Interest Only Mortgage Rates a Riskly Mortgage Loan

October 29, 2011 at 11:39 am · Filed under Uncategorized ·Tagged

Adjustable mortgage rates with mortgage interest only payments are risky. Mortgage rates today are generally low with regular fixed mortgage rates so why risk getting an mortgage interest only adjustable mortgage? You can use a mortgage calculator and see how much your payments will increase with an mortgage interest only adjustable mortgage. Plus there are other thing to consider like prepayment penalties.

More information on ARMs is available online, you can find info on Adjustable Rate Mortgages. But high home prices may make the dream seem out of reach.Some mortgages, including I-O mortgages and payment-option ARMs, have prepayment penalties.Falling housing prices can make the I-O payment period is typically between 3 and 10 years.

Refinancing your mortgage with today’s mortgage rates will save you money. After that, you must repay both the principal and the mortgage interest.Many payment-option ARMs limit, or cap, the amount the monthly minimum payment may increase from year to year.Rising monthly payments and payment shock when mortgage rates today move higher. After that, the rate usually rises to a rate closer to that of other mortgage loans.Your payments may not cover all of the mortgage interest owed.Also, as mortgage interest rates go up, your payments are likely to go up.

Even if home prices stay the same, if you have negative amortization, you may owe more on your mortgage than you could get from selling your home.For example, suppose you made minimum payments on your $180,000 mortgage and had negative amortization.But no one knows what mortgage interest rates will be in 3, 5, or 10 years.You may be able to avoid payment shock and higher monthly payments by refinancing your mortgage.

An I-O payment plan allows you to pay only the mortgage interest for a specified number of years.The principal you owe on your mortgage decreases over the term of the mortgage loan.Your monthly payments during the first year are based on the initial low rate, meaning that if you only make the minimum payment, it may not cover the mortgage interest due.The mortgage interest rate on a payment-option ARM is typically very low for the first 1 to 3 months (2%, for example).

Home mortgage loan mortgage lenders end the option payments if the amount of principal you owe grows beyond a set limit, say 110% or 125% of your original mortgage amount.To make monthly mortgage payments more affordable, many home mortgage loan mortgage lenders offer home mortgage loans that allow you to (1) pay only the mortgage interest on the mortgage loan during the first few years of the mortgage loan term or (2) make only a specified minimum payment that could be less than the monthly mortgage interest on the mortgage loan even if mortgage interest rates rise more than 5%.And if your mortgage loan balance grows to the contract limit, your monthly payments would go up.

This is known as negative amortization.Also, you may find it difficult to refinance.When might an I-O mortgage payment or a payment-option ARM be right for you?What is a payment-option ARM?The unpaid mortgage interest is added to your mortgage balance so that you owe more on your mortgage than you originally borrowed.If you have a 30-year mortgage loan and you are at the end of year 5, your payment will be recalculated for the remaining 25 years.

In the monthly minimum payment on the option-ARM payment rises from $630 in the first year to $1,308 in year 6, assuming the mortgage interest rate stays at 4%.When that happens, the payment could increase a lot, leading to payment shock.A payment-option ARM is an adjustable-rate mortgage that allows you to choose among several payment options each month.Traditional mortgages require that each month you pay back some of the money you borrowed (the principal) plus the mortgage interest on that money.

So if you refinance your mortgage loan during the prepayment penalty period, you could owe additional fees or a penalty.If housing prices fall, your home may not be worth as much as you owe on the mortgage.In the Mortgage Shopping Worksheet example, the penalty is 3% in the first year, 2% in the second year, and 1% in the third year.Your payments may go up a lot–as much as double or triple–after the mortgage interest-only period or when the payments adjust.

The monthly payment could go up to $2,419 if mortgage interest rates reach the overall mortgage interest rate cap.This is not considered “prepayment,” and there usually is no penalty for these extra amounts.Mortgage interest rates.What are some important target dates in an I-O mortgage or a payment-option ARM?Does the type of mortgage loan and mortgage loan payment plan make much difference with ending the option payments.

