Are new stepped rate mortgages just delaying the inevitable

In the UK there has recently been an increase in the number of new stepped rate mortgage products on offer. These products are where the lender offers a stepped phase of interest rates, usually each rate lasts up to a year before you must move up to the next, higher interest rate for the next year. For example, a first year interest rate of 5.99 per cent may be available with a second year interest rate of 6.79 per cent. Usually these type of mortgage products do not charge a fee, making them a very good offer for people coming to the end of a low rate fixed rate deal. 3 or 4 years ago, when interest rates were at an all time low, you could have picked up a fixed mortgage rate in the region of 3.50 per cent!

Imagine the panic setting in for people who initially fixed they’re mortgage rate back in 2003 or 2004. Over the years since then interest rates have continued increasing month after month.

As lenders are now withdrawing their more competitive mortgage products, these new stepped rate offers seem to be the best way forward for customers who may be living in fear of paying a higher mortgage rate.

As you can clearly see the only problem is still the initial first year stepped rate increase to 5.99 per cent in the example. This is an increase of nearly 2.5 per cent; something to bear in mind if you’re still lucky enough to be on a fixed rate under 4 per cent.

Are new stepped rate mortgages just delaying the inevitable

In the UK there has recently been an increase in the number of new stepped rate mortgage products on offer. These products are where the lender offers a stepped phase of interest rates, usually each rate lasts up to a year before you must move up to the next, higher interest rate for the next year. For example, a first year interest rate of 5.99 per cent may be available with a second year interest rate of 6.79 per cent. Usually these type of mortgage products do not charge a fee, making them a very good offer for people coming to the end of a low rate fixed rate deal. 3 or 4 years ago, when interest rates were at an all time low, you could have picked up a fixed mortgage rate in the region of 3.50 per cent!

Imagine the panic setting in for people who initially fixed they’re mortgage rate back in 2003 or 2004. Over the years since then interest rates have continued increasing month after month.

As lenders are now withdrawing their more competitive mortgage products, these new stepped rate offers seem to be the best way forward for customers who may be living in fear of paying a higher mortgage rate.

As you can clearly see the only problem is still the initial first year stepped rate increase to 5.99 per cent in the example. This is an increase of nearly 2.5 per cent; something to bear in mind if you’re still lucky enough to be on a fixed rate under 4 per cent.

Zero Down Mortgage Loans for First Time Home Buyers

The Down Payment Issue

A Down payment in the range of 10% to 20% is usually required for obtaining a home loan to buy a house. There are also closing costs that you will need to pay in order to secure the loan. If you add up these two factors, very few can afford putting down so much money.

The financial industry, however, has found a solution to this problem and offers a new financial option. Zero down mortgage loans are meant for those who cannot put away enough money for a down payment. With these loans you can finance 100% of the property value. Moreover, for those who cannot even raise the money for closing costs, there are lenders offering 103% or 105% finance home loans. The extra percentage is used for covering the closing costs which will then be included in the overall debt that you will have to repay in monthly installments.


Drawbacks of Lack of Down Payment

Zero down mortgage loans sound tempting but though not having to put money down in order to purchase a house can seem to be a fabulous waiver, it has many drawbacks and unless strictly necessary, it should be avoided by all means possible.

A down payment has not only direct positive financial consequences but it also can be a positive factor when the lender has to decide whether to approve your loan or not and on what terms. When the lender has to consider your application, a down payment tells him that if you were able to save enough money to make a considerable down payment, you will probably be able to meet your monthly payments without any difficulty.

A down payment will also imply that you have the ability to obtain finance elsewhere and so, the lender will try to offer you a more tempting loan proposal in order to keep you as a client. Those who can offer a down payment always get a considerably lower interest rate than those who cannot.

As you can see, a down payment reduces dramatically the risk implied for the lender in the financial transaction, and thus, you will be able to get a better deal on your loan. A down payment will not only reduce the interest rate you pay; it will also lessen all the other loan requirements and will turn the loan terms more flexible. You will be able to get stretchy monthly payments and larger loan lengths too.


Home Equity Loans

If you wanted to use that money for making home improvements or for other expenses, you do not need to worry. Once the deal is closed, the amount you had to put down will become home equity and you will be able to request a home equity loan for the difference between your home value and the amount owed on the mortgage. These loans are secured and carry low interests; they are the perfect solution if you ever need the money you used for the down payment.

Paying the Penalty

The interest rate has just dropped and you wonder if you should try and get a lower rate on your mortgage, but there are penalties involved in breaking your mortgage agreement. Hammy...what to do?

Once we are indebted to a mortgage broker or a bank, that financial institution prefers us to stay the course. They have already calculated that they will be receiving X amount of dollars from you for the next five years (or three years etc) and these figures are in their investment portfolio. Your money has been ear-marked by them as their known quantity of 'spending money', usually to be invested in the stock market.

The finance companies like things neat and tidy. They discourage you to mess about with their plans. And they certainly do not like to lose money, hence the penalty for changing your mortgage (you will only change it if the rate goes down).

However, they are willing to talk to you about a change in your mortgage, so it is worth making an appointment to see what their calculations and advice amount to.

The two main factors to take into account are: how much the drop in interest rates amounts to and how much is the penalty. Each contract may have a different penalty. Some companies use a set amount, say $3,000 and some companies charge you three months extra payments, and there are many variations in between.

The Internet has many mortgage tables to help you to calculate your exact repayment differences. Just one quarter per cent is a minimal difference, but one per cent is a big difference, as this example shows:

In this example the amortization is 240 months (this is 20 years, the complete length of time of the loan - regardless of the smaller mortgage periods) and the interest rate is 7.5%. Let us imagine that hypothetically, the interest rate has been gradually dropping and it is now at 6%.

Your monthly repayment is $1,550 and you have two more years ( 24 months) left to pay at this rate.Even if you have the three month penalty clause to pay and you add it onto your total mortgage, your monthly payments, albeit with this slightly larger mortgage amount (the penalty of $3,000) will be lower. They will be $1291 and your savings over the last two years of your repayment period will be $5,016.

Many times the interest rate is not so marked as the example, but contra to what most people think, it is worth looking your figures up on a mortgage table, or phoning your bank to check.

The Federal Reserve Interest Rate Cut Too Little !Too Late

The Federal Reserve cut interest rates on Dec. 11th on hopes that the credit crisis would be tempered from 4.5. Markets were on the upswing up until the cut was announced because many investors were under the impression that the central bank, under pressure from all sectors of the economy especially real estate, would deliver a heftier half-point cut, which would have made it significantly less difficult for banks to borrow money from the Fed for their day-to-day transactions.


While the rate cut was still welcome from all fronts, the quarter-point cut disappointed many investors, resulting in a 200 point drop in the New York Stock Exchange within a matter of minutes. Consumer confidence is at a five-year low, reflected in markets around the world. However, the extreme volatility of recent months has been as much a function of investor skittishness as of the credit crunch itself. While most of the sub-prime mortgage fallout has been focused within the real estate market, investors who are uncertain of market conditions will be less likely to invest more, thereby limiting growth.


If the Fed had taken a different approach to their sole mechanism for assisting economic growth, investors would, in all likelihood, have a much better disposition. Over three months they have cut the rate a total of one percentage point, each cut instigated by liquidity difficulties and the sub-prime woes. Now credit is barely more available, and the only plan offered to circumvent the housing slump is laughably inadequate and initiated by lenders. Nothing significant has changed, except that oil prices have fallen from their incredible highs to a slightly less incredible high, and that most Americans are worried even more about their homes.


A concentrated drop of one percentage point in one month could have signaled a much more decisive Fed, restoring faltering consumer confidence through a message saying that effective measures exist and will be taken. By diluting the interest rate cuts over a fiscal quarter, the potential gains to be made by the resulting rate are less impressive, especially on a spooked market.


Fortunately, another rate cut is on the horizon, probably in January. Thus they are able to reduce rates without making a serious statement in regards to the uncertainty investors feel, and in fact exacerbate its results on the market, as shown in the recent cut. Yet their course does ensure that change will occur, even if not in the form and timeliness one might expect.


Another concession to recent events comes in the primary discount rate cut, which helps boost the amount of currency available for banks to lend to each other, from 5. With projected growth estimates all

The Interest in Interest Rates

Lately we have all become more curious about interest rates and the effect they have on our lives. Our main interest, of course, is to get the most for our money, and as most of us borrow money for a house purchase, part of this involves finding a good interest rate for our mortgage loan.

Many of us who are shopping around for financing are not strong enough about negotiating a lower interest rate. Perhaps we feel that we are not in a position of strength, but in fact, we often represent hard cash to the person negotiating the deal for us.

