Should I Take Out a Second Mortgage on My House?     You’ve probably heard about people taking out a second mortgage on their house when they have a sudden need for extra money. But what are second mortgages, and are they worth the risk?   A second mortgage is exactly what it sounds like: another loan on your home. In other words, if you already have a hard time making the payments on the first loan, you absolutely should not take out a second one!   In some ways, a second mortgage is like any other line of credit -- you should only use it if you really have to. In other ways, though, a second mortgage is much more dangerous. After all, if you find that you cannot make your payments, you risk losing your home.   Of course, there are situations… Read Full Post

If you are trying to buy a house but don’t have the money for a down payment, you might have heard friends or mortgage brokers suggest a piggyback loan. But what is a piggyback loan?   Essentially, a piggyback loan is where you have two mortgages on the same house, with one “piggybacking” the other. Also known as a combo loan or a combination loan, a piggyback loan allows you to finance 100 percent of your home’s purchase price, so that you don’t have to put any money down on it.   Before piggyback loans became an option, if you weren’t putting down at least 20 percent of the total purchase price, you had to buy mortgage insurance -- which, as you can imagine, is an expense most homebuyers would rather do away with. But who has 20 percent of a home’s… Read Full Post

What Does a Mortgage Broker Look for in a Loan Application?

If you’re nervous about applying for a home loan, don’t worry -- you’re not alone. Many people wonder what a mortgage broker really looks for when they review a loan application, and worry how they’ll measure up.

What a mortgage broker looks for is actually pretty simple. He or she wants to see evidence that you can afford the loan, and that you’ve been relatively responsible with other debts or loans. (This doesn’t necessarily mean that a broker expects to see a perfect credit score, as I’ll discuss in a moment.)

A mortgage broker wants to see that you can afford the loan. Although income is big in determining this, it’s not the only thing a mortgage broker will look at. He or…

Fixed-Rate Mortgage Pros and Cons

Are you shopping for a mortgage? There are a lot of different types of mortgages out there, and choosing between them can be difficult. Each type of mortgage has its pros and cons, and if you choose the wrong type of mortgage for your situation, you could end up doing damage to your credit history or even losing your house.

The fixed-rate mortgage is generally seen as the “safest” type of mortgage, because the interest rate stays the same throughout the entire life of the loan. There are two different kinds of fixed rates mortgages: 30-year and 15-year.

Pros

The biggest advantage of having a fixed-rate mortgage is that your interest rate will never change, no matter what the market is doing. This…

Adjustable Rate Mortgages Pros and Cons

If you are shopping for a mortgage, you may already know that there are a variety of different types of home loans to choose from. One popular type of home loan is an adjustable rate mortgage, also known as an ARM.

Adjustable rate mortgages are popular because the starting interest rates and payments tend to be lower than fixed rate mortgages. However, an ARM requires that the buyer share in some of the risk associated with the interest rate, which means that those great rates and low payments may not last for long.

Basically, instead of having a guaranteed interest rate for the life of the loan, as a fixed-rate mortgage does, an ARM’s interest rate “floats”. Most adjustable rate mortgages have an…

Can I Afford My Dream Home?

Why is it Better to Pay on a Mortgage Instead of Paying Rent?

You’re making an investment. When you rent, do you get the money back when you decide to move? Of course not. When you own your home, however, the rules change. Because property values generally go up over time, you can often sell your home for even more than you bought it for, easily making up for the work you’ve put into the place. In addition, selling the house for more usually allows you to move up in the world, and buy a bigger and better house.

The investment is more than just the money you pay on the mortgage every month. Every repair or improvement you make to the home maintains or increases its value. If you remodel the kitchen or the bathroom, it will be a selling point when you…

Right now is a great time to buy a new home, or even refinance your current one!  There’s been a lot of talk lately about the falling real estate market, so you might be wondering why I say this.  The fact is, a slump in the real estate market actually benefits the buyer.  Here’s why now is a good time to buy:

Mortgage rates are falling.  If you know you intend to buy your own home, why not buy it when you are guaranteed a low mortgage rate?  Mortgage rates have fallen considerably in the last couple of months.  After a steep downward slide in the beginning of February, mortgage rates have continued to drop at a slower, steadier pace. 

Fewer houses are selling.  Although a slump in the market scares some would-be homeowners away, others see it as…