Directory of Mortgage

Mortgages Rates Services

2009-01-23T06:52:00.000-08:00

Helpful tips on how to get the lowest mortgage rate. This article will tell you how to save money on your mortgage rate.

Are you in the market for a new house, or thinking about refinancing your current home? You can save money on mortgage rates by shopping around for the best quotes. This can take days, or weeks of your precious time on the telephone and visiting the lenders to get the information you need, then compiling them so that you can compare your findings against each other, but there is an easier way.You can get mortgage rate quotes online in masses, and fast, too. Just by putting in some basic information about the mortgage you want, you can retrieve instant results of anywhere from 25 to more than 100 lenders, which are listed so that you can easily compare them. You can do this without entering any of your personal information, too. It doesn’t get any quicker or easier than this. Visit www.buildwish.com and select get free quotes / mortgages.The process of finding home mortgage quotes online is simpler than you might think. The first thing you do is enter your loan amount. If you are unsure of the amount you will need, type in a reasonable amount based on your home searches. If you are finding that the homes you like are around $200,000, then use that amount minus any down payment you have to put toward it as your loan amount. It doesn’t have to be exact. The next thing you need is the property value. Again, if you are still in the search phase for your new home, then make up a reasonable amount. If you are refinancing, put in the current value of your home. An appraisal is a good way to find your current home value, but an appraisal will be necessary to obtain a mortgage and this will be double the cost if you get one on your own and then the mortgage company wants a new one. Estimate the current value of your home based on the last appraisal and what other homes like yours are selling for in your area.Finally, type in the zip code of your home or the zip code of the area you would like to buy a home in. If you only know the city, you can easily look up zip codes online for that city or you can give your local post office a call. That is all the information you should ever need to give when searching for home mortgage quotes online.Once you click submit you will be given a list of lenders and their current rates to choose from in an easy to read and compare format. Simply choose the lender that best fits your needs and you can apply online for your new mortgage. If you’re not ready for a mortgage right away, but were just checking for quotes, save the website that you searched, but don’t count on the rates being the same the next time you look. Mortgage interest rates change on a daily basis so be prepared to search again when you are ready. An early mortgage search can give you an idea of which lenders best fit your needs, and which ones will save you the most money when refinancing or buying your new home.For more Information on this topic visit www.buildwish.com a free Online Home & Garden Renovation & Design Directory in 100 Cities in North America. Featuring millions of Real Estate Classifieds, Helpful Articles, Contests, Virtual home tools, Qualified Trades, Forums, a moving center, free quotes for Insurance, Moving, Mortgages, Contractors, Find Foreclosures and Much More!

Mortgage Rates Loan

Revised and updated with rates that reflect todays real estate mortgage market, this pocket-size handbook presents quick-reference number charts that eliminate the need for calculation. As such, its tables are time-savers for business students, loan officers, and buyers seeking an adjustable rate mortgage. The tables are as follows: Monthly Payments, Payment Adjustments Resulting from Interest Rate Adjustments, Borrowers Worst Case Annual Percentage Rates, Borrowers Worst Case Monthly Payments, Annual Percentage Rates for First Year, Value of Below-Market Initial Rate, Annual Loan Balance Reduction, and Worst Case Annual Percentage Rate for Convertible Adjustable Rate Mortgages.

US mortgage rates fall to lowest level in decades

Washington, Jan 1 (DPA) Mortgage rates for 30-year-fixed home loans in the US fell for the ninth straight week and to their lowest level in 37 years, according to a report released Wednesday by financier Freddie Mac.The rate dropped in the final week of December to 5.10, down from the 5.14 rate the previous week, Freddie Mac said. For the same period in 2007, the rate was at 6.07 percent.

The mortgage rate has not been this low since Freddie Mac began the survey in 1971.

The crisis in the financial markets caused by risky home loans that brought about record defaults has sent the housing market plummeting and played a key role in sparking the economic slowdown.

“Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all time record low since Freddie Mac’s survey began in April 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist.

The US Treasury Department has moved to pump hundreds of billions of dollars into the finance market to buy out bad loans and rescue the industry. The Federal Reserve has announced a plan to buy up $500 billion in mortgage securities attached to government-backed financiers Fannie Mae, Freddie Mac, and Ginnie Mae.

The three firms have been faulted for risky practices along with other private companies who are blamed for bringing on the economic crisis.

Mortgage Refinance Rates Services

2009-01-23T06:08:00.000-08:00

Refinance Your Mortgage Rate

Behind many mortgages
there are two people. A man and a woman. While both of their names are on the paperwork
one of them never gets involved with the finances more than that.

This person never signs the check that goes out monthly to the mortgage company. Couldn't tell you what the mortgage balance is. Isn't sure what happens when the property taxes come due. And hasn't a clue about the homeowner's insurance (we have some
right?).

More often than not
this person is the woman. For some women
'finances' is a dirty word.

If you are the woman in your household and you don't even know what the interest rate is on your mortgage
it's time to get involved. And here's why.

* You need to know for yourself where your food and shelter are coming from.
* You are a role model to your kids.
* You need to get financially educated so you can help YOUR mom when she needs you to.
* This world isn't heaven...when the unthinkable happens (and some version of it probably will)
you need to be prepared as best as you can.
* You can't believe how good you'll feel when you learn to be in (better) control of your finances.

At this point you may be feeling overwhelmed. That's good! Because for many women
the feeling of overwhelm is a large part of what keeps them from getting involved with their family's finances. Now that you know that fact
you can do something about it. For starters...

* does your mortgage need refinancing? It won't take you much research to discover this one. Talk to your spouse or pull out your mortgage paperwork. What is the current rate? What type of mortgage do you have? Do a search online for 'mortgages rates' and you'll find a lot of information to get you started. Aim for learning enough to be able to have a reasonable conversation about the topic.

* what types of insurance do you have? Simply pull out a piece of paper and list all the insurance policies your family has. Identify each type of insurance (life
auto
home
etc.). Then do an online search on these insurance types and start reading. Look for informative articles
not insurance advertisements. If (when) you get confused
sit down with your spouse and ask questions. Or call up your insurance agent and make an appointment to talk. It's the agent's job to make sure you understand what you're paying for.

* do you have a household budget? For our discussion
you don't need to even worry if you are staying within your budget. Just play with the numbers and get comfortable knowing where your family's money is going. You are building awareness and understanding
not training to be an economics professor.

* do you have a will? How can you find out? Focus on asking questions one at a time and finding the answers to them. This will avoid a lot of overwhelm.

* go to the library and pick up a copy of any of Suze Orman's books. Read and absorb.

That's not so scary
is it?

Do yourself a huge favor and learn one or two new things each week about the financial world. It's a decision you will never regret and one that can have significant impact on the rest of your life as well as your family's life together.

Just take it one step at a time.

Mortgage Refinancing

Refinancing is when you apply for a secured loan in order to pay off another different loan secured against the same assets, property etc. If this original loan had a fixed interest rate mortgage which has now declined considerably, then you would like to avail of a new loan at a more favorable interest rate.

When is Refinancing an Option

Typically home refinancing is done when you have a mortgage on your home and apply for a second loan to pay off the first one. While taking the decision to go for the home refinancing option, it is important to first determine whether the amount you save on interests balances the amount of fees payable during refinancing.

Benefits of Home Refinancing

Imagine a scenario where you can have access to extra cash, while simultaneously lowering your monthly mortgage payment. This dream can become a reality through mortgage refinancing.

A house is the largest asset you may ever own. Likewise, your mortgage payment may be the largest expense you'll have in your monthly budget. Wouldn't it be great to use this asset to reduce your monthly payment and put extra cash in your pocket? When you refinance your mortgage, you can take advantage of the equity in your home and enable this to take place.

Lower Refinance Rate, Lower Payments

When you purchased your dream home, the financial environment dictated interest rates. While certain factors, like your credit rating and the amount of the down payment that you were able to afford, influenced your interest rate, the single most important factor was the prevailing rates at that moment. However, interest rates fluctuate. When the Federal Reserve enters a rate-cutting period, the prevailing rates may become significantly lower than when you originally purchased your home.

By refinancing your mortgage when interest rates are lower, you can exchange a higher interest rate for a lower one, which, in turn, will lower your monthly payment.

Shorten the Length of Your Mortgage when Refinancing

Another advantage of home refinancing is that you can shorten the term of your mortgage. Let's say, for example, that you originally had a 30-year mortgage and have been paying it for eight years. Thanks to mortgage refinancing, you can switch to a shorter term of either 10, 15 or 20 years. This can save you thousands of dollars of interest. Also, if the refinance rate is lower, but you maintain the same monthly payment, you will build up equity in your home more quickly, because more of your payment will be going towards principal.

Exchange an Adjustable Rate for a Fixed Refinance Rate

When interest rates are low, adjustable rate mortgages (ARMs) are the housing market's darlings. However, as interest rates increase, that adjustable rate may not look as sweet. It's also possible that you opted for an ARM because your financial future was less secure, or you weren't sure how long you'd stay in your home. If, however, you've become financially stable and know that you'll be staying in your home for several years, it may be beneficial to swap that fluctuating adjustable rate for a fixed one. You'll have more security knowing that your monthly payment will remain steady, regardless of the current market environment.

Access to Extra Cash - Cash-out refinancing

One way to put more money in your pocket is to tap into the equity you've built in your home and do a "cash-out" refinancing. In this scenario, you can refinance for an amount higher than your current principal balance and take the extra funds as cash. This can provide money for remodeling your home, paying off high-interest rate bills, or sending your kids to college.

Bye, Bye PMI

If you were unable to make a down payment of 20 percent when you purchased your home, you may have been required to purchase Private Mortgage Insurance (PMI). If your house has appreciated since then, and you've steadily paid down your mortgage, your equity may now be more than 20 percent. If you refinance, you will no longer need PMI.

In many ways, your house is like a cash cow. If you have discipline and knowledge of the benefits of refinancing, you can tap into its milk for years to come.

To find the best refinance loan offers complete our short form. You will find lenders and brokers that offer home refinance loans in California, Florida and all other states.

Mortgage Quotes Services

2009-01-23T05:33:00.000-08:00

Mortgage Quotes

Finding a good deal on a mortgage loan used to be challenging. If you wanted to find refinancing quotes or mortgage quotes, you'd need to play phone tag with bank after bank, or comb the financial pages of your local newspaper for more leads. Then, the Internet grew up. Today, your next mortgage is only a few clicks away, and the process of finding it is both quick and painless.

Starting gate for mortgage loan quotes

Let your fingers do the walking-your best bet for securing a variety of competitive mortgage loan quotes is to comparison-shop online. Mortgageloan.com offers you access to quotes from four to five different lenders by merely filling out a simple form. Set the on-screen options to fit your individual situation. Are you looking for a refinancing quote, or a rate quote for a new home purchase? A home equity loan or line of credit? Make sure to indicate the state in which your (prospective) home is located, and how much money you need to borrow. Then you're ready to hit "submit."

After that, you'll receive mortgage loan quotes from several lenders, with clearly defined loan points, interest rates, and APR figures. They can also provide details on anticipated closing costs. You may also receive e-mail follow-ups from local loan professionals who are eager to compete for your business.

Where's the catch?

If it all sounds simple, that's because it is. You could still spend hours submitting the same information to one bank at a time; but in this day and age of high-speed Internet access, there's really no need to. It's important, however, to understand the specific loan quote you are receiving. One lender may offer you a low pie-in-the-sky introductory rate that will eventually give way to a much higher regular rate. Make sure you compare apples to apples.

By using the Internet to find your mortgage, you'll no longer need to play phone tag. You'll have freed up so much time, the only tag you'll be playing is with your children.

Home Mortgage Quotes Online - How Do They Compare To a Quote From a Broker in The Real World?

Online home mortgage quotes are very similar to the quotes given by mortgage brokers in "the real world," except lower. With the reduced cost due to a simplified application process and reduce overhead for office space and personnel, online mortgage lenders can offer financing with no fees or lower interest rates.

Looking At Fees

Fees are the hidden costs of loans. Mortgage brokers are paid in fees or points on the mortgage loan. The advantage of a mortgage broker is that they find the best mortgage rates for you. So even with their fee added into the loan, you still can expect to save money.

Online mortgage brokers have automated much of the mortgage loan process, reducing costs. As a way to stay competitive, many of these lenders have eliminated or reduced their fees.

Interest Rate Quotes

Both traditional and online mortgage brokers can give you an instant generic interest rate quote to narrow your choices from a mortgage lender. However, to get a true quote, you will need to provide detailed personal and financial information. With a traditional mortgage broker, the process can take a couple of days to process the information and meet with the mortgage broker to review rates.

Online mortgage lenders connected all their databases to be able to provide you with a near instant quote. Occasionally there can be delays in processing your information if you have recently moved or changed names or jobs.

Difference Is Sales Styles

Online and traditional mortgage brokers differ in their sales style when relaying quotes to you. A traditional mortgage broker will use sales tactics to pressure you to complete the mortgage application right there. Many people feel the need to make a quick decision rather than taking the time to process the information.

Online mortgage lenders offer a different approach; they provided the information, then wait for you to take the next step. After requesting a mortgage quote, you will receive rates either through the website or through email that you can review at your own pace. You can choose to apply with a specific mortgage lender, or decide that none of them are best for you.

Mortgage Loan Rates Services

2009-01-22T08:01:00.000-08:00

Mortgage Rates Loan

Revised and updated with rates that reflect todays real estate mortgage market, this pocket-size handbook presents quick-reference number charts that eliminate the need for calculation. As such, its tables are time-savers for business students, loan officers, and buyers seeking an adjustable rate mortgage. The tables are as follows: Monthly Payments, Payment Adjustments Resulting from Interest Rate Adjustments, Borrowers Worst Case Annual Percentage Rates, Borrowers Worst Case Monthly Payments, Annual Percentage Rates for First Year, Value of Below-Market Initial Rate, Annual Loan Balance Reduction, and Worst Case Annual Percentage Rate for Convertible Adjustable Rate Mortgages.

Lower Mortgage Rates Not Sparking Home Buying

In a typical mortgage market, significant drops in mortgage rates would sweep in home buyers and mortgage refinancing. Not so in this market. In fact, several of the factors contributing to the recent decrease in mortgage rates are depressing home buying too.

Every politician in Washington has low mortgage rates and affordable housing cost on the top of their to-do list. Unfortunately, it seems that the recessing economy is working hard against that goal. A goal that is critical to putting a floor under housing prices and starting a housing recovery.

The average 30-year mortgage has again dropped this week and has consistently been in the 6 percent range for over a month. However, mortgage applications have dropped to an 8 year low. Meanwhile, foreclosures continue to add to the already bulging housing inventories--keeping housing prices in a downward spiral.

This is a trend that is likely to continue as investors continue to flee to the safety of Treasury bonds and government backed mortgage debt--stabilizing mortgage rates.

Lower and more stable rates should entice home buyers and home refinancing. But, there is more going on in the economy that overwhelms any appeal of low mortgage rates. Here are a few big factors working against mortgage financing and home buying

Mortgage Loan Services

2009-01-22T07:39:00.000-08:00

Mortgage loan

A mortgage loan is a loan secured by real property through the use of a note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan. However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan.

A home buyer or builder can obtain financing (a loan) either to purchase or secure against the property from a financial institution, such as a bank, either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably.

# 1 Mortgage loan basics

* 1.1 Basic concepts and legal regulation
* 1.2 Mortgage loan types
* 1.3 Loan to value and downpayments
* 1.4 Value: appraised, estimated, and actual
* 1.5 Equity or homeowner's equity
* 1.6 Payment and debt ratios
* 1.7 Standard or conforming mortgages

# 2 Repaying the capital

* 2.1 Capital and interest
* 2.2 Interest only
* 2.3 No capital or interest
* 2.4 Interest and partial capital
* 2.5 Foreclosure and non-recourse lending

# 3 Mortgage lending: United States

* 3.1 United States mortgage process
* 3.2 Predatory mortgage lending
* 3.3 Option ARM
* 3.4 Costs
* 3.5 The United States mortgage finance industry
* 3.6 Second-layer lenders in the US
o 3.6.1 Federal Home Loan Mortgage Corporation
o 3.6.2 Federal National Mortgage Association
o 3.6.3 Government National Mortgage Association
* 3.7 Competition among US lenders for loanable funds

# 4 Mortgages in the UK

* 4.1 The mortgage loans industry and market
* 4.2 Mortgage types
o 4.2.1 Self Cert Mortgage
o 4.2.2 100% Mortgages
o 4.2.3 Together/Plus Mortgages
* 4.3 UK mortgage process

# 5 Mortgage insurance
# 6 Islamic mortgages

Mortgage loan basics

Basic concepts and legal regulation

According to Anglo-American property law, a mortgage occurs when an owner (usually of a fee simple interest in realty) pledges his interest as security or collateral for a loan. Therefore, a mortgage is an encumbrance on property just as an easement would be, but because most mortgages occur as a condition for new loan money, the word mortgage has become the generic term for a loan secured by such real property.

As with other types of loans, mortgages have an interest rate and are scheduled to amortize over a set period of time; typically 30 years. All types of real property can, and usually are, secured with a mortgage and bear an interest rate that is supposed to reflect the lender's risk.

Mortgage lending is the primary mechanism used in many countries to finance private ownership of residential property. For commercial mortgages see the separate article. Although the terminology and precise forms will differ from country to country, the basic components tend to be similar:

* Property: the physical residence being financed. The exact form of ownership will vary from country to country, and may restrict the types of lending that are possible.
* Mortgage: the security created on the property by the lender, which will usually include certain restrictions on the use or disposal of the property (such as paying any outstanding debt before selling the property).
* Borrower: the person borrowing who either has or is creating an ownership interest in the property.
* Lender: any lender, but usually a bank or other financial institution.
* Principal: the original size of the loan, which may or may not include certain other costs; as any principal is repaid, the principal will go down in size.
* Interest: a financial charge for use of the lender's money.
* Foreclosure or repossession: the possibility that the lender has to foreclose, repossess or seize the property under certain circumstances is essential to a mortgage loan; without this aspect, the loan is arguably no different from any other type of loan.

Many other specific characteristics are common to many markets, but the above are the essential features. Governments usually regulate many aspects of mortgage lending, either directly (through legal requirements, for example) or indirectly (through regulation of the participants or the financial markets, such as the banking industry), and often through state intervention (direct lending by the government, by state-owned banks, or sponsorship of various entities). Other aspects that define a specific mortgage market may be regional, historical, or driven by specific characteristics of the legal or financial system.

Mortgage loans are generally structured as long-term loans, the periodic payments for which are similar to an annuity and calculated according to the time value of money formulae. The most basic arrangement would require a fixed monthly payment over a period of ten to thirty years, depending on local conditions. Over this period the principal component of the loan (the original loan) would be slowly paid down through amortization. In practice, many variants are possible and common worldwide and within each country.

Lenders provide funds against property to earn interest income, and generally borrow these funds themselves (for example, by taking deposits or issuing bonds). The price at which the lenders borrow money therefore affects the cost of borrowing. Lenders may also, in many countries, sell the mortgage loan to other parties who are interested in receiving the stream of cash payments from the borrower, often in the form of a security (by means of a securitization). In the United States, the largest firms securitizing loans are Fannie Mae and Freddie Mac, which are government sponsored enterprises.

Mortgage lending will also take into account the (perceived) riskiness of the mortgage loan, that is, the likelihood that the funds will be repaid (usually considered a function of the creditworthiness of the borrower); that if they are not repaid, the lender will be able to foreclose and recoup some or all of its original capital; and the financial, interest rate risk and time delays that may be involved in certain circumstances.

Mortgage loan types

There are many types of mortgages used worldwide, but several factors broadly define the characteristics of the mortgage. All of these may be subject to local regulation and legal requirements.

* Interest: interest may be fixed for the life of the loan or variable, and change at certain pre-defined periods; the interest rate can also, of course, be higher or lower.
* Term: mortgage loans generally have a maximum term, that is, the number of years after which an amortizing loan will be repaid. Some mortgage loans may have no amortization, or require full repayment of any remaining balance at a certain date, or even negative amortization.
* Payment amount and frequency: the amount paid per period and the frequency of payments; in some cases, the amount paid per period may change or the borrower may have the option to increase or decrease the amount paid.
* Prepayment: some types of mortgages may limit or restrict prepayment of all or a portion of the loan, or require payment of a penalty to the lender for prepayment.

The two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable rate mortgage (ARM) (also known as a floating rate or variable rate mortgage). In many countries, floating rate mortgages are the norm and will simply be referred to as mortgages; in the United States, fixed rate mortgages are typically considered "standard." Combinations of fixed and floating rate are also common, whereby a mortgage loan will have a fixed rate for some period, and vary after the end of that period.
Historical U.S. Prime Rates

In a fixed rate mortgage, the interest rate, and hence periodic payment, remains fixed for the life (or term) of the loan. In the U.S., the term is usually up to 30 years (15 and 30 being the most common), although longer terms may be offered in certain circumstances. For a fixed rate mortgage, payments for principal and interest should not change over the life of the loan, although ancillary costs (such as property taxes and insurance) can and do change.

In an adjustable rate mortgage, the interest rate is generally fixed for a period of time, after which it will periodically (for example, annually or monthly) adjust up or down to some market index. Common indices in the U.S. include the Prime Rate, the London Interbank Offered Rate (LIBOR), and the Treasury Index ("T-Bill"); other indices are in use but are less popular.

Adjustable rates transfer part of the interest rate risk from the lender to the borrower, and thus are widely used where fixed rate funding is difficult to obtain or prohibitively expensive. Since the risk is transferred to the borrower, the initial interest rate may be from 0.5% to 2% lower than the average 30-year fixed rate; the size of the price differential will be related to debt market conditions, including the yield curve.

Additionally, lenders in many markets rely on credit reports and credit scores derived from them. The higher the score, the more creditworthy the borrower is assumed to be. Favorable interest rates are offered to buyers with high scores. Lower scores indicate higher risk for the lender, and higher rates will generally be charged to reflect the (expected) higher default rates.

A partial amortization or balloon loan is one where the amount of monthly payments due are calculated (amortized) over a certain term, but the outstanding principal balance is due at some point short of that term. This payment is sometimes referred to as a "balloon payment" or bullet payment. The interest rate for a balloon loan can be either fixed or floating. The most common way of describing a balloon loan uses the terminology X due in Y, where X is the number of years over which the loan is amortized, and Y is the year in which the principal balance is due.

Other loan types:

* Assumed mortgage
* Balloon mortgage
* Blanket loan
* Bridge loan
* Budget loan
* Buydown mortgage
* Commercial loan
* Endowment mortgage
* Equity loan
* Flexible mortgage
* Foreign National mortgage
* Graduated payment mortgage loan
* Hard money loan
* Jumbo mortgages
* Offset mortgage
* Package loan
* Participation mortgage
* Reverse mortgage
* Repayment mortgage
* Seasoned mortgage
* Term loan or Interest-only loan
* Wraparound mortgage
* Negative amortization loan
* Non-conforming mortgage

Loan to value and downpayments

Upon making a mortgage loan for purchase of a property, lenders usually require that the borrower make a downpayment, that is, contribute a portion of the cost of the property. This downpayment may be expressed as a portion of the value of the property (see below for a definition of this term). The loan to value ratio (or LTV) is the size of the loan against the value of the property. Therefore, a mortgage loan where the purchaser has made a downpayment of 20% has a loan to value ratio of 80%. For loans made against properties that the borrower already owns, the loan to value ratio will be imputed against the estimated value of the property.

The loan to value ratio is considered an important indicator of the riskiness of a mortgage loan: the higher the LTV, the higher the risk that the value of the property (in case of foreclosure) will be insufficient to cover the remaining principal of the loan.

Value: appraised, estimated, and actual

Since the value of the property is an important factor in understanding the risk of the loan, determining the value is a key factor in mortgage lending. The value may be determined in various ways, but the most common are:

1. Actual or transaction value: this is usually taken to be the purchase price of the property. If the property is not being purchased at the time of borrowing, this information may not be available.
2. Appraised or surveyed value: in most jurisdictions, some form of appraisal of the value by a licensed professional is common. There is often a requirement for the lender to obtain an official appraisal.
3. Estimated value: lenders or other parties may use their own internal estimates, particularly in jurisdictions where no official appraisal procedure exists, but also in some other circumstances.

Equity or homeowner's equity

The concept of equity in a property refers to the value of the property minus the outstanding debt, subject to the definition of the value of the property. Therefore, a borrower who owns a property whose estimated value is $400,000 but with outstanding mortgage loans of $300,000 is said to have homeowner's equity of $100,000.

