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Zach DahlVirginia - Key Steps To Save Money Refinancing Your Mortgage
As a homeowner, refinancing your mortgage can be a daunting task for one simple reason: the cost. Many of us forgo this process because the cost of refinancing can outweigh the benefit of acquiring a lower interest rate. Thankfully, there are a few ways to shave thousands of dollars off your closing costs, some of which are offered specifically to Virginia residents, and here is how:
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Refinance with your current mortgage lender: doing so will reduce, if not exempt you from paying state and county transfer taxes required if moving your mortgage from one lender to the next. These costs can be hundreds, if not thousands of dollars added on to your closing bill.
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Avoid Pre-Paid Interest: Think of pre-paid interest as a pro-rated mortgage payment for the month that you close. If your loan funds the 15th of the month and there are 30 days in that month to be accounted for then you will be paying roughly 15 days of prepaid interest at closing. Closing/funding your loan at the beginning of the month(interest credit option for first five days) or at the end of the month will reduce the amount of interest collected at when your mortgage funds. And remember, be sure to calculate from the day your loan FUNDS, not when you close.
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If you would like to discuss some of these options availabe to you, I am always available and ready to help you Qualify & Close your home loan! unsubscribe here
313 2nd St. SE Suite 112
Charlottesville, VA 22902
Fixed Rate Mortgage: With a fixed rate mortgage, the interest rate does not change for the term of the loan, so the monthly payment is always the same. Typically, the shorter the loan period, the more attractive the interest rate will be. Payments on fixed-rate fully amortizing loans are calculated so that the loan is paid in full at the end of the term. In the early amortization period of the mortgage, a large percentage of the monthly payment pays the interest on the loan. As the mortgage is paid down, more of the monthly payment is applied toward the principal. A 30 year fixed rate mortgage is the most popular type of loan when borrowers are able to lock into a low rate. Benefits: - Lower monthly payments than a 15 year fixed rate mortgage
- Interest rate does not go up if interest rates go up
- Payment does not go up, it stays the same for 30 years
Drawbacks: - Higher interest rate than a 15 year fixed rate mortgage
- Interest rate stays the same even if interest rates go down
A 15 year fixed rate mortgage allows you to pay off your loan quicker and lock into an attractive lower interest rate. Benefits: - Lower interest rate
- Build equity faster
- If interest rates go up, yours is fixed
Drawbacks: - Higher mo Interest rate stays the same if interest rates go down
- Interest rate stays the same even if interest rates go down
- Adjustable Rate Mortgage (ARM):
An ARM is a mortgage with an interest rate that may vary over the term of the loan -- usually in response to changes in the prime rate or Treasury Bill rate. The purpose of the interest rate adjustment is primarily to bring the interest rate on the mortgage in line with market rates. Mortgage holders are protected by a ceiling, or maximum interest rate, which can be reset annually. ARMs typically begin with more attractive rates than fixed rate mortgages -- compensating the borrower for risk future interest rate fluctuations. Choosing an ARM is a good idea when: - Interest rates are going down
- You intend to keep your home less than 5 years
ARMs have the following distinguishing features: - Index
- Margin
- Adjustment Frequency
- Initial Interest Rate
- Interest Rate Caps
- Convertibility
- Index
An adjustable rate mortgage's interest rate increases and decreases based on publicly published indexes. ARMS are based on different indexes including: - United States Treasury Bills (T-bills)
- The 11th District Cost of Funds Index (COFI)
- London Interbank Offering Rate Index (LIBOR)
- Certificate of Deposit Indexes (CODI)
- 12-Month Treasury Average (MTA or MAT)
- Cost of Savings Index (COSI)
- Bank Prime Loan (Prime Rate)
- Margin
Margin is fixed percentage pointed added to the index - accounting for the profit the lender makes on the loan. Margins are fixed for the term of the loan. interest rate = index + margin - Adjustment Frequency
- Adjustment frequency reflects how often the interest rate changes - also known as the reset date. Most ARMs adjust yearly, but some ARMs adjust as often as once a month or as infrequently as every five years.
