February 12, 2013

What's the value of paying points?

By Marcie Geffner - HSH.com


Mortgage shoppers naturally want to lock in the lowest mortgage rates possible. However, the fees associated with your loan are an important reason why you shouldn't shop for a mortgage simply based on the lowest interest rate available.

The largest set of fees associated with any mortgage are what's known as points, which can -- and do -- affect the interest rate on your loan. If you're willing to pay what are known as "discount" or "origination" points, you can reduce or "buy down" your interest rate. On the flip side, there are also "rebate" or "negative" points. The way rebate points work is that if you can't or don't want to pay your closing costs out of pocket, you can take a higher-than-market interest rate that will substantially reduce or even zero out your closing costs.

Read on: http://library.hsh.com/articles/first-time-homebuyers/whats-the-value-in-paying-points.html

How to pay off a mortgage faster

By Marcie Geffner - Bankrate.com


A lot of homeowners want to pay off their mortgages before the end of the loan term. This is especially true for borrowers who want to repay their home loans before retirement. There are a number of ways to accomplish a mortgage payoff.

The two easiest ways to put more money toward a mortgage are to set up automatic payments from a bank account or use the lender's website, explains Jerald Banwart, senior vice president of customer operations at Wells Fargo Home Mortgage in Des Moines, Iowa.

"For those who have a plan to pay off their loan, we will go out and withdraw the money from your account to make your payments … or you can go online anytime on our website," he says.

Automatic payments can be made monthly, bimonthly or biweekly to match the borrower's employment pay periods, if that's the borrower's choice.

Read on: http://www.bankrate.com/finance/mortgages/pay-off-mortgage-quickly.aspx?ic_id=tsMortLk1

Low interest rates: economic boom or bust?


By Marcie Geffner - Bankrate.com

Federal Reserve Chairman Ben Bernanke says low interest rates stimulate the U.S. economy but for savers, low rates aren't all that great, as Bernanke himself also said in a speech Oct. 1 in Indianapolis.

"People who rely on investments that pay a fixed interest rate such as certificates of deposit are receiving very low returns -- a situation that has involved significant hardship for some," Bernanke said.

Here's why today's low interest rates haven't been a welcome benefit to many consumers.

Just ask Pablo Solomon. The artist, 65, lives on a ranch north of Austin, Texas, with his wife, who manages the business side of his endeavors.

Read on: http://www.bankrate.com/finance/savings/low-interest-rates-economic-boom-or-bust.aspx?ic_id=Top_Stories_link_2