How much Homeowner's insurance coverage do I need to get new mortgage?

A safe bet is to buy a guaranteed-replacement-cost policy that will generally pay out 20-50% more than the face value of the policy to rebuild your home (this is also the preferred policy of mortgage lenders). A replacement-cost policy typically adjusts the amount of insurance each year to keep pace with rising construction costs in your area. It is important to note that local building codes require structures to be built to specific standards which could vary over time, if your home is severely damaged, you may be required to rebuild it to current codes. Even guaranteed-replacement-cost polices do not always cover this expense. However, many insurers offer an endorsement that will pay for the upgrading cost, it is a good idea to consider adding such an endorsement to your replacement-cost policy.

What is the difference in rate for non-owner occupied vs. owner occupied financing?

Conforming non-owner occupied rates are typically 3/8% higher than owner occupied interest rates. The equity requirement is usually higher for non-owner occupied mortgages as well, typically 20-30%.

Will my interest rate for second mortgage change?

If your loan is fixed-rate, the interest rate is set for the duration of the loan. Many lenders will offer variable rate mortgages, and these can provide for periodic interest rate changes. If your contract lets your lender adjust the interest rate, make sure to understand when excatly can the lender change the interest rate and if there are any limitations on how much the rate can change.

Why do I need to pay for another policy of title insurance when we already own the property?

Before closing your new mortgage, your new mortgage lender must be certain that the title to the property will be free and clear, free of prior defects and indebtedness. A new policy is needed to protect the new mortgages lender and subsequent investor of your new mortgage. Both a homeowner and prospective lender need to be certain that what is available on the property is what is referred to as a "marketable title". A title company researches the legal history of the property that entails searching public records in the offices of the county recorder. Problems with the title could threaten the mortgage, limit ones use and enjoyment of the property and could result in financial loss. A policy of title insurance protects a homeowner's title and the insurer covers the cost of any legal challenges.

How much money can I borrow with home equity line of credit?

Depending on your your income,credit history, and the amount of your debt, home equity lenders could lend you up to 80% of value of your home less the amount owed on your mortgages.

What is an interest only home loan?

An interest only mortgage is loan with which you can just pay the interest or the interest and portion of the principal whenever you want during the predesignated amount of time. These loans can be 20-year fixed or adjustable rate mortgages.

Is it a good idea to pay points for a lower rate?

If you are refinancing mortgage, paying points is not always your best option. Points paid for refinancing can be deducted only in small amounts from your taxes, so it could take couple of years before you benefit from a lower rate.

What paperwork will the lender need to process my mortgage?

The answer depends upon the quality of your credit and the amount of equity you have in your property. On a typical fully documented house mortgage application (where an applicant is seeking to qualify based on an employee's salary), the mortgage lender will require: one month's current pay stubs, W-2's for the prior two years and bank and investment account statements for the prior 2-3 months. If an applicant is self-employed then additional documentation could be required

What is the best way to find mortage lenders?

It is a good idea to contact at least three to five lenders for input on mortgage programs and rates. You can do all of your shopping on-line or by phone. If there are any usual twists to your mortage scenario, it is best to disclose as much information up front as possible to be certain you are making a proper mortage comparison amongst lenders. When making morgage comparisons you must be sure to compare mortgages of similar terms.

Will the lender require a fee to lock in my interest rate?

For a traditional 30-90 day rate lock, the lender will not require the borrower to pay a lock fee, but for the privilege of locking for a period beyond 90 days they may. Some lenders allow borrowers to lock and then float the rate down one time during the cheap mortgage process, typically a borrower is required to bring in a fee of ½-1% of the mortgage amount which is then credited (or refunded) to them at closing. It is a lock fee the lender requires to insure the transaction will in fact close.

Is Home Mortgage Refinancing the right option for me?

Look at your mortgage related goals: are you looking to improve your monthly cash flow, reduce your mortgage term, do you need to take out cash utilizing the equity from your home? Obtaining the right mortgage for your particular needs could make sense even when rates are not at their lowest levels. First identify your goal and contact a mortgage professional for suggestions on mortgage programs that would best help you meet your objectives. Then shop for rates after you have selected the appropriate mortgage program.