The payment cap does not apply to this adjustment.It is risky to focus only on your ability to make I-O or minimum payments, because you will eventually have to pay all of the mortgage interest and some of the principal each month.What should I keep in mind when it comes to an I-O mortgage payment or a payment-option ARM?Be sure you understand the mortgage loan terms and the risks you face.

Comparison of Five $180,000 Mortgage loans Glossary For More Information What is an I-O mortgage payment?These payments may be based on a set mortgage loan term, such as a 15-, 30-, or 40-year payment schedule.After that, your monthly payment will increase–even if mortgage interest rates stay the same–because you must pay back the principal as well as the mortgage interest.And if your mortgage loan balance is greater than the value of your home, you may not be able to refinance.Whether you are buying a house or refinancing your mortgage, this information can help you decide if an mortgage interest-only mortgage payment (an I-O mortgage)–or an adjustable-rate mortgage (ARM) with the option to make a minimum payment (a payment-option ARM)–is right for you.

For example, if your $180,000 mortgage loan grew to $225,000 (125% of 180,000), your payments would be recalculated.Home mortgage loan mortgage lenders have a variety of names for these mortgage loans, but keep in mind that with I-O mortgages and payment-option ARMs, you could face “payment shock.Most mortgages that offer an I-O payment plan have adjustable mortgage interest rates, which means that the mortgage interest rate and monthly payment will change over the term of the mortgage loan.What do you need to ask when shopping for an I-O mortgage payment or a payment-option ARM?

When might an I-O mortgage payment or a payment-option ARM not make sense?The changes may be as often as once a month or as seldom as every 3 to 5 years, depending on the terms of your mortgage loan.The options typically include a traditional payment of principal and mortgage interest (which reduces the amount you owe on your mortgage).Negative amortization.In this case, you could owe $3,600 if you refinance in year.

Most mortgages let you make extra, additional principal payments with your monthly payment.In addition, with payment-option ARMs you could face negative amortization.Payment-option ARMs have a built-in recalculation period, usually every 5 years.And be realistic about whether you can handle future payment increases.What are the alternatives to I-O mortgage payments and payment-option ARMs.

You begin to pay back the principal, your payments increase after year Back to top What is a payment-option ARM?And if you decide to sell, you may owe the home mortgage loan lender more than the amount you receive from the buyer.If you have a payment-option ARM and make only minimum payments that do not include all of the mortgage interest due, the unpaid mortgage interest is added to the principal on your mortgage, and you will owe more than you originally borrowed.

With a 5/1 ARM has a fixed mortgage interest rate for the first 5 years; after that, the rate can change once a year (the “1″ in 5/1) during the rest of the mortgage loan.It is likely that your payments would go up significantly.For example, if you take out a 30-year mortgage loan with a 5-year I-O payment period, you can pay only mortgage interest for 5 years and then both principal and mortgage interest over the next 25 years.

Any mortgage interest you don’t pay because of the payment cap will be added to the balance of your mortgage loan.If you choose this option, the amount of any mortgage interest you do not pay will be added to the principal of the mortgage loan, increasing the amount you owe and increasing the mortgage interest you will pay.If you’re not comfortable with these risks, ask about another mortgage loan product.If the balance grew to $225,000 (125% of $180,000), the option payments would end.Payment changes.

The unpaid mortgage interest is added to the amount you owe on the mortgage, resulting in a highter balance.If your mortgage loan balance has increased, or if mortgage interest rates have risen faster than your payments, your payments could go up a lot.Your mortgage loan would be recalculated and you would pay back principal and mortgage interest based on the remaining term of your mortgage loan.At this point, your payment will be recalculated (home mortgage loan mortgage lenders use the term recast) based on the remaining term of the mortgage loan.

 

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Hiring a Home Improvment Contractor

October 8, 2011 at 12:12 pm · Filed under Uncategorized ·Tagged

Hiring a home improvment contractor is a big decession to make, the bigger the job the bigger the decession. With current mortgage rates so low right now imagine financing a $50,000, $100,000 or $250,000 renovation and end up with a contractor that leaves you out in the cold. You should be able to request and see a copy of these items ahead of time and ask any questions you may have.Most states and localities require permits for building projects, even for simple jobs like decks.A “mechanic’s lien” could be placed on your home if your contractor fails to pay the subcontractors and suppliers on your project.

