Anyone know lots about mortgages?

Question

How much is a typical monthly mortgage payment?

How easy is it to cahnge mortgages based on circumstances?

Can you let your property without informing the mortgage lenders?

Is there anything else I should know about mortgages, which are the best for first time buyers etcc?

(By 'letting' I mean leasing or renting your property out) Thanks for the many replies, really helpful!

Answer 1

1) Depends on the type of mortgage, the cost of your house, and your credit rating.

2) Not that hard - but possibly espensive - as you'll pay closing costs each time you change.

3) Yes.

4) do NOT accept an "Interest Only" loan, unless you are unusually disciplined - otherwise, you;lll end up paying a huge amount of money indefinitely, even though the monthly payments are lower than traditional mortgages.

Answer 2

Depending on the area you live in. A typical mortgage in the US ranges from $850 to $1500. Many are more than that and some are less. It is not too hard to change the mortgage, it all depends on your credit rating, and how much you make. If your debt-to-income ratio is relatively low (lenders prefere it to be 40% or lower) it's easier to get "refinanced". For your third question, it's really not good to leave your property without letting the mortgage lender know. In this case you're leaving your debt obligation, it will be on your credit report for 7 years (5 in New York) and counts as a foreclosure (which is one of the worst things you can have on your credit report next to bankruptcy). It is much easier to just sell your house (maybe you'll even make money on the equity) than leaving it without payments.
As far as what else you should know, you should definately do some rate shopping before you settle on an offer, there's a lot of competition out there so you can get a pretty decent rate usually (according to the current market). You should also know that most states have a First Time Home Buyer program. And what this is basically, is a grant (free money) that the state gives you usually to put as a down payment so you can buy a house. Why do they do that you wonder? Because the state wants you to buy a house because you'll be paying property taxes for as long as you own that house. So don't think they're doing you a huge favor! They're just helping you at first. It's still a nice program nonetheless.
You should also be aware of the type of the rate. There are two types of rates, variable (that will change according to the prime rate) and then the fixed rate that will never change for the life of the motgage. Make sure you know first hand whether it's fixed or variable. Many people come to me saying that their payment went up wondering why, and then when I say that they had a variable mortgage rate they're very upset, so becareful.
Good luck :)

Answer 3

OK, here are a few things I know.

1. There is no typical monthly mortgage payment. It is going to depend on the cost of the property you are looking to purchase. Mixed with the percentage rate for the mortgage.

2. If you cannot put down at least 25 percent of the home value you will be required to pay for PMI (Private Mortgage Insurance).

3. Some mortgage companies will let you get around PMI by taking out a 100% mortgage. Actuall two martgages 1 for the 25% down payment and 1 for the normal 75%.

4. Home mortgage rates go UP if you borrow less money. I think the figure I've heard is about 150,000 less than that and your rate will be higher. They gotta make their money...

5. A lot of places offer different loan products to try to help new buyers get into a larger house or better house by putting off larger interest payments for about 3 or 5 years. But getting out early cost you money and the rates go much higher after the initial 3 to 5 years. Try to stick with a conventional 30 year fixed if you can.

In regards to your question about how easy is it to change mortgages. That is called a refinance. It's just like what you have to do to buy the house initially. It's not advisable unless rates have dropped typically more than 1 percentage point because you will have to pay closing cost to get the new load and you have to take that into consideration.

Probably not a good Idea to rent your property out without informing your lender. Depending on what documents you signed you may have to state that this is your primary residence and your rate may be linked to that. If you start renting it out without notifying them it could be cause for a lawsuite.

That's what I know.

Best of luck

Answer 4

How much: This varies with the amount of principal (amount you borrow) and the interest rate. There is no "typical" monthly payment

Changes: You can't change your payments, except for two circumstances -
1) Refinance, which is just taking out a new mortgage to pay off the old one, and 2) if you have an ARM (Adjustable Rate Mortgage). There is usually a 3 year initial interest rate, and then it adjusts according to the prime rate at the time. STAY AWAY FROM those advertised loans where they say you can decide how to pay each month. All this does is defer some payments to the back end of the mortgage, and you get killed in interest later on.

Let your property: usually, you can. If you sell though, you have to pay off the first mortgage from the proceeds, unelss you have an "assumable" mortgage and the lender's permission

Best mortgages: 30 or 15 year fixed rate.

Answer 5

There is no "typical" mortgage payment, as people have different sized properties and different sized mortgages.

If you had an "average" £100,000 mortgage over 25 years at 5.49%, you'd be looking at roughly £620 per month. Generally, a mortgage costs you £6.20 per month for every thousand borrowed.

The costs of changing your mortgage solely depend on whether you've signed up to a special deal (e.g. fixed, discount, capped) for a certain period of time - usually, redeeming involves paying a penalty (usually 1-5% of the outstanding balance). If you're on a bog standard variable, paying the standard variable rate, then usually there will be no penalty in transferring the mortgage.

All mortgages will have discharge fees (for discharging the deeds) and other legal/admin fees. The new product may have an application fee, and may even require a survey.

If you wish to let your property, you have to notify the lender, and they may change the terms and conditions of your mortgage - which could even include charging a higher interest rate.

If you're a first time buyer, your best bet would be to consult with an independent mortgage broker, who will be able to advise based upon your circumstances. Most brokers earn their money from commission paid by the lender, but you will be informed at the begining whether this is the case for a particular broker.

