All motor vehicle accidents can result in injuries, but motorcycle accidents can be particularly nasty. Stewart Guss is proud of the “M” endorsement on his drivers license and has spent many hours enjoying our beautiful Texas highways on his motorcycle. With his experience on the road, he understands the particular risks and rewards of riding.
No matter how defensively you ride, statistically speaking you are more likely to be involved in a motor vehicle accident while riding a motorcycle then while riding in a car or truck. Likewise, even with full protective gear, you are more likely to sustain more severe injuries in an accident on a motorcycle then if you were riding in a car.
Why Choose Attorney Stewart J. Guss?
As a motorcycle driver and personal injury lawyer for almost 20 years, he is acutely aware of the particular dangers facing riders. He has obtained major recoveries for many of his fellow Texas motorcyclists. He KNOWS how to get you a maximum recovery if you were injured on your motorcycle. And, you don’t pay us anything until we win your case and get your claim!
Stewart Guss is a man of respect, integrity and family values
You will personally be represented by Stewart, he and his staff will always be there for you
Stewart has over 20 years experience, and will work tirelesslyto recover as much as possible on your motorcycle accident claim
Motorcycle cases can be very complex, involve serious injuries, and require an experienced attorney
And, you don’t pay us anything unless we win your case!
Choose an Attorney with Strength and Experience
For these reasons, if you are ever injured while riding a motorcycle, it is particularly important that you hire an effective and experienced attorney to protect your rights. Stewart Guss has the experience, skills and dedication to maximize your recovery in the unfortunate event of a motorcycle accident. More than that, he takes a personal interest in every case he handles and will always be there when you need him.
If you’ve been in a motorcycle accident, call Attorney Guss and talk about it. Do not sign anything until you speak with us because you risk losing some or all of the compensation that is due to you. Stewart Guss and his team will do everything possible to obtain the best possible recovery on your claim, and we take pride in treating our clients like family. Pick up the phone and call 281-954-3799 to talk to us about your motorcycle accident. Remember, your consultation is FREE, and you pay NOTHING unless we win your case!
Mortgage rates are the rate of interest charged on a mortgage. They are determined by the lender in most cases, and can be either fixed, stay the same for the term of the mortgage, or variable, fluctuate with a benchmark interest rate. Mortgage rates rise and fall with interest rates and can drastically affect the homebuyers' market.
BREAKING DOWN 'Mortgage Rate'
A mortgage is the loan taken out to finance a home. It consists of multiple parts, including collateral,
principal, interest, taxes and insurance. The collateral on a mortgage
is the house itself, and the principal is the initial amount for the
loan. Taxes and insurance vary according to the location of the home and
are usually an estimated figure until the time of purchase. The
interest charged is known as the mortgage rate.
Mortgage Rate Indicators
The biggest indicator for a high or low mortgage rate is the 10-year Treasury bond yield.
If the bond yield rises, the mortgage rates rise as well. The inverse
is the same; if the bond yield drops, the mortgage rate typically also
drops. Even though most mortgages are calculated based on a 30-year
timeframe, after 10 years, many mortgages are either paid off or
refinanced for a new rate. Therefore, the 10-year Treasury bond yield is
a good standard to judge.
The current state of the economy is also a good indicator for
estimating a mortgage rate. If the economy is bad, investors turn to
bonds to secure their money, and the bond yield drops. Mortgage rates
become lower, and therefore more attractive to borrowers. If the economy
is flourishing, investors seek other investment opportunities, and the
bond yield rises, increasing mortgage rates.
Determining a Mortgage Rate
A lender assumes a level of risk when it issues a mortgage, for there is always the possibility a customer may default
on his loan. There are a number of factors that go into determining the
mortgage rate, and the higher the risk, the higher the rate. A high
rate ensures the lender recoups the initial loan amount at a faster rate
in case the borrower defaults, protecting the lender's financial
investment.
The borrower's credit score can often play a role in the rate charged on a mortgage and the size of mortgage loan he is able to obtain. A higher credit score
indicates the borrower has a good financial history and is more likely
to repay his debts. This allows the lender to lower the mortgage rate
because the risk of default is lower. The rate charged ultimately
determines the overall cost of the mortgage and the amount of the
monthly payment. Therefore, borrowers should always seek the lowest rate
possible.
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Rates on two, five and 10-year fixed deals have fallen following a surge in late 2015, when Mark Carney, Governor of the Bank of England, made comments suggesting that a rate rise was imminent. Now, they appear poised to head back up again.
Wholesale interest rates (swap rates) tumbled for much of last year after expectations of a Bank Rate rise faltered, and the Bank of England instead cut its central rate to 0.25pc. The vote to leave the EU caused a sharp decline too.
However, swap rates have increased dramatically since September, indicating that there is pressure on lenders to raise their mortgage rates, although few have acted to do so. >> Scroll down for our list of the current best-buy mortgages
For the time being, there are still ultra-low rates available.
Lenders are offering historically low rates on 10-year fixed deals, although some of these have begun to increase. Historically, such long fixes have been unpopular with borrowers, but have seen something of a resurgence thanks to current levels of uncertainty and the security they provide.
This guide tells you everything you need to know about fixed-rate mortgages and the best deals available. It is regularly updated as events change.
For up-to-date best-buy fixed-rate mortgage deals, go to our mortgage best buy tables. This shows a selection of top rates based around your requirements.