Payment and debt ratios

In most countries, a number of more or less standard measures of creditworthiness may be used. Common measures include payment to income (mortgage payments as a percentage of gross or net income); debt to income (all debt payments, including mortgage payments, as a percentage of income); and various net worth measures. In many countries, credit scores are used in lieu of or to supplement these measures. There will also be requirements for documentation of the creditworthiness, such as income tax returns, pay stubs, etc; the specifics will vary from location to location. Many countries have lower requirements for certain borrowers, or "no-doc" / "low-doc" lending standards that may be acceptable in certain circumstances.

Standard or conforming mortgages

Many countries have a notion of standard or conforming mortgages that define a perceived acceptable level of risk, which may be formal or informal, and may be reinforced by laws, government intervention, or market practice. For example, a standard mortgage may be considered to be one with no more than 70-80% LTV and no more than one-third of gross income going to mortgage debt.

A standard or conforming mortgage is a key concept as it often defines whether or not the mortgage can be easily sold or securitized, or, if non-standard, may affect the price at which it may be sold. In the United States, a conforming mortgage is one which meets the established rules and procedures of the two major government-sponsored entities in the housing finance market (including some legal requirements). In contrast, lenders who decide to make nonconforming loans are exercising a higher risk tolerance and do so knowing that they face more challenge in reselling the loan. Many countries have similar concepts or agencies that define what are "standard" mortgages. Regulated lenders (such as banks) may be subject to limits or higher risk weightings for non-standard mortgages. For example, banks in Canada face restrictions on lending more than 75% of the property value; beyond this level, mortgage insurance is generally required (as of April 2007, there is a proposal to raise this limit to 80%).

Repaying the capital

There are various ways to repay a mortgage loan; repayment depends on locality, tax laws and prevailing culture.

Capital and interest

The most common way to repay a loan is to make regular payments of the capital (also called principal) and interest over a set term. This is commonly referred to as (self) amortization in the U.S. and as a repayment mortgage in the UK. A mortgage is a form of annuity (from the perspective of the lender), and the calculation of the periodic payments is based on the time value of money formulas. Certain details may be specific to different locations: interest may be calculated on the basis of a 360-day year, for example; interest may be compounded daily, yearly, or semi-annually; prepayment penalties may apply; and other factors. There may be legal restrictions on certain matters, and consumer protection laws may specify or prohibit certain practices.

Depending on the size of the loan and the prevailing practice in the country the term may be short (10 years) or long (50 years plus). In the UK and U.S., 25 to 30 years is the usual maximum term (although shorter periods, such as 15-year mortgage loans, are common). Mortgage payments, which are typically made monthly, contain a capital (repayment of the principal) and an interest element. The amount of capital included in each payment varies throughout the term of the mortgage. In the early years the repayments are largely interest and a small part capital. Towards the end of the mortgage the payments are mostly capital and a smaller portion interest. In this way the payment amount determined at outset is calculated to ensure the loan is repaid at a specified date in the future. This gives borrowers assurance that by maintaining repayment the loan will be cleared at a specified date, if the interest rate does not change.

Interest only

The main alternative to capital and interest mortgage is an interest only mortgage, where the capital is not repaid throughout the term. This type of mortgage is common in the UK, especially when associated with a regular investment plan. With this arrangement regular contributions are made to a separate investment plan designed to build up a lump sum to repay the mortgage at maturity. This type of arrangement is called an investment-backed mortgage or is often related to the type of plan used: endowment mortgage if an endowment policy is used, similarly a Personal Equity Plan (PEP) mortgage, Individual Savings Account (ISA) mortgage or pension mortgage. Historically, investment-backed mortgages offered various tax advantages over repayment mortgages, although this is no longer the case in the UK. Investment-backed mortgages are seen as higher risk as they are dependent on the investment making sufficient return to clear the debt.

Until recently it was not uncommon for interest only mortgages to be arranged without a repayment vehicle, with the borrower gambling that the property market will rise sufficiently for the loan to be repaid by trading down at retirement (or when rent on the property and inflation combine to surpass the interest rate).

No capital or interest

For older borrowers (typically in retirement), it may be possible to arrange a mortgage where neither the capital nor interest is repaid. The interest is rolled up with the capital, increasing the debt each year.

These arrangements are variously called reverse mortgages, lifetime mortgages or equity release mortgages, depending on the country. The loans are typically not repaid until the borrowers die, hence the age restriction. For further details, see equity release.

Interest and partial capital

In the U.S. a partial amortization or balloon loan is one where the amount of monthly payments due are calculated (amortized) over a certain term, but the outstanding capital balance is due at some point short of that term. In the UK, a part repayment mortgage is quite common, especially where the original mortgage was investment-backed and on moving house further borrowing is arranged on a capital and interest (repayment) basis.

Foreclosure and non-recourse lending

In most jurisdictions, a lender may foreclose the mortgaged property if certain conditions - principally, non-payment of the mortgage loan - obtain. Subject to local legal requirements, the property may then be sold. Any amounts received from the sale (net of costs) are applied to the original debt. In some jurisdictions, mortgage loans are non-recourse loans: if the funds recouped from sale of the mortgaged property are insufficient to cover the outstanding debt, the lender may not have recourse to the borrower after foreclosure. In other jurisdictions, the borrower remains responsible for any remaining debt. In virtually all jurisdictions, specific procedures for foreclosure and sale of the mortgaged property apply, and may be tightly regulated by the relevant government; in some jurisdictions, foreclosure and sale can occur quite rapidly, while in others, foreclosure may take many months or even years. In many countries, the ability of lenders to foreclose is extremely limited, and mortgage market development has been notably slower.

Mortgage Lenders Services

2009-01-22T07:26:00.000-08:00

Home Loan Lenders - Finding the Best Home Mortgage Lender

The process of obtaining a mortgage or home loan can be very stressful and quite time consuming. Finding the best lender for your situation requires research and comparisons between lenders and loan packages. You may be searching for a first time home loan or to refinance your existing mortgage. Compare lenders carefully and find the best possible terms available to you.

If you have poor credit, you will pay a higher rate of interest than those with good credit. The amount of your down payment will also affect the interest rate you receive. The larger the down payment, the lower the interest rate. A small down payment will mean you pay more interest and your payments will be higher. You can get either a variable interest rate that changes over the length of your mortgage, or a fixed rate that never changes. Do not hesitate to ask questions of your lender and make certain you clearly understand the terms offered to you.

The amount of interest you will pay on your home loan not only depends on your credit score, but your debt-to-income ratio as well. This is the amount of money you make each month as compared to the amount of your monthly debt. Car payments, student loans, and credit card balances are all considered in determining your debt-to-income ratio. If your monthly income barely pays your monthly expenses, you will pay a higher interest rate than someone who's income surpasses their monthly obligations. Mortgage lending is a highly competitive industry and lenders are offering a variety of loan packages to fit almost any income level and credit rating.

You may want to consider choosing a home loan provider before you start shopping for a home. This will allow you to determine in advance how much you can spend on your new home. Pre-qualifying for a home loan can save you time and trouble while you go through the process of buying a home. A pre-approval is an excellent tool when making an offer to buy a home. Sellers like the security of knowing your mortgage is already approved and will often negotiate with a pre-approved buyer more readily than with a buyer who must search for a lender after making an offer to purchase the home.

Compare mortgage lenders and lending practices to find the best possible home loan for you and your family. The interest rate you receive will directly affect the amount of your monthly mortgage payments. A little research can save you thousands of dollars over the life of your mortgage.

Bad Credit Mortgage Lenders - Things You Should Know About Subprime Lenders

Interest rates and fees vary between subprime lenders just like regular mortgage lenders. Just because you have bad credit, that doesn't mean you should accept the first financing offer from a subprime lender. Take the time to do your research, and you can make sure you are getting the best deal in terms of interest rates and fees.

It's A Service

Subprime lenders take risks that the average bank refuses, namely loans to people with bad credit. As a result, subprime lenders charge higher interest rates and fees to ensure they make a profit even with the higher rate of loan foreclosures.

Compare Online

The best way to compare interest rates and fees of subprime lenders is to go online. You can get a straight answer on rates and fees from a number of lenders by entering your information online. When you are comparing between lenders, remember to enter the same information for each lender so you are getting a quote for the same risk level.

Rates And Fees Vary

Interest rates and fees can vary as much as 5% between subprime lenders. While a few dollars a month may not seem much, over years this can mean the difference of thousands of dollars. You should also compare closing costs and other fees in the financing package which can also add up to hundreds of dollars.

Apply Online

Once you have compared companies and found the best lender for you, you can finish the process by applying online with the subprime lender. Mortgage lenders will process your information and send out the paperwork for your final approval and signature. The whole process can take a matter of days.

Read Your Paperwork

Whether you are refinancing or buying a home, make sure you know what type of deal you are getting into by reading the paperwork the subprime lender sends. If you have any questions, you can contact the lending company by email or phone. You can also take the paperwork to a lawyer to get their opinion. You should be comfortable with all the terms before you sign.

Mortgage Leads Services

2009-01-22T07:21:00.000-08:00

Mortgage Leads

Mortgage leads are a hot commodity on the web. Mortgage lenders use the Internet to find leads in order to sell mortgages, primarily to consumers. Mortgage leads are collected is several different ways, including telemarketing mortgage leads, email mortgage leads, and web mortgage leads.

Mortgage leads typically include contact information, the type of mortgage desired, some financial information with respect to value of the property and the amount of the mortgage being sought. Generally speaking, the more detailed the information contained in mortgage leads, the more valuable (and thus, expensive) they will be compared to mortgage leads with less detail.

A very important distiction is between exclusive mortgage leads and non-exclusive mortgage leads. Exclusive mortgage leads are sold only once to single lender, whereas non-exclusive mortgage leads may be sold to several lenders. Under the latter scenario, such mortgage leads are often pitched to consumers by offering mortgage quotes from up to four lenders, etc. Obviously, exclusive mortgage leads tend to cost more.

If you are interested in buying mortgage leads, or if you would like more information, please fill out out the form on the right.

Mortgage Interest Rate Services

2009-01-22T07:02:00.000-08:00

Mortgage Interest Rate Determined by Many Factors

Your mortgage interest rate is determined by many factors. The first and foremost among these factors is your credit score. If you have a poor credit score, say 450 or 500, then your mortgage interest rate will be higher than someone with a good score of say 700. The reason for this is that the mortgage lender considers the person with the higher credit score to be a better risk, and a person who, according to their credit history, is more likely to make the payment, and may the payment on time.

Another determining factor in your mortgage interest rate is the amount of time you’ve been on the job you have now. If you have held your current job for less than one year, you can understand that you simply don’t look as stable as a person who has been at the same job for five years. A lot can happen over time, and a person with a five year track record is much more likely, at least to the people who set mortgage interest rate payments, to stay with a job and have a continuing source of income with which to pay the mortgage.

If you are a first time home buyer, fear not. There is a mortgage lender available for you no matter what your credit history or credit score. However, if you have bad credit, or very little time on the job, or simply no credit history, then the mortgage interest rate that you pay on your home may be a little bit higher than someone with better circumstances in both areas.

Another way of paying a lower mortgage interest rate is by making a down payment on the home, or if you’d already planned on making a down payment, making a larger down payment than initially planned. If you have more of your own money tied up in the home you look like a more serious potential buyer to the mortgage lender and the mortgage interest rate that you are required to pay may go down in comparison. Another way to get a lower mortgage interest rate is to find a co signer who has a higher credit score, more time on the job and a better credit rating in general. Many times parents will help children out on a first home by signing as a co signer to secure a lower mortgage interest rate.

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 interest

Under 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.

Mortgage Insurance Services

2009-01-22T06:56:00.000-08:00

Mortgage insurance

Mortgage Life Insurance refers to an insurance policy that guarantees repayment of a mortgage loan in the event of death or, possibly, disability of the mortgagor. Private Mortgage Insurance (PMI) refers to protection for the lender in the event of default, usually covering a portion of the amount borrowed. There are Government loan products that also include a Mortgage Insurance Premium (MIP), essentially the government equivalent of PMI.

For example, Mr. Smith obtains a mortgage loan that exceeds 80% (the typical cut-off) of his property's value and/or sale price. Because of his limited equity, the lender requires that Mr. Smith pay for mortgage insurance that protects their institution against his default. To obtain a mortgage loan insured by the Federal Housing Administration, Mr. Smith must pay a mortgage insurance premium (MIP) equal to 1.5 percent of the loan amount at closing. This premium is normally financed by the lender and paid to FHA on the borrower's behalf. Depending on the loan-to-value ratio, there may be a monthly premium as well.

Types of Mortgage Insurance

Borrower-Paid Private Mortgage Insurance (BPMI or "Traditional Mortgage Insurance")
is a default insurance on mortgage loans, provided by private insurance companies and paid for by borrowers. BPMI allows borrowers to obtain a mortgage without having to provide 20% down payment, by covering the lender for the added risk of a high loan-to-value (LTV) mortgage. The Homeowners Protection Act of 1998 requires PMI to be canceled when the amount owed reaches a certain level, particularly when the loan balance is 78 percent of the home's purchase price. Often, BPMI can be cancelled earlier by submitting a new appraisal showing that the loan balance is less than 80% of the home's value due to appreciation (this generally requires two years of on-time payments first).
Lender-Paid Private Mortgage Insurance (LPMI)
Similar to BPMI, except that it is paid for by the lender, and the borrower is often unaware of its existence. LPMI is usually a feature of loans that claim not to require Mortgage Insurance for high LTV loans. The cost of the premium is built into the interest rate charged on the loan.

Why Mortgage Insurance Can Actually Save You Money

Mortgage insurance provides lenders a form of financial guarantee which covers the lender in cases in which the borrower defaults on a loan. For those looking to buy a home
agreeing to loan terms which include mortgage insurance
increases the purchasing power of the buyer a great deal.

Agreeing to buy mortgage insurance allows individuals the opportunity to buy a home with a down payment of only 5%-10%
as opposed to the 20% that is often required when the lender does not have the guarantee of mortgage insurance.

Buyers typically purchase and pay for mortgage insurance in three different ways. These ways include paying in annuals
monthly premiums
or singles. We are going to take a closer look at the available mortgage insurance payment options below:

1
Annuals: The annuals payment option allows the lender to collect the first year’s premium at closing and then all subsequent payments are made on a monthly basis.

2
Monthly Premiums: This payment option requires the buyer to only pay for one month at closing and all remaining payments are then made on a monthly basis.

3
Singles: The singles payment option requires the buyer to make a one-time single payment that is typically financed as part of the mortgage amount.

Mortgage insurance ensures the lender is covered in cases in which the borrower can no longer pay the loan and defaults on it. It is also a powerful bargaining tool for potential borrowers who are unable to come up with a large down payment. Offering to pay mortgage insurance can decrease the amount of ones’ down payment by 10% to 15%.

But it is important to note that mortgage insurance does not have to be paid forever. After a certain period of time and when certain conditions are met
mortgage insurance is no longer required to be carried on the mortgage.

Mortgage Financing Services

2009-01-22T06:46:00.000-08:00

Mortgage & Equality: Refinance Home Equity - Mortgage Financing

If you need to refinance, a home equity loan lest you cash in on the value you have built up in your home. The amount of equity is the difference between what you owe on your mortgage and what your home is worth on the real estate market. This option for refinancing is really great for homeowners who have been paying on their mortgage for quite some time and have a significant amount of the principal of the loan repaid. With a home equity loan, you can usually get about 80% of the equity as a loan.

The money you get through a refinance home equity loan is yours to do whatever you like. If you want to make further improvements to your home, then you are building up even more equity. There are some lenders that will approve a home equity mortgage loan where you don't have to make any payments as long as you still live there. When you sell the home you have to repay the loan in full, plus interest of course. If you die, then your estate is responsible for the repayment.

As with a mortgage, your home is the collateral when you refinance. Loan payments have to be made each month, which could mean you have two mortgage payments to make. You have to make sure that you can afford this before you jump into it and the lender will require you to have an excellent credit record. If you default on the payment for the home equity loan, you could lose everything you have worked so hard for.

Many homeowners use the option of refinance in a home equity loan to consolidate all their bills. Then they use the total of the payments they were making each month to make the payment for the loan. Most of the time, this amount is much less than the total of all the other payments, giving you cash to work with each month. The rate of interest on a home equity loan is much lower than a normal loan and in some cases the interest may be tax-deductible.

When you want to refinance, a home equity mortgage loan has two options for you to choose from. You can have a fixed-rate loan where you make fixed monthly payments each month for a specified term. You can also have an adjustable rate line of credit with a home equity loan. If you choose the fixed rate option because you want to be able to budget each month, once you pay the loan in full, you cannot get another home equity loan. This is a one time thing. However, with a home equity line of credit, you can use the money over and over.

When you repay the line of credit, you can borrow money on it as you need it. You don't have to have it repaid in full to do this and can use it as you see fit. You only pay the interest each month on the outstanding principal and you can pay it off in full whenever you want.

Credit After Bankruptcy - Getting A Mortgage With Seller Financing

After a bankruptcy
getting approved for a mortgage loan is possible. However
those who apply for a mortgage should anticipate higher rates. To avoid this common pitfall
many choose to delay buying a home until their credit score increases. If you are eager to buy a home
there are other options available that may not involve high interest rates.

What is Seller Financing?

If attempting to get a home loan after bankruptcy
it is helpful to establish credit beforehand. This may include getting approved for a secured credit card or obtaining an auto loan. By doing so
you will increase your odds of getting approved for a reasonable rate mortgage.

Of course
there is always the option of seller financing. Also known as owner financing
this methods entails the new homebuyer making payments to the seller
and not a bank. This way
the homebuyer does not have to undergo the hassle of trying to get approved for a mortgage loan. With seller financing
the person selling the home establishes the interest
terms
and payments.

How Does Seller Financing Work?

If a homebuyer and seller agree to seller financing
consulting a real estate attorney is essential. To ensure that nobody gets the raw end of the deal
specific terms must be established
and a contract signed.

Seller financing is ideal for self-employed people and those with poor credit. Self-employed individuals have a difficult time proving their income. Thus
it may be harder for them to get traditional financing. On the same line of thought
those with bad credit may need time to boost their credit rating before applying for a traditional mortgage loan.

With seller financing
the home seller will agree to finance the home for a specific length of time. The loan term for seller financing are much shorter than traditional loan terms. On average
the seller will finance the home for five to seven years. At the end of the loan term
the buyer will agree to pay the seller a balloon payment. This allows the home buyer enough time to rebuild their credit and qualify for a loan with a mortgage lender.

Upon the conclusion of the seller financing agreement
the homebuyer must make a balloon payment to satisfy the agreement. The balloon payment is financed with a traditional mortgage lender. Thus
the original seller receives their money for the home
and the buyer begins making payments to the new lender.

Mortgage Deals Services

2009-01-22T06:37:00.000-08:00

Tips on Getting the Best Mortgage Deal

Shopping around for a home loan or mortgage will help you to get the best mortgage deal. You'll want to compare all the costs involved in obtaining a mortgage. Shopping, comparing, and negotiating may save you thousands of dollars.

Get Information From Several Lenders

Home loans are available from several types of lenders, commercial banks, credit unions, mortgage companies, as well as mortgage brokers. Our site 1-800BadCredit offers loans from several mortgage brokers because our experience tells us that they can do the shopping for you, not only saving you time but also helping you avoid all the headaches that go with this type of shopping, thus ensuring the best mortgage deal. A broker has access to several lenders and that can mean a wider selection of product and service.

Obtain All Important Cost Information

Be sure to get all the information about mortgages from the lenders. Know how much of a down payment you can afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest is not enough. When looking for the best mortgage deal, always ask for information about the same loan amount, loan term, and type of loan so that you can compare the information. Here is what you should ask from each lender:

Rates

Ask for a list of the current mortgage interest rates and whether the rates being quoted are the lowest for that day or week.

Ask whether the rate is fixed or adjustable.
Remember that when interest rates for adjustable-rate loans go up, generally so does the monthly payment. We do not think that adjustable rate loans are the best mortgage deal for most people, but they are available. Keep in mind that the recent mortgage problems that have been in the news were with people who had adjustable rate loans also called ARM's.

If the rate quoted is for an adjustable-rate loan, ask how your rate and loan payment will vary, including whether your loan payment will be reduced if the rates go down. This is very unlikely however.

Ask about the loan's annual percentage rate (APR). The APR takes into account not only the interest rate but also points, and any other fees and credit charges that you may have to pay expressed as a yearly rate.

Points

Points are fees paid to the lender or broker for the loan and are often linked to the interest rate; usually the more points you pay, the lower the rate, but a point equals 1% of the total amount borrowed, so watch out for excessive points. For instance, on a $150,000 loan 3 points equals $4,500 dollars.

Check your local newspaper for information about rates and points currently being offered. You won't get the best mortgage deal from being too trusting of the broker or lender. Remember, they are in business to make money, and while 1% or so may not seem like much over 30 years, it's YOUR money that's being spent so insist on the best interest rate you can get!

Ask for points to be quoted to you in dollar amounts, so you will know actually how much you will have to pay. It's quite common for the lender to quote the client just the points (which is technically considered full disclosure, but unless you've got your calculator handy you'll never really know how much cash this translates into). That to me is just so much legalese.

Fees

Even the best mortgage deals involve many fees, such as loan origination or underwriting fees, broker fees, and transaction, settlement, and closing costs. Every lender should be able to give you an estimate of its fees. Many of these fees are negotiable. Some fees are paid when you apply for a loan (such as application and appraisal fees), and others are paid at closing. 'No cost' loans are sometimes available, but they may involve a slightly higher rate. It won't hurt to ask.

Ask what each fee includes. Don't be afraid to ask questions. Several items may be included in each fee. Ask for an explanation of any fee you do not understand. Once again don't be afraid to ask questions, any question. There is no such thing as a dumb question. What's dumb is not asking the question and blindly paying fees that you may be able to eliminate or negotiate.

Down Payments and Private Mortgage Insurance (PMI)

In the old days when homes cost a lot less 20% down payment was the standard to purchase a home. Now though with homes costing so much more most lenders offer loans that require less down payment, sometimes as little as 5 percent on conventional loans. If you have bad credit or less than perfect in the 520 - 659 range they will probably require more or else you might pay a slightly higher loan rate, but remember to shop around for the best mortgage deal, one lender may be 1 or 2 percent less and this can really add up to a lot of money. That's why a mortgage broker is best, they will do the comparison for you.
By shopping around you may find a lender that that will let you buy for little or no money down. On my new condo last year (my first ever home purchase) I put down $2,500, which basically paid the closing fees. So I got a 100% loan-to-value at a very good interest rate. And my credit score was in the mid-600's.

If a 20 percent down payment is not made lenders usually require the home buyer to purchase private mortgage insurance (PMI) to protect the lender in case the home buyer fails to pay.
If you qualify for a government-assisted program such as FHA (Federal Housing Administration), VA (Veterans Administration) or Rural Development Services the down payment may be a lot smaller.

Tip!

One of the best mortgage deals around could come from the city your moving into! Contact your chamber of commerce in the city you are looking to move to and ask them if they have any special grant or subsidy programs for fist time homebuyers.

Peoria, AZ has a first time homebuyer grant program and my friend received a grant of $15,000 towards the purchase of a home there in 2006. Another friend of mine in California found out about a $50,000 grant from the city of Fountain Valley for first time homebuyers!

Ask about the lenders requirement for down payment, including what you need to do to verify that funds for your down payment are available.

Ask if PMI insurance is required and what the total cost of that will be.

Ask how much your total monthly payment will be including the PMI premium, then contact another lender to make sure this is the best mortgage deal you can get.

Ask how long you will be required to carry PMI.

Get the best mortgage deal you can.

Remember: Shop, Compare, Negotiate. Credit problems? Still Shop, Compare, Negotiate!

Which Refinance Mortgage Loan Deals Are Easy To Process

So you want a finger in that refinance mortgage loan. After all
it’s fast becoming the talk of the town. The problem is
you’re daunted by the process that comes with it. Now you’re wondering
what are the easiest deals to come by so far?

You might want to consider the following types of refinance mortgage loan. They are by far the simplest and easiest to process.

Fixed Rate Refinance Mortgage Loan

As opposed to the specialty type of refinance mortgage loans (like adjustable rate mortgage)
this type of loan is much easier to come by. To qualify for an adjustable rate mortgage
you will have to meet up with generally higher standards. You will have to have a higher income
better credit reports
and a more valuable home equity.

