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A guide to mortgages

Dec 9

Posted by ArtQ in Finance, Mortgage | No Comments

For starters you have to understand what a mortgage is, what you gain from it and what you can lose because of it. There are specific kinds of loans, which demand or require collateral. Such collateral is one way or another a type of assurance for the company that you’ll be able to pay your loan even if not by money, especially if you’re negligent with the payments.

A credit report shows a person’s previous reputation as a borrower. A bank will automatically check your credit report before deciding to give you a loan. They want to make sure you will and can repay the loan. A good credit report means you are a low risk to the bank. A bad credit report means that the bank would be taking a risk with you. That is why a financial institution will positively check your credit report.

Your annual income will determine how much money you can borrow. Check out different banks, mortgage brokers, credit unions, and lenders to have an idea of what limit you may be able to receive. A number of other institutions may also be able to help you, like mortgage assistance programs and community service organizations. Mortgage brokers can also give you information about how much of your income should be used to cover your residential expenses.

It is important to include the extra expenditures such as underwriting fees, broker fees, commissions and mortgage insurance when you are estimating the amount needed for a home loan. Not just that, you have to calculate the annual percentage rate rather than the monthly mortgage when you are estimating the amount of interest that you will have to pay.

Home loans are offered by lenders with both a fixed and adjustable rate of repayment. It is important to look into which of these products is best for your own financial situation. You should investigate the rates, points and terms available so you understand all of the terms of the home equity or refinancing loan. If you are not familiar with any points, charges or fees being added to the loan, you should ask for an explanation immediately so you are in position to compare different options.

While considering a loan, the following information should be collected before you finalize any documentation – down payment, terms and conditions of the loan, interest rate, the percentage rate and whether its fixed or adjustable, terms and conditions associated with both the types.

After you have carefully gone through every aspect of the mortgage and are satisfied with it, you may submit your first offer to the broker or lender. The broker or lender may not accept you first offer and they may make a counter offer. Do not be in a hurry to accept that. If you do, the broker or lender will conclude that you are in urgent need for the money. You should continue to bargain for some time and try to get your broker to lower his fees and come up with terms and conditions that suit your needs.

After all the details have been discussed, you need to sign a written contract, which will include the terms and conditions.

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Finding A Buy To Let Remortgage

Nov 28

Posted by ArtQ in Finance | No Comments

The housing market took with it a different kind of property development when it crashed a few years ago. Since the mid 1990s, there was a special type of mortgage that banks have been willing to make, known as “buy to let mortgages”. These types of loans are for properties a buyer intends to rent out, and there for the repayments are calculated on the projected rental earning of the property being purchased instead of the wages or earnings of the buyer. These loans dried up completely for a while and nobody was able to acquire one. However, banks are once again starting to make some buy to let loans, and allowing property owners to also have a buy to let remortgage as well.

A buy to let remortgage can be used to refinance the original mortgage and take advantage of more favorable interest rates and payment terms or to finance another property purchase when the owner is seeking to grow his/her portfolio.

While being able to find a buy to let mortgage is not as simple as it use to be, there are still several lenders who are willing to give them if the credit score is high enough for that property owner. If the property is currently rented and the owner can show proof of the income it generates, that will make it easier to obtain the loan.

Repayment terms for buy to let remortgages can be set up so that the owner is required to pay only the interest due each month or as a full repayment loan. The terms that will best suit the owner differ among different portfolios and different owners.

In general, the key criteria that banks look at when making a decision on a buy to let remortgage is whether or not the property can produce income equal to 125 percent or more of the interest that will be due on the loan each month. If the answer to that question is yes, the approval of the loan is most likely.

Using a buy to let remortgage to fund the purchase of another property can be a smart business decision. When you do that, the property that is already mortgaged stays as the only one at risk if there is any problem repayment of the loan. It’s also much more simple to deal with one loan payment monthly rather than worry about different payments for different properties.

The greatest advantage that comes with a buy to let mortgage or remortgage is the income from the second property should be sufficient to take care of the bulk of the loan payments. Depending on a person’s career, outside sources of revenue might not be enough to even start to cover the amount due on loans for any size of property.

Be prepared for the fact that finding a buy to let remortgage (called max hypotheek in Dutch) may end up taking some time and effort on your part as a property owner. Expending the effort should be done though if one wishes to refinance his current buy to let mortgage to take advantage of changes in terms or to finance a new purchase without risking the new property. It may also be easier to get a buy to let remortgage for a purchase than to get an original mortgage on the new property.

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Reverse Mortgages For Seniors

Nov 25

Posted by ArtQ in Finance, Mortgage | No Comments

In these times of financial insecurity, many of us are struggling to make ends meet, none more so than the elderly. However, reverse mortgages for seniors are an option to relieve monetary stress should it start to become overwhelming for them.

