Mortgage Bankers Association Predictions

The origination of new mortgages is expected to continue to drop through 2007, according to a report issued at the Mortgage Bankers Association (MBA) at the end of October 2006. The report stated that when 2006 is done, mortgage sales will have slipped nineteen percent over the year previous. Nevertheless, 2006 will maintain a position as the fifth highest year on record for new mortgages. The report recognized the last five years of home sales as being an unsustainable pace and characterized current circumstances as the beginning of a normalization period. In raw numbers, mortgage origination was at the $ three trillion mark or above in each of the last three years (2003 - 2005) and hit its peak at $3.9 trillion in 2003. From that perspective, it appears that mortgage sales began to taper a couple of years ago. The production of U.S. home loans will slide 19 percent this year to $2.46 trillion, and then drop another 14 percent in 2007 before stabilizing the next year.

The MBA sees 2007 mortgage creations totaling $2.12 trillion in 2007 and holding at that level in 2008. That�s an interesting, long-view analysis from a source of expertise that is more likely to deliver a disinterested viewpoint than the market analysts that read thuds and crashes into every change in the prime rate. It shows a mortgage market that is, the sale of new loans that will have decreased by 46 percent over a four year period from January 2003 through December 2007. Further, the report suggests that the decreased level of mortgage sales will remain in place for the ensuing year, implying that the lower figure is closer to a �normalized� mortgage market. In the meantime, mortgage rates are continuing to drop, down again at the end of October to 6.36% on a thirty year fixed loan.

So the interest rates continue to invite refinancing, and the number of ARMs scheduled to adjust in the next two years would seem to invite substantial refinancing. Nevertheless, the MBA�s expectations are for a protracted downturn. The MBA estimates that between $1.1 trillion and $1.5 trillion of ARMs will be up for adjustment in 2007, compared to the $400 billion that reset this year.

Their prediction is that $600 billion to $700 billion of those loans will likely refinance, while $500 billion to $800 billion will reset. While these estimates have extremely wide parameters, it is worth noting that the MBA sees something like half of all ARMs moving into maturity and being retained by the homeowners that hold them. That is in contradiction to the predictions that the widespread distribution of interest only and option ARMs will lead to disruption of the mortgage market. It is also encouraging, in the face of warnings issued about these loans by mortgage reinsurers and new guidelines about their use issued by the FDIC. It�s probably worth considering the source on this issue, particularly with regard to the successful retention of reset ARMs and substantially higher mortgage payments by tens of millions of homeowners. The MBA does acknowledge that delinquencies and foreclosures will be on the rise, although they are not forecasting any rate of increase in their report. They do note that how the ARMs play out could have a significant impact on the mortgage market, and predict that ARMs will drop to 19 percent of all mortgages issued in 2008, as compared to 30 percent at the beginning of 2006.

By Bobby Heavens

Getting a mortgage with friends

Property prices for even the smallest apartments are beyond the reach of many first time buyers nowadays. As a result, more and more people are clubbing together with friends to share a mortgage and ownership of a property. It�s a very good way to get on the property ladder, but as such arrangements are never normally for life and one or more party will inevitably want to sell eventually, the fine details should be agreed clearly at the outset to avoid financial loss or the loss of friendships.

The terms of a joint ownership mortgage are no different from a standard mortgage. Regardless of the amount of deposit that each person pays or the salary that they are earning, each shares equal liability for making the mortgage repayments as far as the mortgage lender is concerned. So if one person stops making repayments, the others will have to cover their share to ensure that the full repayment amounts are paid. It�s up to the joint owners to decide how they will divide the mortgage repayments and ownership of the property between themselves.

Clearly, a legal agreement is the best way to ensure that everyone understands their rights and responsibilities. This isn�t a sign of mistrust, it�s simply a guarantee of protection for everyone. Although not compulsory when taking out a joint mortgage with friends, it�s certainly wise to do so. It won�t cost much to have one drafted up by a solicitor. In fact so many people are taking out mortgages in this way that some mortgage lenders provide specially tailored joint ownership mortgages that include the drafting of a legal agreement.

Although the mortgage calculation is based on the sum of everyone�s incomes combined, the mortgage lender doesn�t give people different sizes of share in the mortgage or property. How much each person contributes towards the repayments is up to the joint owners to decide. It doesn�t have to be directly related to each person�s salary. This should be set out in the written agreement.

It can become more complicated in circumstances where individuals have put down different deposit amounts. However, again it�s up to the joint owners to decide how they want to divide the shares in ownership and in the mortgage.

If there�s only a small difference in the amount of deposits paid by everyone, it can be evened out informally by those who paid a smaller deposit making separate repayments to those who paid a larger deposit until their contributions are balanced out.

Alternatively, you may decide that each person has their deposit amount returned to them upon the sale of the property before the remaining profit is shared equally among the joint owners. This tends to work best in circumstances where the deposit amounts are low.

A common agreement for joint owners who have paid different deposit amounts, particularly if they are a large sum, is for the share in the ownership of the property to be equal but for each person�s deposit amount to be taken into account when calculating the mortgage repayments, so that those who put down smaller deposits have a bigger share of the mortgage. When it comes to one owner leaving or the property being sold, each person�s share in the profit is determined by calculating their share of the current balance of the mortgage deducted from the current market value of their share. This is fairer than taking an equal share of the gain plus giving each person back their deposit amount, as those who have been paying more towards the mortgage as a result of their lower deposits will actually have been paying more towards the capital than those who paid lower monthly amounts because of their higher deposit.

There are several different ways in which a person�s circumstances may change, thereby affecting their share of the mortgage and property. The details of what will happen in such situations should be ironed out in the legal agreement.

If for any reason one of the joint owners wants to leave, there are various possible options:

The person keeps their share of the mortgage and property and rents out their room.

The person sells their share to the remaining owners who can then rent out the room if they wish.

The share is sold to a third party in direct replacement of the person leaving.

The whole property is sold and all parties leave Insurance should be taken out as part of the legal agreement to cover situations in which people are unable to continue paying their share of the mortgage for a period of time, for example because of illness, injury, redundancy or death. For illness or injury, insurance cover will normally make their repayments for them for up to a year, and if the person is still unable to make repayments after this, their share of the property will almost certainly have to be sold.

If one of the joint owners dies, life insurance will provide a lump sum to pay off the person�s share of the mortgage, and, depending on the legal agreement drawn up, their share of the property will become part of their estate. Writing a will is a sensible precaution for ensuring that the deceased�s estate is distributed according to their wishes.

There are other things you�ll need to agree such as whether third parties can live at the property, and if so, for how long. You�ll also need to decide how you�ll split the fees for buying and selling the property.

All of these issues should ideally be specified in the agreement, which is best drafted by a solicitor to ensure that it�s fair and legally binding and covers all eventualities. Joint ownership with friends should be an enjoyable experience and you wouldn�t want to lose out on friendships or money as a result of misunderstandings.

By Brad Jensen

Home Loan Interest Rates vs. Mortgage Interest Rates

If you are interested in buying a home, you do have options. Many people opt to get a mortgage, but did you know, your bank may also offer home loans? Take into consideration the debate between home loan interest rates vs. mortgage interest rates before you even think about making a down payment on your future home. If you were to go into your bank to inquire about purchasing a home, you would be greeted by a bank loan officer. A bank loan officer works for the bank and tries to sell their employer�s loans and mortgages.

