Mortgage California Blog

Smarter Ways to Save Big On Your Mortgage

June 20th, 2013

Approved Mortgage loanSmarter Ways to Save Big On Your Mortgage

In our news roundup today we’ll look at ways you can save your money with your mortgage, home repairs to do before refinancing, and report on the most affordable cities in the US.

First, though, we’ll mention that the Feds did not change anything with their recovery stimulus packages, so we should continue to see low rates and aid for people whose homes are underwater.

USA Today reported that four of the nation’s leading mortgage servicers have not complied fully with the new standards for handling home loans.

“This report provides the public with a new and transparent look into how banks are treating homeowners,” said Shaun Donovan, secretary of the Department of Housing and Urban Development.

Donovan said the servicers have improved their performance since the new standards took hold. They no longer sign off on foreclosure paperwork with little or no review or charge distressed borrowers a fee to process a loan-modification request.

Always work with a reputable mortgage loan officer to ensure your loan is handled properly.

Most Affordable Cities In The US

Business Insider released a study on the most affordable cities to own a home in the US after reviewing over 100 metro areas. The least affordable place to own a home was Honolulu followed by Silicon Valley, and then San Francisco metro area. Seattle/Tacoma/Bellevue was 9th on the list of unaffordable. However, they used an average income based upon the entire United States and not in those particular areas where income is above average. And it did not take into account any local initiatives for affordable housing. Work with a reputable Realtor and mortgage loan officer to find a home that’s affordable for you where you want to live.

Home Repairs to Do Before Refinancing

The weight of an appraisal is now more focused upon measurable facts like what other homes have sold for and less on cosmetics.  The appraiser will be evaluating location, lot size, square footage, and the number of bedrooms and bathrooms. The appraiser will also evaluate the cosmetics such as if the kitchen was remodeled.

From Yahoo News:

Improvements that may help a refinance valuation:

  • Additional bedroom or bathroom
  • Addition to the lot size
  • Addition to the garage
  • Improvement that expands the “use” of the home

Improvements that may help a sale price:

  • New paint job
  • Freshly maintained landscaping
  • Remodeled and/or upgraded interior
  • Deck and/or patio addition
  • Additional bedroom or bathroom
  • Addition to the lot size
  • Addition to the garage

When you refinance, you’re looking to save money on interest that you would normally have paid out over the term of the loan. Home improvements that increase the value of your home will also increase your enjoyment and could be considered an investment of the money you saved.

The Smartest Way to Save Big On Your Mortgage

Yahoo Homes reported that a shorter loan term will save you the most on your mortgage. Shorter-term loans typically come with lower interest rates and higher monthly payments.

The benefits of the short term pain are:

  1. You won’t lose as much money on interest
  2. Reap the benefits when you sell your home (you’ll get most of the sale price instead of having to pay off the rest of your mortgage)
  3. Build equity to reverse an underwater mortgage

As always, talk with a certified loan officer to find out what’s best for your situation.

 

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