If you have been looking into buying a home or refinancing your current Mortgage in Oklahoma, you may have heard the term “15-year Mortgage” thrown around. While most Home Loans in Oklahoma are paid back over the course of 30 years, for those with the financial ability and budgeting skills, a 15-year fixed rate mortgage may be a much better option in the long run.
A 15-year loan is just what it sounds like: a home loan that must be repaid back within a 15 year period. It has a interest rate that is fixed throughout the course of the loan. Because it has to be repaid twice as fast as a 30-year mortgage, the monthly payments will be greater on a 15-year loan.
While this may sound too expensive for you to afford, you should realize that because the loan is shorter, you will be able to obtain a lower interest rate on the 15-year mortgage than you would on a 30-year mortgage in Oklahoma. This means you will pay less interest over the life of the loan since the term is shorter and because of the lower rate. This lower rate may help offset the higher monthly mortgage cost, but in most cases even with the rate decrees the monthly payment on the 15 years is higher.
For example, let’s compare the difference in payments and interest between a 30-year $100,000 fixed rate loan at 4.5% and a 15-year $100,000 fixed rate loan at 3.875%. For the 30-year loan, your monthly payment would be $506.94. You would pay $733.44 a month with a 15-year loan. In terms of interest over the course of the loan, with the 30-year loan you would end up paying $82,404, whereas you would only pay $32,192 in interest with a 15-year loan. That is a savings of $50,212!
Plus you would own your home free and clear at the end of those 15 years. Can you imagine the freedom? What would it be like to have no more monthly mortgage payments? For some, the savings benefit is definitely worth the higher monthly payment.
Consider another benefit: With a fifteen-year Oklahoma mortgage loan you will be building the home equity much quicker than you would with a 30-year loan. This is because your initial payments go mostly to interest, but because the interest on a 15-year loan is so much lower and the payments you are making are greater, more of your money goes toward paying down the principal balance thus increasing your equity. If you decide to sell the house before your fifteen years are up, you will have more equity to put towards your next purchase.
Perhaps you might think that you could do just as well by taking out a 30-year mortgage and making an additional $225 payment to principle each month. This is an option to consider for borrowers that don’t want to be obligated to make a higher payment each month. While this option won’t give you the ability to pay off the loan in exactly 15 years it will get you close, in most cases the home would be paid off in 17 to18 years if you followed the extra payment schedule for the life of the loan. But doing it this will not get you a lower interest rate, and the savings won’t be as significant over the life of the loan.
If you think this Oklahoma mortgage program sounds like a good fit for your needs, talk with a mortgage professional to discuss your options. For as much as you would save, it is definitely worth exploring!
Call or Apply online Today http://www.zfgmortgage.com
918-459-6530
Monday, December 12, 2011
Wednesday, June 29, 2011
What?s a Reasonable Down Payment On A Home Purchase ?
According to a recent New York Times article from 06-29-2011 pretty much everyone agrees it’s a good idea for home buyers to put some of their own money down when borrowing to buy a house. Having a stake in the property, the thinking goes, encourages homeowners to keep making payments on the mortgage.
But how much of a down payment is reasonable? Ten percent? Twenty? Five?
That question is part of a debate in Congress and among a cluster of federal regulatory agencies as they try to craft new rules for mortgage lenders following the housing debacle.
As part of the financial reforms mandated last year by the Dodd-Frank law, the agencies, including the Federal Reserve, the Federal Deposit Insurance Commission, the Department of Housing and Urban Development and the Federal Housing Finance Agency, among others, must set criteria for what constitutes a reasonably safe, plain-vanilla mortgage.
Lenders issuing such mortgages — what are to be called “qualified residential mortgages” — will be able to sell them to investors and avoid retaining any of the risk associated with a default of the loan on their own books. Loans that don’t meet the new standards won’t be considered qualified and will be considered riskier so the lender will have to retain 5 percent ownership. The goal is to encourage banks to thoroughly vet a borrower’s ability to repay the loan. In other words, the banks must have “skin in the game” for loans that don’t meet the standards by setting aside extra capital for possible defaults.