With a good credit report, it should be relatively easy for you to get a home loan straight from your bank. This works much the same way as it would if you were to obtain a personal loan or auto loan. The only difference is the amount lent is much higher. Continuing the debate between home loan interest rates vs. mortgage interest rates, mortgage brokers do not have a specific employer. These brokers work freelance to try to find you the best loan or mortgage possible from a wide array of lenders. This works well for people with unique credit situations. The broker will work to pair you with the perfect lender for your specific situation. There are several pros and cons for each bank loan officers and mortgage brokers. Bank loan officers will live in your neighborhood, understand the area and any specific needs you may have due to your locale. For instance, they would understand that you would need a specific type of heating system if you live in one area versus another. A mortgage broker can really help people with bad credit. While a bank may deny your loan request, a mortgage broker can find that one lender that�s willing to give you a chance.

However, the fact that the lender may live across the country can pose problems if you have area-specific needs. Ultimately, the home loan interest rates vs. mortgage interest rates debate will continue to rage on. It is up to you which option works best for your current situation and needs. A few things to take into consideration are your current income, how much you can afford to pay on a mortgage payment each month and whether or not you have good credit. Answering these questions should help you decide between a bank loan or a mortgage. Regardless, konut kredileri and banka kredi faizler are both excellent choices in taking the correct steps toward the home you�ve always wanted.

Mortgage Payment Protection Insurance-A Small Price to Pay for Complete Peace of Mind

Have you ever thought of how you would meet your mortgage repayments if you lost your job or if you are unable work due to an accident or a long illness? If you have not thought about this, it is time you did! Because you have an excellent cost effective option to protect your home in such circumstances- Mortgage Payment Protection Insurance. What is Mortgage Payment Protection Insurance? Mortgage is one of the biggest financial commitments in a person�s life. Mortgage Payment Protection Insurance is a sensible option for anyone who wants to protect their home from advent of unfortunate circumstances. When you choose Mortgage Payment Protection Insurance you can pay your monthly mortgage repayments even if you are off work due to illness or you are unemployed.

Mortgage Payment Protection Insurance from some companies also cover building insurance. These policies require a Qualifying Period of around 28 days, which is a minimum number of days before you can claim against the policy. Once you qualify the insurance company you have applied with will pay you until you get a job or reach the maximum number of months that the insurance company will pay out (which is generally for a year with exception of few companies which will pay for two years). You might feel that Mortgage Payment Protection Insurance with your mortgage lender is the logical step. However most mortgage lenders charge heavily. In such cases Mortgage Payment Protection Insurance from specialist providers is the cost effective option. The borrower needs to research and weigh the pros and cons of the policy before applying for it. Are you eligible for Mortgage Payment Protection Insurance? You are eligible for Mortgage Payment Protection Insurance if:

You are over 18 years of age and under 65 years of age.

You have already availed a mortgage or will be taking out a nationwide mortgage.

You are employed and have been employed for the last 6 months. However you need not be employed for 6 months if you are taking a new mortgage or a further advance.

You will be living in United Kingdom permanently.

However there are a few exclusions when Mortgage Payment Protection Insurance will not pay out. For instance when you voluntarily leave your job because of misconduct or dishonest behavior or if you suffer from long term financial problems which dont display any realistic chance of recovery. Most homeowners who have a full time working partner or savings to the tune of 8,000 will not be able to claim Mortgage Payment Protection Insurance. Life is full of uncertainties. It is difficult to imagine how you would cope with unemployment, accidents and many other unfortunate circumstances. But you can ensure that you sail through trying financial times with Mortgage Payment Protection Insurance

By John Hilgenberg

The Benefits of Using a Good Mortgage Consultant

Challenge your word vocabulary and boggle your mind. Understanding the financial world of home ownership is much easier with a good mortgage consultant, who can guide you through the lending options. Mortgage products are forever changing to provide more selection, more features and more confusion! Know the terminology and know what you are getting into, that�s the bottom line.

Residential mortgages comprise most of today�s mortgage business. There are many types of creative financing options for the homebuyer to consider. Additionally, there is a vast array of mortgage consultants with tremendous financing knowledge at their fingertips. Familiarizing yourself with phrases such as term of interest and life of your mortgage is highly important if you wish to have a life after signing the paperwork for your mortgage. The legwork to find the right home for your family is time consuming, fun and most often involves asking lots of questions to get exactly what you are looking for.

Likewise comparison-shopping when looking for a mortgage is essential. Attractive incentives are often offered, such as low interest rates, closing incentives, pre-approved packages, innovative refinancing options and leveraging untapped potential in your assets. Mortgage terms like fixed rate, adjustable rate, interest only, reverse, assumable and balloon payment mortgages are all specifically designed to meet the diverse needs of clients investing in home ownership.

Mortgage contingencies may appear fairly straightforward but can sometimes become quite stressful if the intent of the terms of the contingency are not clearly defined and understood. It is important to familiarize yourself with many new concepts, such as the 72 hour kick-out clause. Making sure you understand these concepts is the job of your mortgage consultant. Ensure your mortgage consultant takes the time to review all the fine print on your contract so that you are fully aware what is covered and for what length of time. A trustworthy working relationship is one where no hidden fees or requirements surface after the contract is signed. Home ownership is probably the biggest financial investment you will make in your lifetime. Take an interest in the interest. Be wise, thorough, get advice and don�t be shy about shopping around.

By john hemin

Mortgage Brokers and Mortgage Lenders: Who Should You Use?

It is recommended that you work with a mortgage broker or a mortgage lender before you shop for a house. You don't want to end up falling in love with a home and then finding out you can't afford it. Getting pre-qualified or pre-approved for a loan can help you decide what price range fits your situation. So what's the difference between a mortgage broker and a mortgage lender? A mortgage broker is basically a retail seller of a loan. They get paid a commission from the lender and a service fee from you.

The service fee can include an origination fee, a processing fee, a closing fee, and/or points on the loan. The fees will be listed on the documents you sign at the title company, on the day of closing. The advantage of using a mortgage broker is that they have information on a wide range of lenders and loans that can fit your needs. A mortgage broker's obligation to his/her customer is to find the best rate possible and make sure all the documents are prepared by the closing date. To do otherwise could cause the mortgage broker to lose customers and tarnish their reputation with other real estate professionals.

A mortgage lender is the actual institution servicing your loan. A lender could be a bank, a credit union, or a quasi-government company like FNMA or "Fannie Mae". Sometimes a lender will sell the loan to the open market, but still continue to service it. The fee of a lender is typically less than that of a mortgage broker. The mortgage broker, however, might find you a better rate because they are not bound by the policies of one institution. It is, therefore, debatable that going directly to the mortgage lender for a loan will save you money. Then who should you use? The answer is easy.

Find the one who gives you the best deal. All mortgage brokers and mortgage lenders should tell you their fees upfront, so shop around. It is also a good idea, in some instances, to use a lender referred to you by your realtor. Realtors work with lenders all the time and yours might have a good feel for one that is reliable and honest. In the end, though, you should use the mortgage broker or mortgage lender that is right for you.

Everlasting Mortgages

What does the term �inter-generational mortgage� mean to you? If you�re not up to date, then read on for more information on this revolutionary move.

It seems that there is a distinct possibility that lifetime interest only mortgages, which we could pass on down the family, may be the answer to a lot of home buying problems and worries.

The way the scheme works is the borrower takes out an interest only mortgage. This means that your monthly repayments are for interest only and no part of the original sum borrowed is repaid. Monthly interest payments are appreciably lower than that of a repayment mortgage. If you borrow �100,000 the saving on repayments could be around �130 per month.