What affects mortgage rates?
The pricing of fixed mortgage rates depends on several factors, but mostly whether banks can get their hands on cheap money to lend out. They usually get it from savers or by borrowing from other banks on the money markets, buying money at a certain rate – the "swap" rate – for a certain period.
These swap rates react to expectations of future interest rates and inflation, which affect the price of mortgages.
Swap rates dropped sharply last January amid global economic turbulence, and again following the Brexit vote, but rose again at the end of 2016.
Mortgage rates are expected to rise in response, although the level of competition between lenders and some market stagnation may delay reactions. • Predictions on rates, markets and more: get our weekly newsletter
Action taken by the Bank of England can have an impact too. The Bank has made it clear in the past that if runaway house prices are a risk and ultra-low mortgage rates are a cause, the latter will be policed away – by heaping new costs or capital requirements on the banks.
Lenders could then pass on the increased cost of funding to mortgage customers by increasing their rates
What's the difference between fixed and variable rates?
If you take out a fixed-rate mortgage the interest rate you pay will be fixed for an initial period, regardless of rate changes made by the Bank of England or moves in the markets.
Fixed rates are typically for two, three, five and occasionally 10 years, with longer terms costing more. Once the fixed period ends, borrowers are pushed on to the lender's "standard variable rate", which can be much higher.
Variable mortgage rates can vary during the mortgage term, meaning borrowers will not have the security of knowing how much their repayments will be every month.
However, if the British economy dips, interest rates will probably decrease, making the repayments substantially cheaper. Also, because the mortgage comes with the uncertainty of interest rates either rising or falling in the future, the initial rate is often much lower than with fixed mortgages.
The cheapest fixed deals
It's not all about rate. Lenders like to add extra charges, such as arrangement fees.
We have calculated the full cost of some of the best deals, based on a £350,000 home with a loan of 25 years.
Two scenarios are included: a buyer with a 40pc deposit (£140,000) and a buyer with a 10pc deposit (£35,000). The first is intended to represent someone remortgaging or moving home, and the second to represent a first-time buyer. • Calculator: How much can I borrow?
For those who want the peace of mind of a fixed monthly cost, and for anyone who doesn't want the risk of fluctuating interest rates, fixed-rate mortgages are appealing.
Below we list the best on the market, according to London & Country, the mortgage broker, using the two different deposit scenarios.
Two-year fix
40pc deposit
HSBC has a two-year fix at 1.54pc which comes with £0 in fees. Monthly repayments would be £844 with a total cost over the two years of £20,478 including the fee.
HSBC also offers a 1.14pc deal with £1,262 in fees. Monthly repayments would be £805, with a total cost of £20,542 over the two years including the fee.
Platform has a competitive two-year fix priced at 1.59pc withfees of £49. Monthly repayments would be £849 and the total cost would be £20,624 including the fee over the fixed term.
10pc deposit
Atom Bank has a two-year fix at 1.99pc with fees of £1,250. Monthly repayments are £1,334 and the total cost over two years is £33,186.
HSBC offers a two-year fix at 1.99pc with fees of £1,262. Monthly repayments are £1,334 and the total cost over two years would be £33,232.
Loughborough Building Soceity's 2.19pcdeal comes with fees of £499. Borrowers would pay back £1,364 a month, or £33,246 for the two-year term including the fee.
Three-year fix
40pc deposit
Yorkshire Building Society offers a three-year fixed rate at 1.42pc with £1,325 in fees. Total repayments would be £832 a month, or £31,218 over three years including the fees.
HSBC offers a 1.44pc three-year fix with £1,262 in fees. Total repayments would be £834 a month. The total cost would be £31,248 over the three years.
Lastly, Chelsea Building Society is charging 1.43pc on a three-year fix with £1,325 in fees. Total repayments would be £833 a month. The total cost would be £31,251 over three years, fees included.
10pc deposit
Coventry Building Society offers the cheapest deal with its three-year fixed-rate mortgage at 2.29pc with £999 in fees. Repayments would be £1,380 a month, or £50,931 over the three years including the fee.
Accord offers 2.37pc with £1,325in fees. Monthly repayments would be £1,393 for a total cost of £51,459 over the fixed term.
HSBC has a 2.39pc offering with £1,262 in fees. Repayments would be £1,396 a month, for a total cost of £51,474 over the fixed term.
For fee-free advice on your next move, Telegraph Mortgage Advice’s experts can provide guidance on your next mortgage. Call today on 0800 073 2322 or click here for more information
Five-year fix
40pc deposit
Barclays (Woolwich branded) has a 1.75pc offering with £999 in fees. The deal would cost £865 per month and £53,145 over the five years.
HSBC offers a 1.94pc deal, with no fees. The mortgage would cost £884 in monthly repayments, totaling £53,265 over the five-year term.
First Direct offers the next best five-year fixed-rate mortgage at 1.94pc with fees of £35. The monthly repayments would be £884, and £53,300 over the term including fees.
10pc deposit
HSBC offers a five-year fixed-rate mortgage at 2.74pc, which comes with fees of £1,262. Repayments would be £1,452 a month or £88,315 over the five years, cashback included.
Platform offers a 2.74pc deal with £1,249 in fees. Borrowers would pay back £1,452 a month, or £88,545 over the five-year term all included.
