Monday, December 24, 2007

The New Mortgage [By Jason Holter]

Thanks to Federal Regulators there is once again good and bad news. The bad news is more paperwork and tougher standards when applying for and ultimately purchasing your home. Creating tightened guidelines for stated income and piggy back loans and stricter rules for option arms and interest only is meant to create security for the lenders.
Good news for home buyers? YES! Ever since the days of School House Rock we have known that "Knowledge is Power!" nothing has changed. If the borrower knows the rules, they can be prepared to meet the lending institution requirements and come out ahead or no worse for the wear.
Here are the basic steps to survive and flourish under the new "Rules"
1. Be prepared to have payroll stubs and or tax returns available. Instead of using stated income, using actual income will ensure that you get the right size payment and decrease the chances of default later on.
2. Keep your credit report up to date. Check for errors in information. If you find errors contact the reporting credit bureau in writing in order to get the error corrected.
3. Keep credit card payments current. Pay off your credit cards as often as possible in order to help lower your debt to income ration. This will aid you in getting a loan and improve your credit.
4. Once you have applied for a loan, it is important that you do not make any major purchases as it may stop your loan from being approved. Make all purchase after the closing and funding of the loan.
Although initially the new rules may seem insurmountable, the reality is preparation is the key. The new rules will stabilize the demand for real estate and slow the price increases on property. With real estate becoming more affordable, there will be less default and increased access for potential home buyers. Welcome Home!
Jason Holter is an experienced and ethical Mortgage Lender from the Houston area. Jason works closely with the most respected realtors. Jason is so confident about his services, he offers a "2 Day Doc Guarantee". He guarantees that if your closing documents aren't at the title company two days before you are scheduled to close, he will waive his origination fee. To date, he has not had to return the fee to anyone. Jason's website is
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Thursday, December 13, 2007

I Have No Credit Scores, Can I Get A Mortgage?[By Mike Clover]

No Credit Scores, believe it or not it's very common. There are lots of people out there that don't have any credit. It is like a double edge sword, no credit could hurt you, but bad credit will definitely hurt you. Normally people that have no credit scores, fall into two categories.
1. Young and just starting out.2. I pay cash for everything.
Luckily there is hope for individuals that don't have credit scores and want to buy a home. There is a loan called FHA, which is a life saver for lots of happy homeowners. FHA is the single largest insurer of loans in the world. This particular loan is more lenient with banks, because it is insured by HUD. The qualifying process is less stringent. FHA does not require credit scores to get a mortgage. It offers an alternative in place of no scores. It will allow you to provide alternate lines of credit. Typically the underwriter will require 3 sources. The following would work.
1. Last 12 month payment history from any utility company.2. Day Care payment history for the last 12 months3. Letter from car insurance provider.4. Life insurance payment.
I have personally helped many families that had no credit scores get a mortgage. Here are some of the benefits of a FHA loan.
1. Low down payment2. No credit scores required3. Easy credit qualifying
FHA has been helping families since 1934, and its still is doing so. Even with all the changes going on in the mortgage industry, this particular loan is still the strongest provider of home ownership today. So if you don't have any credit scores, the answer is yes, you can get a mortgage. FHA typically requires 3% investment from the buyers, but it will allow you get a 3% gift from a blood relative or Bond money assistance from your local city. It will also allow the seller to pay 6% of your closing costs, so you can essentially get into a house with little or no money at all. Are you currently in a CH 13 bankruptcy? No problem, you can get a mortgage as long as you have been in the bankruptcy for a minimum of 12 months. The trustee is required to give written permission for you to purchase a home. There is no other loan program that has this type of guidelines. You can also get low interest rates with FHA, even though you have no scores, or low scores. I personally think its one of the best loans to help low income families into a mortgage. Do you have medical collections; well FHA does not require you to pay of medical collections, even recent ones. So I think you get the idea, it's a great loan for all types of situations.
About the Author: Mike Clover is the owner of is one of the most unique on-line resources for free credit score reports, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.
Article Source:

Wednesday, December 12, 2007

How To Do A Successful Mortgage Short Sale - Sell Your House In 9 Days With No Fix-Up[By Richard Geller]

Do you owe more than your house is worth?
Or are you unable to make your mortgage payments?
Mortgage costs including taxes and insurance should be no more than 40% of your take-home income, at worst. Many people are paying more than this.
Your mortgage payments may feel like a crushing burden and you probably don't know where to turn for help.
It turns out that a short sale may be the answer for you.
I want to focus on doing a short sale -- that lets you sell your house, get out from under your mortgage without paying in any cash, and get out from under even if you owe more than your house is worth.
Because let's look at your choices.
Choice #1: If you sell your house and you owe more than it is worth, you can pay your own money to make up the loss.
For example, if the buyer pays $180,000 because that is all you can get as far as an offer, and your mortgage is for $250,000, you have to pay in $70,000 cash at closing or else the deal will fall through.
Do you have that kind of cash? Many people do not have that money. And I don't suggest you raid your 401(k) either.
So the only other option that is the least bit appealing is a mortgage short sale.
A short sale involves mortgage lender cooperation. Your mortgage company must agree to accept the buyer's full proceeds as payment in full for your mortgage. The home loan lender lets you out of your mortgage and allows the new buyer to step in and buy your house.
You are out of the picture and you didn't put any cash in.
The mortgage company may still decide to come after you later, to pay them for their financial loss. Each state's laws are different but often they have two to four years to file a complaint in court and sue you for their financial losses.
You can negotiate this, sometimes, during the short sale process. They will agree not to go after you, in writing.
The mortgage lender may also report you as a deadbeat to the credit agencies. Or not. You can negotiate this too, sometimes, during the short sale.
The key element though is that by doing a short sale, you are helping your mortgage lender get out of a big problem. And that gives you room to negotiate more than you thought possible.
You see, their problem is having a non-performing mortgage loan and they do not want your house back either.
Your problem is their problem.
So you can make things a lot better if you will sell your house and get the lender to accept the short sale. The lender loses money.
But not nearly as much money as they lose if they get your house back.
Getting your house back could cost the mortgage company tens of thousands of dollars.
Banks are not that great at holding on to your house. They have to pay for fixing it up because they can't sell a house in any condition. And they have to hold onto it while it sits on the market. Lenders typically only recover $0.68 per $1 of value on a foreclosure house if they take it back.
So why not do a short sale instead?
I have learned of the system that lets you sell your house in nine days, with no fix-up, in any market. Because it is a short sale, the lender expects to get clobbered. So they will let you sell your house for 75% - 85% of market value. That means that you can sell your house while your neighbors probably can't because they feel they must get a higher price than you need to get.
The market value of your house is the real market value today, not the one six months or twelve months ago. A short sale can be done substantially below this real market value. And that means that it is a good deal for the buyer. And good deals are the only deals that are happening today.
Remember, in a short sale, you aren't getting any of the proceeds yourself. All proceeds after closing costs go straight to your mortgage company. You won't see a dime of it.
So that means that all you care about is exposing your house to the market and letting the market decide what your house is worth.
As long as you can demonstrate to the lender that the buyer is paying a fair price today (a price that can be substantially below market value), you can get the lender to say "yes" to a short sale.
And that means you can get out from under your debt and move on with your life. You can even buy another house with little or no money down, no qualifying, and bad credit.
And learn more about short sales do you owe more than your home is worth and how to short sale your house in nine days even when there are no buyers, by author Richard Geller who has developed the Mortgage Relief Formula home study course.
Article Source:

Tuesday, December 11, 2007

The Basics of Tracker Mortgages[By Michael Sterios]

There are several different types of methods for interest to be charged on mortgages. Tracker mortgages have a variable interest rate that moves roughly in line with the Bank of England Base Rate (BoEBR).
Another popular type of interest rate is a fixed rate which does not move in line with the base rate.
The interest rates on tracker rate mortgages are quoted as a fixed percentage above the base rate and will normally exist for a short period, although it can be attached to the tracker rate mortgage for its entire term.
Once the tracker period expires the interest rate will convert to the lender's Standard Variable Rate (SVR). A typical example would be tracker rate mortgages that are quotes as having an interest rate of BoEBR+2% for three years.
The BoEBR is set by the Bank of England Monetary Policy Committee (MPC) each month. The MPC will evaluate a range of economic indicators to decide whether a change in the base rate is necessary to meet the Government's inflationary policies.
Because the interest rates attached to tracker mortgages are attached to the BoEBR, any movement will affect borrowers' monthly repayments. Upward movements in the BoEBR are usually passed onto borrowers within a few days and downward movements within a month.
Tracker rate mortgages therefore come with an inbuilt risk factor that borrowers must assess carefully. If a borrower cannot afford to continue making payments on tracker rate mortgages if the interest rate increases significantly over time, they may need to reconsider applying for this type of mortgage product.
Borrowers who do not want to be exposed to such fluctuations should consider applying for fixed rate mortgages instead of tracker rate mortgages. Fixed rate mortgage have interest rates that do not move each time the base rate is increased or decreased and therefore offer the borrower security.
However, if the base rate falls, borrowers of fixed rate mortgages will not be able to take advantage of the cheaper cost of borrowing. The interest rates on tracker rate mortgages will decline and borrowers of this type of product will subsequently save money.
If you are unsure whether tracker rate mortgages are right for you, contact an independent mortgage adviser for expert and impartial advice.
Visit UK Mortgage Source for up-to-date information on UK Mortgages
Article Source:

Monday, December 10, 2007

Interest Only Mortgages Basics[By Michael Sterios ]

Interest only mortgages allow borrowers to reduce their monthly mortgage payments by only paying interest on the outstanding loan balance.
Capital repayments are not made on a monthly basis with interest only mortgages. Instead, the payment of the capital portion of interest only mortgages is deferred until the end of the term of the mortgage.
Because interest only mortgages reduce the amount of the payments due to the lender each month, they are a popular vehicle for individuals to finance the purchase of their first home.
Interest only mortgages can help ease the financial burden involved with home ownership, allowing for borrowers to get a foot on the property ladder and switch to a repayment mortgage when it becomes more affordable.
Interest only mortgages are therefore a short-term solution to the high cost involved in borrowing money to acquire property. While interest only mortgages are popular at all times, they become even more popular during times of high interest rates.
Despite the advantage of reducing the amount of each monthly mortgage payment during the term of the loan, interest only mortgages have a large disadvantage in that they leave the borrower with a large balance to repay at the end of the term.
To ensure this does not happen, the borrower should either switch to a repayment mortgage at some point during its term of the mortgage, or set up a Capital Repayment Vehicle (CRV).
A Capital Repayment Vehicle is an investment policy designed to produce enough money to repay the balance of an interest only mortgage at the end of its term.
CRVs are usually found in the form of an endowment policy, an ISA-based investment scheme, or a personal pension plan.
Regardless of how the borrower is planning on repaying the capital portion of the loan, a level term assurance policy should be taken out when the interest only mortgage is established.
A level term assurance policy will pay out a fixed sum upon death of the assured. The amount assured should cover the capital portion of the mortgage.
Because of the risks involved, borrowers should consult an independent mortgage adviser before applying for interest only mortgages to ensure that the right product is selected to suit their personal financial situation.
Visit UK Mortgage Source for up-to-date news on Mortgages and to contact a mortgage advisor near you
Article Source:

Sunday, December 9, 2007

Loan Officers - The Tale Of The Average Mortgage Loan Officer[By Andrew Poletto]

I once talked to a Loan Officer whose only goal was to close more loans. He had a plan he told me. He was going to send out postcards and mailers then follow up with phone calls asking the client if they wanted to refinance.
On top of that, he was planning on taking about 2 days a week and visit Realtor offices and drop off information for the Realtors. Not just rate sheets mind you, he was going to pass out flyers and a bio sheet telling everyone about him and what he can do for them. After all, it was a perfect fit, a Mortgage guy and a Realtor, they both need each other, right?
Then, he was going to buy a bunch of leads from a lead generation company and spend two nights a week calling folks from the list.
Does this sound like you? Do these activities sound like something you've ever done? Most Loan Officers and Mortgage Brokers do at least one of these activities to get their business started. Not only that, but the average Loan Officer continues to do these activities throughout his carreer.
Then you know what happens? The Average Loan Officer QUITS the business! That's right, he continues to do these same activities and when nothing changes in his business, he gets frustrated and quits the business. In a way it's good because with less Loan Officers and Mortgage Brokers brokers, the ones that stay around no have less competition. With less competition their is more business, that's the way of the mortgage business.
The bottom line is, to be average in this business means you'll quit. To NOT be average, you have to constantly be evolving your business to keep up with what's going on with the industry. Face it, whether you want it to or not, this business is ever changing. If you keep doing what you're doing without change, you'll just be average. No one is saying the activities mentioned above don't do what they're designed, but they change as well. Keep up with what's going on.
And now I would like to invite you to get "Mortgage Info With An Attitude" with Free weekly answers about the mortgage business in the Mortgage Mailbag. As a Bonus, you'll receive the Special Report "The 5 Biggest Myths about the Pay Option Arm and the Real Truth About Them". You can access this free service and the bonus at
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Saturday, December 8, 2007

What Went Wrong[By Ray Newby]

Oh's a time of goodwill and cheer!
With the holidays comes a bit of stress and anxiety. Some of those factors are money, buy, buy, buy, and some are time, more, more, more. It's tough to just sit back and take it in and revel in the spirit. A cup of cheer will sometimes help. So that's what we're going to try to give you today...a symbolic cup of cheer.
But first the grinch doeth cometh.
Rate Is Low, like most in the mortgage business has gone through many changes this past year. Some have been disappointing. We've had to do layoffs and downsizing. We've had to change our view of what to expect and how to get to the end game. For the last three months the fall out from programs not being available has been nothing less than shattering. Because of the mammoth exodus of lenders, many borrowers have been left in a financial lurch with no where to go. There just weren't any programs for them. And good or excellent credit didn't matter...everyone suffered. So, as we pick ourselves up from the ruins of loan fallout, dust our selves off (more like taking the boot prints off our necks) and start to recover, we must look at business differently.
First, and this is truly sad. Many of the programs that best served the client are indeed gone. Where we were able to deliver programs when the credit score was in the low 500 range, that range is now about 620 as a starting point. And that simply means many folks who need financing, need to consolidate or get cash out, now can't. They haven't changed, the world did. And they will and do suffer the fallout.
And many people are blaming mortgage brokers for the "bad' loans on the market that "drove" people into foreclosure.There's even federal legislation in the works to hunt down the preparator and rid the world of their evil influence. The great thing is that you don't have to know the facts to have an opinion. And because there are people loosing their homes...well there must be someone to blame...and we've got to get them. The truth is a bit different...
In the past when someone bought a home and didn't have a down payment, needing 100% financing, they were given temporary loans designed to be refinanced in about two years into better rates and terms as the homeowner established a payment record and equity. There was nothing wrong with this system as it worked for tens of thousands of people and allowed us to experience the highest rate of home ownership in history. So what happened...what went wrong?
The housing market is what happened. As everyone and their cousin decided they could be the next Donald Trump, everyone bought one, then two, then three homes. We were rolling in profits and our future looked bright. Nothing could go wrong and to the devil with all those doom and gloom people who said it would all end. And them one day it did end. Rates started up, fewer people could afford the increase, demand changed, and everyone stated to dump those wonderful investments. The result was as predictable as Britneys' bad behavior...with less demand (buyers) the price started to drop. And all those good folks who bought homes with 100 % financing now couldn't refi to better rates because they were up side down on their home...and they started walking away and foreclosures were everywhere.
So the newspapers picked up on the term "sub-prime" and "teaser" rates and pretty soon the world was awaking to a new villain. And isn't that always the way to make us feel better...blame someone...especially those evil lenders who made us take these terrible loans. Much like the cartoons from the past where the helpless maiden was strapped on the railroad track waiting for the on coming train, we could see the disaster and we blamed the conductor.
But the conductor isn't the villain. And neither is the mortgage professional or lender. In both cased they are responding to the needs and expectation of the client. Loan programs are created because of demand. And lenders did their job and provided the public with ways to borrow and get the home they wanted. Then, when it falls apart, through no fault of the lender, that is exactly who we blame,...amazing. Were these the programs some how exotic, mystifying or filled with ambiguities. No. All of the programs had been available for many years and were widely used. So what happened...again, the market. When values tumbled so did equity and so did the lenders ability to refi a person out of what they had to what they expected.
And who takes the big loss? The lender will have to write off the huge loss on each home that is in default. And if you haven't noticed many are going out of business. And not because of bad decisions or poor management...but because of the changing market. And that's o.k. No reason to feel sorry for them. But there's no reason to blame them either. They did a great job of getting folks into homes. And for many borrowers...the hard work and diligence of those lenders and brokers have made a huge positive difference in creating wealth.
Ray Newby is a mortgage broker and real estate investor with over 30 years of experience in the industry.
Article Source:

Friday, December 7, 2007

The Reverse Mortgage Association - Here To Help[By Judy Wellsworth]

