Looking for a home mortgage will help you get the best financing deal. A mortgage, regardless if it is a purchase of a home, home equity loan or refinancing is a product, so the terms and prices are negotiable. It is helpful to compare the costs involved to obtain a mortgage. A thorough research on the best deals could save you thousands of dollars.
If you are looking right now for a home mortgage, here is what you can do to find and qualify for the cheapest rate possible.
1. You have to shop around for a loan as hard as you would a car or a Caribbean cruise. Try to compare fees and interest rates from at least a dozen lenders by looking at newspaper ads and online sites. Loans that offer the lowest rate with $1,000 fees or less are usually the best.
2. Check out your Credit Report since this is the most important determining factor of the amount you can afford for a mortgage. If you find errors, you could fix them by writing a letter to the credit bureau, explain the problem, and ask them to do an investigation. Attach whatever proof you have and send everything through a registered or certified mail.
3. Pay your dues on time. Thirty-five percent of your credit score is based on whether you pay your bills on time. When applying for a mortgage, it is important that you do not have late payments on your report within the last six months. More than anything, lenders want to know that you would be able to pay your dues promptly every month. If your credit history reflects a skipped payment or payment that has been a few days late, you will be considered as a risk and borrowers in that category pay higher interest rates or worst, denied the mortgage.
4. To qualify for the best mortgage, you should be able to pay down your credit card debt. One-third of your credit score is based on the amount of available credit you have consumed. If you owe $8,000 on your card with a $15,000 credit limit, you have used more than half of your credit available and that will appear excessive. Every time your debt-to-available-credit ratio goes up above fifty percent will get you penalized. Reducing your balance to less than half of your limit on each card that you possess will have a positive and immediate impact on your score.
5. Refrain from applying for a new credit card and other kinds of loans. Your prospective mortgage lender will check your credit report when you fill out their application and those are noted on your history. Each inquiry could lower your score by up to 12 points.
6. The mortgage rate that you qualify depends on several factors and one of which is your years on your job. Different lenders will look at work stability as the key factor to determine the loan program that you qualify. Discuss with your lender about the best deal for you.
If you will borrow over eighty-percent of the value of the home, you will most likely have to carry mortgage insurance as part of your monthly fee. This fee normally drops off as soon as you have obtained twenty-percent equity in your home. You can buy out the mortgage but this often results in a higher rate of interest. You should be able to weigh the best option for you based on your needs and plans. A qualified mortgage consultant can help in evaluating your credit report. He or she has strategies and tools to ensure you are managing a credit in such a way to have a higher credit score.
The rates of mortgage are currently volatile. Some lenders adjust their rates several times everyday and usually based on the current market rates. Others change rates once a week. Once again, it is necessary to shop around for the best rates before you settle on one.
Homes that offer a range of designs at McDowell Mountain Ranch Homes and ranch condos at McDowell Mountain Ranch Condos
Article Source: http://EzineArticles.com/?expert=Sonia_C_Llesol
Tuesday, December 15, 2009
Reverse Mortgage to Finance Your Home
If you are over sixty-two years old, looking for money to pay off your current mortgage, finance home improvement, healthcare expenses or supplement your retirement income, you might want to consider a reverse mortgage. This allows you to convert a part of the home equity into cash without having to sell it or pay additional monthly bills.
There are several types of reverse mortgages. One is the Single-purpose Reverse Mortgage is the least expensive option. This can be used for one purpose only which is specified by the government or a non-profit lender. Homeowners with low or moderate income can qualify for this loan. There is also the Home Equity Conversion Mortgages or HECMs and backed by the U.S. Department of Housing and Urban Development and the Proprietary Reverse Mortgage backed by the companies that develop them.
HECMs and Proprietary Reverse Mortgages are more expensive than conventional home loans and the up-front costs are high. You can consider this, especially if you are planning to stay in your home for a short while or borrow a minimal amount. These loans are widely available, no medical or income requirements and could be used for whatever your purpose.
Before you apply for a HECM, you must consult with an independent councelor from a government-approved housing counselling agency. Several lenders that offer proprietary reverse mortgage also require you for counselling. He or she will explain the financial implications, expenses and alternatives of a HECM and should be able to help you compare the costs of different kinds of reverse mortgages. The amount you can borrow from a HECM or proprietary reverse mortgage depends on some factors such as you age, the type of mortgage, the appraised value of your home and the current interest rates. Generally, the older you are, the more equity you have in your home and the lesser you owe on it means the more money you can get.
Here are some facts of a reverse mortgage that you should be aware:
1. In general, lenders charge a mortgage insurance premium (for federally insured HECMs), origination fee and other costs of closing. They may also charge service fees for the term of the mortgage. Law currently dictates an HECM reserve mortgage origination fees.
2. While it is true that some reverse mortgages have fixed rates, most have variable rates tied to a financial index and they are likely to change with the conditions in the market.
3. The amount owed in a reverse mortgage grows over time. The interest is charged on the balance outstanding and is added to the amount you owe per month. This means that your total debt decreases as the loan funds are advanced into the interest on the loan accrues.
3. A reverse mortgage could use up all or some of your home equity and leave a few assets for you and your heirs. Most of these mortgages have a nonrecourse clause that prevents you or your property from owning more than its value.
4. You will be responsible for insurance, property taxes, fuel maintenance, utilities and other expenses since you retain the title to your property. If you do not pay these and maintain the condition of your home, the loan may become due and payable.
5. If you own a home with a higher value, you may be able to obtain a higher loan but the higher amount you borrow also means higher costs. The key to determine the differences between a HECM and a proprietary loan is to do a side-by-side comparison of their benefits and expenses.
