MORTGAGE

Four Truths About Mortgage Refinancing

2010-06-06T20:10:00.001-07:00

Many home buyers close their loans, make their payments and don't think about their mortgages again. They don't consider refinancing when they should. If you are among these inattentive homeowners, here are four truths about mortgage refinancing that may surprise you.

Truth #1 – Mortgage Refinancing can save you money.
If interest rates have dropped since you got your original loan, refinancing can reduce your monthly payment. When you refinance, you can also choose to shorten your loan term, meaning you will pay less money in interest over the life of the mortgage.
You could also save money by switching from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. The interest rate on an ARM is based on an index such as the LIBOR or the U.S. Treasury Bill. If they go up, so do your payments. By refinancing to a fixed-rate mortgage, you can prevent payment increases. (Your monthly payment might still increase due to changes in property taxes or insurance, but your principle and interest amounts will stay the same.)
If your original mortgage was for more than 80 percent of your home’s value, you are paying private mortgage insurance (PMI) as part of your monthly payment. As the value of your home increases and the principle on your mortgage decreases, you can get rid of PMI by refinancing for less than 80 percent of your home’s value.

Truth #2 – Mortgage Refinancing is a smart way to access your equity.
In the second quarter of 2006, 88 percent of Freddie Mac-owned loans that were refinanced resulted in new mortgages with loan amounts that were at least five percent higher than the original mortgage balances. Homes refinanced during this time had appreciated 33 percent on average since the original mortgage was taken out. The median age of the mortgage was 3.2 years.
“Borrowers who are looking for an inexpensive way to finance home improvements or business investments, or to consolidate high cost debt, are turning to cash-out refinance,” said Amy Crews Cutts, Freddie Mac deputy chief economist. “These borrowers are often willing to refinance into higher rates on their first lien mortgages. . . This is the second consecutive quarter in which the median refinance borrower increased the rate on their first lien mortgage.”

Truth #3 – Mortgage Refinancing is still very popular.
According to Frank Nothaft, Freddie Mac chief economist, “The staying power of refinance activity has been much stronger than we initially thought . . . borrowers are reacting to both incentives to cash out home equity through refinance and incentives to change their mortgage as they hit an interest rate adjustment.
Freddie Mac estimates that $500 billion in first lien mortgages will adjust this year and another $650 billion in second liens will see at least one rate change this year. Nationally, home values increased 10.2 percent over the last twelve months.

Truth #4 – Mortgage Refinancing is simpler than getting your original mortgage.
Mortgage refinancing is almost always simpler, cheaper and quicker than getting an original mortgage. The process can be handled online at sites like Simple Mortgage Refinancing [http://www.simple-mortgage-refinancing.com]. The site has helpful articles and offers free, no-obligation loan quotes.

Mike Hamel is the author of three business books and several articles about mortgage financing. His material is featured on sites like www.badcreditmortgagerefinancingnow.com [http://www.badcreditmortgagerefinancingnow.com]

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7 Reasons to go for Mortgage Refinancing

2010-06-06T20:08:00.001-07:00

If you want to make a smart financial decision that will allow you to save and gain some extra cash at the same time, there can be no better reason to go for Mortgage Refinancing. It is a perfect financial solution for young parents, couples who want to refurbish their homes, parents who need to pay off education loans as well as individuals who want to improve their financial worth through better investment decisions.

A mortgage refinance is one such aspect of your personal finance that can breathe some life into your stagnant financial situation. Mortgage Refinancing involves paying off your earlier debts with the new loan amount. You get to enjoy a number of benefits from refinancing your mortgage.

Mortgage Refinancing # 1 - One of the best reasons to go for Mortgage Refinancing is that it comes with considerably lower interest rates that help in reducing your monthly mortgage payment, which can at times be very heavy. This reduces the cumbersome fixed pay outs from your steady source of income and gives an opportunity to invest the surplus amount for better returns.

Mortgage Refinancing # 2 - Mortgage refinancing comes with two types of interest rates i.e. fixed rate and adjustable rate. A Mortgage Refinancing allows you to transfer from a fixed rate of interest to an adjustable rate of interest. This is done because adjustable rates are more cost effective. They also allow to make your loan payments without the additional worry about lack of balance.

Mortgage Refinancing # 3 - Mortgage Refinancing also allows you to cut the mortgage duration by several years and you will be able to have full home equity in half the time than your original home mortgage duration. This was you can become the true owner of the property earlier than anticipated.

Mortgage Refinancing # 4 - Mortgage refinancing provides you with a huge amount of extra cash. The equity you have built in your home over the years entitles you to this extra cash from refinancing.