A major feature of the scheme is that it means that your children will be able to inherit your home and very much reduce the dreaded inheritance tax.

In the event of your death the mortgage could pass on to your children, or other beneficiary.

On your death the mortgage passes on to your children, who have the choice of either continuing the mortgage payments and moving into the house or selling the home and repaying the loan. They could choose to live in the property, treat it as a buy-to-let or maybe a holiday home for family use. The implications of this as regards inheritance tax are interesting as only the value of the house, less the mortgage amount, would be counted as part of your estate.

There is no time limit on the mortgage and your children could continue to enjoy the property for as long as they wished.

Your first reaction to all this may be that you don�t want to pass debts to your children but in fact these mortgages are extremely popular in other parts of the world. The careful Swiss have found it works well for them and they�re not known for anything but neat, tidy and methodical practices, whether it is for sourcing mortgages or making cuckoo clocks! If it helps to you both pass on your home to your dependants and also reduce the amount of your hard earned money paid to the taxman, then it�s got to be worth some careful thought.

With more and more estates coming into the inheritance tax bracket (�285,000 in 2006) someone living in a relatively modest house could be affected by this tax. Many older people would be amazed to think that their estate could fall into this category.

It�s an increasingly common situation for older people to take out equity release schemes where they raise money against their home�s value to enable them to live more comfortably in retirement. These schemes can be really expensive. A mortgage which can be passed on to their children could be a far better bet. The interest rate would be much lower and this in turn would give them money to spend on themselves and they could have the pleasure of helping their children and grandchildren in their lifetime. Assuming that the equity in their home is greater than the mortgage, their children are still inheriting an asset worth more than the debt.

It looks as though we�ll be hearing a lot more about inter-generational mortgages. For more information and help on this and other mortgage choices we recommend you get on line and get some independent advice.

Facts About Mortgage Loan Offers And Pre-Approval

Although many of the �pre-approval� letters you get through the post are worthless, there are types of pre-approval from lenders that can help you greatly when buying a house. If you can get pre-approval on your mortgage loan, then you will find it much easier to get the house you want quickly. If you want to know more about pre-approval for mortgage loans, then here are some facts to help you out.

Apply before you buy

Although many people used to look at homes before applying for a mortgage loan, nowadays it is critical that you apply for the mortgage loan first. This will allow you to know exactly how much you can afford to spend on a house, and so find the property you want much more quickly and easily.

Pre-approval and pre-qualification

Although you might have a great credit rating and a good job and know you will be accepted for a mortgage, it is much better to apply and get pre-approval than to simply be pre-qualified. Pre-qualified simply means you are eligible to apply for a mortgage loan, but does not guarantee the amount that you will receive. However, getting a pre-approval letter will tell you exactly how much you will be allowed to borrow. As long as your circumstances do not change, this amount is guaranteed.

Getting pre-approval

To get pre-approval, you simply need to find the right lender for your needs and then speak to them about pre-approval. They will perform the necessary checks and give you a pre-approval letter, after which you can start searching for your dream home.

Looking at the right homes

If you have pre-approval, then you know exactly how much you can afford to spend on a property, and so can narrow your search down to homes within this price bracket. This will help you to find a property to match your needs much more quickly, and so make buying easier.

More negotiating power

If you have pre-approval on your mortgage loan, then you will be seen in the same way as a cash buyer. You already have the funds in place, so the seller is more likely to accept an offer immediately, even if it is below the price estimate. This is because they can be more certain that their house is sold, and so take it off the market pending the close of sale.

Quicker sale closing

One of the lengthiest parts of house buying and selling is the closing of the sale. If you have agreed to buy a house but do not have a mortgage in place, then it can take time to arrange the funds, and you might even find that you cannot get the funds you need. However, if you have pre-approval the funds are already guaranteed, and you can push through the transaction much more quickly. This will make buying a house much less stressful, and help you to get the home you really want.

By : Peter Kenny

Everything You Need To Know About Mortgage Regulation

Until midnight of Saturday 30th October 2004 the regulation of mortgage sales was done so on a voluntary basis which was overseen by the Mortgage Code Compliance Board (MCCB) - Lenders and brokers alike had pledged to adhere to this code which has now closed down.

This changed on the 31st October 2004 when a large section of the mortgage market came under statutory regulation. At this time, control of regulation was passed on to the Financial Services Authority (FSA).

The role of the FSA is to oversee the regulation of the financial services industry in the UK. The FSA is not a government department but is in fact a limited company - It has statutory powers, given to it under the Banking Act 1987. The FSAs board which makes its policy decisions is appointed by the treasury.

All mortgage brokers must be authorised by the FSA, either directly or through an authorised network/packager. You can check whether a firm is authorised via the register on fsa.gov.uk

What Are The Main Statutory Objectives Of The Financial Services Authority In Relation To Mortgages?

The FSA has been given a number of statutory objectives including:
# Maintaining confidence in the UK mortgage system.
# Promoting public understanding of the mortgage system.
# Securing an appropriate level of protection for consumers.
# Reducing the scope for financial crime.

What Are The Main Features Of Mortgage Regulation Under The Financial Services Authority?

Regulation as laid down by the FSA is statutory and any person or any organisation found breaking the rules could be subject to discipline - fines, bans and ultimately, jail time.

# The rules cover mortgage advice and sales, advertising and promotions.
# All mortgage advisors, whether you are a broker or a lender, must be authorised and regulated by the FSA.
# Any mortgage advisors must be suitably trained and professionally qualified.

In respect to mortgage sales and promotions, the FSA is very keen to bring about clarity to the mortgage market - in order that borrowers can effectively shop around and make informed decisions. Any mortgage advice, whether this is provided by a lender or a mortgage broker, must be accompanied with an Initial Disclosure document (IDD), and a Key Facts Illustration (KFI) before the borrower actually applies for the mortgage. These two documents have been standardised across the board in order to compare between different mortgage products.

What Is An IDD?

The initial disclosure document (IDD) must be provided to the borrower at the initial meeting, or if contact is via telephone, the key points must be summarised and explained with written documentation provided in writing within five working days. The IDD must cover the following points:

# Whether advice is offered or simply product information only.
# Whether the lender or broker has access to the whole of the mortgage market, or a limited panel - or even just one.
# Details of fees to be charged.
# Details of the complaints procedure - including a postal address for which to send in writing.

What Is A KFI?

A mortgage lender or broker must supply an accurate Key Facts illustration before a mortgage application is made. The KFI is a standardised document and must contain the following points:

# The total cost of the loan to be repaid.
# Any associated fees including the amount of commission that the broker earns subject to mortgage completion.
# The full details of the mortgage product including the interest rate, monthly payments and all fees.
# The risk of rate changes and the impact of payments.

DoesThe FSA Regulate All Types Of Mortgage Contract?

Buy-to-Let and commercial mortgages are not currently regulated by the FSA under the new regime.

What You Should Do In The Event Of A complaint?

Firstly you must try and iron out the complaint with the mortgage broker or lender. If a satisfactory response is not made then the complaint may be taken further to the Financial Ombudsman Service.

By : Robert Palmer

Five Common Pitfalls When Getting A Home Mortgage

Owning a home is a lifetime dream for many. The best way of acquiring a loan is with the help of a home equity mortgage. You will also sometimes feel the requirement to get some finance by providing your home as collateral. There are some fine points to look before you sign up for a loan by providing your home as guarantee.