While they may not be the answer for all, they can be the ideal solution for many who are facing monetary difficulties.

So, what is a reverse mortgage? Well, it is a type of home equity loan that requires no repayments until either the property is sold, the homeowner no longer uses the property as their permanent residence, or the homeowner dies.

Since the decision by the bank or finance company is not based on the homeowners income, these reverse mortgages are fairly easy to obtain for the more elderly members of our society, particularly so because they have most of their money tied up in their property, which is what these types of mortgages are leveraged on.

There are some non negotiable stipulations though, including…

  • The homeowner must be at least 62 years of age
  • The property in question must have been paid for in full, or have just a small balance remaining on the mortgage
  • Taxes, homeowners insurance, mortgage insurance, and a hefty closing fee, must be paid by the homeowner
  • Attendance at a mandatory counseling session is required to ensure full understanding of the mortgage process

What happens with a reverse mortgage is pretty simple to understand. The homeowner is given a loan based on the equity in their home. The amount of the loan is dependent on the value of the home and the level of equity.

This loan can be had in a single lump payment or as a series of monthly payments; it is up to the homeowner to decide which they prefer. Homeowners are free to spend the loan on whatever they see fit to, with paying bills, making home improvements and going on trips being just a few of the options available.

No repayments are made in reverse mortgages for seniors. That is to say, no repayment for as long as the homeowner makes the home their primary residence and is still alive. Full repayment of the mortgage is due when one of the following occurs:

  • Death of the homeowner
  • Sale of the house by the homeowner
  • The homeowner permanently leaves the property; i.e., taking up residence in a nursing home, with a family member or hospice facility

So, there are clearly some major benefits to be had from reverse mortgages. When looking at the benefits though, still bear in mind the fact that a large closing fee may be due on the signing of the mortgage papers. This fee is typically larger than that of a traditional mortgage and it can vary significantly from place to place..

As with any financial decision, all aspects of reverse mortgages for seniors should be closely examined before signing the paperwork.

As you or a member of your family reaches retirement you’ll want to read more about reverse mortgages pros and cons. You can also read more about reverse mortgages for seniors here.

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FHA Home Loans: Are They Right For You?

Nov 21

Posted by ArtQ in Finance, Mortgage | No Comments

Federal Housing Administration, or FHA mortgage loans are ideal for those buying their first home. In order to increase the number of Americans owning their homes, the government created the FHA and the loans it offers.

The FHA loan advantage is that it is much more flexible than other Fannie Mae and Freddie Mac programs in its credit approval requirements, which allows for an easier qualification process.

Generally speaking, if you are have a job and have acceptable credit for the past 12 months, you have a good shot at qualifying for a FHA home loan.

FHA Home Loan Benefits

Low Down Payment and Closing Costs – For many Americans, coming up with enough cash for closing costs and a down payment is a major hindrance. FHA loans can diminish or abolish many of the restrictive costs of new home purchase.

  • The required down payment is less than 3% of the sales price
  • There are some 100% financing options
  • A gift from a family member can cover all your down payment and closing costs
  • The seller can give you a credit of a maximum of 6% of the sales price towards your closing costs and down payment. If you get this option, you still have to show that you have the required down payment money in the bank or as a gift

Easier Credit Qualifying Guidelines – Any sort of credit issue within the past 2 years can be a major barrier to getting a regular Freddie Mac or Fannie Mae mortgage. The FHA understands that people have unavoidable problems and it believes that a temporary credit issue should not prevent you from owning a home. The FHA has the following flexible credit guidelines.

  • Most FHA lenders want to see FICO scores of 620 or higher to qualify you
  • You can get an FHA loan if you do not have a credit score, but you have other credit accounts like a cell phone, utility bills, cable bill where you can prove your payment history for the past 6-12 months – you can prove your history with cancelled checks or with account printouts from the creditor for example
  • In Chapter 7 bankruptcy, you can still qualify for a FHA mortgage 2 years after your discharge, and in Chapter 13 bankruptcy you can qualify if you are making payments on time and with the trustee’s permission
  • If you have a foreclosure more than 3 years old, you can still qualify for a FHA loan.

More Information about FHA Loan Programs

  • You can also purchase a multi-family residential property that has up to 4 units if you plan to live in one of the units. You can use the rental income from the other units to help offset the cost of the mortgage payment when you qualify for the loan.
  • The FHA allows you only one loan at a time.
  • School teachers, law enforcement officers, those buying HUD repossessed homes or homes needing improvements, or first time home buyers in California have special loan programs available to them.
  • Buying a home with the Nehemiah or Ameridream 100% gift financing is another option. 6% of your closing costs and down payment from the seller allows these programs to convert some of it into a gift, thus eliminating the 3% down payment of your own money that you need to qualify. This is another great program for first time home buyers.

