100 mortgage advice

100 mortgage advice
you have read the title of this article and asked himself," "Where's the catch" and said to himself, "There is no way you can". " I'm here to tell you that it is possible, because I use this strategy to my personal homepage. With this strategy that I have to explain, is in accordance with a Fannie Mae product, which for many years. With out of the box thinking, I have been able to carry out this product to my customers actually pay their mortgage without any additional principal payments.

The loan, which I use for this is a 30 years fixed loan with a temporary buydown.

There are two types of buydown programs: temporary and permanent.

A permanent buydown is when the borrower or seller pays off the lender at a lower interest rate for the duration of the loan. Often a permanent buydown non-financial terms of the amount of time in which loans to the cost of the buydown.

A temporary buydown is when the borrower, seller or lender to pay interest on the first one to three years to get a lower interest rate. The most common types of temporary buydowns are:

3-2-1 buydown
2-1 buydown
1-0 buydown

With a 3-2-1 buydown ... if the note is 6.5%, for the first year your interest would be 3.5%, 4.5% in the second year, 5.5% in the third year and 6.5% over thirty four years.

With a 2-1 buydown ... if your note, when 6.5% rate for the first year your interest rate would be 4.5%, 5.5% in the second year and 6.5% for the remaining years in the description.

With a 1-0 buydown ... if the note is 6.5%, you would have an interest rate of 5.5% for the first year and 6.5% two to thirty years.

Temporary buydowns were most frequently by sellers / owners who are trying to lure buyers with lower than market rates for the first few years resulting in a lower monthly mortgage payment.

Why temporary buydowns and the "No Closing Cost Loan" are perfect together?

If your loan exceeds $ 200,000, DNJ Mortgage has the option of the Commission, the bank pays us for the loan to pay for the cost buydown and closing costs. This gives our customers a better than market rate with no cost to them. We can also continue to refinance at no cost buydown with a program that provides below market rate.

Example:

The customer has a current loan amount of $ 250,000 at an interest rate of 6.625% at 30 years. Current monthly payment is $ 1600.78.

On the basis of current market conditions we are in the position they no curfew costs of 6.5% a year buydown. This gives them an interest rate of 5.5% for the first year and then the loan is a 30 years to 6.5% after the first year. By refinancing at no cost, they receive an interest savings of $ 2500 in just one year. At the end of the year, they have three options:

Keep the loan and the 6.5% interest.
Refinance again without a degree in a different one years buydown.
Excluding acquisition costs refinance into another loan product (ARM, 15 years fixed, etc.).
As you can see, with no closing costs loan with a temporary buydown offers customers numerous benefits, including:

* Under normal market interest rate at no cost to them, leading to lower monthly payments
* More interest savings
* A hedge against higher interest rates in times of economic strength

This is where we can create a big effect on how quickly you pay your mortgage.

With temporary buydown DNJ Mortgage Products, we are prepaying the difference of interest between the note and the interest rate of the first two years. The prepaid interest in a trust account by the lender. Every month that you make a payment, the difference in interest rates this month from the escrow account. Since the objective with this product reduction is the main contractor, you want to make as few transfers as allowed lenders and then refinance. Usually the number of months varies from 4-6.

If we repeat the loan amount, the left in the escrow account will be credited to your payment. This is a direct principal reduction loan.

Here is a real analysis that I wrote together for a customer of mine. This should show that by this program.

Proposed structure of mortgage (30 years fixed, two-year buydown):

1. Mortgage loan amount: $ 417,000
Rate for the first year: 5.25%
Monthly fee: $ 2302.69
Monthly savings from current loan fee: $ 231.05

How it works:

With this program, we have (DNJ Mortgage) are prepaying the difference in interest rates for the first two years between the knowledge of 7,25% and the prices buydown. The first year of the buydown is 5.25% and in the second year, the rate is 6.25%. The total amount of interest we would be prepaying is $ 9829.44 and this amount is in escrow service from the bank.

Every month a payment, the difference between the payment at 5.25% and 7.25%, the note is from the trust account. The amount deducted each month is $ 541.99. Since the objective of this program is the most important reductions, we would want the least from the trust account as possible. The Bank requires that 4 payment that you made a total of $ 7661.48, if you are refinancing after 4 Payment. You will receive a credit to your payment of $ 7661.48 be applied directly to the principal. This, in conjunction with your monthly savings would total savings of $ 8585.68 for 4 months. We can redo this every 4-6 months to the largest and most effective reduction lower your interest rate dramatically.

Substantial reduction of your total of 4 months, if your existing loan $ 1633.66. In comparison with this loan your principal reduction would be $ 9587.48.

As you can see with this example, there is an enormous amount of principal reduction 4 short months. There was this customer 27 months to pay their principal amount. This program is your effective interest rate enormously by the interest saved in the course of the loan.

I understand that some of you might note on the 7.25% interest rate and the fear, or there is a greater risk. As I have already explained, first at the buydown program, we can use this program as a hedge against higher prices, because the first installment for this program is about 1% below the market rate. Also you are only in the program a short time (4-6 months). If we see prices begin to trend one way or another, we can at a lower fixed rate when you refinance. Also, if you wish, you can use all or partial credit towards a permanent buydown and a solid product from the market for the entire duration.

For more information on this product, please do not hesitate to contact me.

© Copyright 2008 Cari DeCandia

Search DeCandia
Senior Residential Mortgage Advisor
DNJ Mortgage
919.459.6507
cari@dnjmortgage.com
http://www.lenderforlife.net