In many cases, this person will be a mortgage broker. The different types of mortgages vary so much that one short article cannot explain them all. However, once the mortgage broker knows all the facts about your finances. then he/she will know the best type of company to place you with.

If you are unable to get financing from your bank, there are still options out there. Folks who have a less than perfect credit rating can often still find mortgages through a broker. There are also such things as an equity mortgage, this is where you can use an existing property to raise money for a second property. Your broker can help you with many different scenarios.

In the case of house buying, your relator will often be able to recommend a broker. Sometimes the recommended broker will go the extra mile to try and get you the financing, because he has a deal with the relator to get a small percentage of the commission on the sale. This is a logical step for the relator , as a house sale will often fall through because of the financing and then the realtor loses the deal.

It is in your favor to have a broker who is pulling out all the stops, so it is worth trying a broker recommended by the relator , as well as one you may have in mind. The broker's fee is paid by the finance company who eventually finance you, so having more than one working for you is not uncommon.

The interest rate is negotiable right up to the moment of preparing the document for signing. Your mortgage broker can go back to the financier at any time. Even one quarter of a percent will save you hundreds of dollars.

Some advice from a group of independent mortgage experts reads as follows: When dealing with your lender, it is advisable to have the same steely determination as you would when dealing with a used car salesman!

Mortgage Refinance The Smart Choice

As the market shows lower rates many are thinking of refinancing their home loans thus saving thousands of dollars in interests. However in order to decide whether a refinance is the right option for you, you need to know the process of mortgage refinance and which lenders and which loans are right for you.

Mortgage Refinance Definition

Mortgage refinance implies getting a loan in order to pay off an outstanding loan. Both loans will be secured with the same asset thus the repayment is done immediately and the loan amount can not be used for other purposes, unless of course there is cash remaining after the previous loan is canceled. The new loan can be obtained from the same institution or from another.

Uses Of Refinance

There may be other reasons why you would like to refinance; you may want to make home improvements, reduce the monthly payments, convert an adjustable rate into a fixed rate, etc. If you want to make home improvements you can apply for a refinance with a higher amount than the remaining of the outstanding loan, this way you will have extra cash to undertake any improvements you where longing to carry out.

Reducing Monthly Payments

In order to reduce the monthly payments you can extend the loan repayment period. You will apply for a loan with similar rates but longer repayment periods; consequently the monthly installments will be substantially reduced. Even if the interest rate is a bit higher, you can still reduce your monthly payments by extending the loan length. However, make sure to balance these two variables (length and interest rate) so you do not end up overpaying just because you want to use your income for other non essential purposes.

Opting For Fixed Or Variable Rates

If you fear that interest rates may raise in the future you can refinance your home loan and opt for a fixed rate in exchange for the variable rate of the outstanding loan. This way you will be safe from future rates variations as the amount of your monthly payments will remain as settled in the contract. You can also opt for a variable rate if you feel that you can take advantage of lower interest rates that are usually implied by variable rate loans.

Finding The Right Lender

As you can see, refinancing your home loan is an excellent option when done taking into account all of the above. You can take advantage of better market conditions and end up in a better financial position with a very simple financial transaction. The key to be successful is to find the right lender, you can find the best options by applying online, and you will be able to compare rates, periods and other conditions.

Nevertheless, refinancing ought to be taken seriously; the new loan will be a burden you will have to carry for many years, so make sure to get it as weightless as possible so you do not have to make sacrifices in order to meet the monthly payments. This kind of financial transactions, due to the length an amount, will determine your future financial situation for many years.

Fixed Rate - or Wait

Times they are a-changing and these days we all have to become our own mortgage experts. So, is this a good time for a fixed rate mortgage? Today's market seems to be crying out for would-be home owners to negotiate for only one type of mortgage, and the advice must be clear: finance with fixed-rate mortgages.

In this financial climate, why would anyone do anything else, mortgage interest rates are at their lowest levels since May, in fact we're looking at rates last seen in the 1960s. Why such low mortgage interest rates? Why such low mortgage rates in the face of large balance-of-payments debts, rising oil costs, huge federal deficits, chaos on Wall Street and foreclosures in every state? This low rate is mystifying many financial analysts, especially as it is coupled with record high foreclosures.

Loan applications are up nearly 20% compared with last year, according to a report from the Mortgage Bankers Association. Could this be investors snapping up the foreclosures, or regular buyers taking advantage of the low rates? This is a puzzle, but prospective buyers just have to jump on the bandwagon, ours is not to reason why! Especially if we need a mortgage! So what about a fixed rate mortgage, what are the snags?

The obvious one that has to be addressed is that, paradoxically, mortgage rates have been spiraling downwards. Once we are locked into a fixed rate mortgage, we can no longer take advantage of a (possibly) dropping interest rate.

Therefore the big snag is that we could end up paying more than we need to. But the big advantage is that we will not suddenly have to accept a jump in rates that will mean that our repayments have zoomed out of our range.

The temptation therefore, is to take a variable mortgage rate and see if it goes down further. If you go this route, make sure that you can organize a quick change to a fixed mortgage and read the small print.

Sometimes the downside about a variable mortgage with a change option is this: the fixed rate that you can switch to can be a higher rate than a straight fixed rate mortgage.

As with many things in life, the type of mortgage we choose will probably reflect our personality. If we are optimists, or if we have a daring side to our nature, we may wait before we lock in.

If we are not the gambling type, and we really need to know that we can live within our budget in order to have peace of mind, then we will probably choose to lock in straightaway.

Shop Around For Your Mortgage

When we visit our bank to ask about mortgages, we get advice based on our own particular financial case, and usually we are offered a number of mortgage suggestions. Many of us inevitably feel that the bank has taken a lot of trouble and that we have to pick one of these choices offered to us.

If we are Mr Joe Average, then there will no doubt be adequate mortgage solutions at the bank. But, in fact, the bank has a lot less scope in the choice of mortgages that it can offer you, than other institutions. If you either want something a little different, or your personal details are a little different, you may benefit from shopping around.

A mortgage broker will have many alternative choices at his fingertips. In many cases, you may not realize that some scenarios even exist!

For instance, what if you are a thinking of buying an older home, and need extra renovation cash? Lets say for example the only house you can find that you like needs $20,000 in repairs. There is a mortgage to accommodate this. This type of mortgage is called a “purchase plus improvements” mortgage.

The title is self-explanatory: Once you find the home you want to buy, you decide which repairs or improvements are required. Now you have to act quickly to get written estimates of all the repairs you want included in the mortgage. If you plan on doing the work yourself, you will still need written estimates for the materials. Often a home improvement depot will provide you with these. You have to do all of this very quickly, before your mortgage approval process deadline, so be ready – know where you are going to shop for the materials and the written quotes before the time comes.

The repayment part of the improvement loan works like this: you apply for the mortgage along with the quotes for the improvements. Also, if you are putting 5% down on your house, you will have to cover a 5% down payment on the cost of your repairs as well.

The lender will only reimburse you for the work, after it is completed, so this is the tricky bit. You will need the money up front to pay for the materials in order to do the work. Hopefully, you have a credit card that might work for the short term. If you are hiring someone to work for you, make sure they know that their payment will be at the finish of the work. And, after an inspection has been made by the lender's appraiser.

If you are lucky enough to already have equity in your home (maybe you have had the house for a few years), a mortgage broker can also help you with an equity mortgage.

So as you can see, there are a couple of different options available to finance a renovation depending on whether you have equity, or whether you want to renovate or update a house you are in the process of buying to live in. There are other options as well, so it is advisable to talk to a mortgage specialist before planning a renovation or house purchase.

Which Mortgage? Part 2

Adjustable Rate Mortgage:

Almost self explanatory, the interest rate on your monthly repayment will adjust according to the bank rate. So your monthly repayment will go up and down as the bank or mortgage lender decides according to the fluctuations in the interest rate. Sometimes this can save you more money than if you were opting for a long term fixed rate. However, it is a gamble and the market need monitoring so that you can switch to a fixed rate in a hurry if needs be. This switching can also be problematic, as the optional fixed rate when you want to switch, will often be higher than a regular mortgage rate would be offering. So check the small print. (Always!) Experts actually stress that you check the small print carefully on this one and that if you take an adjustable rate mortgage out try it for a three year period only. Some adjustable rate mortgage contracts do have a clause written in that allow you to change fairly easily.

VA Mortgages:

VA stands for Veterans' Affairs and amazingly, twenty nine million American veterans and service employees can qualify for a VA (veteran) loan. These VA loans will usually be at an extremely competitive rate, are easier to qualify for, often need no down payment and do not require to be insured. VA loans also have other advantages and service personnel would be well advised to look into this opportunity.