A fixed rate mortgage loan may be just what you need. With this type of refinance loan
you deal with a fixed interest rate for the whole credit term
as opposed to an adjustable mortgage interest rate wherein you are subject to the inconsistencies of the mortgage market. If the economy is not in good shape
then you’ll have to prepare yourself for burgeoning interest rates. So basically
you get peace of mind and stability with your fixed rate mortgage loan as bonus.

Closed Refinance Mortgage Loan

Another type of refinance mortgage loan that is easy to qualify for is the closed refinance mortgage loan. Now what is this? It’s the type of loan wherein you are not allowed to make prepayments or to pay off your loan in advance. You may want to do prepayments if you suddenly find yourself with a lot of extra cash and with the desire to pay out your loan to avoid interest fees. With a closed mortgage loan
your lender will only allow you to do this for a fee.

It’s much easier to close this kind of deal
though
as opposed to an open refinance mortgage. The latter allows you to pay out without fees
but it’s not easy to qualify for them. You will have to have a more inviting income
credit report
and home equity.

Long Term Refinance Mortgage Loan

Another refinance mortgage loan that is easier to qualify for is the long-term refinance mortgage loan. Now what would make for a long-term loan? It’s the type of loan that lasts for 6 years or more. It usually lasts for up to 10 years
though there are those that reach until 25 years.

Short-term mortgages are more advantageous in that they offer lower rates. But then again
they are not easy to come by. Yet again
you will have to have better income
better credit reports
and better home equity.

But the qualification process may be the least of your worries. Getting a deal closed and getting just the right deal are two different things. You may have gotten your refinance mortgage without much sweat
only to encounter serious problems when you are already in it. Do not go for a deal only for its expediency. Be very scrutinizing.

Mortgage Brokers Services

2009-01-22T04:55:00.000-08:00

Mortgage broker

A mortgage broker acts as an intermediary who sells mortgage loans on behalf of individuals or businesses.

Traditionally, banks and other lending institutions have sold their own products. However as markets for mortgages have become more competitive, the role of the mortgage broker has become more popular. Today in most developed mortgage markets (especially Canada the U.S., UK, Australia, New Zealand, Spain mortgage brokers are the largest sellers of mortgage products for lenders.

The majority of mortgage brokers are regulated to ensure compliance with banking and or finance laws in the jurisdiction of the consumer; however, the extent of the regulation depends on the jurisdiction. Only one state within the U.S. has no laws that govern mortgage lending.

# 1 Tasks of mortgage broker
# 2 Mortgage brokerage in the USA

* 2.1 Difference between a mortgage broker and a loan officer
* 2.2 Industry competitiveness
* 2.3 Secondary market influence
* 2.4 Improved consumer laws

# 3 Brokers and client's interests

* 3.1 Predatory mortgage lending and mortgage fraud

# 4 Mortgage brokerage in Canada
# 5 Mortgage brokerage in Australia
# 6 Mortgage brokerage in Singapore

Tasks of mortgage broker

Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to High Net Worth Individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits. Central banks are normally government owned banks, often charged with quasi-regulatory responsibilities, e.g. supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis.

The nature and scope of a mortgage broker's activities varies with jurisdiction. For example in the UK anyone offering mortgage brokerage is offering a regulated financial activity; the broker is responsible for ensuring the advice is appropriate for the borrowers' circumstances and is held financially liable if the advice is later shown to be defective. In other jurisdictions the transaction undertaken by the broker may be limited to a sales job: pointing the borrower in the direction of an appropriate lender, no advice given, and a commission collected for the sale.

Therefore the work undertaken by the broker will depend on the depth of their service and liabilities. Typically the following tasks are undertaken:

* Marketing to attract clients
* Assessment of the borrowers circumstances (Mortgage fact find forms interview). This may include assessment of credit history (normally obtained via a credit report) and affordability (verified by income documentation).
* Assessing the market to find a mortgage product that fits the clients needs. (Mortgage presentation/recommendations)
* Applying for a lenders agreement in principle (pre-approval)
* Gathering all needed documents (paystubs/payslips, bank statements, etc.),
* Completing a lender application form.
* Explaining the legal disclosures.
* Submitting all material to the lender.

Mortgage brokerage in the USA

According to a 2004 study by Wholesale Access Mortgage Research & Consulting, Inc., there are approximately 53,000 mortgage brokerage companies that employ an estimated 418,700 employees and originate 68% of all residential loans in the U.S.. The remaining 32% is retail done through the lender's retail channel, which means the lender does not go through a broker.

The mortgage broker industry is regulated by 10 federal laws, five federal enforcement agencies and over 49 state laws or licensing boards.[citation needed]

The banks have used brokers to outsource the job of finding and qualifying borrowers, and also to outsource some of the liabilities for fraud and foreclosure onto the originators through legal agreements.[citation needed]

During the process of loan origination, the broker gathers and processes paperwork associated with mortgaging real estate.

Difference between a mortgage broker and a loan officer

A mortgage broker works as a conduit between the buyer and the lender, the loan officer typically works directly for the lender. Most states require the mortgage broker to be licensed. States regulate lending practice and licensing, but the rules vary. Most have a license for those who wish to be a "Broker Associate", a "Brokerage Business", and a "Direct Lender".

Secondary market influence

Even large companies with a lending license sell, or broker, the mortgage loan transactions they originate and close. A smaller percentage of bankers service and keep their loans than those in past decades. Banks act as a broker due to the increasing size of the loans because few can use depositor's money on mortgage loans. A depositor may request their money back and the lender would need large reserves to refund that money on request. Mortgage bankers do not take deposits and do not find it practical to make loans without a wholesaler in place to purchase them. The required cash of a mortgage banker is only $500,000 in New York. The remainder may be in the form of property assets (an additional $2.00), an additional credit line from another source (an additional $10,000,000).[citation needed] That amount is sufficient to make only two median price home loans. Therefore, mortgage lending is dependent on the secondary market, which includes securitization on Wall Street and other large funds.

The largest secondary market or"wholesale" institutions are Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation, commonly referred to as Fannie Mae and Freddie Mac, respectively. Loans must comply with their jointly derived standard application form guidelines so they may become eligible for sale to larger loan servicers or investors. These larger investors could then sell them to Fannie Mae or Freddie Mac to replenish warehouse funds. The goal is to package loan portfolios in conformance with the secondary market to maintain the ability to sell loans for capital. If interest rates drop and the portfolio has a higher average interest rate, the banker can sell the loans at a larger profit based on the difference in the current market rate. Some large lenders will hold their loans until such a gain is possible.

The selling of mortgage loans in the wholesale or secondary market is more common. They provide permanent capital to the borrowers. A "direct lender" may lend directly to a borrower, but can have the loan pre-sold prior to the closing.

Few lenders are comprehensive or "portfolio lenders". That is, few close, keep, and service the mortgage loan. The term is known as portfolio lending, indicating that a loan has been made from funds on deposit or a trust. That type of direct lending is uncommon, and has been declining in usage.[citation needed] An example of a portfolio lender in the USA is ING Direct.

Improved consumer laws

The laws have improved considerably in favor of consumers. A mortgage broker must comply with standards set by law in order to charge a fee to a borrower. The fees must meet an additional threshold, that the combined rate and costs may not exceed a lower percentage, without being deemed a "High Cost Mortgage". An excess would trigger additional disclosures and warnings of risk to a borrower. Further, the mortgage broker would have to be more compliant with regulators. Costs are likely lower due to this regulation.[citation needed]

Mortgage bankers and banks are not subject to this cost reduction act. Because the selling of loans generates most lender fees, servicing the total in most cases exceeds the high cost act. Whereas mortgage brokers now must reduce their fees, a licensed lender is unaffected by the second portion of fee generation. This is due to the delay of selling the servicing until after closing. Therefore, it is considered a secondary market transaction and not subject to the same regulation.
A mortgage broker is normally registered with the state, and personally liable (punishable by revocation or prison) for fraud for the life of a loan. A loan officer works under the umbrella license of their current institution. Both positions have legal, moral, and professional responsibilities as well as liabilities to prevent fraud and fully disclose loan terms to both consumer and lender.

Typically, a mortgage broker will make more money per loan than a loan officer, but a loan officer can utilize the referral network available from the lending institution to sell more loans. There are mortgage brokers and loan officers at all levels of experience.

Industry competitiveness

A large segment of the mortgage finance industry is commission based. Potential clients can compare a lender's loan terms to those of others through advertisements or internet quotes.

In the 1970s, mortgage brokers did not have access to wholesale markets, unlike traditional bankers. Today, mortgage brokers are more competitive with their access to wholesale capital markets and pricing discounts. A mortgage broker has lower overhead costs compared to large and expensive banking operations because of their small structure.[citation needed] They can lower rates instantly to compete for clients. On the other hand, larger companies are less competitive since they provide their sales representatives their fixed rate sheets. Loan officers often cannot reduce their companies' profit margin and may be higher or lower than the marketplace, depending on the decision of managers. Thus, mortgage brokers have gained between 60 to 70% of the marketplace.[citation needed]

Mortgage brokers can obtain loan approvals from the largest secondary wholesale market lenders in the country. For example, Fannie Mae may issue a loan approval to a client through its mortgage broker, which can then be assigned to any of a number of mortgage bankers on the approved list. The broker will often compare rates for that day. The broker will then assign the loan to a designated licensed lender based on their pricing and closing speed. The lender may close the loan and service the loan. They may either fund it permanently or temporarily with a warehouse line of credit prior to selling it into a larger lending pool.

The difference between the "Broker" and "Banker" is the banker's ability to use a short term credit line (known as a warehouse line) to fund the loan until they can sell the loan to the secondary market. Then, they repay their warehouse lender obtain a profit on the sale of the loan. The borrower will often get a letter notifying them their lender has sold or transferred the loan. Bankers who sell most of their loans and do not actually service them are in some jurisdictions required to notify the client in writing. For example New York State regulations require a non servicing "banker" to disclose the exact percentage of loans actually funded and serviced as opposed to sold/brokered.

Brokers must also disclose Yield spread premium while Bankers do not. This has created an ambiguous and difficult identification of the true cost to obtain a mortgage. The stricter Broker disclosure requirements, especially the Good Faith Estimate, can often create the illusion that they are charging more to obtain the exact same mortgage when compared to a Banker, when in fact they may cost the same or the Brokers offer may even be less costly.[citation needed] This topic has been hotly debated on Capitol Hill and state level judiciary committees.[citation needed]

Also See: Predatory lending & Mortgage fraud

Sometimes they will sell the loan, but continue to service the loan. Other times, the lender will maintain ownership and sell the rights to service the loan to an outside mortgage service bureau.

Brokers and client's interests

As of 2007, in the United States the federal law and most state laws do not assign a fiduciary duty on mortgage brokers to act in best interests of their customers. An exception is California, where a 1979 ruling of the Supreme Court of California did establish fiduciary duties of mortgage brokers.[1] This means that consumers, in states other than California, may be charged excessive rates and fees and are encouraged to do some shopping around prior to any agreement.

[edit] Predatory mortgage lending and mortgage fraud

Mortgage fraud is when one or more individuals defraud a financial institution by submitting false information willfully. This is normally to obtain a favorable outcome. Some mortgage brokers have been involved in mortgage fraud according to the FBI. [2]

Predatory mortgage lending is when a dishonest financial institution willfully misleads or deceives the consumer. Some mortgage consultants, processors and executives of mortgage companies have been involved in predatory lending.

Some signs of predatory lending include:

* Falsifying income/asset and other documentation.
* Not disclosing Yield spread premium or other hidden fees BEFORE the settlement/closing.
* Failing to provide all RESPA documentation, i.e. Good Faith Estimate, Special Information Booklet, Truth in Lending, etc so the borrower may clearly understand the mortgage terms and lender policies.
* Convincing borrowers to refinance a loan without any true benefit.
* Influencing a higher Loan Amount and inflated appraisals (usually in tandem with an appraiser).
* Unjustly capitalizing on a borrower's relative ignorance about mortgage acquisition.

Another unethical practice involves inserting hidden clauses in contracts in which a borrower will unknowingly promise to pay the broker or lender to find him or her a mortgage whether or not the mortgage is closed. Though regarded as unethical by the National Association of Mortgage Brokers, this practice is legal in most states. Often a dishonest lender will convince the consumer that he or she is signing an application and nothing else. Often the consumer will not hear again from the lender until after the time expires and then they are forced to pay all costs. Potential borrowers may even be sued without having legal defense.

Mortgage brokerage in Canada

The laws governing mortgage brokerage in Canada are determined by provincial governments. Throughout Canada, high ratio loans are insured by either the Canada Mortgage and Housing Corporation, Genworth Financial or AIG United Guaranty.

Quebec is unique in all of North America as its laws are based on the Civil Code. The law permits mortgage brokerage to be performed by those in the finance industry, as well as those in the real estate industry.

Mortgage brokerage in Australia

Mortgage Brokers have been active in Australia since the early 1980's however they have only become a dominant force in the mortgage industry during the late 1990's on the back of aggressive marketing by Aussie Home Loans & Wizard Home Loans. Approximately 35% of all loans secured by a mortgage in Australia are introduced by mortgage brokers[3].

Currently there are few federal laws requiring any form of accreditation, licensing or training for mortgage brokers. Despite this the WA state government has introduced their own mortgage broker licensing to protect consumers. Although the other states are largely unregulated the industry has seen some degree of self regulation. This is due to the requirements of lenders for accredited brokers to be members of an industry body such as the Mortgage & Finance Association of Australia (MFAA) and an external dispute resolution provider such as COSL.

Australian mortgage brokers do not usually charge a fee for their services as they are paid by the lenders for introducing loans[4]. They are paid an up front commission that is on average 0.66% of the loan amount and an ongoing trail commission that is on average 0.18% of the loan amount per annum paid monthly. These commissions can vary significantly between different lenders and loan products, especially since the commission re-alignments introduced by Australian banks during June to August 2008 in reaction to the Subprime mortgage crisis.

Although mortgage brokers are paid commissions by the lenders this does not alter the final rate or fees paid by the customer as it may in other countries. Mortgage brokers do not have the ability to charge the customer a higher or lower rate and in return obtain a higher or lower commission.

Mortgage brokerage in Singapore

The mortgage brokerage industry is still relatively new, compared to USA and UK. Not all of the banks in Singapore are tied up with the mortgage brokerage firms. The mortgage brokers are mostly regulated by the Singapore Law of Agency.

A study undertaken by Chan & Partners Consulting Group (CPCG) shows that the mortgage brokering industry is still largely a relatively new concept to the Singapore financial consumers. However this will set to change as more consumers realize that taking up a housing loan with the mortgage broker does not increase the consumer's cost at all, and can in fact aid them in making a more informed decision.

A separate research by CPCG shows that the fee structure in the mortgage brokerage industry in Singapore is not regulated. This resulted in different kinds of fee structure for different mortgage brokerage companies. The research stated that while mortgage brokers in other parts of the world are largely commission based, some mortgage brokers in Singapore do charge the customers a retainer's fee which can range from SGD$500 to SGD$1000.

Mortgage Note Brokers

There are several brokers who help people to sell and buy mortgage notes. They match people who want to sell their note with people who want to buy that note. Their professional fee is paid entirely by the note buyer. The real estate notes are today a massive industry, worth more than $400 billion.

Mortgage brokers are independent contractors who usually shop for loan applications amongst lenders to find the most attractive term for a borrower. Mortgage brokers offer loan products of multiple vendors. These multiple vendors are known as wholesalers. The mortgage broker gets paid for his services by the lender.

Mortgage brokers do not lend; they primarily counsel borrowers on the problems involved in qualifying for the loan. Brokers also help by compiling all the documents that are required for the transaction. This reduces delays in the loan processing.

Mortgage notes are usually produced by banks or mortgage companies. The federal government secures these notes. There are several agents who facilitate the sale of existing private mortgage notes or commercial mortgage notes. These agents or service providers can easily arrange for point of sale funding, commonly known as table funding or simultaneous closing. This enables the seller and the agent to offer financing to their buyers, without taking the trouble of securing their bank lines of credit.

While issuing mortgage notes, agents or service providers look at the type of property, location of the property, the way in which the mortgage is structured, and the credit history of the buyers. These elements essentially dictate the guidelines for the valuation of the mortgage note. The more information given to the service agent, the better they can evaluate the right transaction for sellers. To collect information, service providers usually seek information by E-mail, fax or telephone.

Mortgage Approval Services

2009-01-21T08:16:00.000-08:00

How to Get a Mortgage Approval
Everyone wants the American Dream, and a big part of that dream is owning your own home. Unfortunately, not many of us have the entire amount of money needed to buy a house. We need to mortgage a large portion in order to get that house. Here are some ways you can assure yourself of getting a mortgage approval.

Instructions

Step1

Score a high credit rating. An excellent credit history will show potential lenders that you are not a high risk. Have a credit card or two, even if you don't use them, to show your credit history. If you do use them, pay them promptly every month.

Step2

Pay your monthly bills on time. Don't be late when paying your utility bill, phone bill, car insurance or any other monthly expense. It's much easier to get a mortgage approval when you can prove you have a history of paying your bills on time.

Step3

Verify your full-time employment. Show a pay stub or a copy of your most recent income tax return. It helps if you have had the same job for at least two or three years or, if you have changed jobs in the recent past, that you are still in the same field or in a similar line of work.

Step4

Put down at least 10 to 20 percent of the price of the home as a down payment. The less the bank or mortgage company has to lend you, the more apt you are to get a mortgage approval.

Tips & Warnings

Try to get pre-approval for a mortgage from a bank or lending institution before looking for a home. A pre-approval letter will show potential lenders you are a "safe risk" when it comes to getting a mortgage.
Show copies of bills you have paid on time to establish a credit history if you are one of those people who simply refuse to have credit cards.
Shop around when it comes to seeking mortgage approval. See what different banks and mortgage companies have to offer when it comes to types of mortgages, interest rates, length of loans and any payment penalties.

What Does It Take to Get Approved with a Good Mortgage Rate?

Right now, one of the issues with refinancing and first mortgage financing is that it is hard to get approved. Mortgage applications are way up, but approvals aren't making that much headway. And those who do get approved are finding that they are not enjoying the mortgage rate they had hoped for.

Mortgage interest rates at multi-year lows

Mortgage interest rates are at multi-year lows -- in some cases as low as 4.5%. Many mortgage lenders are advertising a low mortgage rate, but it is important to realize that is the best rate. Not everyone gets that low rate. In order to get that best rate, you will likely need the following:

* Credit score of at least 740 or 750.

* 80% loan to value ratio (for refinancing).

* At least 5% to 10% (some mortgage lenders asking 15% or 20%) down payment for first time mortgage financing.

Approval isn't as onerous; you likely only need a credit score of 680 and a 3% to 5% down payment, along with adequate income. However, if you meet only the minimum, you probably will not get the best mortgage rate.

Even so, mortgage interest rates are low enough to make it worth your while -- if you can get approved.

Low Mortgage Rates Services

2009-01-21T07:27:00.000-08:00

Low mortgage rates make refinancing attractive

The past few months have been lonely ones for mortgage lenders, but business is picking up. The phones are ringing, and banks don't have to give away doughnuts to attract customers. They've got something much more enticing to offer: rock-bottom mortgage rates.

Last week, the average rate for a fixed-rate 30-year mortgage was 5.68%, down sharply from 6.34% a year ago, according to Freddie Mac (FRE). The drop in rates has prompted a surge of refinancing as homeowners look to get out of adjustable-rate mortgages or lower the rate on their fixed-rate mortgages. Applications for mortgage refinancing rose 22% for the week ended Jan. 25 from the week earlier, the Mortgage Bankers Association says.

Should you jump on the refi bandwagon? Unless you're already paying a low fixed rate, it's certainly worth considering, especially if you plan to stay in your home at least several more years.

Some borrowers may be tempted to hold out in hopes that rates will fall even more. But that's risky, says Bob Walters, chief economist for Quicken Loans. Long-term mortgage rates are near historic lows, he notes, which means they're more likely to rise than fall. The Federal Reserve reduced short-term rates by half a point last week and signaled that it might cut rates even more in the next few months. But while Fed cuts typically lead to lower rates for credit cards and car loans, the Fed doesn't influence long-term mortgage rates. These rates track 10-year Treasury notes, which tend to respond to changes in the economy.

In fact, "There are times when short-term rates go down and mortgage rates go up," says Jim Svinth, chief economist for LendingTree.com, a website that connects borrowers with lenders.

Long-term rates are particularly sensitive to any whiff of inflation, which causes bond yields to rise. If Congress approves an economic-stimulus package, Walters says, mortgage rates could move higher on fears that the stimulus will boost the inflation rate.

The bad news

Though mortgage lenders are hungry for business, credit standards have tightened. That means some borrowers won't qualify for the lowest rates, and some won't be eligible to refinance at all. To take advantage of low rates, you'll need:

•A good credit score. To get the lowest mortgage rates, you'll need a FICO score — named after the model developed by Fair Isaac (FIC) — of at least 680, and preferably above 700, Svinth says.

•Equity. Some lenders are offering competitive rates for borrowers who have as little as 5% equity in their homes, as long as their credit scores are above 680, Walters says. Some borrowers with at least 5% equity and lower credit scores will also be able to refinance, he says, but they'll pay more.

If, however, you're one of the millions of homeowners who are "upside down"— you owe more on your mortgage than your home is worth — you won't be able to refinance, Walters says.

•A conforming loan. The decline in mortgage rates has been limited to so-called conforming loans. These are loans that can be bought by Fannie Mae (FNM) and Freddie Mac and resold to investors. Only loans of $417,000 or less are considered conforming loans.

Rates for mortgages that exceed that limit, known as jumbo loans, haven't declined along with rates for conforming loans. Last week, the average rate for a 30-year fixed-rate jumbo loan was 7.03%, according to Bankrate.com.

No free loan

Here's a scary sign of the times: Last week, mortgage refinancing promotions accounted for 10% of all spam, according to Commtouch (CTCH), which develops anti-spam products. Whenever interest in a product or service rises, shady operators tend to emerge.

For that reason, it's important to make sure you're dealing with a reputable lender and to scrutinize all offers. To stand out from the crowd, some lenders are promoting "no-cost" refinancing. But those deals are "rarely free," Svinth says. Some no-cost loans carry a higher interest rate, he says. In other cases, the costs are rolled into the loan, which means you would end up financing them for the next 30 years.

"As a consumer, you need to have your eyes wide open," Svinth says. "If somebody is offering you something for free, they're earning it back someplace else."

Paying upfront fees can help you negotiate a lower rate than you'll get on a no-cost refinancing. But before you sign any papers, think about how long you plan to stay in your home. If, for example, you pay $2,500 in closing costs to lower your monthly mortgage payment by $100 a month, you'll need to stay in your house for 25 months before you start saving money.

Lower Mortgage Rates Not Sparking Home Buying

This is a trend that is likely to continue as investors continue to flee to the safety of Treasury bonds and government backed mortgage debt--stabilizing mortgage rates.

Land Mortgage Services

2009-01-21T07:21:00.000-08:00

What is a Land Mortgage?

A land mortgage is a type of mortgage loan which is used to purchase land or a lot, in contrast with a structure which has been built on a piece of land. Buyers of raw land usually purchase land with the intent of developing it or establishing a structure. Land mortgages are different from mortgages for structures because, from the point of view of a bank, land is a less secure investment. If someone defaults on a land mortgage, the bank will be left with an empty lot which could be difficult to resell.

Typically, banks have different requirements for land mortgages. Getting a land mortgage may require a higher percentage of the sale price as a down payment, ensuring that the borrower has substantial equity in the land. The borrower may also be obliged to purchase mortgage insurance or to offer up another form of collateral to support the loan, such as a property in another location.

Another concern with a land mortgage is the ability to build on or otherwise utilize the land. Banks assume that something will be done with the empty land, because otherwise the property would not generate any returns for the owners. Some banks will not loan money until the parcel has been inspected, and the buyer may need to provide proof that the land is safe for building, that the zoning permits building, and that permits for water, sewer, septic, and other services can be obtained. Failure to obtain this proof can put a land mortgage in jeopardy. Liability may also become an issue, as people who are injured on vacant land can recover damages from the owner, leading some banks to require that raw land be fenced or otherwise controlled for safety.

There are some distinct advantages to a land mortgage. Land is often much less expensive than occupied lots, reflecting the fact that significant investment is needed to make the property usable. Buying land also allows people to build a structure to their exact specifications, rather than being forced to work with an existing structure. It may also be possible to purchase a large lot at low cost, for people who want open space around their homes.

