Tag Archives: interest rates
Take 5 Steps Now To Become A First Time Homebuyer in Delaware in 2013

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From credit scores to down payments to paperwork, there’s a lot you can do now to prepare for the home buying adventure ahead of you

Let’s take a look at 5 steps you can take now so you can become a credit score

If you want to become a first time home buyer in 2013, you need to get any debt under control

  • Gather paperwork

    As you’ve probably heard, paperwork is the backbone of the home buying process

    Income verification, tax forms, and bank statements

    The more prepared you are now, the easier it will be to gather the necessary documents

  • Understand your credit history

    A mortgage consultant will pull your credit report from the 3 main credit reporting agencies – Experian, TransUnion and Equifax – and use the middle score (known as a tri-merge credit report)

    Knowing what’s on your credit report can help ensure that you’re doing the right things when it comes to your credit

    Make sure no outstanding issues are on there, and ask your mortgage consultant what needs to be addressed if some issues do arise

  • Research

    Begin the research phase now and start exploring first time home buyer loan options

    Are you considering a mortgage pre-approval is vital in the home buying process

    Step one should not be house hunting and dreaming of the perfect home

      This will help you gear your house hunting to homes you can afford

     

    Here at Delaware Financial Capital Corp, we can answer your questions about your mortgage needs

      Just give us a call at (302) 266-9500 or click on the button below and fill out our online contact form

     

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    Download your FREE Report!  Click the button below:

     

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  • Mortgage interest rates are still low!

    interest rates, delaware, mortgageDelaware mortgage rates have improved since the Federal Reserve started its QE3 program by pumping in an additional $40 billion to boost the housing market.  This should keep rates low for a while, so the sooner you get refinanced, the sooner you will start saving money monthly and increasing your cash flow.

    If you are considering refinancing your home, now is the time is take advantage of these all time record low rates. 

    Did you know that 69 % of homeowners today have mortgages exceeding 5% according to recent data.

    Why aren’t more people  refinancing if they know they can get a lower interest rate?  It
    turns out that many homeowners who purchased prior to 2008 and even into 2010, may find they are underwater, (underwater is owing more on your mortgage than your home is worth). Still some homeowners have run up credit card debt and in some cases unfortunately lost their jobs, making it impossible to qualify.

    The good news is there is help for Delaware homeowners.  First, we are seeing there is an increase in home sales and home values, especially in New Castle County and other areas, depending on property location.  Next, many Delawareans have kept up on their mortgage payments despite being in a down economy.   Keeping up to date with your mortgage payment is a key element in getting refinanced or maybe even buying a new home.

    Finally, the HARP 2.0 Program is still available which may mean further easing for borrowers who are underwater. 

    How do you know whether or not you qualify?  Simply, you won’t know unless you ask.  If this whole topic seems a little confusing, please do not hesitate to give us a call at 302-266-6500 to see if you may qualify for a lower rate and a refinance.

     

     

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    How Mortgage Loans Work

    How Mortgage Loans WorkExcluding property taxes and insurance, a traditional fixed-rate mortgage payment consist of two parts: (1) interest on the loan and (2) payment towards the principal, or unpaid balance of the loan.

    Many people are surprised to learn, however, that the amount you pay towards interest and principal varies dramatically over time. This is because mortgage loans work in such a way that the early payments are primarily in interest, and the later payments are primarily towards the principal.

    In the beginning . . . you pay interest
    To help calculate monthly payments for loans based on different interest rates, lenders long ago developed what are known as “amortization tables.” These tables also make it fairly easy to calculate how much money of each payment is interest, and how much goes towards the principal balance.

    For example, let’s calculate the principle and interest for the very first monthly payment of a 30-year, $100,000 mortgage loan at 7.5 percent interest. According to the amortization tables, the monthly payment on this loan is fixed at $699.21.

    The first step is to calculate the annual interest by multiplying $100,000 x .075 (7.5 %). This equals $7,500, which we then divide by 12 (for the number of months in a year), which equals $625.

    If you subtract $625 from the monthly payment of $699.21, we see that:

    • $625 of the first payment is interest
    • $74.21 of the first payment goes towards the principal

    Next, if we subtract $74.21 (the first principal payment) from the $100,000 of the loan, we come up with a new unpaid principal balance of $99,925.79. To determine the next month’s principal and interest payments, we just repeat the steps already described.

    Thus, we now multiply the new principal balance (99,925.79) times the interest rate (7.5%) to get an annual interest payment of $7,494.43. Divided by 12, this equals $624.54. So during the second month’s payment:

    • $624.54 is interest
    • $74.67 goes towards the principal.

