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Time to Expose and Debunk Refinance Myths

Many times, what we know about refinancing (and mortgages in general) comes from what our family, friends, and coworkers are continually telling us. While it’s a good idea to seek advice from people you trust, be careful to avoid outdated information and, more importantly, information that is wrong altogether. The housing market is always changing, increasing the need to find the most accurate information as possible. Here are some of the most common misconceptions to look out for:

1. You should refinance if rates drop 2%

For one thing, you could end up paying more in fees and closing costs than you would have spent by sticking with your original loan. Some mortgage companies will offer to “fold in” the closing costs so you owe nothing up front, but keep in mind that you’ll be paying interest on the folded amount during your loan term.

If you are already 10 or 20 years into your 30-year mortgage, refinancing to another 30-year loan will obviously only increase your costs. On the other hand, if you plan on being in your home for a long time and need more flexibility in your budget, then sometimes you don’t even have to wait for a 2% drop in order to save money.

2. Refinancing always saves you money

The typical reason for refinancing is actually to lower your monthly payments, which involved stretching out your loan term. While this does save you money in your monthly budget, sometimes you can end up owing more in the long run.

3. You don’t need to refinance if you just double up on your current payments

This can sometimes be a smart move, but only if you understand the conditions of your current loan. For instance, some loans carry a prepayment penalty, meaning you will be charged for paying off the loan faster.natutal viagra has no side effect of viagra In this case, you would want to refinance to a shorter term and hopefully save a little extra money on interest in the process.

4. Refinancing to consolidate debt is always a good idea

While consolidating debt can make it easier by making one low monthly payment, it can also mean freeing up credit so you can rack up even more debt. Many consumers are looking for the simple way out by creating one big pile of debt. However, if you are not ready to change your lifestyle by backing off spending and focusing on eliminating current debt, you could end up with way more debt than you originally started with.

5. If you can afford it, a 15-year loan is always better

Before you refinance into a 15-year mortgage in hopes of saving money over the long run, remember that you can’t always predict unexpected expenses in the future. For example, having a major medical emergency has been know to bankrupt savings accounts across America. So it might be smarter to take out a 30-year mortgage (making sure there are no prepayment penalties) and then pay it off in 15 years.

Is a Condo the Choice for You?

While you may have already found the perfect condo for you and your family, you still want to explorer the possibilities of this purchase before you sign on the dotted line. Many people planning to purchase a new home forget to do their homework and either end up with less home for their money or a home that doesn’t meet all of their needs. Here are some helpful tips to insure that you get what you are looking for:

Define Your Needs

One of the most overlooked aspects of purchasing a condo is balancing your family’s needs against the potential condo features you are interested in. You should write down your family’s needs and the features you are looking for, including the number of bedrooms, number of bathrooms, garage size, kitchen size, etc. Knowing what you want (and need) will save you tons of time and energy.

Consider the Location

Just like the age old real estate saying “location location location”, knowing the area you plan to live in is just as important as knowing the financial and structural facts of the home. What are the average home values in the neighborhood? How close are the schools local shopping? What are the morning traffic conditions for your commute to work? What is the proximity to friends and family?

Learn About the Condo

Learn all you can about each condo you view and make detailed notes. One of the questions you will want to ask is the home’s current condition. Although a potential condo may have an external appearance of being structurally sound, in some cases that could be far from the truth.cialis Ask for an inspection. Any reputable real estate agent won’t refuse a request for a home inspection, and as a matter of fact, if you plan on securing a home loan, an inspection will undoubtedly be required.

Will the condo require any repairs before you move in? If so, estimate the time and cost of the repairs. Knowing the facts will give you leverage when it comes time to negotiate.

Protect Yourself at All Times

Ask a lot of questions and ask to see all related documents. If the seller says he has had a new heating system installed, then ask for proof! A home that has been carefully maintained will have documents to support it. When it is time to finalize the purchase of your new condo, make sure you understand everything before you sign. If you don’t understand, don’t sign until you do!

Getting a Home Loan with Bad Credit

If you have bad credit, then you may think you have no options available to you when it comes to financing a home loan. However, there are still some home loans available that might be able to suit your needs.

Understanding Bad Credit Mortgages

Bad credit mortgages are designed for people who have a poor credit score. If you have missed payments on previous loans, and if you are still working to pay off other large debts then your credit score is probably suffering. There are various levels of bad credit and where you fall will affect what interest rates you are offered when it comes to applying for a home loan. For example, if you have only missed a few repayments then it will not go against you as much as a bankruptcy would.

Bad credit mortgages will typically have high interest rates, which means that you will not necessarily want to take them out for long periods of time. That can be problematic with a home loan but may be the best option available to you right now.

How to Get the Best Possible Mortgage

In order to get the best possible quotes for a bad credit mortgage, you first need to work on improving your credit score. Each time you repay something on time or pay off your debt, it improves your credit score. Obviously, if you pay off all of your debt, your credit score will be improved dramatically. So what is the best way to improve your score?

What you may not know is that a credit card could potentially help you improve your credit score. If you get a credit card, spend a small amount on it, and then pay the full amount at the end of the month, it will help you to build a positive credit history. Just be sure that you do not spend too much on the card and you should be ok.

Choosing the Right Bad Credit Mortgage

While you are working on improving your credit, it would be a good idea to take out a bad credit home loan for a short, fixed-term period. Once you have rebuilt your credit you can easily refinance your mortgage to get a better deal.side effect viagra side effect of viagra natural viagra alternative to viagra alternatives to viagra natural alternatives to viagra natural alternative to viagra herbal viagra erectile function So when you search for bad credit mortgages, try to find a fixed mortgage for a couple of years and then work on improving your credit over that amount of time.

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