Interest Only Mortgage:

A quick way to describe this is to say that it is like having a line of credit. You just keep paying the interest but the principal stays the same. This means reduced payments - which can be a good option in times of financial stress. However, it also means that you have never paid off your house! The length of the term can be anything up to fifteen years. Once the loan comes to full term, you then have to pay back the total loan principal. If the realty market has increased significantly then this may offer no problem.

High End Mortgage:

This may not affect Mr. Jo Average. These have come into play in New York where a second mortgage may be needed to 'top up' the finances. This is because the first mortgage has a government ceiling on it that may be lower than the house cost. Most people that require this type of mortgage will use specialist help as it is inevitably a higher interest rate and also requires a top notch credit rating.

FHA Mortgages:

FHA stands for the Federal Housing Administration. This is a scheme to insure a mortgage on a property. Its history goes back to the 1930s where it was used to help higher risk families obtain financing. Because they were paying insurance on their mortgage, the lender was not taking the risk, thus making it easier for people to buy their own home.

Which Mortgage Part 1

There has been a large amount of media coverage relating to mortgages and more specifically the recent increase in interest rates. There are so many different types of mortgages that it could get confusing, but several of the most popular ones can be DE-mystified.

Fixed rate mortgage:

This gives the borrower a feeling of stability as the payment amount will stay exactly the same throughout the whole period of the mortgage time. Most fixed terms are for five years or for three years, but in fact they are available for six months, and up to ten years. A fixed rate mortgage will allow for more efficient budgeting, as regardless of the increases (or decreases) in the interest rate, they will remain locked in for the duration. Some contracts allow for the possibility of changing, but there is often a large penalty payment for borrowers who want to alter the existing contract. Fixed rate mortgages are the winners if mortgage rates look like they will go up fairly significantly.

Reverse Mortgages:

This is a loan that allows you to access some of the equity that you have accrued in your home. It really isn't a mortgage because there are no immediate repayments. When agreed, you, or on your death your estate, will repay on the cash advances plus the interest. The owner of the house will still be responsible for repairs and property taxes etc. Many older people opt for this, so that they can remain in their own home and leave it to the children, but also have some spending money for themselves.

HUD Mortgages:

HUD stands for the Department of Housing and Urban Development. Part of HUD's mandate appears to sponsor loans to community and faith based organizations. There are a variety of programs offered, and if you think you can squeeze into this mandate check out the HUD web site.

Assumable Mortgage:

Here you will be taking over the mortgage that the previous owner already has in place on the house that you are planning to buy. This assumable mortgage is often a competitive interest rate (or else you do not want it), but it may require a large down payment. This will be because the previous owner has paid some of the balance off and usually the property has also increased in value. Beware of the odd clause that you would not wish to adopt - you will have to take the mortgage as is. This means that if you wanted to make a yearly lump sum payment off your principal and the option is not there, that is tough luck!

In spite of the low interest rate that an assumable mortgage often carries, it is usually a bad financial move to take out a second mortgage in order to accommodate the assumable mortgage. If it is a very low rate, then you can do the math, but normal advice would be that if you can't find the higher down payment, then scrap it and negotiate a whole new mortgage

Prefer Right Mortgage Broker

Choosing right mortgage broker for the business enables the customer to be successful in his business. The customer should have to make smart selection of mortgage brokers using proper techniques and tools. The client is required to make investigation regarding various kinds of mortgage brokers available in the market. The service of credit agent is required for the customer, because people required finance without schedules for their uncertainty. The service offered by financial dealer will be differed from each of the mortgage broker providing their service.

It is essential for the mortgage broker to get through his commitments and professional carefully to handle the complex problem at the time of providing advice. With regards to the experience and knowledge gained from the business, the consultant is required to provide adequate suggestion to the client. Mainly the credit experts should have to meet the requirements of the clients initially and also provide tips related to payment of mortgage to the mortgage company.

When a person is interested in purchasing any asset or real property, then he goes for mortgage to negotiate the transaction. Mortgage broker is a right person who will be providing service along with advice. They provide essential and more required advice to the clients who are intended to negotiate their business transaction in successful and legal manner. Most of the people obtain the advice of financial dealer is to choose the best debt policies existing and to overcome the problematic debt. The prices charged by the advisor will be prominent and reasonable.

Selecting a financial advisor is not the difficult task. But still more number of customers finds it difficult to select the correct credit debt consultant for their business. Debt consultants are special people who work specially for customers who requires mortgage for the business. They provide advice and other services with regards to the statute, rules and ordinance of the state and federal government of the appropriate state. Even specialized company is also available in the market to help the client in choosing the best mortgage broker in the state.

Most of the clients choose wrong mortgage advises and they face the difficulties in payment of debt. Generally, mortgage broker should lead and advice the client in loan package, selection of mortgage lender, payment of loan schedule and for many other cases. Getting through the performance, service and advice of the broker will help the client to choose the best finance broker of the state. So, it is the responsibility of the client to choose correct mortgage broker and also it is the obligation of the credit advisor to provide excellent performance to his client.

Accelerate the pace of life with reverse mortgage lender

Money plays a crucial role in building and strengthening lives. However, the other true fact that is associated with life is the golden age and believe it or not, it is one of the most testing periods of one’s life and God forbid, if one suffers from the financial woes in this age then it is a set back for him. It also means that life can play a cruel role even though one has always led a life of a king.

However, if you are a senior citizen and are in a dire need of good amount of money, then reverse mortgage lender is a final destination and perhaps a ray of hope for you. Thus, do not hesitate and approach a lender for a secured and wealthy future.

The money offered by the reverse mortgage lender can be utilized for many purposes like health care, house renovation, vacation, and automobile or for various other personal needs. Therefore, applying for a reverse mortgage from a lender is an excellent idea to accelerate the pace of life smoothly. Senior citizens residing anywhere in the United States can rely upon reverse mortgage for intact and reliable future. However, you have to fulfill some basic but significant information to the lender for a secured life. These terms and conditions are easy to follow and fill.

All that a senior citizen has to do for a reverse mortgage loan is that he or she should be above 62 years and own a high valued residential asset. However, the borrower need not pay the loan amount till the time he or she is alive, this way the borrower is able to retain the house also. In case, the house is sold or the person residing in it moves to somewhere else, then only the property will be mortgaged by the lender.

Well, it has been noticed that not many elder citizens are aware of the terms and conditions related to reverse mortgages. This is the reason that many of the senior citizens turn toward reverse mortgage lender for a better and comprehensive understanding of the terms. However, the best thing about a lender is that the borrower does not have to pay any interest on the taken loan, as it will be deducted from the realized cost of the property or a house.

Normally, repayment period of regular mortgage is 30 years, but reverse mortgage loan can be repaid in a form of a monthly installment. Therefore, reverse mortgage lender assures senior citizens with instant finance and that too in a lesser period of time in comparison to other regular mortgages. He understands the intensity of the need, hence, if you are planning to go for reverse mortgage then do a detailed market research before making any decision.

In fact, involve the lender and compare as many plans as you can before settling for any. It is advisable to choose a plan according to the requirement, for instance, you need a loan for home repairing then the best option will be the single purpose loan from reverse mortgage lender. And lastly thoroughly read all terms and conditions to avoid frauds.

Easier Solutions For Home Owners

Easier Solutions For Home Owners

Imagine suing Wall Street because your mortgage company had financed you for a loan that you couldn't repay! It sounds unreal, but a new bill proposed would allow just that! The mere fact that there is even such a bill being thought of could serve as a warning to all of us that care must be taken, as not all financial institutions are not equal!

While this proposed bill may get opposition from Wall Street and mortgage companies, if passed it will make it easier for struggling home owners to pursue other financial options for their home.

It will be easier for anyone who wants to pay down their mortgage, or who wants to try and re-finance their home, if the new proposals by the Senate Banking Committee are accepted.

The chairman of the Senate Banking Committee, Christopher J. DOD is introducing this bill in the hope that it will restrict certain lending practices. It was prompted by the surge in default rates on mortgages made to people with poor credit rating.

One of the advantages to this bill for homeowners is that it will legislate for mortgage brokers to act in the interest of the borrowers. This will discourage the practice of mortgage lenders to pay mortgage brokers a larger commission if the property owner takes out a loan at a higher cost than necessary. The proposals are not expected to take much effect until early next year, giving plenty of time for the opposing factions to organize themselves.

Mr. Dode's bill would also ban such practices as subjecting borrowers to prepayment penalties. Having to make these penalty payments hinders borrowers from trying to refinance or pay off their loans early. Sometimes the penalty written into the loan contract can be as high as three months extra mortgage fees or a lump sum such as $3000.00. Naturally this discourages change to someone who is already struggling financially.