If you are a US homeowner approaching retirement, and have already realized that your pension, social security, or 401K will not be enough to let you maintain the lifestyle you have been able to afford during your working years, you may be considering a reverse mortgage. If you are, you should take advantage of the services offered by the National Reverse Mortgage Association.
Started in 1997, the National Reverse Mortgage Association has a decade of experience in assisting both seniors who want to use reverse mortgages to help fund their retirements, and lenders who want to offer reverse mortgages as part of their services.
For homeowners who have made the decision to preserve their financial independence through reverse mortgages, the Reverse Mortgage Association offers educational programs. For lenders who wish to offer reverse mortgages, the Reverse Mortgage Association has a Code of Conduct designed to safeguard interests of older homeowners, and which it expects its lenders to honor. It has also established, and strongly recommends for reverse mortgage lenders, training in effectively dealing with the needs of older borrowers.
What Is A Reverse Mortgage?The programs overseen by the Reverse Mortgage Association help homeowners over the age of sixty two understand how to get a part of the home equity they have accumulated as tax-free income, while still keeping full title to their homes. Taking advantage of a reverse mortgage will allow a homeowner to avoid the monthly payments which result from borrowing against home equity in the traditional manner. The Reverse Mortgage Association also oversees the lenders who actually write the reverse mortgage loans and make the payments to the homeowners.
Reverse mortgages are ideal for senior homeowners because they will not have to be paid off until the homeowner is no longer living in the home at least half of the year, or decides to sell the home, or passes away. And in the event that the home sells for a price in excess of the balance borrowed against the home mortgage, the homeowner or his or her heirs will receive the extra funds.
Watchdogging The LendersThe future demand for reverse mortgages in the US will only grow as the Baby Boomer generation enters retirement, so it is becoming increasingly essential that older homeowners have access to trustworthy lenders. The Reverse Mortgage Association has taken of the task of investigating the credibility and competence of reverse mortgage lenders so that they will reflect well on their profession.
By sponsoring an ongoing program of yearly seminars for its lenders, the Reverse Mortgage Association ensures that its members are kept up to date on all the aspects of the reverse mortgage industry, including the latest loan products and issues affecting senior borrowers.
If you are facing retirement and struggling to cope with a vanished pension, badly managed IRA or 401K, and soaring health insurance premiums, your financial future may seem bleak. Taking out a reverse home mortgage from a member of the Reverse Mortgage Association will assure you of getting help from a lender who operates with integrity, and let you rest a little more easily when your retirement arrives.
You can also find more info on Reverse Mortgage and Reverse Mortgage Association. is a comprehensive resource to get information about Reverse Mortgage.
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Thursday, December 6, 2007

Home Equity Loans - Reverse Mortgages -You Know They Have Arrived When[By J Krohn]

Only recently has LeBron James of the Cleveland Cavaliers lived up to his superstar status. He has arrived.
Reverse mortgages have been around for years. They, for the most part, have had a low profile with only smaller lenders being involved. They have been the subject of ridicule and some serious misgivings.
Only recently has it dawned on the biggest lenders in the country what a huge market there is in reverse mortgages-78 million baby boomers in the next decade to be precise. Now the big lenders are getting into the fray in a big way. The race is on for market domination. They have arrived.
The nation's aging population, along with the rapid housing-price appreciation from 2000 to 2005, has led to record growth in reverse mortgages, which allow homeowners 62 years old and above to turn home equity into income they don't have to repay until they move out.
Reverse mortgages provide income to the homeowner in the form of a lump sum, monthly payments, or a line of credit while allowing them to stay in the home - the "reverse" of the way a traditional mortgage works borrower.
Now, two of the biggest lenders in the mortgage business Countrywide and Bank of America have gotten into the game. Their entry into the reverse mortgage market has given an air of respectability to the heretofore "dissed" reverse mortgage. They have arrived.
As we have noted before, unless you have a huge reason to do it now, you should seriously consider waiting until the dust settles. The reverse mortgage market is undergoing rapid changes with new products and new programs coming out.
The increased competition with new players will only make things better for the consumer. Don't make a mistake by moving too fast.
Jack Krohn is a leading free lance writer on Home Equity and Mortgage issues with over 50 articles to his credit. He is also the #1 author of Home Security Articles in the country.
To learn more about mortgages click on the links below.
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Tuesday, December 4, 2007

Home Equity Loans Bad Credit - Cheap Loans Against Your Home[By Steve C Clark]

If you want a cheap loan despite your bad credit than you can choose bad credit home equity loans. These loans are given on the security of your home. People with CCJ's, arrears or any default payment can easily go for these loans. The lender keeps your home as collateral so that they don't have fear to loose their money. This provides you the cheap interest rate. The loan amount is decided by evaluating equity on your home based on its current market price and mortgages over it. You can use the loan amount for any purpose such as home improvement, clearing medical bills or any other debts without the intervention of lender.
These loans do not have any specific prerequisites and lender may only want to see the paper of home and details of various mortgages on it. These loans require some paperwork to be done so it may take about 3 to 4 days in the approval. As stated, the loan amount is decided by the current market value of your home and the mortgages it carry. The interest rate is very low since lender has a security in his hands. The interest rate is even lower than other secured loans. Another exciting feature of these loans is the extended repayment period which may go up to 25 years. Hence with planned financial strategy you can repay the debt easily.
It is advised that you should think twice before going for these loans as they need your home to be kept as security. Also you must repay the debt well in time as in case of failure in repayment the lender has the authority to sell the home to retrieve his money.
Bad credit home equity loans is given to people having bad credit by keeping their home as security. The borrower gets a good amount at cheap rate as the loan amount is evaluated according the market value of the home. You must repay the debt timely in order to get your home back because in case of failure you may loose it.
Steve Clark can tell you how to look better, live better and breathe better by giving you tips to improve your finances. He writes on loans. His ideas can help you rejuvenate your money. To find Bad credit homeowner loans, Debt consolidation loans for homeowners, Homeowner personal loans, Home secured loans UK visit
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Monday, December 3, 2007

Home Equity Refinance[By Sara Sentor]

Home equity refinance can come in handy when your main objective is to pay off your credit card debt or you want to remodel your home. The best part about home equity refinance is that you get the much-needed cash very quickly and that too without any problem. This is not the case with traditional refinance where you need to fill lots of application forms and go through various procedures.
No closing costs-
Another good thing about home equity refinance is that you don't need to pay any sort of closing costs for the loan. However, there are few financial institutions that will charge you few dollars for processing the loan but it is still quite low as compared to other loans.
Private mortgage insurance-
Don't opt for private mortgage insurance because not only it is useless but also quite costly in nature. You have to pay private mortgage insurance if you borrow against your home for more than 80 per cent of the value. You can avoid private mortgage insurance by going for a home equity loan, where you can borrow up to 100 per cent of the equity you possess.
Low interest rates-
Equity loan market is quite competitive in nature. Because of this, there is not much of a surprise that you can clinch the best equity loan deal with low interest rate by shopping around and comparing lenders. Local financial institutions are the brilliant source for these kinds of loans. In some cases, big national lending companies can also help you immensely.
Sara Sentor Webmaster
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Sunday, December 2, 2007

Cash-Out Refinancing - Suitable For Eliminating Debt?[By Jess Peterson]

Following you will find a few easy steps you should follow to obtain extra funds from your property by refinancing and use the money to eliminate your outstanding debt.
Assess Your Financial Situation
It is important that you analyze your financial situation before making any type of decision. Whether it is advisable to obtain a cash-out refinance home loan or not to eliminate debt will depend on several factors that constitute your finances. The first thing that you must analyze is how much debt you will need to consolidate with the amount of money you get out of a cash-out refinance home loan. Unless you have subsidized loans like student loans or loans with high prepayment penalty fees, chances are that you should consolidate all your outstanding debt with the mortgage refinance home loan.
Also, check how much money you are spending monthly in terms of debt repayment. Add up mortgage payments, car loan payments, unsecured loan payments, credit card average balance payments, etc. This will provide you a reference amount to compare with the monthly payments of the new loan and uncover at a first glance how much money you will be saving each month on debt payments. It is also advisable (though not imperative) to see how much interests you are paying each month and annually to see how much money you will really be saving.
Finally, find out how much equity is available on your property to see what kind of money you can obtain by applying for a cash-out refinance home loan. If you do not know how much equity is available on your property, find out the value of your home (contact a real estate agent to get an approximate value) and ask your mortgage lender how much money you still owe on your mortgage loan. Equity will be the difference between the value of your property and the amount of outstanding debt on your current mortgage loan.
Request Loan Quotes And Compare
With the amount of outstanding debt in mind, request refinance mortgage loan quotes and compare the monthly payments to see how much money you will be saving both monthly and over the whole life of the loan. Say for instance that you currently owe $30,000 apart from your mortgage loan and the payments on that debt add up to $1200 a month. If you request loan quotes for a refinance mortgage loan of an amount equal to your current mortgage balance plus $30,000 and the resulting monthly payments are lower than your current mortgage payment plus $1200, you would be closing on a good deal.
Truth is that with a cash-out refinance home loan you will probably be able to obtain almost a $600 reduction on your overall debt monthly payments under this scenario.
Jessica Peterson writes finance articles for where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more.
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Saturday, December 1, 2007

Bi-Weekly Amortization Schedule - Why Half is Sometimes Better than Whole[By Dave Poon]