6. You have the right to cancel the reverse mortgage deal within three days for any reason minus a penalty. You have to write a letter to the lender by certified mail and ask for an acknowledgment or return receipt, this will allow you to document that the lender received it a said date. Keep copies of your correspondence. After cancelling, the lender has twenty days to return any amount you have paid for the financing.
Bear in mind that regardless of the type of reverse mortgage you are considering, you should comprehend all the conditions that could make the loan due and payable.
Enjoy housing that's made with you in mind at Chandler 55+ Housing and homes that exceed your expectations at Sun Lakes Realty
Article Source: http://EzineArticles.com/?expert=Sonia_C_Llesol
There are several types of reverse mortgages. One is the Single-purpose Reverse Mortgage is the least expensive option. This can be used for one purpose only which is specified by the government or a non-profit lender. Homeowners with low or moderate income can qualify for this loan. There is also the Home Equity Conversion Mortgages or HECMs and backed by the U.S. Department of Housing and Urban Development and the Proprietary Reverse Mortgage backed by the companies that develop them.
HECMs and Proprietary Reverse Mortgages are more expensive than conventional home loans and the up-front costs are high. You can consider this, especially if you are planning to stay in your home for a short while or borrow a minimal amount. These loans are widely available, no medical or income requirements and could be used for whatever your purpose.
Before you apply for a HECM, you must consult with an independent councelor from a government-approved housing counselling agency. Several lenders that offer proprietary reverse mortgage also require you for counselling. He or she will explain the financial implications, expenses and alternatives of a HECM and should be able to help you compare the costs of different kinds of reverse mortgages. The amount you can borrow from a HECM or proprietary reverse mortgage depends on some factors such as you age, the type of mortgage, the appraised value of your home and the current interest rates. Generally, the older you are, the more equity you have in your home and the lesser you owe on it means the more money you can get.
Here are some facts of a reverse mortgage that you should be aware:
1. In general, lenders charge a mortgage insurance premium (for federally insured HECMs), origination fee and other costs of closing. They may also charge service fees for the term of the mortgage. Law currently dictates an HECM reserve mortgage origination fees.
2. While it is true that some reverse mortgages have fixed rates, most have variable rates tied to a financial index and they are likely to change with the conditions in the market.
3. The amount owed in a reverse mortgage grows over time. The interest is charged on the balance outstanding and is added to the amount you owe per month. This means that your total debt decreases as the loan funds are advanced into the interest on the loan accrues.
3. A reverse mortgage could use up all or some of your home equity and leave a few assets for you and your heirs. Most of these mortgages have a nonrecourse clause that prevents you or your property from owning more than its value.
4. You will be responsible for insurance, property taxes, fuel maintenance, utilities and other expenses since you retain the title to your property. If you do not pay these and maintain the condition of your home, the loan may become due and payable.
5. If you own a home with a higher value, you may be able to obtain a higher loan but the higher amount you borrow also means higher costs. The key to determine the differences between a HECM and a proprietary loan is to do a side-by-side comparison of their benefits and expenses.
6. You have the right to cancel the reverse mortgage deal within three days for any reason minus a penalty. You have to write a letter to the lender by certified mail and ask for an acknowledgment or return receipt, this will allow you to document that the lender received it a said date. Keep copies of your correspondence. After cancelling, the lender has twenty days to return any amount you have paid for the financing.
Bear in mind that regardless of the type of reverse mortgage you are considering, you should comprehend all the conditions that could make the loan due and payable.
Enjoy housing that's made with you in mind at Chandler 55+ Housing and homes that exceed your expectations at Sun Lakes Realty
Article Source: http://EzineArticles.com/?expert=Sonia_C_Llesol
Understanding Mortgage Terms and Choosing One That is Best For You
Real estate experts would tell you to look for a mortgage term that suits you best. However, how are you going to know if the term suits your needs? In order to have a better understanding at this, you should learn about the different items used in mortgage. Understanding them will allow you to choose the best arrangement for you.
To understand this better, you should learn about the different factors considered in getting a loan. These are the following:
1. The loan size is among most important factors. This is very important because it will significantly affect everything in your mortgage term. You can apply for a certain amount but the lender will decide how much he will loan you. You can consult a broker and find out how much you can borrow. The broker will need to check your income, your credit score as well as your savings.
2. The interest rate is another important factor. There are two types of rates. One is the fixed rate and the other is the variable rate. As the name suggests, the fixed rate will remain the same all throughout the life of the mortgage. The variable rate on the other hand will change, depending on the state of the economy and other influencing factors.
3. Another important aspect of mortgage is its maturity. Thirty years is the standard maturity for the U.S. However, lenders have developed different plans to provide choices for their borrowers. Here, the borrower can have more control. If he wishes to pay the mortgage faster, he can choose a shorter maturity. The monthly payment is more expensive though.
4. Mortgage insurance is also essential. This is normally required from borrowers whose down payment
is less than 20% of the size of the loan. You may also have issues with your credit score or current monthly income.
5. You should also be aware of the fees and penalties that will be charged to you. You can avoid penalties by looking for lenders that do not charge this. You should also familiarize the different fees when applying for a loan. There is the appraisal fee, origination fee and others. Bear in mind that there are charges that you cannot negotiate. However, there are also those that you can. Familiarize the fees you can negotiate like the operating fees. You may ask the lender for the details of this and try to lower the charges.
The above mentioned items are among the most important considerations you should make when choosing a mortgage term. Always consider your future financial plans as well. How long do you plan to stay in the house? Will you be able to afford it? It is very important that you compare this with your monthly income and expenses. Will you still be able to live comfortably even with the additional monthly obligation?
