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No one, not psychics or clairvoyants, economists or analysts know for sure what is going to happen to mortgage rates in 2016.  After the surprising twists and turns within the housing market over the past decade and the credit crunch of 2007 into 2008 the only thing for sure is that economic forecasting is no more reliable than astrology as the late professor of economics at Harvard, John Kenneth Galbraith stated.  This does not mean however that speculation about the 2016 mortgage rates is futile.

It is unwise to go through the year without a forecast.  Some thought at what our credit market will possibly look like based on the current economic situations, historical data and trends are necessary.  It may not prove to be one hundred percent spot on but time and time again it has been proven that the more we know the better off we can prepare for the future.

It is unwise of homeowners to expect the crazy low rates that are currently “normal” to remain.  If you look into the archives of Freddie Mac you will see that it has been more than five years since the rates on a thirty year fixed rate mortgage were over five percent.  In fact, this decade has reached an all time low point.  Near the end of 2012 the rates were at three point thirty five percent.   Currently, the thirty year fixed rate mortgage rates are a little over four percent.

Consumers will look at this as a new normal when in fact this is far from normal and is in fact exceptional.  Although it is not expected that mortgage rates continue to rise at any significant levels it should not be forgotten that there was a time in our not so distant past where normal thirty year fixed rate mortgage rates were above ten percent reaching a high around eighteen point forty five percent.  This wasn’t that long ago, in fact these rates were found in October of 1981, only thirty five years ago.  This was in fact when many of us were in middle school.  Think about it; that really isn’t too long ago.  Consider what the rates will look like when your middle school aged children are middle aged; can our economy continue to grow with rates under five percent.

It is probably unlikely that any economists would bet that we will see mortgage rates reach those all time high’s again in our lifetime but to stay at the low we are currently experiencing is unlikely over time as well.  What you will find mortgage analysts saying is that the “normal” we are experiencing at the moment are unlikely to be permanent just as the high’s of the early eighties were unlikely to become continue for years to come.

There are many variables when it comes to our economy and mortgage rates.  The timing of when mortgage rates will increase and decrease is anyone’s guess.  The inevitability of the situation however remains the same; mortgage rates will continue to increase and decrease throughout time depending on a number of variable situations within our own economy and that of the economies we rely on outside if the United States.

Continue to look for the increase in the current economy with low inflation and low unemployment to increase mortgage rates slightly.  As we continue to see peeks in incomes, spending, consumer confidence, manufacturing and the gross domestic product we can expect strong mortgage rates with increasing.  The faster the economy grows the more the mortgage rates will spike and at a greater pace.  What we look for going forward is consistent growth that paces itself in order to prevent a major spike in mortgage interest rates for 2016.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Mortgage brokers work to help make the dreams we have made come true.  Working in conjunction with real estate professionals, mortgage brokers lead home buyers to the perfect home that is well within their budgets, including the hidden costs buyers often find out later that sooner when buying a home.  The following tips will help you to avoid mistakes that you may end up regretting later on.

Budget Carefully:  The goal is to budget the expenses you have with the new home in a way manner that allows you to remain comfortable.  Bigger isn’t always better.  A large home with a mortgage to match isn’t going to bring you the happiness you desire if your lifestyle has to change drastically to afford it.  Plan ahead to avoid hidden fees within a mortgage such as primary mortgage insurance or PMI which is insurance that is paid on top of home owners insurance that guarantees the payment on the mortgage.  In order to avoid this cost it is imperative to save enough money for a large enough down payment.  Most mortgage lenders require twenty percent of the face value of the home loan to be placed down on the home to avoid paying an extra monthly PMI.

Research Mortgage Brokers or Possible Lenders:  Meet with professionals to discuss what options are available to meet your mortgage needs.  There will be several options that fit your needs but one will fit your needs better than all the rest.  In order to evaluate if you will be able to afford the monthly mortgage payment make a list of all of your current expenses and anticipated costs with moving into the new home.  If you need to make renovations or want to improve the home in any way you must calculate those expenses in to the overall monthly budget to ensure you will be comfortable with the outgoing monthly payments.

Hire a Local Real Estate Agent:  A local agent knows that the area in which you are searching inside and out and therefore can lead you to the best neighborhoods and locations to fit your needs.  They will be able to point you in the direction of recreational areas, schools, hospitals and more.  Your agent should offer you a block of time in which to view the options in housing that fit your needs and work within to your budget.  They will help you throughout the buying process and won’t stop searching until you have found the perfect home.  This process will go a lot smoother with the help of a professional agent verse going it alone.