The agencies proposed requiring qualified mortgages to have a down payment of 20 percent, but that idea provoked a firestorm of opposition from an unusual alliance of banks, real estate agents and consumer housing advocates. The Center for Responsible Lending, which has been vociferous in urging financial reforms to protect borrowers, argued that 20 percent down, or even 10 percent down, would price many homeowners out of the mortgage market. Many creditworthy borrowers would find it difficult to meet the down payment rule and would end up paying more for their loans because lenders would boost interest rates on their loans to cover their extra costs, the center argued.
The group’s Web site has a chart showing the length of time it would take borrowers of different occupations to save enough for a 10 percent down payment. A public school teacher at the median salary of $33,530, for instance, would take 14 years to save enough cash to buy a $173,000 home.
Kathleen Day, spokeswoman for the center, said a borrower’s ability to repay a loan should be determined by thorough underwriting, that is, an assessment of risk through examining a borrower’s credit history, income and debt, by the lender.
“We’re not advocating for zero percent down,” says Kathleen Day, spokeswoman for the center. “We think down payments are good. But we think the market should set them, based on the underwriting.”
(Loans insured by the Federal Housing Agency, which can be obtained with small down payments, are exempt from the qualified mortgage mandates.)
Due to an outpouring of concern from the industry and consumer groups, as well as members of Congress, the regulatory agencies have extended the public comment period on the change to Aug. 1.
What do you think? Is it reasonable to set a minimum down payment for home loans?
If you would like to Apply for a mortgage in Oklahoma, Log on to our website at http://www.zfgmortgage.com
But how much of a down payment is reasonable? Ten percent? Twenty? Five?
That question is part of a debate in Congress and among a cluster of federal regulatory agencies as they try to craft new rules for mortgage lenders following the housing debacle.
As part of the financial reforms mandated last year by the Dodd-Frank law, the agencies, including the Federal Reserve, the Federal Deposit Insurance Commission, the Department of Housing and Urban Development and the Federal Housing Finance Agency, among others, must set criteria for what constitutes a reasonably safe, plain-vanilla mortgage.
Lenders issuing such mortgages — what are to be called “qualified residential mortgages” — will be able to sell them to investors and avoid retaining any of the risk associated with a default of the loan on their own books. Loans that don’t meet the new standards won’t be considered qualified and will be considered riskier so the lender will have to retain 5 percent ownership. The goal is to encourage banks to thoroughly vet a borrower’s ability to repay the loan. In other words, the banks must have “skin in the game” for loans that don’t meet the standards by setting aside extra capital for possible defaults.
The agencies proposed requiring qualified mortgages to have a down payment of 20 percent, but that idea provoked a firestorm of opposition from an unusual alliance of banks, real estate agents and consumer housing advocates. The Center for Responsible Lending, which has been vociferous in urging financial reforms to protect borrowers, argued that 20 percent down, or even 10 percent down, would price many homeowners out of the mortgage market. Many creditworthy borrowers would find it difficult to meet the down payment rule and would end up paying more for their loans because lenders would boost interest rates on their loans to cover their extra costs, the center argued.
The group’s Web site has a chart showing the length of time it would take borrowers of different occupations to save enough for a 10 percent down payment. A public school teacher at the median salary of $33,530, for instance, would take 14 years to save enough cash to buy a $173,000 home.
Kathleen Day, spokeswoman for the center, said a borrower’s ability to repay a loan should be determined by thorough underwriting, that is, an assessment of risk through examining a borrower’s credit history, income and debt, by the lender.
“We’re not advocating for zero percent down,” says Kathleen Day, spokeswoman for the center. “We think down payments are good. But we think the market should set them, based on the underwriting.”
(Loans insured by the Federal Housing Agency, which can be obtained with small down payments, are exempt from the qualified mortgage mandates.)
Due to an outpouring of concern from the industry and consumer groups, as well as members of Congress, the regulatory agencies have extended the public comment period on the change to Aug. 1.
What do you think? Is it reasonable to set a minimum down payment for home loans?