The most important thing is to get a loan that will suit your lifestyle and resources. Do not go beyond what you can afford as it will lead to problems in the future. Remember, one missed payment could be your ticket to foreclosure.
Look for quality homes to invest in. Check out Paradise Valley Realty and Scottsdale New Homes.
Article Source: http://EzineArticles.com/?expert=Roby_V._Pagong
To understand this better, you should learn about the different factors considered in getting a loan. These are the following:
1. The loan size is among most important factors. This is very important because it will significantly affect everything in your mortgage term. You can apply for a certain amount but the lender will decide how much he will loan you. You can consult a broker and find out how much you can borrow. The broker will need to check your income, your credit score as well as your savings.
2. The interest rate is another important factor. There are two types of rates. One is the fixed rate and the other is the variable rate. As the name suggests, the fixed rate will remain the same all throughout the life of the mortgage. The variable rate on the other hand will change, depending on the state of the economy and other influencing factors.
3. Another important aspect of mortgage is its maturity. Thirty years is the standard maturity for the U.S. However, lenders have developed different plans to provide choices for their borrowers. Here, the borrower can have more control. If he wishes to pay the mortgage faster, he can choose a shorter maturity. The monthly payment is more expensive though.
4. Mortgage insurance is also essential. This is normally required from borrowers whose down payment
is less than 20% of the size of the loan. You may also have issues with your credit score or current monthly income.
5. You should also be aware of the fees and penalties that will be charged to you. You can avoid penalties by looking for lenders that do not charge this. You should also familiarize the different fees when applying for a loan. There is the appraisal fee, origination fee and others. Bear in mind that there are charges that you cannot negotiate. However, there are also those that you can. Familiarize the fees you can negotiate like the operating fees. You may ask the lender for the details of this and try to lower the charges.
The above mentioned items are among the most important considerations you should make when choosing a mortgage term. Always consider your future financial plans as well. How long do you plan to stay in the house? Will you be able to afford it? It is very important that you compare this with your monthly income and expenses. Will you still be able to live comfortably even with the additional monthly obligation?
The most important thing is to get a loan that will suit your lifestyle and resources. Do not go beyond what you can afford as it will lead to problems in the future. Remember, one missed payment could be your ticket to foreclosure.
Look for quality homes to invest in. Check out Paradise Valley Realty and Scottsdale New Homes.
Article Source: http://EzineArticles.com/?expert=Roby_V._Pagong
Getting a Homes Second Mortgage
Numerous people use home second mortgages to finance large purchases after they have built up equity in their home. A second mortgage uses the equity you have in your home as collateral for a line of credit; basically, it is another lien against the deed to your home. Second mortgages are generally flexible, meaning they can be allocated to a variety of purchases. Loan terms vary from one to thirty years. Despite these umteen benefits, second mortgage loans are highly risky.
A Homes Second Mortgages are Subordinate. A subordinate loan is not listed as the primary lien on your collateral. This means in the case of a bankruptcy, your primary lien holder would be paid off before your subordinate lien holder. Even though you are securing your second mortgage against an asset, because this is a subordinate loan form, the interest rate will be very high. There is little self-confidence against default for the lender. They will not likely recoup funds if you default. Whenever a loan poses this type of risk to the lender, the cost of funding is much higher for the borrower. You may find lower interest rates if you secure the loan with another form of collateral, such as an automobile, and list the lender as the primary lien holder.
A Homes Second Mortgage is Similar to a Home Equity Loan. Most individuals confuse homes second mortgages with home equity loans. The two are alike in the profits they pose to you. However, the main difference is a homes second mortgage actually puts a lien on your home deed. A home equity loan is a line of credit or installment loan based on the assets you have in your home; but a home equity loan does not truly collateralize the deed to your home. Because home second mortgages actually places the whole value of the home as collateral, it is much riskier for a borrower. Typically assuming more risk as a borrower will drop your interest rate. In this case, your interest rate will still be high. This lessens the benefits to a second mortgage substantially when compared to a home equity loan. Numerous still opt for the homes second mortgage, though, because their credit is not enough to get a one.
Defaults Leads to Foreclosures. One thing borrowers often misunderstand about a homes second mortgages is the fact they can lead to foreclosures on a primary mortgage. Many feel they are protected from foreclosure if they default on a second mortgage. After all, the primary lender still technically holds the deed to the home, not the borrower. The subordinate lender can purchase your primary debt, efficaciously buying the deed to your home from your primary lender. Then, a subordinate lender can get you through the foreclosure process in order to recover funds lost in your default. This is the greatest risk of a second mortgage, and is what finally can leave many people and families in desperate situations if they over-mortgage their homes, taking on too much debt, with a home second mortgage.
Please feel free to hear more from Mr. Molin at his Second Mortgage site
Article Source: http://EzineArticles.com/?expert=Deet_Molin
A Homes Second Mortgages are Subordinate. A subordinate loan is not listed as the primary lien on your collateral. This means in the case of a bankruptcy, your primary lien holder would be paid off before your subordinate lien holder. Even though you are securing your second mortgage against an asset, because this is a subordinate loan form, the interest rate will be very high. There is little self-confidence against default for the lender. They will not likely recoup funds if you default. Whenever a loan poses this type of risk to the lender, the cost of funding is much higher for the borrower. You may find lower interest rates if you secure the loan with another form of collateral, such as an automobile, and list the lender as the primary lien holder.