Dealing with wrong people

You have heard enough of frauds and cheats. Financing your requirements with unscrupulous can cause you lose the equity you build up and your home as a whole. Don�t talk finance with any party that asks you to claim more income than you actually have and to apply for higher amounts than you require. Such people are also likely to sign unfilled forms, not allow you to keep a copy of the documents you sign and most importantly put pressure on you to pay huge monthly payments than you could afford, usually at a later stage of loan approval.

Not Keeping a Good Credit Score While Applying for Home Equity Mortgage

Major credit purchases immediately before you apply for loan can affect your score. Not caring too much about your credit score for a long time can damage your credit scores and you will not be able to quickly build up the damage. Healthy credit score is always desirable to get lower interest on home mortgage too. However, succumbing to the pressure of the first lender that sites your average credit score as reason for higher interest is also a major pitfall you should avoid. If the credit score is affected due to inability to repay a credit due to illness or temporary loss of job, you can still shop around and negotiate your way to low interest home mortgage.

Allowing a lot of credit Companies Check your Credit Score

Equifax, TransUnion and Experian are the main credit rating agencies. Ordering your own credit score can cost you $ 40. Your credit score drops a little with each credit check by lending companies. If you shop around and allow all the companies to check your credit score, it can drop considerably, disqualifying you from lower interest mortgage. Allow only the company you zero in on for your financing requirements to check your credit score.

Holding Back Information about your Credit History from Your Broker

Once you choose to deal with a mortgage broker to find a good home equity mortgage, you must talk with him if you had any credit problems in the recent history. If you try to misguide the broker, you will be in a bad light to getting a mortgage. If you describe your situation well, chances are higher that he will find a low cost loan to you.

Overlooking Overages and giving up the power of negotiation

Overage is the difference between lowest available price for the mortgage and the higher price the buyer is willing to pay. Lenders or brokers can keep the whole of or a part of the difference as additional compensation. Ask your broker(s) how much he gets as compensation.

By: Joel Teo

Home Equity Loans Based On A 2nd Mortgage

If you are looking to take advantage of the money accrued in your home, 2nd mortgage home equity loans are worth looking into. You can use the equity in your home to do some home improvements, take a vacation, or pay off some of your other debts. Getting a 2nd mortgage home equity loan can be a great way to get a little extra breathing space financially, and take advantage of your most valuable asset.

What is equity?

Simply, equity is the amount of ownership you have in your home. When you first get a loan, the lender basically owns the house. As you make payments, and as your home increases in market value, you start to own more and more of your home, and the bank owns less and less of it. The amount that would be left if you were to pay off your mortgage home loan today is the equity. 2nd mortgage home equity loans are a way to take advantage of the cash value you have built up in your home.

Using the money from 2nd mortgage home equity loans

There are many things that you can use the money for when you take advantage of a 2nd mortgage home equity loan. This is because the money that results from such a loan is yours. Here are some things that many people use the money for:

Home improvements. Many people make expensive repairs and upgrades with the money from a 2nd mortgage home equity loan. Home improvements add to the home�s value, and can increase the amount of equity in the home.

Vacations. Some people make it a point to go on vacation when they have equity built up. This is because many people feel that they deserve a nice break after working so hard. Using the money for a vacation can be a rewarding experience in some cases

Consolidating debt. If you have a great deal of consumer debt, especially credit cards and medical bills, 2nd mortgage home equity loans can help you pay them off. You can consolidate your debt into a single, lower monthly payments and interest rate. Plus, most home equity loan interest payments are tax deductible!

By: L. Sampson

How To Find Good Home Mortgage

While looking for home mortgage loans, you find yourself entitled for lower interest rates if you have healthy credit scores. However, don�t assume you will get only a costly loan if you have some credit problems that arose due to illness, or temporary unemployment. You can explain the situation to your lender and chances are higher you will get a less expensive home mortgage. The key here is to open yourself up to available mortgage choices and willingness to do some bargain. Before you submit a loan application be aware of your credit standing by checking your latest credit score with any of the credit rating agencies � Equifax, TransUnion or Experian.

In fact, home loans or mortgages are available from banks and thrift companies, mortgage companies, and other financial institutions. Credit unions are also a good source for finding a good home mortgage deal. Shop around to find the best deal. Get details of home mortgage plans by different financial institutions. You can always bargain your way to lower initial payments, fees, and other associated expenses that come in different names.

Including a mortgage broker includes some extra money paid as commission, but it is a good recommendable option. Such a broker will be knowledgeable about interest rates, fees, and other expenses associated with specific home mortgage schemes and will connect you to different lenders. Negotiating with a home mortgage broker can also, in most cases reduce the interest rate. A reduction by 0.5 % or even 0.25 % can make a difference in your monthly pay, which adds up to a good some in a year and major savings by the time you finish paying off the loan. However you are not obliged to any person or firm, and the thing to look for is lowest interest rates, monthly pay, and low to little late payment fee.

Private mortgage insurance (PMI) is a good option you should explore while applying for a home loan. This is actually a way to ensure that the lender doesn�t lose money, in case you fail to pay the loan amount. You require PMI whenever you take a loan for more than 80% of the appraised value of the property. This will however put the lender in a more relaxed state to release loan for your property buying requirements. You can in turn build up any loss in credit score during the tenure of the loan. However you continue to pay monthly PMI terms till you own 23 % of total equity or in other words, till you pay 23% of total value of the property � the mark is not 20%.

By: Joel Teo

Investment Property Mortgage Rate: Some Key Considerations To Note

Investment property mortgage rate is one of the most decisive factors when choosing a mortgage. Typically, the lower the interest rate, the better the mortgage. But the assessment of viability of a mortgage really depends on the type of mortgage and other loan terms. It is crucial that you shop around a bit to find a mortgage and mortgage rate that suits your requirements. A mortgage can be obtained from reputable banks, financial institutions, credit unions, and even private mortgage brokers, who would find the best rate possible for you.

Investment property mortgage rate can be classified into three major types: fixed-rate, adjustable-rate and balloon or reset.

Fixed-rate mortgage is a mortgage in which your interest rate and monthly payments are fixed throughout the life of the mortgage. There are two major types of fixed-rate mortgages based on the duration of the mortgage � 30-year & 15-year. The major advantage of a fixed-rate mortgage is that the interest rate and the monthly payments don�t increase with an increase in market rates. However, this can sometimes work against you, simply because the mortgage interest rate remains fixed even if the market rates are down.

Adjustable-rate mortgage (ARM) is a mortgage that has a variable investment property mortgage rate. ARMs usually start with a lower interest rate and lower monthly payments � this contributes to their wide popularity. However, it is imperative that you be aware of the specifics of an adjustable-rate mortgage, including the adjustment periods; indexes and margins; caps, ceilings and floors; and the number system.

Balloon or reset mortgage is based on a 30-year amortization schedule, with a 5-year or 7-year term. At the end of the term, you have an option to either pay off the remaining principal, or reset the mortgage at the current market rates. Therefore, you have the benefit of lower monthly payments, but you are required to repay the complete mortgage by the end of the specified term.

With several types available, you might be perplexed as to what type of investment property mortgage rate should you choose. The following few points will elucidate this aspect.

A fixed-rate mortgage is perhaps the best option if you plan to own the investment property for more than 5 years. But if you wish to sell the property earlier, or you want to start with a lower monthly payment, an adjustable-rate mortgage seems like an apt choice. And if you believe that your income will increase over time, and you can pay off the whole mortgage within 5 or 7 years, then you can go for a balloon or reset mortgage.

