The decision between a 15-year and a 30-year mortgage is one of the most significant financial choices a homebuyer can make, setting the trajectory fo...
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The choice between a 15-year and a 30-year mortgage is one of the most significant financial decisions a homebuyer or refinancer will make. This decis...
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The journey to homeownership is often symbolized by the quest for the perfect mortgage rate, but the financial responsibility extends far beyond that ...
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In the ever-evolving landscape of real estate financing, an often-overlooked option presents a unique opportunity for both buyers and sellers: the ass...
Read More1. Confirm with your lender: Ensure there are no prepayment penalties. 2. Verify the process: Ask exactly how to make an extra payment so it is applied correctly to the principal balance, not to future interest. 3. Get your financial house in order: Pay off high-interest debt and build an emergency fund first.
Interest-only mortgages are not for everyone and are typically considered by sophisticated borrowers with a clear and robust repayment strategy. They can be suitable for:
Sophisticated investors who can use their capital to generate a higher return elsewhere.
Individuals with irregular but large incomes, such as bonuses or commission.
Borrowers who have a guaranteed future lump sum, like an inheritance or maturing investment.
Buy-to-let investors who plan to sell the property to repay the loan.
Lenders typically require you to have at least 15-20% equity in your home after both the first and second mortgages are combined. Most lenders will allow you to borrow up to 80-85% of your home’s appraised value, minus the balance on your first mortgage. For example, if your home is worth $400,000 and you owe $250,000 on your first mortgage, you might qualify for a second mortgage of up to $70,000 (using an 80% combined loan-to-value ratio).
Refinancing can alter your debt load by changing your interest rate, loan term, or principal balance. A lower rate reduces total interest costs. A shorter term accelerates payoff but increases monthly payments. A cash-out refinance increases your principal, thereby increasing your total debt.
Yes, in most states, insurance companies use a “credit-based insurance score” to help set premiums. This score is similar to a traditional credit score and is based on your credit history. Studies have shown a correlation between credit history and the likelihood of filing an insurance claim. A lower score could lead to higher homeowner’s insurance premiums.