People who are into a much more manageable way of paying off their mortgage will definitely benefit from a bi-weekly amortization schedule. This type of amortization schedule will go by more quickly than a monthly mortgage because if it is biweekly then the payment schedule is accelerated. You usually make 26 half payments in a year instead of 12 full payments. Should you decide to go for a biweekly amortization schedule, you will find yourself being able to compare the size, interest rate and number of years of biweekly mortgages against monthly ones.
It is then not very surprising to know that research and statistics confidently reveal that the demand for such an amortization program is indeed very outstanding. Such a side by side schedule of amortization can show you the dramatic interest when it comes to saving and speedier payoffs of frequent payments. The great results that this type of schedule shows are quite amazing. If you pay for your mortgage every two weeks, your dollar savings get compounded faster. It is also very simple to do this – you just need to input the normal mortgage information and the calculator will compute for you the biweekly schedule of payment.
If you use a tool for your biweekly amortization schedule, you are open to a lot of benefits. You can easily see how much you get to save each time you pay. You can predict how soon you can pay off your mortgages. You can even see how much you get to save when it comes to pre-tax interest over the entire life of the loan itself. Overall, you can take better control of your financial responsibilities. When you do, you will be adequately informed about your financial status and will have an easier time talking to your bank manager about any kind of loan that you wish to apply for. Every time you get a mortgage, you should utilize the biweekly amortization schedule so you will always save money, pay off your loan and breathe easier.
So what are you waiting for? If there is something out there that you want but do not know how to get it, go for the biweekly amortization schedule. You have already seen how it can benefit you and make paying off your loan easier. This then will allow you to enjoy your loan in the present. Your wallet will thank you for it.
Jeff Dodd is an expert with various Biweekly Amortization Schedule. Read more about this topic at
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Friday, November 30, 2007

100% Financing Mortgages

100% finance mortgages are mortgages with zero money down required at the time of the initial loan. The main advantage of this type of loan is the ability to buy a home with almost no money down. Providing 100% financing of the purchase price of your home, this mortgage is specifically designed for homebuyers who have limited available cash, but excellent credit. 100% financing offers complete financing of your property. The other option, 80/20, finances your mortgage with two loans. If you have a strong credit profile but have limited funds to commit to a down payment, then an 80/20 mortgage is just right for you. Lenders typically require a down payment of at least 20 percent of the purchase price. If the loan amount is for more than 80 percent of the purchase price, PMI is usually required. You can avoid paying PMI by getting a second mortgage ('piggyback loan') to back up your first mortgage.The first mortgage is provided for 80 percent of the cost of the home and the 'piggyback' second mortgage is for the remaining 20 percent. The 80 percent first mortgage can be a fixed-rate (15-year or 30-year), adjustable-rate (usually 5/1, 7/1 or 10/1 fixed period ARM) or interest-only loan. The 20 percent second mortgage can be a home equity line of credit that changes with the prime rate. Combined, the two loans allow you to purchase 100% of your home with no money down. Both loans may be carried by your lender, but sometimes the seller or a second lender is required to carry the 20% mortgage.Each lender has their own criteria for deciding who will meet the required qualifications for a zero-down loan. Most sub-prime lenders require any bankruptcies or foreclosures to have been at least twelve months ago. A conventional loan requires these to be discharged for two to four years ago.While a credit score of 600 or higher is best, large cash reserves can also qualify you. Six to twelve month’s worth of cash reserves in the form of savings, money market, or other liquid assets are considered ideal.If you choose 80/20 financing with the seller carrying the second mortgage, you can qualify with sub-prime lenders with a score of 560.You will also want to decide what type of mortgage you want. An ARM is easier to qualify for and has lower rates. A fixed rate mortgage offers the safety of a constant interest rate over the life of your loan.Typically an ARM will be a better deal if you plan to refinance within a couple of years. After you have improved your credit history, you can refinance for a conventional mortgage with low interest rates.The two main benefits of 100% financing are: constant monthly payments - with a fixed rate mortgage, your monthly principal and interest payments stay the same throughout the life of your loan, so you are protected against any unexpected interest rate increases; frees up cash - existing funds can be used for closing costs or other needs, rather than a home down payment.

Thursday, November 29, 2007

Smart Mortgage Shopping - 3 Steps to Take

Most people wouldn't just purchase the first car they look at, so why would shopping for a mortgage be any different? New would-be homeowners are looking for ways to simply just secure financing that they forget that they are the ones in control of their terms. To help you get the best mortgage deal for your current financial situation and for your future, here are three steps you will want to take.Before you can take advantage of any of these steps, it will help if you to gain a basic understanding of the mortgage process and terms you might run across as you begin your search. There are a number of helpful books and websites you might want to look into that can help you begin to find your footing in this maze of mortgage-speak.First of all, you need to look at the lending information from several different lenders. You have a number of options for borrowing money - credit unions, banks, thrift institutions, and mortgage companies. So, with those places in mind, you will want to start asking around for the amount of money that you will want to borrow to see what offers you might get. And while a mortgage broker can do this footwork for you, they will need to be paid for their services, which may not be something you want to pay. However, their services are worth it due to their experience and how many lenders they can access.The next step in finding a mortgage is to start asking these lending institutions what kinds of terms they can offer you. The most important term that you will come across is the rate of interest. When you are purchasing a home, you will be paying not only money for the house itself, but also for the borrowing of the money - interest. This allows the lender to make money from your transaction as most interest is calculated over the time period and the amount of the loan. Thus, the longer and bigger the loan, the more money they will make. But since you're interested in paying for a home and not the bank, you will want to start looking for the lowest rates you can.You will find that rates are divided into fixed and adjustable. You will want to make sure that the lenders are up front about how current their latest posted rates are. Note that fixed rates mean that your mortgage payments will not change, while adjustable rates will make your monthly payment vary. In addition to the interest rate, you will want to get a thorough explanation of the points and the APR associated with the lender to get a comprehensive idea of what a loan from them will entail.The third step in shopping for a mortgage is often the most intimidating for the borrower and that's negotiation. You have a right to negotiate for the terms that you want, though you might not get them. It will help as you are looking at the various lending institutions if you begin to create an 'ideal' mortgage plan in your head. That way, you can talk to other lenders about what other institutions have offered you so that they can match that price or reduce their rates to attract your business.You are in the driver's seat when it comes to your mortgage, so be sure to speak up when you think something is too high or ask for an explanation of every number that you see. If you're not happy, you can always look elsewhere for a lender.

Wednesday, November 28, 2007

Do You Really Need A Secured Loan?

If you've watched any amount of daytime TV, especially on minority channels, you can't fail to have seen some of the many adverts extolling the virtues of taking out a loan secured on your home. These adverts all seem to follow similar themes - a busy family situation with smiling children but a somewhat saddened parent pondering on their financial troubles, with the suggestion that taking out a loan will free you from your financial worries and lead to a brighter, happier life.The implication of these promotional messages is that taking out a secured loan is a beneficial part of everyday life, and one which you'd hardly need to think twice about pursuing. In actual fact, a secured or homeowner loan represents a very significant financial decision with ramifications far into your future, and at least one loan company has recently been censured by the financial regulators for not sufficiently emphasizing the gravity associated with such a financial commitment.Of course, there are times in life when we really do need a helping hand, especially when existing debts are becoming unmanageable or we're faced with an essential but unaffordable expense. In these kinds of situation, a secured loan can work out well if properly researched and planned for.However, many people are tempted by the prospect of having some extra cash available to buy luxuries or improve their homes, and take out a loan when they don't really need one, or take out a larger loan than is necessary to fix their financial problems. This is a very bad idea, as the whole point behind a secured loan is that you're using your house to guarantee that the debt will be covered. If you get into difficulties somewhere down the line you run the very real risk of losing your home. You may also be tied to your loan for a long period of time, with repayment terms of up to 25 years not uncommon. The amount of interest you'll pay over that period can be considerable, and if you work out the figures you can easily find that you're paying well over the odds in the long term for a short term luxury.Not that this means that you should never take out a secured loan, but it will stand you in good stead to properly consider whether the serious commitment of a secured loan is the most suitable course of action to take, or whether an unsecured method of finance such as a smaller personal loan or an cheap rate credit card might be a more sensible option.After all, if you do have money worries at some point in the future, the last thing you'll need is the additional stress of facing the prospect of losing your home.

Tuesday, November 27, 2007

What is a Bad Credit Mortgage?

Things such as County Court Judgements (CCJ's) or a poor credit history can scupper the chances of you getting a personal mortgage because mortgage companies deem you a high risk.If you are self-employed, and even have a pristine credit history, you may find it just as difficult to get a mortgage due to your circumstances, which is unfair.However, there are more and more specialist mortgage companies that are sympathetic and able to offer bad credit mortgages to people - as well as mortgages for the self employed.Many of these companies do not charge excessively high interest rates as they have done in the past, meaning that you should be able to get a mortgage and pay a fairly realistic interest rate. Apart from the obvious benefit of taking out a mortgage for whatever purpose you need it for, having a mortgage can actually improve your credit scoring - making it easier for you to borrow money and get credit in the future! However, you will need to make your monthly repayments on time, and this will help improve your credit score over time.Of course, when choosing a bad credit mortgage, do shop around. While there are understanding lenders out there willing to provide a mortgage without charging you the Earth, there are still, sadly, some unscrupulous mortgage companies.Do your homework - get several quotes; check out the interest rate and any financial penalties you would be liable for should you pay the mortgage off early. And make sure you are fully happy with the amount you are repaying.How the web can help you if you are looking for a bad credit mortgageIf you have a poor credit history, finding a mortgage specifically for people with bad credit can be difficult. And even if you do find a mortgage, how do you know that it is the right one for you?Using the internet can help. There is tons of information on there relating to bad credit mortgages such as free guides, as well as access to providers of bad credit mortgages.Going online also allows you to compare multiple providers so that you can look at all the product features and benefits to decide whether it is right for you. There are also websites that accept online mortgage applications and there are hundreds that offer free and immediate online quotes. This means that you can see how much you can really afford to pay out for a mortgage.