Atom Bank has a 2.79pc offering with £1.250 in fees. The deal would cost £1,460 per month, or £88,755 over the five years, fee included.
Ten-year fix
40pc deposit
First Direct's 2.49pc deal comes with £35 in fees. Repayments would be £941 a month, for a total cost over the fixed term of £113,190.
Coventry Building Society has a deal at 2.49pc with fees of £999. Monthly repayments would be £941, and the total cost over the term would be £114,170.
Barclays (Woolwich branded) has a 10-year fix at 2.49pc with fees of £999. Monthly repayments would be £941, for a total cost of £114,180 over the fixed term.
10pc deposit
For those with a 10pc deposit, Nationwide has a 3.89pc deal, with £999 in fees. Monthly repayments would be £1,644, or £198,750 in total over the 10 years, including the fee.
Nationwide also offers a 3.99pc deal with zero fees. Monthly repayments would be £1,661 for a total cost over the fixed term of £199,830.
TSB offers a 10-year fix at 4.04pc with £200 in fees. Monthly repayments would cost £1,670, for a total cost including fees over the fixed term of £200,560.
If you’re considering fixing for 10 years don’t forget to factor in the effect of early repayment charges. Some deals are more expensive to end early than others.
Use our mortgage calculator to work out how much you will need to repay on your mortgage.
Ah, the world post-housing bubble: Lenders are lending again, and
interest rates are low, for now at least. But buying a home is huge —
possibly the biggest financial decision you’ll make in your life. And
because lenders are more relaxed about who can get a loan, if you’re
looking to buy (and therefore borrow), it isn’t just a question of,
“Will I get approved?” but also, “Who do I choose?”
There are more options available now than there have been in years,
and finding fair rates and fees is only part of it. The best mortgage
lenders — like my top pick, Quicken Loans — will have it all: good rates and better customer service, plus resources that can help you snag your dream home.
The Simple Dollar’s Picks for Best Mortgage Lender
After exploring 181 mortgage companies, I found 5 that embody
everything I want in a lender. If you’re hunting for a home loan, these
are a great place to start.
I’ll say it now (and repeat it later because it bears repeating): No
matter what, the rate and terms you’re quoted will vary depending on
your credit score and financial circumstances. That’s why you don’t see
recommendations for cheap mortgage lenders or mortgage lenders with the
lowest rates. There’s just no way to guarantee it. On to how — and why —
I like these ones the most.
The best mortgage lenders have three things in common.
They’re widely available.
A mortgage company doesn’t have to be nationwide to be good, but I
didn’t want to get you jazzed about a lender just to find out it only
works in one state. Lenders operating in at least 40 states were the
only ones that made my list.
That said, if you’ve heard glowing reviews about a local lender, you
should definitely check it out — especially if you want some TLC. The
little guys processing fewer loans every month will have more bandwidth
for that kind of service.
They’re not the middlemen.
In the world of mortgages, there are three types of companies: direct
lenders, mortgage brokers, and lead generators. Direct lenders can
process your application and issue your loan directly.
Mortgage brokers, on the other hand, serve as a go-between. They find
loan products that fit your needs and work with a lender to get your
mortgage approved. There are great mortgage brokers out there, and
they’re especially helpful if you want more tailored service or have
specific circumstances (like you’re self-employed, for example). But
many mortgage brokers work on a local level, which didn’t fit my
criteria.
Lead-generation websites simply take your information and pass it
along to any number of lenders; those lenders then contact you. With
these companies, you don’t know what lender you’ll get or even who
you’re giving your personal information too, so I nixed them.
They’re not predatory.
Lenders get regulatory actions, complaints made against them by the
state they operate in, all the time. Having a few business hiccups
doesn’t necessarily mean a lender is predatory — maybe it forgot some
paperwork, or didn’t realize its license had expired — but multiple
infractions is a red flag. What if an unlicensed loan officer signs you
up for the wrong policy, or the company is paying illegal quota
incentives to nab as many mortgages as possible? I played it safe and
cut repeat offenders.
And I tested each of them.
First priority: an easy-to-navigate, functional website.
Sure, you can always get pre-approved in person or over the phone,
but most of us are going to start out with the easiest option: online. I
looked for a website that made the whole process feel professional,
streamlined, and unintimidating.
Key features I wanted to see:
Easy-to-find loan rates right on the website
A knowledge center that was actually full of knowledge, plus tools like mortgage calculators
An efficient online pre-approval application
Someone who can help answer questions via live chat
The option to apply over the phone (because sometimes you feel like talking to a real person)
Citibank Mortgage was
a standout. Its website guided me through the entire mortgage
application, starting with a nifty home-affordability calculator that
actually showed me what I could afford to pay instead of just what my
rates might be, like most other calculators. However, Citibank has a
huge amount of information on its site, and while the company does its
due diligence to make it digestible, the font is small; the words are
large; and more than once I zoned out.
I’m a big fan of Alliant Credit Union for
its simplicity. The website is clean and modern. In fact, the
information I needed first was laid out so I could follow step by step
and the pre-approval form was easy. The only downside: When I had a
question, I had to call in. There is no live chat.
Citibank’s site features a useful home-affordability calculator that offers a realistic sense of how much you can afford.
Then I got pre-approved.
You can’t really recommend something without trying it out yourself,
right? I didn’t want to go through the whole application process for
each finalist (my credit score would cry), but I did try getting
pre-approved. Twelve times.