If people purchase land as an investment, intending to sell it later, they often pay cash rather than trying to obtain a land mortgage. Land purchased for farming may also need to be paid for in cash, reflecting the fact that agriculture may not generate a significant return on the land, especially in areas where property prices are high and land is at a premium. Organizations which purchase land for the purpose of retaining open space, greenways, and parks may also be forced to pay for their purchases in cash by banks which are wary of extending a mortgage on a property which will lie fallow.

vacant land mortgage

Question
Hello, I am a fellow allexperts expert in the computer section. I have a question about purchasing land. I want to buy some empty acreage up in Michigan. So far every lender I have talked to wants a house on the property or they will only give me a balloon mortgage. Do know of any lenders that specialize in land or any way around this?

Answer
Hi Andy,

It is usually the local lenders that are willing to do land. They are usually high interest rate and short term loans. Lenders think that there is not enough collateral there and land is tougher to sell.

What you are describing is the way most these deals work. Usually the buyer is ok with the balloon and higher rate as they are just looking to own the land then build a house on it. At that point they will refinance for a much better rate. The only real way around is to look for owner financing but many times the owner is not willing to provide a better deal than the banks.

Thanks,
Doug

Jumbo Mortgage Rate Services

2009-01-21T06:21:00.000-08:00

A jumbo mortgage means a larger than normal size mortgage. While getting a jumbo size anything usually means getting a good deal - especially when it comes to hamburgers and fries - it may not mean the best deal in the case of mortgages
however. Here are a few things you need to know about jumbo mortgages.

The largest mortgage lenders in the United States - Freddie Mac and Fannie Mae
determine mortgage sizes. They determine what is to be considered the standard size each year. Anything above that amount is considered to be what is called a jumbo mortgage. Currently
as of 2006
the amount is set at $417
0
This amount is higher for the Hawaiian Islands
Alaska
and in the U.S. Virgin Islands.

A jumbo mortgage
also referred to as a non-conventional
or non-standard mortgage
also comes with jumbo interest rates. In other words
the amount of interest that you pay for your larger than usual mortgage also comes with higher interest. Part of the reason for this is because the lenders believe that they are at a higher risk for possible loss. Like any other type of loan
though
the interest amounts do vary from one location to another.

For a larger home
jumbo mortgages may be just about the only option you have
but there are still ways around it if the home is not priced too high. Some companies offer a solution in the form of a package mortgage deal - getting a first and second mortgage at the same time. By financing the first mortgage at 80%
you can then get financing on a second mortgage to cover the balance. By going this route
you may also be able to avoid having to pay for private mortgage insurance
too.

A jumbo mortgage is available in either a fixed rate mortgage or as an adjustable rate mortgage. You do need
however
to pay attention to the economy at the time in order to know which way is best at the time. Both have their advantages
and both have their drawbacks depending on which way the economy is going.

Some companies are even offering no doc loans on their jumbo mortgages. Typically this type of mortgage comes with higher interest but some mortgage companies declare that their rates are the same for doc and no doc alike. Other forms may be developing so you will need to do some research to see if another form of jumbo mortgage suits your needs a little better.

As with any loan
you need to do some comparison shopping in order to find the best deal. This means learning the terms that may be involved. The easiest way is to go online and go to a broker website where you can get several mortgage quotes with one application. Separate the principal from the interest and then compare that with the other fees that apply. Before long you will have the best deal. You also may want to investigate the company some
too
if you have not heard of them before.

All mortgage plans can be divided into categories in two different ways. Firstly, conventional and government loans. Secondly, all the various mortgage programs may be classified as fixed rate loans, adjustable rate loans and their combinations.

Jumbo Loans

Loans above the maximum loan amount established by Fannie Mae and Freddie Mac are known as 'jumbo' loans. Because jumbo loans are bought and sold on a much smaller scale, they often have a little higher interest rate than conforming, but the spread between the two varies with the economy.

If you are looking for a jumbo loan and need more information or advice, we invite you to take advantage of our database of the most competitive lenders available.

In the United States, a jumbo mortgage is a mortgage with a loan amount above the industry-standard definition of conventional conforming loan limits. This standard is set by the two largest secondary market lenders, Fannie Mae and Freddie Mac. Loans above the conforming limits may be offered by seller servicers of these wholesale institutions, as well as Wall Street conduits who provide warehouse financing for mortgage lenders. The loan amounts reflect average loan sizes nationwide. Jumbo mortgages apply when agency (FNMA and FHLMC) limits don't cover the full loan amount. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that purchase the bulk of residential mortgages in the U.S. They set a limit on the maximum dollar value of any mortgage they will purchase from an individual lender. As of 2006[update], the limit is $417,000, or $625,500 in Alaska, Hawaii, Guam, and the U.S. Virgin Islands. Other large investors, such as insurance companies and banks, step in to fill the need, with maximum mortgage amounts going to the $1 million or $2 million range. A loan in excess of $650,000 is referred to as a super jumbo mortgage. The average interest rates on jumbo mortgages are typically greater than is normal for conforming mortgages, and vary depending on property types and mortgage amount.

On February 13, 2008 President Bush signed an economic stimulus package that temporarily increases the conforming limit to $729,750 until December 31, 2008. The limit for any area would be the greater of (1) the 2008 conforming loan limit ($417,000); or (2) 125% of the area median house price, but no more than 175% of the 2008 conforming loan limit ($729,750, which is 175% of $417,000)

The value of raising the limits to these levels is questionable. The secondary paper market (resellers/buyers) have not freely adopted these new limits, making them essentially "theoretical."

Risk

Jumbo mortgage loans are a higher risk for lenders. This is because if a jumbo mortgage loan defaults, it is harder to sell a luxury residence quickly for full price. Luxury prices are more vulnerable to market highs and lows. That is one reason lenders prefer to have a higher down payment from jumbo loan seekers. Jumbo home prices can be more subjective and not as easily sold to a mainstream borrower, therefore many lenders may require two appraisals on a jumbo mortgage loan.

The interest rate charged on jumbo mortgage loans is generally higher than a loan that is conforming, due to the slightly higher risk to the lender. The spread, or difference between the two rates, depends on the current market price of risk. While typically the spread fluctuates between 0.25 and 0.5%, at times of high investor anxiety, such as August 2007, it can exceed one and a half percentage points.

Loan options

Jumbo mortgage loan options are similar to traditional loan programs. They simply require a slightly higher down payment, usually of an additional 5% for similar program types. No-money-down programs are generally not available, but instead require a minimum of 5% down payment for a jumbo mortgage. Because the loans are large, jumbo lenders frequently offer variable loan programs to the jumbo client. The risk of an interest rate increase can result in a large dollar amount increase.

It can be more expensive to refinance a jumbo loan due to the closing costs. Some lenders will offer the service of an extension and consolidation agreement, so that a jumbo refinancer will not have to pay for mortgage tax again on the same principal balance. In other cases, title insurance companies will offer up to a 50% discount, often required by law for those refinancing within 1 year to 10 years. The largest discount is for refinancing within one year.

Some consumers seeking a jumbo mortgage choose to seek advice from a competent professional familiar with jumbo mortgage loans.

Recent trends

Due to increased housing prices, there is a large increase in the number of jumbo loan applicants. Many consumers are becoming jumbo borrowers when buying a modest ranch or Cape Cod house; this option is no longer limited to high-end luxury residences.

New loan programs are now offered to address the large increase in jumbo loan applications. Because of the steep price increases during the recent years (2000-2006), mortgage loans are required in excess of the conforming limits in most big-city areas or their surrounding suburbs. The new loans are either a 40- or even 50-year amortization, or an interest-only option. They allow the jumbo loan borrower to pay the loan back over a longer period of time, or to defer any repayment of principal for a few years—thus saving them on their monthly payment. In some cases, the banker makes a larger profit if the loan takes more than 30 years to repay.

Popular Programs Avoid Costly Private Mortgage Insurance ("PMI")

80/20 & 80/15 jumbo loan programs are very popular with new home purchasers. Because any borrower with less than a twenty percent down payment was previously subject to purchasing private mortgage insurance (PMI) to insure the lender for the higher risk, jumbo borrowers were previously paying a very large PMI fee on a loan with an LTV (loan-to-value ratio) higher than 80%.

Now, the jumbo borrower can borrow the 80% without PMI, and take a second mortgage at a slightly higher intererst rate, which does not require PMI, and hedges the risk of the first position lender at the lower interest rate.

However with recent foreclosures on the rise lenders have turned away from 80/20 loans and very few zero down loans are available both for jumbo and conforming loans. Many lenders are offering LPMI (Lender Paid Mortgage Insurance) options that build the PMI into the interest rate. So by taking a slightly higher interest rate the borrower can avoid PMI altogether even if they are only putting 5-15% down payment. This will effectively reduce the monthly payment for the short term - but overall the higher rate may not be the best option because many times the standard PMI can be dropped after the homeowner has over 20% in equity.

Jumbo Mortgage Services

2009-01-21T06:17:00.000-08:00

Jumbo mortgage

In the United States, a jumbo mortgage is a mortgage with a loan amount above the industry-standard definition of conventional conforming loan limits. This standard is set by the two largest secondary market lenders, Fannie Mae and Freddie Mac. Loans above the conforming limits may be offered by seller servicers of these wholesale institutions, as well as Wall Street conduits who provide warehouse financing for mortgage lenders. The loan amounts reflect average loan sizes nationwide. Jumbo mortgages apply when agency (FNMA and FHLMC) limits don't cover the full loan amount. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that purchase the bulk of residential mortgages in the U.S. They set a limit on the maximum dollar value of any mortgage they will purchase from an individual lender. As of 2006[update], the limit is $417,000, or $625,500 in Alaska, Hawaii, Guam, and the U.S. Virgin Islands. Other large investors, such as insurance companies and banks, step in to fill the need, with maximum mortgage amounts going to the $1 million or $2 million range. A loan in excess of $650,000 is referred to as a super jumbo mortgage. The average interest rates on jumbo mortgages are typically greater than is normal for conforming mortgages, and vary depending on property types and mortgage amount.

On February 13, 2008 President Bush signed an economic stimulus package that temporarily increases the conforming limit to $729,750 until December 31, 2008. The limit for any area would be the greater of (1) the 2008 conforming loan limit ($417,000); or (2) 125% of the area median house price, but no more than 175% of the 2008 conforming loan limit ($729,750, which is 175% of $417,000)

The value of raising the limits to these levels is questionable. The secondary paper market (resellers/buyers) have not freely adopted these new limits, making them essentially "theoretical."

What Is A Jumbo Mortgage

Interest Only Mortgage Services

2009-01-21T06:06:00.000-08:00

1. What is an interest-only mortgage?
2. For what types of borrowers is it suitable?
3. What are the hazards you should watch out for?
4. How much more does an IO cost?
5. What information do you need to assess an IO mortgage?

What Is An Interest-Only Mortgage?

A mortgage is “interest only” if the scheduled monthly mortgage payment – the payment the borrower is required to make --consists of interest only. The option to pay interest only lasts for a specified period, usually 5 to 10 years. Borrowers have the right to pay more than interest if they want to.

If the borrower exercises the interest-only option every month during the interest-only period, the payment will not include any repayment of principal. The result is that the loan balance will remain unchanged.

For example, if a 30-year loan of $100,000 at 6.25% is interest only, the required payment is $520.83. In contrast, borrowers who have the same mortgage but without an IO option, would have to pay $615.72. This is the "fully amortizing payment" – the payment that would pay off the loan over the term if the rate stayed the same. The difference in payment of $94.88 is “principal”, which reduces the balance.

For a more complete discussion of the difference between an interest-only and a fully-amortizing mortgage, see Interest-Only Versus Fully Amortizing.

For What Types Of Borrowers Are Interest-Only Mortgages Suitable?

Interest-only mortgages are for borrowers who have a good reason for preferring the lower initial required payment, and are prepared to deal with the consequences. Here are some possible reasons:

Pay Principal When Convenient: Borrowers with fluctuating incomes may value the flexibility the IO mortgage gives them. When their finances are tight, they can make the IO payment, and when they are flush they can make a substantial payment to principal.

Ask yourself whether you are disciplined enough to make the payment to principal when you aren’t obliged to.

Buy More House: It is common for families to begin with a "starter house", then move into a more expensive house as their incomes rise. This process of "trading up" carries high transaction and moving costs.

You can avoid these costs by skipping to the second house now. In the short term, this will cause a cash flow strain, but the IO mortgage may make it manageable.

Ask yourself whether you are comfortable with the risk that the expected higher income won’t materialize.

Invest the Cash Flow: For most homeowners, paying down mortgage debt is the most effective way to build wealth. Nonetheless, some may build wealth more rapidly by investing excess cash flow rather than paying down their mortgage. For this to succeed, their return on investment must exceed the mortgage interest rate, since that rate is what they earn when they repay their mortgage.

A valid example is the young borrower with a long time horizon who invests in a diversified portfolio of common stock. This should generate a yield of 9% or more over a long period. See Borrow On Your Mortgage to Invest in Common Stock? Another are business owners who might earn a high return investing in their own businesses.

Ask yourself whether you really will invest the excess cash flow, as opposed to spending it; and whether you have a firm basis for believing that your investments will yield a return higher than the mortgage rate. I don't recommend it as a wealth-building strategy for most borrowers. See Is Unused Home Equity a Missed Fortune?

Quick Capital Gain: An interest-only (IO) is the instrument of choice in a quick turnover situation if you are trying to maximize the amount of house you can buy, and are limited by your income. The IO option lowers the required initial payment, which allows you to qualify for a larger loan amount.

This is why buyers in markets undergoing strong price appreciation, who are looking for quick capital gains, gravitate to IOs – or to their big brother, the flexible payment (option ARM), which has even lower payments in the first year than an IO. See Questions About Option (Flexible Payment) ARMs.

The more expensive the house they can buy, the larger the expected capital gain. However, if you don’t need an IO to qualify for the house you want to buy, it is not the best choice in a quick turnover situation. See Is Interest-Only Best For a Quick Turnover? And if the period of rapid capital appreciation is followed by a financial crisis, as in 2007-8, the expected capital gain becomes a major capital loss.

Allocate Cash Flow to Second Mortgage: John Doe finances his home purchase with an 80% fixed-rate mortgage (FRM) at 5.5%, and a 20% HELOC at 7.75%. The FRM is IO, and Joe uses all his available cash flow to pay down the balance on the HELOC. This makes sense because of the higher rate on the HELOC, and the possibility of future rate increases.

Payment Responsive to Principal Reduction: On most IO loans, whether fixed or adjustable rate, the monthly mortgage payment will decline in the month following an extra payment. This is the only type of mortgage that has this feature. On a conventional FRM, the payment never changes while on ARMs, the payment doesn't change until the next rate adjustment.

Some borrowers find this feature extremely convenient. For example, a home purchaser who must close before his existing house is sold may want to use the proceeds of the sale, when it occurs, to reduce the payment on the new mortgage. On many but not all IOs, a large extra payment reduces the payment in the following month

On some IOs, however, the payment doesn't change until the anniversary month, and on others it does not change until the end of the IO period. If you are contemplating an interest-only loan and find immediate payment adjustments in response to extra payments a highly desirable feature, ask about it. See When Will Extra Payments Reduce Monthly Payments?

What Hazards Should YouWatch Out For?

The major hazard is being deceived into accepting an interest-only mortgage that does not meet any of the suitability tests described above. The deceptions are about alleged desirable features of IOs that don’t in fact exist.

Borrowers can immunize themselves against most deceptions by remembering one critical fact. If two mortgages are identical except that only one has an interest-only option, lenders view that one as riskier. The reason is that, after any period has elapsed, the loan with the IO option will have a larger balance.

Deception 1: An interest-only loan carries a lower interest rate. Lenders usually charge a higher rate for an identical loan with an interest-only option, for reasons indicated above. I have never seen a price sheet in which a lender quotes a lower rate on an identical loan with an IO option, though I am told it happens; this is not a perfect market.

The deception arises from comparisons of apples and oranges. Most interest-only loans are adjustable rate mortgages (ARMs), and ARMs have lower rates than fixed-rate mortgages (FRMs). ARMs with the IO option have lower rates than FRMs because they are ARMs, not because they are IO.

Deception 2: An interest-only loan allows the borrower to avoid paying for mortgage insurance. Since loans with an IO option are riskier to the lender, the option cannot cause the disappearance of mortgage insurance.

Any IO loans with down payments less than 20% that don’t carry mortgage insurance from a mortgage insurance company are being insured by the lender. The borrower is paying the premium in the interest rate rather than as an insurance premium.

Deception 3. On an ARM with an interest-only option, the quoted interest rate is fixed for the interest-only period. It may or may not be. The interest-only period is the period during which you are allowed to pay interest only, usually 5 or 10 years. The period for which the initial rate holds can be as long as 10 years or as short as one month.

Where the initial rate period is 3, 5, 7 or 10 years, the interest-only period is likely to be the same. Where the initial rate period is a month, 6 months or a year, the interest-only period will probably be longer. These are the cases where deception is most likely to arise.

Deception 4. It is less costly to amortize an interest-only loan. This is patently ridiculous, but some variant of it keeps popping up in my mail.

There is no magic connected to amortizing an interest-only loan. A borrower who takes an interest-only option but decides to make the fully amortizing payment instead will amortize in exactly the same way as the borrower who takes the same mortgage without the option. Read Does an an Interest-Only Amortize Faster?

How Much More Does an IO Cost Than the Same Mortgage Without IO?

Among two loans that are identical except that one has an IO option, that one will be priced higher.

I recently compared the wholesale prices of 30-year FRMs with and without IO options in a variety of market niches. All prices assume the borrower has good credit and puts 20% down.

On a home purchase mortgage of $300,000, I found a wholesale rate difference greater than .375%. On a purchase for investment, the rate difference was almost .625%. On a cash-out refinance covering an owner-occupied home where neither income nor assets are documented (called "NINA"), the rate difference was almost .875%. And on the same loan covering an investment property, the rate difference exceeded 1%. Similar differences arise on ARMs.

Read How Much More Does Interest-Only Cost?

What Information Do You Need To Assess An IO Mortgage?

ARMs have the advantage of carrying a lower interest rate, and lower monthly payment, in the early years than fixed-rate mortgages (FRMs). But because the ARM rate is adjustable, it may rise in later years, and the payment will rise with it. Intelligent decisions about ARMs, therefore, require that account be taken of what might happen when the initial rate period ends.

While future interest rates are not known, we can make assumptions about what will happen to rates; these are called interest rate scenarios. Usually, we focus on rising rate scenarios, because those are the ones we worry about.

For any given scenario, we can calculate exactly how high the rate and mortgage payment will go, and when it will get there. This is scenario analysis. We can also calculate the total cost over any period specified by the borrower. In assessing ARMs with an IO option, borrowers will want to compare scenarios with and without the option.

When ARM rates are much lower than FRM rates, shrewd borrowers may take an ARM but make the payment that they would have had to make had they taken an FRM. By paying the balance down faster, the cost imposed by rising rates in the future is reduced. Hence, it is useful to perform scenario analysis based on the assumption that the borrower pays at the FRM rate for as long as that payment is larger than the ARM payment.

This is an alternative to an IO, and based on the opposite premise. Where an IO attempts to minimize the borrowers payments in the early years, for any of the reasons noted earlier, the FRM payment option is designed to pay down the balance as much as possible in the early years.

To see a sample of rates/payments and costs on an ARM, with and without both the interest-only and FRM payment options, click on Sample Rates/Payments and Costs.

What Is An Interest-Only Mortgage Is It Right For Me

Consumers are generally categorized into three classes:

1
Those who shudder at the very thought of paying interest.

2
Those who are willing to pay interest in order to have more purchasing power based on their current income level.

3
Those who view interest as a cost of doing business and use it to their advantage. Yes
paying interest does bring some financial advantage!

There are many common misperceptions about interest only loans. The first one many people have is: “All I will ever do is pay interest and I will never be able to pay off the principal of my home.” An interest-only loan can best be described as a mortgage (loan) that allows the mortgagor (borrower) to pay only the interest of the loan for a specified period of time typically during the first 2 to 10 years of the loan.

While the first classification of our consumers are frantically reaching for a brown paper bag
in which they can breath heavily in and out-of
the other two may also be wondering why anybody would want to pay interest-only for up to one-third of the loan’s lifetime. The reasons are as follows:

1
Paying the interest only during the early parts of the loan excludes the amount of the monthly payment that would have been applied toward the principal of the loan thus lowering the payment. In a market with high housing costs this makes getting into a home more affordable.

2
Leverage. Why pay down a mortgage at 6% when a portion of that payment could be invested somewhere else with a higher return?

3
Snowballing. Suppose a borrower could free up some of his mortgage at 6% to be applied toward his or her credit card that has an interest rate of 18 – 24%. Once he/she had that card paid off with money saved by not paying toward the principal
he/she could then apply the saved principal plus the recently paid off credit card payment toward the other high interest debts – we know you have them – viola snowballing.

Interest Mortgage Services

2009-01-21T05:57:00.000-08:00

Should You Get an Interest-only Home Mortgage?

Before you consider taking out an interest-only mortgage, you should first understand what they are. Unlike traditional, fixed-rate mortgages, interest-only mortgages allows the borrower to initially pay the interest on the principal for a short period of time, rather than making payments on both the principal and the interest. This is how it works: say, for example, you've taken out a mortgage for $100,00.00, which would require a monthly payment of around $1,000.00. However, with an interest-only mortgage, the same payment would only amount to around $695.00. You could use the extra money to pay existing debts, like credit cards or student loans, or perhaps invest it.

The concept of an interest-only home loan is not a new one. A descendant of the jumbo market, these types of mortgages were initially geared towards those who intended to utilise the excess cash for other types of investments. This is an ideal option for the market-savvy investor, as it frees up some income for other projects. However, this type of mortgage has now entered the mainstream market, and is available to most home buyers.

There are many benefits associated with taking out interest-only loans. They allow younger buyers to take advantage of a developing real-estate market, giving them the opportunity to afford a slightly higher priced home.

Before taking out an interest-only mortgage, there are few things that you must take into consideration. While the thought of only having to pay for interest for the next few years may seem very tempting, you must remember that when the interest-free grace period is over, you will have higher payments than you would have with a traditional mortgage. Many young couples do not account for this, assuming that they will be earning more money in the future, not anticipating that they may face financial hardships down the road, thus putting their home at risk.

While there are many advantages to taking out an interest-free mortgage, it is important to remember that the grace period will not last forever and that the monthly payments will eventually go up. As long as you make financial plans for the future, taking advantage of an interest-only mortgage could allow you to increase your financial well-being, bringing you peace of mind.

Now Is The Time To Refinance An Arm Mortgage

Owning your own home is the end of a dream and the beginning of a headache if the interest rate that you are paying off is too high
although paying quickly helps you to save money each month if you consider refinancing.

Before shopping
keep in mind the different mortgages available on the financial market and go for a refinancing solution that lengthens the term of your actual mortgage
or a new low interest mortgage.

Adjustable rate mortgage (ARM) is a good refinancing option
since its interest rate is adjusted periodically
moving lower or higher occasionally
but always within the same ratio.

ARM mortgages are often compared with Treasury bill rates
since their fluctuation is based on a pre-selected index. ARM’s may include caps on interest rate increases and limits on the frequency of interest rate adjustments
protecting you against higher payments resulting from increasing interest rates.

Another advantage when it comes to buying an ARM mortgage for refinancing is the fact of initial lower interest rates with continuous adjustments over a period of time or the life of the mortgages or loan.

Mortgages can be purchased for 15 or 30 years with fixed interest rates
that can be reduced if you refinance your home buying an ARM mortgage. Benefits from resetting your monthly payments apply immediately after switching to this option
especially when you are planning to sell your home within a few years.

Today is more convenient than ever to refinance your mortgage this way because of the recent drop in interest rates allowing you to save in monthly interests.

Why should you consider refinancing now? Among the many benefits that an ARM mortgage offers
including a lower interest rate and monthly payment
refinancing allows you to build equity in your home faster because your loan term is shortened
or draw an actual equity through the so-called cash-out refinance.

However
it is necessary to keep in mind a few considerations before shopping for a new ARM mortgage for refinancing your actual mortgage. Among the points of consideration
jot down the interest rate of your existing mortgage against the interest rate of a new ARM mortgage
and the total cost of refinancing.

Other factors influencing your decision are your current credit status and actual income
the time that you plan to live in your home
and how much equity you have been built up in this property
if any.

Income Mortgage Stated Services

2009-01-21T05:48:00.000-08:00

Stated Income Mortgage Loan - Get Approved Online

A stated income or no doc mortgage loan allows individuals with difficult to document income to buy a home. With a documented credit score and reasonably stated income, you can qualify for a mortgage at a slightly higher rate. Online mortgage lenders allow you to easily compare rates on stated income mortgage loans, guaranteeing that you get the best rate.

