3 Mortgage Mistakes You Can Avoid

The mortgage market in today's world is pretty chaotic, at best. Rates are ridiculously low, and many homes are worth less than the mortgages they secure. People are still losing their homes left and right, but qualified borrowers are being denied loans every day. It's no wonder potential and current home owners alike are confused about mortgages. I found this great article from inmanNEWS titled "3 mortgage mistakes you can avoid," which I thought would be great to share with you all to try and clear things up a bit. The mistakes are:

1. Failing to try to refinance because you're upside down.
At last count, nearly 11 million Americans were upside down on their homes - meaning they owe more in mortgage payments than the home is actually worth - and that's about 23% of all American homes. With interest rates having dropped to historic lows, more than 10 million Americans have refinanced their mortgages since 2009. But there are still many homeowners with negative equity feeling trapped in the 6, 7, or even 8 percent interest rates because they're unable to refinance.

The fact is, there are multiple options for lowering your interest rate and monthly payment if you're upside down. Banks are increasingly amenable to simply modify existing mortgages to render them less prone to default and foreclosure - especially when the homeowner is trying to recover from a financial hardship, and especially with upside-down loans (which are particularly liable to strategic default).

2. Walking into the bank branch to get a mortgage.
Unless your bank happens to be a neighborhood credit union or one of the few large banks that ranks highly in customer satisfaction, you'll likely not be satisfied with the speed, customer service or assertiveness of a mortgage banker you meet just walking into the branch. But if you work with a mortgage broker or a private mortgage banker, chances are good you'll get someone who understands that the long-term health of their business depends on you and clients like you getting a good deal in a timely manner.

Also, if you work with a mortgage broker whose company also has its own bank, you get the best of both worlds: a professional who will shop lots of banks' offerings to find the best options for you, and someone who can coordinate your transaction via a small pool of local, experienced appraisers. Many large banks use appraisers who don't know the area, which can kill your deal in the long run.

3. Thinking you're stuck with it for 30 years.
Some people avoid mortgages simply to avoid a 30 year debt. Others are stuck with a 30-year loan because the 15-year mortgage payments were too steep. But the fact is, you control when you pay off your mortgage, and it doesn't take a lottery or inheritance windfall to pay yours off sooner than later.

Some people pay half their mortgage payments every two weeks, which results in a full extra payment every year and can pay your mortgage off as much as five years early. Others just pay an extra $100 or so whenever they can and apply it to the principal. Some apply paycheck raises over the years or the amount they would use to extinguish a credit card debt in an effort to pay the mortgage off early.

What to take away? As a borrower, you have much more power than you think - from exploring all available options to being aggressive about paying off your home sooner rather than later. Either way, be clear on your personal goals for your mortgage, get educated about your options and get assertive about making them happen -- now.

** Be sure to check out the original article at InmanNEWs.com.

Bumper Stickers

On my way to work I saw a bumper sticker that read "the problems we're facing right now will not be solved by the person and/or persons who created them." I instantly thought of our politicians and blamed them for our problems and agreed that yes - they caused the problems and yes - they would not be the ones to solve them.

But really think about this. It certainly is easy to blame everyone else for the problems when in reality, the problems have been caused by a combination of a lot of factors. We need to accept accountability and move forward and yes, I believe that even though we created the problems, we are capable of solving them. We need to stop blaming other people and just get it done.

It's Not All Bad News

Good economic news can be a little sparse right now and selling your home in today’s market can be intimidating if you are not working with a REALTOR® who has experience and market knowledge. Many homeowners are scared they will be selling their home for a discount in today’s market, and if you listen to the national news, this will only feed the hysteria.

Don’t base your decisions on what you read in the paper and hear on T.V. because not all markets are the same. The first step would be to request a comparative market analysis from a REALTOR® to determine if it’s the right time to sell or not.

Keep in mind, if you are selling your house for possibly less than your purchase price, you may be able to more-than offset this by your next purchase. Many homeowners are taking advantage of this with low interest rates to move up to their dream home!

Monthly Financial Reviews

As I prepare the monthly owner statements for e-mailing/mailing this month, I always wonder what percentage of our real estate owners look at their statements. In my opinion, this is one of the crucial items that real estate investors need to take time to do each and every month. By spending 10-15 minutes on the monthly reports, real estate investors can determine the following items:

• The status of tenant rent receipts - what was owed versus what was collected
• Number of units vacant
• Detail of expenses that were paid during the current month, as well as copies of receipts
• Net operating income of property/properties in previous months versus net operating income of property in current month
• Any outstanding expenses that haven't been paid yet due to insufficient funds or project not complete

By spending time each month reviewing the financials on your properties - you might not like the results in this market, but at least you have the knowledge of why. Take the time - it is very important!!

Home Loans

I just wanted to share a quick article with you entitled "Fed Imposes $85M Penalty Against Wells Fargo."

Essentially, Wells Fargo was hit with this fine for leading customers into high-cost loans and also for falsifying income information on home loan forms. So to everybody out there about to take this big step in their life: MAKE SURE YOU KNOW WHO YOU'RE DEALING WITH!!! Loans and mortgages can follow you for a lifetime, so make sure you trust the people you're working with to recommend what's best for you and not their pockets! Because unfortunately, although a lending company or bank is well-established, it doesn't mean they are trustworthy.

Rent Increases

I question if it is a good time to increase rent or not. Do you take the chance of loosing a good tenant over a rent increase of say $25.00 to $30.00, or do you increase the rent in hopes that the tenant will be able to absorb the increase and all will be good?

The rents in the Omaha area are very competitive right now. Every where you look there are move in specials, free rent, no deposit. How do you decide?? Would you move over a rent increase??

First Time Financing

My advice to anyone looking at their first home purchase is to start saving. I would recommend that all buyers try to secure a conventional loan. They are easier to get and have fewer restrictions.

I ran into a problem last month with a buyer who wanted a foreclosure but had an FHA loan. The lending prohibited him from buying the house while any repairs were needed. The bank would not do any repairs before the sale. A normal FHA loan wouldn't work for him. When he tried switching to a FHA 203k loan, the new lender denied him the financing. If he had the savings to put down a payment with a conventional loan, he would be living in a new house right now instead of renting still.

My Firsts

This week marks two firsts for me, my first day at Landmark and my first experience in blogging. I have never been one who is good with words, let alone making my words interesting for others to read, so here it goes.

Recently, my husband and I decided to refinance our 30-year mortgage into a 15-year mortgage. There are a lot of people that are hesitant about refinancing because of the new closing costs that might be applied. However, it is important to remember what a 15-year mortgage could do for you. These are just a couple of the reasons my husband and I decided a refinance was right for us.

We were able to lower our interest rate. Especially in today’s market the interest rates are lower than ever if you can qualify.

We will be able to pay our home off faster. Obviously, the loan is cut in half, but a 15-year loan allows the equity to build faster than on a 30-year mortgage.

We will be able to save thousands of dollars in interest over the life of the loan. Just by switching to a 15-year mortgage and lowering our interest rate my husband and I will save close to $100,000 in interest alone during the life of the loan.

So whether you have been thinking about refinancing or it has never crossed your mind, it is something to definitely consider