Explaining Some Options in Home Finance

This is a good time to explain financing options with mortgages. You will need to know about how lenders review your application and decide whether or not to approve your request for a mortgage.

Two main criteria apply:
1. The first is your ability to pay back a mortgage. This is evaluated on the basis of your total monthly income and total monthly debt. In general, a monthly income to debt ratio of 36-40% (where your total monthly expenses do not exceed 36-40% of your monthly income) is desirable.
2. The second factor is your willingness to pay, and is represented by your credit rating or score.

As a rule, the lower your credit score or the higher your income to debt ratio, the lower your chances of being approved for a conventional mortgage. For the lender, the risk is higher when either of these two situations applies, and the borrower pays for this higher risk with less attractive mortgage terms and conditions, such as a higher interest rate.

Conventional Fixed Rate Mortgages
For many first time buyers, the simplest loan is often the best, and it doesn't get much simpler than a fixed rate 30 year mortgage. This is a standard home loan that the average person who meets the above two criteria will find affordable.

Adjustable Rate Mortgages have their Uses
First time home buyers may prefer to steer clear of mortgages with a variable interest rate, however they are beneficial in certain situations. The advantage is that borrowers can obtain a much more affordable interest rate for the first few years of the mortgage. However, after the initial fixed rate interest period expires, the interest rate becomes adjustable according to an economic index that fluctuates with the market.

The advantage for first time buyers is that the majority of such people do not live in their first home for more than a few years. This means a first time buyer with an adjustable rate mortgage can enjoy the lower interest rate during the fixed rate period, and may be ready to purchase a new home by the time the adjustable rate period begins.This should be approached cautiously, however. If you are not ready to move when the adjustable rate period begins, you may end up having trouble making payments if interest rates have climbed sharply during the fixed rate period.

Getting a Mortgage with a Small Down Payment
A conventional mortgage with an affordable interest rate usually requires a down payment of anywhere between 10% and 20% of the value of the property. In general, it is best to use the largest down payment you can afford, both to reduce the size of your mortgage and so that you don't have to pay private mortgage insurance.

First time buyers with small down payments do have some options-it is even possible to obtain a 100% mortgage that requires no down payment at all. The disadvantage to buyers is that these loans are considered highly risky by mortgage lenders. The buyer pays for the higher risk with private mortgage insurance or higher interest rates. It also means that the buyer builds up home equity much more slowly.

FHA-Backed Mortgages
The Federal Housing Association provides would-be home owners with another means of obtaining an affordable loan, by providing insurance for mortgage loans so that they minimize the risk to lenders. This allows buyers with smaller down payments to obtain affordable mortgages with more favorable interest rates. This is perhaps the best option for a first time buyer, as they can obtain a conventional fixed rate mortgage even if they have a down payment of less than the standard 20%. These mortgages can also be a good option for buyers with lower credit ratings, as FICO scores are not an eligibility criteria for applicants of FHA-backed mortgages.

Visit my website http://www.ncmortgageguy.homestead.com

Service is Key...

The primary service offered by mortgage brokers is expert knowledge, not only of mortgage rates and terms, but also of the various mortgage loans offered by specific banks and lending institutions. Therefore, mortgage brokers can save you time and money by identifying lenders and mortgage products that match your particular situation and preferences.

Experts in the Field

Mortgage brokers are experts in the field of mortgage loans. Mortgage brokers work with home buyers to find the right mortgage loan much in the same way as real estate brokers help you find the right house.

Finding the right house is only half the battle...

Finding the right house is only half the battle; you also need to find the right mortgage loan. Just as no two houses are alike, no two mortgage loans are alike either. Interest rates and repayment terms are just the beginning.
I specialize in matching homebuyers with the right mortgages. I am committed to providing the highest quality service available anywhere. Call or E-mail today to learn more about how I can help you buy your new home or refinance your current residence.

Brian@lafayettemortgage.com
http://www.ncmortgageguy.homestead.com

Renters Have Much to Gain by Pursuing Home Ownership

One of the advantages to having my job... is the personal satisfaction I get from putting good, hardworking people in their first home. Many people don't plan out in their goals for homeownership... that decision could have consequences on their futures.

Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.

Taking the time to talk to your mortgage consultant in depth, will offer insight as to your current financial position. The results may surprise you...

Mortgage rates drop - Nov. 1, 2007

Mortgage rates drop - Nov. 1, 2007: "November 1 2007: 10:46 AM EDT NEW YORK (CNNMoney.com) -- Signs that the economy may be slowing ahead helped push mortgage rates near a six-month low, Freddie Mac reported Thursday. The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.26 percent for the week ended Nov. 1, down from 6.33 percent last week. Current Mortgage Rates TypeOverall avgs 30 yr fixed mtg5.89% 15 yr fixed mtg5.51% 30 yr fixed jumbo mtg6.55% 5/1 ARM5.60% 5/1 jumbo ARM6.02% Find personalized rates: The 30-year rate has not been this low since the week ending May 17, 2007. Last year at this time, 30-year mortgage rates averaged 6.31 percent. 'October's consumer confidence fell to its lowest level since October 2005 as mortgage rates continued to decline this week to their lowest level in almost six months,' said Frank Nothaft, Freddie Mac's (Charts, Fortune 500) chief economist. 'Continued market concerns about weaker economic growth and further declines in the housing market have kept mortgage rates low over the last few weeks,' he added. In its latest report, Freddie Mac said rates on 15-year fixed-rate loans averaged 5.91 percent in the latest week, down from 5.99 percent last week. A year ago, the 15-year rate averaged 5.87 percent. Five-year adjustable-rate mortgages (ARMs) averaged 5.98 percent this week, down from 6.03 percent last week. A year ago, the 5-year ARM averaged 6.05 percent. One-year ARMs averaged 5.57 percent this week, down from 5.66 percent last week. They were at 5.53 percent this time last year. "

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Information: "Mortgage brokers are experts in the field of mortgage loans. Mortgage brokers work with home buyers to find the right mortgage loan much in the same way as real estate brokers help you find the right house. The primary service offered by mortgage brokers is expert knowledge, not only of mortgage rates and terms, but also of the various mortgage loans offered by specific banks and lending institutions. Therefore, mortgage brokers can save you time and money by identifying lenders and mortgage products that match your particular situation and preferences. "