Getting Started

To apply for a stated income or no documentation mortgage loan you will need to provide necessary paperwork verifying your credit score and employment. You must provide your social security number since your credit worthiness is based almost entirely on your credit score. Typical stated income loans will require a credit score of at least 680, but some lenders will offer loans for scores as low as 580.

You will also need to prove you are employed - self-employed individuals qualify. You will need to disclose your income, which must be reasonable in your profession.

Finding Mortgage Lenders

Just like with any type of mortgage loan, it pays to compare lenders' rates and fees. Even a quarter of a percent difference can save you thousands over the life of your mortgage. However, you also need to factor in fees when comparing lenders. Fees often hide the true cost of a mortgage loan.

To quickly find lenders, use a mortgage lender website to request basic quotes. By providing the loan amount and your estimated income, lenders will give you a generic mortgage quote. Online mortgage lenders allow quick shopping from the convenience of your home.

Getting An Approved Loan

Once you have found a mortgage lender, you have two options. You can apply to be pre-approved for your stated income mortgage loan or you can find your house and then apply for a loan. Pre-approved borrowers increase the chance that their offer will be accepted when buying a home.

When you are ready to apply for your mortgage loan, you can complete your application online by entering your personal information over a secure server. Final paperwork will be mailed out to you to review and sign. Once notarized, you send the forms back to the lender for their final approval.

Stated Income Loans: Lie to Get a Better Rate?

Stated income loans are also called “liars loans”, because in some cases, the rules virtually invite the borrower to lie. The case below is a great illustration.

“My husband makes $7,000 a month but has a credit score of 503. I make $1250 and have a score of 690. The loan officer offered a mortgage in my name alone but I must sign a statement saying that I bring in $7000 a month. I don’t make that money but my husband does and we need the loan. Should I sign it? The loan officer told me to sign it only if I was comfortable...It is called a stated income loan.”
Stated Income Loans Compared to Full Documentation Loans

A stated income loan qualifies a borrower using the income the borrower states on the application form – as opposed to the income the borrower can document. With a stated income loan, the lender agrees not to attempt to verify the income the borrower states on the application.

Stated income loans are designed for the many prospective home buyers who have the income to afford a mortgage and have acceptable credit, but don’t meet traditional underwriting standards – called full documentation or “full-doc”.

Full documentation generally requires that applicants show that the income they claim was actually earned in each of the two prior years. This is usually done by presenting W-2s or tax returns for two years.

Self-employed borrowers usually have the most trouble meeting this requirement, and stated income loans were originally designed to deal with them. But many applicants with incomes from salaries also can’t meet full-doc requirements. For example, the income they claim might incorporate their latest increase in salary, which is not yet reflected in documents covering past income.
Stated Income Borrowers May Have to Execute IRS Form 4506

Some lenders require that the stated income borrower execute a Form 4506, which authorizes the lender to request IRS verification of the bottom line of the borrower’s tax returns for the previous two years. Lenders who require a 4506 don’t ordinarily check the returns, but the possibility that they might is viewed as an inducement to report income truthfully.

If the borrower defaults very quickly, the lender might check the returns for possible evidence of fraud. Many mortgage brokers steer borrowers away from lenders who require the 4506.

In many cases, a check of tax returns would not reveal a falsehood. This includes the case of the woman who wrote the letter cited above, who filed a joint return with her husband. This is probably why many lenders do not bother with a 4506.
Lenders Verify the Source of Stated Income

While lenders don’t check income on a stated income loan, they do check the source of the income. Ordinarily, they require that a self-employed borrower be self-employed in the same business for two years, and that a salaried employee be employed in the same line of work for two years.

The income stated by the applicant is not verified, but it must be roughly consistent with incomes earned in the type of business or line of work in which the applicant is involved. Where the range of incomes is very large and the applicant comes in at the top of the range, the underwriter might ask the applicant to strengthen the application by showing significant financial assets.
Stated Income Lies

Stated income lies are less about the true amount of income the borrower has available than about the source of the income. Few loan officers or mortgage brokers will encourage borrowers to exaggerate the amount of their income, because that is the surest path to a default where everybody loses. But embroidering on the source of the income is viewed as OK, so long as the borrower really has the income and is not uncomfortable embroidering. Their general attitude is, “so long as the borrower really has the income, what does it matter where it comes from?”

The inducement to lie on a SIL is that the price of the mortgage, while higher than the price on an identical loan with full documentation, is lower than the price with no documentation. For example, the rate could be .4% higher on a stated income loan than on a full-doc loan, but .2% lower than on a no-doc loan. (I took these adjustments off one lender’s price sheet, another lender might price differently.)

The woman who wrote the letter above can easily rationalize the lie that the income of her husband’s is actually hers. Indeed, she lives in a community property state where husband and wife share legal right to each other’s incomes. But the loan officer did not try to persuade her to sign, and I didn’t either. She must be the custodian of her own conscience.

House Mortgage Services

2009-01-21T05:43:00.000-08:00

Buying your first home is not the intimidating ordeal you might think. Although it is likely to be the most expensive thing you'll ever own, the home buying process is much simpler than most people think. Realtors, agents, contracts, home loans, pre-qualification letters, buyer loyalty agreements, sales and purchase agreements and banks are just a few of the many things to consider when starting the process of purchasing a house. Luckily, loan officer Jim DiVietri has teamed up with Expert Village to explain and demystify the seemingly daunting task of qualifying for a home mortgage. In this free video series, learn how to qualify for a mortgage, how your credit history and credit score factors into getting a mortgage, what documents are needed for a mortgage, and how to choose the best kind of loan for your investments.

"Hi! This is Jim DiVietri from Allied Home Mortgage in Lansing, Michigan on behalf of Expert Village. In this clip, we're going to talk about what a mortgage is. A mortgage is money that a bank or a mortgage company will lend you so that you can purchase a house. That sounds really simple, but there are so many different kinds of mortgages. My job is to find out what mortgage will fit you and find out from you what kind of mortgage you're looking for. Most people think of a mortgage as 30 year. That seems to be the one that we sell the most of. You get an interest rate that's fixed. Let's say a 6.5 interest rate is fixed for 30 years. It's amateurised. Say we borrow 100,000 dollars. You put 25,000, so we'll financing about 78%. The mortgage company or bank will come in and give you that 78%. The interest rate is fixed for 30 years and it's amateurised over 30 years. Your payment's going to be somewhere in the seniti of about 650 dollars a month. There are other kind of mortgages and we'll get into those later."

In House Mortgage Services in the Real Estate Brokerage

The trend in the real estate brokerage business is to bundle other services together for the convenience of the client. One of these extra service offerings is the in house mortgage, with a mortgage provider having space in the real estate brokerage office.

One extensive network example is Bank of America's Alliance Program. In joining with real estate brokerages, Bank of America provides:

A mortgage consultant in the broker's offices
Closing cost credits to the consumer
Promotional reimbursement to broker for advertising B of A services
Leads to the broker from Bank of America's website
Consumer access to the B of A mortgage site to manage their accounts

The question that presents itself is the cooperation in this way that tends to move the consumer to the single mortgage loan product. Yes, it is more convenient, but is it going to be the best deal for any particular consumer?

With the Internet changing the way that we do business in so many ways, some real estate professionals are moving toward a "consultant" approach to offering their services to clients. I like this approach, but it requires a concentrated effort to provide customized advice and services to your customer.

If your brokerage office has an arrangement with a major lender in their offices, can you be the consultant offering the very best advice for your customer? Even those taking the consulting approach do not always offer a great deal of help in the selection of a mortgage broker. They may just hand a list to the client, advising them to call for the best deal.

If you are moving toward providing value as a consultant with resources to guide and help your customer through the process, can you do that with an in house mortgage company? Even if you truly believe this company is the best out there right now, will they be the best next year, or even next month? Is there a better choice for this particular client? Will your office allow you to recommend it?

This question as it relates to mortgages is really just a small part of the larger problem for today's real estate professional. How can we continue to provide value, increase that value, and retain compensation structures that will allow us to stay in business? I like the consulting approach, and I don't see how I can do it well with an in house mortgage relationship, no matter how convenient for my customer.

Home Mortgage Rate Services

2009-01-21T05:28:00.000-08:00

Home Mortgage & Home Loans: Home Mortgages - Home Financing

Completing your research and having home mortgage information at hand before applying for your home mortgage loan can save you a lot of money over the term of your home mortgage loan.

Your interest rate and total payments on your home mortgage are very important things to look at when working out the financing for your new home. Many people pay more than they have to because they did not take the time to do a little research before entering into a contract for their home mortgage.

This is home mortgage information that you need to know. There are two basic major types of home mortgages that are available. One is a fixed rate mortgage which involves a fixed amount of payment of principal and interest for the entire term of the loan. This means that regardless of economic conditions, one has to pay a certain fixed amount of money to the lender for each payment period.

Another basic type of home mortgage is the adjustable rate mortgage. This is an loan arrangement which allows your payment to be pegged to economic indicators such as those of the Fed funds market or to the prime rate. Some adjustable rate mortgages are based upon the more volatile LIBOR rate so you should be alert for this term. An adjustable rate mortgage with no cap based upon LIBOR rates may reach much higher levels than you anticipate at the time of your loan closing.

The use of any adjustable rate mortgage means that your interest rate payments can go up or down depending on the performance of the entire economy. Adjustable rate mortgages usually start out with lower interest rates than fixed rate mortgages (because of the risks involved in the adjustable rate mortgage moving to the upside). However, after an initial period of a year or two the adjustments to rates can be extreme. You must be aware of this and be prepared to pay much higher mortgage payments when the rate adjusts.

During the last few years, we probably have had the lowest interest rates for the last 50 or so years. This has been favorable for most home mortgage payees, but it is also an indicator that for the next few years, that interest rates will probably go up.

Remember that total interest paid will increase considerably for longer term mortgages. This is critical home mortgage information to understand. The longer the term of your loan the more interest payments you will make. You might be amazed how much you really pay for your home once interest payments are factored in. The shorter time it takes you to pay off the home mortgage the less you pay for the house.

Interest rate movements can be very dynamic. Having a strong view towards interest rates movements can determine your position in taking out a mortgage. If you believe that rates are bound to go up, then you will probably be better off availing of a fixed rate home mortgage. If one believes that rates are bound to go down, you might consider an adjustable rate home mortgage to take advantage of the movements. Then at or near the bottom of the interest rate cycle you could refinance with a fixed rate mortgage.

Having a good sense of interest rates and their movements can save one a lot of money. Ask your lenders about the different schemes and calculate how much you are would pay for each type of arrangement. Then weight the risks and potentials of the movements of the interest rates and choose the best payment scheme.

Having good home mortgage information at hand is the key to locking in the right type of mortgage. Taking your time and carefully researching home mortgage information can pay off every month over the term of your loan as you make your mortgage payments.

Refi Home Mortgage Loans How Soon Can You Refinance An Adjustable Rate Mortgage

Homebuyers have several loan options. Hence
purchasing a new home has never been easier. Individuals who cannot afford a down payment or closing costs may take advantage of loan programs that offer assistance. Furthermore
those hoping to obtain a low rate mortgage may consider a loan with an adjustable rate. Because of the initial low cost of adjustable rate mortgages
monthly mortgage payments are also lower. However
low rate mortgages are short term. To avoid an interest rate hike
homeowners should refinance before rates begin to increase.

Advantages of Adjustable Rate Mortgages

There are several advantages to accepting an adjustable mortgage. For starters
a low rate mortgage allows buyers to purchase pricier homes
while maintaining an affordable monthly payment. Moreover
because of record low rates
homebuyers who obtain an adjustable rate mortgage can enjoy falling rates without refinancing their mortgage. Thus
they avoid closing costs and other fees.

Adjustable rate mortgages are also ideal for individuals who plan on moving in a few years. Some people enjoy the stability of living in one place for many years. In this case
refinancing for a fixed rate is a wise choice. However
if you prefer the flexibility of moving every three to five years
you will save money with an adjustable rate.

Pitfalls of Adjustable Rate Mortgages

While adjustable rates offer many attractive features
one major drawback is that low rates are temporary. If interest rates continue to fall
you will not be subjected to the dangers of these loans. However
if rates begin to climb
so will your mortgage payment. Homebuyers who cannot afford an increased mortgage are at risk of losing their home. Thus
if your goal is to remain in your current home for many years
refinancing for a fixed rate will offer predictable mortgage payments.

How Soon Can You Refinance a Mortgage?

Fortunately
home mortgage loans can be refinanced whenever you like. Some lenders suggest allowing the loan to mature at least 12 months. However
if you detect a change in market trends
refinancing shortly after purchasing your home is a smart maneuver. Those contemplating refinancing must be prepared to pay additional closing fees. Moreover
contact your current lender and inquire of prepayment penalties.

Home Mortgage Loans Services

2009-01-21T05:14:00.000-08:00

Home Mortgage & Home Loans: Home Mortgages - Home Financing

Refi Home Mortgage Loans How Soon Can You Refinance An Adjustable Rate Mortgage

Home Mortgage Interest Rate Services

2009-01-21T05:08:00.000-08:00

Home Mortgage & Home Loans: Home Mortgages - Home Financing

Mortgage Interest Rate Determined by Many Factors

Home Mortgage Services

2009-01-21T04:57:00.000-08:00

Home Mortgage & Home Loans: Home Mortgages - Home Financing

Home Mortgage Quotes Online - How Do They Compare To a Quote From a Broker in The Real World?

Looking At Fees

Online mortgage brokers have automated much of the mortgage loan process, reducing costs. As a way to stay competitive, many of these lenders have eliminated or reduced their fees.

Interest Rate Quotes

Difference Is Sales Styles

Home Equity Mortgage Services

2009-01-21T04:45:00.000-08:00

Mortgage & Equality: Refinance Home Equity - Mortgage Financing

Home Equity Loan ? With a Reverse Mortgage, Your Home Pays You!

The home equity loan has become quite popular in the last five years, and Americans have tapped into the equity of their homes in record numbers. The reasons vary, although home improvement and debt consolidation are the most common reasons for borrowing against a home's equity.

In the last fifteen years or so, a new twist has arrived in the home equity market ?- the reverse mortgage. Like a traditional home equity loan or line of credit, a reverse mortgage allows you to borrow against the equity in your home. Unlike those other options, you don't have to make payments in order to pay it back. The repayment takes place when you die, when you move, or when you sell your home. You must be at least 62 years of age to qualify, but unlike other loans, you do not have to have any appreciable income in order to get a reverse mortgage.

There are a number of advantages of a reverse mortgage over a traditional home equity loan:

Your options of receiving the money from the loan include a monthly payout, although you may also elect to receive a lump sum or a credit line. A monthly payout would effectively provide you with a regular "income" during the remainder of your time in your home.

The loan isn't due until you move, sell the home, or die. There is no repayment schedule, as with regular installment loans. At the time of your death or when you sell the house, the loan must be repaid with interest.

The amount you have to repay cannot exceed the value of your home. With this feature, you are protected should your home decline in value. The lender cannot force you to pay more than the value of the home.

Due to the age restrictions on reverse mortgages, they are not for everyone. But if you qualify, it could provide an excellent opportunity to have an income during your retirement years.

Fixed Rate Mortgages Services

2009-01-20T05:39:00.000-08:00

A fixed rate mortgage (FRM) is a mortgage loan where the interest rate on the note remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or "float." Other forms of mortgage loan include interest only mortgage, graduated payment mortgage, adjustable rate mortgage, negative amortization mortgage, and balloon payment mortgage. Please note that each of the loan types above except for a straight adjustable rate mortgage can have a period of the loan for which a fixed rate may apply. A Balloon Payment mortgage, for example, can have a fixed rate for the term of the loan followed by the ending balloon payment. Terminology may differ from country to country: loans for which the rate is fixed for less than the life of the loan may be called hybrid adjustable rate mortgages (in the United States).

This payment amount is independent of the additional costs on a home sometimes handled in escrow, such as property taxes and property insurance. Consequently, payments made by the borrower may change over time with the changing escrow amount, but the payments handling the principal and interest on the loan will remain the same.

Fixed rate mortgages are characterized by their interest rate (including compounding frequency, amount of loan, and term of the mortgage). With these three values, the calculation of the monthly payment can then be done.

Fixed Rate Mortgages

As the name implies, a fixed rate mortgage is one on which the interest rate is fixed and set for the duration of the loan. In other words, the interest rate remains the same during the entire term of the mortgage or for a stipulated length of time. Fixed rate mortgages are the most popular ones and almost 75% of all home mortgages are fixed interest rate mortgages.

The biggest benefit of a fixed rate mortgage is that you will know precisely what your mortgage interest and principal payments are going to be and hence plan your budgeting in accordance.

By virtue of the fixed mortgage rate, you are secure in the knowledge that the interest rate is going to remain unchanged for the duration of the fixed rate mortgage. For example, the lender offers a 15 year fixed loan to the buyer of a home. He charges the purchaser 6% interest which is fixed and will not change for the entire term of the loan. Whether the market rate rises to 7% or decreases to 5%, the homebuyer will continue to pay the fixed 6% interest rate. Thus a Fixed-Rate Mortgage applies the same interest rate toward monthly loan payments for the term of the loan.

Characteristics of a fixed rate mortgage

It is simple and easy to understand in comparison to the Adjustable Rate Mortgages (ARMs).
It offers more security for buyers and is very commonly used by first time home buyers.
It is best suited for persons who like to know what their monthly budget for expenses is going to be and for those who wish to keep their houses for a longer period of time.
The fixed rate interest mortgages usually charge higher rates of interest than ARMs as the risk perceived by lenders is higher.
The Fixed rate mortgages usually have higher initial monthly payments compared to those of adjustable rate mortgages.
Fixed-rate mortgages have less flexibility than adjustable rate mortgages.

In the case of adjustable rate mortgages the interest rate is not fixed, but changes during the life of the loan. These changes are linked to an index rate and move in accordance to it. The Adjustable Rate Mortgage offers you the benefit of low initial rates and therefore you are able to afford more expensive homes. In a fixed-rate mortgage, your interest rate stays fixed for the entire life of the mortgage.

Equity Mortgage Services

2009-01-20T05:26:00.000-08:00

Mortgage & Equality: Refinance Home Equity - Mortgage Financing

The equity mortgage revolution

Just putting a roof over your head can soak up more than a third of your weekly income, and even then you can't buy where you want because you just can't afford it.

But what if you had a silent partner, who paid 20 per cent of the cost, and you didn't pay one cent in interest on that portion of your loan?

It's called an equity finance mortgage, the latest attempt to make it easier for people to get a foot on the housing ladder.

It works like this: say you need $100,000 to buy an apartment. First, you get a small deposit of $10,000 together. Then your equity partner invests 20 per cent, or $20,000, and you take out a regular mortgage of $70,000.

You never pay interest on your equity partner's share, enabling you to borrow more than you could have, or keep your repayments much lower.

"Potentially it's the most innovative product to hit the mortgage market in at least the last decade," said Dennis Orrick from consumer advisory group Info Choice.

The only catch comes when you want to sell your house - the silent partner takes 40 per cent of the capital gain.

So if the house you bought for $100,000 makes $200,000 at sale time then $40,000 goes to your equity partner and you walk away with $60,000, in lieu of never having paid one cent in interest on this added investment.

Equity Finance Mortgages or EFMs will be launched tomorrow (13 March) by the Adelaide Bank.

And it might not be too long before other major banks pick up on the idea.

"We expect these loans to be available to 80 per cent of the population in every mainland capital city," said the EFM's inventor, Chris Joye.

Credit Mortgage Services

2009-01-20T05:21:00.000-08:00

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Low Credit Score Home Loans Home Buying Tips

Although you can purchase a new home without knowing all the tricks and techniques for securing a low rate, future homebuyers should educate themselves on the home buying process.

In some states, it is mandatory for first time homebuyers to attend a home buying workshop. If you have bad credit, these workshops are beneficial. They teach you various techniques such as how to improve credit rating, and how to find a lender that caters to bad credit home loans.

Bad Credit Rating Effect Loan Approval

For the most part, you can obtain a home loan with fair credit. In some cases, you may even be able to get a low rate. Unfortunately, if your credit score falls below 500, homeownership may be impossible. Even with a credit score below 600, your loan options are limited. Thus, it is important for those contemplating buying a home to improve their credit rating.

Before approving a loan and offering a mortgage rate, lenders will carefully review your credit report and score. Late payments, collection accounts, excessive debts, and inquiries contribute to having a high or low credit score. Mortgage rates are based on credit rating. Hence, if you are hoping to get a great mortgage rate, which equals lower monthly payments, now\'s the time to improve credit.

Save Enough Money for a Down Payment

Because it is difficult for hard-working people to save money for a down payment and closing costs, various loan programs will incorporate fees into the total loan amount. However, if you have bad credit, a down payment can improve your chances of getting approved for a home loan.

The ideal down payment is about 20% of the home price. Nonetheless, lenders are willing to accept smaller amounts. If possible, attempt to have a down payment of at least 3% to 5%. Aside from boosting approval chances, a down payment may help you secure a lower rate.

Use the Right Lender for a Bad Credit Loan

To obtain the best mortgage loan with a low credit score, you need to use a sub prime or high risk lender. Some traditional lenders offer sub prime loans. However, choose a lender that specializes in bad credit loans. You may obtain better rates with a bad credit mortgage lender.

View our recommended bad credit mortgage lenders online.

Also check out our recommended sources for a free instant credit report, or view our recommended online debt recovery solutions online.

Commercial Mortgages Services

2009-01-19T07:07:00.000-08:00

A commercial mortgage is a loan made using real estate as collateral to secure repayment.

A commercial mortgage is similar to a residential mortgage, except the collateral is a commercial building or other business real estate, not residential property.

In addition, commercial mortgages are typically taken on by businesses instead of individual borrowers. The borrower may be a partnership, incorporated business, or limited company, so assessment of the creditworthiness of the business can be more complicated than is the case with residential mortgages.

Some commercial mortgages are nonrecourse, that is, that in the event of default in repayment, the creditor can only seize the collateral, but has no further claim against the borrower for any remaining deficiency. The general reason for this is twofold: many laws significantly prevent the creditor from going after the borrower for any deficiency, and mortgages structured for sale as bonds give a higher priority to constantly receiving some sort of income and therefore require a clause which allows the lender to take the property immediately, regardless of bankruptcy proceedings that the borrower might be going through.

Frequently, the mortgage is supplemented by a general obligation of the borrower or a personal guarantee from the owner(s), which makes the debt payable in full even if foreclosure on the mortgaged collateral does not satisfy the outstanding balance.

Commercial Mortgage Rates Services

2009-01-19T06:57:00.000-08:00

Commercial mortgage loans differ from residential mortgages primarily because they're used to finance commercial property. The property may technically be a residence, but if it's used as a commercial venture-for example, a large apartment building rented out for its income potential-a commercial real estate loan is generally required. The volume of commercial loans grew 16 percent in 2005 to $1.3 trillion, as lenders provided business loans for various ventures, developments, investments, and construction projects.

Tips for successful business loans

When lenders qualify customers for a commercial mortgage, the credit history of the business and its directors is taken into consideration, and the risk of the commercial venture itself is carefully evaluated. The better you can present a successful business plan, the more likely you will be convincing lenders to approve your loan on favorable terms. For instance, if an office building has good tenants and a positive, profitable track record, lenders will be more inclined to lend money to help an investor buy it than they would for a building with vacancies or negative cash flow.

Commercial loans carry either fixed or adjustable interest rates, and many charge penalties for prepayment. Most commercial loans are structured with a balloon payment that comes due after five, 10, or 15 years, although some have fixed 30-year schedules. And commercial real estate loans are sometimes created as bridge loans, to help borrowers finance projects until they get off the ground. For instance, a developer might use a two- or three- year bridge loan to borrow money to build a shopping center, and then refinance to a longer loan once the shops are occupied and tenants are providing a steady cash flow of rents to the developer.

Commercial second mortgages

Just as homeowners often use a home equity loan to raise cash for household purchases, improvements, or expenses, commercial borrowers also use second mortgages, equity loans, or refinancing strategies to raise capital for such things as equipment, inventory, or business expansion.

Because commercial mortgages are tailored to meet the needs of the business community, they're the best option for those who need financing for commercial real estate ventures.

Commercial Mortgage Rates

Commercial mortgage rates are essentially the combination an index and the margin that the bank charges. Borrowers should be careful on how the term sheets are written, in regards to quoted rates. Below are a few suggestions on how you can protect yourself against bait and switch moves that some lenders still use regarding commercila mortgage rates.

