Dear Money Guy,
I bought my home a few years back when the real estate market was hot and interest rates were at 30 year lows. Oh yeah, at the advice of my mortgage broker, I got an adjustable rate mortgage.
This was great when I got it, but now it's killing me. I am not very skilled at mortgages and finance. Is a refinancing mortgage rate the same as a home purchase rate? Meaning, is it a totally different process to refinance a home as it is to purchase one?
I know I sound naive. But I really need to refinance my mortgage.
My question: what is the refinancing mortgage rate?
Thanks in advance for your answer.
- Paul C.
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Dear Paul,
Don't feel bad. Mortgages can be confusing even to those in the financing and real estate industries. That being said, the loan process for refinancing and purchase a basically the same.
Refinancing tends to have much fewer requirements because you are generally using the equity already established in the home to back up the mortgage.
Getting a purchase mortgage is much more riskier, and so there are many additional steps that are often bypassed in refinances (ie. work history, monthly income and expenses, down payments, etc).
There really is no "refinancing mortgage rate." The interest rate for the mortgage you will be getting will based off of a variety of factors including loan program, credit history, and how much equity you have built in the property.
The best way to know what your interest rate will be is to get a free quote. There are many mortgage companies that can provide you with a free and quicky online interest quote.
Here's one company that I recommend getting a FREE online quote from:
Although there is no refinancing mortgage rate, I really hope that you haven't paid out too much unnecessarily with the raise in your adjustable interest rate. Adjustable rate mortgages have hurt far too many individuals. Getting a fixed rate mortgage can stop the bleeding, and allow you to be able to save hundreds of dollars each month.
Regards,
The Money Guy
Refinancing Mortgage Rate
What Is The Average Price Of Life Insurance For Senior Citizens
Dear Money Guy,
My wife and I are in our mid-sixties (in terms of age), and I hate to say it, but we don't have life insurance policies. I know that we should, and I am getting more and more worried about it. I asked my wife, "what is the average price of life insurance?" but she didn't know.
Going through death is difficult enough without having to be concerned with the financial disaster is causes. My wife means the world to me, and I want to make sure she has a good life if anything should ever happen to me.
Question: What is the average price of life insurance for senior citizens?
Looking forward to your response.
- William P.
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Hello William,
Don't let anyone tell you otherwise: it is never to late to get life insurance. Just the costs of a normal funeral can run between $3000 to $15,000. Ouch!
But that's nothing compared to the long term effect that death causes. If you are the only one bringing in income, death can be devastating to the loved ones you leave behind. Good job on finally getting some coverage.
What is the average price of life insurance for senior citizens?
Coming up with an "average" price is kind of difficult, but there are some things to keep in mind.
Being a senior citizen, your monthly premiums will be at the top of the scale. Why? Because there's a much greater chance of something happening to a person in their sixties, as opposed to a person in their twenties. Life insurance is a business based off of probability.
The greater the probability of something happening to you, the more in life insurance premiums you will pay. Factors like age, smoking habits, and pre-existing medical conditions can drastic influence what you'll pay each month.
Your best bet is to get a few free quotes from life insurance companies, and then compare against each other. Many times the insurance company can give you a quote instantly.
Here are two life insurance companies that provide you with free quotes online:
1. NetQuote
2. Mysurance
Once you get your quotes back, compare the financial payout you would get and the monthly premiums you are responsible for. You may be very surprised at the difference.
Regards,
The Money Guy
How Much Can I Borrow For A Mortgage?
Dear Money Guy...
I am so damn sick of renting an apartment! Each month when I give my landlord the rent payment, my blood boils because I will never see that money again. I know that if I had my own home, that money will at least be building up some equity for future use. So my main goal right now is to buy a house.
But I have no idea how much I can borrow for a mortgage. I have rented my entire life (sad, I know), and have no idea how the home buying and mortgage process works. My credit is decent, I make about $50,000 per year, and my other bills come up to about $1000 a month.
My question: how much can I borrow for a mortgage?
Thanks in advance,
- Jason T.
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Jason,
Good to hear that you are thinking about purchasing your own home. Besides the financial benefits that you will get from being a homeowner, the emotional impact can be just a strong. I feel good knowing that my home is MINE.
How much can you borrow for a mortgage? Well, let me make some assumptions first. I am going to assume that you have been employed at the same place for over two years, have a good credit history, and can come up with 20% to put down on a home.