Monday, November 26, 2007

Can your Mortgage be your Savings Account?

It is becoming increasingly popular to use a mortgage in lieu of a low-interest savings account. Is this a good idea?The latest version is a home-equity line of credit that is used to buy a home. It is marketed as a way to pay down your mortgage faster than the traditional mortgage. But it only works at this if you use it correctly. It could be both good and bad that you can use the funds from the account whenever you want to. All you have to do is write a check.It is basically an adjustable-rate home-equity credit line that is based on the value of the property. You make interest-only payments for the first 10 years. The balance is then fully amortized over the next 20 years. You will pay both the interest and the principal at this time.If you go ahead and own the home for ten years, you could be facing amazing monthly payments. Your monthly payment could more than double on you. Yet, there is no negative amortization on this loan program. The interest is capped for five years and high-credit score borrowers are currently looking at a cap of 8% over the starting rate. In today's world, the maximum the interest rate could hit is in the 14% range. Yet, after five years, the cap could revert to either 21% of the state's usury.This plan could work well for the dedicated purchaser who puts all extra money and bonuses into the mortgage account as payment on the balance. The interest is then lowered and the loan is paid off much faster. Most borrowers must have a score of over 660 to be approved.Many advisors suggest the use of a 30-year fixed-rate mortgage with interest-only payments for the first ten years instead. Yes, the payment will go up after the inital ten years, but the interest rate won't. The concern against the equity-line to purchase is that borrowers would simply write checks without thinking about the addition to their mortgage balance. Plus, the interest rate is adjustable -- always a risk.If you are considering an alternative loan program for the purchase of your home it is important that you sit down and do all of the necessary math. For example, you should calculate how high the payment could go due to rising interest rates on an adjustable rate mortgage. You should be able to afford the worst. If you can't, you probably should look to a less expensive home.If you only plan on living in a home for three to five years, a loan in which the interest is fixed for five years is perfect for you. You get the lower rate, but you have to be sure that you are going to want to move in the time period. It still remains that the best long-term bet for a mortgage is the 15-year fixed rate mortgage. You pay less interest and build equity faster.Other new trends to watch for in the marketplace include mortgages that can be automatically converted into reverse mortgages and longer fixed-rate term mortgages.

Sunday, November 25, 2007

Get a Mortgage With Bad Credit

In the old days if your credit history was less than perfect, the only mortgage you would be offered would be one with extortionate interest rates from a shady broker. Nowadays, there are more sympathetic lenders who will offer you a bad credit mortgage without charging you sky-high interest charges. And because there are more lenders out there now offering these non-standard mortgages, it has driven the interest rates on them down which is good news!The term ‘Bad credit’ can be anything from County Court Judgements (CCJ’s) on your credit file to something like having missed a mobile ‘phone payment or made a few mortgage payments late. More and more people now have a ‘bad’ credit file. Rising inflation and credit companies making it easier for people to borrow means that just because you have a bad credit file, you are not rubbish with money!So, what can you do to get a mortgage, without being ripped off by greedy lenders?First of all, if you are considering using a mortgage for debt consolidation, do bear in mind that it will probably cost you more in interest in the long run. And also the debt will be secured against your home, so you must really ensure that it is affordable to you.And when it comes to choosing a mortgage, do not apply for the first mortgage that you see. TV adverts saying that they can help people with bad credit are all very well – but many of them charge as much as a 3% fee to arrange a sub-prime mortgage. So, on a £150,000 mortgage, they get £4,500! Get independent advice from an independent mortgage specialist as well as doing your own research. ‘Bad credit’ no longer has the financial stigma it used to, so hold out for the right deal for you. How the web can help you if you are looking for a bad credit mortgageIf you have a poor credit history, finding a mortgage specifically for people with bad credit can be difficult. And even if you do find a mortgage, how do you know that it is the right one for you?Using the internet can help. There is tons of information on there relating to bad credit mortgages such as free guides, as well as access to providers of bad credit mortgages.Going online also allows you to compare multiple providers so that you can look at all the product features and benefits to decide whether it is right for you. There are also websites that accept online mortgage applications and there are hundreds that offer free and immediate online quotes. This means that you can see how much you can really afford to pay out for a mortgage.Steps to improve your credit ratingIf you have recently applied for credit and have been turned down or you have been offered credit but at higher interest rate than advertised, then this is probably because of your credit rating.Even if you never miss payments or do not have any debts such as a loan or credit card, you could still have a low credit rating.This is because you can be penalised if your credit record is empty. Prospective creditors like to see positive entries on your credit fie and if you have no financial history, they are unable to judge how well you manage your credit.The solution is to develop your credit file by adding positive entries on your record. Running bank and savings accounts as well as paying your mobile phone bills on time are a good start as are well managed credit card and store card accounts. If you do not have any credit accounts, then gradually apply for them. Don’t apply for lots of credit all one go as this will look like you are in financial distress. Instead, get one card at a time with a low credit limit and pay the balance off in full every month. Open up a bank and savings account. And pay your bills on time – even the small ones!Start building a financial history gradually and over time you will find it easier to get credit, and at a better interest rate too.

Saturday, November 24, 2007

Mortgage: First Time Buyer Tips

Taking out a mortgage is always a huge decision. With interest rates varying and different mortgages to choose from there are right ways to go about getting a mortgage and ways you shouldn’t. Taking your mortgage from the salesman who makes commission from selling is not the best way to go. In many cases, they are going to sell you the costliest deal possible so always shop around and to get an idea of the best deals available. That way you will be better informed should you choose to use a broker or financial adviser.Some companies will include mortgage payment protection insurance (MPPI) along with your mortgage but you should realise that in most cases, this isn’t compulsory. By including the cost of mortgage payment protection insurance in your mortgage, it can boost up the price by hundreds of pounds. Again by shopping around you can purchase MPPI independently at a much lower cost. Of course if you are looking for a 100% mortgage it will cost you more. By going, say, for a 95% mortgage with a deposit, your options are more open with greater savings being made on the repayments. An option you will then have to take into account is where you are going to get the deposit from. The bottom line is, shop around for your mortgage. Don’t go for the first one you are offered no matter how good a sales pitch you are given. Shopping online is a great way to make comparisons from many providers and also allows you to research the different types of mortgage available.Interest Only Mortgage a good option?Anyone needs to consider the type of mortgage they are going to take out before rushing into it, but for the first time buyer this is even more crucial.It is only common sense to go for the best deal possible, but you should also go for the shortest mortgage too. One type of mortgage to consider when taking the first steps in home buying is the interest only mortgage.Of course as with any mortgage, there are good and bad points to consider. In the long run, the interest only mortgage can end up costing more but the monthly repayments are less. By just paying the minimum interest payment you could leave yourself wide open should the housing market take a downturn. This means that you could be paying more for your mortgage than what the actual property is worth.A way to counteract this is by putting down a deposit of around 10% to 15%, rather than get a 100% loan. However, you then have to take into account how to raise the deposit. Whichever mortgage you choose to go with it is essential that you have researched it thoroughly and know you can afford to make repayments. Providing you can afford a mortgage and particularly if you think you might wish to sell within a few years, then an interest only mortgage could work to your advantage.

Friday, November 23, 2007

Mortgage: The Key Points that You Should Know

A mortgage is a kind of an agreement made to pay the money, which was loaned, to a person by keeping the house as collateral. Mortgage is a promise made to pay the debts by putting it in writing basically. Mortgages have terms and interest rates which are either adjustable or fixed.Mortgage terms: Mortgages are designed in such a way that they can be paid in installments for a certain period. The time frame which allows the person to pay back his mortgage is called the term. The term may be 10 or 15 or even 30 years. The length of the term determines the amount of money to be paid, which is actually spread in installments.Mortgage interest rate: The interest rate depends on the percentage to be paid on the mortgage loan amount. The interest rates vary according to the credit score of the person. If the credit score of the person is very high, the interest rate and the amount of monthly installments are lower. If the credit score is lower then the interest rates and the monthly installment amount are higher. Hence a good credit score will help getting lower interest rates to the debtor.Types of mortgages:Mortgages - Adjustable rate of interestUnder this type of mortgages, the interest rate changes from period to period according to the fluctuations of the market. The degree of change of mortgage interest rate is directly associated with the index to which it is tied. Since index will differ as they may be tied to a foreign bank rate of interest in certain cases, it is good to ask to which index the adjustable rate of interest is tied to. Usually they are fixed for a period of 1-5 years and then become adjustable.Mortgages – fixed rate: The interest rate of the loan amount is fixed in the case of fixed rate mortgage till the end of the term regardless of the market fluctuations. The debtor will never have to pay more than the fixed interest rate at any cost. The only means by which a fixed rate mortgage can change is through Refinancing.Refinancing: It is a process of changing the existing mortgage terms of agreement. The debtor can go for refinancing when the interest rates are lower so that he can save money qualifying for the lower rate of interest. The length of the term can also be adjusted to be either long or short using refinance option. Care needs to be taken when going for refinancing of mortgages as it entails for new closing costs. Fees and closing costs are involved in this method.Appraisal: The crucial part of mortgage is the appraisal. Before going for a loan from a bank, the value of the house must be assessed properly. An appraiser can determine how much the house is worth actually by inspecting the features of the house and by comparing it with the neighborhood houses. If any addition or embellishment is made to the house, it can raise the value of the house, but may require to appraise the new value of the document.

