Grow Your Net Worth with a Mortgage Checkup --------------------------------------------------------------------------------Managing your mortgage isn't something you do once or twice in a lifetime. If you want to stay fiscally fit, you need to examine your mortgage at least once a year. A mortgage checkup can help you build your net worth, move into a larger home, create a retirement plan, send your children to college or put more money in the bank.
A mortgage checkup is a review of your current mortgage and how well it supports your lifestyle and your plans for the future. We will look at many aspects, such as interest rates, home values and life changes, including career moves, new family members, college expenses and investment opportunities. From there, we will construct a viable financial strategy that helps you hit your financial goals.
If any of these scenarios apply to you, contact me today for a FREE mortgage checkup: I want to lower my mortgage payment. I want to consolidate a first and second home loan. My ARM loan is resetting to a floating rate. I want to roll my home equity debt into a new loan. I plan to relocate in the next couple of years. I want to send my children to college. I want a bigger house. I want to eliminate credit card debt. I want to explore real estate investment financing. It's a smart move to view your mortgage as a financial instrument that can help you save money and achieve other life goals. Contact me today and let's schedule an appointment.
Wednesday, March 21, 2007
Thursday, February 8, 2007
What You Should Know About Indexes
Homebuyers commonly ask how lenders set their rates on adjustable rate mortgage (ARM) loans, and what causes a rate to fluctuate. Here's what you can tell them:
Whether a loan starts with an initial fixed rate, or is adjustable from the beginning, lenders set adjustable rates using indexes, because indexes are good indicators of variations in economic conditions. As those conditions fluctuate, so, too, does a loan's adjustable rate. Here are two commonly used indexes:
The London Interbank Offered Rate (LIBOR), based in London and used globally, is one of the most widely used indexes to adjust ARMs. Published by the British Bankers Association, the LIBOR tracks the rate by which banks in London's wholesale money markets exchange money between one another. The LIBOR was traditionally used to benchmark interest rates for corporate financial transactions. However, it grew to be such a reliable economic barometer, without wide fluctuations, that it was adopted by mortgage lenders to gauge ARM interest rates.
The Monthly Treasury Average (MTA) index is based on the 12-month "rolling" average of returns on U.S. Treasury Bills (T-Bills). Each month, the MTA totals up the sum of returns on those T-Bills for the past 12 months, divides that sum by 12 and the yield is the 12-month MTA rate. The MTA is a commonly used index for two key reasons: It does not widely fluctuate, seeing monthly fluctuations of no more than 0.26 percent over the past decade. Also, because the MTA's rate reflects historical activity, it takes longer for the MTA rate to change, while others might rise or drop more quickly.
For more information on indexes, contact me using the information on this email.
Homebuyers commonly ask how lenders set their rates on adjustable rate mortgage (ARM) loans, and what causes a rate to fluctuate. Here's what you can tell them:
Whether a loan starts with an initial fixed rate, or is adjustable from the beginning, lenders set adjustable rates using indexes, because indexes are good indicators of variations in economic conditions. As those conditions fluctuate, so, too, does a loan's adjustable rate. Here are two commonly used indexes:
The London Interbank Offered Rate (LIBOR), based in London and used globally, is one of the most widely used indexes to adjust ARMs. Published by the British Bankers Association, the LIBOR tracks the rate by which banks in London's wholesale money markets exchange money between one another. The LIBOR was traditionally used to benchmark interest rates for corporate financial transactions. However, it grew to be such a reliable economic barometer, without wide fluctuations, that it was adopted by mortgage lenders to gauge ARM interest rates.
The Monthly Treasury Average (MTA) index is based on the 12-month "rolling" average of returns on U.S. Treasury Bills (T-Bills). Each month, the MTA totals up the sum of returns on those T-Bills for the past 12 months, divides that sum by 12 and the yield is the 12-month MTA rate. The MTA is a commonly used index for two key reasons: It does not widely fluctuate, seeing monthly fluctuations of no more than 0.26 percent over the past decade. Also, because the MTA's rate reflects historical activity, it takes longer for the MTA rate to change, while others might rise or drop more quickly.
For more information on indexes, contact me using the information on this email.
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