By: Joel Teo

Tips for Lowering Your Mortgage Payment

If you are interested in paying less money for your mortgage, you are probably trying to lower your mortgage payment. There are a few different ways you can lower your monthly mortgage payment. You can change the term of your mortgage. Since the balance of your mortgage is spread out over a longer period of time, your payment is lower.

If you have a thirty year mortgage and one of your financial goals is long-term savings, you may want to consider shortening your term to twenty or even fifteen years. Your payment will be higher, but you will pay much less in interest over the life of the loan, saving you thousands of dollars in the long run. In addition, you can lower your payment by refinancing an interest-only loan.

With an interest-only loan, the minimum amount you are required to pay is the amount of interest for a certain period of time, though you can pay as much principal as you like. One helpful too is the refinance calculator that will allow you to see how you could lower your monthly mortgage payment. Keep in mind that it is important to consider what mortgage rates are doing. Since mid-2004, the Federal Reserve has raised interest rates several times and is expected to keep raising rates in the near future.

This means that if you have an adjustable rate mortgage, it may adjust to a rate that's higher than a fixed-rate mortgage. You should consider refinancing to a fixed-rate loan. Additionally, you need to consider how long you plan on being in your home. Many people move within nine years so it may not make sense to pay a higher interest rate for a 30-year fixed-rate mortgage when you are not going to be in the home that long. Doing so may be costing you money.

Consider refinancing to an ARM instead. You will get a lower rate as well as lowering your monthly mortgage. You also have to think about the fact that if you are only going to be in your home for a few more years, it may make sense not to refinance out of your ARM. The equity you have in your home can act like a savings account that you could access through a home equity loan or a cash-out refinance.

This is usually done when you want to finance an important home improvement, pay for college or pay off high-interest credit card debt. Whatever your reason, this may be the right option for you.

The interest you pay on a credit card is not tax-deductible and you pay a higher rate than you would on your mortgage. Consequently, credit card debt is often referred to as bad debt whereas your mortgage is considered good debt. Using your home equity to pay off your high-interest credit card debt can save you money in the long run.

Using your home equity, rather than your credit cards, to finance expensive purchases can also be a smart move.

By : Groshan Fabiola

Mortgage Lenders And Specialist Lending

Fierce competition amongst mortgage lenders in recent years has brought about great news for the consumer - The Banks & Building Societies scrapping for business has only resulted in a greater depth of choice and value, for nearly every type of borrower, from those looking to obtain a mortgage for the first time through to those looking to remortgage their existing one.

In todays market, the traditional one size fits all type of mortgage has long disappeared - individual borrowers now have individual requirements and objectives, not to mention individual credit backgrounds too! It is true to say that regardless of your credit history or personal circumstances, there are mortgage products to suit nearly every type of borrower.

If your mortgage requirements are less than conventional, you may experience difficulties securing mortgage finance through the usual channels, by way of approaching the High Street Banks and Building Societies.

Traditional High Street lenders have long been the preserve of those borrowers with impeccable credit records - many of these lenders will be extremely anxious to deviate from their ideal customer profile. In many cases where a borrower has a blemished credit history, an initial computerised credit scoring system will result in an application refusal.

There are a now a huge selection of specialist/sub-prime mortgage lenders, many of whom that are prepared to consider most types of mortgage application - from those with the most severe of credit records, to those self employed borrowers with little or no proof of income.

In many instances, a borrower will find themselves being redirected to the world of specialist lending after having been turned away by a High Street Bank or Building society for whatever reason. These types of specialist lenders, once regarded as a niche market, have become widely recognised throughout the mortgage industry and provide an increasing important role.

Many specialist/sub-prime mortgage lenders may only be accessed through an intermediary such as a mortgage broker, Independent Financial advisor or mortgage network - Customers must first go via these channels in order to access many of these lenders mortgage products.

Self Employed Mortgages

Self employed borrowers have always been treated differently from their employed counterparts. They have always been penalised for their status in the past, usually in the form of higher interest rates, or an interest rate loading. Self employed borrowers are still today perceived by many Banks & Building Societies as a higher lending risk unless you are able to provide backup of your income in form of two or three years of accounts and six months of bank statements.

There are many specialist lenders who recognise the sheer volume of self employed individuals in the workforce, well over four million and thus make a greater effort in accommodating the borrowing needs of such individuals. They may not offer the lowest rates on the market however their mortgages are still competitively priced and can offer greater degrees of flexibility too.

Buy To Let Mortgages

Buy to let remortgage products have long been the preserve of the specialist lender. The buy to let market has attracted a huge number of landlords in recent years as escalating house prices and a greater need for low risk investment has made property a very viable option in which to invest in.

Many of the mainstream lenders have since jumped on the buy to let bandwagon however it is worth considering that specialist lenders often have more experience of the buy to let market.

Approaching a mortgage broker can often be a great place to start in researching your specialist lending needs. As previously mentioned many of the leading specialist lenders are only available through an intermediary however most mortgage brokers will have access to a wide variety of these different lenders.

A mortgage broker may charge you a fee for there services however this can at times be negotiated in light of the fact that most will also receive a commission from the lender on completion of your mortgage application.

You will also notice when doing your research that most of the specialist lenders are in fact lending arms of the major mainstream Banks & Building Societies.

By : Robert Palmer

Mortgages For Old Timers

With the whole pension fiasco many people are struggling when in their golden years. Releasing the equity from your home can be a good way to supplement your income in retirement. Make sure you use these ten points to avoid the pitfalls.

#1 Make Sure That Equity Release Is Right For You
If you are coming near to retirement or are retired and you are a homeowner you could be eligible for a cash lump sum in the form of an equity release plan. The amount you eligible for will depend on your age, property and the type of scheme.

Regardless of the equity release plan you choose, it will still affect the amount you are able to leave as inheritance. So you should make sure that you talk things through carefully with your family first.

#2 Get Financial Advice
It is always a good idea to talk to an independent financial advisor who will be able to access your current situation and what you want to achieve and find the most suitable solution.

Make sure you ask your financial advisor about the different equity release options available, the associated costs and whether any repayment charges are payable if you decide to end your plan early.

#3 Make Sure Your Provider Is A Member Of SHIP
Safe Home Income Plans (SHIP) is the organisation dedicated to the protection of equity release plan holders and the promotion of safe home income and equity release plans. All participating companies have pledged to observe the SHIP code of practice, which guarantees the safety of all their plans.

#4 Check Out A Lifetime Mortgage
Lifetime mortgages used to be called cash release plans or roll up mortgages. The amount you borrow is secured as a mortgage against your home and you do not have to pay anything back until you die, need to go into care or the loan is repaid from the sale of your home.

Interest builds up from the start of the loan until it is repaid. A no negative equity guarantee ensures the lender will always accept the value of your home as full repayment for the loan and your estate will not have anything to pay on top. This is something to talk to your financial advisor about.

#5 Consider A Home Income Scheme
A home income scheme is another type of product where the money from a lifetime mortgage is used to buy an insurance policy that provides a guaranteed income for the rest of your life.

#6 Look At A Reversion Scheme
This is where you sell all or part of the value of your home to a reversion company in return for either a cash lump sum or an income. The amount you receive will be less than the value of the proportion you have sold. You can live in your home for the rrest of your life, but you will not be the sole owner and in some cases may have to pay rent. When you die the property is sold and reversion company keeps its share of proceeds.