- Initial Interest Rate
- The initial interest rate is the interest rate paid until the first reset date. The initial interest rate determines your initial monthly payment, which the lender may use to qualify you for a loan. Often the initial interest rate is less than the sum of the current index plus margin so your interest rate and monthly payment will probably go up on the first reset date.
- Interest Rate Caps
Interest rate caps put limits on interest rates and monthly payments. Common caps: - Initial Adjustment Cap
An initial adjustment cap limits how much the interest rate can change at the first adjustment period. Example: If your ARM has a 1% initial adjustment cap, your interest rate may only increase or decrease by a maximum of 1% at the first adjustment period. - Periodic Adjustment Cap
A periodic adjustment cap limits how much your interest rate can change from one adjustment period to the next. Usually a six-month adjustable rate mortgage will have a one percent periodic adjustment cap while a one-year adjustable rate mortgage will have a two percent periodic adjustment cap. Example: If your loan has a 2% periodic adjustment cap, your interest rate may only increase or decrease by a maximum of 2% per adjustment period. - Lifetime Cap
A lifetime cap sets the maximum and minimum interest rate that you may be charged for the life of the loan. Most ARMs have caps of 5% or 6% above the initial interest rate. Example: If your loan has a 6% lifetime cap, your interest rate may only increase or decrease by a maximum of 6% for the life of the loan. Initial adjustment caps, periodic adjustment caps, and lifetime caps make up an adjustable rate mortgage's cap structure, and are usually represented as three numbers: Example: 2/2/6 -- Initial adjustment cap is 2 %/ periodic cap is 2% / lifetime cap is 6%.
- Negatively Amortizing Loans
Because Negatively Amortizing Loans provide payments caps instead of interest rate caps, they limit the amount the monthly payment can increase. However, there is a risk interest rates could potentially escalate to a point where the monthly payment would not cover the interest being charged. If this scenario were to occur, the extra interest charges would be added to the principle of the loan, resulting in the borrower owing more than was initially borrowed. Borrowers are usually allowed to make payments over the loan amount to pay down the mortgage and guard against this scenario. There are certain times when having a negatively amortizing mortgage could be beneficial. If a borrower were to lose a job or have an unexpected financial emergency a negative amortization option could ease cash flow situation. However, this should only be used as a short-term solution. - Option ARM loans
Option ARM loans allow the borrower to choose the amount to pay toward the mortgage each month. Make a minimum payment, interest-only payment, 30-year amortized payment or 15-year amortized payment. Pay the minimum amount to free up funds for other uses, or make larger payments for faster equity build up. Option Arms offer much more cash flow flexibility but must be used wisely by the borrower. Always consult a qualified loan officer to learn about all of the risks associated with these types of loans. He or she will also be able to offer valuable advice on properly managing your monthly payments.
Ameritime Mortgage Company - Newsletter
Resource Center
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Turn the home of your dreams into reality.
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Save money by taking advantage of the lowest rates available.
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Use your home to help eliminate bad debt and bundle your bills into one easy monthly payment.
-
Your loan approval is only minutes away when you apply online using one of our easy loan application options.
-
Click here for direct access to our network of proven business professionals.
Real Estate Marketplace
Rochelle, VA
5 Bed, 3.5 Bath
$1,150,000
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MORTGAGE NEWS
Rates Drop & Mortgage Application Volume Rises
Mortgage application volume increased 3 percent going into March, according to a weekly application survey by the trade group, Mortgage Bankers Association.
Check out our "Resource Center" to your left to find a tool that suits your mortgage or real estate needs. Now is the time to take action!
Read the full story at BusinessWeek.com
BUSINESS NEWS
Airborne Settles Lawsuit for $23.3 Million
The herbal supplement firm will settle a class-action lawsuit that alleges false advertising. It looks like money will be refunded to customers...
Read the full story at CNNMoney.com
YOU TUBE VIDEO OF THE MONTH
Hilarious Japanese Prank Show Video Clip
A compilation of video clips from a Japanese hidden camera prank show that will have you rolling! Just click on the link below and enjoy.