Mortgage Refinancing # 5 - Mortgage Refinancing can be obtained from different types of lenders including thrift institutions, commercial banks, mortgage companies, and credit unions. The loans can also be arranged through mortgage brokers.

Mortgage Refinancing # 6 - Another reason to go for Mortgage Refinancing is that Mortgage interest is tax deductible, unlike interest on other bills. Cashing out part of your equity to pay off bills can give you a financial edge to get ahead. Be sure to make refinancing part of your larger financial goals to enjoy the full benefits.

Mortgage Refinancing # 7 - The elimination of Mortgage Insurance is a huge advantage in Mortgage Refinancing. Zero or Low down payment options allow homeowners to purchase homes with less than 20% down. Unfortunately, they also usually require private mortgage insurance, which is designed to protect the lender from loan default. As the value of your home increases and the balance on your home decreases, you may be eligible to remove your PMI with a mortgage refinance loan.

Martin Lukac represents RateTake.com Home Equity and Refinance Loan mortgage marketplace. RateTake.com matches consumers with mutiple lenders offering low mortgage rate quotes. For more information please visit 7 reasons to go for Mortgage Refinancing

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7 Things You Should Know About Mortgage Refinancing

2010-06-06T20:04:00.001-07:00

Most people define refinancing as obtaining a fresh loan after satisfying an old one. The reason takes on many faces such as seizing an opportunity or privilege brought about by an accelerated credit rating, or an equity that has grown on a piece of property. However, the bottom line remains the same: refinancing has untapped privileges that a homeowner can avail of. However, just like any other forms of financial obligation, refinancing has its risks, therefore, caution should be observed. An informed decision should be sought before one becomes entrenched in the web of mortgage refinancing.

Why refinance? This is the first of the seven things you should know.
Refinancing allows a lower mortgage interest rate on the new loan, which will redound to the benefit of having lower monthly amortizations thereafter, rather than putting up with the higher interest rate on an existing loan.
Second, when is the best time to seek out mortgage refinancing as an option?
When there is prevailing low mortgage interest rates, refinancing is a viable option.
Third, how does credit rating influence your refinancing loan application? Are there remedies for a bad credit rating?

Keeping score of the data outlined in your credit report, a mortgage company has a reliable basis of your credit character, as well as your capacity to satisfy your obligations. In consortium with other factors, your credit rating will determine either the approval or decline of your mortgage refinancing application, thus, efforts should be exercised in making sure that at least your credit score remains high.
In the event of a bad credit score, mortgage refinancing may still be available but on a higher interest rate.
An improved credit rating will open doors to favorable credit terms and access to types of loan with lower interest rates.
Fourth, what role does home equity play? Is it a determinant factor, too in taking out mortgage refinancing?

Mortgage refinancing can help hasten the building up of your home equity. Consider taking refinancing to jumpstart payment of your existing loan on your home from a 30-year period to a shorter term. The earlier your home loan is satisfied, the earlier you build on your equity.
Short-term loans may require higher monthly payments but a good part of this is applied to the principal amount rather than on the interest expense.
Home equity is an important aspect in the taking out of mortgage refinancing for obvious reasons, thus, the appraised value of your property is determined against your outstanding debt.
Fifth, who are eligible for mortgage refinancing loans?

First, a thorough analysis of your future plans is encouraged. Refinancing is favorable to those who intend to stay longer in their present homes. Projected savings vis-à-vis total refinancing fees should be analyzed to determine if the whole prospect of getting refinancing is a sound option.
Like all other financial programs, your eligibility for being granted refinancing is determined by your income, value of your property, status of your current loan and other relevant information.

Sixth, what are the basic requirements?

Basically, refinancing requires the same requirements as your original loan which include filling out of a loan application, report on the value of your property, and a credit report which underscores your credit history. Your home equity also becomes part of the requirements.
Secondary requirements include financial statements, proof of income, deposits, title to the property, a property survey and an appraisal report.
As for your original loan that has to be satisfied before refinancing could be granted, a statement detailing your monthly payment, current balances, taxes due, insurance, including other relevant information may be required.
Lastly, how much cost does refinancing entail?

Refinancing entails the basic fees such as application fee, insurance fees, appraisal costs, legal fees (when necessary) and other relevant fees whichever is applicable.
A final fee to close the original loan will also be borne by the borrower. All other fees, including analysis and interpretation of a credit report can be made subject of a negotiation between the borrower and the mortgage refinancing provider. Some mortgage loan companies, for the purpose of having an upper hand over their competitors may even offer a cost-free refinancing application and processing.
Mortgage refinancing, when applied properly on the very purpose it is taken can go a long way in providing every borrower the opportunity to cash in all the advantages and benefits of this type of loan program.

