Michael Santos

MLB Residential Lending

3 Easy Ways to Put Aside a Bit of Extra Cash So You Can Pay off Your Mortgage Faster

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3 Easy Ways to Put Aside a Bit of Extra Cash So You Can Pay off Your Mortgage Faster If your personal budget is similar to many other people’s budgets, your home mortgage payment is by far the largest expense that you pay for each month. In fact, this payment may easily account for 20 or 25 percent or more of your take-home income.

Understandably, you may be focused on trying to pay this expense off early. By focusing on this payment, you can build equity and may be able to achieve financial security more quickly. You simply have to find a way to put aside a bit of extra cash regularly so that you can make extra payments, and there are few easy ways that you can consider.

Use Your Tax Refund

First, if you are one of the many taxpayers who receives a refund each year, consider setting aside some or all of this refund to reduce your outstanding mortgage balance.

Some taxpayers may have such a sizable refund that it can account for two or more mortgage payments each year. However, even a few hundred dollars extra put toward your principal balance will save you a considerable amount of money in interest charges over time and will have a wonderful effect on your balance.

Earmark Your Annual Bonus

If you are lucky enough to receive an annual bonus each year, you may consider using this to pay down your principal balance. While you may usually spend this money on extra holiday gifts or just add it to your spending cash, you can benefit more substantially when you contribute it to your effort to pay down your mortgage.

Use An Automated Draft To Create a Fund

Another great idea that will work well for all individuals is to create an automated draft from your checking account each month. You may set aside the funds in a special account, and you can make an extra mortgage payment from this account periodically. Another idea is to set up auto payments for your mortgage that are higher than the amount due. For example, you may establish auto payments that are $50 or $100 more than your scheduled payments.

Paying off your mortgage earlier can be a life changing event for you. Simply imagine how different your life would be if you were not responsible for this payment each month. The fact is that this could be your reality sooner than you think if you follow these tips. For the best results, apply two or even all three tips to your efforts.

Suffering from Credit Problems? Understanding Mortgage Lenders and How They Assess Your Credit

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Suffering from Credit Problems? Understanding Mortgage Lenders and How They Assess Your CreditOne of the most significant factors a mortgage lender will review when you apply for a new mortgage loan is your credit history and rating. While some people have stellar credit, others have a troubled credit history with lower scores.

If you fall into the latter scenario, you may be wondering how lenders will assess your credit situation when you apply for a mortgage in the near future.

Reviewing Your Credit Scores

Initially, lenders will review your credit report to determine your credit scores. Your scores will have a direct impact on the interest rate that you qualify for or if you qualify for a loan at all. There are prime mortgages for good credit borrowers and sub-prime mortgages for those with a blemished credit rating.

If your scores are too low, however, you may not qualify for a mortgage. A mortgage representative can tell you more about their credit rating thresholds and the terms that you may qualify for.

High Debt Balances

Your mortgage lender will dig deeper into your credit report after an initial review of your credit rating. Your debt balances will be reviewed to determine your debt-to-income ratio. Provided your debt-to-income ratio and your credit rating are in line with requirements, high debt balances may not be an issue. Essentially, the lender will determine if you are able to make your payments on time as scheduled or if your debt balances appear to be burdensome. Even if your debt balances are high, you may be approved for a loan if you can afford to make the payments.

Difficulty Making Timely Payments

Your mortgage lender will also review the number of late payments on your credit report as well as the dates for those late payments. When late payments are clustered together, this may indicate a temporary rough patch rather than an on-going issue with making payments on time. However, if you have multiple payments that have been late over the course of the last year or two, this may indicate that you are not creditworthy as a loan applicant.

A credit report can tell a lender many things about you. While it superficially can tell a lender more about your outstanding debts, it also delves into previous financial issues and your overall responsibility with managing debt. If you have suffered from credit problems in the past, you may consider reaching out to a mortgage professional for more insight on how a lender will assess your credit situation.

The Mortgage Pre-approval Letter: Why It’s Important and How to Get One

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The Mortgage Pre-approval Letter: Why It's Important and How to Get One If you are thinking about buying a new home in the near future, you may already be searching online to get a feel for the different types of homes available in the local area. You may have reviewed your budget, and you may have a fair idea about a sales price that is comfortable for you to afford.

While you may feel as though you have taken the preliminary steps necessary to prepare yourself to buy a home, it is important that you also get a mortgage pre-approval letter for your financing before you starting hunting for that perfect new house or condo.

The Importance of a Pre-Approval Letter

A mortgage pre-approval letter is issued to a loan applicant after he or she has passed through a preliminary credit review process. Most of these letters state that the individual is pre-qualified for a property with a maximum sales price, and it is contingent on the loan applicant providing supporting documentation, such as tax returns and bank statements.

This letter gives you a better idea about what it will take for you to get final loan approval and what loan amount you may qualify for. The letter is also provided to a seller, and it gives the seller the confidence that comes with knowing that you are a qualified buyer. When a seller has an offer from a buyer with a letter and another offer from one without a letter, there is a good chance that the seller will opt for a buyer who is already pre-qualified for financing.

How to Get Your Pre-Approval Letter

As you can see, there are several reasons why it is important to get pre-qualified for your mortgage financing. Getting a pre-approval is generally a straightforward process, but it can seem intimidating. You will need to complete a loan application, and this may be done in person or online with a lender or mortgage company. You will also need to sign an authorization for the lender to pull your credit report. After taking these steps, you typically will be able to receive a pre-approval letter within a day or two.

When you have plans to purchase a new home, you likely will need to apply for financing in order to complete your plans. Getting a pre-approval letter up-front can help you in a number of ways, and you can easily take the steps necessary to get pre-approved for your mortgage. Simply contact a mortgage company or lender today to get started with the process.