Ask for a list of refences .How long have you been in business?Home Improvement Professionals Depending on the size and complexity of your project, you may choose to work with a number of different professionals.  General Contractors manage all aspects of your project, including hiring and supervising subcontractors, getting building permits, and scheduling inspections. A general contractors hires all the other contractors, they are like mortgage brokers getting you a list of today’s mortgage rates, you deal with one person but have access to many. Just ask may I have a list of references?

Are you licensed and registered with the state?Ask each how long ago the project was completed and if you can see it.One caveat: No record of complaints against a particular contractor doesn’t necessarily mean no previous consumer problems.A competent contractor will get all the necessary permits before starting work on your project.Will you be using subcontractors on this project?

Also, the licensing requirements in one locality may be different from the requirements in the rest of the state.Some inspector associations and state regulations allow the inspector to perform repair work on problems uncovered in the inspection.The average on-site inspection time for a single inspector is two to three hours for a typical single-family house; anything significantly less may not be enough time to perform a thorough inspection.

Check with your local building department or consumer protection agency to find out about licensing requirements in your area.The licensing can range from simple registration to a detailed qualification process.Other associations and regulations strictly forbid this as a conflict of interest.This will help you determine how familiar the contractor is with your type of project.Otherwise, you’ll be held liable for any injuries and damages that occur during the project.Look for a well-established company and check it out with consumer protection officials.

If yes, ask to meet them, and make sure they have current insurance coverage and licenses, if required.What types of insurance do you carry?Contractors should have personal liability, worker’s compensation, and property damage coverage.They also work with architects and designers.The contractor should be able to give you the names, addresses, and phone numbers of at least three clients who have projects similar to yours.Designers have expertise in specific areas of the home, such as kitchens and baths. Mortgage rates today are very low right now you can finance a big job.Don’t Get Nailed Not all contractors operate within the law.

If your state has licensing laws, ask to see the contractor’s license.While most states license electrical and plumbing contractors, only 36 states have some type of licensing and registration statutes affecting contractors, remodelers, and/or specialty contractors.Speciality Contractors install particular products, such as cabinets and bathroom fixtures.The inspector should ensure that their inspection and inspection report will meet all applicable requirements in your state if applicable and will comply with a well-recognized standard of practice and code of ethics.

Hiring a Contractor Interview each contractor you’re considering.If the inspection is for a commercial property, then this should be asked about as well.Be suspicious if the contractor asks you to get the permit(s).They can tell you if there are unresolved consumer complaints on file.Avoid doing business with contractors who don’t carry the appropriate insurance.Will my project require a permit?Ask for explanations for price variations.

Your home may be your most valuable financial asset.Related experience in construction or engineering is helpful, but is no substitute for training and experience in the unique discipline of home inspection.If you’re not careful, you could lose your home through a home improvement loan scam.Some firms have architects on staff; others use certified designers.

That’s why it’s important to be cautious when you hire someone to work on it.If there are any areas you want to make sure are inspected, be sure to identify them upfront.Protect yourself by asking the contractor, and every subcontractor and supplier, for a lien release or lien waiver.

Newer inspectors can be very qualified, and many work with a partner or have access to more experienced inspectors to assist them in the inspection.Ask for copies of insurance certificates, and make sure they’re current.However, don’t consider an ad an indication of the quality of a contractor’s work.Architects design homes, additions, and major renovations.Home improvement and repair and maintenance contractors often advertise in newspapers, the Yellow Pages, and on the radio and TV.Don’t automatically choose the lowest bidder.Design/Build Contractors provide one-stop service.

Your best bet is a reality check from those in the know: friends, neighbors, or co-workers who have had improvement work done.It could mean that the contractor is not licensed or registered, as required by your state or locality.Here are some questions to ask.Additional inspectors may be brought in for very large properties and buildings.