Christiene S.C.Villanueva
Florida Mortgage Broker [http://floridamortgagebroker.us]

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Mortgage Refinancing With a Broker: Costly Mistakes to Avoid When Refinancing With a Mortgage Broker

2010-06-06T20:02:00.001-07:00

If you are considering mortgage refinancing with a mortgage broker, there are a number of things you need to know before signing an agreement. Mortgage brokers can be an excellent resource for finding competitive mortgage refinancing offers; however, you need to be careful to avoid overpaying for the mortgage broker's services. Here are several tips to help you avoid costly mortgage refinancing mistakes when working with a mortgage broker.

Mortgage Refinancing: What Are Mortgage Brokers?
Mortgage brokers are a third party retail outlet for securing mortgage refinancing loans. When mortgage refinancing it is important to understand the how the retail mortgage market works. With the exception of banks and broker-banks (which you should avoid altogether) the retail mortgage market is made up of mortgage companies, online web portals, and mortgage brokers. These retail outlets all work basically the same; mortgage brokers sell mortgages for wholesale mortgage lenders for a commission.

Mortgage Refinancing: How Do Mortgage Brokers Operate?
When you apply for a mortgage loan from a mortgage broker the wholesale lender qualifies you for a certain interest rate and provides the mortgage broker with a written guarantee of that interest rate. The mortgage broker will turn around and reissue the mortgage refinancing interest rate guarantee in their company's name. Do you think the guarantee you receive is the same as the one that came from the wholesale lender? If you said "No!" give yourself a gold star. Mortgage brokers always mark up the interest rate the wholesale lender qualified you for. The wholesale mortgage refinancing lender may have qualified you for a 6.0% loan; however, the mortgage broker marked it up to 6.75% on your interest rate guarantee.

Mortgage Refinancing: What is Mortgage Broker Yield Spread Premium?
The markup your mortgage broker slips into your interest rate when mortgage refinancing is called Yield Spread Premium. Mortgage brokers are compensated with the origination points or fees you pay for mortgage refinancing. Yield Spread Premium is the icing on the cake for many retail mortgage outlets like mortgage brokers. By overcharging you for the interest rate, the mortgage broker receives an additional point for each .25% they mark up on the loan as a bonus from the wholesale lender. In the case above where the wholesale lender qualified you for a 6% loan and your mortgage broker marked up the interest rate to 6.75%, that broker will receive three additional points as a bonus for ripping you off.

Suppose your mortgage refinancing loan was for $200,000, the mortgage broker would receive a $6,000 bonus for overcharging you. The overwhelming majority of homeowners never know they've been ripped off in this manner by the mortgage broker. How can you avoid paying this mortgage broker markup when mortgage refinancing? Homeowners that learn to recognize Yield Spread Premium can avoid paying the markup. To learn how you can avoid paying mortgage broker markup when refinancing your mortgage, register for a free mortgage refinancing guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.
Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing Broker - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.
Claim your free mortgage refinance information guide today at: http://www.refiadvisor.com
Mortgage Refinance Information

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Four Quick Tips on How to Lower Your Mortgage Interest Rate

2009-12-18T22:25:00.001-08:00

Lowering your mortgage interest rate
Are you buying a new home? I don't care if it's a condo or a house, you will end up spending a lot of money. For most people it's going to be the single largest business deal of their life. To keep expenses in check it is extremely important to try and secure the very best mortgage rate possible. There is a number of things you can do to lower your mortgage rate, and right now is an excellent time because of the low interest rates.

Tip number one - let lenders compete
Banks and mortgage brokers are in business to lend you money. If your credit record is in order and you have a steady paycheck coming in you are a prime candidate for a home loan, and banks will bid under each other to offer you a loan. The trick is to let them know you are an informed customer looking for the very best interest rate, and that you are also looking at what other banks have to offer. Don't just go to your regular bank, shop around!

Tip number two - get your interest rate offer in writing
Right, so you have approached several different banks to try and secure a low interest rate for your new home loan. As soon as one of these financial institutions have pre-screened you and are ready to offer you a loan, get them to put the interest rate they will extend to you in writing. With this interest rate locked in, you can now get back to all the other banks you are talking to and tell them: "If you can't match a 5.25% interest rate, we have nothing to talk about."