Four Ways That Being Diligent with Your Mortgage Payments Can Seriously Improve Your Credit

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Four Ways That Being Diligent with Your Mortgage Payments Can Seriously Improve Your CreditThe unfortunate reality is that many individuals have a lower credit rating than they would like. For many, this is caused by issues related to high debt balances, late payments and other related issues.

If you have a lower credit rating, you may be wondering what steps you can take to improve your standing with the credit bureaus. While there are several steps available for you to consider, making timely payments on your home mortgage can have a great impact on your credit. There are four unique ways that diligence with your mortgage payment may improve your credit.

Showing Financial Responsibility

First, when you make timely payments on an account, including your mortgage, you are proving your financial responsibility. Previous issues with late payments, collections accounts and other similar credit events may have indicated that you are a credit risk to lenders, but you can prove your responsibility through regular mortgage payments.

Reducing Outstanding Debt Balances

High debt balances are another common reason your credit ratings may be lower. When you make your mortgage payments on time, you will effectively reduce your outstanding balance on what may be the largest single debt that you have. This can have a tremendous impact on your rating over time.

Preventing New Derogatory Credit Events

When you are trying to improve your credit rating, the last thing that you may want is to have additional derogatory credit events listed on your credit report. Making your mortgage payments on time each month will prevent new late payments from being shown on your report. Establishing a solid new credit history from this day forward will help you to rebuild your credit rating.

Increasing The Length Of Time Between Older Derogatory Credit Events

As you regularly make your payments on your mortgage each month, more time will elapse between any blemishes or derogatory events on your credit report. Essentially, you will be making those derogatory events dated, and you will have a recent history of positive activity. Increasing the length of time between the present and your derogatory credit items is a great way to boost credit scores.

If you have a speckled credit history with lower scores than you would like, you understandably want to take steps to improve your credit rating. These are all ways that making timely mortgage payments can boost your credit rating, and you can apply these concepts to any other outstanding debts as well.

A mortgage consultant may help you to learn more about your current credit report and steps that you may take to boost your scores.

Variable-Rate VS. Fixed-Rate Mortgages – Which Is Better For Your Financial Situation?

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Variable-rate Vs. Fixed-rate Mortgages - Which is Better for Your Financial Situation? When applying for a new home mortgage, many loan applicants initially consider applying for a 30-year fixed rate mortgage. This is perhaps the most common and traditional type of mortgage available. It allows you to enjoy the opportunity to pay for your home over the course of 30 years with equal payments every month. While this is one option, there are actually multiple choices available. For some applications, a variable rate mortgage may be more advantageous. If you are comparing the options between a fixed rate and a variable rate mortgage, you may consider a few points.

A Lower Initial Interest Rate

When you compare the fixed rate and variable rate options, you will immediately notice that the variable rates have a lower start rate. The interest rate will influence the mortgage payment amount. Because of this, you will benefit from a lower initial mortgage payment with a variable rate. However, it is important to understand that the interest rate on a variable rate mortgage will adjust periodically over the life of the loan. This means that the mortgage payment will also adjust.

Managing A Potential Rate Adjustment

The true benefit of a fixed rate mortgage is the ability to better control your budget and manage your funds. A mortgage payment can be a large expense item in your budget, and it may be the largest single expense you have by far. An increase to your variable rate and therefore your mortgage payment can be difficult to bear if you have a tight budget with no wiggle room. In some cases, the rate may go beyond what is affordable for a homeowner to endure. If you do take on a variable rate loan, it is important that you understand what the highest possible interest rate adjustment is and what your payment may be with that rate. If you can manage that payment, then you may confidently apply for a variable rate mortgage.

If you are thinking about applying for a mortgage, it is important that you consider all of the options carefully and that you understand the key differences between them. You can speak with a mortgage loan officer or lending representative in detail to get more information about the options available to you. This can help you to make a better decision about your mortgage application and to better plan and budget for your future as a homeowner.

Understanding The Key Factors That Affect Your Mortgage Interest Rate

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Understanding the Key Factors That Affect Your Mortgage Interest RateWhen you initially start shopping for a home mortgage, you may be drawn to advertisements for ultra-low interest rates. These may be rates that seem too good to be true, and you may gladly contact the lender or mortgage company to complete your loan application. However, the unfortunate truth is that all too often, mortgage applicants are unpleasantly surprised and even disheartened to learn that they do not qualify for the advertised interest rate. By learning more about the factors that influence your interest rate, you may be able to structure you loan in a more advantageous way.

Your Credit Rating

One of the most important factors that influence an interest rate is your credit score. Lenders have different credit score requirements, but most have a tiered rating system. Those with excellent credit scores qualify for the best interest rate, and good credit scores may qualify for a slightly higher interest rate. Because of this, you may consider learning more about your credit score and taking time to correct any errors that may be resulting in a lower score.

The Amount Of Your Down Payment

In addition, the amount of your down payment will also play a role in your interest rate. The desired down payment may vary from lender to lender, but as a rule of thumb, the best home mortgage interest rates are given to those who have at least 20 to 30 percent of funds available to put down on the property, and this does not include subordinate or secondary financing. If you are applying for a higher loan-to-value loan, you may expect a higher interest rate.

The Total Loan Amount Requested

In addition, the total loan amount will also influence the rate. There are different loan programs available, but one of the biggest differences in residential loans is for very large loan amounts. The qualification for a jumbo loan will vary for different markets, but these loans qualify for different rates than conventional loans with a smaller loan amount.

While you may be able to use advertised interest rates to get a fair idea about the rate you may qualify for, the only real way to determine your mortgage rate will be to apply for a loan and to get pre-qualified. You can contact a mortgage lender today to request more information about today’s rates and to begin your pre-qualification process.