Once you find a home within the pre-approved amount from your mortgage lender and within your specifications it is time to make an offer on the home.  Don’t try to time the market because while you are waiting for a lower rate another buyer is swooshing in to purchase the home of your dreams.  Your agent, along with help from local mortgage brokers can work with you to decide upon a reasonable offer to make including the items that were found in need of repair within the initial inspection.

After this is done and the offer is presented negotiations may begin.  Once an offer is accepted the legal procedures are started and this eventually leads to you and home ownership.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

When you are thinking about buying a home the term mortgage broker is something you are likely to become familiar with.  It isn’t a term most of us completely understand or exactly what they do.  For simplicity’s sake a mortgage broker is a middle man between a borrower and someone who is eligible for a home loan.  Basically a mortgage broker is works with both a lender and a borrower to determine the eligibility of a new purchase or the refinancing of an existing home loan.  The mortgage broker is the go-between that brokers the mortgage on behalf of the individual or business and lenders.

The process usually begins when a borrower contacts a broker initiating a home loan.  The broker collects all of the information a lender will need from the borrower including their income, assets, employment history and credit score.  After this process is completed the mortgage broker works with lenders to determine what options in home loans are the best for the borrower as well as the appropriate amount and the loan to value ratio.  At this point the borrower decides on their own what they can afford with the brokers assistance.

When a borrower works with a mortgage broker they do not need to deal directly with banks or lenders.  Mortgage brokers make money by charging a fee for their services or offering no cost loans where they utilize a lender credit.  Essentially this means that the interest rate the borrower is paying is a bit higher to cover the cost of their services.

When you use a mortgage broker they can help you find the best rates on a home loan that are available within the market.  What happens when a borrower looks towards a single bank for a mortgage they are only receiving the rates and loans of a single bank whereas when using a mortgage broker the best home loans are presented and the borrower can choose between them.  Brokers are approved by banks and therefore individually contacted.  Different brokers have a variety of different bank contacts and therefore can offer borrowers a number of different quotes from a variety of different lenders.

When it comes to getting a home loan it is quite possible that a mortgage broker will provide the best guidance out of anyone as they have insight on the industry as a whole.  This is, in fact, what they are paid to do.  Mortgage brokers are more available then home loan lenders at a bank and tend to work on a more personal level with their clientele.  It is also important to note that if a home loan or mortgage is rejected by a bank lender it is done whereas with a broker they lead you to another lending source.  It is more likely to receive a mortgage offer, no matter what your credit status, if you work with a mortgage broker to obtain a home loan.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Another popular mortgage option is a flexible interest only mortgage.  Unlike an adjustable rate mortgage the interest rate remains the same but the payment can change.  This option allows for the homeowner to make a minimum payment each month that only covers the interest that as accrued on the home loan.  It is up to the homeowner how much more they pay on the mortgage to cover the principal.  Individuals that select this option for their mortgage must be incredibly self-disciplined.

The mortgage payment will be due at the same time each month.  The interest payment will stay the same and is at a very minimum what needs to be paid on the date each month.  With the flexible option it is up to the homeowner how much extra they will pay towards the principle.  This is a great mortgage loan for those working in commission based jobs.  The amount of money brought into the household changes monthly and therefore the payment can be adjusted to match that.  Different amounts can be paid each month with the goal of paying down the principle of the mortgage as quickly as possible.

Another popular option in home loans is a fixed rate mortgage.  With this type of mortgage the interest rate on the loan remains the same throughout the loans lifetime.  This type of loan option represents more than seventy fiver percent of mortgages.  The terms of the loan vary anywhere from ten to thirty year options.  The thirty year fixed interest mortgage loan is the most popular.  It is important to note that the fifteen year fixed mortgage rate option starts to build equity in the home at a much faster rate than the thirty year option.

One of the greatest advantages found in a fixed rate mortgage is that the homeowner knows exactly how much they are paying each month towards the interest of the loan as well as the principal. It is understood that the payment will remain constant for the length of the loan.  This option makes creating a household budget a lot simpler as the interest rate and mortgage payment with interest and principle included will remain constant for the length of the home loan.

Homeowners like predictability and that is what is offered when choosing a fixed rate mortgage.  With the rate being agreed upon at the beginning of the loan there is no concern when it comes to changes with market interest rates.  If the interest rate on mortgages does decrease in the future homeowners have the ability to refinance to the lower rate.  The homeowner will be required to pay the closing fees on the new mortgage.  The good thing is that if the rates increase at all, even a significant change, the rate on a fixed rate mortgage does not change.  Homeowners pay a premium to lock in the interest rate as the interest rate on an adjustable mortgage is usually slightly lower however it remains unstable throughout the life of the loan.  There are tradeoffs associated with both of these mortgage options that homeowners need to consider before locking into one over the other.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Although it is possible to obtain a mortgage online it isn’t necessarily an appropriate option for everyone.  A mortgage broker generally has a wider scope of lenders to work with then what you would find on your own online.  A home loan broker also has insight on special programs that are available specific to your situation and sometimes location that would be impossible to find online.  Processing time is also decreased when using a mortgage broker as they are professionals that are educated in obtaining various mortgages, quickly for their clients.  They know the ins and outs of the industry and are able to maneuver around sticky situations without getting caught in various loop holes.

