Tag Archives: home loan

Benefits and Drawbacks a Mortgage

Mortgage

Mortgage in St. GeorgeA home to call your own is one of the most fulfilling things a person can achieve. However, most people find it difficult to buy a house in full cash payment. This is where mortgages come to rescue. A lot of people avail this kind of loan in order to acquire house ownership. With pros come the cons of mortgage.

Benefits of a mortgage

Home ownership made affordable. Buying a house in full cash payment requires a lot of money. Plus, there are a lot more household payments and bills to pay. It makes buying a house much more difficult to achieve. When you avail of a mortgage, the amount is divided by the number of years you will pay. Payment is much more affordable when you cooperate with a mortgage company. St. George companies offer flexible rates to customers for them to achieve their dream house.

Investment Potential. Religiously paying your mortgage and eventually owing your own home is a big investment. Homes tend to increase in value as time passes. The amount you pay today may be far less than the amount in the future.

Drawbacks of a mortgage

You pay back much more than you borrowed. The longer period of time you are paying off your debt, the more interest adds to your debt. Monthly payment may not be huge, but when you multiply it by the numbers of years plus interest, the amount will be enormous.

Risk of losing collateral. The house itself is the collateral. Once you cannot pay, your house will be taken back by the lender. Surely, if you will not be able to pay your account, a good mortgage company will find ways to recover their money by selling the property. Once the house is taken from you, you lose the money you already paid up.

When deciding whether or not to apply for a mortgage, you must weigh your options carefully. Evaluate the pros and cons in order to come up with the best selection. In your decision lies your way to achieving your dream house.

Saving Your FHA Loan with Streamline Refinance

Home Loan in Utah

Home Loan in UtahIf you’re having trouble with your current FHA home loan, you may be eligible for refinancing through FHA streamline refinance. Just like any other mortgage refinances option, you must qualify before you get an approval for FHA streamline.

Getting an approval gives you more opportunities for an excellent deal. Unlike other refinancing options, the FHA streamline refinance mortgage allows you to take out a new FHA mortgage without submitting assets and income documents and conducting a home appraisal.

In addition, taking out current FHA loan provides lower rates. According to City Creek Mortgage, “An FHA variable rate loan gives you the benefit of today’s low interest rate, while easing up on qualification requirements. FHA home loans are government insured, which mitigates loan risks for lenders.”

The Process for FHA Streamline Refinancing

To qualify for this refinance program, you must meet the following requirements:

  • Have a current FHA home loan
  • Actively paying monthly dues for the last 12 months in full and on time
  • A FICO credit score of 620 and no less, though some lenders may require a 640 or 680
  • Have not refinanced within the last 210 days

Not all lenders have the same requirements. If you don’t qualify for one lender, find another one.

Other Necessary FHA Loan Requirements

Moreover, you should comply with the FHA requirement “net tangible benefit.” It should state that by refinancing, you avoid increasing mortgage rates in the future or lessen monthly mortgage payments, which includes the interest, private mortgage insurance, and principal.

Even though homeowners pay PMI premiums on their FHA loan, they still have to continue paying their dues with the new FHA streamline refinance loan. In addition, based on the date you got your new FHA loan, the insurance premiums may be relatively higher and forego any reduction on payments; however, you get a much lower interest rate.