First of all, an indexes commonly used in the commercial mortgage industry includes Prime and the 10 Year Treasury. Less well known indexes such as the 5 Year Swap or the FHLB indexes are becoming more popular.

The margin is where the bank makes its spread. It is a very complicated process for banks to figure out what to charge as they basically have to predict the future and take into account the probability of default, adequately cover their costs, and of course try to make a profit. At the same time the industry is highly competitive and they have to price out their loans 'skinny' enough to be able to bring in new borrowers.

The combination of the margin and index is commonly referred to as the Effective Rate. It's what the borrower will use to calculate their payments and what they normally think of when they ask for rate quotes. For example if a bank quoted you Prime plus 1% your Effective Rate would be 6% as prime right now is at 5%.

The main suggestion regarding not having your rate bumped up on you while your loan is in process is to have both the margin and index clearly written on the term sheet. The opposite is to just have the effective rate quoted with no mention as to either the margin or the index. If either or both go down for example, you would not know, and would not know that your rate should be lower. The lender could simply keep your rate the same and you would have no recourse or really any way of knowing.

A worse scenario would be to have your rate increase during process. Rate locks are rare in the commercial mortgage industry so it is possible for the funding bank to call you with the bad news that your rate will be higher. In fact, as of this writing 5/8/8, it's not that uncommon at all, as banks are constantly rethinking what they can and what they want to lend on - due to the credit crisis. And many will have the attitude of, take it or leave it. More to the point though if the margin and index are not clearly known the lender could mention any margin or index when challenge to 'cover' his story.

Get it in writing or assume they will try the bait and switch on your commercial loan rate.

Best Mortgage Rate Services

2009-01-19T06:49:00.000-08:00

Getting the best mortgage rate

There are two things you must do to find the best mortgage rate: you must educate yourself about mortgages and you must shop around for the most competitive rate. This sounds easy enough but in practice it takes a lot of time and effort!

Most people only think about their mortgage once every five years. These days, the marketplace for mortgages is changing on a monthly basis so the average consumer has a lot of work to do to get up to speed on what is available in the marketplace.

There are no longer just the big banks to consider. There are several new mortgage lenders that have entered the Canadian market over the last decade, including ING Direct, PC Financial, MCAP, Maple Trust, Citizens Bank, HSBC, etc. At any given time there are at least a dozen financial institutions that are offering competitive mortgage rates. One institution might have a great one year rate, another a great five year rate and yet another a great variable rate mortgage.

Trying to determine who is offering the best rate is not always an easy task! The big banks still refuse to tell you what their best rate is. They will only tell you what their posted rate is and then it's up to you to try and barter them down (if you can actually find someone to talk to in their branches). Some of the newer players, like ING and PC Financial will tell you up front what their best rate is. This is a nice change but there are usually even better rates to be had elsewhere.

Educating yourself about the various mortgage products and mortgage promotions is not an easy task, either. If you have looked at a variable rate mortgage recently you will have discovered that every single financial institution has a different type of variable rate mortgage. The differences make it confusing for the average consumer to compare one product to another. This is not done by chance: this is done so the banks can confuse you enough to make you think you're getting the best product when, in fact, you're not.

So what is the average consumer to do? You can try to educate yourself and shop for the best rate, or you can rely on the experience of a mortgage broker. Your best option will usually be a combination of the two.

The usual place to start is with your current bank. Talk to them about your situation and see what they are prepared to offer you. Be sure to get any offers in writing! Once you have an idea of what your own bank will do then you can start to inquire with other institutions. Start with phone calls and do not give them a full application. Just tell them enough about your financial situation that they can give you a quote over the phone. Do the same with a few mortgage brokers. You essentially want to interview the bankers and the brokers to see who will offer you the best advice and the best rates. It is important to note that the person you are dealing with can make a big difference. It is not uncommon to speak to someone at the same bank and get two totally different answers to the same question. Some of the lenders are aggressive and want your business while others are underpaid, overworked and don't really care.

The same advice applies to mortgage brokers. There are a lot of new brokers in the industry. Interview your broker to see how long they have been in the industry and find out if they know their stuff! A knowledgeable mortgage broker will usually get you a better mortgage rate than you could on your own. Remember that a mortgage broker is not limited to dealing with one or two lenders. They can deal directly with almost all the lenders in the industry to find you the best available mortgage.

Once you have picked someone to deal with, you should stick with them. If your current bank comes back to you and says they will match the rate, tell them they're too late. They had their opportunity and they wasted your time. If you go back to them now, you are just rewarding their behavior.

If you want the best mortgage, you must find the best people to work with. You can try to do it all yourself but you may fall short of getting the best available mortgage. If you educate yourself and rely on the experience of a knowledgeable mortgage broker or an aggressive lender you will often do a little better.

Mortgage Rate Tip #1 Origination Fee
Your mortgage rate might be low in your mind, but you must take the origination fee into account as well because this can increase your APR. Lenders frequently charge 1%, but you can always negotiate the mortgage rate origination fee lower. Also, if the origination fee is much higher than 1% you need to either negotiate it down, or find another lender with a more favorable overall mortgage rate.

Mortgage Rate Tip #2 Lock in the Rate
When negotiating your mortgage rate, make sure your lender is prepared to lock in your rate for at least 30-60 days. This way you will be guaranteed a particular rate even if rates skyrocket the next day. Another not trick many individuals are not aware of is to include a clause that also will allow you to take a lower rate if rates fall during this period. This is a great mortgage rate tip because you get your mortgage rate locked in so it can’t go any higher, but if the average mortgage rate goes lower you receive the lower rate.

Mortgage Rate Tip #3 Fight
If the mortgage rate drops significantly and you have already signed a deal locking in a particular mortgage rate and don’t have a clause that ensures you will receive the lower rate, then you need to fight. You simply need to call your lender and say that while you signed the lock in agreement you want the lower rate. This will take some negotiating, but your lender wants you business and might be willing to negotiate the mortgage rate with you.

Best Mortgage Services

2009-01-19T06:43:00.000-08:00

Getting the Best Mortgage Rate

Buying a home is an expensive endeavor so getting the best possible mortgage rate should be one of your main priorities. By deciding to get the best mortgage rate possible you will be making a positive decision to help you for many years to come. However, just deciding to get the best mortgage rate available is not going to get you the best mortgage rate available. Instead, you will need to learn the tips and tricks for negotiating with your mortgage lender in order to receive the best possible mortgage rate for your personal situation.Mortgage Rate Tip #1 Origination FeeYour mortgage rate might be low in your mind, but you must take the origination fee into account as well because this can increase your APR. Lenders frequently charge 1%, but you can always negotiate the mortgage rate origination fee lower. Also, if the origination fee is much higher than 1% you need to either negotiate it down, or find another lender with a more favorable overall mortgage rate.Mortgage Rate Tip #2 Lock in the RateWhen negotiating your mortgage rate, make sure your lender is prepared to lock in your rate for at least 30-60 days. This way you will be guaranteed a particular rate even if rates skyrocket the next day. Another not trick many individuals are not aware of is to include a clause that also will allow you to take a lower rate if rates fall during this period. This is a great mortgage rate tip because you get your mortgage rate locked in so it can't go any higher, but if the average mortgage rate goes lower you receive the lower rate. Mortgage Rate Tip #3 FightIf the mortgage rate drops significantly and you have already signed a deal locking in a particular mortgage rate and don't have a clause that ensures you will receive the lower rate, then you need to fight. You simply need to call your lender and say that while you signed the lock in agreement you want the lower rate. This will take some negotiating, but your lender wants you business and might be willing to negotiate the mortgage rate with you.

Choosing the Best Mortgage

Why It's Important and How To Do It

By the time you finish paying off the mortgage on your home, you'll have paid more in interest alone than the actual purchase price of the house. For example, if you borrow $125,000 at 8% for 30 years, you'll end up paying over $205,000 in interest, plus the $125,000 you borrowed. Your $125,000 house has cost you $330,000! so it makes sense to shop wisely for the best mortgage, since it will probably be the biggest financial decision of your life.

A mortgage is a mortgage is a mortgage, right? Wrong! There are many mortgage products on the market now, so it's important for you to do your homework to determine which type is best for you, and which bank, savings and loan, mortgage bank, finance company or credit union offers the best terms for that type of loan.

The Internet makes this process easier. You can find out how large a loan you qualify for, compare loans, search for the lowest rates in your area, and in some cases, apply online.

Although there are many mortgage products available, most fall into one of several general categories:

Fixed Rate

Fixed rate mortgages are the traditional loans that have a fixed interest rate over the life of the loan, typically 30, 20, 15, or 10 years. With these loans, your monthly payment for interest and principal never changes (your escrow expenses, such as property taxes and insurance, may change from year to year). Downpayments required on these loans can be as low as 5%. If you want predictable payments over the life of your loan and don't mind paying a bit more for this assurance, the fixed rate mortgage may be the best option for you.

Adjustable Rate

Adjustable rate mortgages typically start at a lower interest rate (and lower payments) but interest rates and payments fluctuate depending on market interest rates. A typical ARM is adjusted annually (although some are adjusted more frequently). Increases are usually capped for any given year and for the life of the loan. For example, a typical ARM might include an annual cap of two percentage points and a cap over the life of the loan of six percentage points. An ARM that starts out at 7.5% could increase to 9.5% in the second year, 11.5% in the third year, 13.5% in the fourth year, at which point it would be capped.

These loans are popular with people who expect rising income over the next few years because they can buy more house on a lower current income, confident that their increasing income will make the higher payments affordable if the interest rates rise in subsequent years.

Balloon Mortgage

If you know you'll be moving in five to seven years, and you'd like a lower interest rate but are uncomfortable with an adjustable rate, the balloon mortgage may be for you. These loans often have a somewhat lower interest rate than a conventional 30-year mortgage, but the loan is due in five to seven years. If you're still in the house at the end of the term, you'll have to find another mortgage in order to pay off the first one.

Jumbo Loans

Jumbo loans are just what their name implies: a larger than average loan. Most lenders follow the Fannie Mae or Freddie Mac federal guidelines for loans, which limit the amount you can borrow to $252,700. If you need to borrow more than this, you should look for a Jumbo loan.

Summary

The features of these loans are summarized in the table at the bottom of this page.

Before shopping for a mortgage, take advantage of some of the online tools that will help you be better informed so you can choose the mortgage that works best for you.

Bank Mortgage Rates Services

2009-01-19T06:26:00.000-08:00

When To Buy A Home And Get The Best Home Mortgage Rates

When you look to buy a home, you have to be conscious of current home loan equity mortgage rates. They fluctuate so much, typically due to supply and demand, and you need to be aware of the trends before you sign off on any home loan.

::: Research - The key to the best home loan equity mortgage rates ::: Getting a mortgage is a time consuming process, and one which is a long term commitment. You will have new friends for the next 20-30 years! And they want you to pay on time during the interim.

Many people will opt to go to there bank who may offer a mortgage to them because they have been with the bank for x number of years. However, this is not always the best way to get the best home loan equity mortgage rates. Realize that getting a mortgage to buy a home, is big business, and a profitable one for the mortgage lender, lending you the money. With so many lenders offering a home mortgage, you can find the lowest home mortgage rates to buy a home. There are hundreds of lenders who are willing to offer you the money to buying your first home

Research is the key, and more you invest time to research and find several lenders, more you will save over the long term. In most cases you are literally giving back $100,000 or more back to the mortgage lender over the period of the mortgage. The investment in time to make any savings on the mortgage will benefit you over the long term.

First ask your bank if they offer a mortgage to buy a home. Next you can look in newspapers, check on the web, and several other places. Get information about the various mortgage packages available to you. Look at the interest rates, but don't always go for the best home loan equity mortgage rates, as these may not serve you.

Most mortgage packages have so many details to the mortgage. You have fee's, and some of these fee's may not be apparent to you. Very easily the lowest home mortgage rate can easily end up being the most expensive home mortgage rate.

Getting your home equity first mortgage and buying your first home is not always the easiest thing to do. With a bit of research, you can find a home equity first mortgage and buy your new home.

Bad Credit Mortgage Loans Services

2009-01-19T05:55:00.000-08:00

The first thing that you are asked when you apply for bad credit mortgage loans is 'What is your credit score?' Well, life is such that you might end up with a bad credit score even before you realize the importance of the whole thing. Many people have credit cards and take loans even before they realize the importance that the credit score can play in their lives later on. Many people also end up getting a bad credit rating owing to uncontrollable circumstances. A child who has fallen sick, an accident and many other unexpected things can pop up. Life cannot and does not always work as planned. The result might be a bad credit rating.

How To Spot Bad Credit Lenders

A bad credit lender seems like a messiah for a person with a bad credit score. While every other lender in town will chuck his application into the dustbin, it's these guys who will come forward to grant a loan. Now with more and more people looking to own a house or a car, the loan business is on an all time boom. More and more people are looking for loans. But along with the genuine companies a lot of other fakes have also sprouted up. These guys are only there to make some fast money via charges, fees or simply high interest rates. Many do not even have a registered office and operate from flashy websites. So how can you distinguish between a genuine bad credit lender and a fake one?

Everything About Bad Credit Mortgage Loans

We all know how important mortgage loans are when it comes to securing a home. But not everyone is fortunate enough to get a very good deal on a mortgage loan. Many people have a bad credit history owing to their faulty spending habits at a young age. Often the euphoria of landing the first job and getting a credit card of our own leads to a spending spree which results in debts. This however deters any chances of securing a good mortgage loan later on in life. But, now companies have come up with a loan that is designed specially for people with a bad credit rating. These loans are called as bad credit mortgage loans.

Bad Credit Mortgage Financing

If a person has ever missed a credit card payment or fallen behind on student loans purchasing a home can seem impossible. Securing a mortgage with a great interest rate depends largely on having a good credit score. For someone who has faced credit problems, they need to consider bad credit mortgage financing.

Bad Credit Lenders

The biggest problem that people with less than perfect credit face is trying to secure a loan of any size. Not only do they struggle with finding a mortgage or car loan with a reasonable interest rate, but they may also face hurdles when it comes to getting a credit card. It can be difficult in today's world when you don't have a credit card if you want to travel, purchase items online or even rent a car. With bad credit lenders virtually anyone can take a small personal loan or obtain a credit card.

Take Advantage of US Commercial Bad Credit Mortgage Loan
Commercial bad credit loan mortgage is used to purchase office buildings, apartment complexes, health care facilities and retail outlets. Whether it's a hi-rise building or a family-owned restaurant, buyers usually need additional funding to complete the construction or purchase. And, commercial bad credit loan mortgages provide exactly that additional funding.

Superb Side Of Bad Credit Mortgage Loan
Industry With bad credit, purchasing a home need not cause despair thanks to bad credit loan on mortgage. Lenders specializing in bad credit loan on mortgage are also known as sub-prime loan lenders. The same stringent guidelines are not used as traditional banks and credit unions. There's no worry as perfect credit is not a serious criteria for availing a bad credit loan on mortgage.

Seekers of Bad Credit Mortgage Loans
Bad credit mortgage loans are the loans that are meant for the people who have poor credit ratings. Bad credit mortgage loans can be used for purchasing, or refinancing the equity on your home. Lenders known as sub-prime lenders specialize in making these loans available to the people who are known as sub-prime borrowers. You can take bad credit mortgage loans to buy yourself a home in the Ohio city.

Why should you opt for Bad Credit Mortgage Loans

Bad credit mortgage loans are the loans that have gained a lot of popularity in the current credit market. Bad credit mortgage loans are meant especially for the people who are suffering with bad credit. People get bad credit due to many reasons. They may have missed out on their debt payments because of accidents, other emergencies, loss of a job, loss of a loved one, and many other reasons. The credit report cannot include such personal information; it is based on facts and figures.

A Fair Game for Bad Credit People: Bad Credit Mortgage Loans

If you have bad credit and want to buy a house, bad credit mortgage loans are waiting just for you. If you don't qualify for the other loans, you can always go for these bad credit mortgage loans and you will note the difference.

Bad Credit Mortgage Loans And Sub-Prime Lenders

It is not in the least bit unheard of for Americans to be known for bad credit history before the question of applying for a home mortgage loan even comes up. Your credit history, whether good or bad, begins from the moment you make a financial commitment in your name. Here you will find information on what bad credit mortgage loans are all about and sub prime lenders. You'll be able to learn the right way to go about borrowing in the most effective way where bad credit mortgage loans are concerned and all that you need to be prepared for when seeking sub prime financing resources.

Bad Credit Mortgage Loan Rates

Even with bad credit mortgage loans interest rates at an all-time low and an increasing number of mortgage seekers getting several bad credit mortgage loans quotes, it is highly unfortunate that mortgage scams continue to approach an all time high.

Bad Credit Mortgage Loans Quotes: Dreams or Nightmares

The market for bad credit mortgage loans is teeming with fraudulent elements these days. It is easy for these scamsters to allure financially vulnerable people by pretending to offer bad credit mortgage loans at great discount rates. Once the fraudulent representation hits the bull's eye, the borrowers are all at the mercy of these unscrupulous elements.

Bad Credit Mortgage Loans Seekers: Ohio Is Calling

Every day there are bad credit mortgage loans secured in Ohio, with lenders increasingly prepared to take the risk of borrowers with less than perfect credit. Even in case of a recent bankruptcy, collections or charge offs, you may still find yourself being considered for bad credit mortgage loans. There is no expense in applying for the loan and you even get a free credit report online.

Bad Credit Mortgage Loans

At the time you begin your search for a house, bad credit mortgage loans are probably not on your mind. Everybody would love to have the option of being able to sign a check with a flourish and make a single payment for the entire home at one go. However it is only the fortunate few who are actually able to enjoy such a privilege in life, with the majority only being in a position to purchase a new home with the help of a bad credit mortgage loan. Given a choice, there's nobody who wishes to have bad credit but circumstances make it inevitable.

Bad Credit Mortgage Loans: Change your Life for the Better

Bad credit mortgage loans are the loans that are given out to those people with bad credit who can put up a mortgage as a security against the loan. Bad credit mortgage loans have higher interest rates and monthly payments than the regular loans, as the risk of the lenders involved is higher than the regular lenders.

Bad Credit Mortgage Loans: How to Get the Lowest Rates?

A long time ago, it was difficult for a person with bad credit to avail any kind of a loan; bad credit mortgage loans were unheard of. Bad credit mortgage loans have now become the most favored loans. Just like these loans are specially designed for people with bad credit, there are lenders who specifically deal in these loans.

Factors That Are Considered By Lenders To Approve Bad Credit Mortgage Loans

Bad credit mortgage loans are one of the handiest tools that can help you in buying your dream mansion. Millions of Americans, who are suffering from the clutches of bad credit, are stretching their hands to the aid, provided by bad credit mortgage loans. And, to a very great extent they are reaping the fruits.

Low Income Homes with Bad Credit Mortgage Loans

Bad credit mortgage loans are the loans that are specially packaged, designed, and lent out to the people with bad credit. Lenders who deal only in bad credit mortgage loans gain from the high interests that they get from the borrowers.

Bad credit mortgage loans: How to obtain a Mortgage with bad credits

Obtaining a mortgage with bad credit isn't as impossible as some people make it out to be. For obtaining bad credit mortgage loans, a car loan or personal loan, there are strategies available to help you get that mortgage and dream house.

Low Credit Score Home Loans Home Buying Tips

Although you can purchase a new home without knowing all the tricks and techniques for securing a low rate, future homebuyers should educate themselves on the home buying process.

Bad Credit Rating Effect Loan Approval

Save Enough Money for a Down Payment

Use the Right Lender for a Bad Credit Loan

View our recommended bad credit mortgage lenders online.

Also check out our recommended sources for a free instant credit report, or view our recommended online debt recovery solutions online.

American Equity Mortgage Services

2009-01-19T05:40:00.000-08:00

In yet another legal outshoot of the Vinson v. Vinson divorce proceedings in St. Louis County Circuit Court, Deanna Daughhetee's company, American Equity Mortgage, is suing a former marketing executive for bringing "confidential information" to a new position with a Phoenix mortgage company.

The former executive, Kimberly Winslow, fired back in May with a counterclaim that portrays AEM's West County offices as roiled with drama, armed security guards and constant surveillance while Ray and Deanna Vinson pursued their divorce case from 2005 to 2006.

Winslow also claims security guards hired by Daughhetee continue to monitor her home and workplace in Arizona.

On Aug. 29, Judge Colleen Dolan ruled that Winslow can continue her counterclaim against Daughhetee and her mortgage company despite several motions from the business to dismiss the claims.

According to court documents, Winslow started working for the mortgage company in 1996 and was promoted to vice president of marketing and sales in 2002.

Daughhetee's company filed claims alleging that when Winslow resigned from American Equity Mortgage, she took confidential information to a new position at First Option Mortgage in Phoenix.

Winslow's suit denied she was privy to confidential information and added an affirmative defense: She left the company due to a "hostile, offensive and threatening work environment."

During the divorce, Daughhetee forced American Equity Mortgage employees to take sides in the dispute, Winslow's suit claims, and frequently told employees that "if they were unhappy with their employment or not 'on her side,' then they could leave."

Employees were later barred from speaking to Vinson, and Winslow was once asked by attorneys for American Equity Mortgage if they could tape record her conversations with Vinson, the suit said.

The suit said personal security guards hired by Daughhetee during the divorce attended a Christmas party at AEM headquarters and posed for photographs with their guns bared.

Other employees left American Equity Mortgage for similar reasons, the suit claims, but the company did not prevent them from seeking jobs at similar businesses.

Further, Winslow claims Daughhetee has kept her under surveillance since she left St. Louis. As late as April, Winslow claims she saw security guards trolling the areas around her home and office. She recognized these guards as those employed by American Equity Mortgage.

In addition to her counterclaim, Winslow also entered a tortuous intrusion claim that said Daughhetee tapped Winslow's cell phone and accessed her Internet phone records while she worked for American Equity.

In early June, attorneys for Daughhetee and her company filed motions to dismiss Winslow's counterclaim. These filings accused Winslow of backing up her claims with salacious details about the highly publicized Vinson divorce, none of which had anything to do with her employment at American Equity.

"Why it was necessary to include these types of allegations in a counterclaim defies logic or explanation, unless Winslow is simply attempting to publicly discredit her former employer," the motion said.

The motion further states that all of Winslow's claims about the intolerable working conditions at American Equity are riddled with "redundant and immaterial" allegations.

Attorneys from both sides met Aug. 8 to argue Daughhetee's motion to dismiss. Dolan denied the motion Aug. 29.

Jennifer Behm with Lewis, Rice & Fingersh, an attorney for Winslow, did not return calls for comment, nor did Thompson Coburn attorney Kimberly Yates, who filed claims for Daughhetee and American Equity Mortgage.

2nd Mortgage Lenders Services

2009-01-19T05:14:00.000-08:00

Finding the best mortgage lender online

Finding the best mortgage lender online is simply a matter of doing some smart shopping. Begin by gathering your financial information, and then request quotes from several lenders. Compare the rates and fees for each quote to find the best mortgage lender.

Online Mortgage Lenders

Online mortgage lenders bring you all the services of a mortgage broker with the convenience of the internet. With online lenders though, you can quickly compare rates without feeling committed to a loan. Most mortgage loan information can be found on a lender's website, but you can also contact a representative through email or the phone.

Start Prepared

Start prepared by gathering all your financial information in one spot for easy access. Bank statements and previous tax records will usually be all you need. Also, determine how much you would like to borrow and use as a down payment.

Gather Quotes

Online mortgage lenders provide almost instant mortgage loan quotes by asking you basic questions about your income, the loan amount, and your credit rating. These types of quotes will allow you to quickly compare rates and come up with a handful of potential mortgage lenders.

Actual mortgage rates are determined by many more factors, such as property location and value. Once you have a list of potential mortgage lenders, take the time to fill out the longer application to get a detailed mortgage quote to make your final decision.

Compare Financing

With detailed mortgage quotes from a few lenders, you can pick the best loan for you. Rates are certainly one way of measuring the cost of the loan, but you should also look at the fees. Fees can come with many different titles, but in the end they all cost money.

To determine the total cost of the mortgage loan, add the fees plus the interest you will pay over the course of the loan. With this figure, you can choose the best mortgage lender.

Mortgage lenders are financial institutions that lend money to people so
they can buy a property that they can’t yet afford, but should be able to
by the end of a mortgage term.

Once you have decided you are interested in buying a home and before you
actually begin the home purchase, it is a good idea to get an overview of
home buying and homeownership.

