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For the vast majority of us, homeownership means a monthly mortgage installment. If youre not careful, the installment payment can quickly grow beyond your budget, so take a minute to find out what goes into an installment before you start making offers.

A monthly home loan installment contains three parts. First is your monthly repayment loan amount with capital and interest payments. Second is their monthly administration charge. Third is the insurance premium of the homeowner and sometimes life insurance premium also.

To begin calculating your payment, you can access home loan calculators on banking or real estate websites. This will give you a base to start from. Keep in mind that your home loan installment cannot exceed 25 percent of your gross monthly income if you are single or 30 percent of a joint income.

Installments of loans taken by you are highly affected by the rates of intrest fixed by bank. Home loan base rate are fixed for you by your bank as per your credit record. If your record is good you may get rate reduction but above all negotiation for a bettr deal is advisable.

Monthly installments are also heavily affected by repayment terms. Even though the normal period is 20 years you can choose to extend that period by 5 or 10 years more. When you do this your monthly payment will be less but you will pay significantly more money in interest over time. By using an online payment calculator you can get help deciding which route will be the best for you to take.

Monthly administration fees vary so be sure you are clear what the fees for your loan will be before you agree to the loan.

Now,Thanks to the N.C.A. also known as the National Credit Act,You,as the Borrower now do not have to buy homeowner’s insurance from the bank,that financed your home loan. You can now look around, and choose a policy that will fit your needs! You, as you know, will have to talk with your lender about the policy. Buying a policy with another carrier will add more to your monthly fees. When and If you do decide to buy the INS. (Insurance)from your lender, the new premium will be added to the monthly payment. It says that it is 50.3% unique

Your financial institution may need you to buy life insurance which will be used to finance your home loan should you die. You can add the payments for this to your installment. This is something worth thinking about whether nor not it’s a requirement, for the security of your family.

It is important to first obtain a pre-qualification certificate before house hunting. If you do this you will go prepared with a much better idea of what you can afford. It will also send a message to sellers and give you an advantage over other buyers as they will know that you are serious about buying.

Tom Martens is the content coordinator for South Aricas leading Homeloan portal which amongst others offers origination services for FNB homeloans

Comments (0) Dec 08 2009

South Africa is not immune to the current global credit crisis, and the evidence is showing in a couple of ways. First, home prices are dropping. According to statistics released by bond originator ooba, home prices have fallen 6.6 percent overall compared to October last year. In real terms, that means the averaged home priced at R803,908 last October would only be able to sell for R751,118 in October of this year.

A second indication of our poor property market is that potential homeowners are finding it difficult to get financing. Banks are being very cautious because of the credit crisis, the National Credit Act and economic outlook. Even though the rate of home loan declines are down 1.4% it doesn’t really dent last months rate of 51%.

Another reason that banks are clamping down on their lending is because of the increasing number of late payments by homeowners. In just the third quarter of the present year, loans that were more than two months late increased by 21.5%.

What is a potential homeowner to do in this market? It is important to note that decline rates vary from one bank to another, so take the time to try applying with other banks before you give up completely.

Home loan applicants must be able to prove that you can make your installment payments and that you have not been late or defaulted on any other payments for at least two years before making your home loan application. Another must, a sound credit rating. It is no longer enough just to have a steady paycheck.

Potential lenders want their patrons to be stable borrowers, with a solid history of debt payment. If you have this quality, it will be extremely helpful in your pursuit of a home loan.

If your past is not the greatest, it is beneficial to be honest. If you had problems in your credit history lenders appreciate when a borrow states the truth instead of lying. Also, if you open a savings fund in order to gain a home deposit fund, you are showing signs of serious financial obligation. Yet, dig into details because the average deposit requirements stands at 10 percent, but varies in different banks.

The goal that you are looking to achieve is to make your monthly installment less than 30% of your monthly income. You will not even be looked at by a bank if your installments are more than that.

When thought about all in one, the property market today is one filled with great amounts of frustration. In one corner you have sellers that are having a difficult time finding someone to buy their home, and may be forced to reduce their prices, which works out quite well for the buyer. Although it is getting increasingly harder for buyers to secure financing.

As a potential buyer, it is really worth your while to explore every avenue to get a home loan as long as you can afford the payments and your job is stable enough to allow the commitment.

Tom Martens is the content coordinator for South Arica’s leading Homeloans portal which amongst others offers origination services for ABSA home loans

Comments (0) Nov 30 2009

A jumbo mortgage is different than a conforming loan. A jumbo loan amount exceeds that limit set by FNMA. That limit can change every year, but is currently at $417,000.

It may be hard to believe but jumbo mortgage rates are very low in most cases. On a 5/1 arm rates in the low 4% range are readily available.

Jumbo mortgages are available for purchase or refinance. On a purchase the borrower will need to put 30% down or more in order to qualify for financing. The use of the banks money can make more sense then to use cash and stocks.

It generally takes 30-45 days for a loan to close. It can take longer if the Loan Officer or Mortgage Broker is not experienced with the jumbo mortgage underwriting process. With the right company the process can be very easy.

In general the most competitive jumbo mortgage rates will be on loan amounts between $417,000 and $850,000. The loan sizes that are offered vary from state to state and from lender to lender. Rates above $ 850,000 tend to be a little higher.

The loan to value that is offered on jumbo mortgages is dependent upon the loan amount, occupancy status, and property type. Down payment requirements can will range from 30% to 50% depending on many factors.

W-2 employee’s are required to have a 660 credit score and a 700 score is required if the borrower is self employed. Jumbo mortgages require full income verification.

Jumbo Mortgage cash out refinances are available to qualified borrowers. The loan amount will determine what percentage of the value is eligible for cash out. For loan amounts up to $ 850,000 cash out is allowed up to 65% of the equity. 50% is the max as you move towards the $ 3,000,000 loan size.

Jumbo Loans are available for both primary residences as well as second homes. Borrowers should expect higher rates and more conservative loan to values on second homes compared to owner occupied residences. It all boils down to risk!

Group One Mortgage provides Jumbo Mortgage Program throughout the State of Florida. For Jumbo Mortgage Rates CLICK HERE

Comments (0) Nov 15 2009