Thursday, November 22, 2007

Finding the Best and Right Mortgage Loans

The home mortgage might be biggest personal financial commitment of a borrower in his or her lifetime. Hence, it becomes very important to choose the right kind of home mortgage to save money as well as save from headaches which might crop up in the future. Mortgage is a kind of a pledge or guarantee made by the home purchaser or borrower to repay the loan to the lender. A right home mortgage loan can save thousands of dollars in the long run. Hence, it becomes very important and crucial to the borrower.Important factors to be considered while selecting the right kind of mortgage loans:The purpose for the borrower should be solved: The home mortgage selected should fit the purpose of the home buyer. If the home purchaser intends to live in the house he has purchased then the most suitable will be the home mortgage loan while an investor will need a residential investment loan.The loan structure: The loan structure or the type of loan should suit the interests of the borrower. It depends on the fact whether the borrower is interested in the flexible paying option or whether he is interested to pay at regular intervals, or whether he is interested to go for a variable interest rate or a fixed interest rate, or requires an additional credit option for home improvements or for purchasing a car etc. The term of the loan should also be suitable for the borrower in selecting the right kind of mortgage loans.Loan features too need to be considered by selecting the right kind of mortgage loans: To find out the features of the loans enough homework has to be done to analyze each and every feature of the loan, for making the right selection of mortgage loans.Features of many loan products are listed below for selecting the right mortgage loans: Some loans offer credit facilities which can be used for home improvements and furnishings by increasing the credit limit of the current loan. This avoids the need to go to another lender for borrowing money.Certain loans allow additional repayments through which the borrower can pay from their year end bonuses. This option saves thousands of dollars for the borrower and also reduces the loan period considerably.Accounts consolidation option helps to merge all the transactions. It simplifies the banking, saves money paid as interest towards the loan making every penny working for the benefit of the borrower.The option of income transferred to the loan account helps the borrower to save interest calculated on the mortgage, while allowing to access cash or allows to pay bills by making automatic transfers set into another transaction account.Linking the mortgage with the borrower’s transaction account enables every single dollar in the transaction account to offset the interest calculated on the mortgage.Parental leave option helps to reduce the repayments up to 50% for nearly six months time which is again subject to certain conditions and terms.Redraw option allows to get access to additional money paid over and above the normal schedule of repayments. Refix option allows to get into another fixed interest loan at the end of the present fixed interest rate term period.

Wednesday, November 21, 2007

Find The True Cost Of Your Mortgage

When comparing mortgages, it isn’t just a case of looking at the difference in interest charging and choosing the one with the lowest rate. There is so much more you need to consider finding out the true cost of a mortgage.First of all, how much is the arrangement fee? This can vary from lender to lender. Sometimes it will be a flat fee of around £500. With others it can be a percentage of the loan amount. With the latter, as an example, a charge of 1.5% of the loan amount as a fee equates to £2,625 on a £175,000 mortgage. Also look at valuation, legal, early redemption costs and exit fees. Some providers will offer a free valuation or similar as an incentive for you to buy their product which could save you money.Do bear in mind that overall, high charges do not necessarily mean that the mortgage product is a no-go. If you have a bigger mortgage it is more likely in the long run that you’d be better off choosing one with higher charges and a lower interest rate.The key is to sit down and calculate the overall costs for each mortgage product for the period of time that you plan to keep the mortgage.This will give you a solid basis when choosing the one that is the most financially attractive to you.Why Mortgage Affordability MattersMore and more mortgage lenders are now changing their criteria when considering how much they will allow you to borrow. Rather than basing it on multiple incomes, lenders are now actually looking at affordability.This is great news for homebuyers, particularly First Time Buyers (FTB’s). According the Council of Mortgage Lenders, FTB’s now get offered an average borrowing of 3.24 times their income. For most, this is not normally enough to buy where they want to live. However, this does not need to be the case. By looking at affordability rather than straightforward income multiples, lenders can see what a potential homebuyer can realistically afford. This is a real boon for potential borrowers, especially FTB’s trying to get that first foot on the property ladder.Moneyfacts, the independent research company, revealed that five of the top 10 mortgage lenders now look at affordability (also known as ability to repay) in preference to income multiples. The good news too is that even some of those lenders who still work on the income multiples basis have refined their criteria. This means that they may lend more where there are larger salaries or a bigger deposit involved. If you are looking to mortgage or remortgage, the most important thing is to borrow how much you realistically think that you can afford. Just because a lender believes that you can afford x amount every month, if you feel that it would be over stretching yourself, then don’t go ahead with the mortgage.Free Yourself From Fees!If you are looking for a new mortgage or remortgage, it is not just the interest rate that is important. While it looks like you may get a good deal initially, once fees have been added, it could be a whole different ballgame.There are around 8,000 home loans out there, so there is a wide choice. When choosing a mortgage, most people will look at how much their monthly mortgage repayments will be and then base their decision on that. However, while this is a valid exercise, you should not base your decision on which mortgage to take out solely on this figure. To ensure that you really are getting a good deal, you need to check out what fees you will need to pay. These could include one or all of the following: fees for booking, administration, arrangement and application; valuation or survey fees; and mortgage indemnity premiums (also known as a mortgage indemnity guarantee). And don’t forget to look at what fees you will be charged once you come to moving your mortgage such as early redemption penalties and exit, sealing and deeds fees.The latter, in particular, has recently come under the scrutiny of the Financial Services Authority (FSA). In June 2006, lenders were warned that massively increasing exit fees could be unfair. It has asked for justification of these hikes.So take a bit of time to check out exactly what fees you will be charged - it could save you money in the long run

Tuesday, November 20, 2007

10 Questions to Ask Your Mortgage Lender

When you sit down with a mortgage lender, you should be the one in the driver's seat; after all, you are the one that will be paying for this mortgage in the coming years. To help you stay in control of the things that are happening as well as stay informed of what you need to do next or if you are dealing with the right lender, here are ten questions you need to ask.What is the interest rate I will be getting with this mortgage?Obviously, this is the most important question that's already on your mind. In order to negotiate for a good interest rate, you need to ask what you will be offered from a number of lenders, keeping in mind that a poor credit rating might be negatively affecting what you can expect.Can I set up a way to lock in my interest rate?The goal of any home mortgage is to get the lowest interest rate. But if this isn't possible in the current market, you might want to choose a loan that has a variable interest rate, keeping you available to lock in the lowest interest rate once it comes up in the market. This means that you might have to pay a higher interest rate for a while.And depending on the lender, you might need to stay in this variable interest rate setup for a certain time period. Check to see just how long that is and how much it might cost you to lock in your low interest rate.A good interest rate of about 6 to 7% is something a person with good credit can expect to get, though this does vary from region to region, lender to lender.What are closing costs can I expect?This question is especially important when you don't have a lot of money to spend during the mortgage process. If you can determine the amount of the closing costs now, you can add these onto your loan to help you move the purchase along.Will I be penalized if I pay my loan off more quickly?If you've set up a 30 year fixed mortgage payment plan, but you think you can pay it off more quickly, check to see how much it might cost you to do so. Since the lender will be losing money from the interest you won't be paying on the loan, they tend to create a penalty for those that pay off their homes sooner.What down payment is necessary?In most cases, the lender will require that you provide 10 to 20% of the home's value as a down payment. However, this is not necessarily something that needs to come from your pocket – at least, not right now. You can actually add on the down payment to your mortgage with some lenders.Find out what the down payment will be and then if you can create a loan plan that will handle those costs too.How many origination and discount points will I be responsible for?If you don't know what points are, read up before you head in to talk with your lender. These points can mean that difference between a high mortgage payment and additional costs and having a very reasonable agreement.How long will the loan process take?If you have a particular house or moving date in mind, knowing how long the lending process will take will help you choose the best mortgage company.What might delay my loan or the approval of the loan?By finding out what the potential problems can be during the loan process, you can make sure you are avoiding them.What do I need in order to qualify for this loan?This is a great question to ask when you're not in the market at the current time. It will give you a change to get your credit and your affairs in order so that you are the best possible candidate for a mortgage agreement. Ask the lender to be as specific as they can about what you need to do.What documents will I have to have available? Since not all of us are great record keepers, you will want to ask well in advance of your loan process what you will need to find and have on hand for your loan application.

