40-Year Mortgage Loans Make Sense – When Do They Make Sense?
By Dan M. Kennedy

Do 40-Year Mortgage Loans Make Sense?

If you’re like most people, you spent most of your life without thinking about 40-year mortgage loans. But the current economy has changed your plans and 40-year mortgage loans have moved to the front of your awareness. Are they worth it?

On the good side, they spread the payments longer than the more conventional loans, so you get lower monthly payments. Currently, to get smaller, fixed monthly payments than you get with mortgages amortized over 30-years,, you’d have to get an interest only mortgage, a much riskier loan.

Since the monthly payments are lower, you might qualify for this type of loan when you cannot for a 30-year fixed rate mortgage. This situation would apply to a rather small number of people.

On the other hand, the longer the term of the mortgage, the more interest you pay.

With a 5% interest mortgage loan amortized over 30 years you end up paying $93,255 in interest. With a 5% interest mortgage loan amortized over 40 years you end up paying $131,456 in interest. That’s $38,200 more. But the 40-year mortgage does save you almost $50 on your monthly payments.

Obviously, the higher the interest rate, the higher the loan amount, the more interest you pay. The price is really high. The difference between the monthly payments for the two types of loans is not that great.

To make a good comparison, you should not only compare the 30-year and the 40-year mortgage loans but your other alternatives too.

For instance, if you rent right now and rents are high and you cannot qualify for a 30-year loan, maybe it makes sense to go for the 40-year one. Or if you’re already a homeowner with equity in your home but can only afford the payments on a 40-year loan and not accessing the equity would have bad consequences.

Maybe you can refinance later, if your income is higher or the mortgage rate you’d qualify for would be lower.

Of course, counting on future events is not good practice. They should be a bonus; you should be prepared to accept the loss resulting from 40-year mortgage loans from the start.

So 40-year mortgage loans make sense for a rather small group of people and are pricier than the more conventional 30-year mortgages.

Current interest rates are low. If you can get a mortgage, now it’s a good time to. do it. However, you should be well informed. Visit http://www.1-currentmortgagerates.com to get information.

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3 Tips to Choose a Good Conveyancing Service
By Alexander Richard Martin

When you are buying a new property, it is likely to be one of the largest financial transactions in your life. It is a complex process that requires attention to detail and making sure that the entire conveyancing process takes place within the specified time frames of the contract.

It is certainly possible to do all of the legal work yourself, if you are prepared to put in the time and you have a certain amount of legal expertise. But with such a large amount of money involved it is a good idea to engage the services of a competent conveyancing service to get the job done properly for you.

In the majority of cases a property transfer usually goes through without any hitches, but there are also many occasions, where small problems arise and if you don’t have competent advice, you can find yourself on the end of a hefty fee, if you cannot settle the transaction in time.

So, it’s time to look at the hallmarks of a good conveyancing service and what questions you should be asking yourself, when you make this important decision.

* Fees. Most conveyancing firms will charge a reasonable fee as they are engaged in a fairly competitive industry. It’s a good idea to phone around and check with several firms to make sure the fee being charged is reasonable and in accordance with the usual practices. If you have a more complex transaction to conduct you have to be prepared to pay a little more to get the expertise you need.

* Competence. Most conveyancing firms are qualified and experienced in all aspects of property transfers, but it is a good idea to ask about the experience of the person, who will be handling your particular contract. This way you can be sure to get the correct answers to your questions at each stage of the conveyancing process. It is simply not good enough for a company to claim they have had many years experience, if the person dealing with your transaction does not have the same level of competence.

* Searches. Make sure you ask about the number and cost of searches that you should be making on your property. If the transaction is simply between family members, there may be no need for any searches whatsoever, but depending on the type of property your conveyancing firm should be able to assist you in determining which searches are appropriate. If you can’t get a clear answer at your enquiry stage then you should probably seek the assistance of another firm.

Remember that the conveyancing firm will not be able to give you a complete quote unless they have all the details of your transaction. That is why it is important to go over every aspect of your contract and make sure you cover every concern you have before you make your decision.

Whether you’re selling property or buying a house, select from our range of low cost conveyancing packages and let Go Go take care of the rest. For more information or to view our packages, visit Conveyancing.

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How Soon Can a Mortgage Be Refinanced?

There are many advantages to having your mortgage refinanced. Of course, the most important and obvious reason is the lower rate you’ll enjoy. When applied at the right time and opportunity, having a mortgage refinanced can save you thousands of dollars in the long run. However, since timing plays a crucial role in refinancing, it’s important that you understand the factors that can affect how successfully you can take advantage of it. So how soon can a mortgage be refinanced and should you?

The right time
Getting a mortgage is not for sissies. This type of loan, whether you’re taking it out to purchase a car or a house, is easily one of the biggest financial decisions you’ll ever make in your life.

If you’re taking out a home mortgage loan and are considering getting it refinanced later, you’ll be glad to know that you could probably do it at any time you want. But once you have a mortgage and interest rates begin behaving in a manner that is favorable to you, you shouldn’t automatically apply for refinancing.

First, the difference in the new interest rate and the current interest rate should be enough to actually give you some advantages. Second, most lenders will probably advise you to refinance only after your loan has matured for a minimum of 12 months or so.

However, it’s good to consider this only if interest rates have remained more or less the same. If, at any time after you have taken out a mortgage loan the market trend begins tipping to your advantage, you should consider refinancing your loan. Remember that interest rates are rather volatile and if you wait too long for them to dip further, you could miss out on a very good opportunity to get a good deal.

Consider the 2 percent rule.
Just because interest rates have fallen a tiny bit does not automatically justify your decision to refinance. Consider refinancing only if the new interest rate is at least 2% lower compared to the rate you’re currently paying. A 1% difference in interest is not sufficient reason to make the switch.

Remember that there are costs associated with a new loan. When you consider refinancing for your mortgage, remember that you will have to pay extra for closing fees. An interest rate as low as 1% will not cover the expense.

You have no late payments.
You could go ahead and refinance a mortgage provided you have paid your loan faithfully for the last 12 months. If you have never had a late payment during the last year, you could make the shift and have your mortgage refinanced.

You have already built up equity.
If you want to refinance a mortgage soon, try to examine if you have already built up equity. You should have a minimum of about 5% or 10% equity (depending on the lender) before you could consider refinancing as a feasible option.

So is refinancing an option for you?
Of course, you can always consider refinancing your mortgage at any time you feel most comfortable. The key is to consider the time factor, along with the type of opportunity being presented by the market. After all, refinancing is really getting a new loan. Just be prepared for the procedures and costs that you will have to go through all over again.

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