One advantage of this bill is that it has given extra understanding to the ordinary house buyer. Whether it gets through or not, it has brought awareness for the type of questions that need to be asked when looking for financing.

It will be a struggle to get this type of bill through, but it is gratifying to know that in this case, the Senate Banking Committee are backing the man on the street!

Adverse Credit Mortgages

Getting a loan to refinance their existing loans and seeking personal assistance for dealing needs can be a painful process. Especially for people who are having bad credit history can feel the pain of this difficult process of seeking additional money support. Normally, it is quite difficult to achieve what you want with all poor history records. If you are such a person dealing with complexities of situations of getting a loan, you must look for adverse credit mortgages as your proper answer.

Further, to seek the proper way, you can contact money lenders who generally have contacts with numerous lending agencies and companies that can solve your problems. Do not feel disheartened as if first one refuses you, it is a possibility that another one has some way to fulfill your criterion. So, you need to keep trying.

Apply Online Mortgage Loans
Internet is the best source to find quality mortgage brokers that will submit your application to multiple lenders, so that you can get quality offers from lender that might have a key for your problems. There are numerous companies which submit your application to usually hundreds of mortgage lenders that provide monetary benefits to help you to refinance, purchase, second mortgage or home equity loan. If you are staying in the United Kingdom, you may get numerous online mortgage broker services that will really help in many ways.

One of the interesting features of applying online mortgages is that you actually do not have to submit your credit history then. When you start receiving lender’s offer, you can negotiate your terms and after finalizing your things, you may have to ask to submit your record.

The best way to avert the possible negative consequences is to identify your needs and requirements and avoid the need of any loans if it is not necessary at all.

Mortgage Closing Costs - What to Expect

Don’t just assume that the price of a home that you agree on with a seller is the end of the road as far as costs! Like so many other purchases, buying a home will mean that there are additional costs associated outside of the actual retail price. These are usually due at the end of the buying process, before a deal is struck with the lending company, and are known as “closing costs”. Here are a few of the most typical.

Points

Points are equal to one percent of the total amount of a loan. If you buy a home worth $300,000, then one point would be $3,000. The decision to buy points is made right before the mortgage is closed, as the number of points you opt for will directly affect the amount of money you pay each month for the mortgage.

There are two types of points, discount and origination fees. Origination fees are charged by the lender in order to cover the cost of the loan. Discount points are prepaid interest amounts and will reduce the dollar amount you pay each month on the interest on your loan, and therefore your total payment amount.

Home Insurance

If a house is destroyed by fire or act of God, the mortgage company stands to lose the most; after all, the money is still owed to them and with no way to recover the loan through the sale of the home they will take the hit. For that reason, lenders will insist that you purchase home insurance before they approve the mortgage. This insurance must be renewed each year according to almost all contracts.

Title Insurance

Every once in a while a home owner and their mortgage lender will get a nasty surprise in the form of another person with a lien on the property. In effect this person claims that the property is theirs, and that the person who sold it to the buyer had no right to do so. Title insurance, like home insurance, will mean that both the lender and the buyer are protected against undisclosed liens.

Surveys and Inspections

Lenders will also typically request an inspection of the home and/or a survey of the property in order to ensure that everything is still within the original boundaries. Appraisal fees, to determine if the property has been valued appropriately (directly related to recovery in the event of a resale) are also an added cost.

So as you can see, when looking to purchase a new home, you must also consider the additional costs associated with the purchase.

Importance Of Mortgage Broker Services

Choosing right mortgage broker for the business enables the customer to be successful in his business. The customer should have to make smart selection of mortgage brokers using proper techniques and tools. The client is required to make investigation regarding various kinds of mortgage brokers available in the market. The service of credit agent is required for the customer, because people required finance without schedules for their uncertainty. The service offered by financial dealer will be differed from each of the mortgage broker providing their service.

It is essential for the mortgage broker to get through his commitments and professional carefully to handle the complex problem at the time of providing advice. With regards to the experience and knowledge gained from the business, the consultant is required to provide adequate suggestion to the client. Mainly the credit experts should have to meet the requirements of the clients initially and also provide tips related to payment of mortgage to the mortgage company.

When a person is interested in purchasing any asset or real property, then he goes for mortgage to negotiate the transaction. Mortgage broker is a right person who will be providing service along with advice. They provide essential and more required advice to the clients who are intended to negotiate their business transaction in successful and legal manner. Most of the people obtain the advice of financial dealer is to choose the best debt policies existing and to overcome the problematic debt. The prices charged by the advisor will be prominent and reasonable.

Selecting a financial advisor is not the difficult task. But still more number of customers finds it difficult to select the correct credit debt consultant for their business. Debt consultants are special people who work specially for customers who requires mortgage for the business. They provide advice and other services with regards to the statute, rules and ordinance of the state and federal government of the appropriate state. Even specialized company is also available in the market to help the client in choosing the best mortgage broker in the state.

Most of the clients choose wrong mortgage advises and they face the difficulties in payment of debt. Generally, mortgage broker should lead and advice the client in loan package, selection of mortgage lender, payment of loan schedule and for many other cases. Getting through the performance, service and advice of the broker will help the client to choose the best finance broker of the state. So, it is the responsibility of the client to choose correct mortgage broker and also it is the obligation of the credit advisor to provide excellent performance to his client.

Professional Mortgages

Are you a working professional seeking answer for your money problems? Well, being a professional, you can actually avail great many benefits or get enough mortgages plans in order to walk with the changing times. These kinds of mortgages options are known as the professional mortgages, aiming to provide advantages for professionally qualified people. If you are a doctor, accountant, solicitor, architect or veterinary surgeon, you are entitled to get professional mortgages and fulfill your money desires.

If you seek a good professional mortgage to fulfill your needs, you can search great many options online. The Internet occupies a key to many lucrative offers for budding professionals. You can submit your requirements with online lenders and get quotations from potential providers or mortgages agencies. After inquiring your demands, you can actually finalize which way you should go to get the best results.

Nowadays, if you taking professional mortgages, you can avail benefits more than a general loan provider. Lenders view professions very favourably. Long term salary prospects are favored by many reputed companies and agencies. Enhanced income multiples together with lower interest rates are among the incentives offered in the mortgage packages. Further, you may get attractive schemes and offers to meet out your financial needs. Especially for well established professionals looking out for huge sum of money can get attractive discounts and particularly lower interest rates. So, this could be the most beneficial deal as a professional.

If you are looking out for real opportunity that may give you gains and satisfaction of money borrowing, you can get the help of a professional money adviser. With their skills, updated knowledge and information about the financial market, these professional people can give you proper advice and ways to chase your dreams. So, start your search now and feel elevated with options available for you.

Reverse Mortgage Rate- Your sacred possession is in safe hand

Home is heaven for all. A big house in a plush area with all modern amenities is every person’s dream. When we pass through a bungalow, we wish if we had one. After a long hiatus, a person purchases their dream house.

However, when circumstances arise where in they had to give their house to the creditor in trouble, then it is really very painful. However, gone are the days when people had to sale their house for debt or give the key of their house to the creditor because they had borrowed money from them to meet certain crisis situation.

Today, you can face any problem successfully because reverse mortgage is there to rescue you from your problem. Reverse mortgage to a large extent does not come under give and take policy. Reverse mortgage rate is increasingly flourishing day by day.

There are certain rules and regulation of reverse mortgage rate, which the creditor and the debtor need to follow. There are essentially two types of legal mortgage. They are mortgage by demise and mortgage by legal charge. In a mortgage by demise, the creditor becomes the owner of the mortgaged property until the loan is repaid in full. However, in mortgage by legal charge, the debtor remains the legal owner of the property, but the creditor gains sufficient rights over it to enable them to enforce their security, such as a right to take possession of the property or sell it. People are finding reverse mortgage rate very useful.

A reverse mortgage is a method of using property as security, usually the payment of a debt. Reverse Mortgage rate is also known as a "Lifetime Mortgage". It helps you when you are in trouble. It pays out regardless of current income, social security payments etc. It helps senior citizens in home improvements, unforeseen medical bills and to enjoy vacations. Reverse mortgage is more advantageous than traditional mortgage.

In traditional mortgage, people generally sell their land or house to pay the debt. However, reverse mortgage does not carry any risk because the debtor does not have any right to misuse your property and cannot demand loan repayment.

House is a sacred possession of any person and now he need not have to discard it at any cost to meet the crisis situation. There are five main ways in which you can receive payment from your reverse mortgage. They are tenure, term, line of credit, modified tenure and modified term. Through reverse mortgage, you can fulfill your dream without any risk. Before taking any reverse mortgage, it is very-very necessary to study its pros and cons. One of the pros of reverse mortgage is the it is tax-free and allows you to continue living in your own house.

