If you are refinancing your existing mortgage loan the Internet is an excellent tool for comparing mortgage offers. Comparison shopping for the most competitive loan offer can save you thousands of dollars if done correctly. Here are several tips to help you find the best mortgage loan utilizing the Internet.

I. Shop From a Variety of Online Mortgage Lenders

Avoid the temptation to accept the first mortgage approval you receive. In order to find the most competitive mortgage offer you will need to shop from a variety of mortgage lenders and compare all aspects of the loan offers. The Internet makes it easy to quickly locate mortgage offers from dozens of online lenders and brokers. You can quickly perform a side-by-side comparison of all aspects of each offer before choosing a mortgage loan.

II. Compare All Aspects of the Loan Offers

Many homeowners make the mistake of comparing only interest rates when choosing a mortgage loan. If you overlook lender fees and closing costs by concentrating on interest rates, you will overpay thousands of dollars for your new mortgage. To learn how to quickly compare mortgage loan offers and determine which offer is best for you, register for a free mortgage guidebook.

III. Don’t Make Hasty Decisions When Refinancing Your Mortgage

Refinancing your mortgage is not something you should rush. Taking your time and researching mortgage lenders will help you find the most competitive loan offer. Choosing the most competitive mortgage will help you avoid common mistakes and save thousands of dollars. You can learn more about mortgage terminology, researching mortgage offers, and choosing the most competitive offer by registering for a free mortgage guidebook.

If you are in the process of refinancing your home loan, there are steps you can take to improve the interest rate that you will qualify. Qualifying for a better interest rate is easier than you think. Here are three tips to help you find the best interest rate when refinancing your home loan.

I. Clean Up Your Credit History

Paying down your debts and making all of your payments on time will boost your credit score. Before you apply for a new home loan it is important to review your credit records for mistakes. There are three credit agencies that maintain your records and these records are prone to mistakes. If you find errors on your credit reports it is important to dispute the error with each credit agency and the creditor responsible for placing it there at least sixty days before applying for a home loan.

II. Put Money in the Bank

Any money you can put in the bank will help your cause when refinancing your home loan. Money you have in savings, stocks, mutual funds or other investments is counted as an asset when the lender evaluates your application. When you save money the lender views you as less of a risk which could help you qualify for a lower interest rate. In addition, you may want to pay points in exchange for a lower interest rate, having the cash on hand will make this easier for you.

III. Do Your Homework and Shop for Home Loans

You can save yourself a lot of money by shopping from a variety of mortgage lenders for the most competitive home loan. The Internet is an excellent tool for comparing loan offers from dozens of lenders. When you compare loan offers it is important to compare all aspects of the home loans, not just the interest rates. There is an easy way to make this comparison that will save you time and money. To learn more about comparing home loan offers, register for a free mortgage guidebook.

Unless you are one of the fortunate few, you are going to need financing to buy a home. One of the things that is looked at closely by lenders is your employment.

How Your Job Impacts Your Ability To Get a Mortgage

When you are ready to buy your first home or move up to a bigger, better property, you need to consider your financing options. While many things go into finding the best loan, most people are first concerned about actually being approved for a loan. One of the factors that is critical when an underwriter analyzes your loan application is your employment status. Mortgages are all about risk in the eyes of a lender. Your employment status is a huge factor in evaluating that risk.

When we talk about employment, we are going to focus on the three most common categories. The first is the salaried employee who receives the same earnings each month. The second is the self-employed person who owns their own business and has fluctuating revenues. The third is the commissioned person, a salesperson, who also receives fluctuating revenues based on their production each month.

Salaried employees are the simplest for lenders to evaluate. The annual earnings of this person are a set figure. Lenders are very comfortable with this designation because they can accurately predict the money you have coming in relation to debts and so on. In general, lenders are looking for stability in employment with a two-year history. If you have changed your job, make sure to explain why and try to stay in the same general profession.

Self-employed individuals are in a bit more of a bind when it comes to mortgages. If you are in this designation, you tend to show a range of earnings versus a steady amount each month. Moreover, you also tend deduct just about everything you can to limit taxes. This can cause problems when you apply for a loan because your reported income is low. If you are self-employed, lenders are going to want to see tax returns, bank account statements and other financial documents for the last two years. If at all possible, do not switch your business effort to a new line of work during this two-year period as the lender will consider it a brand new business and raise its risk assessment.