A Homes Second Mortgage is Similar to a Home Equity Loan. Most individuals confuse homes second mortgages with home equity loans. The two are alike in the profits they pose to you. However, the main difference is a homes second mortgage actually puts a lien on your home deed. A home equity loan is a line of credit or installment loan based on the assets you have in your home; but a home equity loan does not truly collateralize the deed to your home. Because home second mortgages actually places the whole value of the home as collateral, it is much riskier for a borrower. Typically assuming more risk as a borrower will drop your interest rate. In this case, your interest rate will still be high. This lessens the benefits to a second mortgage substantially when compared to a home equity loan. Numerous still opt for the homes second mortgage, though, because their credit is not enough to get a one.
Defaults Leads to Foreclosures. One thing borrowers often misunderstand about a homes second mortgages is the fact they can lead to foreclosures on a primary mortgage. Many feel they are protected from foreclosure if they default on a second mortgage. After all, the primary lender still technically holds the deed to the home, not the borrower. The subordinate lender can purchase your primary debt, efficaciously buying the deed to your home from your primary lender. Then, a subordinate lender can get you through the foreclosure process in order to recover funds lost in your default. This is the greatest risk of a second mortgage, and is what finally can leave many people and families in desperate situations if they over-mortgage their homes, taking on too much debt, with a home second mortgage.
Please feel free to hear more from Mr. Molin at his Second Mortgage site
Article Source: http://EzineArticles.com/?expert=Deet_Molin
The Varying Fortunes of Remortgages and Mortgages
The financial situation in the UK in general is at an all time low.
The UK has only previously been in such financial crisis when at war.
It was to be hoped that the Budget this week might contain some little gems that would help the recovery but unfortunately this was not to be.
In fact certain aspects of the Budget such as the raising of National Insurance Contibutions that employers will have to pay for their workers will only cause some companies already struggling to survive to even lose their fight for survival.
It will even lead to further redundancies at a period when redundancies have reached epidemic proportions
In the midst of all this economic depression there was a glimmer of hope this week with the announcement by The Council Of Mortgage Lenders that mortgage applications had risen in October to the highest level since December 2007.Mortgage applications rose to 55,000.
There are still citizens who feel that they are financially in a good place at the moment.
When buying a property a mortgage is required and this up turn in mortgage applications shows that some people have the confidence to move house.
Most of these will be moving to a bigger more expensive property as if they were down sizing frequently there is no need for a mortgage as the profit on their current property should make them mortgage free.
Mortgages appear to be moving in the right direction with the figures for October being 33,000 more that those in January.
However the news from the remortgage front is not the same as for mortgages.
Mortgages are the home loan required when buying a property whereas remortgages are the product which replaces an existing mortgage, and an be on a like for like basis or to release additional funds for any purpose.
The majority of homeowners in the past remortgaged at the end of their current deal which could last from two to five years after which there was no early repayment penalty.
People wanting a remortgage are being turned down as they may not have the required equity in their property.
Underwriting criteria for remortgages is not nearly so lax as it one was.
The Council Of Mortgage Lenders has been keeping records for more than seven years now, and the number of remortgages granted in August this year being only 30,000 made it the lowest month in all these years.
It is difficult to understand why remortgages have been so badly affected by the recession as rates are at their lowest rates ever for those with good equity in their property.
There are homeowners who have equity and for those with an equity margin of 70% and 60% rates of 1.99% and 1.98% respectively are available on a tracker product.
As such it makes little sense that remortgages have fallen so badly while mortgages are on the up.
Champion Finance has been established since 1985. They offer friendly efficient service whether you require secured loans for any purpose or a mortgage or remortgage arranged from the entire mortgage market. Debt help and advice is also available.
Article Source: http://EzineArticles.com/?expert=Liz_Moir
The UK has only previously been in such financial crisis when at war.
It was to be hoped that the Budget this week might contain some little gems that would help the recovery but unfortunately this was not to be.
In fact certain aspects of the Budget such as the raising of National Insurance Contibutions that employers will have to pay for their workers will only cause some companies already struggling to survive to even lose their fight for survival.
It will even lead to further redundancies at a period when redundancies have reached epidemic proportions
In the midst of all this economic depression there was a glimmer of hope this week with the announcement by The Council Of Mortgage Lenders that mortgage applications had risen in October to the highest level since December 2007.Mortgage applications rose to 55,000.
There are still citizens who feel that they are financially in a good place at the moment.
When buying a property a mortgage is required and this up turn in mortgage applications shows that some people have the confidence to move house.
Most of these will be moving to a bigger more expensive property as if they were down sizing frequently there is no need for a mortgage as the profit on their current property should make them mortgage free.
Mortgages appear to be moving in the right direction with the figures for October being 33,000 more that those in January.
However the news from the remortgage front is not the same as for mortgages.
Mortgages are the home loan required when buying a property whereas remortgages are the product which replaces an existing mortgage, and an be on a like for like basis or to release additional funds for any purpose.
The majority of homeowners in the past remortgaged at the end of their current deal which could last from two to five years after which there was no early repayment penalty.
People wanting a remortgage are being turned down as they may not have the required equity in their property.
Underwriting criteria for remortgages is not nearly so lax as it one was.
The Council Of Mortgage Lenders has been keeping records for more than seven years now, and the number of remortgages granted in August this year being only 30,000 made it the lowest month in all these years.
It is difficult to understand why remortgages have been so badly affected by the recession as rates are at their lowest rates ever for those with good equity in their property.
There are homeowners who have equity and for those with an equity margin of 70% and 60% rates of 1.99% and 1.98% respectively are available on a tracker product.
As such it makes little sense that remortgages have fallen so badly while mortgages are on the up.
Champion Finance has been established since 1985. They offer friendly efficient service whether you require secured loans for any purpose or a mortgage or remortgage arranged from the entire mortgage market. Debt help and advice is also available.
Article Source: http://EzineArticles.com/?expert=Liz_Moir
Want the Facts on Refinancing?
