Refinancing helps homeowners save a lot of money. It is important for homeowners to be aware of the changes in the interest rates in their area and to take advantage of it when the rates dive really low.  This offers them the most money in savings in a refinance on their current California home mortgage loan.

To find out how much a homeowner may save through a refinance, it is good to start with a loan calculator. Loan calculators can be found all over the Internet and there are many guides on how to use them. These are programs that help homeowners compute for differences between two different loans.

It can also give them accurate figures about monthly payments that they will be paying for certain home loan plans. For example, someone with a $250,000 loan payable in 30 years at seven percent who will pay it down to $175,000 in eight years can definitely benefit from a refinance, since current rates are at 5 percent. When we put this scenario through a loan calculator, the end result is that about $300 worth of savings can be achieved every month through a refinance.

When we buy houses, we usually buy either directly with cash on hand or through an installment plan with a home loan. With the dwindling economy, buying a house through a home loan is the more practical option.

After you choose your dream home, the next step is finding the best home loan to pay for it. It is very important to choose your loan carefully. There are many lenders available in California who offer many different loan types. It might be overwhelming going through all the lenders, but it is a sure way to get the best payment plan for your house.

Your typical types of home loans are fixed rate, adjustable rate, or second mortgages. Fixed rate mortgages offer a fixed monthly payment until the loan is fully paid. Adjustable rate mortgages are the exact opposite and are usually paid at a lower initial interest rate, which increases as the loan progresses. Second mortgages usually have either fixed rates or adjustable rates.

In the Sacramento area, homeowners have a variety of choices in terms of home mortgage loans. These choices vary in length, loan type, and interest rates. There are many different lenders, like Voyage Home Loans, that offer great rates, quick processing and excellent customer service, often with some variation of borrower loan education throughout the loan process.

One important thing homeowners should always do before getting their mortgage loan is to thoroughly think things through. It is always better to be safe than sorry. With home mortgages, we are talking about long term obligations, and these are no joke. No matter how pressed you are to make a decision, the best thing you can do for yourself, and the many years you will be paying for your home, is to think things over before making a decision.

Are you over shopping for a mortgage?

As a consumer, you should shop for the best rate and fee structure, but do not shop yourself out of the best pricing. Rates go up and down throughout the day and there are ideal times for your lender to lock to get the best rate for you.

If you are in the market for a American mortgage and are looking to get the best rate available, then make sure that you provide your lender with the information they will need to lock when rates hit your goal rate.

If you would like to speak with someone about your loan needs or you just want some information as you shop around, please contact me at your earliest convenience.

Rita Reyes, Mortgage Specialist

Got a Question? Send me an Message!

VoyageHomeLoans.com

Refinancing means getting a new loan to pay off an existing home loan. This is a common practice nationwide. The trick in refinancing is to time it perfectly. The best timing can get you more savings than you ever imagined.

For example, you refinance and pay about $2,000 in closing costs. Then, the refinancing ends up giving you $100 savings each month. So this means that the closing cost of $2,000 will be paid off by the $100 monthly savings that you get in about twenty months. This timing will give you the most savings if you timed your refinancing the earliest that you can.

Here is another example:

You have been on a home loan for five years. The loan amount is $125,000 with a monthly interest of 10%, payable in thirty years. The calculations of the home loan means you pay $1,097 every month for the next twenty-five years, since you are already five years in to the loan. Then you suddenly decide to refinance. A good choice would be to pick something that can allow you to cover the closing cost as soon as possible. The real savings come in after the closing cost has been paid off.

Just be sure you observe the two-percent rule. Meaning, your refinancing loan should be at least two percent lower than your existing home mortgage.

A large portion of California residents pay for their homes through a home mortgage. For the residents on a mortgage home loan, two end results usually happen. One, the home loan is fully paid off; or two, the house is foreclosed. A foreclosure is a borrower’s nightmare. But little do we know that even lenders fear foreclosures too.

One of the reasons lenders avoid a foreclosure is because of profit. The moment a property is foreclosed, the flow of profit (that usually comes from the interest of the loan) stops. After a property is foreclosed, more problems come in to play for the lenders. They are in charge of taking care of the property while it is still vacant and in the selling process. This situation forces the lender spend money just to maintain the condition of the house.