Monday, November 19, 2007

Best Type of Mortgage for Investment Properties

Considering buying properties either as investments or to sell? If so, you need to look at mortgages differently. In order to make the most money, borrow as little money as possible. Remember: retaining the capability to turn the property around to the buyers without causing you payments in the process is important. Thankfully, there are several ways that you can mortgage these investment properties to everyone's benefit.What Can You Afford Now?As with any business, there is an initial start up fee. In the investment properties business, this means that you will make payments on any property that you are unable to immediately sell again (or 'flip' as the popular term is). However, if you do not have a lot of money to spare, there are ways to ensure that you can still get into real estate sales without having to spend a lot of your money in the process.Take a moment to review your current financial status. If you can afford a down payment on a house, you may want to go ahead and use this to your advantage. With every subsequent house, you will then be able to use that same equity to help build your profits as well as the number of investment properties you have.The Best Mortgage for YouSince you want to spend as little money as possible when you are buying properties to sell, you will want to choose a mortgage agreement that requires little money from you over the time when you will be trying to sell the property. For example, you may want to choose a no deposit loan as this will help you cut down your costs, plus the initial mortgage payments will be smaller than they would be in a traditional mortgage agreement. Also, look into hybrid loans that allow you to have certain time periods in which you will pay certain interest rates and then they will increase to higher interest rates (and thus mortgage payments). This will also give you some motivation to sell off those properties before the payments become higher for you.All in all, you will want to choose a mortgage in which you will spend as little money as possible. Other options include the 80-20 mortgage and any of the newer exotic loans that are available for homeowners and real estate investors. Look for loans with low initial interest rates or loans that pay off the interest first too.How to Get the Best Loan for Your NeedsWhen you find a property that you wish to sell, you will need to sit down with several banks and lending institutions that will assist you with your loan. Explain your plan for the property as well as what monetarily you are able to contribute. It is best to work with lenders that work with other investment property holders as they will have a better idea of what your needs are and what has worked for them in the past.When you are investing in real estate, you are investing in a win-win business. Since everyone is interested in either owning or leasing their own place, you will never run out of possible ventures of increasing your revenue. The key is to pay as little money as you can during the purchasing process - and there are plenty of loans that can help you.

Sunday, November 18, 2007

Where to Start When You Have Bad Credit

Whether they realize it or not, more people than ever have bad credit. When it comes to buying a home, this is bad news for the prospective buyer. If you are ready to buy a home, you need good credit in order to impress the lenders you will be asking to loan you money. But sometimes it can be confusing to see where you should begin to repair your credit. With so many leaks in your financial history, how do you begin to plug them up?Find Your Credit ScoreThe best thing you can do is find credit score. This is a free process in most cases. Each citizen is entitled to one free credit report every year. Even if you already have your credit report, you can also pay to receive this report from one or all of the three major credit reporting agencies – Experian, Equifax, and TransUnion. This report will tell you what your rating is from 350 to 850. The higher your credit rating is, the better you will look to lenders. While you may never have a perfect credit rating, you want to have it as high as possible.Look at Paying Those Bills on TimeOne of the easiest ways to help improve your credit score is to start paying your bills on time every month. When you don't make a payment on time, it affects your credit score negatively, which can cause lenders to be hesitant to lend to you. After all, if you can't pay your regular bills on time, they may worry that you won't pay your mortgage payments on time too. If you have troubles paying your bills on time, you need to look into automatic bill pay options. This will deduct the money from your checking account every month so that you don't have to write a check and mail the bill physically. If this is not something that appeals to you, you may also want to set up a filing system at home that reminds you when you pay your bills on time. Remember to send your bills at least a few days before they are due to be sure they arrive on time.Reduce Your Credit Card DebtThe biggest concern for many would-be homeowners is their credit card debt. With the average credit card debt total around $2000 per household; it is no wonder than more people are seeing red when it comes to credit cards. However, in order to increase credit card ratings, the first step is paying these debts down. When you carry higher balances, it can seem as though you are living beyond your means and that is not what a lender wants to see. Try paying more than the minimum balance each month in order to reduce the balances as quickly as possible.Think about Credit CounselingIf you are still having trouble with increasing your credit score, you might want to look into a credit counseling service. They can talk to your credit card companies to get your interest rates reduced, thus reducing your credit card balances more quickly. These companies can also help you learn better spending practices to help you learn how to spend and save more wisely.Getting rid of bad credit is simple when you know what caused the trouble in the first place. From this point on, show lenders that you are a reliable customer.

Saturday, November 17, 2007

Co-Signing a Mortgage for Your Child

When your children get older, it's absolutely normal for them to strive to become independent, and living separately is the first step towards that. And it is also absolutely normal for you as a parent to be willing to help your children as much as possible. So, when your child decides that the time has come for him or her to buy a home of his/her own, should you assist by co-signing the home mortgage? This is a very tricky matter, and it takes a lot of thinking to decide what is best for you both, because co-signing a mortgage for your child can with equal chances turn out to be a very good idea or not so good at all. Everything depends on what you want your role to be.First of all, let's look into the concept of co-signing in general. Why would a lender require a co-signer at all? The answer is simple: a lender will only require a co-signer, if an applicant for the mortgage does not meet all of the important criteria. A co-signer in this case is a person, who assumes responsibility in the event the borrower defaults on his mortgage obligations, e.g. fails to pay timely.The first thing you should do before making a decision on co-signing is to carefully study all the terms of the mortgage and the proposed scheme of payments. It's very important to have a clear idea of what you and your child are getting into and what is expected from you both in this regard. Is your son or daughter actually ready for all those house payments? If he/she needs a co-signer, the answer to this question is quite likely to be "no".If the financial status of your son or daughter is not quite sound, co-signing a mortgage for him/her may be a very bad idea, unless you have enough money to take the blow or just like to risk. It can once come and backfire on you, which is surely not what you want. So in this case the risk is probably not worth it, because you wouldn't like to get into a situation in which the only thing that can happen to you is something bad. If this is the case, the wisest idea would probably be to convince your child to wait until he/she becomes financially sound and the situation becomes less risky for both of you.If your son or daughter is overly anxious about getting a house, try to explain him/her that it's not a failure if they do not achieve this goal right away - on the contrary, getting a house to quickly may well turn out to be a failure. In order to be ready for all the necessary house payments, your child should be financially backed, and the only way to achieve this is to work and build up a solid credit score. A good credit score means a possibility to make a good down payment and keep the monthly payments on a reasonable and affordable level, which is surely better than buying a house on high interest and oversized monthly payments. The main thing your child needs to realize here is that being too anxious will not pay off. Only patience and common sense will help to achieve the goal.So, if the financial risk behind co-signing is too large, talk to your child candidly and explain why such responsibility is too much for you to take. However you should also explain him/her how he/she can work to improve the situation and make it acceptable for both of you. If everything is done correctly, in the end your child will not need a co-signer at all, which would be the wisest idea possible.

Friday, November 16, 2007

Pre-Payment of Home Mortgages: to Be or not to Be?

We all have home mortgages and have to pay monthly mortgage payments that put a substantial burden on our budget. And we all want to get rid of that payments as soon as possible. So if your current financial situation allows you to repay you mortgage early, why not go for it? It could be a wise thing to do, if you can afford it, but there are some matters you should account for. Let's see, what things you should pay special attention to when paying your mortgage off ahead of time.Advance repayment sounds like a totally good idea both for you and for your lender company, and the common sense says that your lender should appreciate such decision. But the main catch here is that in fact some lender companies don't want you to pay early. Why? The answer is very easy: they take advantage of the interest you are paying and are willing to extend the interest payment period for as long as possible. That is why, in order to prevent early repayment, some lenders often impose pre-payment penalties on their borrowers, and those penalties can sometimes be even worse than the interest you are paying. Thus the first thing you should do is to check whether your mortgage provides for pre-payment penalties and how large they are, because if this is the case, it would probably be wiser for you to give up the idea of early payment - the game might well not be worth the candle.Now the second matter: calculate what you will be saving by early repayment, because that's the way to find out whether pre-payment is worth the effort. Decide how much extra principal payment per month you can afford on top of your usual monthly payment, and then calculate by how much this will reduce your overall mortgage repayment period. Sometimes as little as extra $25 per month can in the end cut your repayment period by two full years. You need to know whether those extra payments are worth your effort and time, so take time to calculate the whole scheme in advance.Finally, you should do all the planning yourself - at least as much of it as you can. Do not let the lenders decide for you. They might think that they know the matter better than you and might try to tell you what to do, but in fact you are the only one who actually knows your situation. Plan you budget before you go for early repayment and see how much extra you should pay per month and whether you will be able to afford it. Account for all the possible factors - you are the only one able to do this for your particular situation.Summarizing the above, let's emphasize that repaying your mortgage as quickly as possible is ideal, but only in case it is done correctly. Use your head, calculate and plan everything carefully and make sure that everything you do with regard to your mortgage is in your best interest, because you surely don't want to pay more than you have to or end up with holes in your budget.