There are important factors in a mortgage loan package that will determine
whether you can afford the house, you want. The most important of these are
the interest rate, Points, Mortgage Type (fixed rate, adjustable rate, balloon etc.), Closing costs and fees, and Down payment and mortgage insurance.

Different lenders will offer different interest rates, so it is important to
shop around.

Another detail to consider is what type of mortgage loan is best for you.
Common options include a fixed-rate mortgage, in which the interest rate
does not change or an adjustable rate mortgage will have a fluctuating
interest rate based on market conditions. Since no one knows how the market
will behave, adjustable-rate mortgages are riskier than fixed-rate mortgages
Lenders determine your ability to pay back a mortgage by making sure that
monthly payments of principal, interest, taxes, and insurance (PITI) do not
exceed 28 percent and that monthly debts do not exceed 36 percent of your
gross monthly income. Besides looking at straight numbers, lenders determine
your ability to repay a mortgage debt by considering what kind of job you
have or if you have dependents and what other financial obligations you
carry.

Lenders also consider your credit history and the value of the property you
are buying.

If you are a homeowner looking to refinance or get a home equity loan, be
wary of predatory lenders. Predatory lenders promote quick-fix financial
solutions in order to convince potential homebuyers to invest in properties
that they are unable to afford. Contractors who offer you financing may also
be associated with predatory lenders. While legitimate lenders use marketing
techniques also employed by predatory lenders, predatory lending often is
marked by telephone, door-to-door, direct mail, Internet and television
solicitation that advertises "bad credit, no credit, no problem" loan
programs. Organizations like Neighborhood Housing Services, South Brooklyn
Legal Services, and the Parodneck Foundation can help with identifying and
avoiding the high rates and fees of predatory lenders.

Check whether your contractor is licensed and learn whether homeowners have
filed complaints so call the NYC Department of Consumer Affairs. Look up
your mortgage lender and broker and also call the New York State Banking
Department to see if your lender is FHA-authorized

Adjustable Rate Mortgages Services

2009-01-19T04:50:00.000-08:00

An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on a variety of indices.[1] Among the most common indices are the rates on 1-year constant-maturity Treasury (CMT) securities, the Cost of Funds Index (COFI), and the London Interbank Offered Rate (LIBOR). A few lenders use their own cost of funds as an index, rather than using other indices. This is done to ensure a steady margin for the lender, whose own cost of funding will usually be related to the index. Consequently, payments made by the borrower may change over time with the changing interest rate (alternatively, the term of the loan may change). This is not to be confused with the graduated payment mortgage, which offers changing payment amounts but a fixed interest rate. Other forms of mortgage loan include the interest only mortgage, the fixed rate mortgage, the negative amortization mortgage, and the balloon payment mortgage. Adjustable rates transfer part of the interest rate risk from the lender to the borrower. They can be used where unpredictable interest rates make fixed rate loans difficult to obtain. The borrower benefits if the interest rate falls and loses out if interest rates rise.

Adjustable rate mortgages are characterized by their index and limitations on charges (caps). In many countries, adjustable rate mortgages are the norm, and in such places, may simply be referred to as mortgages.

An adjustable-rate mortgage refers to a loan program with a variable interest rate that can change throughout the life of the loan. It differs from a fixed-rate mortgage, as the rate may move up or down depending on the direction of the index it is associated with.

All adjustable-rate mortgage programs come with a pre-set margin, and are tied to a major mortgage index such as the Libor, COFI, or MTA. Some banks and lenders will allow you to choose an index, while many rely on just one of the major indices for the majority of their products.

Most adjustable-rate home loans are hybrid programs, meaning they carry an initial fixed period followed by an adjustable period. They are also usually based on a 30 year amortization.

You may see mortgage programs advertised such as 5/25 ARM or 3/27 ARM, just to name a couple. A 5/25 ARM means it is a 30 year mortgage, with the first 5 years fixed, and the remaining 25 years adjustable. Same goes for the 3/27, except only the first 3 years are fixed, and the remaining 27 years are adjustable.

You may also see programs such as a 5/6 ARM, which means the interest rate is fixed for the first 5 years, variable for the remaining 25 years, and will adjust every six months. If you see a 5/1 ARM, it is exactly the same as the 5/6 ARM, except it changes only once a year after the 5 year fixed period.

Adjustable-rate mortgages carry payment caps, which limit the amount of rate change that can occur in certain time periods. There are three types of caps:

Initial: The amount the rate can change at the time of the first variable period. In the examples above, it would be the first change after the first 5 years of the loan.

Periodic: The amount the rate can change during each period, which in this case of a 5/6 ARM is every six months, or just once for a 5/1 ARM.

Lifetime: The amount the rate can change during the life of loan. So throughout the full 30 years, it can’t exceed this amount, or drop below this amount.

Typically you might see caps structured like 6/2/6. This means the rate can change a full 6% once it initially becomes an adjustable-rate mortgage, then 2% each subsequent period, and 6% total throughout the life of the loan. And remember, the caps allow the interest rate to go both up and down. So if the market is improving, your adjustable-rate mortgage can go down!

To figure out what your fully-indexed interest rate will be each month with an adjustable-rate mortgage, simply add the margin to the associated index. You’ll be able to look up the current index price on the web or in the newspaper, and the margin you agreed to, which is usually found within your loan documents. You’ll also have to factor in payment caps to see when and how often your adjustable-rate mortgage adjusts.

Let’s look at a basic example:

Margin: 2.25
Index: 4.75
Caps: 6/2/6

Based on the two figures above, your fully-indexed rate would be 7.00%. It is equally important to note both the index and margin when selecting a mortgage program from your bank or broker. Many consumers overlook the margin, or simply don’t even realize it’s an active aspect of the loan price, but as you can see, it plays a major role in the pricing of an adjustable-rate mortgage. Margins can vary by over 1%, so it can certainly affect you mortgage payment.

Most homeowners get into adjustable-rate mortgages for the lower initial payment, and then usually refinance the loan after the fixed period ends. At that time, the interest rate becomes variable, or adjustable, and the homeowner would likely refinance into something fixed, or sell the home outright. Some homeowners may also choose an adjustable-rate mortgage if the home is simply a short-term investment, or if they don’t plan on owning the home for more than five years. But all adjustable-rate mortgages can be risky as the payments can change, sometimes sharply if the timing isn’t right.

All that said, make an interest rate plan before you purchase a property. Decide what you want to do with the home in the next five years, and from there, you’ll be able to decide if an adjustable-rate mortgage is right for you. Either way, it’s usually always a losing affair to play the interest rate game.

50 Year Mortgage Services

2009-01-17T11:08:00.000-08:00

here’s an intriguing item that I found on the web site of a Florida newspaper that talks about efforts within the real estate industry to develop a 50-year mortgage (don’t laugh; I seem to recall that in Japan, 50-year mortgages became popular as home prices soared through the stratosphere). Lively debate in the article as to whether 50-yr mortgages will take off, with a lot of skepticism. My hunch is the idea, for better or worse, will take off as a solution to rising inaffordability in many markets (not that I don’t think that home prices won’t also come down in overheated markets). What’s troubling is the point that one critic makes that the buyers of these mortgages could be individuals trying to repair their credit, which is not necessarily the intended audience.

I’m curious what readers of this blog think about the prospect of 50-year mortgages.

Sean Brunnock

August 25, 2006 05:58 PM

Didn't Japanese banks offer 100 year mortgages?

robert bruyneel

August 25, 2006 08:02 PM

The rise of 50 year mortgages is not unexpected, we have anticipated those since the acceptance of 40 year tied to interest only loans.. if the aggresive position of the lenders continue to search for new ways to attract customers then all legal means to combat the unaffordability of homes is going to be reached. a forty year interest only would have been unheard of ten years ago, now a 40 year is getting as common as a thirty. fremont and other banks are allready widely pushing the program, the fact that fremont is a subprime company that markets to the credit challenged is a age old dilema like gambling...the poor or those who have more to lose will lose more..

CJ in L A CA

August 25, 2006 10:36 PM

In reality, I'm sure most people will not be keeping this mortgage for the full 50 year term. But if they ~do~, I hope they're factoring a monthly mortgage payment into their retirement plans, and I hope Social Security is still around to help them make the payment.

Frank

August 26, 2006 06:10 PM

As far as I'm concerned there's nothing magic or sacred about 30 year terms on mortgages. I believe that mortgages will lengthen in terms of duration as a way of making real estate more affordable. As long as land prices are high in areas where people want most to live and construction costs are high, there is a definite limit to how far prices will drop. Longer term mortgages are coming our way, IMO.

Geoff B

August 26, 2006 10:42 PM

I doubt that a 50 year mortgage could do much to help buyers stretch any more than they already have. Over the past couple of years, no down payment 5/1 ARMS became very popular as buyers stretched beyond the limits of a 30 year fixed to win bidding wars. People seeking something slightly safer often went with a 10 year, interest-only hybrid. Both these loans typically carried a much lower interest rate than a 30 year fixed, and didn't require paying any principle. A 50 year mortgage, on the other hand, would presumably carry a higher interest rate than a 30 year fixed (as opposed to the adjustable short term loans, which carry a lower interest rate). And since principle is such a small amount of a payment in the early years of a long term loan, I doubt the buyer would see much benefit.

Brian

August 27, 2006 12:41 AM

Dean, rather than being part of the solution to the rising unaffordability of homes, the 50-year mortgage will simply contribute to that rising unaffordability. Home prices have risen to such absurb levels in large part because of the widespread availability of the exotic (read "idiotic") mortgages. Negative amortization? Give me a break, lenders.

L.C.

August 28, 2006 03:18 AM

I don't get it, are you surprise with the length of the mortgage, is that it??? Well, my house is a 100 year mortgage since 1986 in Switzerland, which is a quite common practise around here. Therefore I don't understand the article. Lucas.

Brandon W

August 28, 2006 08:56 AM

Hello. I'm relatively new to this blog. I have experience working for a mortgage loan company and as a marketing advisor at a real estate marketing company.

The mortgage industry is as cut-throat as they come. They're also as creative as they come (so was Enron). When they aren't selling loans, they aren't making money, so if there is talk of a 50-year mortgage you can be assured that someone is already preparing to offer them. It will likely start at the seediest end of the industry and work it's way up.

This is merely a band-aid on a larger problem of increasing unaffordability of homes and real estate for the middle and lower class. The long-term result of this will either be a majority of those classes renting from wealthy landlords (are we sliding back toward feudalism?) or those classes will be forced to take on far longer debt terms such as this which only serves to place those classes further under the thumb of bankers. I'm personally betting on the former option winning in the long-run.

Nathan

August 28, 2006 11:55 AM

I am not surprised by 50-year mortgages. As another commenter put it, there's nothing sacred about 30 year terms. If the lenders can manage the 50-year risk then I see nothing 'evil' or predatory about it. Creative financing is nothing but a boon to the average homeowner, especially with as mobile a population as we have, and even more so if you take into lifetime consumption theory.

Affordability really comes down to government policy. The places with the highest housing prices also generally have the highest amount of land regulation. The voters there like their wealthy and relatively unaffordable enclaves.

Jason R

August 28, 2006 11:56 AM

At the risk of sounding uneducated on the matter... do the mortgage payments go to next of kin if the 1st party passes?

Mike N

August 28, 2006 02:59 PM

What I want to know is, when are we going to see the "perpetual mortgage"

ie you pay (interest only) on a property in perpituity. Since no-body pays off their house anymore, I dont see any material difference between this and a 30 year interest only (IO) mortgage, which is available today. Realistically everyone will refi or default within 20 years anyways, and you could set up periodic "checkpoints" to asses a borrowers capacity to continue repaying the loan, with a resulting adjustment in interest rate or amortization schedule.

It would only be a product for good credit borrowers, obviously...

olerush

August 28, 2006 03:37 PM

One of my friends just closed on a 50 year mortgage on her first home last week. I haven't asked her much about the mortgage because she knows that I am a RE bear and I don't want her to feel like I am I'm raining on her parade. I was discussing the issue with my sister and i came to the conclusion that as we become more of a debt burdened society we will become increasingly comfortable with carrying debt throughout our lives. Today, the notion of paying off our debt remains of high importance but I think that will change. Extended payment schedules are not just limited to RE but car payments have also been growing i.e. 84 month loans. I can see fifty/hundred years from now people just carrying debt to their graves without even thinking twice. On the other hand, this could just be the part where things get worse before they get better.

KT

August 28, 2006 05:20 PM

The Japanese 50-year mortgage was long gone as far as I understand because all those banks were either bankrupt or acquired by others. The Japanese 50-year mortgage was called the "two-generation" mortgage which only applied to a father and son(both)working status. Remember a typical Japanese house require a major overhaul in 20 years.

johen

August 29, 2006 08:37 AM

This will be a very short lived fad. The housing market is crashing as I type. It might ensnare a few morons at the bottom of the pyramid scheme. Thats about it.

Even the real estate industry is beginning to admit the obvious:

http://www.realtor.org/Research.nsf/files/Leadership%2520Summit%2520(August%25202006).ppt/%24FILE/Leadership%2520Summit%2520(August%25202006).ppt

The real estate market is crashing, hard! There will be no demand for 50 year (or 100 year) mortgages come this fall.

curtis johnson

September 4, 2006 02:58 AM

I have a 40 year ARM (11th District Cost of Funds Index) on a home that I bought in 1990. So the 40 year mortage is not new by any means. I have every reason to believe that the 50 year mortage is right around the corner. With the price of homes rising much faster than "incomes", 50 year mortages will become very common within the next 4 to 8 years.

rsinex

September 7, 2006 07:13 PM

You can depreciate over 50 years, so why not borrow over the same term? This concerns me because it could become a norm that supports the inaffordability of homes to new entrants in the market.

JR Diaz

September 20, 2006 04:34 AM

We were actual the ones that released the "50 year mortgage" earlier this year and now some other lenders have followed. Like anything else not one product meets the demand of all. Some homeowners need options so they can maintain their payments low. This loan is not for everyone but giving consumers different real estate financing options is always a great thing. In my option this loan is here to stay and in the long term about 5 - 10 years it will be a standard option for homeowner to choose from.

mike b

October 21, 2006 10:19 AM

i am in the process of purchasing my first home,my lender is offering me a 40yr COFI option arm.can anyone please give me feed back on this type of loan.

george

October 29, 2006 03:40 PM

Are there any stipulations or penalties regarding refinancing from a 50yr to a 30yr loan in this extended financing program ? Wouldn't the yearly tax deductions help even though not much if any money would be put on the principal at all?

john aho

December 20, 2006 01:55 PM

heh, I just signed up for a 40 year note myself and the difference between a 30 and a 40 for my interest rate was negligible but my dad always said to get the softest terms possible and prepay towards principal when you can.

John

December 24, 2006 11:29 AM

Take the equity you already HAVE in your house out using a 50 year loan. Since housing prices are going to be going down about 25 to 30% in the next couple of years, it makes since to me to take out as much equity from your home as possible. A 50 year loan can help you do just that! Say you have $200,000 in equity and take it out of your home with this new loan. That money could be put to work for you in a bank or mutual fund or wherever you choose instead of being tied up in your house and just depreciating over the next few years. Sure, your mortgage payment may be a bit higher but that would be clearly offset by the additional interest write off, plus the additional interest earning you could make on the $200,000 equity you're received on the new loan. Seems almost like a "no brainer" decision to me...

Leanese Childress

December 31, 2006 10:39 AM

I am about to purchase a Home and I dont have good credit. The builder is paying up to 6,000 in closing cost and fees the agreement estimated cost are about that much. I only had to pay 500 down thus far, my closing date is set for January 24th. I do have some concerns this will be a 3yr/1yr arm I do understand what that means but they are offering a 50year conventional what will this do to my chances of refinancing in 1 year when I get my score up some. I want to build equity as fast as possible will the 50 yr mortgage have an affect on that?

Second Mortgage Refinance

January 2, 2007 09:32 AM

I think the big downside to a 50 year Mortgage Loan is that homeowners' children will inherit the debts and mortgages, rather than children/grandchildren inheriting a house that is paid off.

Natalie

January 25, 2007 12:34 PM

What about 50-year mortgages for folks in their 60s with no children and plan to be in the home maybe 5-10 years?

Michael

January 26, 2007 03:06 PM

I think the upside to this type of loan is more leverage for investors to purchase multiple properties and provide housing. The monthly payment will be significantly less and more than likely investors will refinance or change programs before the length of the term anyway

Easy MD - Ambien

February 23, 2007 11:22 AM

I think 50 year mortgages help people out in times of bad economy like right now. I have a 40 year mortgage and still cant afford it. 50 year mortgages will help out alot

JC

April 3, 2007 04:47 PM

hi agree with the person that wrote a 50 yr would help a lot it would help us out rite now as we are losing our home of 19 yrs. so i am all for it our payments are choking me and that's working 7 days a week but at this crucial moment no one touch us we're not bad people just bad refi decisions they are going to put the moves on my family soon is it very scary and stressful you bet after 19 yrs i am feeling like worthless

todd

April 11, 2007 08:15 AM

Why not do the 50 year loan and then at age 62 to the reverse mortgage and you will get the best of both worlds?

Ciro'

May 2, 2007 11:48 AM

A 50+ mortgage at regulated rates (by factoring income) can help many American families from losing their homes throughout our nation.

In fact, both Houses of Representative should pass & mandate by law that the banking/mortgage industry automatically put those on Arm negative amortization loans (who are on the verge of forclosure)into(according to income etc) 50 or more year fixed loans.

We have enough homeless families in our society.

stillinstateofshock

October 1, 2007 06:44 PM

Playing games with mortgages is how the housing market became unaffordable in the first place. I believe a 50 year mortgage will only add to the current problem.

When the interest rates dropped, instead of buying a more expensive house, I lowered both my payments and time by switching to a 15 year fixed mortage at 4.75%. My house will be fully paid off in 2 years--my 2 rental houses were paid off long ago.

No, I don't agree that everyone necessarily needs to buy a house--or that they should. I think an awful lot of people were "conned" into buying houses they couldn't afford, and didn't really NEED--on the false pretext that they had to buy NOW before the prices rose even further.

What's wrong with renting for a while? Right now, rent around here is about 1/2 a house payment, so why buy?

bryan

November 19, 2007 10:49 AM

stick to shorter term mortage @ payment of( 30%no) more of total monthly gross income. this will put you in price range of home to buy. example total net income per month at $ 2,400.00 total mortage no more than $800.00 may have to settle for less check on bank foreclosures,auctions,older home with good potential fix up as you go.but at the times we have now everything is getting expensive!!

jr w/jc

February 14, 2008 06:29 PM

Right now with the feds cutting rates and still trying to come up with solutions to stimulate the economy, along with the situation at hand, this might be the greatest time ever to bring out the 100 year loan. With a sunomi of foreclosures effecting the economy, we must get serious about moving on trying to stop this disaster from destoying our economy. Even if its for a limited time(2008)loan option, I think it will save thousand of families from losing homes and the country from going into a recession. Of course, this isn't for everyone, especially for the self-righteous who might, by luck be in a perfect financial situation, no matter what it took to get there. They yet have to realize that the economy effects them as well. So, what I want to know is if this is a possibility and we still refuse to help our neighbors in times of trouble, than what kind of a nation are we.

K.Rea

February 29, 2008 12:05 AM

Right on, Jr W/Jc.
What the US needs right now is longer term loans in order to bring down payments, which in turn will keep people in the houses long enough until the gluttony of houses on the market returns to normal. Then they can sell there house and buy something more affordable.
I cannot believe I havent heard one person on CNBC mention this as a solution.

Mustafa Musa

May 29, 2008 06:09 PM

Could you please name some companies that are offering 50yr mortgages.

30 Year Mortgage Services

2009-01-17T10:50:00.000-08:00

Mortgage ante were bottomward hardly this anniversary for the aboriginal time in bristles weeks.

Freddie Mac letters that the boilerplate amount on a 30-year, fixed-rate mortgage fell to a civic boilerplate of 6.74% this week, bottomward from aftermost week's 6.79%.

Many economists are alpha to accept that the Federal Reserve will not abide to accession absorption rates. Housing sales accept been able for bristles years in a row, yet are accepted to abatement by 7% this year, due to college mortgage ante appraisement bodies out of the market.

Chief Economist for Freddie Mac Frank Nothaft says that a bit-by-bit acceleration in mortgage ante is accepted this year, as continued as the Fed doesn't accession rates.

The banking markets apprehend that the Fed will alone accept one added absorption amount backpack this year. This has helped to apathetic the acceleration of mortgage absorption rates.

"This should accumulate mortgage ante almost abiding for the accountable future," said Nothaft.

The boilerplate amount on kreditaufnahme a 15-year, anchored amount kreditaufnahme mortgage averaged 6.37% for the week, bottomward from 6.44% aftermost week. The 15-year anchored is a accepted best for homeowners who are refinancing.

Adjustable amount mortgages additionally saw a abatement this week. One-year ARMs fell to 5.75% from 5.85% aftermost week. The ante on five-year hybrids were bottomward to an boilerplate of 6.33% for the kreditaufnahme week, from 6.39% the anniversary prior.

The appear ante do not accommodate points. The 30-year mortgage carries a civic boilerplate fee of 0.6 point. The boilerplate fee for a 15-year anchored was 0.4 point. The five-year amalgam kreditaufnahme agitated a fee of 0.5%, while the one-year ARM has a fee of 0.6 point.

30-year mortgage under 5%
Weak economy keeps pushing interest rates lower

CHICAGO (MarketWatch) -- The benchmark 30-year mortgage fell below 5% for the first time ever in Freddie Mac's weekly rate survey as economic weakness continued to push interest rates lower, the mortgage agency said Thursday.

The national average rate on the 30-year loan fell to 4.96% in the week ending Jan. 15, down from 5.01% a week ago. That is the lowest on record. Freddie Mac began its rate survey in 1971. A year ago the loan averaged 5.69%.

Adjustable-rate loans also fell. The 5-year, Treasury-indexed hybrid mortgage averaged 5.25%, down from 5.49%. A year ago the loan stood at 5.40% and has not been this low since September 2005. The 1-year, Treasury-indexed ARM averaged 4.89%, down from 4.95%. A year ago that loan was at 5.26%.

The 15-year fixed-rate mortgage, a popular refinancing choice, edged up to 4.65% from 4.62% a week ago. Last year at this time the loan averaged 5.21%. Refinancing activity has been strong as mortgage rates have plumbed historic lows.

The two fixed-rate loans required the payment of an average 0.7 point to achieve the interest rate; the hybrid needed 0.6 point and the ARM 0.5 point. A point is one percent of the loan amount, charged a prepaid interest.

"Interest rates for 30-year fixed rate mortgages fell for the 11th straight week to another record low, due in part to the slowing economy and government actions," said Frank Nothaft, Freddie Mac chief economist.

"Both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on interest rates for fixed-rate mortgages. The Federal Reserve may add up to an additional $570 billion more this year, based on its November 25, 2008 announcement, to further shore up mortgage lending and keep rates low."

"In December, the unemployment rate rose to 7.2 percent, the highest since January 1993, and the economy lost 2.6 million jobs over 2008, the largest annual drop since 1945. That brought down yields on Treasury securities and mortgage rates followed," Nothaft said.

Staying low

Mortgage rates could remain low at least until the summer, said Greg McBride, senior financial analyst for Bankrate.com.

"The outlook is very positive that these low mortgage rates will likely persist at least through the first half of the year. That is the timetable laid out from the Federal Reserve for pumping up to $500 billion in mortgage-backed bonds," McBride said.

Although refinance applications are skyrocketing, many people won't be able to take advantage of the low rates because of their home equity situation, said Jim Sahnger, vice president of Palm Beach Financial Network. Some homeowners are underwater, owing more than their home is worth.

Sahnger said that the majority of his Florida-based clients interested in refinancing aren't able to, unless they're able to refinance into a loan backed by the Federal Housing Administration. Part of that is due to local market conditions. Dan Green, loan officer with Mobium Mortgage in Cincinnati, said his clients -- mainly based in Cincinnati and Chicago -- aren't having as much trouble refinancing.

If rates remain low, it could entice more home buyers into the market, McBride added. "There's a lot more affordability for prospective home buyers than there was six or 12 months ago," McBride said.

Sahnger said that already some buyers are jumping in. "Many of the buyer's agents I work with haven't been this busy in months," he said.

Not so fast

While conforming mortgage rates are low, the fees associated with getting those loans are on the rise, Green said.

"If you don't mind paying a point, your interest rates have fallen dramatically. For no closing cost loans, interest rates are almost a point higher than the survey," Green said.