Watch the video clip at YouTube.com
RECIPE OF THE MONTH
Garlic Mashed Potatoes Secret Recipe
This Garlic Mashed Potatoes recipe has been reverse engineered from a certain Italian restaurant.
Read the full recipe at AllRecipes.com
Entertainment
Ridley Scott To Make a Monopoly Movie
There's word from Down Under that Monopoly will be made into a major motion picture, and it will actually be directed by the great Ridley Scott.
Read the full story at Cinematical.com
Rest in Peace, HD DVD
Blu-Ray has won the high-def war.
Read the full story at BusinessWeek.com
WIKIPEDIA ARTICLE OF THE MONTH
Search Engine Optimization
SEO (Search Engine Optimization) is the process of improving the quality and quantity of traffic to a website from search engines for targeted key words.
Read the full story at Wikipedia.com
PHOTO IN THE NEWS
First Mars Avalanches Seen In Action
The first-ever picture of avalanches occurring on Mars might have had scientists yodeling for joy when they found it among the latest batch of images from NASA's orbiting HiRISE camera.
Read the full story story at NationalGeographic.com
FUNNY DUMB CRIMINAL STORIES
1. Chicago, IL: A man was wanted for throwing bricks through jewelry store windows and making off with the loot. He was arrested last night after throwing a brick into a Plexiglas window...the brick bounced back, hit him in the head and knocked him cold until the police got there.
2. Portsmouth, RI: Police charged Gregory Rosa, 25, with a string of vending machine robberies in January when he: 1. fled from police inexplicably when they spotted him loitering around a vending machine and 2. later tried to post his $400 bail in coins.
3. Lake City, FL: Karen Lee Joachimi, 20, was arrested for robbery of a Howard Johnson's motel. She was armed with only an electric chainsaw, which was not plugged in.
Conventional Loans: Conventional loans are mortgage loans offered by non-government sponsored lenders. These loan types can range anywher from 10 to 40 years and include: - Fixed Rate Loans
- Adjustable Rate Loans (ARMs)
- Interest Only Mortgages
- Combination (1st and 2nd) Loans
- Balloon Mortgages
- Renovation/ Rehab / Construction to Permanent Loans
- Jumbo Mortgages (Note: Effective March 3, 2008 - Jumbo Mortgages are now determined by county and state. Click here to find out more.
- Reverse Mortgage
If you would like any assistance in comparing one conventional loan with the next, please feel free to contact me at anytime. Get Started
Mortgage Rate UpdateMarch 7th, 2008
Resource Center
-
Turn the home of your dreams into reality.
-
Save money by taking advantage of the lowest rates available.
-
Use your home to help eliminate bad debt and bundle your bills into one easy monthly payment.
-
Your loan approval is only minutes away when you apply online using one of our easy loan application options.
-
Click here for direct access to our network of proven business professionals.