It wasn’t as smooth a process as you might think (I expected it to be very smooth
since getting pre-approved doesn’t require endless paperwork or
underwriting like an actual mortgage). Chase Bank required unexpected
questions that weren’t so easy to answer (I’m not sure what my annual
hazard insurance premium is) and when I first tried applying to New Penn
Financial, an error on the first page of its quote tool left me banging
my head on my desk.
For
some reason, we were initially unable to choose a state during New Penn
Financial’s application page, which impeded our progress.
Once I’d applied, I sat back and waited for the responses to roll in. Some lenders — like MB Financial — took hours or even days to
let me know where I stood, but others replied immediately and made me
feel like I was already a beloved customer. Take Quicken Loans: Its
reply email thanked me, gave me a helpful tip about improving my credit
score, and made the whole process feel a little less stressful.
With the replies in, I set upon customer service. I called during
peak hours. I called during off-peak hours. I told each lender that I
was a first-time buyer looking for a home and asked how long my
pre-approval was good for. Some lenders, like Alliant Credit Union and
Quicken Loans, walked me through everything. The folks at eLend and
Stonegate never even picked up the phone.
A good lender is worth its weight in
gold. From the initial interview to the follow-up after receipt of the
credit report, the lender needs to listen carefully. They need to
respectfully treat the buyer like a family member. Pamela Cirkiel CIPS, SRES, ABR
M.E. “Gene” Johnson Realtors, Inc.
Then, and only then, did I look at interest rates.
If customer service is king, interest rates are queen. I get it; I’m a
first-time homebuyer myself and I live and die by my rates, especially
when you consider even just a half percentage point difference in
interest can have a massive impact over the life of your loan.
Say you got a $250,000 mortgage spread over 30 years. If your
interest rate was 4 percent, you’d end up paying $429,673 total, with
$179,673 going to interest alone.
Sound like a lot? Just wait.
If you locked in at 4.5 percent for the same loan, you’d pay $456,017
overall with $206,017 going to interest. And if you went “all the way”
up to 5 percent? That adds up to $483,139 overall with $233,139 in
interest. Yep: Shaving just that half percentage point off your interest
rate could save you more than $26,000.
Using the same standardized quote, I found the average costs and fees
among all the lenders. To make it past the final round, companies had
to have below-average interest rates, fees, and closing costs — plus an
affordable monthly payment. The average interest rate from my list of
lenders was 3.729 percent; anyone higher (Wells Fargo at 4 percent and
LoanDepot at 3.875) was nixed.
Quicken Loans, Alliant, and Citibank won me over.
And my winner had it all: Quicken Loans is
well-rounded and robust. Getting pre-approved with Quicken took under
30 minutes end to end — and that included the time I spent on the phone
with its customer service. Even better: I’m not getting spammed with
emails and phone calls.
While I loved Alliant’s slick
website, its customer service really stood out. Case in point: I got an
agent on the phone in three rings who offered to help me complete the
pre-approval application if I wasn’t quite sure how. If this were my
first mortgage, their patience would have helped keep my panic at bay. Citibank was
the opposite, and why I recommend it for more seasoned home buyers.
It’s the biggest name out of my top picks, and has the manpower and
resources to keep everything clipping along. Its pre-approval process
was done in a fast 15 minutes, and even though I was assigned a loan
officer within an hour, I didn’t really need it: The Thank You page
listed out all the next steps.
And it’s worth noting that while First Internet Bank and New American Funding had
higher rates than my three top picks, each stood out: First Internet
Bank for its up-front, transparent rates for those looking to refinance
and New American Funding for its Upfront Credit Approval. The Upfront
Credit Approval is an additional step before the pre-approval process
that shows where you’re at without having to hand over your social
security number or getting a hard pull on your credit. This is extra
handy for anyone with a more tarnished credit history.
6 Things to Know Before Looking for a Lender
It helps to speak the lender’s language.
You’ll have a lot of choices when you start shopping for a mortgage.
Do you want a government-backed loan or a private loan? An adjustable
rate or a fixed rate? It can be overwhelming.
Different mortgage options fall into two basic camps: conventional
loans backed by a bank or mortgage company, and government-backed loans.
Conventional loans vary in length, rates, fees, and other terms. Many
conventional loans have a standard 30-year repayment term, but you can
opt for a 15-year (or even lower) term generally at a higher interest
rate.
Government-backed loans are insured by a government branch. A
government-backed loan can have some perks, like a lower down payment or
more flexibility in credit score requirements, but not everyone
qualifies. Take Veterans Affairs (VA) loans: They’re more lax about
credit scores and can be completely financed, meaning there’s no down
payment at all. But to qualify, you (obviously) need to be a veteran.
USDA loans are another good option for people with past credit
problems or those struggling to build a down payment, but to qualify,
your house has to be in a rural area. Even most “out in the country”
suburbs aren’t eligible.
The most well-known government-backed option of the bunch, the FHA
loan, has a lower down payment requirement than most other loans — as
low as 3.5 percent! — and the credit score requirements aren’t as strict
as you’d might expect. But as a trade-off, most FHA loans require you
to pay mortgage insurance for the life of the loan, much longer than a
conventional loan requires.
