How to Choose the Right Mortgage and Save Money

When purchasing a new home, a mortgage can be a great investment tool. Making sense of fixed, arms, reverse amortization, and interest only loans can save you thousands.

The right mortgage can save you thousands of dollars, while the wrong mortgage can put your house in jeopardy. With all the mortgage products on the market, it is more important than ever to understand real estate financing.

Making Sense of Mortgage Options

Start by simply understanding your options. People with average credit ratings or better should be able to secure a fixed mortgage for a traditional 30 year term. This essentially means you pay the same mortgage payment monthly for the entire loan period. Alternatively, you also have the option of choosing a 1, 5, or 10 year Adjustable Rate Mortgage (ARM). These mortgages adjust to the market rate after 1, 5, or 10 years. This could be up or down, depending on how interest rates move. Essentially, this means you could either be paying more or less when your rate lock period ends. Rates traditionally don’t move significantly, so don’t expect any major surprises. However, over the course of a 30 year loan rates could change significantly.

People with no or bad credit should expect higher rates on these standard products. Additionally, you may have to reach into the sub-prime lending market. These loans typically have much higher interest rates and a variety of different structure. Importantly, when evaluating these loans, ensure there is no penalty for prepayment. Your major goal should be to pay off these loans as soon as possible or refinance to a lower interest rate when your credit improves.

Many other products exist. Reverse amortization, interest only, balloon mortgages, etc. offer a variety of payment terms, while increasing the cost (and sometimes the risk) to the buyer. Unless you have alternative investments, traditional mortgages provide the best option for purchasing a home. Regardless of the mortgage you choose, understand the payment schedule, fees, penalties, and ways the interest rate can be adjusted. Always remember that it is in everyone’s best interest for you to pay off your loan on time.

The Down Payment and the Interest Rate

The two most important parts of the mortgage are the down payment and the interest rate. There are two schools of thought when it comes to paying down a mortgage. Some people suggest paying down your mortgage as soon as possible, while others suggest making minimum payments to maximize your tax advantage. Bottom line, if you are an active investor (401k, real estate, stocks, etc.) it is probably best to pay as little down as possible. If you have good credit, try getting a 100% mortgage. While you will have to pay a higher interest rate, the cost of borrowing for your personal home will be cheaper than the returns you can get from investing.

In contrast, if you are not an active investor, your mortgage can make a reasonable investment vehicle. When most savings accounts offer 2.5% to 4% interest, it makes more sense to pay off your mortgage that charges 6.5% to 7.5%. You are essentially saving about 1.5% on every dollar you repay. The only short coming of this investment strategy is the lack of compounding you would receive with a traditional investment. If you are still young (18-55), consider a tax deferred IRA. You get similar tax benefits, plus a return that can be compounded, basically leaving you more money in the long run.

Understand that everything in this process is negotiable. Your goal should be to minimize the down payment and the interest rate. Typically, the higher the down payment the lower the interest rate and vice versa. Shop around using a mortgage broker to save yourself some time and legwork.

Finally, decide on the right mortgage for you. You should be able to comfortably make the payments and have enough in savings to cover at least three months of payments. This provides a buffer in case of layoff or any other possible tragedy that might occur during the homeownership. Additionally, make sure you get to know your loan officer. A good relationship with your banker could save your house. Banks can be far more flexible than most people think. Again, banks do not want to foreclose on houses because it cost them far more money than they make. While a mortgage is simply a tool to purchase a house, managing this tool properly can save you thousands.

Tips for Cleaning Granite, Stainless, and Ceran Easily

Today’s new surfaces require special cleaning. Years ago, porcelain stoves and laminate countertops required little effort to keep them clean. A wipe of the sponge is all it took. But, they weren’t nearly as attractive as today’s stainless and granite. Increasingly, though, we are using natural surfaces and stones for countertops and appliances and that range from porcelain to ceramic, from stainless steel to cast iron, from granite to marble. And when it comes to cleaning, it’s become a nightmare. These surfaces, while beautiful, do require more maintenance.

Glasstop or ceran stovetops take their very own kind of liquid paste cleaner. Granite is also a maintenance nightmare if you don’t know how to clean it right, requiring gallons of spray cleaners and three trees’ worth of paper towels. Fortunately, there is an easier way that can handle most cleaning needs for these special surfaces that is as easy as soap and water were for handling the surfaces in our mothers’ and grandmothers’ kitchens.

STAINLESS STEEL
It was most often used for kitchen sinks, but now stainless steel become an extremely popular finish and is used on everything from kitchen counters to refrigerators to stoves, ovens, and microwaves. It’s versatile and practical. However, over time, stainless steel can become dull-looking or lose its original luster.

How to clean: To remove fingerprints from stainless, use a lightly dampened microfiber cloth. For extra stubborn stains or fingerprints, use a mild window cleaner with a microfiber cloth. Do avoid using scouring powders on stainless steel. For all-purpose cleaning, use plain dish detergent and make sure water spills are wiped up right away as water is harmful to the finish of stainless steel.

GRANITE
Nothing is as durable as granite – or as beautiful. It’s tough and extremely handsome making granite a terrific choice for kitchen counters and floors. It resists heat and scorching and is almost impossible to nick and scratch. The problem with granite is getting that shine on it again – especially for that beautiful, deep black granite. To clean, dampen the cloths with a spray bottle filled with regular tap water.

Worried about bacteria on the counters? Don’t be. Microfiber cloths have fibers small enough to pick up bacteria according to a test conducted in Canada that compared cleaning with microfiber and water versus a sponge and disinfectant. The room they cleaned? A men’s urinal. The microfiber tested cleaned 96% of bacteria – cleaning as well as the sponge and disinfectant did! If you have granite floors, use a microfiber mop dampened with water. Soon your counters and floors will be glossy and beautiful and disinfected without harsh chemicals.

How to clean: The most important thing to remember is to avoid using window or ammonia-based cleaners. These will harm granite and its finish. Wiping with a sponge is no good either because it makes a nasty, dull finish. To keep that beautiful, glossy granite shine, the only thing to clean with is microfiber cloth. These cleaning cloths shine without using strong chemicals – so you you’re assured that you aren’t damaging your beautiful stone counters while you’re cleaning.

Ceran & smooth-top Cooktops & Stoves
These beautiful surfaces are wonderful to look at but do require some special treatment – especially with regard to the cleaners used. Ceran and smoothtop stoves usually require a special liquid paste for cleaning. They should be regularly cleaned (about weekly) with this paste to polish the surface, but for daily cleaning, this becomes too tedious.

How to clean: Wipe up spills with a damp cloth as soon as possible, especially if the spill is sugary. Use plastic scrapers to bring up any food particles, or follow the manufacturer’s instructions. For daily cleaning, use a regular sponge and water to wipe up any food particles, follow up with a microfiber cloth to make the stove shine. For deep cleaning, use a cleaner specially formulated for glass tops. Never use scouring pads or cleansers as they will scratch smooth surfaces.

In short, microfiber is a cleaning and polishing wonder. Use it in every room in the house but where it really does some of its best work is on today’s new surfaces. Microfiber levels the cleaning playing field and makes today’s beautiful-to-look-at-but-hard-to-clean surfaces as easy to clean as the ones we grew up with. You can go without using microfiber, but why would you when it makes cleaning easier (especially for today's surfaces), better, and chemical-free?

Original Source of this tip can be found here.