Do The Math Before Choosing A Mortgage.

Have you ever analyzed the difference in monthly payments between mortgages with different interest rates? Everyone wants to get the lowest interest rate possible. Savvy borrowers will shop around, contact different mortgage lenders and try to negotiate for the best terms. But do they really do the numbers? Do they look at the actual monthly payment that each loan will require? For example, what do you think is better for a $200,000 loan: a 6 percent interest rate with one point or a 6.125 rate with no points? Keep in mind that a point is one percent of the amount loan -- or in our example $2,000. The monthly payment to amortize a $200,000 loan over 30 years at 6 percent will cost you $1199.11.

Financial Fitness Improves Chances Of Home Ownership.

Do people who live in financially fit communities have a better shot at owning a home? To some extent. Many of the community qualities examined in "Which Metropolitan Areas Are the Most "Financially Fit?" " are the same qualities necessary for sufficient financial strength to buy a home. Late last year, Orlando, FL-based InCharge Education Foundation, a non-profit financial education organization, examined 314 metropolitan areas of varying sizes to determine their financial fitness based on five factors: Employment opportunities. Wages and salaries produce most of a household"s personal income and that makes employment an important financial success indicator. Greater financial fitness is associated with areas with higher employment opportunities. You typically can"t buy a home without a job.

Most Homeowners Won"t Recommend Lender.

Consumers who spend some time shopping around for home loans are more satisfied with the mortgage origination experience than those who don"t bother to shop around. But most consumers aren"t satisfied enough to recommend their lender to others. Market researcher and consumer satisfaction rater J.D. Power and Associates says consumers who shopped solely with mortgage brokers were more satisfied with the mortgage acquisition process than those who shopped solely with a direct lender. "Brokers are perhaps more dependent on customer referrals than the direct lenders. As a result, brokers may be more in tune with the cause and effect of customer satisfaction and advocacy," said Jeremy Bowler, director of the finance and insurance practice at the Westlake Village, CA-based firm. However, consumers were most satisfied with the mortgage acquisition process when they contacted a broker, but also went on to apply for their loan directly with a lender, according to Power"s 2005 Home Mortgage Study.

Lost Mortgage Documents May Cause Future Problems.

Question: We recently paid off our mortgage. The mortgage company sent us a release from the county in which our property is located. However, they claim that they do not have the original promissory note or deed of trust which we signed when we first obtained this loan. The lender has agreed to send us a copy of these legal documents. We took out the mortgage 17 years ago. Over the years, our loan has been transferred to at least four other companies. Are we protected? Answer: I do not think you have to be concerned, but -- as you will see from my answer -- there are some steps you should take to protect yourself. When you obtain a mortgage loan, you will sign two important legal documents: a promissory note and a Deed of Trust.


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