    Equity
    As you can see from the above example, even though you pay a lot of interest up front, you’re also slowly paying down the overall debt. This is known as building equity. Thus, even if you sell a house before the loan is paid in full, you only have to pay off the unpaid principal balance–the difference between the sales price and the unpaid principle is your equity.

    In order to build equity faster–as well as save money on interest payments–some homeowners choose loans with faster repayment schedules (such as a 15-year loan).

    Time versus savings
    To help illustrate how this works, consider our previous example of a $100,000 loan at 7.5 percent interest. The monthly payment is around $700, which over 30 years adds up to $252,000. In other words, over the life of the loan you would pay $152,000 just in interest.

    With the aggressive repayment schedule of a 15-year loan, however, the monthly payment jumps to $927-for a total of $166,860 over the life of the loan. Obviously, the monthly payments are more than they would be for a 30-year mortgage, but over the life of the loan you would save more than $85,000 in interest.

    Bear in mind that shorter term loans are not the right answer for everyone, so make sure to ask your us about what loan makes the best sense for your individual situation. 

    Give Delaware Financial Capital Corp. a call at 302-266-9500 or simply click on the button below and fill out our online form

     

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    Refinance or not to Refinance – Top Ten Considerations

    describe the imageOne thing is for sure, if you have the right situation that works for you and your family, then you can greatly benefit from refinancing your home mortgage loan. The best way to figure out whether you, in particular, are in that situation is by talking to professionals and comparing mortgage rates and program; we do that for you here at Delaware Financial Capital Corp.

    Did you know that everyday hundreds of people here in Delaware who refinance their home mortgage?  If you have the right situation refinancing your home mortgage can be the smartest financial decision you make this year.  Check out the top ten considerations in deciding whether to refinance or not to refinance. First, you have to determine if the fees and time it takes to refinance are going to be worth it for the amount of money you will save?

    1. Will refinancing my home lower my rate?
    2. Can I reduce my term or shorten the duration of current loan term?
    3. Do I have enough equity to take cash out, to pay for a home improvement, education, or some other worthwhile family endeavor?
    4. How long it will take me to recover my closing fees?
    5. Will rates get any better?  Or, can the bond market be timed?
    6. Is my mortgage an adjustable ARM?  Should I do a fixed rate loan why rates are this low?
    7. Will the process be overwhelming?
    8. How long will I be in my house?
    9. Can I consolidate some credit card debt using my home equity and create a lower payment and a tax advantgage?

    There is a continuous change in the mortgage industry used to determine if your refinance loan makes both dollars and sense; such as, interest rates, your house value, credit rating, current equity and debt standing.  These things may make any possible now for you to consider a new favorable refinance loan.

    1. Take advantage of a lower interest rate
    2. Shorten or lengthen the duration of your loan
    3. Lower your monthly payments
    4. Get cash out
    5. Lock in a fixed rate while they are still low

    It’s Alright to have Concerns about Refinancing

    Just as with the creation of any other new loan there are fees associated with refinancing your home mortgage. Depending upon how long you have been paying on your current loan, the interest vs. principle pay down will be a consideration.

    You also consider how much longer you will remain in your home. If you are going to save $2,400  a year by refinancing, but you have to spend $4,000 to get it the refinance done,  then you will have to own that home for at least almost two years to realize any savings on that level, which is a very good return.

    Overall consideration should include not only payment, but total interest reduction, which can be significant in today’s interest environment.

    Regardless of any of these concerns, if your situation is correct, you can save a ton of money by refinancing your current home mortgage loan. Do the research by comparing mortgage rates with us, time is of the essence and it may not be in your favor, but why?

    Mortgage Rates Can Go Up Quickly

    When will rates begin to tick up?  The answer is quite simply; no one knows, but we are sure it is just a matter of time before we see rates begin to tick up.  Rates have a tendency to go up a lot faster than they go down. 

    Pressure on financial institutions, corporate earnings, taxes, and the ever lying snake in the grass, “Inflation” will be the culprits to the return of higher interest rates.

    How Can You Be Sure My Rates Won’t Change?

    Our loan locks are good for 60 days and our prices reflect a 60 day lock.  We don’t low ball our rates by quoting rates for 10 or 15 day locks just to get you into our grasp, that’s not what we are all about. We’re upfront and will fully disclose all fees. 

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    Begin your search to refinance your home mortgage today by doing your homework, and find a loan that is right for you.

    Start now by giving us at (302) 266-9500 or simply click the button below to contact Sam.

     

    Contact Sam!