying to save money through a lower monthly payment? Are you trying to reduce your interest rate? Are you hoping to combine your refinance with a cash-out equity loan?
If you're simply trying to find a lower interest rate, make sure you calculate the related fees and closing costs. These fees might make you rethink the process. Unless you can save enough money to easily cover these costs, refinancing may not be right for you.
Mistake #2 - Cash-Out Refi to Pay off Unsecured Credit-card Debt
Many people opt for what's called a cash-out refi. This not only can save you money on your monthly mortgage payment, but can provide you with cash to pay off high-interest credit cards. We recommend that you review all of your options before choosing this path. Are you really desperate enough to get rid of your unsecured debt that you would consider putting your home on the line? Review other options first, like calling your creditors and asking them to reduce your interest rates and save your home equity for a rainy day. Remember, you can always refinance without having to touch your home equity.
Mistake #3 - Not Asking About Points
In their simplest form, Points are up-front mortgage interest fees paid on a loan to reduce the initial interest rate. Points are fees the borrower pays the lender at the time of loan closing. If you pay one point (1%) on a $100,000 loan, then you will pay the lender $1,000 at loan closing, but will reduce your long-term interest rate, which will save you money throughout the life of your loan.
Some loan rates have points already built-in, so you need to make sure the lender is very clear on how many points are being charged.
Mistake #4 - Refinancing into an ARM or Interest-Only Loan
In some cases, it makes sense to refinance into an Adjustable Rate or Interest-Only loan. But be aware of the ramifications. While you might refinance into an ARM and initially save money; over the years, your interest rate may creep up and end up eating-up the refinance savings.
Interest-only loans are another popular option, but they're not right for everyone. Interest-only loans are actually only 'interest-only' for a short period of time, like 5-10 years. This means that eventually, your payment will start to include principal again, and if you can't afford to pay the principal at that time, you might be forced to refinance again! Always plan long-term.
Mistake #5 - Not getting a Guaranteed Lowest Bottom-Line Cost
All lenders are required by law to provide what is called a Good Faith Estimate of Closing Costs. Use this 'Good Faith Estimate' as a tool to find the lowest price. You should ask any lender you speak with for a guarantee that clearly states, in-writing, that they have the lowest bottom-line closing cost. If they can't provide you such a guarantee, in writing, then you should find another lender.
We guarantee our refinance closing costs, in-writing. As a matter of fact, we are so confident that we have the lowest refinancing closing costs that we'll PAY YOU cold-hard cash if you can find a better deal elsewhere.
For more information, schedule a pre-approval or application appointment with us now. At our appointment, we will give you a form that guarantees the lowest costs, in writing.
SPECIAL REPORT! - How to Stop Paying Rent and FINALLY Afford Your Own Home
(.and you'll be surprised to find out how easy it really is!)
Are you tired of paying rent to your landlord? Ready to FINALLY own a home? This special report will show you how easy it really is.
Many people never own their own home because of fear. Maybe you have fear that you'll have to reveal credit problems to the lender and then get turned down. Maybe it's because you've rented for so long, you feel like there is no way out.
It's time to put your fear aside. In this special report, you'll learn why it is easier and cheaper to obtain home financing than at any time in history! You'll learn how you can get approved and FINALLY stop wasting thousands dollars every year on rent.
Here are the main reasons why you most likely have never attempted to become an owner:
1.) You might think that you need 20% down before a mortgage lender will even talk to you
2.) You might think that a couple of past credit mistakes will bar you from getting approved
Well, as you are about to discover, you're wrong on both counts. Let's examine some secrets that most renters don't know:
Renter-Turned-Owner Secret #1
You don't need a 20% down payment in most cases. - There are many federal, state and local programs that are specifically designed to help low-income families with little or no down payment to get into a home. If you are a first-time homebuyer, you may qualify for special loan programs that will assist you in getting approved, even if you don't have the standard 20% down payment.
Renter-Turned-Owner Secret #2
Even people with credit problems can get approved. - Your credit rating isn't the only factor lenders take into consideration when loaning you money. They look at your down payment amount, debt-to-income ratio, and other factors. Especially if you can come up with more than the minimum down payment or provide some form of equity to borrow against, the lender can seriously consider loaning you the money to purchase a home.
Renter-Turned-Owner Secret #3
Some sellers are willing to finance you to purchase their home. - Some sellers may offer to finance you so that you can purchase their home, by using a seller take-back to secure a second mortgage loan.
Renter-Turned-Owner Secret #4
In some cases, the lender will offer to loan you the down payment too! If you have decent credit, and some other asset to borrow against (such as a car), your lender might be able to not only loan you the money to purchase the home, but your down payment also.
FREE Pre-Qualification Session - Now Available
If you would like to find out if you qualify for a home loan, please contact us by visiting our website. We will be happy to perform a FREE pre-qualification session, and let you know how much you qualify for. Even if you don't qualify, we'll tell you exactly what you need to do so that we can provide you with a loan. Remember, it's not 'can we lend you the money, it's simply a matter of when'.