Commissioned employees are more and more common these days as corporate culture changes. If you fall in this designation, the good news is lenders are much more comfortable with commission earnings these days. As with self-employed individuals, however, it is important that you do not change your job in the two years prior to applying for the loan. Lenders will view such a change negatively, because they will consider your new position independently from the old one. This makes you a riskier proposition in their eyes.

If you are planning on buying a home in the next few years, stability is very important. While there are exceptions to every rule, your best course of action is to stay the course with employment before apply for a loan. You can always make changes after being approved.

Interest rates constantly fluctuate, so when is the time right to refinance your home? One of the tools that can help you decide this is a mortgage calculator.

It shows you what your new payments will be, and whether the difference is worth the leap right now.

The most common reason to do a straight refinance is to take advantage of lower interest rates to lower the payment or reduce the term (the number of years to finish paying off the note.)

To work with a refinance mortgage calculator, you will need to know details about your current loan like the original loan amount, the original term (number of years to pay off), the number of months you have already paid, your interest rate, and, perhaps, the number of years until you intend to sell.

For the new loan, the mortgage calculator will want to know the loan points and interest rate on the new loan and approximate closing costs. Do not even try to figure it out on your own. Just look up several refinance mortgage calculators on the net and open them in separate windows or tabs in your browser. Start filling the figures into one after another, setting them to calculate as soon as they are loaded. Now, take a break, and relax. When you are ready, return to the computer for the news.

Have a look at the figures for monthly payment, term, and the breakeven date. See if the mortgage calculators come anywhere near agreeing. Like the scoring in the old Olympics, throw out the high and low numbers and average the rest to get an approximation on your savings.

What you are concerned with is the breakeven date. The breakeven date is determined by the mortgage calculator as the month in which the savings on the mortgage covers the cost of the refinance itself. If the breakeven date is five years down the road and you are selling in four, then it does not matter how good the interest rates are.

You will still lose money. On the other hand, if you are expecting to stick around more than five years, now is the time to go for it. You can redo the figures on the mortgage calculators with different interest rates and different terms (number of years to repay) to see where the breakeven point and the terms line up with what you can afford to give you the best deal.

But what if you have a different reason to refinance, say to "cash out" the equity of your home, for whatever reason. Emergencies happen, debt consolidation need to occur, and a good mortgage calculator can still help you figure out how to get your best deal.

When you feel like you know what you want, print out the best options, collect up your documents and head to the mortgage broker. One note: a refinance is a new note; you will be paying all appraisal fees, points and closing costs associated with a brand new note. The mortgage calculator does not take this into account. Proceed carefully and cautiously.

If you are refinancing your home mortgage, you can save yourself a lot of money by researching mortgage lenders before you apply. Shopping for the best home loan will not only save you money but help you avoid many of the mistakes homeowners make. Here are 3 tips to help you find the most competitive mortgage offer for your financial situation.

I. Shop for Home Loans Online

The Internet is an excellent tool to help you find mortgage offers. You can quickly screen dozens of mortgage lenders and do side-by-side comparisons right off a lender’s website. Competition in the mortgage industry is fierce; using the Internet to comparison shop for mortgage loans allows you leverage this competition in your favor.

II. Compare All Aspects of the Loans

Many homeowners make the mistake of only comparing the interest rate when shopping for a new home loan. If you concentrate solely on interest rates, or only use the Annual Percentage Rate, you may overlook fees that will cost you thousands of dollars. Mortgage lenders are required to provide you a document that itemizes all expenses upon receipt of your application. There is a way to get this document and use it to screen loan offers before you apply. To learn more about comparing loan offers to find the best deal, register for a free mortgage guidebook.

III. Explore All of Your Options

Good mortgage lenders offer a variety of loan programs that can be tailored for any financial situation. Choosing the wrong mortgage is an expensive mistake that could ultimately cost you the home. You can learn more about choosing the right mortgage for your individual financial situation by registering for a free mortgage guidebook.

If you are refinancing your mortgage there are a number of mistakes that will cause you to overpay for your new mortgage loan. Doing your homework and researching mortgage lenders will help you avoid making these mistakes. Here are three things to watch for when refinancing your home loan.