To complicate things even more, the minimums listed by the VA or FHA
aren’t all you need to qualify. Since the loan is only guaranteed by the
government but issued by a lender, the lender can stack its
own requirements on top. Known as overlays, these additional
requirements could affect your approval. “Banks always have overlays on
top of federal lending guidelines that make loans more restrictive,”
says Nick Schlekeway, designated broker for Amherst Madison Legacy Real
Estate. “FHA has a debt-to-income ratio cap at 57 percent, and the
lender may put a debt overlay of 10 percent on top of that.”
If I’m making it sound like government-backed loans aren’t your best
deal, don’t worry. An overlay could have an effect on your loan, but it
isn’t likely to be a big one. Think of this more as just a “good to
know.”
Quicken
Loans makes it easy to see which options can fit a variety of
situations — from adjustable rates to flexible term lengths.
Get a fixed rate.
Mortgage interest rates come in two flavors — fixed, meaning you’ll
pay the same through the life of your loan; and adjustable, meaning
after a period of time your interest rate might increase. Fixed rates
are an attractive option because you’ll always know what your payment is
going to be each month. Adjustable rates are attractive because they
often start off lower than fixed rates, and that could mean you might
get approved for a higher loan amount (and possibly get a bigger and
better home).
So which is better?
Right now, a fixed rate is. Adjustable loans were really popular
when interest rates were super high because, although you were locked
in at that rate for a period of time, you had the potential to decrease
later without having to refinance. Right now, that’s not an issue.
I’ll be blunt. If you need to get an
adjustable-rate mortgage right now to afford a home, you shouldn’t be
buying a home. The rates are still so ridiculously low that you should
lock a fixed rate in while you can. Joshua Jarvis
Founder Jarvis Team Realty
Your rates are yours and yours alone.
Some lenders are extremely forthcoming with the interest rates,
closing costs, and fees you’ll pay for getting a mortgage — I
specifically looked for lenders that are — but what you see advertised
may not be exactly what you get.
That’s because a lot goes into determining your interest rate: If
you’ve had past credit problems, for example, you may have to pay a
higher rate. On the other hand, if you’re willing to put down a large
down payment, your quoted rate may be lower. The numbers will also
change depending on what loan product you pick: FHA interest rates are
lower than conventional loan rates when you apply; opting for a 15-year
term instead of a 30-year term could also lower the rate a bit.
The good news is you can shop around — and you should. Different
lenders will offer different terms, and if you apply to several within
30 days, all of those hard pulls on your credit report will only count
as one inquiry.
Interest rates might go up.
In December 2015, the Federal Reserve agreed to raise the interest
rate for the first time in 10 years. It’s not much of a hike — only a
0.25 percentage point increase — but that little number could change
what you’ll pay for a mortgage.
The Fed doesn’t determine the exact interest rate you get: That’s up
to your lender. But the Fed’s increase might be a good reason to finally
raise the mortgage rates above the historical lows we’ve been enjoying.
The problem is, no one can say for certain when that will happen.
“We’ve all been telling each other that rates are going to go up for a
decade now. And we know they will go up — just not when,” explains Schlekeway.
It’s also hard to tell how much the increase would actually be, and
if you’ll even notice (much). “Do I think it is going to have a huge
effect on the housing market? Not really,” Schlekeway says. “But it
depends on how much rates go up. Too much could affect affordability.”
The simple answer might be to pull the trigger now if you’ve been on
the fence about buying. Rates are currently low and getting in before
“anyone’s guess” happens is a win.
You don’t need 20 percent down, but it helps.
Having a 20 percent down payment is a good thing: It ensures you’ll
avoid monthly private mortgage insurance (PMI) payments (no one wants to
throw money away). It may also help you get better rates or terms. But
what if you just can’t get there?
Socking away $30,000 isn’t an easy task, especially for first-time
buyers who don’t have something large like, say, a house to sell to
boost their savings. But that doesn’t mean you have to give up on buying
a home.
There are so many rumors and false
information floating around about lending. It is unbelievable. Having to
have a 20 percent down payment is definitely false. Most people that I
see are putting 10 percent down, but FHA loans go as low as 3.5 percent
down and you can find conventional loans for 5 percent. Nick Schlekeway
Designated Broker
Amherst Madison Legacy Real Estate
Still, if you’re right on the cusp of 20 percent, waiting until you
hit that marker is likely the better financial decision. When you start
off with a higher down payment, you’ll already have some equity built
up, and that is a good thing. “Your down payment and your equity in your
house is your safety net if the market shifts,” Schlekeway says. Having
equity will keep you from being underwater on your mortgage and give
you the option to sell (and make some money) if you need to.
Past credit problems won’t keep you from buying.
During the housing market crash, lenders got spooked: They tightened
requirements and it was difficult to get a loan if you had blemished
credit. But every expert I spoke with agrees that this isn’t the case
anymore.
Lenders are willing to lend again, and to give more people a chance. Things like the Dodd Frank Act
— an act that standardized the mortgage-application process, giving
lenders clear steps to follow for most loans — have helped ease the way
too, and people with a few credit faux pas shouldn’t be afraid of at
least applying for pre-approval.
“We get home buyers that ask if they should even bother thinking
about a loan if they have bad credit. It’s just the wrong thinking,” Jarvis
says. “They view lenders as this scary thing or process, but a good
home lender will walk a client through the process of getting the money
to buy.”