When it comes to determining how much of a mortgage you can borrow, most lenders calculate something called the front end ratio.
The front end ratio is the percentage of your income that will be used for your monthly house payment (principal, interest, escrow, insurance, etc). Most mortgage companies will cap this percentage at 28% of your pre-tax income.
What this means to you?
If your salary is $50,000 gross a year, then that means that you are making $4166.67 per month. By using the front end ratio (28%), you should be able to get a loan whose monthly payment is $1166.67.
Now, how much the total loan size will be will be dependent on the interest rate that you get. So let's say that you get an 30 year loan with an 6.0% interest rate. The total amount of mortgage that you can get is just over $194,000.
Some things to consider: I didn't include property taxes or homeowners insurance into the calculation. So please keep that in mind when determining the max amount you can borrow.
The best way to answer the question "How much can I borrow for a mortgage?" is to fill out a free, no obligation quote with a mortgage company.
Here's one company that can give you an accurate answer :
Once you get the quote back from them, you'll know exactly how much house you can get. A lot of people start looking for homes BEFORE they research how much they can realistically borrow. I wouldn't recommend doing this because generally people find that they can get much less how than they initially thought.
So all that time looking at houses (that they can't even afford) is wasted. Find out how much of a mortgage you can get FIRST, and then go house hunting. If you get a pre-qualification or pre-approval letter from the lender, even better.
Regards,
The Money Guy
I Need A Payday Loan Immediately
Dear Money Guy,
Holy crap I'm in a heap of trouble!! I think I need a payday loan immediately! My landlord wants about $500 in his hand by tomorrow from me, or he's going to evict me from my apartment. I have worn out my welcome with my friends and family, so borrowing it from one of them is out of the question.
I was searching online for some possible solution when I came across an advertisement for payday loans. From what I understand, they will lend you the money now, and take it right out of your checking account when you get paid next. I have a job, so that's not the problem.
My issue is that I need the payday loan right now. Not a week. Not even a few days. I need the money by tomorrow.
So my question is: I need a payday loan IMMEDIATELY, will the payday loan companies be able to make that happen?
- Kent L.
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Dear Kent,
I feel for you, brother. I have been in a couple of those financial nightmares in the past, and I vividly remember how scared I felt (especially at the prospect of losing your home). Payday loans may be able to get you through this rough patch.
Can you get a payday loan "immediately"? No, not immediately. Although you are in a hurry to get some money, they are still a financial institution that needs to verify that they will get their investment back.
That being said, there are a few payday loans that specialize in getting your loan approved and cash in your hand in under 24 hours. I have listed three payday loan companies that provide this speedy service.
1. PayCheckToday.com
2. Secure Money Store
3. Team Quick Cash
Using one of these companies should get you past this incident. But do yourself a favor: start saving for an emergency cash fund that you can use the next time an unexpected crisis occurs (and you are not sitting there with your head in your hands thinking, "I need a payday loan immediately to get me out of this jam").
Regards,
The Money Guy
Hard Money Loans In Chicago
Dear Money Guy,
Man, I'm in a true cash crunch. I need about $1000 as soon as possible. One of my friends told me about a company that does hard money loans in Chicago (I live just outside of the city). But when I think of "hard money," I think of loan sharks and broken legs for not paying on time. Is it still like that?
Should I even contact those companies that offer hard money loans in Chicago?
- Randall M.
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Hey Randall,
Although hard money lenders face much more regulation nowadays, it's still not an option to be used unless it was the absolute last resort. So no, I don't think that you should consider getting a hard money loan in Chicago (or in any city for that matter).
The potential risks associated with hard money loans would not be your best option. Besides the incredibly high interest rates and the excess points on the loan, the speed at which you can find your owing more and more if you don't pay the loan back in time is truly frightening (and perfectly legal).
If all you need to come up with is $1000, a much better option for you would be getting a payday loan. These are easy to qualify for, can happen online, and you can have your money in as little as 24 hours. And because of the way they set up the loan, it's much less likely that you will default on it (and end up paying unnecessary fees).
Here are three payday loan companies that I recommend to my readers:
1. PayCheckToday.com
2. Secure Money Store
3. Team Quick Cash
Hard money loans in Chicago? No, you are placing yourself at risk for no reason. To get a quick $1000, I'd recommend getting a payday loan. It accomplishes what you need to happen, without the incredible risk associated with hard money loans.
Regards,
The Money Guy