FHA loan specialists will have all the information you need for your new home purchase, and it’s always a great idea to speak with one when you are ready to buy. Educating yourself on home loan options before proceeding in the buying process with a realtor can really save you time, energy, and of course, money!

 

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You Can Locate A Mortgage Lender on the Web

Nov 21

Posted by ArtQ in Finance, Mortgage | No Comments

The internet has listings for a variety of lenders who can assist you in finding appropriate mortgage financing quickly and easily. Many traditional mortgage lenders list their services on a website, and still hundreds of other who are currently offering their services exclusively on the web. Many people are finding that the internet has more helpful tools and information which can be accessed at any time than any other resource for finding mortgage lenders.

In order to take advantage of doing online mortgage financing in your own home, many internet mortgage lenders provide the same exact services that their traditional counterparts offer. Borrowers will be able to receive loan quotes as soon as they have all of the pertinent information available to complete online loan applications. There is no obligation to accept the first loan quote that is received online because there may be others. An decent amount of time should be taken in choosing the best loan offer with the right terms for the borrower’s circumstances.

There are some vital facts to have available to refer to when filling out online loan applications; items such as past tax records, past bank account statements, and a copy of your credit report showing your current credit score.

When you are preparing to request an online mortgage loan quote, be sure to have information such as the loan amount, associated loan costs, and the estimated down payment close at hand as it must be entered totally and correctly on the loan application. After entering information on your income and credit standing and the requested loan amount into the mortgage loan calculator you can expect to receive a loan quote in a matter of minutes.

The speed and wealth of information that is available to everyone whenever it is needed is the greatest advantage of the internet. Large numbers of quotes for mortgages can be collected easily and quickly so you can compare the offers and narrow them down to find the best one for you.

After submitting the electronic application forms and receiving the loan quotes, the decision process for choosing the right lender should be slowly and carefully considered. The online mortgage lenders who offer the best terms and lowest interest rate should be the first ones to be considered when you start whittling away at loan quotes find the right provider.

When you have made a final decision on which loan quote best suits your circumstances it will signal the beginning of the final process to granting your online mortgage loan.

An online mortgage lender may take a much shorter period of time to process your mortgage loan than it takes when you use the traditional method of a banking facility.

Some of the best memories are those that are made in a new home that has been purchased using any one of the competent mortgage lenders on the web.

More of Alisdair Cosgrove’s articles are available at Glitec Finance which also offers great personal unsecured loans and debt consolidation loans.

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How To Refinance

Oct 13

Posted by ArtQ in Finance | No Comments

If you are working with tough times and have a house loan in existence you must try not to have your bank foreclose on your property because it’s bad. 

Not to do anything only makes your debt worse since the interest will be compounded.  There’s a better choice to attempt and that is’s refinancing.  Fundamentally, refinancing is when you take on a second mortgage in order to repay the present mortgage. 

Latterly that has modified and refinancing is now a method for restructuring debt since it permits creditors to collect money on bad debt while the debtor is relieved of some money burden.  Under these circumstances, a refinance is achieved thru changing the factors of interest – principal, rate and repayment period.  When you apply to refinance, the present price of the loan is figured out.  This new principal sum would frequently include the portion of the first loan principal remaining delinquent, interest which has amassed, and any applicable surcharges.  Once the new principal is fixed then you want to organize a new IR and most often the rates allowed will depend on this market averages.  The market rates always change, but refinancing is often a good move when the rates are low.  If refinancing is done to restructure debt that is’s causing difficulty, then the IR is debatable without reference to what the conditions on the market are.  In all cases, when a loan refinance bears a lower IR than the first mortgage.  This permits the debtor more reasonable regular payments.  During periods when market rates are high, creditors make up for the difference by permitting a longer repayment period.  The creditors quite likely will make money on the refinanced mortgage. 

That doesn’t basically count if you already were having difficulty with the first present house loan.  The increments in which the total interest increases until the mortgage is paid off is still usually a bargain and especially if you are going to be able to pay your monthly mortgage and keep your home.  Lately, though, refinancing mortgages now has a different meaning for those that own a home.  Although refinancing is typically a technique of restructuring a uneasy mortgage, there are those that use it as a methodology to save on loan charges.  The same factors still perform a part in this situation and they are the IRs, repayment period and principal loan amount.  Many owners decide to renegotiate their mortgage to use the low rates and in doing so also shorten the repayment time period, supposing that they can nicely afford the bigger payments every month.  This is also favorable to the bank or mortgage company, since repayment is speeded up so reducing the danger of defaults and repos. 

Banks particularly like cash vs inventory as it is more expensive to upkeep. 

