When Sam and Holly went out searching for mortgage information at their local bank and mortgage banks, they ran into a lot of jargon. To them that was one of the most intimidating aspects of getting a loan, is trying to sift between jargon and fact. They found there was plenty of misinformation and myth getting a loan. If you talk to five different people, you may get five different opinions and observations about their mortgage.
One myth: Never take out an adjustable rate mortgage (ARM). There are plenty of horror stories from the housing crash that tell you about the borrowers who got into trouble with ARMs. The truth is that ARMs rates are lower and are perfect for someone who knows they will be in a house less than five years. If you plan to stay in a house for longer than five years, you need a 15 year or 30-year mortgage.
Sam and Holly found out there are No True First Time Homebuyer Programs. According to CT Homes “One of the biggest myths in the home buying community is that there are discounts for first-time homebuyers. There are cleverly worded programs for new home buyers, but there is no rate discount or down payment reduction solely for first-time buyers. Where buyers may be confused is with FHA or other minimal down payment programs. Those programs offered only to buyers without any other mortgages. If you are working with a lender or mortgage broker, who claims to have an exclusive first-time homebuyer program you may want to ask exactly what it entails.”
You must make your mortgage payment on the first of the month. Fact: You aren’t late if you pay by the 15th. After that, the lender will ssess you a late fee of $50 to $100. Paying on the 20th of the month may still leave you with a late fee from your lender but not a mortgage late on your credit report. You are not late in the eyes of a creditor until you are thirty days late.
Further, a foreclosure starts after a homeowner misses four consecutive mortgage payments. At that point, they receive notice from their lender that they are moving to foreclose the property. This shouldn’t exactly come as a surprise. Starting from the first month, you are late, and you will receive notice from your lender every few weeks with attempts to modify or restructure the loan. Depending on the specific lender once you hit the 90-day late mark they may only accept the total amount owed. Then you can’t pay one month and stall foreclosure. You must bring the whole account current including late fees.
It is true; extra principal payments really do work. If you are looking to pay off your mortgage as quickly as possible, extra payments towards principal will accelerate the payoff. On a thirty-year mortgage one extra mortgage payment towards the principal every year will knock roughly seven years off the mortgage. On a fifteen-year term, one payment can chop off four years. Make sure that when you make an extra payment, you note on your check that this payment is an extra payment. Otherwise, it could be credited toward interest.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. We offer the simple truth about your home and how we can help you sell it fast to resolve any situation.
If you’d like to give us a ring, we would be more than happy to spend some time with you to help you understand the process and to get all of your questions answered. You can reach us at 402 999.0577.