Tip number three - don't compare apples and pears
Remember that the interest rate you get is dependent on a number of things, but the main factor is if you are shooting for a fixed or adjustable rate mortgage (FRM or ARM, as they are called for short). This is in fact one of the first decisions you have to make about your mortgage. Say you decide you are looking for a 3/1 ARM, being fixed at an initial low rate for the first three years and adjusted each year after that. That means that is what you are going to use as a basis for comparison between different lenders. Don't get sidetracked by all the other adjustable mortgage rates or fixed rares on offer, they'll only get you mixed up.

Tip number four - go for the adjustable rate mortgage
First of all, everyone has different needs and no one mortgage type will fit all. Some people really appreciate the security of knowing the exact amount of their mortgage payments for years to come, and that means fixed rate is the best choice for them. With that out of the way, what we're looking to find here is the best way to lower the interest rate on your mortgage. And that definitely means adjustable rate. Adjustable rates mortgages are nearly always lower than fixed rates, just take a look at what your local bank will offer you. Over the life of your mortgage that adds up to serious money, and personally I've always hated paying too much!

Gus Benson runs http://www.mortgage-content.com, a website dedicated to information on mortgages, home loans and interest rates. Click to visit his site: Mortgage Content

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Fixed and Adjustable Mortgage Interest Rates - Basic Facts

2009-12-18T22:19:00.001-08:00

There are many different types of mortgage loans. Various types of loans make the whole process of home-buying quite intimidating.
Mortgage interest rates influence the borrower’s choice of mortgage to a great extent.
There are two most prevalent mortgage interest rates. These are fixed mortgage interest rate and adjustable mortgage interest rate. This article briefly describes the two types.

• Fixed Mortgage Rates:
In case of 'fixed mortgage rates', the principle and the monthly payments for interest do not change throughout the duration of the loan.
As long as the borrower is in a fixed term agreement, the interest rates remain the same.
The advantage of this type of mortgage interest rate is that the borrowers can keep a track of the exact amount of their payments. They can, thus, manage their personal budget easily.
It is advisable to have a fixed-rate mortgage in case the mortgage interest rates are rising. This is because fixed-rate mortgage fixes the current rate and the borrowers need not worry about the future hikes in rates.
Thus, the long-term fixed mortgage rates protect borrowers from any sort of upward fluctuations in mortgage interest rates.

• Adjustable Mortgage Rates:
The mortgage interest rates that are adjusted from time to time on the basis of an index are termed as the ‘adjustable mortgage rates’.
It is advisable to go for adjustable mortgage rates when there is a downward fluctuation in the interest rates.

These mortgage rates change periodically, that is, every one, three, or five years. Therefore, borrowers can easily capitalize on the new rates that are lower than the previous rates.

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Mortgage Interest Rate Analysis

2009-12-18T22:15:00.001-08:00

In the very beginning of the month of August the mortgage interest rates remained quite stable. Except a few mortgage program interest rates most of then remained unchanged to what it was in the last week of July. Interest rates of mortgage programs like 10-Year Treasury and 30-Year Treasury were down by 0.06% and 0.04% respectively. And the interest rate of programs like USD LIBOR 6-month and USD LIBOR 1 Year were up by very nominal 0.015% and 0.022%. Other than these, the interest rates of 30 year fixed average, 15 year fixed average, 5/1 ARM average, 3/1 ARM average and some other programs remained unchanged.

On the third day of the month most of the mortgage interest rates fell down by units in decimal due to change in market conditions. But the interest of short-term mortgage loans like USD LIBOR 6-month and 1-year were raised up to 5.318% and 5.230%.

During the first 15 days of the month the mortgage interest rate fluctuated a lot. Though the average fluctuation rate was very low but it kept on fluctuating up and down. On most of the occasions the short-term loan interests got affected and kept changing everyday.

Analysts believe that the decline in the mortgage industry is due to the higher unemployment in the recent times. Some believe that the recent drastic drop in mortgage market is due to the tighter lending standards and cooling home prices. This fall in the mortgage interest rate has in fact started to affect the sub-prime lending too.

Due to the fall in mortgage interest rates the U.S. mortgage applications rose for the second straight week. Experts believe that the recent disturbance in the mortgage market is the reason behind the rising applications. The housing sector and the homebuilders market are down and so are the financial companies including mortgage companies. Last week, the fall in the mortgage market spread to the financial markets with a rapid speed and provoked the fear that tighter credit will have a bigger impact on consumers, markets and the economy.

It has been forecasted that the interest rates for the 80% of homeowners and buyers that qualify for A-paper mortgages will probably remain stable or slightly increase in the near future. Those who are with sub-prime credit or don't have proper documents to prove income, may face difficulty in getting the loans or they might be charged with higher interest rates or huge down payment.