If you would like to Apply for a mortgage in Oklahoma, Log on to our website at http://www.zfgmortgage.com
Friday, May 20, 2011
The 5 Most Important Facts Most Home Buyers Don?t Know
For many things, people assume to know more than they actually do. This is especially dangerous in the home buying process. Recent Oklahoma Mortgage marketplace survey indicates that there are several aspects of the home buying process that continue to elude prospective home buyers. Here are some surprising results of our findings, along with five things most home buyers don’t know, but should:
1. FHA loans & 100% USDA Loans are available to all buyers
More than two in five (42 percent) prospective home buyers think that only first-time buyers qualify for an FHA & USDA loan, a mortgage insured by the Federal House Administration or by the United States Department of Agriculture. This is not the case. In fact, these loans are available to all buyers who meet eligibility requirements. Among the key attractions of FHA loan: a minimal or even no down payment in some cases, relaxed credit score requirements, low cost, and low interest rates. Key attractions of 100% USDA Loan zero down payment, relaxed credit score requirements, low cost, and low interest rates.
2. Mortgage rates vary daily
Fifty-five percent of prospective home buyers don’t realize that mortgage rates, which are determined by a slew of factors, can—and do—change daily (and sometimes more than once a day if certain economic reports are released). Just by monitoring rates, you could save yourself money. For example, a rate change of 0.125 percent to 0.25 percent could mean thousands of dollars in savings each year. To get the best rates, monitor them. The best indicator is the movement of the 10-year Treasury bond. And, don’t stop at the first rate you see—shop around.
3. Lender fees change and are negotiable
When you apply for a loan, the bottom line is that you’re going to have to pay lender fees. These fees—from origination fees to credit report fees to appraisal fees and more—can add up quickly. The good news, and what 34 percent of prospective home buyers don’t know, is that fees not only vary from one lender to the next, but that they’re negotiable. This is all the more reason to shop around for different mortgage rates from various lenders.
4. Interest rates on ARMs don’t always reset higher
While rates on adjustable rate mortgages (ARMs) do often increase after five years, they can also decrease. Prospective home buyers may not realize this because many people (57 percent) simply don’t know how adjustable rate mortgages work. The interest rate on an ARM is made up of two parts: the margin, which is a fixed percentage and the index, which goes both up and down with the general movement of interest rates. If you’re planning on living in a home only for a few years, an ARM could be a good loan option.
5. Pre-qualified doesn’t mean much, Loan-Approved Does!
Just because you have a “pre-qualification” for a home loan doesn’t mean you’ve secured financing, yet 37 percent of prospective home buyers believe it does. Most of the time when you’re “pre-qualified,” a lender has figured out approximately how much you can afford, but they haven’t run your credit or requested any sort of documentation to support/verify the information you provide. That is why it is so important to make sure your lender has fully approved your potential loan before you go out house hunting.
To Apply online and get a “FREE” Full-Mortgage Approval, Log on to http://www.zfgmortgage.com
918-459-6530 or 1-866-205-7266
1. FHA loans & 100% USDA Loans are available to all buyers
More than two in five (42 percent) prospective home buyers think that only first-time buyers qualify for an FHA & USDA loan, a mortgage insured by the Federal House Administration or by the United States Department of Agriculture. This is not the case. In fact, these loans are available to all buyers who meet eligibility requirements. Among the key attractions of FHA loan: a minimal or even no down payment in some cases, relaxed credit score requirements, low cost, and low interest rates. Key attractions of 100% USDA Loan zero down payment, relaxed credit score requirements, low cost, and low interest rates.
2. Mortgage rates vary daily
Fifty-five percent of prospective home buyers don’t realize that mortgage rates, which are determined by a slew of factors, can—and do—change daily (and sometimes more than once a day if certain economic reports are released). Just by monitoring rates, you could save yourself money. For example, a rate change of 0.125 percent to 0.25 percent could mean thousands of dollars in savings each year. To get the best rates, monitor them. The best indicator is the movement of the 10-year Treasury bond. And, don’t stop at the first rate you see—shop around.