Real Estate Marketplace
Rochelle, VA
5 Bed, 3.5 Bath
$1,150,000
View More
Mortgage Rates - Effective March 7, 2008
| *Fixed Rate Mortgages |
30 Yr FRM
|
30 Yr IO
|
15 Yr FRM
|
| Interest Rate (0 points) |
6.125%
|
6.50%
|
5.50%
|
| Interest Rate (1 point) |
5.875%
|
6.25%
|
5.25%
|
| Fixed/ Interest Only Term (months) |
360
|
360 (10 Yr IO)
|
180
|
| Principal & Interest Payment (0 points) |
$1,215.22
|
$1,083.33
|
$1,634.17
|
| Principal & Interest Payment (1 point) |
$1,183.08
|
$1,041.67
|
$1,607.76
|
| **Jumbo Fixed Rate Mortgages |
Jumbo 30 Yr FRM
|
Jumbo 30 Yr IO
|
Jumbo 15 Yr FRM
|
| Interest Rate (0 points) |
7.25%
|
7.25%
|
6.875%
|
| Interest Rate (1 point) |
6.875%
|
6.875%
|
6.50%
|
| Fixed/ Interest Only Term (months) |
360
|
360 (10 Yr IO)
|
180
|
| Principal & Interest Payment (0 points) |
$2,865.14
|
$2,537.50
|
$3,745.79
|
| Principal & Interest Payment (1 point) |
$2,759.10
|
$2,406.25
|
$3,658.65
|
| *LIBOR/TBILL ARM's |
3/1 ARM
|
5/1 ARM
|
7/1 ARM
|
| Interest Rate (0 points) |
4.875%
|
5.25%
|
5.875%
|
| Interest Rate (1 point) |
4.50%
|
4.625%
|
5.25%
|
| Fixed Term (months) |
36
|
60
|
84
|
| Principal & Interest Payment (0 points) |
$1,058.42
|
$1,104.41
|
$1,183.08
|
| Principal & Interest Payment (1 point) |
$1,013.37
|
$1,028.28
|
$1,104.41
|
| *LIBOR/TBill ARM's - Interest Only |
3/1 IO ARM
|
5/1 IO ARM
|
7/1 IO ARM
|
| Interest Rate (0 points) |
5.00%
|
5.25%
|
5.55%
|
| Interest Rate (1 point) |
4.50%
|
4.75%
|
5.00%
|
| Interest OnlyTerm (months) |
36
|
60
|
84
|
| Principal & Interest Payment (0 points) |
$833.33
|
$875.00
|
$916.67
|
| Principal & Interest Payment (1 point) |
$750.00
|
$791.67
|
$833.33
|
| **Jumbo LIBOR/TBill ARM's |
Jumbo 3/1 ARM
|
Jumbo 5/1 ARM
|
Jumbo 7/1 ARM
|
| Interest Rate (0 points) |
6.00%
|
6.50%
|
6.50%
|
| Interest Rate (1 point) |
5.50%
|
5.625%
|
6.00%
|
| Fixed Term (months) |
36
|
60
|
84
|
| Principal & Interest Payment (0 points) |
$2,518.12
|
$2,654.69
|
$2,654.69
|
| Principal & Interest Payment (1 point) |
$2,384.72
|
$2,417.76
|
$2,518.11
|
| **Jumbo LIBOR/TBill ARM's - Interest Only |
Jumbo 3/1 IO ARM
|
Jumbo 5/1 IO ARM
|
Jumbo 7/1 IO ARM
|
| Interest Rate (0 points) |
6.125%
|
6.625%
|
6.625%
|
| Interest Rate (1 point) |
5.625%
|
5.75%
|
6.125%
|
| Interest Only Term (months) |
36
|
60
|
84
|
| Principal & Interest Payment (0 points) |
$2,143.75
|
$2,318.75
|
$2,318.75
|
| Principal & Interest Payment (1 point) |
$1,968.75
|
$2,012.50
|
$2,143.75
|
| ***Government Loans Programs |
FHA 30 Yr FRM
|
FHA 15 Yr FRM
|
VA 30 Yr FRM
|
| Interest Rate (0 points) |
6.00%
|
5.625%
|
6.00%
|
| Interest Rate (1 point) |
5.75%
|
5.375%
|
5.75%
|
| Fixed Term (months) |
360
|
360
|
360
|
| Principal & Interest Payment (0 points) |
$1,453.19
|
$1,997.54
|
$1,453.19
|
| Principal & Interest Payment (1 point) |
$1,415.16
|
$1,965.38
|
$1,415.16
|
*Conforming Scenarios Based On: $250,00 sales price/Full Documentation/Owner Occupied/Single Family Residence/680 FICO score with 20% Down
**Jumbo Scenarios Based On: $525,00 sales price/Full Documentation/Owner Occupied/Single Family Residence/720 FICO score with 20% Down
***Gov't Scenarios Based On: $250,00 sales price/Full Documentation/Owner Occupied/Single Family Residence/620 FICO score with 3% Down
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313 2nd St. SE Suite 112
Charlottesville, VA 22902 | |