I. Watch Out for Balloon Payments

If you accept a mortgage with a balloon payment you will be required to pay the amount due on a date specified in your loan contract. If you are unable to make this payment you will have to refinance the loan or sell your property to avoid foreclosure. Mortgages with balloon payments are typically used by real estate investors as a source of short term financing; however, predatory mortgage lenders use them as part of a ploy to take your home. Unless you know exactly what you are getting yourself into avoid any home loan with a balloon payment.

II. Watch Out for Excessive Fees & Rates

If you are a homeowner with poor credit you can expect to pay more for your new mortgage. There are lenders that will take advantage of your credit and charge you excessive fees and rates. Some Predatory lenders try and sell bad credit loans to homeowners with good credit in order to charge higher rates. The only way to know what fair rates and fees are for a homeowner in your financial situation is comparison shop from a variety of mortgage lenders. When you comparison shop the right way it is easy to spot mortgage lenders that are trying to take advantage of you. You can learn more about comparison shopping for the best mortgage by registering for a free mortgage guidebook.

III. Be Careful With Adjustable Rate Mortgages

Adjustable rate mortgages have more risk than traditional fixed rate mortgages. Many homeowners are enticed by the introductory rates and low payment amounts; these homeowners often don’t realize their payments will go up significantly at the end of the introductory period. In addition to this payment increase, the mortgage lender will adjust your interest rate periodically and change your monthly payment depending on prevailing interest rates.

You can learn more about your home loan options by registering for a free mortgage guidebook.

If you are thinking about refinancing your home loan you might want to consider using a broker to help you find the best mortgage offer. Working with a broker will help you compare offers from dozens of mortgage lenders; however, you should be careful when entering an agreement with a mortgage broker. Here are several tips to help you avoid overpaying when using a mortgage broker to refinance your home loan.

The Internet As a Mortgage Tool

The Internet is an excellent way to locate and compare mortgage brokers. A mortgage broker is an individual paid a commission for referring your business to a mortgage lender. Mortgage broker’s fees vary, it pays to shop around and read the fine print before entering an agreement with a mortgage broker. The advantage of using a mortgage broker is that they have extensive contacts with mortgage lenders and can find you mortgage offers you might not find on your own.

Use Multiple Mortgage Brokers

There is nothing preventing you from working with more than one broker. Comparison shopping works best with the maximum number of brokers and lenders. Don’t be afraid to negotiate with mortgage brokers and lenders for better terms and interest rates.

Compare All Aspects of the Loans

When you comparison shop it is important to compare all parts of the loan offers, not just the interest rate or Annual Percentage Rate. Homeowners that focus solely on interest rates overpay thousands of dollars for other fees. There is a simple way to do a line by line comparison using documentation the lender is required to provide you after receiving your application. You can even get this documentation prior to applying, allowing you to make an informed decision as to which loan is best. To learn more about comparing loan offers and shopping for the best home loan, register for a free mortgage guidebook.

Without a proper grasp of mortgage lingo, the home-buying process can leave your head spinning. But fear not, for help has arrived. The 42 definitions that follow will give you a solid understanding of mortgage loans and lenders.

Amortization -- The monthly reduction of a mortgage loan brought about by making regular mortgage payments.

Annual Percentage Rate (APR) -- Shows the monthly cost of the mortgage (including interest, points and mortgage insurance), expressed as a percentage.

Application -- First step in getting approved for the loan. The application provides information about the borrower that the lender will use to justify the loan.

Appraisal -- A formal assessment of a home's fair market value, generally required by the mortgage lender to ensure the home is worth the loan amount.

Adjustable Rate Mortgage (ARM) -- A type of loan that starts out with a lower interest rate for an introductory period (3 years, for example) and later adjusts to whatever the current interest rate is at the time of adjustment.

Balloon Mortgage -- A mortgage that offers low rates for an initial period (generally 5, 7 or 10) years. After this period, the owner must pay the full balance or refinance the loan.

Cap -- A limit to how much a monthly payment or interest rate can increase or decrease. Caps are commonly used on adjustable rate mortgages.

Cash Reserves -- Money often required to be held in addition to the down payment and closing costs. Lenders have their own requirements as to the amount.