#7 Check Whether The Product You Have Chosen Is Regulated
The Financial Services Authority (FSA) currently regulate lifetime mortgages. If you see a product advertised as a lifetime mortgage, find out exactly what type of product it is. Regulation means advisors and lenders have to adhere to the FSAs strict code of conduct or face heavy penalties.

#8 Think About How House Prices Will Affect You
All SHIP members have a no negative equity guarantee on their lifetime mortgages. This means that if the price of your house falls you, or your estate, will not have to pay any extra to compensate.

With a lifetime mortgage, an increase in the value of your house can help to offset the interest on your loan. With a reversion scheme the company will take the agreed share of your property regardless of what happens to property prices.

#9 Check You Entitlement To Welfare Benefits
A large cash sum could affect your entitlement to state benefits. This will depend entirely upon your financial circumstances and it is an issue you should bring up with your financial advisor.

#10 Check How A Plan Will Affect Your Tax Liability
A large lump sum might also affect both your current and future tax situation, but not necessarily for the worse. If your children are looking at a large potential tax bill then releasing some equity in the house now might elevate this. But it is important that you speak to a specialist tax advisor about your personal circumstances.

By : Robert Palmer

Three Critical Things To Consider When Getting A Home Mortgage

While looking to buy a new home or while trying to tide over your immediate financial problems, you will think about getting a home mortgage. A mortgage, like a loan comes with a fixed or an adjustable interest rate. You make new or owned home collateral for acquiring a mortgage. You can get up to 80% of the value of the house, as appraised by an attorney as loan amount. If you plan to get more than 80% of value as loan, you will need to buy PMI insurance policy and make additional monthly payments as premium. There are means to tide over this situation, a 80/20 mortgage will be your answer, that is you get two mortgage for 80% and 20% equity of the house.

Whatever be your plan, consider a few critical things before you jump into buying home mortgage financing.

The first thing of course is the interest rate. APR is variable based on different factors. Some factors, like credit score are under your control. Reducing the overage, the compensation that the lending officer or loan broker takes, depends on your negotiating skills and the willingness of the lender or broker to reduce their compensations. It is important that the monthly payment amount is comfortably affordable by you. The last thing you would like to see is your home attached by the lender for default payments. Many people consider interest rate as the only major thing about loans or home mortgage, while overlooking several other factors that costs you huge dollars.

Checking your credit information is an important step. Before you apply for a home mortgage, be disciplined to ask your credit score from the three credit agencies � Equifax, TransUnion and Experian � and check whether there are any errors there. Thoroughly check spelling, employment information, social security number, etc. More than 50% of all credit reports have errors in it � why dampen your chances of getting a low cost home mortgage due to mistakes made by other people? Another thing about credit report is that your credit score drops a bit with a lending agency checking your credit score. Take the measures to prevent dozens of lenders check your credit score while you shop around.

Ask about prepayment fine before applying for a home mortgage. Look for home mortgages that come with zero or at least very low repayment fees. This will save you considerable amounts of money while you consider refinancing your loan in the future.

By: Joel Teo

Mortgages - Short Term Memory

Do you, in common with millions of other home owners, have a short-term mortgage? If so, it�s very easy to set up the monthly repayment and then get involved with so many other aspects of your life that time slips away and before you know it, the two or three year period of your loan is coming to an end. Whilst many lenders write to their customers towards the end of the loan period, it isn�t compulsory.

When you sign on the dotted line for your mortgage deal, you are issued with a key facts mortgage document which will include all the loan details together with the all important date that your fixed price deal will come to an end. If you forget this date and also fail to receive a reminder, the first thing you�ll become aware of it a notice of a change in monthly re-payments, which means that you�ll be going on to the lender�s usually expensive SVR, or standard variable rate.

As an example, on a loan of �150,000, you could easily be paying out a substantially higher amount - more than �200 a month extra. This is assuming that the SVR is 2.25% more than the �special rate�, which would not be unusual.

Obviously most borrowers would opt to change to an alternative short term mortgage, but it takes between four to six weeks to arrange this change-over.

If you are extremely diligent at remembering to take action you may run into problems too as if you ask what your options are when there�s more than a month or so to run, your lender will very often say they�re unable to make a decision until nearer the date. Then you�ve been stalled and still can�t make a decision.

There has been some improvement in the way insurers are handling the situation. An increasing number of them are contacting borrowers around three months before the end of their current deal and setting out options.

It�s not always the right thing to automatically change to another lender to get the best price. Consider your options carefully. If you stay with your current lender, there will be a saving on legal charges and you shouldn�t need another valuation. Nor will exit fees be charges, which could mean a fairly big saving. It just could be that a slightly more expensive deal with your current lender may work out best in the long run.

Because of this and with the intense competition in the re-mortgaging business, it�s becoming increasing common to find new lenders who will fund the charges, just to get your business.

If you used a broker to arrange the mortgage, you may well find that they�ll send you a friendly reminder. This is a service which will be no problem for them and another thing less for you to think about, which has to be good news. Your broker will weigh up the deals and come up with some facts and figures when it comes to renewal too. The internet�s the place to look and an on-line broker�s the person to look for.

Ohio Mortgage Loans And Financing

When Should You Refinance Your Mortgage? There are two primary reasons to refinance a mortgage: to get a more desirable rate and terms or to extract cash from the home's equity. Both of these reasons can of course also be fulfilled!

Rate-and-term refinancing

Rate-and-term refinancing pays off one loan with the proceeds from the new loan, using the same property as collateral. This type of loan allows you to take advantage of lower interest rates or shorten the term of your mortgage to build equity faster. Rate-and-term refinancing refers to a myriad of strategies, including switching from an ARM to a fixed or vice versa. For example, if you have an ARM that is set to adjust upward in a few months, you can refinance into a fixed-rate mortgage. Or if you have a fixed-rate loan and you know you will move in two or three years, you could refinance into a lower-rate 3/1 hybrid ARM.

Cash-out refinancing

Cash-out refinancing leaves you with additional cash above the amount needed to pay off your existing mortgage, closing costs, points and any mortgage liens. You may use the additional cash for any purpose.

For example, say you bought your house for $150,000 a few years ago and borrowed $120,000. Now the house has an appraised value of $250,000 and you owe $110,000. With a cash-out refinance, you could get a mortgage for $150,000. You would pay off the $110,000 you owe and pocket the $40,000 difference, minus closing costs.

Ohio Mortgage Bankers Association

To learn more about Ohio Mortgage options you can check with the Ohio Mortgage Bankers Association, founded in 1961. OMBA is a statewide organization devoted exclusively to the field of residential and commercial real estate finance. OMBA's membership comprises mortgage originators and servicers, as well as investors, and a wide variety of mortgage industry-related firms. Mortgage banking firms engage directly in originating, selling, and servicing real estate investment portfolios.

Members of OMBA include mortgage bankers, mortgage brokers, banks, mortgage insurance companies, attorneys, credit unions, saving & loans associations etcetera.

OMBA is dedicated to the maintenance of a strong housing, residential and commercial, real estate finance system. This involves support for a strong economy; a public-private partnership for the production and maintenance of single and multi family home ownership opportunities; a strong secondary mortgage credit delivery system; equitable tax laws; suitable shelter for low income families and the disadvantaged; housing opportunities for the nation's veterans; appropriate environmental measures; and fair and equitable bankruptcy laws.