With home refinancing, you can get rid of your existing mortgage and acquire a better loan with new provisions and terms. A refinance can be beneficial in several ways. Your current (first) mortgage could have ceased to be of advantage to you and you wish to get a new mortgage with improved terms.
Your present mortgage may be one that is going to soar up and increase drastically, which would be a good call for a refinance. If you find yourself in need of a refinance, take caution. There are a lot of lenders out there who look to take advantage of refinancers. Some lenders are quick to abuse the ignorance of families who rush into refinancing without preparing as they should. By refinancing without a fine understanding of where their finances stand, a family that refinances their mortgage with the wrong lender can easily be taken for tens of thousands of unnecessary dollars.
This shows the importance of understanding the refinancing process to avoid being tricked by lenders.
When considering a refinance, you should not just look at the interest rate. The first consideration with ANY loan is always the term of the loan, or how much time it actually takes to repay the loan. As you are in debt for more and more years, the amount of money you actually pay grows larger and larger exponentially. For example, on a $100,000 loan, customer focused on lower interest rates would instinctually grab at a 8% loan that is a 30-year term. At the end of those 30 years you would have paid $262,000 to pay off the $100,000 debt. Compare that to the 10% loan at 15 years, which would have cost only $168,000 to pay off the $100,000 debt.
It is mathematical fact that the longer you are exposed to a debt, the more you pay exponentially! That is why interest rate should be secondary in making your decision to refinancing a mortgage.
Short term refinance loans usually have a lower total interest cost but higher monthly payments. You must also consider if a fixed rate or an adjustable rate mortgage does your situation the most benefit.Fixed rate mortgage are more secure because the monthly payments usually do not change (making them more predictable), while an adjustable rate mortgage's monthly payment will change frequently after an initial period.
Insider's secrets lender's DON'T want you to find out about Refinance First Mortgage....
Article Source: http://EzineArticles.com/?expert=Evan_Erhardt
Your present mortgage may be one that is going to soar up and increase drastically, which would be a good call for a refinance. If you find yourself in need of a refinance, take caution. There are a lot of lenders out there who look to take advantage of refinancers. Some lenders are quick to abuse the ignorance of families who rush into refinancing without preparing as they should. By refinancing without a fine understanding of where their finances stand, a family that refinances their mortgage with the wrong lender can easily be taken for tens of thousands of unnecessary dollars.
This shows the importance of understanding the refinancing process to avoid being tricked by lenders.
When considering a refinance, you should not just look at the interest rate. The first consideration with ANY loan is always the term of the loan, or how much time it actually takes to repay the loan. As you are in debt for more and more years, the amount of money you actually pay grows larger and larger exponentially. For example, on a $100,000 loan, customer focused on lower interest rates would instinctually grab at a 8% loan that is a 30-year term. At the end of those 30 years you would have paid $262,000 to pay off the $100,000 debt. Compare that to the 10% loan at 15 years, which would have cost only $168,000 to pay off the $100,000 debt.
It is mathematical fact that the longer you are exposed to a debt, the more you pay exponentially! That is why interest rate should be secondary in making your decision to refinancing a mortgage.
Short term refinance loans usually have a lower total interest cost but higher monthly payments. You must also consider if a fixed rate or an adjustable rate mortgage does your situation the most benefit.Fixed rate mortgage are more secure because the monthly payments usually do not change (making them more predictable), while an adjustable rate mortgage's monthly payment will change frequently after an initial period.
Insider's secrets lender's DON'T want you to find out about Refinance First Mortgage....
Article Source: http://EzineArticles.com/?expert=Evan_Erhardt
Writing a Loan Modification Hardship Letter - Get Your Facts Straight
Writing a loan modification hardship letter is your first and probably, your most important step in avoiding foreclosure and saving your home. Your modification hardship letter should be able to express to your lender the situation that you are in with regards to your finances and your inability to keep up with your monthly payments. A poorly written letter could be denied immediately for losing the interest of the lender reading it.
The hardship letter that you submit to your lender should state briefly and explicitly your financial situation. You also have to indicate the causes of your hardship and provide proof through your most current financial documents. Give them your reasons on why you need to have your loan modified and how you are determined to keep your home from foreclosure.
It is imperative that your lender is informed of what you are going through, but stick to the facts. Do not exaggerate your situation by presenting an overly dramatic letter. The best way to approach writing a loan modification letter is through being sincere and truthful in detailing nothing but the facts of your circumstances. Tell your lender why you need to keep your home and how a loan modification can help you pay for it. You should assure your lender that you will not default your loan once it has been modified.
Because of the crisis in the economy, many borrowers are panicking and not thinking things through. Do not be one of them. You may only get this one chance in getting an approval. Remember, it is always better and preferable to organize yourself and your requirements before you blow up your only chance of saving your home. To be seriously considered for a loan modification, your hardship letter should not be more than 2-3 pages in length. You should be focusing on the content. Be brief but definite with your purpose and your explanations. Be realistic and optimistic in presenting your plans in the letter. You should be able to present a responsible and diligent image to your lender.
This is your second chance to bring your finances back on the right track. Don't take any more chances!
Writing a loan modification hardship letter can be a meticulous process. Get expert advice now and receive a FREE sample hardship letter.
Article Source: http://EzineArticles.com/?expert=Clint_Richards
The hardship letter that you submit to your lender should state briefly and explicitly your financial situation. You also have to indicate the causes of your hardship and provide proof through your most current financial documents. Give them your reasons on why you need to have your loan modified and how you are determined to keep your home from foreclosure.