When there is urgency in your mortgage request possible because there is a fast approaching closing date or need for a quick refinance a local mortgage broker is the best option in obtaining a new mortgage.  Brokers have advanced tools at their finger tips that allow them to speed up credit checks, income verifications and loan applications.  It is also important when looking for a mortgage that there is a basic understanding of a variety of mortgage options.

One option is an adjustable rate mortgage.  If this is the mortgage option chosen there are a few things to understand so that when the rate adjusts you are prepared.  It is important to know when the first rate adjustment will happen as well as the amount of the adjustment.  Knowing when the rate will change and by how much can help a plan to be put into place.  It is crucial to understand that with an adjustable rate mortgage that the rate can adjust both higher and lower.

An adjustable rate mortgage fluctuates with the changes in interest rates.  Know the index that the mortgage is associated with in order to fully investigate the current interest rates and future interest rates on your own.

It is also crucial that refinancing options are known when using an adjustable rate mortgage. If the rate proves to be unbeneficial to homeowners they will have an option to refinance to a fixed rate mortgage.  In order to obtain the best fixed interest rate on a mortgage there needs to be a priority given to watching rates closely.  This will help in the future with refinancing when interest rates begin to vary often and homeowners wish to refinance to a fixed rate mortgage.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

It is impossible to become a mortgage expert for most of us.  We don’t really need to be proficient in mortgage lingo if it is not something we handle daily.  Many of us will only deal with applying for a mortgage a few times in our lives.  Some will have experience in refinancing and even fewer in reverse mortgages.  It is important however, to have at least the most basic understanding of the terms used within mortgage contracts.   Even the most technical mortgage terms can be broken down to allow even the most novice mortgage seeker to understand exactly what they are paying for at the end of the day.

On a mortgage application or contract the term administration fee is often used.  This is the fee that is charged by the provider of the mortgage to cover the costs to evaluate and procure the documentation needed for a valid mortgage contract.  This fee is nonrefundable in the event you decide to terminate your mortgage contract.  It is a variable fee that is dependent upon the rate charge by your mortgage provider.

There are two main parts within your actual monthly mortgage payment: the principle and interest.  This means that when you make that one payment monthly you are actually dually paying on your mortgage.  One portion of the amount paid goes directly towards the interest payment on the original loan amount while the other goes to pay down the overall principle loan amount.  Depending on the contract the amount you pay is split up differently in how money is applied.  Some individuals looking to decrease the amount of interest paid overall will opt for a larger down payment or one large lump sum payment on the mortgage principle.

Another term that is often used is owner’s equity.  This refers to the difference between what is owed on the home loan verse what the home would sell for.  Without taking into consideration any increase in the value of the property it comes down to the difference you paid originally minus principle payments made on the home loan.

It is important to note that once the mortgage contract is issued it cannot be altered or changed in any way.  The only process in which to decrease the interest rate on the loan or the terms of the mortgage is to refinance.  Refinancing will cost the homeowner additional in administrative fees and such because it is essentially entering into a new mortgage in which you will proceed through each step once again.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

When you don’t work in the mortgage industry the jargon used is not familiar and a bit overwhelming.  Mortgages are complicated; buying a home is complex.  The entire process is intricate and involves a basic understanding of what you should be looking for.  Below you will find a few essential descriptions to better help you throughout the processes of procuring a new home loan.

Interest Only Mortgage Options

A mortgage that is an interest only mortgage is meant to decrease the monthly payment over the first few years of the loan.  This option allows homeowners to pay only on the interest of the mortgage without making any payments to the principle.  This option can be a bit risky.  You are not paying anything on the principle of the loan which leads to a lower payment because you are only making payments on the interest that is accruing.

Eventually though homeowners will be required to begin making payments on both the principle of the loan and the interest.  This option will lead to a higher monthly payment at a specific date set forth in the terms of your mortgage.  It is important to be sure that when it is required that you are able to afford both the interest payment and the principle payment.  An interest only loan option is often used when homeowners have purchased a home that is need of some work.  Homeowners can use the money that would normally be going towards the monthly principle payment on renovations to the home.