The con is that it will have fees and closing costs with it. Reverse mortgage rate is increasing flourishing day by day. People are finding it quite beneficiary and secure too. With reverse mortgage half of your problem will be solved.

Get a better financial deal with an annuity reverse mortgage

A house can be much more than a shelter for you and your family. Especially it fulfills the role of a financial security in the case of a senior citizen above the age of sixty-two if he is a homeowner. In times of need, it can be difficult for an elderly, retired person to raise the required amount of finance - but not if you happen to own a house. An annuity reverse mortgage on your house can be one of the best options to raise funds when you need it.

The reverse mortgage scores over many other traditional forms of loan and mortgages due to the many advantages that it offers to the borrower. In addition, the loan amount can be made available either as a lump sum or in monthly installments depending on the need and preference of the house owner.

The senior citizens of United States can put up their property for an annuity reverse mortgage and borrow against the equity of their property. The loan amount keeps decreasing with time as the borrower pays off the amount within the allocated tenure of the loan. In addition, a major advantage of an annuity reverse mortgage is that the borrower does not have to repay any part of the loan during the entire tenure of the mortgage. He can also continue to reside on the mortgaged property for as long as he desires or till his death.

The burden of debt does not pass on to the heir of the homeowner and the borrowed money is repaid through the sale of the house owner after his demise.

The only monthly expense of a reverse mortgage property is the usual cost of maintaining the house such as a house tax. This is the only kind of expenditure that needs to be undertaken by the property owner.

The ownership of the property also remains with the original owner in spite of him opting for an annuity reverse mortgage. So, in case the borrower wants to sell off his property, he is legally entitled to do so. The only condition to be maintained in this case is that he should first pay off the mortgage amount and only then can he get access to the remaining money from the sale.

Annuity reverse mortgage can be of different kinds and have a different set of terms and conditions attached to it. It can be offered by either the state or the local government and is used for a single purpose only as the use of such loan money is restricted. The private sector also offers such reverse mortgages with a different set of conditions. Before you decide to opt for any of the reverse mortgage schemes, it is imperative that you acquaint yourself with the associated charges and cost of taking such a loan. It may be beneficial to hire an agent or broker to handle the deal for you in case you are unsure about the terms of the deal

.A guide to the different types of mortgages

At face value mortgages seem straightforward - you borrow money to buy a house and then pay back the loan plus any interest.

But the more you look into mortgages the more you realise that it's not quite so simple after all.

The mortgage market is very competitive, building societies and banks are forever updating and extending the range of mortgages they offer, adding to the extensive list of products that are already available.

When deciding on what mortgage product best suits your needs the most important points to consider are how you will be paying back the capital you have borrowed and the interest that has been added to it.

Paying back the capital

The capital part of the mortgage can either be paid back a little bit each month over the term of the mortgage (repayment mortgage) or it can be repaid at the end of the mortgage term (Interest only or endowment mortgages).

Repayment mortgages - With a repayment mortgage each monthly payment pays off a little of the underlying debt and interest on the loan. At the end of the term the mortgage is guaranteed to be cleared.

This is generally considered to be the most easy to understand and least risky mortgage type.

Interest only mortgages - With an interest only mortgage you pay-off the interest on the loan but not the capital. At the end of the mortgage term you are expected to repay the total of the capital that was borrowed, how you do this is up to you.

With this type of mortgage care needs to be taken that adequate procision is made to have sufficient funds available to pay of the capital portion of the mortgage at the end of the mortgage term. This type of mortgage could therefore be considered to be riskier than a repayment mortgage.

Endowment Mortgages - With an endowment mortgage you use an endowment policy to provide life insurance and to save the funds to repay the capital portion of the loan at the end of the mortgage term.

However the inherent danger with this type of mortgage is that if the investment performs badly, you could face a shortfall on the capital portion of your mortgage at the end of the repayment period.

Paying the interest

There are a number of ways that the interest can be paid on a mortgage.

Variable rates - With a variable rate mortgage you pay the current going rate on your loan. The mortgage rate changes every time interest rates change or, as in many cases, the overall effect of any interest rate changes is calculated once a year and payments are altered accordingly. Whatever kind of mortgage you start with, it is likely to change to variable rates at some point.


Fixed rates - With a fixed rate mortgage the interest rate is fixed for an agreed period - often two to five years. The advantage of a fixed rate mortgage is that they help in budgeting and are attractive if you think rates might increase. You do not benefit if rates fall, and will face penalties if you try to quit.


Capped rates - These are similar to fixed rate deals but if rates fall you pay the lower rate. Once again this can be a good for budgeting.


Cash back deals - This is when lenders offer money back if you take out a particular product. However, you may find that there may be substantial penalty charges if you wanted to switch lender in the early years.


Discounted rates - With a discounted mortgage the borrower is offered a discount off the lender's variable rate. The rate paid will fluctuate in line with changes in the variable rate. The discount applies over a set term, usually two to five years as with fixed rate mortgages

Reverse Mortgages Can Reverse Your Luck!

Reverse Mortgages Can Reverse Your Luck!

Looking after an aging parent in their own home often seems to be a good solution to an awkward problem. However, depending on the type of financing on the property in question, things could get difficult.

It is certainly a solution that needs to be thoroughly investigated before it is set into place. Many parents have switched their once-paid-for properties to a reverse mortgage and this could complicate your joint lives.

A reverse mortgage is not really a mortgage at all, as there is no monthly payment to be made. It is more like a line of credit with the home used as collateral against the loan.

Credit payments can be made at any time to reduce the amount borrowed. Many older people use a reverse mortgage as a way of spending some of the capital from the value of their home, while leaving some capital in the estate for the children to inherit.

It seems a sensible and a viable proposition to live in the same house as an ailing parent. Many of us are living longer these days, and we are also having children later or having families for a second time as we re-marry. This is where we get the nickname the 'sandwich generation'.

Often as we try to assist aging parents we are still also trying to care for our own families. Living in the same home could make life easier. It takes away less of the carer's personal time to be right on the premises.

This means you are giving up your independence in some ways, though being able to share the financial responsibility can often offset this feeling. However, it may also mean that you give up your own stake in the realty market.

With a realty market that almost doubles every ten years, you may want to consider keeping your stake, perhaps by renting out your own property. Often, in these days of longevity, we are the 'old' looking after the 'older' and it is difficult to predict if our own health will always allow us to stay in this situation.

There can be many reasons why you or your spouse may not be able to stay in the home of the aging parent. Arthritis may make the stairs unmanageable, there may be breathing problems develop, you may want to move to be near a specialized hospital for yourself, one of you may have to enter a nursing home that is not close by. It sounds morbid, but the list is endless and real.

By living with your parent you have limited your own choices, especially if your parent has a reverse mortgage. This could mean that if you are forced to move for health reasons the parent may not be able to move with you; often as soon as the parent wants to move out of the house, the loan must be paid in full.

This will cause no problem unless you are in a down market where the selling price may not be as high as anticipated. You cannot rent the property as it is not allowed in the rules. Meanwhile you are dealing with some type of health problem!

It is noble and desirable to look after an old parent, but do check the small print as they say. It should not be at a large cost or disruption to your own financial well being or health.

Tips for Saving Thousands on Your Home Loan

Saving as much money as possible when requesting a home loan will contribute to the family financial freedom and will reduce the mortgage payment effects on the family finance.

Interest Rate

The interest rate will determine how much money over the original amount you will have to pay over the life of the loan. Along with fees and insurance costs, the interests are the price you pay for borrowing the money. As regards the lender, the interests represent their profit.

As with any loan term, the interest rate is negotiable. You need to request loan quotes from several lenders and compare them. Do not hesitate to contact a lender, tell them that you have received a better offer and ask if they can improve theirs. The idea of loosing a deal to another lender might convince them to offer you a lower interest rate.


Down Payments

Probably the best way to save money on a mortgage loan, is to request only the amount you strictly need. If you can save enough money for an important down payment, not only you will have to pay less money on interests (interests are calculated as a percentage over the principal), but you will also prove that you are capable of making considerable savings and thus the lender will offer you lower interest rates and a much better deal.


Installments

Instead of making regular monthly payments, you can save a lot of money by paying every two weeks. Even if you only pay a bit more, every time you pay, the principal is reduced and so is the amount of money you will have to pay on interests. Moreover, the sooner you pay of your debt, the lesser you pay on interests.