They see your project through from start to finish.Get written estimates from several firms.Here are some tip-offs to potential rip-offs.That means the subcontractors and suppliers could go to court to force you to sell your home to satisfy their unpaid bills from your project.If your project includes structural changes, you may want to hire an architect who specializes in home remodeling.

The inspector should be able to provide his or her history in the profession and perhaps even a few names as referrals.Home Sweet Home Improvement Whether you’re planning an addition for a growing family or simply getting new storm windows, finding a competent and reliable contractor is the first step to a successful and satisfying home improvement project.

It may be that problems exist, but have not yet been reported, or that the contractor is doing business under several different names.How many projects like mine have you completed in the last year?Make sure it’s current.Also, tell the contractor that you’d like to visit jobs in progress.Also ask them if they were paid on time by this contractor.

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Optimize your Kitchen Organization and Simplify your Life

June 15, 2011 at 1:09 pm · Filed under Uncategorized ·Tagged

Our kitchens are easily the busiest room in our homes.  From cooking and entertaining to a place for your kids to do their homework, play board games or work on their arts and crafts projects, it can be easily overrun with art supplies, outdated spices and unused or damaged utensils.

Go through your kitchen and discard anything you don’t use, along with any food, spices or medicines kept in the kitchen that are beyond their expiration dates.   Then take everything out of your cupboards and drawers, and wash the insides with warm soapy water. Rinse, let dry and replace cupboard and drawer liners with fresh, new ones.

Store pots, pans and cooking utensils near the stove, nesting the pots and pans together to conserve space.  Make sure each one you choose to keep has a matching lid.  This is also a good time to make sure handles are securely fastened, so keep a screwdriver handy to tighten down skillet handles or pot lids if necessary.  Keep your dishes and silverware near your eating area or your dishwasher to shorten meal preparation or cleanup time.  Plastic storage containers should be inventoried to ensure each has a matching lid and that they are free from cracks or other damage.  Store them near your refrigerator to ease meal cleanup time.

Alphabetize your spices and keep them near the stove on a spice rack or in a nearby cupboard on a revolving rack.  Store food items that you use on a daily in a place you can easily grab them when needed.  Organize your pantry so that similar canned goods are in the same place and can be found easily when it’s time to cook meals. Make sure your children an easily reach items they use on a regular basis, and make sure items such as knives, scissors, and household chemicals are out of reach and secured in a locked cabinet.  Utilize airtight food storage containers to lengthen the shelf life of your foods.

If you have small appliances on your kitchen countertop that you don’t use on a regular basis, remove them and store there in a nearby cupboard or pantry. A countertop storage cabinet for those appliances that are used on a regular basis keeps them out of site and helps reduce the countertop clutter.

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Keep your Kitchen or Dining Room Table Clutter-Free

June 15, 2011 at 1:08 pm · Filed under Uncategorized ·Tagged

Kitchen or dining room tables can easily become a catch-all for everyone’s belongings.  Mail, school books, car keys, pens, pencils, and other miscellaneous items can quickly appear, and at dinnertime, end up in a large pile of clutter somewhere else in your household. You can try remodeling your kitchen since refinance rates make borrowing money less expensive since you play less interest charges when refinancing.

To curtail this habit, try organizing a central area for everyone’s belongings right inside the door to your house.  Install hooks on the wall so that purses, coats and backpacks can easily be hung upon entry.  A bench or short shelf can be placed directly underneath the hanging area for clearly labeled catch-all bins for each member of the family.  This will also help during the course of the day when picking up around the house.  Items found around the house can be placed in these bins, and each family member should get into the habit of making sure items are emptied from the bins and properly put away each evening.

If your kitchen table doubles as an arts and crafts studio or location for your kids to do their homework, make sure that there are bins, shelves and containers nearby that neatly organize school, office and arts supplies, and keep them within easy reach.  Help establish good habits in your children by ensuring they are held responsible for putting these things away as soon as they are done using them.  Make sure snacks are kept on plates and drinks are kept on coasters to ease cleanup time.