Reverse Mortgage Funding

A reverse mortgage is an option that exists to aid homeowners needing extra funds when their homes are fully paid for.  When you take advantage of a reverse mortgage you receive a monthly stipend from the equity within the home.  This option is usually left for elderly homeowners whom have had time to pay off their mortgages and see an increase in equity within their homes.  This option gives homeowners extra money as they age in place in their own homes.  This is an option many older homeowners choose to leave liquid funds available upon their passing.  A reverse mortgage can be set up to pay closing costs and realtor fees upon the sale of the home.  When the homeowner passes the house will be placed for sale thus alleviating the burden that selling the home can cause to heirs.

To find out more about mortgage options that best meet your unique situation contact a local mortgage broker.  Meeting and discussing your unique situation with a mortgage advisor is a sure way to find a mortgage option that meets your need.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

In our last installment on home loans we looked into the world of refinancing.  The most obvious reason that homeowners look into new mortgage options is to save money.  Saving money is important to all of us.  Homeowners don’t need to waste money making interest payments when they can refinance their current high interest rates.  The extra money can be put towards paying more towards the principal, paying off high interest credit cars, doing major home renovations, putting a child through school or even something frivolous like taking a family vacation.

There are a ton of situations that make it necessary to look into refinancing.  In our first installment we looked at several situations in which it makes sense to refinance your current mortgage.  Here are a few more situations where it makes sense to consider refinancing.

If your home value has increased, the equity in your home as also increased.  This is something many homeowners want to take advantage of this “extra” money.  Homeowners may want to put money back into their home with renovations and upgrades.  Others may wish to use that money to pay off higher credit cards rates while some may even want to use the money towards a vacation.

Some homeowners are stuck in mortgages that have a fee associated with paying your mortgage off early.  It is a fee that basically makes it impossible to make extra payments towards the principal on your homes mortgage.  Homeowners will refinance these loans in favor of reducing the overall size of their mortgage.  They will look for an option that does not have fees associated with extra payments and early payoffs.

Another option for this situation is to look for a mortgage options that offer a ten to fifteen year payoff putting more monthly towards the principal of the loan.  When you take on a mortgage over this amount of time your payment goes more towards the interest then the principal.  The first years of paying on a thirty year mortgage you will see that you pay like seventy-five percent interest twenty-five percent principal.   Where as a fifteen year mortgage the interest payment may be more around fifty to twenty-five percent of the payment and the rest principal.  This allows you to pay less in interest, saving you money over the lifetime of your mortgage.

No matter what your current situation is it makes sense to refinance your mortgage if it saves you money.  This of course is not the only reason homeowners look to refinance.  Some look to refinancing as an option to lower their monthly payment.  Maybe they have recently taken a decrease in pay.  Homeowners may look into refinancing in order to stretch their mortgage out over a greater period of time which in turn will lower the payment they are currently responsible for.

To see if refinancing is the best option for your situation speak with a local mortgage broker.  They will review your current mortgage, current life situation and present you with a number of options that will help you meet your ultimate refinancing end goal.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.

Why do homeowners choose to remortgage their homes?  This is a tricky question to answer as there are many reasons that people decide the time is appropriate to refinance their current mortgages.  One reason people refinance is to get out of a flexible rate mortgage.  Some refinance looking to take advantage of the equity that has built up.

The equity money can be used to pay off high debt credit cards, remodeling projects or whatever the homeowner desires.  Also, homeowners looking to lock in a lower fixed rate mortgage will also refinance when the housing market interest rates dropped.  The main objective homeowners have for refinancing is to save money.  Lower interest rates lead to lower payments thus increasing the money you have to save.

If you current mortgage situation is coming to an end you may look to refinancing.  Some mortgages are meant to draw in new homeowners and thus offer low interest rates for an introductory period.  After this period of time your mortgage rate jumps, increasing the payment of your mortgage.  What homeowners do at this point is to refinance their current mortgage.

The old mortgage is going to try to reap the loss they have taken in offering you the low introductory rate to begin with.  In this situation when homeowners refinance that are looking to get a lower rate then what their current mortgage is going to jump up to.  It is best to start shopping for a new mortgage in this situation about twelve to fourteen weeks before the introductory rate ends.

Another reason that homeowners look to refinance is to get a better rate on their fixed mortgages.  For instance, home mortgages obtained in October of 1981 were around eighteen percent where as today mortgage rates are around three and a half percent for thirty years.  As you can tell this is a huge difference and therefore will save the homeowner thousands of dollars over the course of the home loan.

Any time interest rates are lowered it is important to look into how much you will save verse how much it will cost to refinance to see if it is something you need to look into more. Also consider any fees that may be added to exit the mortgage you currently have.  The costs to refinance need to be consider as much as the savings.

In our next installment on home mortgages we will look into other ways refinancing helps to save you money over your current mortgage situation.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.