Thursday, November 15, 2007

Avoid Disqualification For Mortgage

For new homebuyers the common mistake is buying up things to fill the homes. In doing so they will not found any difficulties as the lender will provide them enough money whereas the seller has nothing to refuse the deal. But some hurdles are still there invisible to the naked eye and should be overcome before you make some decision. Things which you need to avoid during the process of home buying to ensure your transaction will go smoothly are:-a. It is always tempting for buying new items to make your new home a comfortable one. Major purchases including electronic equipment, jewelry, cars, or furniture must be avoided until you finish your home and all the transactions. Financing these stuffs when you are already paying up transactions for your home could jeopardize your credit worthiness no matter whether you use your own credit card or a store credit card. Using cash to buy these products also have some impact on approval of your mortgage where banks take into consideration of the cash reserve of the borrower. b. The mortgage process needs a permanent job or at least the client must be working for last three years. Lenders often want to see about the job consistency of the client. Frequent change of jobs might not affect the qualification for a mortgage loan especially when it is for making more money but surely raise some concerns among the lender.c. For mortgage process the lender needs bank statements of the client for about the last two or three years in terms of checking accounts, money market funds, savings accounts and other liquid assets. They go thoroughly to avoid any type of potential fraud. In this situation changing of banks or transferring money to other accounts will create difficulties for the lender in documenting the funds.d. Even after your loan pre-approved by the lender don’t disregard the requirements of the lender. Supply them all the necessary documents such as bank statements, W2s or any other paper works. Failure in providing such important documents may cost you the loan. To finalize the process you need to submit these documents.e. There is one important thing you must remember in mortgage process. You should not deposit a good faith directly to the seller in a FSBO purchase. This belongs to you until the deal finalized. The FSBO seller must not know the good faith fund is applied at your expenses; instead you could take the help of a third party till the deal closes. In case the transaction fall through you must be sure that the purchase contract dictates to you.

Wednesday, November 14, 2007

Tips on Finding a Mortgage with Bad Credit Score

Bad credit score is not an uncommon thing. The question is, can you actually qualify for a mortgage if you have a bad credit? The simple answer is: yes, you can! Even if your credit is less than flawless, you still have a chance to find mortgage that will meet your requirements and suit your needs. The main trick here is that you will probably have to put down more money than in case of a usual loan just to convince the lender of your reliability, but after that your monthly payments will be the same as for a borrower with a flawless credit.There are several ways to find a bad credit lender. The best place to start your search would probably be online. There are some internet-based companies directly specializing in lending money to individuals with bad credit scores, and such companies will be willing to work with you and will propose you the best rates they can. Perhaps that would be a right way to get funds for the house you want.Another place to visit is your bank. Of course, most banks will treat you as a giant risk and will most likely refuse to lend money to you, but they might as well point you in the right direction - they may know and advice you to turn to some lending companies that can potentially be willing to work with you.After all, you can just ask other people - maybe some of them were in similar bad credit situations and know where to turn to for reasonable mortgage options.Once you have found a few lenders willing to lend money to you, you should do a careful research to choose the one that suits you the most, and below we shall discuss the main points you should pay special attention to.First of all, ensure that the lender is credible. Check the actual company to make sure that it is legitimate.Second, verify if there are any additional costs. Most likely you will have to make a large down payment, but that is normal in a bad credit situation. The thing to be on the lookout for is that there are no additional monthly fees or overly high application costs. Don't neglect this point - checking it in advance can well save you from a lot of trouble in future.Finally, check out all the basic facts, as you would do with a usual mortgage. Is the mortgage fixed or adjustable? Can you pay off more each month without penalty? Whatever your credit score is, these basic matters do not become less important.All in all, be very careful when choosing a lender - having a bad credit does not mean that you can't find a suitable mortgage option that will provide reasonable rates and save your money. On the other hand, remember that if an option looks too good to be true, then most likely it actually is.

Tuesday, November 13, 2007

Choosing a Mortgage: Adjustable Rate vs. Fixed Rate

What type of mortgage to choose is a very important question when buying a house. Will it be more appropriate to choose an adjustable rate mortgage (ARM) or a fixed rate mortgage? Many potential homeowners ask this question, willing to know what are they in for with this two options. The first thing to understand here is that the type of mortgage you choose actually determines the amount of interest payable and the overall size of your monthly mortgage payments. Initially ARMs offer lower costs, which look very attractive to smart investors, but the reverse side of this option is that the mortgage rate is subject to fluctuation, which introduces high degree of uncertainty. Fixed rate mortgages, on the contrary, provide high degree of certainty, but are generally more expensive. Thus your particular situation will determine what type of mortgage is more suitable for you, and in this article we shall try to give you some hints that will hopefully help you in choosing between the above two options.ARMs are a great option for homeowners who don't intend to live in a house for a very long time: if mortgage rates are falling and you are not planning to live in the house for a period long enough for them to start rising when the market situation changes, then an ARM might be your perfect choice. Moreover, because ARMs offer lower rates at the initial stage of the mortgage period, you get a chance to buy a larger and more expensive house that you could afford with a generally more expensive fixed rate mortgage. Besides, if you a lucky enough to see mortgage rates falling during your mortgage period, then, with an ARM, you are able to take advantage of lower monthly payments and save some of your money.But ARMs also have a substantial downside, which is a possibility of mortgage rates to dramatically increase over a short period of time. To partially eliminate the devastating consequences of mortgage rate rises, ARMs provide lifetime caps, but these caps can sometimes be reached in as short as three years since the beginning of your mortgage period.Fixed rate mortgages are much more secure, because they do not depend on fluctuating factors like inflation or current situation on the housing market. Whatever happens, you always have the same monthly payments, which gives you a better chance to plan your budget and presents less surprises during thee mortgage period. Fixed rate mortgages are thus generally easier to understand and are much more stable than ARMs.But there are downsides in this option as well. Since the mortgage rates are fixed and independent of market fluctuations, a borrower will have to refinance his home in order to take advantage of falling mortgage rates, which requires a lot of additional paperwork, closing fees, processing fees etc. Besides, fixed mortgage rates are almost identical in all banks, and thus a potential borrower will not have much choice when searching for a lender.Well, these are basically all the main facts. Carefully assess you current situation before making a choice - you surely want to get the best deal possible.

Monday, November 12, 2007

How can you benefit from a Reverse Mortgage?

Reverse mortgages are government insured home loans specifically designed for senior homeowners. This type of loan allows a homeowner to payoff their existing mortgage along with a combination of the following: establish a credit line, receive monthly checks, or withdraw cash. The amount of cash available depends on many factors, which we will discuss shortly. If you choose to get cash with your reverse mortgage loan, you can choose from the following methods:Tenure – equal, monthly payments. Modified Tenure – line of credit combined with monthly payments. Term – equal, monthly payments for a fixed period.Modified Term – line of credit combined with monthly payments for a fixed period.Line of Credit – payments or installments at the borrower’s discretion (much like a standard credit line – use the money only when you choose to).Perhaps the most worthwhile benefit of a reverse mortgage is that the borrower will not be required to make any mortgage payments for the duration of their stay. That’s right: zero payments for the rest of their life or until they move from the home. As you can imagine, zero house payments could drastically alter a person’s lifestyle in a positive manner and could do so almost overnight. In regards to qualifying for a reverse mortgage, there is yet another benefit that is often over-looked: you do not need to verify your income since the loan is based on your home’s value. There are no payments to be made, remember? Essentially, you do not need any income nor do you need an outstanding credit report. When reverse mortgages were first introduced, they allowed the lender to have a stake in the future value of the home. In essence, the lender would profit from your equity even if it extended beyond the original loan amount. Fortunately for seniors, times have changed for the better: regardless if your home goes up or down in value, you will never owe more than the loan amount or your home’s current value, whichever is lower. Another question often asked is: can I outlive my loan? You can never outlive a reverse mortgage loan. So long as you are alive and living on the property, you will never have a mortgage payment for your reverse mortgage. Nor can a lender take your home away from you. As long as you live in your home, pay your taxes and insurance, you can live indefinitely in your home without making a single payment. The amount of money that can be borrowed with a reverse mortgage is dependent upon many factors, including but not limited to: the age of the borrower, the amount of money currently owed on the home, the interest rate, the value of your home, and FHA’s lending limits for your area. Typically, the older you are and the less money you owe on your home, the more you can borrow. However, every situation is unique. To get an accurate, approved loan amount, you should speak with an approved reverse mortgage lender or broker in your local area. Do not be intimidated about contacting a loan broker! HUD requires that you speak with an approved, HUD counselor prior to any loan funding to ensure that you are fully aware of how a reverse mortgage works. You may call 1-800-569-4287 to acquire a list of FHA approved lenders for your particular area. They can also give you names and phone numbers for HUD-approved counseling agencies. Reverse mortgages are truly designed to help seniors live a higher quality life. If you or someone you know is 62 years of age or older, you should take the time to find out about a reverse mortgage.