By: Louise Wasa

Five Reasons That Banks Reject Commercial Mortgages

This article highlights the five main reasons that banks decline commercial mortgage loan applications. The reasons provided below do not represent obscure issues, so it is likely that two or three of the reasons described will be important for typical commercial mortgage situations. The first two reasons (business plans and tax returns) will potentially impact all commercial borrowers. Many commercial loan officers will start their loan review process by stating some variation of �Can you show me your business plan?� and �We will need to see several years of tax returns�.

Many commercial projects are too unique for traditional commercial banks. In these situations (even if a commercial borrower has favorable tax returns and an adequate business plan), it is not unusual for commercial borrowers to be declined for a commercial mortgage loan by a traditional commercial lender. Commercial borrowers are likely to be confused when they are turned down and will be unsure as to why it happened and what to do next. For each of the five major reasons that a bank might decline a commercial real estate loan, a strategy is provided for converting the declined loan into an approved commercial mortgage.

Reason # 1:
A bank's loan officer or loan underwriter is not satisfied that the business plan provided by the commercial borrower supports the requested loan.

Strategy # 1:
Most commercial borrowers will benefit directly from dealing with a commercial lender that does not require a business plan due to the following major benefits:

(1) Reduce commercial mortgage costs by thousands of dollars. A common range for an average business plan (prepared to typical bank specifications) would be $5,000 to $10,000.

(2) Reduce mortgage closing time by several months. Business plans can be prepared before or after applying for a loan, but either way the net extra time required will probably be 1-2 months or more.

(3) If the lender does not require a business plan, there is one less item standing between the commercial borrower and their approved loan.

Reason # 2:
Loan underwriters find something on a tax return that disqualifies a borrower under the bank's lending guidelines. This "something" will frequently be insufficient net income, but when loan underwriters look at tax returns, there are many other possibilities which produce a similar result. For example, IRS Form 4506 (which authorizes the lender to obtain tax returns directly from the IRS) is routinely required by most traditional banks. Some lenders require this form in addition to current tax returns.

Strategy # 2:
Business loan borrowers will NEVER have Reason Number 2 to worry about if they are applying for a "Stated Income" commercial real estate loan. Very few traditional banks use Stated Income (no tax returns, no income verification, no IRS Form 4506) for a commercial mortgage. Commercial borrowers should seek out lenders using Stated Income Commercial Loans and "Limited Documentation Requirements". This strategy will not work for all commercial mortgages since there is a maximum loan amount of $2-3 million for most Stated Income Commercial Mortgage Programs.

Reason # 3:
The bank does not generally make business loans for the type of business involved or imposes special requirements that make the loan impractical for the commercial borrower. Fewer and fewer banks are making loans to bar/restaurant properties. Similarly, auto service businesses are frequently given unnecessary (and expensive) environmental reporting requirements. There are many "special purpose" properties such as funeral homes, nursing homes, assisted living facilities, RV parks, marinas, golf courses, bed and breakfast, day care centers, churches and car washes that most traditional banks will not include in their business lending portfolio.

Strategy # 3:
For most business borrowers that can get approved at a traditional bank, there are better options available elsewhere. And "better options" are clearly available ONLY elsewhere when the bank won�t make the business loan in the first place! There are very capable commercial lenders that are interested in unique or special purpose properties.

Reason # 4:
When a business is refinancing their current commercial mortgage and wants to get a significant amount of cash out for various uses, it is not unusual for the bank to limit the amount of cash to amounts as small as $100,000. Even though the bank might make the loan, if they won�t provide the amount of cash needed by the commercial borrower, this is equivalent to declining the loan.

Strategy # 4:
As mentioned in Strategy Number 3, there are better options available elsewhere! The commercial borrower's mission (and it is not impossible at all) is to use a commercial real estate lender that will allow them to get much larger amounts of unrestricted cash out of a commercial refinancing, i.e. more cash out and no restrictions on what they do with it.

Reason # 5:
The bank will not provide a business loan without adequate collateral, usually in the form of a lien on personal assets such as the commercial borrower's home.

Strategy # 5:
Commercial mortgage borrowers should seek out lenders that do not "cross collateralize" assets as a condition for obtaining a business loan. This will provide greater flexibility for the commercial borrower and avoid unnecessary (and unwise) connections between personal and business assets.

By: Stephen Bush

Revolutionary Fixed Rate Option Arm Mortgages

Love it or hate it, the Payment Option ARM or Pick a Pay mortgage has become one of the most popular home loans in the USA, and is definitely the fastest growing option in high cost states like California, New York, New Jersey and Connecticut. While many people love the 1% start rates, there are a lot of people who don't feel comfortable with the possibility of payments increasing in as little as 1 month on many of the most common programs. The common wisdom is that Option ARMs are incredible products for savvy homeowners and investors, but may be too powerful for the average homeowner to handle.

Introducing Hybrid ARMs

For the rest of us, an innovative class of new loans has been recently introduced for homeowners who want the security of a Fixed Rate mortgage, with the flexibility and exceptionally low payments of an Option Arm. These home loans go by many names, including Hybrid Option & Fixed Option Arms, but they have one thing in common: A fixed payment for several years. Some of these mortgages have fixed interest rates, some of them have fixed minimum payments which don't go up, and some of them have both!

So what are the key benefits of Hybrid ARMs?

- Fixed Minimum Payments for 1, 3, 5 or 7 years
- Fixed Interest Rates for the Full Term on Many Programs
- Minimum Payment is typically 55% lower than a Regular Loan
- Increased Cash Flow, Decreased Risk Makes Housing Affordable & Secure
- Interest Only Payment Option Continues Even After Recast
- Greatly Reduces the Sticker Shock of a Fixed Mortgage
- Greatly Reduces the Payment Shock of an Adjustable Mortgage
- Greatly Reduces Negative Amortization
- Retains Flexibility of an Option ARM

Like an Option ARM, Your Payment Coupon Has 4 Options on it

1. Minimum Payment
2. Interest Only Payment
3. 15 Year Fixed Amortized Payment
4. 30 or 40 Year Amortized Payment

A Real World Example

Your Minimum Payment is generally 55% of what a regular fixed rate mortgage would cost. Let's take a look at a hypothetical scenario. Jane has a house in California which has been appraised for $400,000 and has a traditional fixed rate mortgage on the property of $200,000 on which she pays $1467.00 per month before taxes & insurance. If Jane were to refinance this mortgage into a Fixed Option ARM, her minimum monthly payment would be about $800 dollars, about 55% of the cost she was paying previously. And both rate and minimum payment would still be fixed for 3, 5 or even 7 years. In fact Jane could take out $100,000 in cash out when she refinanced and she would still have a minimum payment of $1200 per month, and both rate and payment would remain fixed for 3, 5, or 7 years.

But Do I Qualify?

Because of the very low effective rate of this financing and the very generous terms, these types of loans are generally available only to borrowers with credit scores of 620 or more. If you don't know your credit score, you should call your loan officer and find out. Other things to look out for are any late payments on your mortgage in the past 1 to 2 years, and of course any serious delinquencies like liens or judgments on your credit report. Also, you will usually be limited to borrowing no more than 80% to 95% of the value of your home. And if you talk to your loan officer and they haven't done a lot of Hybrid ARMs, get a new mortgage company, because there are a lot of ways they can steer you wrong simply out of ignorance (which we cover in a few of our other articles on the subject). These Hybrid loans are very new, very powerful financial tools and are best handled by those with extensive experience with the product.

But Wait There's More!