3. Lender fees change and are negotiable
When you apply for a loan, the bottom line is that you’re going to have to pay lender fees. These fees—from origination fees to credit report fees to appraisal fees and more—can add up quickly. The good news, and what 34 percent of prospective home buyers don’t know, is that fees not only vary from one lender to the next, but that they’re negotiable. This is all the more reason to shop around for different mortgage rates from various lenders.
4. Interest rates on ARMs don’t always reset higher
While rates on adjustable rate mortgages (ARMs) do often increase after five years, they can also decrease. Prospective home buyers may not realize this because many people (57 percent) simply don’t know how adjustable rate mortgages work. The interest rate on an ARM is made up of two parts: the margin, which is a fixed percentage and the index, which goes both up and down with the general movement of interest rates. If you’re planning on living in a home only for a few years, an ARM could be a good loan option.
5. Pre-qualified doesn’t mean much, Loan-Approved Does!
Just because you have a “pre-qualification” for a home loan doesn’t mean you’ve secured financing, yet 37 percent of prospective home buyers believe it does. Most of the time when you’re “pre-qualified,” a lender has figured out approximately how much you can afford, but they haven’t run your credit or requested any sort of documentation to support/verify the information you provide. That is why it is so important to make sure your lender has fully approved your potential loan before you go out house hunting.
To Apply online and get a “FREE” Full-Mortgage Approval, Log on to http://www.zfgmortgage.com
918-459-6530 or 1-866-205-7266
Thursday, May 5, 2011
Oklahoma Mortgage Rate Declines To Its Lowest Since January
According to a Wall Street Journal article on 5-5-2011 the average rate on the 30-year mortgage matched its lowest level since mid-January this week, according to Freddie Mac's weekly survey released Thursday.
The mortgage averaged 4.71% for the week ending May 5, down from 4.78% last week and 5% a year ago, according to the survey.
Meanwhile, the 15-year fixed-rate mortgage averaged 3.89% this week, the lowest since the beginning of the year. It averaged 3.97% last week and 4.36% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.47% this week, down from 3.51% last week and 3.97% a year ago.
And 1-year Treasury-indexed ARMs averaged 3.14%, down from 3.15% last week and 4.07% a year ago.
To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, while the five-year ARM required an average 0.6 point and the 1-year ARM required an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.
"Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week," said Frank Nothaft, vice president and chief economist at Freddie Mac, in a news release. "For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in April."
But reports on the housing market were a bit more uplifting, he added.
"The National Association of Realtors reported pending home sales rose in March for the second month in a row to the highest index reading since
November 2010," Mr. Nothaft said. "Also, the Federal Reserve reported credit standards among commercial banks for prime mortgages were unchanged on net in the second quarter of the year, following two quarters of tightening."
Take advantage of the low mortgage rates, Apply online for a "FREE" Pre-Approval before its to late.
http://www.zfgmortgage.com
The mortgage averaged 4.71% for the week ending May 5, down from 4.78% last week and 5% a year ago, according to the survey.
Meanwhile, the 15-year fixed-rate mortgage averaged 3.89% this week, the lowest since the beginning of the year. It averaged 3.97% last week and 4.36% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.47% this week, down from 3.51% last week and 3.97% a year ago.
And 1-year Treasury-indexed ARMs averaged 3.14%, down from 3.15% last week and 4.07% a year ago.
To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point, while the five-year ARM required an average 0.6 point and the 1-year ARM required an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.
"Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week," said Frank Nothaft, vice president and chief economist at Freddie Mac, in a news release. "For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in April."
But reports on the housing market were a bit more uplifting, he added.
"The National Association of Realtors reported pending home sales rose in March for the second month in a row to the highest index reading since
November 2010," Mr. Nothaft said. "Also, the Federal Reserve reported credit standards among commercial banks for prime mortgages were unchanged on net in the second quarter of the year, following two quarters of tightening."
Take advantage of the low mortgage rates, Apply online for a "FREE" Pre-Approval before its to late.
http://www.zfgmortgage.com
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