Closing -- The process through which property ownership is transferred from the seller to the buyer. Also known as settlement.

Closing Costs -- Expenses above and beyond the sale price of the home. Closing costs vary from state to state, but they often include such items as title searches and lawyer's fees.

Conventional Loan -- A loan made from the private sector and not guaranteed by the U.S. government.

Credit Report -- A record of your credit history, including previous debts, payments and other financial details. Used by lenders to determine your credit score.

Credit Score -- a number derived from your credit report. Used by mortgage lenders to determine your level of qualification for a loan.

Debt-to-Income Ratio -- A ratio calculated by dividing your overall monthly debt by your gross monthly income. Mortgage lenders use this to help determine your "credit worthiness."

Deed -- Official document that shows ownership of a property. It transfers from seller to buyer during the closing process.

Default -- This is what happens when a homeowner is unable to make mortgage payments. Defaulting on a loan could lead to foreclosure (defined below).

Discount Point -- Equal to 1% of the loan amount. Points can be paid by the buyer at closing to reduce the interest rate on the loan.

Down Payment -- Portion of the home's purchase price that is paid in cash and is not part of the mortgage loan.

Earnest Money -- Money the buyer puts down to show sincerity in buying the home. If the offer is accepted, the money becomes part of the down payment. If the offer is rejected, the money is returned. If the buyer pulls out of the deal, the money is forfeited.

Fixed-Rate Mortgage -- A mortgage with payments that stay the same throughout the life of the loan. In other words, the interest rate and other terms of the loan remain fixed.

Foreclosure -- Process through which the home is sold to repay the loan of the defaulting homeowner. See definition of default above.

Good Faith Estimate -- An estimate of all fees and charges that will be due at closing. Must be given to the borrower within three days of a loan application submission.

HUD-1 Statement -- A list of all closing costs. This document must be given to the buyer prior to closing. Also referred to as a settlement statement.

Interest -- A fee charged for borrowing money, expressed as a percentage of the amount borrowed.

Lien -- A legal claim on a property. Must be resolved before the property can be sold.

Lock-in -- Offered by some lenders to guarantee a certain interest rate if the loan is closed within a certain time.

Mortgage Broker -- Individual or company that originates and processes loans for a number of different lenders.

Mortgage Lender -- Bank or lending institution that loans you money for a home.

Mortgage Insurance -- Insurance purchased by the buyer to protect the lender in the event of default. Usually required on loans with less than 20 percent down payment. Also known as Private Mortgage Insurance or PMI.

Origination -- Process of preparing and submitting a loan application. Usually involves a credit check, a property appraisal, and other forms of financial review.

Origination Fee -- Charges associated with origination, defined above.

PITI -- Principal, Interest, Taxes, and Insurance. These are the four elements that will make up your overall monthly mortgage payment.

PMI -- Private Mortgage Insurance. See "Mortgage Insurance" above.

Pre-Approval -- When a lender commits to loaning you a certain amount (as long as you still meet their qualification requirements at time of purchase).

Pre-Qualification -- When a mortgage lender informally reviews your finances to determine the maximum amount they're willing to lend you.

Principal -- The "core" amount borrowed from a lender, excluding interest and additional fees.

RESPA -- The Real Estate Settlement Procedures Act is a law that protects consumers during the home buying and loan application process. Among other things, it requires lenders to make full discloses about settlement costs and conditions.

Settlement -- See previous definition under "closing."

Title Insurance -- Protects the mortgage lender against claims that come from a dispute about property ownership. Similar coverage for home buyers is also available.

Title Search -- A review of public records to ensure the seller is the legal owner of the property and that there are no unsettled liens or claims.

A mortgage is a powerful tool that can work to help you achieve your goals. Used correctly, it can be a financial ally that will help you build wealth. The scenario below illustrates the powerful effect that proper mortgage planning can have on your personal wealth accumulation.

Plan A: Mr. John Doe is working hard to save, however a significant amount of money is used to pay the mortgage and credit cards. Anything left over is put toward mortgage principal to reduce the length of the mortgage. We will assume the mortgage is paid within 30 years.