Martin Lukac represents RateTake Refinance Rate marketplace. RateTake matches consumers with multiple lenders offering low rates. Got too much credit debt? Get Debt Help and you'd be surprised what we can do together.

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Mortgage Interest Rates

2009-12-18T22:11:00.001-08:00

The interest rate paid on a debt for which property has been provided as security is known as a mortgage interest rate. Mortgage interest rates are probably the most keenly tracked interest rates in America. This is because a small change in the mortgage interest rate can affect a large number of people who have used mortgages to finance their purchase of a home. Mortgage interest rates are also a dynamic macroeconomic indicator of the economy. Usually, a rise in mortgage interest rates leads to a drop-off in home sales and refinancing.

There are two kinds of mortgages that are of significance. They are the fixed rate mortgage (FRM) and adjustable rate mortgage (ARM). In case of fixed rate mortgages, the interest rate, and hence monthly payment, remains fixed for the term of the loan. This term can vary from anywhere between 10 to 30 years.

In case of adjustable rate mortgages, the interest rate is fixed for an initial period of time after which it is periodically adjusted depending on the movements in the economic index to which it is linked.

The recent consecutive hikes in interest rates by the Federal Reserve have pushed the average mortgage interest rate for a 30 year FRM close to 7%. The new chairman of the Federal Reserve, Ben Bernanke, has indicated that further hikes in interest rates may be on the cards. If you are planning to use a mortgage to finance a new home purchase, it's best to act quickly to avoid the prospect of rate hikes in the future

To get the best mortgage interest rates, you need to research mortgage options. It's advisable to check rates at local banks work with a mortgage broker work to find what's best suited to your needs. You or your mortgage broker can scope out mortgages online.

You also need to make sure you are qualified for a mortgage loan. Check your credit report, clear up any errors and resolve any outstanding issues. It's usually a good idea to work with your mortgage broker to get pre-qualified for a mortgage, so that you know how much you qualify for and what kind of house to begin shopping for.

Interest Rates provides detailed information on Interest Rates, Mortgage Interest Rates, Prime Interest Rates, Current Interest Rates and more. Interest Rates is affiliated with California Refinance Mortgage [http://www.e-californiarefinance.com].

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Glossary of Mortgage Terms

2009-12-18T22:05:00.000-08:00

Additional Security Fee
An Additional Security Fee (Mortgage Indemnity Guarantee policy) is the fee taken to get an insurance policy that will cover your lender so that if you default on payments, he will not suffer any loss. You have to pay the Additional Security Fee and the premium along with your mortgage advance. Although you are paying the premium, remember that this policy is for the protection of your lender and not for you.

Administration Fee
The administration fee is the amount charged by your lender to start working on the documentation part of your mortgage application. It includes the home valuation fee as well. The administration fee will not be refunded even if your valuation is not done or if your application has been rejected.

Adverse Credit
Adverse credit occurs when you have a history of bad credit, bankruptcy, CCJ, or loan arrears. Adverse credit can also be called as bad credit, poor credit, or it can be said that you have a low credit score.

Agricultural Restriction
An agricultural restriction is a rule which will restrict you from holding a property if your occupation is in any way related to agriculture.

Annual Percentage Rate
The Annual Percentage Rate is the rate at which you borrow money from lender. It includes all the initial fees and ongoing costs that you will pay throughout the mortgage term. As the name suggests, annual percentage rate, or APR, is the cost of a mortgage quoted in a yearly rate. The annual percentage rate is a good way to compare the offers from different lenders based on the annual cost of each loan.

Apportionment
Apportionment, or sharing out, is a facility that allows you to divide the responsibility for utilities, property taxes, etc. with the buyer or the seller of the property when you are either selling or buying the property.

Arrears
Arrears happen when you default on your mortgage payment or any other type of debt payment. If you have arrears on the record of your current mortgage, you will face problems when you want to look at remortgaging or getting a new mortgage.
Arrangement Fee
An arrangement fee is the amount you have to pay your lender to access particular mortgage deals. While searching for a fixed rate, cash back, or discounted rate mortgage, you will pay this fee at the time that you submit your application, it must be added to the loan upon completion of the term, or it will be deducted from the loan on completion.

Assignment
An assignment is the document transferring the lease of the property or rights of ownership from a seller to a buyer. It may be an endowment policy to the building society in connection with a mortgage.