Answer 6

Monthly payment is determined by many variables such as: cost of home,qualifying interest rates,and term of the loan. Remember,you still must include your taxes and insurance. How much can you afford a month is a better question! ......To change a mortgage in any way is called refinancing. You must still maintain your credit after getting a first mortgage in order to refinance easily. If you have circumstances DO NT buy a home now. ..........It is your property of course you can rent it out. However, some lenders require you to hold the mortgage for a short wile before you rent it out it is called seasoning. Never rent to family especially mother in laws........First time buyers is really a phrase that applies to car purchases not home loans. First time buyer programs are mostly associated with government programs. I can write a book about what else you should look for but, I cant do that write now,so buyer beware.

Answer 7

Typical payment might be about $1000 for each $100,000 borrowed for a 30-year fixed rate mortgage. It will vary depending on the interest rate you get, and length of time of the mortgage. Payments usually include an escrow account for taxes and insurance. If you're in an area with high real estate taxes, the above numbers might go up some.

You can usually refinance a mortgage if your credit is OK, but there are costs involved so you don't want to do it unless you have a good reason, like a lower interest rate or changing from an adjustable rate mortgage (ARM) to a fixed rate. With an ARM, the interest rate can go up during the mortgage time; fixed rate means the rate stays the same. ARM's usually have lower starting rates than fixed rate mortgages, but with a fixed rate mortgage your payment won't change except due to taxes and insurance changes.

You can most likely do about anything you want to with the property without informing the lenders unless your mortgage contract says otherwise.

Answer 8

The typical monthly payment will, of course, depend on the type of the mortgage, the amount of the mortgage (the principal), the interest rate, and the length over which you seek to repay the mortgage.

(FYI - the proportion of the monthly payment that is devoted to interest versus principal will shift over time: at first, you will be paying like 99% interest and 1% principal. But every time you make a payment, your principal will decline slightly. Less interest will accrue, and so the next payment will be like 98% interest and 2% principal. This shift continues through the life of your loan).

Do a web search for a "mortgage calculator" - you should be able to find sites that will permit you to adjust these variables to determine what your monthly payment would be.

It is not easy to change a mortgage. It is a binding contract between you and the bank. You may be able to re-finance the mortgage, but your options can be limited. If your circumstances decline and you cannot pay, the bank will foreclose on your house.

Whether or not you can lease the property without informing the mortgagee will depend on your contract. If you plan on leasing the property, let your mortgagee know this - they may be able to give you a lower interest rate if there is going to be a guaranteed income stream from the property with which you can make your monthly mortgage payments. (Guaranteed income stream = less risk --> lower interest rate).

Steer away from "popular" mortgages, such as the adjustable rate mortgage or interest-only mortgages. They are popular because they promise low payments up-front, but be aware that 5-10 years down the road, the payments will balloon to make up for lost time, and you may not be able to meet your repayment obligations. A traditional 30-year fixed is probably the way to go.

Answer 9

The monthly mortgage payment depends on how much you're borrowing from the lender. If you want to refi your house, as long as you have good credit it's very easy, but you have to make sure that there is no pre-payment penalties when you get a mortgage. You can rent your house without letting your mortgage company know. The best for the first time buyers is really never, right now the market is for buyers though, there are many houses on the market, but the interest rates are high.
If you have any more questions, just ask! Good luck

Answer 10

Before we start now is a really bad time to be getting in the residential property market US UK NZ or OZ. I'm assuming you are in the UK.
FTBs(First Time Buyers) should go for a fixed term repayment mortgage at least 5 years but at current rates I would go longer. Reasons being rates are now at historical lows hence more likely to rise to average trend than fall lower, even if rates don't go up your utility bills will and maintenance and repair expenses will come just when you don't need them. Add on an interest rate increase to a Variable Rate mortgage and you are really up crappy creek. FTBs are typically offered rates unavailable to other home owners. This is to entice them in like those gifts for student bank a/cs. Financial institutions know how inert (lazy would be a better word ) people are when it comes to checking that they are still getting a good deal later on.
Secondly any insurance products earn the salesman (that would be a mortgage adviser) commission. Hence endowment mortgages are encouraged. Any mortgage that is not a simple repayment mortgage will leave you unsure as to exactly how your finances stand at any given point in the future.
How much is a mortgage 25-30% of your income in good times
30-40 when things are overpriced as today
Changes - you tell me the circumstances and what the future holds and I can tell you. The simple answer is that inducements and penalties for switching will vary depending upon interest rates and the ease of credit. Hence my recommendation to fix. If interest rates do come down you might be paying more than you might otherwise but at least you can sleep comfortably knowing that if things move the other way you won't be struggling.
Yes you can let your property without informing the mortgage lenders but you are acting illegally and if they have to foreclose and they have the added expense of tenants to evict they are entitled to sue you. If just letting the odd room whilst still remaining there yourself most lenders are quite happy. They should - it reduces their risk of you defaulting on the repayments.
Anything else to know. You are obliged to take out life insurance with an endowment policy and buildings insurance with all mortgages. This does not mean that you have to accept a policy offered by the lender. They may offer the best deal but don't bank on it. It may the vehicle that pays for the special rates available for the first 2 years. Shop around for the best all round deal (mortgage + insurance payments) and think long term not the cheapest deal over the first couple of years or you'll be fully exposed at the end of this period. Lastly if you don't have a partner or family and you haven't got an endowment mortgage life insurance is a complete waste of money.
Did I miss anything? Good luck you're a braver one than me buying at this time.

Answer 11

Well I'm also a first time buyer, and well what I know about mortgages is that depending on how much is your loan was for, some mortgages range form 2,000-and above. If you think your mortgage is too much after a year of living in your home you can refinance your payments and make it into a lower payment every month. When you are changing something with your mortgage you would have to let your lenders know and realtors as well. But if you need more infor I suggest you speak to your lenders about anything that has to deal with mortgage.