The last reason why lenders avoid a foreclosure is because of the tedious task of selling the house again. Foreclosed properties are cheaper than brand new houses. And while the lenders shoulder fees normally paid by the buyers in a brand new sale, they will also have to take a much lower offer than usual. Although this is a chance to earn again, it is also a huge hassle.

Whether you are buying your very first house in California, planning to relocate to California after residing in another state, or have been a resident of California for a while and are just looking to refinance or take a home equity amount, it is still important to know details about California home loans. In California, the median cost of a home is $211,500. This is easily above the average nationwide price. However, this is beneficial because a California house appreciates excellently.

Before a buyer makes his offer on a house that he wants to buy, the real estate agent attending to the buyer will need to complete a Real Estate Transfer Disclosure Statement. This statement will contain the seller’s notes about what appliances and/or furniture will come with the house, etc. The seller will also state possible sources of problems in the house or certain hazards that could greatly influence the buyer’s decision in going through the purchase.

In California, there are also laws set up to protect buyers from unscrupulous lenders. These are set up to ensure the buyers will not have a hard time paying their monthly obligations from the loan. But no matter the number of laws protecting buyers, it is still best to have good judgment. It adds an extra safety net for you as a buyer when processing your home loan application.

Defaults occur before a foreclosure is done on a property. In Sacramento, the rate of defaulted properties is improving and reaching levels that are the lowest they have been in the last three years. This is an indication that fewer homeowners will lose their homes to foreclosures this year compared to last year. Experts say that this improvement should last for a while. They also believe that the quality of the home loans themselves has greatly improved. A loan granted back in 2006 has a higher probability of being foreclosed compared to a loan offered in 2008.

This year, 70,051 default notices in California were tallied for the second quarter. This is an improvement from 44% of last year, and shows how the homeowners are able to make payments. Before 70,051, the last recorded low was 54,000, three years ago.

Foreclosed properties have risen while default notices dropped. This may be a bit confusing, but experts say that the foreclosures came from defaults that happened months back. Foreclosures are usually delayed from their actual defaults. That means that the low defaults of the second quarter will mean the decrease of foreclosures in the next quarters of the year. On the other hand, the housing market has also improved in Sacramento. Median prices of a home is at $185,000. This is the highest recorded price since 2008.

Many first time buyers in California will seek a home loan to help them pay for their now house. There are many requirements to get a home loan, but these are very doable.

The very first thing to start an application for a home loan is to get preapproved. The banks, mortgage bankers, and credit unions who offer the home loans in California will have requirements, and these will be important to get you started as a borrower. Your credit score will also be checked and is important information that lenders will use to assess your qualifications in getting a loan. If your credit score is not outstanding, you can discuss this with your lender. They can accommodate your concerns and check if they have loan programs that will fit with your credit score.

Next, you should think about the possible down payment that you will need to pay for the house. The down payment amount will depend on the type of loan you will get. If you are having problems financing your down payment, there are assistance programs that you can take advantage. Keep in mind that there are also closing costs after the down payment.

After all these, you can choose whether to look for an interest rate that is adjustable or fixed. Adjustable interest rates change and usually have lower values compare to fixed rates, which will remain the same throughout the loan’s life.

There are three types of American home mortgages. These are adjustable-rate mortgages, fixed-rate mortgages, and mortgages that easily fall in between the first two. Among the three, adjustable-rate mortgages are the easiest to get with a low interest rate. These mortgages are also the most unpredictable since the interest rate could rise to unimagined levels.

On the other hand, there are fixed-rate mortgages. These mortgages are more reliable in the sense that you are guaranteed the same interest rate until you fully pay off the mortgage. These types of mortgages do not depend on the economy to determine the interest rates offered. And because of this, most fixed-rate mortgages will have a slightly higher interest rate than most adjustable-rate mortgages.

Fixed-rate mortgages are a sure way to build equity. If shorter terms are chosen, the equity can build up quite easily. Although the shorter-termed fixed-rate mortgages will have larger monthly payments, they are still worth it in the long run.

Another great thing about fixed-rate mortgages is the ability to prepay the mortgage. Prepayment means you pay the principal at an earlier date to have lower payments in the subsequent months. However, it is best to double check the conditions of this because some fixed-rate mortgages have a penalty fee for prepayment.