A nicely decorated table spread is also an ingenious way to keep the table from becoming cluttered.  Spread a nice tablecloth and place a large centerpiece on it, or even set four or six formal place settings on a dining room table that is not used for meals each evening.  Your family will be less likely to lay things on these tables since they can see there are already things there.  You’ll also be ready for company at the last moment this way

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Garage Organization Made Simple

June 15, 2011 at 1:07 pm · Filed under Uncategorized ·Tagged

You’ve conquered your house, your home office, and your car, and you’ve mastered the art of scheduling and cooking in bulk.  But your garage is still a cluttered and unorganized mess.  As with everything else, a neat and organized garage is attainable with just a little elbow grease and some simple storage solutions.

First, get a handle on the mess by moving everything out to sort through what goes and what stays.  Large, clear plastic containers can help you do this. They’re great for clearing away the clutter and then using for storage.  Be ruthless with yourself during the sorting and purging process.  Don’t keep paint from a project from two years ago, and if you have parts to things you no longer have, get rid of the parts as well.

Consider adding a cabinet to your garage. Look for units that offer keyed locks, so you’re able to store poisonous materials and sharp tools out of children’s reach.

The garage is also where most of your kid’s sporting goods land. To keep bats and balls organized, purchase a hamper-style organizer. Designate a section for each child. Add a bin or shelf outside to store messy, muddy shoes as well.
Find a workable storage solution for all the little things in your garage.  Organize bolts, screws, nails, fasteners and other small parts into small clear containers so you can easily see what each contains.  Organize into steady stacks or consider installing a shelving unit to house these out of the reach of small and curious fingers.

For long-handled items, such as rakes and shovels, look for storage units to keep everything straight or use a durable rubber trash can.  Pegboards can also be installed on garage walls, and can be a simple solution for hanging items such as rakes or shovels out of the way.  They can also be hung on hooks. Inexpensive hooks come in a variety of sizes. Large deep hooks are perfect for hanging a ladder and bikes can be hung and kept off the garage floor as well.

Now that you’ve practiced on your house, your office and your car, organizing your garage is a snap with a little creativity, some hard work, and a well thought out plan.

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Conquer Bathroom Clutter Simply and Effectively

June 15, 2011 at 1:06 pm · Filed under Uncategorized ·Tagged , , , ,

Bathrooms seem to be notorious for becoming cluttered and unkempt.  Between small makeup compacts, medicine bottles, hair accessories, razors and the like, it can be quite easy to lose things in the shuffle.  Assess your bathroom and its contents and utilize a few simple ideas and you’ll find more space and tranquility as a result.

First, take a good look at your medicine cabinets.  Ironically, it’s probably not a good idea to store medicine in your medicine cabinet, as most bathrooms become hot and humid during showers and baths, and can be detrimental to medication that requires being stored at room temperature.  Don’t keep medicines past their expiration date, even if you’ve never opened them or have used them very little.  Try storing your medications on a high shelf in your linen closet with a lock-tight lid.  This will help lengthen their shelf life as well as keep them out of reach of curious little hands.

The same should be done with old makeup.  Generally speaking, most makeup will last about 18-24 months, with the exception of mascara, which lasts about three months, and liquid eyeliner, which lasts about three to six months.  Nail polish generally only holds up for about a year, so if you have any older than that, get rid of them.  And since many makeup products have animal-based ingredients, it’s also important to pay attention to how they smell.  If they smell like they’ve gone bad, they probably have, so toss them. Try using a permanent marker to mark the purchase date on the back of the item, so that way you won’t have to try to remember just how long it’s been since you purchased something.

If you take a look in your favorite discount store’s home organization aisle,  you’ll find lots of inexpensive storage containers that can easily be utilized in bathroom drawers, under the sink, and for shower and bathtub areas as well.  Since bathrooms are full of small things, they can easily be organized in small bins, baskets or boxes.