You may not be instantly approved, but the right lender will take the
time to work with you, offer suggestions for improving your chance for
approval, or even hook you up with their credit repair specialists if
you need it.
Ready for that mortgage?
Before you apply, save yourself a lot of stress (and possible
heartache once you’ve found your dream home) and take these
pre-application steps:
Get your down payment together. You’ll need funds
for the down payment, closing costs, moving expenses, and pretty much
everything else. Start saving at least six months — but ideally a year
or more — in advance so you have the largest down payment possible
before you apply.
Pull your credit reports. You get free reports once a year through AnnualCreditReport.com.
Dispute any errors you find; pay any outstanding bills; and then don’t
take on any more credit. Just work on paying on time and getting those
scores as good as they can be.
Practice making payments. If you practice making
payments ahead of time (put the extra in your savings each month), you
won’t go through new homeowner shock later.
Get pre-approved. Once your financial ducks are in a
row, apply for pre-approval before you start shopping for a home. A
pre-approval letter shows sellers they should take you seriously.
Get a real estate agent. You really can’t go at this alone. A qualified real estate agent is your best advocate in the home-buying process.
The Bottom Line
The best mortgage companies fit four criteria: They offer fair rates,
have online tools you can actually use, are quick to communicate, and
won’t leave you hanging if you need help. My top five lenders — Quicken Loans, Alliant Credit Union, Citibank, First Internet Bank, and New American Funding —
all stood out for different reasons, but hit every mark. Your
individual rates and terms will vary, but if you’re looking for a
mortgage, these are the best places to start.
If you want to learn more about mortgages, take a look at some of The Simple Dollar’s other articles on home loans:
Shortly after you close on a mortgage,
whether it’s because you just bought a home or refinanced your existing
loan, you’ll probably start getting daily solicitations in the mail
urging you to purchase mortgage protection life insurance.
These solicitations disguise themselves as official requests from your mortgage lender
with details about your mortgage, like your lender’s name, how much you
borrowed, your loan type and, of course, your name and address. In
stern, bold lettering, they lead with statements like these:
“IMPORTANT NOTICE: PLEASE COMPLETE AND RETURN”
“FINAL NOTICE: MORTGAGE PROTECTION CARD”
“NOTICE OF OFFERING: MORTGAGE FREE HOME PROTECTION”
Then they get into the scare tactics and emotional pleas:
“What if you die suddenly? Would your family be able to continue paying the mortgage and maintain the same quality of life?”
The solution they offer is a program claiming to “protect your family in case of an unexpected tragedy by paying off your mortgage.” It’s called a mortgage protection program or mortgage protection life insurance. “Without this plan,” the solicitations say, “your family would still have to make your monthly mortgage payments.”
But mortgage protection insurance (MPI) is really just a type of life insurance.
It’s sold by banks affiliated with lenders and by independent insurance
companies that can obtain information about your mortgage from public
records. Policy terms and conditions vary by state and by insurance
company; the information provided here is meant to be a general overview
and may not precisely reflect the terms of any specific policy. That
being said, most people don’t need mortgage protection life insurance.
Here's why, plus information on who might actually benefit from having
one of these plans.
No Flexibility (Maybe)
With regular term life insurance,
your survivors or caretakers can use the money they receive as they see
fit. Under some traditional-style mortgage protection insurance
policies – particularly those purchased through your lender – the
insurer sends the benefit payment directly to your lender so your
beneficiaries never see it at all. A better option is a mortgage
protection policy that pays your loved ones directly. More and more
policies do, so be sure that's the kind you get if you choose this
product.
Higher Cost
If you’re healthy and have never used tobacco, you’ll usually pay
more for coverage when you get mortgage protection insurance than you
would for term life insurance.
“The main reason for not buying the MPI is the cost,” says Bakul
Modi, an insurance adviser at Protection from Life in the
Raleigh-Durham, N.C. area. “It typically offers a declining amount of
coverage for a cost that is higher than a term policy. You can get level
term protection for a lower cost with term insurance.”
Unlike other types of insurance, it’s difficult to get a quote for
mortgage protection insurance online. Prices for mortgage protection
insurance can vary widely; there is less transparency
in this market and there are too many variables to accurately compare
prices, Modi says. But here is one example of the difference in payment:
For a 35-year-old male nonsmoker living in New York, a 30-year mortgage
life insurance policy from State Farm might cost $755 per year. If he
qualified for the best rates on a 30-year term life insurance policy, he
might pay $345 per year; if he qualified for the worst rates on the
same policy, he might pay $677.50 per year. These prices are subject to underwriting, which may require a medical exam.
What’s more, the premiums
on the mortgage protection policy might only be fixed for the first
five years; with that kind of policy, they could then go up or down.
You’ll have to consult the policy to see how high the premiums could
get. By contrast, the term policy has fixed premiums for 30 years; no
surprises or price increases.
Shrinking Payout (If You Buy the Wrong Kind)
Many mortgage protection policies do offer level premiums for the policy’s duration, meaning that your premiums will stay the same.
This feature sounds great – except that with many policies the coverage
these consistent premiums buys you will shrink over time as the
potential payout decreases. This type of mortgage protection life insurance is referred to as “decreasing term” insurance.
Here's the reasoning: The insurance is designed to pay off your mortgage balance, and each month, you pay down part of your mortgage principal. Therefore, the mortgage protection insurance policy’s potential payout shrinks every time you pay your mortgage.