It is imperative that your lender is informed of what you are going through, but stick to the facts. Do not exaggerate your situation by presenting an overly dramatic letter. The best way to approach writing a loan modification letter is through being sincere and truthful in detailing nothing but the facts of your circumstances. Tell your lender why you need to keep your home and how a loan modification can help you pay for it. You should assure your lender that you will not default your loan once it has been modified.
Because of the crisis in the economy, many borrowers are panicking and not thinking things through. Do not be one of them. You may only get this one chance in getting an approval. Remember, it is always better and preferable to organize yourself and your requirements before you blow up your only chance of saving your home. To be seriously considered for a loan modification, your hardship letter should not be more than 2-3 pages in length. You should be focusing on the content. Be brief but definite with your purpose and your explanations. Be realistic and optimistic in presenting your plans in the letter. You should be able to present a responsible and diligent image to your lender.
This is your second chance to bring your finances back on the right track. Don't take any more chances!
Writing a loan modification hardship letter can be a meticulous process. Get expert advice now and receive a FREE sample hardship letter.
Article Source: http://EzineArticles.com/?expert=Clint_Richards
I Have Mortgage Arrears - What Can I Do?
Many home mortgage payments are at an all time low. However properties are still being repossessed at the rate of 3000 a month. Arrears need to be dealt with swiftly to avoid losing your home.
According to the Council of Mortgage Lenders, approximately 10,000 homes are repossessed each quarter. This is a significant number of families who are affected by the stress and upheaval of losing the roof over their head. With a better understanding of their situation and the remedies available, this number could be significantly reduced.
Vary your mortgage
If you have mortgage arrears or believe that you are struggling to pay your mortgage and are likely to miss a payment, the first thing you should do is speak to your lender. At the beginning of 2009, the government introduced some guidelines to mortgage lenders called the mortgage pre-action protocol. This made some strong suggestions to lenders about how they should work to help customers who fall into arrears.
The pre action protocol requires mortgage lenders to see whether they can agree a variation to the terms of the mortgage agreement to make payments more affordable. This may include adding arrears to the mortgage, changing the agreement to interest only and or extending the life of mortgage to make payments more affordable.
Reduce payments to unsecured debts
Varying your mortgage will help to make mortgage payments more affordable. However, once introduced the revised mortgage payments must be paid. To enable you to afford this, you may have to look at reducing your outgoings in other areas. A key area to consider is your unsecured debt payments.
If reducing the payments on personal loans, credit cards and store card accounts will enable you to maintain your mortgage payments and keep the roof over your head, then this is something you should consider. Monthly payments towards unsecured debt can be reduced by using either a debt management plan or more formal agreement such as an individual voluntary arrangement (IVA).
Of course, using these types of arrangements will have serious effects on your credit rating and ability to borrow in the future. However, if the alternative is the repossession of your home, then these options should certainly be considered seriously.
Consider rented accommodation
If you have looked at all of your options and you simply cannot afford your mortgage, then your best option may be to leave your home under your own terms rather than face a forced repossession process. If you are unable to sell the property, you have the option of simply moving out into rented accommodation and handing the keys back to the mortgage lender.
Your mortgage lender will then act to sell the property so that the outstanding mortgage can be repaid. The significant downside to this process is that the property will normally be sold at below the market rate and may leave a shortfall on the mortgage. You will remain responsible for the payment of this shortfall and the mortgage lender will act to recover it from you. However, this debt then becomes unsecured and as such, can be included in a debt management plan or IVA.
If you find yourself in mortgage arrears, the first priority is to find a way for you to remain in your property and avoid repossession. One of the ways to do this is to speak to your mortgage lender to see if your mortgage can be varied and the monthly payments reduced. However, as important will be to ensure your ability to maintain ongoing payments once they are agreed. To ensure this, you should consider how your other expenses, particularly unsecured debts, can be reduced.
Steve Jackson is a debt adviser from BeatMyDebt.com in the UK. For more quality and unbiased information on Personal Debt Solutions, visit our website at http://www.beatmydebt.com
Article Source: http://EzineArticles.com/?expert=Steve_J_Jackson
According to the Council of Mortgage Lenders, approximately 10,000 homes are repossessed each quarter. This is a significant number of families who are affected by the stress and upheaval of losing the roof over their head. With a better understanding of their situation and the remedies available, this number could be significantly reduced.
Vary your mortgage
If you have mortgage arrears or believe that you are struggling to pay your mortgage and are likely to miss a payment, the first thing you should do is speak to your lender. At the beginning of 2009, the government introduced some guidelines to mortgage lenders called the mortgage pre-action protocol. This made some strong suggestions to lenders about how they should work to help customers who fall into arrears.
The pre action protocol requires mortgage lenders to see whether they can agree a variation to the terms of the mortgage agreement to make payments more affordable. This may include adding arrears to the mortgage, changing the agreement to interest only and or extending the life of mortgage to make payments more affordable.
Reduce payments to unsecured debts
Varying your mortgage will help to make mortgage payments more affordable. However, once introduced the revised mortgage payments must be paid. To enable you to afford this, you may have to look at reducing your outgoings in other areas. A key area to consider is your unsecured debt payments.
If reducing the payments on personal loans, credit cards and store card accounts will enable you to maintain your mortgage payments and keep the roof over your head, then this is something you should consider. Monthly payments towards unsecured debt can be reduced by using either a debt management plan or more formal agreement such as an individual voluntary arrangement (IVA).
Of course, using these types of arrangements will have serious effects on your credit rating and ability to borrow in the future. However, if the alternative is the repossession of your home, then these options should certainly be considered seriously.
Consider rented accommodation
If you have looked at all of your options and you simply cannot afford your mortgage, then your best option may be to leave your home under your own terms rather than face a forced repossession process. If you are unable to sell the property, you have the option of simply moving out into rented accommodation and handing the keys back to the mortgage lender.