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Creative and Affordable Ideas to Bring your Living Room to Life

June 15, 2011 at 1:05 pm · Filed under Uncategorized ·Tagged , , , ,

Your living room is the room in your house where most of the living takes place.  It’s where your family gathers to watch television, read, and generally unwind and relax after a busy day.  It’s also the room where company gathers during parties and holidays.  But you’re struggling to come up with decorating ideas and strategies for it, and you worry that your budget isn’t big enough to do the job justice.  But with a little planning, creativity, and ingenuity, your living room can be a relaxing environment where you can unwind or entertain with comfort and ease.

Consider pulling pieces you have in other rooms into your living room to use.  A short, double-sided dresser can easily become a buffet when a table runner and an arrangement of candles or a colorful flower centerpiece is placed on top.

Getting your living room redone can be very expensive but not as expensive as a kitchen or bathroom. Current mortgage rates are very low so if you’re one of the lucky few homeowners that have equity in your own you can put it to use.

Use your furniture arrangement to define functional areas. Strategically placed floor rugs, lamps and furniture can create zones in your home. You can arrange your seating to take advantage of a focal point, such as a television, picture window or a fireplace.  You can also find affordable component pieces that combine functional storage with fashionable decorating lines. Tables with drawers and shelves add valuable, and a simple desk doubles for homework,  household management, bill paying and filing.

When accessorizing your room, remember that less is more. Choose neutral colors and accent with colorful textured throws, rugs, and other decorative and artistic elements.  Keep the balance of your room in perspective.  You don’t want to overwhelm a small room with large, bold pieces, nor do you want to place smaller, neutral pieces in a large room where they’ll get lost.
If you’re working with used furniture, try distracting from worn upholstery or a faded finish by using colorful toss pillows or table runners.  Bright curtains can distract from a faded carpet and breathe new life into an old room

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Organizing your Child’s Bedroom Can Be Fun

June 15, 2011 at 1:01 pm · Filed under Uncategorized ·Tagged , , , , ,

If you have a child, you know how easily their bedrooms can get out of control. Toys strewn about, clothes out of drawers, books on the floor; it can almost be a hazard sometimes just to enter.  But getting your child’s room organized can be rewarding and fun, especially if your child is actively involved in the process.

Never attempt it without their permission, input and most importantly their active participation.  Don’t surprise your child and go ahead and organize their room for them.  Just as you expect your privacy and possessions to be respected, so should theirs.

Teach your child as soon as possible the importance of keeping their room tidy and orderly, so they’ll have a strong appreciation for neatness and order as they grow.  With a little patience and cooperation, even the youngest can be taught this habit early on, simply by learning how to put toys and other belongings like books and art supplies away after use.

Mortgage rates are so low right now so making an investment to remodel your child’s bedroom won’t cost you a fortune if you refinance your mortgage for the money.

When organizing your child’s room, make sure it’s fun and creative, so they are interested in maintaining it.  And as we all know, children grow and change rapidly, so their rooms should have the room to grow with them.  Make sure your organizational method has room to grow and change as well.  And above all, make sure you get their ideas about what they think will work the best for them.  Make sure that all their favorites are well within reach and easy to put away.

Place things that they use on an infrequent basis on the top shelves in their closet, and devise a workable system for hanging and organizing clothes and grouping favorite outfits together.  When it comes time to put laundry away, ask if they need your help, but try to give them the space when possible to do it themselves, and it will grow into a good habit as they grow older.   Hanging storage closet systems are ideal for kids. They are bright and colorful and are able to contain closet items in a way that enhances visibility for a child. Designed with roomy pockets they hold an array of shoes, toys, and clothes, and hang over any standard closet rod.  Their front openings make it simple and quick for any child to use.

Also consider a desk with drawers or other filing system for your child’s school work, art work, awards, report cards, and other papers.  There are many brightly-colored and durable storage bins, desks and organizers available for your child’s room, so take them shopping with you so you can both select the best option.

And most importantly, keep your room neat and organized, and maintain it on a daily basis.  Don’t expect your child to maintain a nice, tidy room if you’re not doing the same.   The best teacher is your example.

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