Obviously, to make payments every two weeks you need to have an important and steady income. However, if you dont, you can always make additional payments every time you have an unexpected income. Just make sure the payment goes to the principal and not to the interests only, otherwise, it would be completely pointless. Also, check before making additional payments that your loan terms do not include prepayment penalty fees.


What If I already have a Mortgage Loan?

If you are currently paying your mortgage installments and your outstanding mortgage loan terms are not as good as current lender offers, you can always refinance your home loan. You will then take a loan with better terms and use the money to cancel the previous loan.

You need to be sure that the interest rate charged for the refinance home loan is lower than your previous mortgage, but you also need to check that the overall costs of the transaction are lower than the amount of money you will be saving over the life of the loan.

There are many ways of saving money on your home loan, just take your time to analyze what your options are and do not rush in to the first offer you receive. Compare rates, fees and other terms and once you have all the information you need you will be able to make a conscious and well informed decision.

Combine Mortgage Prepaying and Equity Lines of Credit and Save Thousands

Mortgage Prepaying

Mortgage prepaying consists on cancelling part or the total amount of the mortgage loan remaining debt. If the type of mortgage loan lets you pay part of the principal and not only interests, then you will be saving money by prepaying your mortgage.

The reason why prepaying part of the principal can save you thousands of dollars is that interests are calculated as a percentage over the principal. If the loan capital is reduced, the interests charged will also be reduced.

Since the interests are the lender earnings, many lenders penalize these practices either by not letting you prepay the mortgage or by charging prepaying fees in order to discourage these practices.

Home Equity Lines of Credit

The difference between the propertys value and the remaining of the home loan debt constitutes equity. And the equity you have build on your home since the mortgage loan was agreed, can be used to obtain further finance in the form of a home equity loan or line of credit.

A home equity line of credit is guaranteed with the same asset as the mortgage loan. This line of credit usually carries lower variable interest rates which allows you take advantage of good market conditions and get money at probably the lowest rates on the private financial market.


Combining Both

Prepaying itself lets you save thousands of dollars in interests. But in order to do so you need to save a significant amount of money and make a lump mortgage payment every 4 or 6 months in order to reduce the principal. You will then get fewer interests and thus, lower monthly payments that will let you save even more money each month.

However, you cannot always save enough money to make such payments and if you want to have any reliability in your finances, you will probably want to have an extra amount available for any unexpected situation.

At this point is when home equity lines of credit come in handy. Since they carry low interest rates, these lines of credit are the perfect solution for solving the problem of unexpected situations. Even if you have not save enough money, you can turn to them in order to get extra money and make a mortgage payment to keep canceling the principal.

You will then destine the extra money to repay the amount you borrowed from your home equity line of credit. Moreover, if anything unexpected comes to happen you will have more cash available on your line of credit and will not have to apply for a loan and wait to be approved.

In order to see if this is the solution for you, you need to go through your mortgage loan terms and check if there are any penalizations for prepaying your home loan. Then compare the amount you would save on interests with the prepaying fees and the home equity line of credit costs. If the overall transaction saves you at least a couple of thousands and reduces your mortgage length, then seize the opportunity and start prepaying your home loan.

How to Lower your Mortgage Interest Rate

Even if you have a relatively low interest rate on your mortgage, the amount that you'll pay in interest on your loan over the entire course of your repayment can be quite significant. In order to save as much as possible, it's important that you try and keep the lowest interest rate that you can. Many people mistakenly believe that once you've received your mortgage there isn't anything that you can do to lower the interest rate that you pay; provided you aren't behind on your payments and have a good history with your lender, though, this isn't the case.
If you're interested in reducing your mortgage interest rate and getting the best deal that you can on the money that you have to pay back, here are some suggestions of how to get started.

On-Time Payments

Making your mortgage payments on-time is an essential first step to being able to lower your mortgage interest rate. By making your payments on-time or early, you not only are reducing the total amount that you owe and avoiding late fees but you're also building a trusting relationship with your lender and showing them that they can count on you to get them their money when it's due. This can make them much more likely to offer you a lower interest rate if you request one (or in some cases to lower your interest rate even without you having to ask for it.)

If possible, paying slightly more than the amount of your due payment can also be a great way to get your lender to lower your interest rate. This will establish a trust in you making your payments even quicker, and will also have the added benefit of reducing the total amount that you owe faster and will ultimately result in your mortgage being paid off well ahead of schedule.

Being Aware of Shifting Interest Rates

Interest rates set at the national level fluctuate frequently, as do the average interest rates that are offered by other lenders. By keeping track of these fluctuations, you may discover that interest rates have significantly dropped since the time when you originally took out your mortgage and that you're paying more in interest than you would be if you had applied for a mortgage more recently. This can be a great time to request a review of your loan in hopes of getting a lower interest rate, especially if you've been making all of your payments on-time or if you have additional accounts with the bank or lender that holds your mortgage note (provided that those other accounts are current as well, of course.)
This can also help you to know when you're paying below the national average, which is also a very useful piece of information; if you're already paying less than most other people who are applying for mortgages today, then the likelihood of your interest rate being reduced more is significantly reduced.

Negotiations with Your Lender

The best way to get your lender to reduce your interest rate is simply to talk to them… contact one of the loan officers at your bank or loan provider and set up a meeting. Be sure to point out your good payment history, especially if you've been paying more than the minimum payment; mention that interest rates are low elsewhere if that is the case as well. Don't seem desperate, but present a fact-based case to them so that they can review your mortgage rate and see if they can lower it.

Keep in mind that you won't always be able to get your interest rate reduced, especially if it has been adjusted within the past several months already. If you've been making good payments and are otherwise a good customer for the lender, then it's likely that they'll do what they can to keep you happy provided your interest rate isn't locked in (or sometimes even if that is the case.)
Refinancing

If you're stuck with a locked-in interest rate or your lender refuses to consider you for a lower rate for some other reason, then you might want to look into refinancing your mortgage loan completely. You can refinance at the same bank or lender, or choose a different one that will offer you a better deal. Refinancing is basically the process of taking out a new loan that's used to pay off the old one, and ideally provides you with a lower mortgage interest rate than you had on your original loan. Monthly payments may also end up lower than what you were paying, since you've got both a lower interest rate and a smaller amount to repay. Make sure that you're careful when refinancing, though, or you may end up paying more than you expected to.

How Late Mortgage Payments Affect Your Credit

How Late Mortgage Payments Affect Your Credit

Everyone knows that it's important that you make your mortgage payments on time, since late or missed payments can result in your mortgage lender increasing interest rates or even foreclosing on your property. There is another danger involved in missing payments or sending them in significantly late, however; too many late or missed mortgage payments can have a significant negative influence on your credit rating.

While it won't have a horrible impact if you're late once or twice over a period of time, repeated late or missed payments can cause your credit store to start to plummet and the effects can remain for up to seven years. As your credit score drops lower, you may have difficulty when applying for credit cards, store credit, refinance loans, and even some jobs that use credit as a screening method for employment. To help keep your credit secure, here is some additional information on how your credit rating works and the dangers of bad credit.

Your Credit Report

Your credit report isn't actually a single report that is kept on you, but is instead made up of separate reports which are kept by various credit reporting agencies. Different lenders and credit providers may report to one or more of these agencies, and the reports that they receive will be filed together in order to keep track of your positive and negative credit habits. When you make your payments on-time, your creditors will make positive reports which will improve your credit rating overall. Missed payments can result in negative reports being sent, which will in turn reduce your credit rating.

When you apply for new lines of credit, the credit provider who receives your application will run a check of your credit score. This score will be provided from the credit reporting agency that they request it from, and will reflect the sum of positive and negative reports that the agency in question has received about you. They may also provide additional information regarding the overall balance that you have in comparison to the number of credit lines that you have open, the number of accounts that you have had which have since been closed (and whether they were closed by you or by the issuing credit provider), and some details of your payment history on your existing credit lines (to the extent that they will let the requesting institution know whether you've received positive or negative reports in regards to your payments.) The information available may vary from one reporting agency to the next, since not all creditors report to all agencies.

Late Payments and Bad Credit

It has already been established that the more often you send in late payments or fail to send in payments at all then the more negative reports you will have in your credit history. These reports will lower your overall credit score and will also serve as warnings to potential creditors to let them know how often you have failed to meet your required payments during the time that you have been paying on loans or credit lines. Having some negative reports is generally acceptable, as many creditors realize that no one is perfect and is prone to accidentally mailing payments late or having the occasional financial trouble; a large number of negative reports tends to be a sign of severe problems, however, and alerts possible creditors that there is a risk that you might default on any credit that they extend to you and that they might not get their money back. The worse your credit score is, the harder it will be for you to receive any new lines of credit.