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Golf Course Loans

Oct 9

Posted by ArtQ in Finance | No Comments

Among the most problematic commercial finance situations for business borrowers is specialized commercial real estate. golf course business loans~Substantial challenges for commercial refinancing and acquisitions are typical for golf course business loans~Difficult challenges for acquisitions and business refinancing are increasingly common for golf course mortgages}.

As a further complication for a difficult golf course business loan, fewer business lenders are currently willing to offer competitive small business finance terms. There are now noticeably fewer local and regional banks offering golf course mortgages. funeral home business loans~Unfortunately this difficulty can also be seen with other specialized property financing including funeral home mortgages~Other specialized property financing such as funeral home financing is also experiencing similar difficulties}.

When they are willing to provide commercial loans, regional and local banks will probably offer short-term business financing instead of a long-term business loan for golf course financing. The maximum percentage of value for business financing is a key finance term that can differ from one lender to another. Particularly with business loan terms for length of loan and percentage of value, it is critical for borrowers to avoid unrealistic commercial mortgage terms for golf course refinancing or acquisition.

There are several problems found in golf course mortgages that are not typically seen in other commercial loans. When the primary goal is {business refinancing for golf course financing, it is likely to be more complicated than the original business financing for purchase~It is likely to be more complicated than the acquisition business financing when the primary goal is commercial refinancing for golf course financing~When golf course financing primarily entails business loan refinancing, business owners should expect that it will probably be more complex than acquisition business financing, especially in the current lending environment}. For golf course business loans, the commercial real estate loan value is often less than the business value. This disparity can result in reduced business financing because many lenders will offer a commercial loan that includes only the commercial property loan value.

During the early stages of the business loan process for golf course financing, there should be some reasonable commercial financing fees. Many business lenders have used the reduced alternatives for golf course acquisition, building and refinancing to take advantage of business owners. A common tactic is to charge excessive fees of ,000 and more even if the commercial financing is not finished.

For this specialized business loan category, availability of adequate lenders has shrunk. A prudent choice involving the lender will be a prime factor in securing viable commercial financing for golf course mortgages. It is critical to select a lender with the ability to successfully complete the complex business loan process and at the same time avoid the commercial mortgage obstacles described earlier.

The use of a small business financing expert should be conducive to a better understanding of difficulties to anticipate in a complex commercial loan situation. The use of preliminary business consulting should be helpful in obtaining better terms and avoiding serious problems since golf course business loans are among the more difficult business finance transactions that a commercial borrower is likely to encounter.

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Funeral Home Mortgages

Oct 6

Posted by ArtQ in Finance | No Comments

Specialized commercial properties are among the most difficult small business finance situations for commercial borrowers. Difficult challenges for acquisitions and business refinancing are increasingly common for funeral home loans.

As a further complication for a difficult funeral home business loan, fewer business lenders are currently willing to offer competitive small business finance terms. There has recently been a noticeable shrinkage in regional and local banks which offer commercial mortgage programs for funeral home loans. Unfortunately this difficulty can also be seen with other specialized property financing including golf course business loans.

Business owners should be ready for the possibility that the small number of active regional and local banks will probably offer short term financing instead of long term financing for funeral home loans. Another key term that can vary significantly is the percentage of value for the commercial financing. Particularly with business loan terms for length of loan and percentage of value, it is critical for borrowers to avoid unrealistic commercial mortgage terms for funeral home refinancing or acquisition.

There are some serious potential problems found with funeral home mortgage loans that are not usually apparent in other commercial mortgages. When funeral home financing primarily entails business loan refinancing, business owners should expect that it will probably be more complex than acquisition business financing, especially in the current lending environment. The commercial real estate loan value is often less than the business value for funeral home business loans. The potential for significantly reduced business financing will often occur because of this disparity which causes many lenders to provide a business loan that includes only the commercial mortgage loan value.

Business owners should be prepared for reasonable business financing fees during the beginning of the business loan process for funeral home financing. Many business lenders have used the reduced alternatives for funeral home acquisition, building and refinancing to take advantage of business owners. Commercial borrowers should be aware that charging excessive early fees of $25,000 and higher is a common tactic.

For this specialized business loan category, availability of adequate lenders has shrunk. A prudent choice involving the lender will be a prime factor in securing viable commercial financing for funeral home mortgages. It is critical to select a lender with the ability to successfully complete the complex business loan process and at the same time avoid the commercial mortgage obstacles described earlier.

The use of a small business finance consulting expert should be conducive to a better understanding of difficulties to anticipate in a complex commercial loan situation. The use of preliminary business consulting should be helpful in obtaining better terms and avoiding serious problems since funeral home business loans are among the more difficult commercial financing situations that a commercial borrower is likely to encounter.

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