ASU
ASU is Accident, Sickness, and Unemployment insurance which covers your mortgage payments in case of an accident, a sickness, or involuntary unemployment.

Auction
An auction is the public sale of a property to the person who quotes highest bid. The highest bidder has to sign a binding contract that ensures that he do all valuations, searches, etc. before the sale of the property.

Authority to Inspect the Register
An authority to inspect the register document is a document fro the legal or registered owner of a property allowing the solicitor of the purchaser to get information concerning the property.

Banker Draft
A banker draft is a way to make a payment. In appearance, it is the same as a cheque, but in effect it is a cash payment. The money is given to the bank, and they issue a cheque that is certified to be good for the given amount.

Base Rate Tracker
Base rate tracker is a type of mortgage in which the interest rate is variable, but it is set at a premium (above) the Bank of England Base Rate for a period or for the full term of the mortgage. The best part about this type of mortgage is that it has little or no redemption penalty. This means that by making overpayments, you will be able to save money on interest by paying off your mortgage earlier than the agreed upon date on the initial mortgage contract.

Booking Fee
A booking fee or arrangement fee is charged when applying for a fixed or a capped rate loan. Booking fees are normally non-refundable if charged upfront, but sometimes the booking fee is added to your final mortgage payment.

Bridging Loan
A bridging loan is useful when you want to purchase a property, but your ability to do so is contingent upon the sale of your old property. This is a very short term loan that is paid off as soon as your old property sells. Speak with a loan adviser before taking out a bridging loan to be sure it is the best option for you.

Broker Fee
A broker fee is paid to your debt advisor or other intermediary that assists you in finding the best mortgage or loan deal for your circumstances. BSAThe BSA, or the Building Societies Association, is a group that works in the interest of member societies.

Building Societies Commission
The Building Societies Commission is a regulatory organization for Building Societies. This commission reports to the Treasury Ministers.

Building Society
A Building Society is a mutual organization that gives you money to buy or remortgage residential properties. This money comes from individual investors who are paid interest on their funds. A portion of building society funds is also raised through commercial money markets.

Buy-to-Let
When you purchase a property for the sole purpose of renting it out, you can apply for a buy-to-let mortgage. The payments for this type of mortgage are calculated based on your projected rental income instead of your personal income.

Capital and Interest
Your monthly mortgage payments consist of two parts: the interest and the capital. The interest payment is a payment on the interest balance of your loan. The capital payment is a payment on the amount that you borrowed.

Capital Raising
Capital raising generally means remortgaging for a higher amount than you need to pay off your existing mortgage in order to use the excess money for other personal financial uses.

Capped Rate
A capped interest rate is an interest rate that will not exceed the standard variable interest rate for a set period of time (from 1-5 years) that is decided by you and your lender. If the standard variable rate falls below your capped rate, your interest rate will decrease accordingly.

Cash Back
Cash back is the amount you receive when you take out a mortgage, the amount may be fixed or a percentage of your mortgage amount.

