3 Steps to Finding Great Mortgage Loans

Just like many things in this world, not all refinancing mortgage loans are created equal. In fact, there are numerous loan offers that you might find scouring the Internet or by visiting with multiple mortgage loan consultants. The question is: How do you determine which mortgage loans are great mortgages? Well, as the saying goes, great things come in threes...or in this case, in three steps.

The first step to finding a great mortgage loan is to hire a quality mortgage consultant. In the real estate business, that means having a mortgage loan consultant who operates with transparency so you'll know every fee that you'll be assessed and the amount of each fee. A transparent mortgage loan consultant will also explain everything-even the things you don't ask but need to know-in plain language so that you fully understand everything related to obtaining a mortgage.

The second step to finding a great mortgage loan is to find an appropriate mortgage loan. What does "appropriate" mean? It means that the mortgage consultant you've chosen to work with has located a mortgage loan that has a feasible interest rate for the payments you can afford; the lower the mortgage rate, the better. There is a catch: Mortgage loan consultants in Florida, California, New York, or anywhere else in the US can only offer you the mortgage loans that you are eligible for, which is based on the current market rates and your credit score. Therefore, be sure to keep tabs on both.

The third step is to put on a pair of mortgage loan blinders. By that, I mean you need to narrow the scope of the types of loans you'll entertain; only consider loans that are 100% buyer-friendly. Ideal buyer-friendly loans give you, not the lender or the mortgage broker the advantage. Buyer-friendly loans have flexible loan terms. For instance, the loan may be available as a one to ten year loan; it may be available as an open, closed, variable, or convertible mortgage. Another key sign of a buyer-friendly mortgage loan is that the mortgage allows you to have some control over the interest rate. If a mortgage loan consultant says that "points" is an option, it's an offer worth considering. Mortgage loan points, in case you don't know, allow you to decrease the interest rate on a given loan. Though buying points will increase your initial mortgage loan costs, it'll mortgage refinancing you money in the long run. That's why it's a great option to have, regardless of whether you utilize it.

If you follow the steps above as you begin hunting for your perfect mortgage loan, you won't have any problems finding a loan that you can live with. Keep in mind that finding such a loan does take time. Be patient, plan ahead, and most importantly, find the right mortgage consultant or firm to help you along the way first!

Mauricio Navarro is writer and adviser to CompareMortgageQuotes.ca - A Toronto mortgage comparison website. CompareMortgageQuotes.ca is Canada's one-stop online source for the most popular mortgages - mortgage loans for purchases, home loan refinancing, home mortgage rates, home loans for repairs, and more!

How Much Mortgage Can I Afford?

To establish how much mortgage you can realistically afford, you can use one of two main formulas - called "Qualifying Ratios". Qualifying ratios examine a person's income and expenses in order to estimate how much money can reasonably be spent on monthly mortgage payments.

Buying the Home: Down Payment and Closing Costs

This is the first and most obvious factor most people consider in buying a home. How much of a down payment can I afford? And how much can I spend on closing costs?

The down payment is usually between 3% and 20% with most conventional loans preferring down payments within the 10-20% range. Low-to-moderate income households, however, can find programs enabling them to purchase homes with as little as 3-5% down.

Closing costs are fees for various items that must be handled through your lawyer in order for the deal to legally go through. These include: origination fees, title insurance, attorney fees, recording and transfer fees, and pre-pays.

Keeping the Home: Monthly Housing Expenses

Taken into account when determining monthly housing expenses are:

* Mortgage principal;

* Mortgage interest;

* Taxes;

* and Insurance.

This is commonly written as "PITI" for "Principal, Interest, Taxes, Insurance".

In the case of conventional loans, your monthly housing expenses should fall below 26-28% of your gross monthly income. For FHA mortgages, the qualifying ratio is 29%. If you carry any long term debt (that's expenses extending 11 months into the future or more), then the ratios change slightly. Conventional loans allow a maximum monthly housing expenses and long-term debt combined of 33-36% of gross monthly income; FHA loans allow a 41% maximum. These numbers reflect guidelines, however - not hard and fast rules. Each loan application is considered on an individual basis.

To figure out how much you should spend on a mortgage, you can do the same basic calculations. Make a simple comparison between your monthly income and your monthly long-term expenses and financial obligations. For the most accurate results, don't pad the numbers. Include only income that you can count on. And by the same token, don't exclude from your calculations any regular expenses, whatever they mortgage refinancing be.

Maintaining the Home: Maintenance Costs

It is also advisable to allow for the various expenses you don't have yet, but will once you own the refinancing mortgage you're trying to buy. For example, estimate your monthly maintenance costs (or estimate it annually and divide by 12). Not only do you want to make sure that you can afford to buy the home you want; you also want to ensure that you can afford to maintain and keep it. You can easily compile information on such maintenance expenses as utility costs by asking previous owners or residents to give you an average of what they spent.

Assistance Affording the Home

Low-to-moderate income households may qualify for several conventional and government programs that make home-buying more affordable and easier to achieve. With more lenient qualifications than comparable standard loans, many of these programs do require that applicants consent to financial counseling in order to be approved.

Somerset Mortgage Lenders has been in business since 1979. Whether you are looking to refinance your mortgage, consolidate your debt, improve your home, we can help.

Call us toll-free at 1-800-675-9783 or visit us online.

