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RSSMortgages in Hamilton County
One of the most important mortgage decisions you make when buying a home is how much you should put down on the purchase. There are a number of factors you must look at when determining how much of a down payment you should contribute to the purchase. The first issue is private mortgage insurance (PMI), which is insurance for the lender should you default on your loan or be unable to pay it back. This is charged to the homeowner (added on to your monthly mortgage payment) when you put less than 20% down on the home. This fee alone is reason to try to pay at least 20% as a down payment. Depending on the value of your home, this could cost you $30-50 a month until you only owe 80% of the current value. On a thirty year mortgage, it can take almost ten years to reach that loan-to-value if you make no down payment at all. That is a lot of extra money that could have been avoided by putting enough money down up front.
Another consideration should be what you can afford. It may seem necessary to throw all your savings into the down payment in order to lower your monthly payment, but this is not always smart. Although a house is the biggest purchase you will ever make, remember all the other costs that go along with buying a new home. Your new house may need new flooring, a coat of paint, landscaping, or a few other repairs. All these things cost money and putting them on a high-interest credit card negates all the money you saved with your big down payment. There are also other costs such as new furniture, appliances, and décor which you need to take into account. Be sure that you are not hurting yourself by putting every last penny into your house. If you have extra money after you are all settled in, then you can consider making an extra payment to pay down your principle a bit faster.
Refinancing in Hamilton County
When choosing whether or not to refinance, it is important not to be seduced by a lower interest. There are a number of factors that help determine if a refinance is the best plan for you. These factors all combine to make a simple equation called your break even point. The break even point is the number of months you need to stay in the house to recoup the costs that you put out to refinance. The farther apart the interest rates are, the lower the break even point while the closing costs push the break even point more months into the future. To find out your break even point take your current mortgage payment and subtract the new payment to determine your monthly savings. Then divide the costs of refinancing (don’t forget the appraisal, application fee, and closing costs) by your monthly savings. This is the number of months you must stay in the house to make back your costs in money saved by the refinance. If you do not plan on staying in the home as long as the break even point, then a refinance is not appropriate for you.
Hamilton County Home Equity Loans
If you decide that a home equity loan is right for you, do everything you can to get the most out of your loan. To get the most money out of your home, your home needs to appraise well. Most appraisals are simply drive-by so it’s important to enhance your curb appeal to increase your home’s value. To get the most out of the money you take out of your house, you need to reduce the costs of actually getting the loan. This means searching out one of the many no-closing-costs loans that are available today. The less money you spend trying to get your loan, the more money you will have to use to your advantage.