CCJ
CCJ stands for County Court Judgment. This is a decision reached by a county court against you when you have defaulted on your debt payments. If you clear the debt in question in a set amount of time, a satisfactory note will be put on your credit report to signify that the debt is taken care of.
Centralized Lender
A centralized lender is a mortgage lender that does not rely on a branch network for distribution. Centralized lending is now provided by several building societies. These societies operate separately from their branch networks, and they rely exclusively on mortgages from intermediary sources.
Charge
A charge is any interest on a mortgage to which a freehold or leasehold property can be held.
Charge Certificate
A charge certificate is a certificate issued by HM Land Registry to you with your name as the registered title for a given property. This certificate contains details of restrictions, mortgages, and other interests. It has three different parts: a charges register, a property register, and a proprietorship register. If there is no mortgage on the property, it is called a Land Certificate, and it is issued to the registered proprietor.
Chattels
Chattels are moveable items in your house such as furniture or your personal possessions.Chief RentChief rent is paid by the owner of a freehold property. This is the same as the ground rent that is paid by a leaseholder.
CML
Council of Mortgage Lenders
Completion
Completion is a term that explains that you have become the owner of your house after finishing the formalities of the sale and the purchase of the property.
Conditional Insurance
When you take out a fixed or discounted rate mortgage, your lender may try to persuade you to take out an insurance policy that will cover any missed payments due to an illness, an accident, or unemployment.
Contract
A contract is a legally binding sale agreement. There are two identical copies signed by both the buyer and the seller, and each party keeps a copy for their records. Once both parties have signed the contract, they are committed to the terms of the agreement.
Conveyance
A conveyance is the deed by which a freehold, unregistered title is transferred. The deed is called an assignment if your property is unregistered or leasehold. If the property is registered, the deed is called a transfer.
Conveyancing
Conveyancing is the legal process by which the buying and the selling of a property take place.
Covenant
A covenant is an assurance given in a deed.Credit ScoringCredit scoring is the procedure by which a lender evaluates your paying capacity before offering a loan or mortgage.
Credit Search
A credit search is done by a lender and a credit bureau to search your records for CCJs and other indicators of bad credit.
Debt Consolidation
Debt consolidation is the process by which you take out a loan or mortgage in order to pay off a number of high interest debts. By doing this, you will only need to make one payment each month, and you will save significantly on interest charges.
Deed
A deed is a legal document that denotes the owner of a given property. You can transfer a title to both freehold and leasehold with a deed.
Deposit
A deposit is the amount of money you put down toward buying a property.
Disbursements
Disbursements are any amount you pay to solicitors against land registry fees, searches, faxes etc.
Discounted Rate
Discounted rates are used to attract new borrowers to lenders by setting the interest rate below the standard variable rate for a guaranteed period of time. If you repay the entire discounted rate mortgage within the first few years, your lender may charge you early redemption penalties.
Early Redemption Penalty
An early redemption penalty is charged by your lender if you do a part or full payment of your mortgage amount before the completion of your mortgage term. These penalties will also be charged if you decide to remortgage and move your mortgage to a new lender. Early redemption penalties mainly apply to fixed rate, discounted rate, and cash back mortgages.
Easement
Easement is the right held by one property owner to make use of the land of another for a limited purpose, like a right of passage.
Endowment Mortgage
An endowment mortgage is an interest only mortgage supported by an endowment policy. During the term of the mortgage you will pay only interest to the lender, and your premiums are alternately paid into an endowment policy which will mature over the term of your mortgage. The endowment policy is designed to pay off your mortgage as well as act as life insurance. However, you cannot depend on this amount to be sufficient to pay all of your debt.
Endowment
There are different types of endowments, but here an endowment is a life insurance policy that will pay off your interest only mortgage.
Equity
Equity is the amount of value in your home. It is the value of your home less the amount left to be repaid on your mortgage.
Equity Release
Equity release is a means of releasing money from the value of your home either in a lump sum or in monthly installments. This money may be used for home improvements, debt consolidation, or other large expenses.
Exchange of Contracts
Exchange of contracts occurs when the buyer and the seller of a property sign and swap the contracts which detail the property, the price, the date, and the terms of the arrangement. When the contracts are signed, they become legally binding, and legal action can be taken against anyone who breaks the contract.
Existing Liabilities
Existing liabilities are all financial commitments outside of your mortgage. Existing liabilities may include bank loans, credit card debt, maintenance payments, etc.
First Time Buyers (FTB or FTP)
A first time buyer is one who has never owned property before.
Fixed Rate
A fixed rate is when you pay a fixed amount of interest on a loan for a fixed period of time. Lenders provide fixed rate loans for short periods of time (three-six months) all the way up to 25 years. Early redemption penalties apply if you pay off the mortgage before the end of the fixed rate term.
Flexible Scheme
A flexible scheme is a new way of calculating mortgage interest charges. Lenders calculate interest on a daily basis instead of on an annual basis. The new interest rates will only affect the remaining balance of the mortgage. By making regular overpayments, you can repay the loan faster thereby saving a lot on interest charges.
Fixture
A fixture is an item attached to your property, and therefore it is legally part of the property.
Freehold
Freehold means that you have ownership of a property for an indefinite period of time. This is in contrast to leasehold which means that the property is only under your control for a limited period of time.
Further Advance