Instead, look for the newer type of mortgage protection product where the payout doesn’t decline; this feature is called a level death benefit.
What it means is that if you're covering a $100,000 mortgage, your
beneficiary (not the lender) will receive the whole $100,000, even if
the mortgage debt has declined to $65,000. If you pay off the mortgage
while the policy is still in effect, some policies allow you to convert
your mortgage insurance into a life insurance policy.
Returned (But Inflation-Eroded) Premiums
Some mortgage protection insurance policies will return your premiums
if you never file a claim. Does this make up for the fact that your
coverage declines although you keep paying the same amount? Not really.
After 15 or 30 years, when your mortgage is paid off and you get your
premiums back, they’ll be worth far less because inflation will have
eroded their value. You also will have lost the opportunity to invest
what you saved from purchasing cheaper term life insurance instead of
mortgage protection insurance. That’s 15 or 30 years of potential compounding returns down the drain.
So Who Might Benefit?
Some people don't qualify for term life insurance because of their
medical history or current poor health – and aren’t eligible for a group policy that doesn’t require medical underwriting
(employer life insurance may not require a medical exam, for example).
For these individuals, mortgage protection insurance could be a useful
alternative. .
“MPI is usually sold without underwriting,” Modi says, “so if you are unable to get term, MPI might make sense.”
If that fits your situation, get quotes from several companies – not
necessarily the ones that sent you the alarming letters through the
mail. Any time you purchase insurance, check the firm’s financial
strength rating with A.M. Best,
a company that gives insurers a letter grade to help consumers evaluate
whether the insurer will be able to pay them if they file a claim.
To avoid a declining-payout MPI policy, you might be better off with a no-medical-exam (also called “guaranteed issue”)
term policy with level premiums and a level death benefit. These
policies cost more and sometimes have lower coverage than term policies
that review your health and medical history, but they’ll pay the same
benefit whether you die 5 or 25 years into your mortgage.
Another possibility: Mortgage protection insurance could offer more
coverage at a better price earlier in your mortgage term, but once
you’ve paid down the principal significantly, you might be better off
switching to a guaranteed issue term policy.
“If you cannot qualify for term insurance, be sure to shop around,” Modi says. Compare the fine print
to see what you’re really getting for your money. “While there are
scams out there, it is a legitimate, albeit expensive, product,” he
says. “Not all policies are equal.”
Here are two more important considerations if you're considering MPI:
Age Limits
Like many other types of life insurance, mortgage protection
insurance may not be available after a certain age. State Farm, for
example, only offers 30-year mortgage protection insurance to applicants
age 45 or younger; the age limit is 36 in New York. You’ll need to be
60 or younger to get a 15-year policy.
Don't Confuse It With Private Mortgage Insurance
While the names sound similar, mortgage protection insurance and private mortgage insurance
are completely different products. Private mortgage insurance protects
the lender, not you. If you put down less than 20% on your home, you pay
monthly premiums to a PMI policy that will pay your lender if you default. If you die, your heirs
will continue to owe the mortgage payments and would have to default on
them before PMI kicks in. If anyone depends on your income, be sure
that you purchase life insurance to help them pay the mortgage and other
expenses after your death.
The Hard Sell
Mortgage protection insurance companies might try to convince you
that you need their product in addition to life insurance. They’ll tell
you that paying off the mortgage will eat up a major portion of your
life insurance proceeds,
leaving much less for your survivors to meet their basic living
expenses. But if you don’t think you have enough life insurance, you
should buy more; it will probably cost less to increase that coverage
than to purchase a separate mortgage protection policy. The other flaw
in this argument’s logic is that your survivors would need to pay off
the mortgage if you died unexpectedly. That isn’t always the case and
isn’t necessarily the best use of insurance proceeds.
The Bottom Line
Financial experts usually don’t recommend any insurance product that
only pays certain bills. If you’re concerned about your spouse or
children inheriting a mortgage they might not be able to pay, term life
insurance is the best option for those who qualify. Even though some
policies are more flexible now, people should heavily research term
insurance and other options before choosing mortgage protection life
insurance.
Are you wondering how to refinance, when to refinance, and what all
of the terms really mean? We’ve put together answers to some of the most
frequently asked questions regarding refinancing!
Should I refinance?
As a general rule, if you can shave at least a half point off your
current interest rate, it is a good idea to refinance. If you currently
have a home mortgage above 7%, the time is now to make a change.
However, your decision should also depend on how long you plan to stay
in your home. If you are only going to stay 2 to 5 years, you should
figure out the cost of the refinance. Will you pay more in closing costs
than you will save on your monthly payment? For those who plan to move
after a few years, a ‘no-cost’ loan, which drops your mortgage payment a
significant amount, would probably make sense.
What is a ‘no cost’ or ‘zero cost’ loan?
A ‘zero cost’ loan means that you pay no closing costs for the loan. A
‘zero cost’ loan is different than a ‘zero point’ loan. You will
probably have to take a higher rate to get a zero cost loan, but that is
okay. Closing costs include appraisal, credit report, processing fee,
underwriter fee, attorney fee, notary fee, title insurance and any other
fees the lender may make up. Closing costs typically cost between
$2,000 and $2,500.
How do I find good rates?