Your mortgage lender will then act to sell the property so that the outstanding mortgage can be repaid. The significant downside to this process is that the property will normally be sold at below the market rate and may leave a shortfall on the mortgage. You will remain responsible for the payment of this shortfall and the mortgage lender will act to recover it from you. However, this debt then becomes unsecured and as such, can be included in a debt management plan or IVA.
If you find yourself in mortgage arrears, the first priority is to find a way for you to remain in your property and avoid repossession. One of the ways to do this is to speak to your mortgage lender to see if your mortgage can be varied and the monthly payments reduced. However, as important will be to ensure your ability to maintain ongoing payments once they are agreed. To ensure this, you should consider how your other expenses, particularly unsecured debts, can be reduced.
Steve Jackson is a debt adviser from BeatMyDebt.com in the UK. For more quality and unbiased information on Personal Debt Solutions, visit our website at http://www.beatmydebt.com
Article Source: http://EzineArticles.com/?expert=Steve_J_Jackson
Loan Modification Program - Do Not Bury Your Head in the Sand Take Action to Save Your Home
If you at the point now where finding the money for every mortgage payment is difficult you could be heading for foreclosure. You might even be at that point now and dreading every phone call and knock on the door.
If you are in this situation you need to take urgent action as even one missed payment will reflect badly on your credit score, which will in turn will make it very difficult for you to get refinancing.
If you are stuck in situations such as these, a home mortgage loan modification might be the only thing you need in order to rescue your home before you are kicked out.
For a lot of people, by the time they take action the only course of help they can get is with a loan modification. This is because many banks and lenders will look at your credit score first and if you are doing a loan modification your credit score is not the important factor.
Most lending institutions nowadays are not eager to get your property foreclosed either. This is because they will usually have to shell out more money on the process of foreclosure and if there are no buyers waiting in the market they are going to take a big loss on their loan as they will have to slash the price of the property to sell it.
Because of this, lenders do not recover the money they spent. This is why it is to your advantage to apply for a loan modification. Your lender will realise you mean business and you do not want to lose your home and by agreeing to a loan modification program the lender will not lose out either.
The government has a loan modification program to help bailout homeowners who have been hit hard by the recession. This program works by helping the lenders and subsidizing them, who in term will pass on the benefits to home owners, even if they are taking a loss. This is because these losses are subsidized by the federal government.
When you have been accepted, there are two different ways your monthly payment can be modified. One is to lower your interest rate, the other is to extend the term of your loan. In some cases lenders will even grant you a modification if your loan is more than your house value.
As compared to a refinancing structure, the mortgage modification is by far a better option. This is because it is done with no additional cost and your current credit score is not affected by the process. A loan modification program is definitely the best way to avoid foreclosure on your home.
If you want to save your home here is the best place for a Loan Modification Program just click here
Article Source: http://EzineArticles.com/?expert=Jake_Randell
If you are in this situation you need to take urgent action as even one missed payment will reflect badly on your credit score, which will in turn will make it very difficult for you to get refinancing.
If you are stuck in situations such as these, a home mortgage loan modification might be the only thing you need in order to rescue your home before you are kicked out.
For a lot of people, by the time they take action the only course of help they can get is with a loan modification. This is because many banks and lenders will look at your credit score first and if you are doing a loan modification your credit score is not the important factor.
Most lending institutions nowadays are not eager to get your property foreclosed either. This is because they will usually have to shell out more money on the process of foreclosure and if there are no buyers waiting in the market they are going to take a big loss on their loan as they will have to slash the price of the property to sell it.
Because of this, lenders do not recover the money they spent. This is why it is to your advantage to apply for a loan modification. Your lender will realise you mean business and you do not want to lose your home and by agreeing to a loan modification program the lender will not lose out either.
The government has a loan modification program to help bailout homeowners who have been hit hard by the recession. This program works by helping the lenders and subsidizing them, who in term will pass on the benefits to home owners, even if they are taking a loss. This is because these losses are subsidized by the federal government.
When you have been accepted, there are two different ways your monthly payment can be modified. One is to lower your interest rate, the other is to extend the term of your loan. In some cases lenders will even grant you a modification if your loan is more than your house value.
As compared to a refinancing structure, the mortgage modification is by far a better option. This is because it is done with no additional cost and your current credit score is not affected by the process. A loan modification program is definitely the best way to avoid foreclosure on your home.
If you want to save your home here is the best place for a Loan Modification Program just click here
Article Source: http://EzineArticles.com/?expert=Jake_Randell
Reverse Mortgage - Is it For You?
Reverse mortgages have been around for a while and the Department of Housing and Urban Development (HUD) under the Federal Housing Administration (FHA) was one of the first to offer them.
Before diving into the deep end of a reverse mortgage, you need to make sure you understand what it is, if you are eligible, and what will be expected if you decide on one.
A reverse mortgage is a home loan that allows you to borrow against the equity you've built up in your home over the years. The main differences between a reverse mortgage and a more traditional mortgage are that the loan is not repaid until you no longer live in the residence or upon your death, and that you will never owe more than the home's value. You can also use a reverse mortgage to buy a different principal residence by using the cash available after you pay off your current reverse mortgage.
A reverse mortgage is not for everyone, and not everyone is eligible. For a Home Equity Conversion Mortgage (HECM), HUD's version of a reverse mortgage, requirements include that you must be at least 62 years of age, have no mortgage or only a very small mortgage on the property, be current on any federal debts, attend a session hosted by a HUD-approved HECM counselor that provides consumer information and the property must be your primary residence.