Other Dangers of Bad Credit

In addition to making it harder for you to get new lines of credit, you may also experience difficulties with your existing credit lines if you let your credit rating slip. If you have a credit card already, you might not be issued a new card when it comes time for renewal. Loans such as your mortgage may be more likely to increase their interest rates significantly with missed payments because of the other credit problems that are present in your history. As was mentioned earlier, you may also find that you don't qualify for certain jobs or programs because they check your credit before acceptance as a means to screen out applicants who might bring unnecessary risk to the company. As credit becomes more of a deciding factor in the world due to the financial problems that have been encountered in various countries in recent years, it's important that you do what you can to protect your credit rating and avoid the negative effects that late payments can have on it.

How a Mortgage Accelerated Loan Program Works

If you want to own your home free and clear and you know that you are years away from being able to do it, then you should check out a mortgage accelerated ownership program. These programs will help you to pay off your mortgage faster by adding one interest free monthly payment to the premium to your payments each year. This one payment can really add up, especially since the payment goes entirely to your principal and not to the interest on your mortgage account.

So how does it work? The theory behind the mortgage accelerated ownership program is simple and easy to understand. Start with this:


* There are 52 weeks in a year.
* You are paid (in most cases) every 2 weeks.
* That means that you get paid 26 times in a year.
* In most cases, you take your 2 paychecks a month together to pay for your mortgage.
* So you pay your mortgage 12 times a year - that's 24 paychecks.



Where do the other two paychecks go? In most cases, nowhere. Those two "extra" paychecks get placed into a savings account or worse yet; they are spent as soon as they come in since they are "extra". With a mortgage accelerated loan program, however, those two extra paychecks go right onto your mortgage to create a 13th monthly payment every year, dropping your principal balance by the full amount of a month's mortgage payment.

There are several ways to do this kind of program, one of which is to simply add a certain amount to your own monthly payment all by yourself. The problem with this is that because you are not enrolled in any special program with your bank, you might be tempted to slack off when there are other better things to spend your money on. Unfortunately, it seems as if there is always something better to spend your money on than extra mortgage payments, and the "program" simply doesn't work unless you are dedicated to making it work.

A better option is to find out from your bank if you can enroll in a mortgage accelerated loan program through them. They will either bill you every other week for the amount of half your normal mortgage payment, or they will deduct the money automatically, either from your bank account or from your paycheck. This will help you make the payments whether you "want to" or not, because they are coming directly out of your cash flow before you even see it.

Because there are an extra two paychecks in this kind of plan, the balance of those two payments goes directly onto your mortgage, reducing your debt. This can take a good deal of time off of your mortgage, especially if you are settled into a 30 year mortgage already, and are looking for ways to shave off a couple of years.

If your bank or lender does not have an accelerated mortgage repayment program, then consider doing it yourself. You should write out a check for half the amount of your monthly mortgage payment every time you get paid without fail. If your bank will not let you send these checks in individually, then hold onto your first check until you can send both together. Send them two at a time rather than waiting and writing out one every other paycheck, or you may start to allow yourself to slide back into only 12 payments a year.

Also check with your bank to make sure that you will not be penalized for making an extra monthly payment during the course of the year. If they are charging you heavy fees for paying "too much" on your mortgage, then it might not be worth the money that you put onto your premium because of the high cost. If this is the case, then you might want to consider refinancing to get rid of this stipulation. You will still have to pay the fees for an early repayment, but it might be less if it is done all at once, at least.

Another option, especially if you like your bank, is to warn them that you plan to refinance because of the high fees on extra payments. Ask if they would be willing to waive those fees in return for the continuation of your patronage. They might not agree, but it is always good to ask, and you might get just what you are asking for if you talk to the lending division and make your position clear. With no extra payment penalties, your mortgage accelerated loan program or the decision to accelerate your payments will help you own your home free and clear much earlier.

An Introduction to Equity Release Mortgages

The equity release mortgage (also known as a lifetime mortgage or a reverse mortgage) is becoming an increasingly popular method by which seniors can tap into the equity in their homes, providing them with cash in the form of a lump sum or supplementary income.

Who can get an Equity Release Mortgage?

There are a few simple criteria you must meet to be eligible.



* Be a UK Citizen
* Own your own home
* Be over a certain age (typically 55 to 62 depending on the individual scheme and the company offering it)
* Own a property worth at least £40,000 to £70,000 (again, the exact amount depends on the company offering the scheme)
* Some companies may allow you a small outstanding mortgage balance as long as you agree to pay it with funds from your equity release mortgage



How it Works

Most schemes allow you to borrow a cash amount that amounts to between 20% and 50% of the value of your property. The exact amount depends on your age (or your partner’s age-whichever is the lowest). In general, the younger you are, the lower the amount you can borrow.

You can receive the loan money as regular instalments, as one large lump sum, or in smaller lump sums at irregular intervals. Interest accrues on the amount you borrow, in the same way as with a conventional mortgage, meaning that interest will accrue more slowly if you choose to receive money via instalments rather than as one large lump sum.

The money you borrow via an equity release mortgage does not need to be repaid until the property is sold. At this point, the full balance of the loan is due, including interest.

There are four main types of equity release mortgage: home income plans, the interest-only mortgage, the lifetime mortgage, and the home reversion scheme.

Home Income Plan

The owner of the property takes out an equity release mortgage and uses the lump sum to purchase an annuity that provides income for life. Interest payments on the mortgage are deducted from the annuity. The mortgage does not have to be repaid until the home is sold.


Advantages



* You are guaranteed an income for life, and don’t have to worry about interest accruing, as this is paid from the annuity.
* The amount you owe on the mortgage remains constant-if the property increases in value over time, you or your heirs benefit



Disadvantages



* Inflation may reduce the value of the annuity over time.



Interest-Only Equity Release Mortgage

The equity release mortgage is used to provide a lump sum, and the borrower must make monthly interest repayments. The principal balance must be repaid in full when the property is sold.

Advantages



* The amount you owe on the mortgage remains constant, so any increase in property value benefits you or your heirs
* You have fixed monthly repayments (if you choose a fixed-rate mortgage)



Disadvantages



* You must be able to ensure that you can cover interest payments over the life of the loan
* Choosing a mortgage with a variable interest rate is risky



Lifetime Equity Release Mortgage

The equity release mortgage is used to provide either a lump sum or monthly instalments of cash (the borrower can also choose to receive a combination of both types of payment). When the property is sold, the balance of the loan, including principal and interest, is paid in full.

Advantages



* Provides a larger income than the home income plan or interest-only mortgage



Disadvantages



* It will be difficult to estimate the amount of equity left in the property until it is sold




Home Reversion Equity Release Mortgage

The owner of the property sells their home (or a portion of the equity) to a lender, and receives a lump sum or monthly income. The lender takes a share of the proceeds when the property is sold, taking a share that is proportional to the amount of equity they purchased. For example, if you sell 50% of the equity, the lender will take 50% of the proceeds from the sale of the property.

Advantages



* You will always know exactly how much equity you own
* You or your heirs benefit from an increase in property value
* No repayments-even interest-in your lifetime



Disadvantages



* The lender will not pay market value for the equity



Look for a SHIP-approved Equity Release Mortgage

Plans that are approved by the Safe House Income Plan guarantee that you will never end up owing more than the home is worth, even if the property market changes, and no matter how much interest you accrue. You cannot build up negative equity in the property, and will not pass debt to your estate in the event of your death.

A Quick Guide to Mortgage Protection Insurance

Mortgage protection insurance is a form of insurance that has become more popular in recent years. This insurance can cover injury, illness, and even death, and helps to make sure that you and your family won't fall behind on mortgage payments should the unexpected happen. There are several different types of mortgage protection insurance offered by a number of different insurance agencies, so if you have been considering purchasing this insurance then it's important that you take the time to know exactly what it is that you're buying before you sign on the dotted line.

What Mortgage Protection Insurance Is

Mortgage protection insurance is a specialized type of life, health, or disability insurance that focuses not on funeral or medical expenses but instead on making sure that your mortgage payment doesn't fall behind. Different insurance providers may provide different payout options or benefits packages, but the end result is that if you are injured, fall sick to the point that you cannot work, or are killed, then the insurance payout is sent to you, your family, or in some cases to the mortgage provider directly to ensure that your house or other mortgaged real estate doesn't run the risk of foreclosure.

Knowing How Your Insurance Works

It is important that you understand exactly how different types of insurance work so you can choose whether this insurance would be in your best interest. Since there are different types of mortgage protection insurance different insurance providers may pay out differently
Mortgage protection insurance that is sold as health or accident insurance is designed to provide short-term relief while you recover in order to help keep you from falling behind on your mortgage in the time that you are unable to work. There is often a limit as to how long you will continue to receive payments from this insurance, and depending upon the policy it may be as short as three months or as long as six months to a year or more.