We've had so many questions from consumers and success stories from our customers who have used this loan, that we have decided to publish a series of articles to inform our readers about this new category of products, and will be covering a variety of topics including some of the most common and some of the most creative uses of this financing, as well as a detailed look at the benefits and risks of this type of mortgage as compared to traditional fixed mortgages and Option ARMs.

By: Tristan Hunt

Mortgage After Bankruptcy: These Steps Could Help

If you want to increase your chances of qualifying for a mortgage after bankruptcy, here are some steps you can take:

First, if you plan to apply for a mortgage after bankruptcy, you will want to have any inaccurate or obsolete negative information on your credit reports corrected or removed. This can help increase your credit score.

Also, you will want to establish some new accounts, and pay them in a timely manner over time. If you've paid the accounts on time for about 18-24 months since your bankruptcy, this should help rebuild your credit - which can be a plus when applying for a mortgage after bankruptcy.

Next, you will want to work with an experienced mortgage broker. Why? Because buying a home is probably going to be one of the biggest investments you'll make. You will want to have an experienced professional guiding you through the lending process - especially when it comes to applying for a mortgage after bankruptcy.

A mortgage broker typically has access to dozens of lenders and will probably have a good idea of which ones will (and will not) approve you for a mortgage after bankruptcy. In addition, they will be able to tell you what to expect in terms of the financing process.

So how do you find a mortgage broker? One way is to to ask friends or real estate agents for a referral. Once you have a few names, set up an appointment to interview each mortgage broker.

Among other questions, you will want to know if they have successfully been able to get other individuals a mortgage after bankruptcy. You also want to make sure they are licensed.

Another question you will want to ask is what type mortgage loan (A, B, C, or D) the mortgage broker thinks you can qualify for. Why? The lower the grade of the loan, the higher the interest rate. This is an important consideration when applying for a mortgage after bankruptcy.

In addition, there are other important questions you will want to ask a potential mortgage brokers - ones that could help you save money and/or increase your chances of qualifying for a mortgage after bankruptcy. While there isn't enough room to cover them here, I go into detail on them in After Bankruptcy Credit Solutions.

Also make a point to bring your financial information with you when you meet with a mortgage broker. For example, you should have your income and expenses available as this will help the broker determine the loan amount you may be able to qualify for when it comes to a mortgage after bankruptcy.

Generally speaking, most lenders will allow you to get a home loan with a payment of up to 28% of your gross income. So if you make $4,000 per month, that would be $1,120. But keep in mind that this just an example. Again, a good mortgage broker can explain the criteria that each lender has.

If you have copies of your credit reports from each of the major credit reporting agencies (Experian, Equifax, and Trans Union) this will help also. Your credit report will play a major role when it comes to qualifying for mortgage after bankruptcy.

On that note, if you want to increase your chances of qualifying for a mortgage after bankruptcy, make sure that any inaccurate or obsolete negative information is removed from your credit report. This is important for two reasons: (1) It can mean the difference between qualifying or not qualifying for a mortgage after bankruptcy, and (2) if you end up qualifying for mortgage after bankruptcy, any inaccurate or obsolete negative information on your credit report could cost you up to $1,000s or even $10,000s in additional interest.

How do remove any inaccurate or negative information from your credit report, so you can improve your chances of qualifying for a mortgage after bankruptcy? There are specific steps you need to take. While I cover them in After Bankruptcy Credit Solutions, there is not enough room to go into detail here. Just remember that ideally you want rebuild your credit history before applying for a mortgage after bankruptcy.

By the way if you think that removing inaccurate or negative information from your credit reports takes a long time, I have good news. There is a way to have it removed in as little as 72 hours - the service is typically not available directly to consumers. In After Bankruptcy Credit Solutions I show you how to find this type service if you are trying to qualify for a mortgage after bankruptcy.

In this article we touched on two important steps you can take if you plan on applying for a mortgage after bankruptcy: Correcting or removing any inaccurate or obsolete negative information from your credit reports, and finding a mortgage broker to guide you through the lending process.

By: R. Lawrence Anderson

Hybrid Option Arm Mortgages

The reality of today�s market is that interest rates are higher than rates from the past few years. What this means for first time homebuyers, real estate investors, and property owners with adjustable rate mortgages is that monthly payments for the traditional 30 year mortgage are becoming more and more of a financial burden.

Fortunately, for current and prospective homeowners who have good payment histories over the last two years and credit scores above 620, an emerging product is making monthly payments for mortgages both affordable and safe.

Hybrid Arms

Similar to Option-Arm mortgages, Hybrid Arm mortgages have 4 different options for monthly payments. These options are:

1.Minimum Payment - minimum payment�can lead to negative amortization.
2.Interest Only Payment - payment on only the interest of the mortgage
3.15 year Amortized Payment - payment towards the principal and interest based on a 15 year term
4.30 � 40 year Amortized Payment - payment towards the principal and interest based on a 30 or 40 year term

The primary difference between an Option-Arm mortgage and a Hybrid Arm mortgage is the length of time the minimum payments and interest rates in a Hybrid Arm are fixed.
Option-Arm mortgages typically have fixed interest rates of 1 to 3 months. In contrast, Hybrid Arms have fixed interest rates between 1 and 7 years.

What this means for homeowners is that the benefits of Option-Arm mortgages are now combined with the security of longer termed mortgages.

For example, a homeowner with a 200,000 5-year adjustable mortgage pays $1467.00 before her taxes and insurance. With a 5 year Hybrid Arm, the homeowner would pay $800 a month on the same mortgage. The savings on the minimum payment would be comparable to the savings of an Option-Arm mortgage.

However, for an Option-Arm mortgage, the minimum payment would increase after 1 to 3 months, leading to minimum payments above $800. With a Hybrid Arm, the minimum payment would remain at $800 for the 5 year term. For the homeowner, this means a more predictable monthly payment and a reduced risk for negative amortization.

Hybrid Arms (also known as Hybrid Option Arms and Fixed Option Arms) typically save homeowners about 55% of their typical monthly payments. They are powerful tools to save money and ensure financial freedom. To see if you qualify for a Hybrid Arm, contact a mortgage professional today.

By: Henry Tsaur

Be ARMed With Knowledge When Shopping For an Arm Mortgage

When you go shopping for a house there are many important decisions to make. Not only do you have to find that perfect house that you want to live in for years and years, but you have big decisions to make at your financial institution as well. Before you go to your lender, arm yourself with knowledge about mortgages and the different types that you will be offered so you can make a thoroughly informed decision when choosing a mortgage.

There are generally two types of mortgages - a fixed rate mortgage and an adjustable rate mortgage, or ARM mortgage. A fixed rate mortgage offers one interest rate for the entire life of the loan, while an adjustable rate mortgage offers changing interest rates at intervals of time.

By arming yourself with knowledge before you head to the lenders, you can ensure that you are going to get the product you need at the price you can afford. There are advantages and disadvantages of adjustable rate mortgages that need to be weighed before deciding for, or against, an ARM mortgage.

Adjustable rate mortgages usually come with a significantly lower interest rate than is offered on a fixed rate mortgage. For this reason, ARM mortgages are very tempting to home buyers. On the other hand, a fixed rate mortgage offers the security and consistency of payments and interest rate throughout the term of the loan. There are risks involved with an ARM mortgage, such as higher interest rates in years to come.

Is the risk worth it? It is this primary question you need to ask yourself before heading to the lender to secure a home mortgage loan.

By: Ken Charnly