HUD bases the mortgage amount on current interest rates, the age of the youngest applicant and the lesser amount of the appraised value of the home or FHA's mortgage limit for the HECM. Financial requirements differ vastly from more traditional home loans in that the applicant does not have to meet credit qualifications, income is not considered and no repayment is required while the borrower lives in the property. Closing costs may be included in the home loan.
Stipulations for the property require that it be a single-family dwelling, a 1-4 unit property whereby the borrower occupies one of the units, a condominium approved by HUD or a manufactured home. Regardless of the type of dwelling, the property must meet all FHA building standards and flood requirements.
HECM offers five different payment plans in order for you to receive your reverse mortgage loan amount - Tenure, Term, Line of Credit, Modified Tenure and Modified Term. Tenure enables you to receive equal monthly payments for the duration that at least one borrower occupies the property as the primary residence. Term allows equal monthly payments over an agreed-upon specified number of months.
Line of Credit enables you to take out sporadic amounts at your discretion until the loan amount is reached. Modified Tenure is a combination of monthly payments to you and a line of credit for the duration you live in the home until the maximum loan amount is reached. Modified Term enables a combination of monthly payments for a specified number of months and a line of credit determined by the borrower.
For a $20 charge, you can change your payment options.
Lenders recover the cost of the loan and interest upon your death or when you no longer live in the home and your home is sold. You or your heirs receive what is left after the loan is repaid. Since the FHA insures the loan, if the proceeds from the sale of your home are not enough to cover the loan, FHA pays the lender the difference. Keep in mind that the FHA charges borrowers insurance to cover this provision.
The amount you are allowed to borrow, along with interest rate charged, depends on many factors, and all that is determined before you submit your loan application.
To find out if a reverse mortgage might be right for you and to obtain more details about FHA's HECM program, visit HUD's HECM homepage or call a representative of the National HECM Counseling Network at one of the following organizations:
* American Association of Retired Persons - 1-800-209-8085
* Consumer Credit Counseling Service of Atlanta - 1-866-616-3716
* Money Management International - 1-877-908-2227
* National Foundation for Credit Counseling - 1-866-698-6322
Ki's Austin real estate business is easily accessible in Central Austin and on the web. He designed a website, which includes a free Austin MLS search. Future owners can use a map search to search for Austin real estate. His site also keeps consumers up to date on mortgage rate trends.
Article Source: http://EzineArticles.com/?expert=Ki_Gray
Before diving into the deep end of a reverse mortgage, you need to make sure you understand what it is, if you are eligible, and what will be expected if you decide on one.
A reverse mortgage is a home loan that allows you to borrow against the equity you've built up in your home over the years. The main differences between a reverse mortgage and a more traditional mortgage are that the loan is not repaid until you no longer live in the residence or upon your death, and that you will never owe more than the home's value. You can also use a reverse mortgage to buy a different principal residence by using the cash available after you pay off your current reverse mortgage.
A reverse mortgage is not for everyone, and not everyone is eligible. For a Home Equity Conversion Mortgage (HECM), HUD's version of a reverse mortgage, requirements include that you must be at least 62 years of age, have no mortgage or only a very small mortgage on the property, be current on any federal debts, attend a session hosted by a HUD-approved HECM counselor that provides consumer information and the property must be your primary residence.
HUD bases the mortgage amount on current interest rates, the age of the youngest applicant and the lesser amount of the appraised value of the home or FHA's mortgage limit for the HECM. Financial requirements differ vastly from more traditional home loans in that the applicant does not have to meet credit qualifications, income is not considered and no repayment is required while the borrower lives in the property. Closing costs may be included in the home loan.
Stipulations for the property require that it be a single-family dwelling, a 1-4 unit property whereby the borrower occupies one of the units, a condominium approved by HUD or a manufactured home. Regardless of the type of dwelling, the property must meet all FHA building standards and flood requirements.
HECM offers five different payment plans in order for you to receive your reverse mortgage loan amount - Tenure, Term, Line of Credit, Modified Tenure and Modified Term. Tenure enables you to receive equal monthly payments for the duration that at least one borrower occupies the property as the primary residence. Term allows equal monthly payments over an agreed-upon specified number of months.
Line of Credit enables you to take out sporadic amounts at your discretion until the loan amount is reached. Modified Tenure is a combination of monthly payments to you and a line of credit for the duration you live in the home until the maximum loan amount is reached. Modified Term enables a combination of monthly payments for a specified number of months and a line of credit determined by the borrower.
For a $20 charge, you can change your payment options.
Lenders recover the cost of the loan and interest upon your death or when you no longer live in the home and your home is sold. You or your heirs receive what is left after the loan is repaid. Since the FHA insures the loan, if the proceeds from the sale of your home are not enough to cover the loan, FHA pays the lender the difference. Keep in mind that the FHA charges borrowers insurance to cover this provision.
The amount you are allowed to borrow, along with interest rate charged, depends on many factors, and all that is determined before you submit your loan application.
To find out if a reverse mortgage might be right for you and to obtain more details about FHA's HECM program, visit HUD's HECM homepage or call a representative of the National HECM Counseling Network at one of the following organizations:
* American Association of Retired Persons - 1-800-209-8085
* Consumer Credit Counseling Service of Atlanta - 1-866-616-3716
* Money Management International - 1-877-908-2227
* National Foundation for Credit Counseling - 1-866-698-6322
Ki's Austin real estate business is easily accessible in Central Austin and on the web. He designed a website, which includes a free Austin MLS search. Future owners can use a map search to search for Austin real estate. His site also keeps consumers up to date on mortgage rate trends.
Article Source: http://EzineArticles.com/?expert=Ki_Gray
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