Plan B: Mr. Doe uses their mortgage to retire consumer obligations and increase investments. In conjunction with professional financial advice, he uses $25,000 of equity to increase investment accounts. In subsequent years the client invests a small lump sum of equity every five years while continuing to invest a small monthly amount. The client is able to leverage the equity in the home, while still being able to payoff the mortgage in 30 years.

If Mr. Doe continues with Plan A, his current mode of operation, he will have a house that is paid off and they will have $961,869.97 for retirement. While this seems like a large sum, it is probably not nearly enough to allow this person to have a comfortable retirement over a 20-30 period considering what inflation can do to the purchasing power over that time. With a 7% return on investment in retirement, $961,869 will provide a monthly income of $5,610.91. Considering the fact that this is 30 years in the future, this would be the equivalent of $2,151.12 in today's dollars assuming a 3.2% rate of inflation.

If this individual implements proper home equity management strategies to get the dead equity in their home working for him, he can create a completely different financial picture. In fact, by investing a lump sum of $25,000 every five years through the age of 60 and by investing the $42,194.81 in payment savings over the first five years of the new mortgage and by increasing the average monthly investment from $250 to $500, he will have $3,168,583.75 by the age of 65. Using the same 7% return on investment in retirement, his monthly income will now be $18,483.41 without ever having to access the principal portion of his investments. In this scenario, the mortgage will not be paid off, but he will have a great income that will easily handle a mortgage payment which will provide him with a tax deduction as a side benefit. Certainly he would have the ability to pay the mortgage off if he wanted to but then he would have money that could be creating more wealth tied up in an asset that is not liquid.

Finally, if Mr. Doe takes advantage of leverage by investing in real estate, he may very likely get a much better return on investment than 10%. Assuming that he gets just 2.5% better on his return annually for his new investments, he would have $5,020,528.38 at the age of 65. This means that his retirement income based on a 7% return on investment in retirement would be $29,286.42. Again, with this much wealth, Mr. Doe could certainly choose to pay his house off or he could continue to grow his wealth to be able to help out his children, contribute to charities, and so on.

You don't have to be relegated to a low income in retirement if you own a home and have equity. As in the example above, if you invest wisely and have a decent time period (10 or more years) until you retire, it is possible to create substantial wealth.

Your dream house may not be every person`s idea of "Home, Sweet Home," but it's going to be all yours.

Now if you can just figure out how to finance that bit of real estate. Not wanting to leave any stone unturned, you are on this site to get some background for your decision.

One kind of mortgage calculator ("how much house can I afford" type) takes a look at your budget and, with your input, works out how much you can afford to pay, either monthly or annually. Some are not comprehensive enough to take into account taxes, insurance and the increased costs of home ownership.

It's worth your extra time to pull up several of these mortgage calculators and run your numbers through them for comparison. Then you are ready for the next step.

The fixed rate mortgage gives you the same monthly payment for the life of your mortgage. That' is what you just worked through. This means you can set up your household budget more precisely and have greater control over how your money is spent.

A "how much can I borrow" mortgage calculator helps you work out how much you can afford to pay for the house altogether. Can you afford that dream home? Maybe yes; maybe no.

It also depends upon the interest rates you negotiate with the lender, an increase in the size of your down payment, the number of years you want the note for and the actual price you negotiate for the house.

Using the mortgage calculator, you can input these factors individually and see what happens to your bottom line. A small additional prepayment to your regular mortgage payment may be what pushes you over the top.

A prepayment mortgage calculator can show you what it means over the life of your note. The beauty of the prepayment is that it is optional, not contractual.This can help you save more than $100 per month.

Unlike an Adjustable Rate Mortgage (ARM), you are not locked in to an increase every one to five years. You are only responsible to make the original mortgage payment. If you are not so financially constrained with a monthly budget, and prefer to have a lower rate of interest to start, then use an ARM mortgage calculator.

This will give you a rough idea of monthly payment over a period of time. ARMs do have the distinct disadvantage of putting your home in danger financially should the interest rates rise dramatically.

You need to use the mortgage calculator to find out what your optimum interest rate would be before you reached that financial crisis. Make sure that the price of the house you buy gives you quite a large safety net so that the interest rate can rise without danger. The beauty of mortgage calculators is that you get experiment before committing anything to paper or even speaking realtors or lenders.