Home Refinance - Things You Need to Know

Home refinance loan - an introduction

In simple terms, home refinance or home loan refinance means a special type of loan that adds mortgage refinancing to the principal balance owed, usually for property or home improvements, and alters the existing payment amount and terms. If you're paying a high interest rate for your current mortgage, or if you're stuck in an adjustable rate mortgage, or if you require cash liquidity, or if you plan to consolidate your debt, it's advisable to avail mortgage refinancing facilities. Mortgage refinancing helps you to redeem the remainder of your existing home loan or mortgage loan by taking on a new loan with better terms and conditions. There are many mortgage refinancing options available to you.

When to refinance

If you're currently paying for an adjustable rate mortgage, you might want to think about going in for a fixed-rate mortgage. At times it makes sense to refinance. However, the exact time to refinance depends greatly upon your individual situation and what your financial goals are. It's important to ask yourself some questions before refinancing:

• How long do you plan to occupy your home?
• How much equity have you invested in your home?
• Are you willing to compromise for a lower interest rate?
• Are availing lowered payments worthwhile as compared to the cost incurred for the mortgage closing costs and the initiation fees?

Refinancing from an adjustable rate to a fixed rate

It's advisable to get the lowest possible fixed rate for refinancing your home or mortgage, but you also have to consider your existing financial situation. If currently you're in the first year of an adjustable rate mortgage (ARM), and you plan to move on after three years or so, it's not advisable for you to refinance.

Whether to "lock in" an interest rate

It's not possible to predict what the future interest rates will be. But statistically, when mortgage rates rise faster, eventually they do lower down and become steady. Therefore, if you're thinking about availing a home loan or a mortgage loan, you could lock in your rate now. You can always "refinance" later on if the mortgage rates drop in the future. The possible drop in the future interest rates may not be drastic enough to affect your monthly mortgage payment. However, every situation is different, so it's important to consider and analyze all your options before deciding in a conclusive manner.

The difference between the estimated value of your home and what your house is actually worth

A home's "estimated value" is refinancing mortgage determined by either an appraisal or a comparative market analysis, while its actual "worth" is eventually established by what the prospective buyers are in fact willing to pay for it. The "sale" price that you can obtain by actually selling your existing home is the practical "price" generally considered by banks and lending institutions.

Our professional will assist your income better, by make certain that you will meet the necessities of your home refinance loan which would be based on your specific situation regarding your difficulty. Refinanceitt offers mortgage refinance with finest solution by our professionals according to your state affairs.

Federal Mortgage Plan to Help You Refinance

The federal government's Hope For Homeowner plan started Oct. 1 and a "proactive home retention plan" for Countrywide customers will begin in December. This program is slowly making its way to help homeowners as government is providing $40 billion to help homeowners to avoid foreclosure.

Under this program some customers will get reduced interest rate, either temporarily or permanently. Some will have portion of their debt wiped out and some will get loan forgiveness and loan reduction. All plans will be serviced by local banks.

The Hope for Homeowner plan is supposed to help 400,000 homeowners who can't afford their monthly payment, and who own more on their loan that their property is worth. This program encourages lenders to work with a customer directly which will allow customers to refinance into Federal Housing Administration, or FHA.program.

If you are in foreclosure lender will go through steps to determine the best choice for you. In most cases your adjustable loan will become 5 year fixed mortgage loan under FHA program. Government is also considering extending 30 year fixed mortgages into 40 year mortgages. All refinances will be done through your lender.

The last option that any lender wants is debt forgiveness. In some cases banks would have to swallow losses. The lender would have to forgive all debt above 90 percent of your home value and allow homeowner to refinance into FHA secured loan.

For example, your property value is $100,000 and you currently owe $125,000. That means that lender has to forgive $35,000 of debt allowing homeowner to refinance $90,000 with another lender. The loan would be insured by FHA.

The homeowner who will take advantage of this program will have to share future appreciation with the government. For example, if your property is worth $100,000 and in few years you decide to sell for $120,000 the $20,000 is your profit. With that you have to give government $10,000, half of the appreciation.

What to do next:

If you are in foreclosure and need help you have two choices. First contact your lender to open negotiations under Hope for Homeowner plan. However, there is a report that homeowners have to wait up to 2 hours to just get to talk to their lenders to negotiate.

Other options are counseling agencies. One of them 1DebtMoney.com will be able to help you negotiate your options with your lender. Others that may work are non-profit agencies as well.

Counselors are here to help:

As this program makes into market there are many problems as of right now. Many customers experience providing different mortgage refinancing and are being bounced around from person to person one requesting taxes, another pay stubs.

By now many homeowners should have received a letter from two major counseling agencies Hope Now and Project Lifeline, if not you may contact them at (888) 995-HOPE (4673).

Get Started:
Before calling any counseling agency, have your documents ready as they will be asking for any or all documents. List below will give you an idea what you would need:

1) Loan account number
2) Promissory note
3) Date of last mortgage payment
4) Amount past due and any letter that you have received from lender that your amount is past due
5) Any information if you have already talked to a lender, such as when you made the call, mortgage refinancing you talked to.
6) Any letters from attorney, court, etc.
7) Most recent mortgage statement
8) Name of your lender or bank
9) Your insurance policy, account number and insurance agent
10) Last two months' pay stubs
11) Last two months bank statements
12) W-2s and tax return from last year
13) An idea how much you can pay a moth for your home

Finally, you need to write a hardship letter explaining why you are behind your payments and suggest resolution in your cases. It can be anything from interest rate reduction to a longer repayment plan.

With this letter you need to paint a picture why you are behind in your payment. Credit counselors will help you with many options.

John Weise represents RateTake Refinance Loan marketplace. RateTake matches consumers with multiple lenders offering low mortgage rate quotes. RateTake also operates Debt Management resource center.