Mortgage Archives - Page 2 of 60

There are numerous steps involved in the process of buying a new home. It is important to go through the mortgage qualifying process before looking at dream houses. This gives people an idea of how big a house they can afford. Sometimes, individuals looking for a house might not get a loan that is big enough to cover their dream house. There are ways to qualify for a larger loan; however, one of the fastest methods is to use a co-signer.

What Is A Co-Signer?

A co-signer is someone who signs onto a potential home loan with the homebuyer. Essentially, the co-signer is saying that he or she is willing to be on the hook for the loan in the event that the primary homeowner is unable to make his or her mortgage payments.

This is a big commitment from the co-signer because he or she is exposing himself or herself on behalf of the primary borrower. On the other hand, the co-signer is also providing a vote of confidence on behalf of the primary borrower. Parents often act as co-signers for their children when they purchase their first home.

Vetting The Co-Signer

When someone is going through the home loan process, they are asked to produce tax returns, proof of income, credit reports, bank statements, and more. The co-signer is going to go through the same process. The bank wants to make sure the co-signer is actually adding something of value to the buying process.

The income and debt of the co-signer will be added to the primary borrower. Then, the two will be combined to be approved for a larger home loan. This can help someone purchase the home of his or her dreams.

An Important Note On The Co-Signer

If the co-signer goes to apply for a home loan or car loan in the future, the loan for which they co-signed will show up. This could limit the ability of the co-signer to qualify for a loan down the road. Even though having a co-signer can increase the size of the loan for the primary borrower, this is not without risk to the co-signer. Consider this carefully!

3 Signs It Is Time For You To Refinance Your Mortgage If you are looking for ways to save money on your mortgage, refinancing might be a good option. For those who might not know, refinancing can help a homeowner reduce monthly mortgage payments by switching to a lower interest rate.

Basically, the homeowner takes out one loan at a lower interest rate to pay off the old loan, which is at a higher interest rate. While the homeowner may have to pay closing costs a second time, this could save someone hundreds of thousands of dollars over the life of the loan. Furthermore, those who want to pay off their loan more quickly may be able to do this as well. There are a few signs that someone should refinance their home loan immediately.

1. Current Mortgage Rates Are Significantly Lower

One of the biggest signs that someone should refinance is that current home loan interest rates are way lower than what they have. While everyone’s financial situations are different, if the current average interest rate is more than a point lower than your current interest rate, you should consider refinancing

While not everyone is going to qualify for the current average interest rate, some people might. This means that this is a possibility worth examining. If you can qualify for a much lower interest rate, it is time to refinance.

2. Your Credit Is Good

In order for you to qualify for home loans with lower interest rates, your credit has to be in good shape. There are ways for you to improve your credit score. Paying off credit card debt, paying your bills on time, and fixing errors on your credit report are all great ways to raise your credit score. If your credit score is good, it might be time to refinance.

3. You Are Not Moving Any Time Soon

As mentioned above, you may have to pay closing costs when you refinance. Therefore, if you plan on staying in that house for a while, this could be a good time to refinance. On the other hand, you don’t want to pay closing costs just to move again next year.

These are a few of the biggest signs that indicate it is time for you to refinance. Don’t pass up this chance to save money!