Mortgage protection insurance that is sold as a form of life insurance is designed to help your family pay off the mortgage in the event that you should pass away. This insurance works much like any other life insurance, though in some cases it may be paid directly to the bank or mortgage lender specified in the policy. More often, however, the policy simply pays out to your family so that they can pay the mortgage as well as use some of the money to cover funeral costs or other expenses.

Costs, Benefits, and Potential Problems

The cost of mortgage protection insurance tends to be in line with other forms of disability or life insurance, though that cost will obviously vary depending upon your personal medical history, habits and the insurance agency who you buy it from. Likewise, the benefits of the insurance are quite similar to other types of insurance that fill the same general role. Mortgage protection insurance serves as security to help make sure that you're going to be able to make all of your payments even if something unexpected or tragic happens; in some cases you may even be able to lock in a lower interest rate for having the insurance as it serves as an additional guarantee to your mortgage lender.

Unlike some of these other insurance types, however, some mortgage protection insurance policies can be very specific about the payouts that they make and the circumstances that they will pay out under. It's very important that you take the time to make sure that you understand the specific policy that you're considering before you buy it in order to make sure that the insurance company is going to pay out the money that you or your family needs when they need it.

Finding the Best Deal

If you have decided to purchase mortgage protection insurance it's important that you locate the insurance provider that will not only offer you the policy that you want but also will give you a good deal on that policy. Take the time to shop around both at insurance agencies in your area as well as online to see which places offer mortgage protection policies and the prices that they are willing to offer you for them. Collect quotes from several different agencies and websites, comparing the amount of coverage that each provides, the circumstances that they'll pay out under, and the overall price that it will cost you per month or per payment period for the insurance. If buying a life insurance option, talk it over with your spouse or family to get their input on it. Ideally you're going to want to find the best balance between price and coverage that you can.

A Quick Guide to Mortgage Protection Insurance

Mortgage protection insurance is a form of insurance that has become more popular in recent years. This insurance can cover injury, illness, and even death, and helps to make sure that you and your family won't fall behind on mortgage payments should the unexpected happen. There are several different types of mortgage protection insurance offered by a number of different insurance agencies, so if you have been considering purchasing this insurance then it's important that you take the time to know exactly what it is that you're buying before you sign on the dotted line.

What Mortgage Protection Insurance Is

Mortgage protection insurance is a specialized type of life, health, or disability insurance that focuses not on funeral or medical expenses but instead on making sure that your mortgage payment doesn't fall behind. Different insurance providers may provide different payout options or benefits packages, but the end result is that if you are injured, fall sick to the point that you cannot work, or are killed, then the insurance payout is sent to you, your family, or in some cases to the mortgage provider directly to ensure that your house or other mortgaged real estate doesn't run the risk of foreclosure.

Knowing How Your Insurance Works

It is important that you understand exactly how different types of insurance work so you can choose whether this insurance would be in your best interest. Since there are different types of mortgage protection insurance different insurance providers may pay out differently
Mortgage protection insurance that is sold as health or accident insurance is designed to provide short-term relief while you recover in order to help keep you from falling behind on your mortgage in the time that you are unable to work. There is often a limit as to how long you will continue to receive payments from this insurance, and depending upon the policy it may be as short as three months or as long as six months to a year or more.

Mortgage protection insurance that is sold as a form of life insurance is designed to help your family pay off the mortgage in the event that you should pass away. This insurance works much like any other life insurance, though in some cases it may be paid directly to the bank or mortgage lender specified in the policy. More often, however, the policy simply pays out to your family so that they can pay the mortgage as well as use some of the money to cover funeral costs or other expenses.

Costs, Benefits, and Potential Problems

The cost of mortgage protection insurance tends to be in line with other forms of disability or life insurance, though that cost will obviously vary depending upon your personal medical history, habits and the insurance agency who you buy it from. Likewise, the benefits of the insurance are quite similar to other types of insurance that fill the same general role. Mortgage protection insurance serves as security to help make sure that you're going to be able to make all of your payments even if something unexpected or tragic happens; in some cases you may even be able to lock in a lower interest rate for having the insurance as it serves as an additional guarantee to your mortgage lender.

Unlike some of these other insurance types, however, some mortgage protection insurance policies can be very specific about the payouts that they make and the circumstances that they will pay out under. It's very important that you take the time to make sure that you understand the specific policy that you're considering before you buy it in order to make sure that the insurance company is going to pay out the money that you or your family needs when they need it.

Finding the Best Deal

If you have decided to purchase mortgage protection insurance it's important that you locate the insurance provider that will not only offer you the policy that you want but also will give you a good deal on that policy. Take the time to shop around both at insurance agencies in your area as well as online to see which places offer mortgage protection policies and the prices that they are willing to offer you for them. Collect quotes from several different agencies and websites, comparing the amount of coverage that each provides, the circumstances that they'll pay out under, and the overall price that it will cost you per month or per payment period for the insurance. If buying a life insurance option, talk it over with your spouse or family to get their input on it. Ideally you're going to want to find the best balance between price and coverage that you can.

A Brief Explanation of Mortgage Fees

In addition to the loan itself, your mortgage has a number of fees associated with origination of the loan, as well as some ongoing costs. Some of these are payable in advance, and others must be paid when you close on the property. In general, these costs typically total between three and five percent of the value of the property you're buying.

Most fees associated with a mortgage come under one of two groups: fees associated with getting the mortgage (such as title insurance, credit checks, and loan origination fees), and fees paid to local or state government (such as prepaid taxes and document recording fees). When you apply for a loan, a lender is required by law to provide you with a Good Faith Estimate within three days of application, in which closing costs are detailed.

Here's a quick break-down of the fees you can expect for a typical mortgage.

Administration Fees: These fees are paid to the lender, and can include document delivery fees, notary fees, document preparation fees, and processing fees. Reduce your mortgage costs by questioning these fees-if your mortgage does not have to be completed as quickly as possible, ask that documents be delivered via regular mail rather than overnight delivery, for example.

Application Fee: This is the cost of processing the loan, and must usually be paid to the lender when you apply. Note that this fee is typically non-refundable in the event you decide not to take the loan.

Appraisal Fees: The lender requires that the property be appraised to determine the market value of the property and ensure the mortgage has an acceptable level of risk.

Attorney Fees: If an attorney must prepare and review loan documents, an addition fee is paid for document preparation.

Credit Report Fee: A fee for having your credit report pulled by the lender.

Document Preparation Fees: Charged by the lender or Title Company for the preparation of legal documents such as deeds of trust and the mortgage contract.

Earnest Money: This is paid by the buyer when an offer is made on the property. It is usually a small amount of cash, and is paid to the seller as a show of good faith. This money is held in the escrow account.

Escrow Account Funds: Includes up to two months worth of private mortgage insurance (if applicable), homeowner's insurance, hazard insurance, and property taxes payments. This money is held in the escrow account.

Loan Discount Points: Borrowers can choose to ‘buy down' the interest rate by paying points in addition to the loan origination fee. Each point is equal to one percent of the value of the loan, and one point typically represents about one eighth of a percentage point. This fee is paid to the lender.

Loan Origination Fee: Fees charged by the lender to cover administration fees involved in preparing, evaluating and submitting a loan. This is usually equal to one percent of the value of the loan. Origination fees may be as high as two percent, but unless your loan is particularly complicated you should expect to pay no more than approximately one percent.

Mortgage Broker Fee: Only applicable if you use a mortgage broker rather than working directly with a lender.

Mortgage Underwriting Fee: Covers underwriting, closing and funding costs for your lender. This is typically where the lender makes their immediate profit from lending (as opposed to profit over time from interest). Note that brokers should not charge an underwriting fee, as they are not the ones underwriting your loan.

Prepaid Interest: The interest that accrues between closing time and the date of the first mortgage payment. This fee is paid to the lender at closing time. Close at the end of the month to reduce the amount of prepaid interest-this will also reduce the amount of cash you need to come up with at closing time.

Property Inspection Fees: Including general property and pest inspection. Property inspections protect both the buyer and the lender.

Survey Fee: The lender or title search company may require that the property be surveyed to determine the property's official boundaries, and ensure that they have been upheld.

Title Insurance: Taken out on a property to protect the buyer in case there are any unpaid mortgages or tax liens on the property that is overlooked during the title search. In the event that any title issues appear in the future, title insurance pays for legal costs and reimburses you for any other losses you incur.

Title Search Fee: A title search is carried out on the property to make sure the person selling it is the legal owner.