Also keep in mind that the Freddie Mac survey covers average rates over the past week. Rates are now up from the levels cited in the survey, Sahnger said.

And those who need jumbo mortgages aren't seeing the same kind of relief as those applying for conforming mortgages. The average jumbo 30-year fixed-rate mortgage was 7.07% this week, according to Bankrate.com's national weekly mortgage survey, conducted on Wednesday using data from the top 10 banks and thrifts in the top 10 markets.

Because the top conforming loan limit actually declined in 2009 from 2008 in high-cost markets (to $625,500 from $729,750), "there are a lot more people who are going to have to borrow at a higher rate today than a couple of months ago," McBride said.

Steve Kerch is assistant managing editor and personal finance editor of MarketWatch in Chicago.
Amy Hoak is a MarketWatch reporter based in Chicago.

30 Year Fixed Mortgage Rate Services

2009-01-17T10:06:00.000-08:00

Fixed Rate Mortgages

The biggest benefit of a fixed rate mortgage is that you will know precisely what your mortgage interest and principal payments are going to be and hence plan your budgeting in accordance.

Characteristics of a fixed rate mortgage

It is simple and easy to understand in comparison to the Adjustable Rate Mortgages (ARMs).
It offers more security for buyers and is very commonly used by first time home buyers.
It is best suited for persons who like to know what their monthly budget for expenses is going to be and for those who wish to keep their houses for a longer period of time.
The fixed rate interest mortgages usually charge higher rates of interest than ARMs as the risk perceived by lenders is higher.
The Fixed rate mortgages usually have higher initial monthly payments compared to those of adjustable rate mortgages.
Fixed-rate mortgages have less flexibility than adjustable rate mortgages.

Rates on 30-year mortgages set a record for a fifth straight week by dropping to below 5 percent, the lowest mark since Freddie Mac started tracking the data in 1971.

Mortgage rates have been dropping since late November, when the Federal Reserve said it was going to pump money into the banking system by buying $500 billion in mortgage-backed securities to get banks to lend more money and perhaps aid the ailing U.S. housing market.

Freddie Mac reported Thursday that average rates on 30-year fixed mortgages dropped to 4.96 percent this week, down from the previous record of 5.01 percent established last week. It was the 11th straight weekly drop, and way below the rate of 5.69 percent at the same time last year.

Rates at are their lowest since the company started its survey in April 1971, Freddie Mac said.

Frank Nothaft, Freddie Mac's chief economist, said mortgage rates have fallen as the Treasury Department and the Fed added more than $100 billion in liquidity to the mortgage market since September.

The average rate on a 15-year fixed-rate mortgage rose to 4.65 percent. That rate was 4.62 percent last week, the lowest point since June 2003, Freddie Mac said.

Average rates on five-year, adjustable-rate mortgages fell to 5.25 percent, the lowest since the week ending Sept. 8, 2005, when it averaged 5.24 percent, Freddie Mac said. Rates on one-year, adjustable-rate mortgages fell to 4.89 percent, down from 4.95 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point for this week. Fees for five-year adjustable rate mortgages averaged 0.6 point, compared with 0.5 point for one-year adjustable-rate mortgages.

Freddie Mac, and sibling company Fannie Mae, own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the companies in September.

Mortgage Refinancing Services

2009-01-07T08:10:00.000-08:00

Mortgage Refinancing

Refinancing is when you apply for a secured loan in order to pay off another different loan secured against the same assets, property etc. If this original loan had a fixed interest ratemortgage which has now declined considerably, then you would like to avail of a new loan at a more favorable interest rate.

When is Refinancing an Option

Benefits of Home Refinancing

Imagine a scenario where you can have access to extra cash, while simultaneously lowering your monthly mortgage payment. This dream can become a reality through mortgage refinancing.

A house is the largest asset you may ever own. Likewise, your mortgage payment may be the largest expense you'll have in your monthly budget. Wouldn't it be great to use this asset to reduce your monthly payment and put extra cash in your pocket? When you refinance yourmortgage, you can take advantage of the equity in your home and enable this to take place.

Lower Refinance Rate, Lower Payments

By refinancing your mortgage when interest rates are lower, you can exchange a higher interest rate for a lower one, which, in turn, will lower your monthly payment.

Shorten the Length of Your Mortgage when Refinancing

Exchange an Adjustable Rate for a Fixed Refinance Rate

Access to Extra Cash - Cash-out refinancing

Bye, Bye PMI

If you were unable to make a down payment of 20 percent when you purchased your home, you may have been required to purchase PrivateMortgage Insurance (PMI). If your house has appreciated since then, and you've steadily paid down your mortgage, your equity may now be more than 20 percent. If you refinance, you will no longer need PMI.

In many ways, your house is like a cash cow. If you have discipline and knowledge of the benefits of refinancing, you can tap into its milk for years to come.

Costs of Refinancing

Costs associated with refinancing can be divided into three different categories:

lender fees – which may include origination, application, points, appraisal, and credit report services;

third-party fees – these vary according to the state and the specific company with whom you choose to close your loan and may include fees for closing, title insurance, title exam, and recording; and pre-paid items - these are items taken at the time of closing but are not usually considered costs. These include items you paid for whether or not you refinance (for example taxes, interest, and hazard insurance).

When you refinance your mortgage, you usually pay off your original loan and sign a new one. With the new mortgage, you again pay most of the same costs you paid to get your original mortgage. These can include settlement costs, discount points, and other fees. You also may be charged a penalty for paying off your original loan early, although some states prohibit this. The total expense for refinancing a mortgage depends on the interest rate, number of points, and other costs required to obtain the new loan. To get the lowest rate offered, most mortgage companies will charge several points, and the total cost can run between three and six percent of the total amount you borrow.

All together, closing costs usually can range from 2% to 3% of your loan amount and you will be given an estimate of your closing costs shortly after your application has been received. Any prepayment penalty on a loan being refinanced will raise the amount needed to close. If there is enough equity in the home, your closing costs may be included in your new loan amount to keep your out-of-pocket costs as low as possible. If you change the product type or loan amount, the estimated closing costs will change. If this should occur, be sure to ask how the changes will affect your closing costs.

Refinance to Build Equity

Refinancing a mortgage essentially means paying off an existing loan and replacing it with a new one. Homeowners may decide to consider refinancing for a number of reasons. Potential reasons include: the chance to lock in to a lower interest rate; an opportunity to shorten the term of the mortgage; wanting to convert from an ARM to a fixed-rate mortgage (or vice versa); tapping into equity to finance another purchase; or to consolidate debt.

All of the above options have potential benefits as well as risks. But, if you’re looking into refinancing as a way of building equity or paying off your home more quickly, you’ll want to focus primarily on how refinancing can:

1) help secure a lower interest rate;

2) shorten your loan’s terms; and

3) convert between adjustable rate and fixed rate mortgages. It’s in these areas where refinancing can make a big difference in your effort to build equity in your home.

One of the best reasons to refinance is to lower the interest rate on loan you already have. The rule of thumb has usually been said to be that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, however, many lenders say 1% savings is enough incentive to refinance. Decreasing your interest rate not only helps you save money, but increases the rate at which you build equity in your home, and can decrease the size of your monthly payment.

When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another that, without much change in the monthly payment, has a shorter term. For that 30-year fixed-rate mortgage on a $100,000 home, refinancing from 9% to $5.5% cuts the term in half to 15 years, with only a slight change in the monthly payment from $804.62 to $817.08. If you’re looking to build equity, this would certainly be a good deal.

While adjustable rate mortgages start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available with a fixed-rate mortgage. When this occurs, converting to a fixed-rate mortgage results in a lower interest rate and gets rid of any fear of future interest rate hikes. On the other hand, converting from a fixed-rate loan to an adjustable rate mortgage can also be a sound financial strategy, especially if interest rates are falling. If rates continue to fall, the periodic rate adjustments on an adjustable rate mortgage result in decreasing rates and smaller monthly mortgage payments, eliminating the need to refinance every time rates drop.

Refinance to Get Cash

Another reason to consider refinancing a loan is the potential to simply get more cash. In such a situation, you basically refinance the loan for a higher amount of money. What this means is that you will owe more money than you initially began with and you may even lose a low interest that you had previously. However, you’ll still be reducing monthly payments and freeing up more money to spend on what new needs or situations may have arisen.

One way to put more money in your pocket this way is to tap into the equity you've built in your home and do a "cash-out" refinancing. Basically, you can refinance for an amount higher than your current principal balance and then take the extra funds as cash. This can provide money for whatever purpose you may need - remodeling a home, paying off high-interest rate bills, or even sending children to college.

One of the most common reasons for refinancing is to consolidate debts like those accrued with credit cards. When you consolidate such debts through refinancing, you have one monthly payment instead of many and, in addition, this is generally lower than the combined amount of payments you were already making.

So, after exercising such a refinance option, even if you don’t end up walking away with extra cash, you’ll see a noticeable difference in the extra money remaining from paycheck each month.

Bad Credit Mortgages Services

2009-01-07T06:08:00.000-08:00

About bad credit ratings

When you apply for any type of financial product, in this case a mortgage, you will have your credit rating checked.

Credit rating is a way for the lender to see how reliable you have been in the past with financial products. They need to make sure you are worth the risk of lending you the money.

The lender will look at why you're applying for the mortgage ie is it sensible?

They will study your financial position ie your income and outgoings.

In addition a detailed credit check will be carried out.

The mortgage lender will probably use one of the two major credit reference agencies, Experian or Equifax.

These agencies hold a wide range of information on everyone and have a - no doubt secret - formula for grading how good or bad a credit risk you are.

They'll know if you've had any past problems with a financial provider.

They'll grade you by current address (in fact they're so clever that if anyone in your house has ever had any bad credit that will count against you too).

Despite being extremely thorough, the process should be fairly quick.

What you must be clear on is that there is very very little chance of you being "cleared" if you have any history of poor credit. The problem is more for people who are wrongly labelled as having bad credit.

Causes for a bad credit rating

You may fit into one of the following categories:

You have been mislabeled, for whatever reason, as having a bad credit history.
You have had a distant past history of bad credit - but may feel you can show you are a reformed character.
You have a recent history of bad credit.
A surprising but possible cause for a bad credit rating is that you have an unconventional source of income. This means normal credit scoring techniques make you look like a bad bet.

So if you're a multi millionaire songwriter, living off the royalties of a mega hit, don't be surprised if you get a bad credit rating. The cyclops credit reference agencies can only see that you haven't got a 9 to 5 job so must be a bad credit bet.

How are you credit rated?

Here's an enlightening article in the Guardian about how you are assessed / credit scored.

Secret tips that let you beat the credit guard

If you've got a good job and no debts but have been turned down for a loan with no reason given then you need to read this. Patrick Collinson pulls away the veil over how banks assess you

Patrick Collinson, Guardian

Bad Credit Remortgages

What Is A Bad Credit Remortgage?

Why Choose A Bad Credit Remortgage?

How To Get A Bad Credit Remortgage

Things To Consider about Bad Credit Remortgaging

What Is A Bad Credit Remortgage?

A bad credit remortgage is a remortgage deal designed to help you if you have a bad credit rating – either because you are currently having some money problems, or because you have had some financial difficulties in the past and have been left with a poor credit rating.

There are two possibilities:

You can borrow against the equity in your home to raise some cash or to pay off some of your other debts
You can remortgage to reduce your monthly payments – this usually means extending the term (length) of your mortgage
Either way, the end result should be a more manageable monthly repayment, hopefully allowing you to get your finances under control.

A bad credit remortgage will generally offer two benefits:

Reduced monthly payments (over a longer term)
The chance to consolidate your other debts into one lower interest loan, with more manageable repayments, or to release some equity from your house as cash

Getting a bad credit remortgage can help you begin to improve your credit rating too – by clearing your other debts and keeping up with the payments on your remortgage, your credit rating will gradually improve again.

However, you should understand that even though the interest rate of your bad credit remortgage is lower, your total interest payments may be greater, due to the longer length of the loan.

Why Choose A Bad Credit Remortgage?

If you have had problems with credit or debt in the past, you may find it difficult or even impossible to get a mortgage from a regular high street lender. In this case, a bad credit remortgage offers the best solution.

An increasingly popular choice, bad credit remortgaging allows you to borrow against the equity in your home to pay off any debts you might have, and then to repay it all through your mortgage – usually at a much lower interest rate than previously.

Bad credit remortgages are a fairly specialist field.

The normal high street mortgage lenders are catching up by starting to offer remortgages for people with poor credit history's - after all so many normal people now have bad credit records thanks to the huge amount of credit based products that are available and heavily advertised.

However traditionally a number of specialist bad credit mortgage lenders have been the main people to go to. These lenders only make their mortgages available through brokers. Many still tend to offer the best and most flexible bad credit remortgage deals.

By applying through an independent mortgage broker, you can get get the best possible remortgage deal for your circumstances - whether it is from a traditional bad credit remortgager or from a mainstream high street type lender.

How To Get A Bad Credit Remortgage

While some mainstream lenders are starting to offer remortgages to people with bad credit directly, this market is mostly served by a number of specialist bad credit lenders.

You probably won't recognise the names of these companies, but behind them all are some of the largest banks and lenders around – who set them up as seperate "brands" to their normal high street operations. So you can be confident that they are reputable lenders.

These specialist lenders only deal through authorised mortgage brokers.

So to get a quote for a bad credit remortgage, you will have to discuss your requirements with a mortgage broker.

The broker will want to know:

details of your existing mortgage
details of any other debts you have which you wish to include in the remortgage – credit cards, loans, finance schemes, etc
how much you earn
what your outgoings are each month
whether you have had any CCJs, IVAs or bankruptcies
whether you are in arrears with any payments

Once they have this information, they will contact the most appropriate lenders and get a remortgage quote for you.

The quote should include:

details of the monthly payments
interest rate details – is it fixed or variable?
information about fees and tie-ins – are there early repayment charges?
· how long the remortgage is for – it may be over a longer term than your current mortgage
confirmation of what the broker's fees (if any) will be

Remember: Although your monthly payments may be reduced by extending the term of the mortgage, you may end up paying more interest in total than you would have done previously. Ask your broker to explain the numbers to you if you are unsure.

Things To Consider about Bad Credit Remortgaging

Bad credit remortgaging is not suitable for everyone. Before you agree to a deal, make sure you understand whether any of the following points affect you:

Will you have to pay any early repayment fees on your existing mortgage? If so how much are they – it might be cheaper not to remortgage
Most bad credit remortgaging requires you to have at least a 5% deposit or 5% equity in your home. There are some 100% deals, but these usually have higher interest rates.
Consolidating your debts and paying them back over a longer period may mean that you pay more interest in total than you would have done originally, even though your monthly payments are lower.
Don't apply direct to high street mortgage lenders who will be likely to reject you – this will show up on your credit history and make it more difficult for you to get a remortgage. The best approach is to talk to an independent mortgage broker who specialises in bad credit remortgages and let them find you a suitable lender who won't reject your application.
You may see lenders talk about "sub-prime" or "adverse credit" remortgaging – these are the same as bad credit remortgaging.

Second Mortgages Services

2009-01-07T05:44:00.000-08:00

What Are Second Mortgages?

Sometimes known as "secured loans" or "home equity loans", second mortgages are mortgage loans that are secured on a property which already has a first mortgage on it.

For example, if your home is worth $150,000 and you owe $80,000 on your existing [first] mortgage, you would be eligible to take a second mortgage based on the equity in your home – the difference between its value and what you owe on your mortgage.

Why Would I Want A Second Mortgage?

Second mortgages are ideal for a range of purposes:

• Buying a second home

• Funding a business startup

• Renovating or extending your existing home

• Consolidating your existing debts in a single, cheaper loan

Be careful, though – second mortgages are seen as higher risk by lenders, and consequently usually have higher rates of interest than first mortgages.

In some circumstances – depending on what you want the money for – it can be cheaper to remortgage than to take a second mortgage. That way, you retain the benefit of the lower interest rates available on first mortgages, saving you money on interest payments in the long term.

How Do Second Mortgages Work?

Second mortgages are pretty similar to first mortgages, but with a few added complications.

First of all, you can't keep it a secret. When you apply for a second mortgage on a property, you have to tell your first mortgage lender about the second mortgage – and both lenders have to agree to the deal.

The reason for this is risk. Second mortgages are second in line when it comes to debt collection. In a worse case scenario if your home is repossessed and does not sell for enough to cover both mortgages, the law means that the first mortgage lender will get their money first – leaving the second mortgage lender out of pocket.

That's why interest rates are higher on second mortgages – there is more risk for the lender.

Of course, when you apply for a second mortgage your lender will value your home to make sure that it is worth enough to pay off both your first and second mortgages - but even then, things can go wrong:

• You could become unable to pay your mortgages – through sickness or unemployment

• The value of your property could fall, so that even if you sold it you would not be able to pay off both of your mortgages

Even if you are keeping up payments on your first mortgage, your home could still be repossessed if you do not keep up payments on your second mortgage as well. This makes it important not to stretch yourself too much when considering a second mortgage, however tempting it seems when times are good.

Are There Different Kinds Of Second Mortgage?

Most second mortgages work like first mortgages – you are provided with a single lump sum payment, which you repay on a fixed schedule.

However, a limited number of lenders also offer a different type of second mortgage, which effectively provides you with a line of credit.

This type of second mortgage allows you to gradually withdraw the money as you need it – at different stages of a house extension, for example, or maybe to make several large purchases.

It's even possible to get a "second mortgage in excess" – a very high-risk type of secured loan that takes your loan-to-value ratio above 100% - in other words, the mortgages you have secured on your home are worth more than the property itself.

To be honest, it is probably best to avoid this situation if you possibly can – and you will need a very good credit rating to even be considered by lenders.

Most people don't need loans like these, but if you think that one of these types of second mortgage may be suitable for you, a mortgage broker will be able to explain the choices you have.

Which Lenders Provide Second Mortgages?

Second mortgages are available from a variety of lenders – ranging from specialist loan companies to regular high street mortgage lenders.

The terms and conditions on offer – such as fees, interest rates and repayment schedules – can vary widely, so it pays to shop around before you decide on a deal.

Things You Should Know About Second Mortgages

Second mortgages are considered riskier than first mortgages by most lenders. Consequently, the terms and conditions are sometimes a little more restrictive, and the interest rates are normally higher.

Here are a few things you should consider before you agree to a second mortgage:

• What are the early repayment fees?

• What would happen if you had to sell your home – could you pay off the second mortgage, or would you need to re-secure it on your new home? Either way, what would the fees be?

• Can you make overpayments, or take payment holidays if you need to?

• Would remortgaging be a better option? If you can, you will probably get a lower interest rate this way

• Do you need payment protection insurance? If so, make sure you shop around. You will probably be able to find cheaper insurance than that offered by your second mortgage lender.

Remember: Just like your first mortgage, your second mortgage is secured on your home. If you fail to keep up the payments on a second mortgage, your house could be repossessed even if you are not behind with your first mortgage.

*****

A second mortgage typically refers to a secured loan (or mortgage) that is subordinate to another loan against the same property.

In real estate, a property can have multiple loans or liens against it. The loan which is registered with county or city registry first is called the first mortgage or first position trust deed. The lien registered second is called the second mortgage. A property can have a third or even fourth mortgage, but those are rarer.

Second mortgages are called subordinate because, if the loan goes into default, the first mortgage gets paid off first before the second mortgage. Thus, second mortgages are riskier for lenders and generally come with a higher interest rate than first mortgages.

In most cases, a second mortgage takes the form of a home equity loan and the two are synonymous, from a financial standpoint. The difference in terminology is that a mortgage traditionally refers to the legal lien instrument, rather than the debt itself.

The term length of a second mortgage varies. Terms can last up to 30 years on second mortgages; however repayment may be required in as little as one year depending on the loan structure.

A second mortgage can occasionally be the catalyst to foreclosure when a homeowner defaults on their loan. The second lien holder then purchases the primary mortgage (which may still be in good standing) and then forecloses which leaves the homeowner losing their home to the 2nd mortgage lender.

Generally, when considering the application for a second mortgage, lenders will look for the following:

* Significant equity in the first mortgage.
* Low debt-to-income ratio.
* High credit score
* Solid employment history

First Mortgages Services

2009-01-07T05:39:00.000-08:00

What you're getting into

Maybe you want a mortgage to have your own place and to stop throwing away "dead" rent money.

You can now invest the same - or even less - into your own home. Sounds like a good idea.

But let's be clear on exactly what you're getting into here.

A mortgage is usually thought of as a loan to buy a home.

Actually the home doesn't become yours until you've paid the whole mortgage off.

If you fall behind on the loan your home could be repossessed. (But, then again, it'll probably take them longer to kick you out than if you were renting privately anyway).

What is the Process of Buying a Home

Stage 1: Finding a property

What happens	What you pay
Things kick off with you, the buyer, deciding where you want to live and how much you have to spend. It can be a good idea to speak to a mortgage broker who will be able to tell you how much you could probably borrow and how much it will cost you each month.	Zero
Then either register with some estate agents in your chosen area or search the property portals to find properties you want to view.	Zero
At the same time get some quotes for purchasing from a handful of conveyancers or solicitors.	Zero

Stage 2: Having your offer accepted

What happens	What you pay
When you have found a property you want to buy and the vendor has accepted your offer, things really get moving. This is when you instruct your solicitor to act. He or she will contact the seller’s solicitor requesting title deeds to the property and initiate contract negotiations.	Probably just the fees for local authority searches which are normally about $200.
You will also need to formally apply for a mortgage, possibly through a broker.	Zero (mortgage application fees and brokers’ fees are normally paid on completion).
It is also a good idea to get a survey done on the property you are buying. You can either go for a basic homebuyer’s report or full structural survey. The latter is advisable for older properties.	This depends on the value of the property but expect to pay between $250 and $500 for a homebuyer’s report and up to $1,000 for a full survey.
Your mortgage lender will also carry out a valuation on the property to check it is suitable security for the loan.	About $100 but valuations are free on some mortgage deals.

Stage 3: Exchange

What happens	What you pay
If the survey comes back OK and your solicitor has finalised the contract details with the seller’s solicitor then you will be ready to exchange contracts and agree a date for completion. You should have a firm mortgage offer by this stage.	Normally 10% of the purchase price – you pay this into your solicitor’s account and he or she sends it to the seller. If you pull out after this stage you will lose this money.

Stage 4: Completion

What happens	What you pay
Between exchange and completion your mortgage lender will transfer the amount of your mortgage into your solicitor’s account which will be sent to the seller’s solicitor on completion day. The solicitor does the necessary paperwork to register you as owner.	Your solicitor’s bill - normally about $400 to $600 but more if you are buying a leasehold property and about twice as much if you are also selling a property.
Your solicitor pays stamp duty on your behalf.	Currently bands are zero on property’s worth up to $125,000, 1% on properties sold for between $125,001 and $250,000, 3% on properties costing between $250,000 and $500,000 and 4% for transactions of more than $500,000.
Your mortgage is up and running	Monthly payments from now on – for 25 years or whatever term you agreed with the lender.
Your broker’s work is done	The broker’s fee – sometimes free, sometimes a flat rate or a percentage of the loan amount.
You hire a removal van to move your stuff to your new house.	Anything from $200 upwards depending on how much stuff you want to move and how far.

Mortgages First Time Buyers
The good news for First Time Buyers is that there is an availability of products previous generations have not experienced. However, quite often the biggest issue facing first time buyers is whether or not they will be able to borrow enough to purchase the property they want, coupled with the fact that the stamp duty applicable to first time buyers is also adversely affecting them.

The price of properties being considered by first time buyers is rising faster than the general market. The number of first time buyers is at the lowest recorded level for 25 years as an increasing amount of people are priced out of more and more areas.

In many cases, the only similarity between first time buyers is their lack of an existing mortgage or property to sell. One of the most common questions asked by first time buyers is how much they can borrow for their first mortgage.

Stumping up a deposit is usually one of the biggest problems for first-time buyers. Surveyors claim that the present "slab" approach has led to problems for first-time buyers, house price clustering, tax avoidance and impeded mobility. There are as many solutions as there are problems for first time buyers. There was "real urgency" over the problems for first time buyers, he said, and the proposal was a short to medium term way of tackling the issue. However, with current affordability problems for many (particularly first-time) buyers, this issue is fast becoming a luxury few can afford to worry about. Yet there is growing concern that solutions such as clubbing together could create problems for unwary first-time buyers.

Best Buy Mortgages- First Time Buyers (Discount Variable Rates). Banks and building societies now offer a much wider range of mortgages for first time buyers, so it's important to get the best deal.