Clark likes using Bankrate.com
for quotes. It gives you the option of selecting the number of points
you want to pay. Remember to call and verify the loan rate, and make
sure the loan officer you speak to adheres to that published rate.
Choose the lender that offers the lowest total cost for the first 30
months of the loan.
If you prefer to automate the process of finding the best rate, you can use this free loan cost calculator.
With it, you can compare up to 3 offers head-to-head and the calculator
uses interest rate and APR to calculate the total lowest cost loan for
you.
The data is so stark right now that the big banks are not a place you
want to go for a refi. Try looking at mortgage brokers, credit unions,
small local community banks, or even online banks for a rate quote.
When you’re shopping, use a form like the American Enterprise Institute’s mortgage cheat sheet (and definition of terms) to get plain-English disclosure about the terms of your desired loan.
What are points?
A point represents 1% of the total amount of money borrowed. There are
two types of points. Borrowed points are a profit paid to a lender.
Discount points are a fee paid in advance to lower the interest rate
over the life of a loan.
Do I have to stay with my existing mortgage company when I refinance?
No. You are under no obligation to remain with your current lender. But
it is a good idea to let them know what you’re planning to do so they’ll
offer you their best rate.
Should I change from a 30-year to a 15-year loan when I refinance?
If you can afford to pay a bit more each month to pay off your loan,
this is a smart move. Clark’s previous producer Teresa was in this
situation. The balance on her home was $118,000. She had been offered a
15-year ‘zero cost’ loan at 6.5 percent. Her monthly payment would go up
to about $1,300. That’s $200 more than the $1,107 she would pay on a
30-year loan. But, over the life of the loan, the 15-year loan would
save her $8,795. For help calculating your costs, go to hsh.com.
What is a ‘good faith estimate?’ Do I need one?
Yes. Every lender you talk to should mail or fax you a good faith
estimate of all charges when you discuss a refinance with them. The
estimate will include such things as a list of fees, including closing
costs, calculated taxes and your estimated monthly payment. The estimate
gives you documentation to refer to at the closing of the loan, as
well.
You still may qualify for a refinance as part of the federal Making Home Affordable
program — even if you’re upside-down in your home. To determine if
you’re eligible, starting by finding out if your loan is held by Fannie
Mae or Freddie Mac. Contact Fannie at 1-800-7-FANNIE and Freddie at 1-800-FREDDIE from 8 a.m. to 8 p.m. ET. Start with Fannie Mae — they’re the larger of the two. More resources:
If you aren't comfortable with the language of mortgage loans,
locating the best rate in New Jersey can be challenging. If you don't
know that a low payment amount can sometimes mean only a minimal
reduction in your debt balance, you could end up spending way too much.
Likewise, if you aren't aware that the APR allows you to compare
mortgages that have different closing costs, you might be mislead by a
stated rate. Most people aren't mortgage industry experts. That's why
Mortgageloan.com has assembled the resources necessary to make mortgage
and refinance decisions easier. All the tools that you need to find,
understand, and evaluate mortgages is here, from mortgage calculators to
a broker directory to a large selection of informative articles.
Somewhere between the glitz of Atlantic City to the serenity of the
sandy shoreline, New Jersey has the lifestyle you want. Your ideal
mortgage is out there too, and Mortgageloan.com will help you find it.
Rate Map for New Jersey
This
Rate Map for the state of New Jersey shows the rates that individual
borrowers were able to obtain on refinanced and home purchase mortgages.
Each balloon represents a single mortgage – click on them to see what
kind of rates borrowers are getting in your area.
Use the options
in the column at left to sort your choices by location and credit score.
Individual balloons also feature information on loan size,
loan-to-value ratio, loan type, lender and more.
If you recently
obtained or refinanced a mortgage and would like to anonymously share
information about the terms you were able to get, just click on “Share
Your Rate” above the map. Your fellow borrowers will thank you!
Home Equity Loans
Home
equity loans are used to convert home equity into borrowed cash. These
loans are structured with a fixed payment and pay-off schedule. Home equity loan rates
in New Jersey will generally be higher than refinance rates. There are
situations, however, where it makes sense to pay the higher rate rather
than refinance your home. An example would be if you want to pay off the
equity debt in 15 years, rather than rolling it into a 30-year
refinance.
ARMs
Adjustable-rate mortgages (ARMs) are ideal
for the New Jersey borrower who's short on buying power now, but
expects an income increase in the future. ARMs start out with a low
fixed rate, which later switches to a variable one. The initial rate
usually lasts for one, three, or five years. After that time, the rate
is regularly adjusted to move with a specified financial index.
Comparing Mortgages
You'll benefit greatly by clarifying your goals and objectives before meeting with lenders. Some items to consider are:
Your
budget. You may not know how much you can afford until you have a
working knowledge of how the different loan types work. Mortgage
calculators are extremely useful in this regard; use them to run the
numbers on various mortgage types, loan amounts, and interest rates. If
necessary, review how the rates for different loan types compare.
Your
timeline. How long you plan to own the home could determine which loan
type is right for you. The same goes for any foreseeable changes in your
financial situation.
Be prepared to consult with several
different New Jersey lenders, because that's the best way to ensure that
you get a good rate. You can find the contact information for qualified
New Jersey lenders here. The next steps are to schedule your meetings,
talk with prospective lenders, submit your loan applications, and wait
for your loan offers. Then choose the most affordable and suitable
option, and get ready for your closing.