You find the information you need to complete the mortgage calculator's questions by using your own financial information, an approximate house price and the rates advertised on any piece of junk mail that has arrived in your mailbox. You work in the privacy of your own home without the fear of being hounded by a salesman doing follow-ups!

Take the preferred options you worked out on the mortgage calculator with you when you begin discussions with the broker.

Avoiding PMI Payments

The only way to avoid PMI is to make a cash down payment of 20% or more when you buy a house unless your mortgage is going to be origianted through a sub-prime lenders. This money may come from your savings or from a gift from a relative. You may also be able to borrow against your 401(k) retirement plan to raise the down payment needed. (However this option may have long term effects to your financial future and may not be your best option.)

In lieu of a 20% cash down payment, consider these options:

Private Mortgage Insurance (PMI)

While it increases your payment, PMI may in fact be your best option to obtaining a house. After all, PMI often can be canceled within two or three years and some PMI programs even allow you to collect a refund of some premiums upon canceling. PMI is especially attractive in areas where the property values are steadily increasing.

Lender-paid Mortgage Insurance (MI)

Another method of buying a house with less than 20% down is Lender-paid MI. With this MI program the lender pays for the MI premium while the borrower in turn often receives a slightly higher interest rate, usually a quarter-percent. While this slightly higher-interest rate is for the life of the loan, it often results in a lower monthly payment than taking out two loans (piggy back loans, described below), and reduces the costs of closing two loans. The interest paid on this slightly higher rate loan would be tax deductible. Lender-paid MI cannot be cancelled.

Piggy Back Loan A piggyback loan structure is another way to buy a home without making a 20% down payment and without mortgage insurance (MI). In effect, the borrower is taking out two separate loans - one “piggybacked” onto the other - so you will have two loan payments each month. For example, the first loan could be 80% of the total amount and the second loan for the remaining 20%, and considered to be your down payment amount. The second loan is generally at a higher rate than the first. Many times, the second loan has a variable interest rate, which means it can fluctuate, causing your payment to fluctuate. The most common piggy back loan combinations are:

80-10-10: Eighty percent first loan, 10 percent second (piggy back) loan, 10 percent cash down payment.

80-15-5: Eighty percent first loan, 15 percent second loan, 5 percent cash down payment.

80-20: Eighty percent first loan, 20 percent second loan, no cash down payment.

A home equity loan or a home equity line of credit allows you to borrow money, using your home as collateral. Collateral is property that you pledges as a guarantee to the creditor (e.g. a bank) that you will repay the debt. For example, a consumer may pledge his/her home as the collateral.

Equity is the difference between how much the home is worth and how much you owes in mortgage(s). For instance, you take a loan from a bank to buy a house. The house you buy is worth 300,000 pounds, and when taking the home equity loan, you made a down payment of 100,000 pounds to the bank. So in effect, you are borrowing 200,000 pounds from the bank.

The equity at this point is equal to the down payment, i.e. 100,000 pounds. Let's say, after five years the value of your house shoots up to 400,000 pounds. Also assume that you have paid back 25,000 pounds to the bank. Now, you owes 175,000 pounds to the bank. The equity = present market value of the home - amount owed by consumer to the bank = 400,000 pounds - 175,000 pounds = 225,000 pounds.

Hence, home equity loans or home equity lines of credit are second mortgages which, like the primary mortgage, are secured by your home. The first mortgage or primary mortgage was the loan you took to buy the house. You are eligible for the second mortgage i.e. the home equity loan, because the value of your property has increased with time and are worth more. The interest rate for the home equity loan i.e. the second mortgage is higher than that for the first mortgage because the risk involved for the lender of the second mortgage is higher. This is because if, the first mortgager has the first lien on the property, the second mortgager-the bank, giving the home equity loan-takes on the added risk of being second in line to collect if the borrower defaults.

The great disadvantage of home equity is that if you do not make payments on time or unable to make the loan payments, then, in this case, you run the risk of losing the collateral.

So, once again the same home which has a higher value now, is the collateral. This second loan i.e. home equity is usually used for home improvements, debt consolidation, college education or other expenses. However, the same risk applies to this equity debt or second mortgage, i.e. if the consumer fails to make his/her payments, the creditor may take possession of the house.