A further advance is an add-on loan to your existing mortgage from your existing lender. The money from a further advance may be used for home improvements, to purchase a freehold property, or for personal purposes such as debt consolidation.
Guarantor
A guarantor is a person who guarantees the lender that the borrower is eligible for a loan or mortgage. If the borrower fails to make payments, the guarantor will make them.
Gazumping
Gazumping occurs when a seller agrees to sell a property to one person, and they proceed to decline that offer in favor of a higher one.
Ground Rent
Ground rent is the amount which a leaseholder needs to pay to the freeholder each year.
Home Buyer Report
A home buyer report is made by a lender after a mortgage valuation has been done and before the full survey takes place in order to give the borrower a complete understanding of the property they are thinking of buying.
Income Multipliers
An income multiplier is a type of calculation that a lender will use to calculate the amount a borrower can receive. The most common income multiplier is three times a single income or two and a half times joint income. The lender will choose the one that yields the higher figure. Lenders are more flexible if your LTV ratio is low.
Income Protection Insurance
With income protection insurance, your monthly payments will be covered in the case of illness, accident, or unemployment.
Intermediary
An intermediary is a mediator who finds the best mortgage for you, and they also arrange the mortgage for you on your behalf.
Land Registry Fee
A land registry fee is paid when you want to register your ownership of a property or when you want to change the registered title of a property.
Leasehold
Unlike freehold in which a property is owned, leasehold is when a property is owned, but the land that it is built on is not owned by the leaseholder. Their control of the property is only for a set number of years.
Licensed Conveyancer
A licensed conveyancer is like a solicitor in that they specialize in the legalities of buying and selling property.
Local Authority Search
A local authority search is made by the solicitor of the people that plan to buy your property. They check to make sure there are no planned developments on the property such as roads or buildings. They will check for any planning permissions or enforcement notices posted on your property.
LTV
LTV, or loan to value, is the percentage derived from dividing the value of your property by the amount of your mortgage. A low LTV is much less risky for lenders than a 100% LTV.
Loan Consolidation
Loan consolidation happens when a loan is taken out to repay another loan with a higher interest rate or to repay a number of high interest debts. Loan consolidation is often achieved through remortgaging.
MIG
A MIG, or mortgage indemnity guarantee, is insurance one takes out to cover their lender in the case that their property is repossessed, and the lender is unable to get their money back. A MIG is paid for upon completion of a mortgage.
MIRAS
MIRAS, or mortgage interest relief at source, was a tax relief given to those with mortgages, but this relief was abolished by the government in April of 2000.
Mortgage
A mortgage is a loan that allows someone to buy a property. The property itself is the security for the loan.
Mortgagee
The mortgagee is the company or organization that finances your mortgage.
Mortgagor
The mortgagor is the person taking out the mortgage to buy a property.
MPPI
MPPI, or mortgage payment protection insurance, is insurance one takes out in the case of an accident, an illness, or involuntary unemployment that would render them incapable of making their monthly mortgage payment.
MRP
MRP, or mortgage repayment protection, is insurance taken out through your lender during the term of your loan.
Negative Equity
Negative equity occurs when the money you owe to your mortgage lender is greater than the value of your property. People find themselves in negative equity situations when they take out 100% LTV mortgages.
Overpayment
Overpayment happens when you pay more than the regular monthly payment on your mortgage so that the mortgage is repaid before the end of the mortgage term. With overpayments, you can save money on interest, but you may also be charged an early redemption penalty.Payment HolidayA payment holiday is a period during which you make no mortgagee payments. This is normally available with flexible mortgages only.
PEP
A PEP, or personal equity plan, allows you to own shares or unit trusts without paying any taxes.
Personal Pension
A personal pension provides for your financial needs after retirement. You make structured payments into your pension savings during your working years. Often, some of this money may be taken out to pay off your mortgage liabilities.
Portability
Portability is a term used to describe a mortgage that can be transferred between properties when you move from one house to another.
Redemption
Redemption is when you pay off your mortgage, when you remortgage, or when you move to a new house.
Remittance Fee
A remittance fee is charged by a lender for sending the amount of a mortgage to your solicitor.
Remortgage
A remortgage is a loan taken out from a new lender or a loan renegotiated with your existing lender to pay off your existing mortgage. This is done to decrease the interest rate you are paying or to raise extra capital.
Repayment Mortgages
A repayment mortgage is when part of your monthly payment goes toward the interest and another part of the payment goes toward the principal. This is also known as a capital and interest mortgage. If payments are made regularly, the entire sum of the loan will be repaid by the end of the term.
Retention
Retention is the amount that your lender keeps pending until certain conditions of your mortgage are met.
Repossession
Repossession is a legal process by which your mortgaged property comes under the control of your lender due to incomplete repayment. Your property may then be sold at public auction.
Right to Buy
Right to buy means that you are legally able to purchase the property at a discounted rate if you have been a tenant for a long enough period of time.
Sealing Fee
A sealing fee is an amount charged by your lender when you repay your mortgage.
Self Certification of Income
Self certification of income means that you confirm how much you earn, and the lender does not need proof of your income from a third party. Self Certification is useful for self employed people or contract workers.
Shared Ownership
Shared ownership is a scheme devised by housing associations that requires you to pay mortgage payments on the part of a property that you own while you also make monthly rent payments on the portion of the property owned by the building association.
Solicitors
Solicitors are the people who give legal advice and carry out all the legal work for mortgage and remortgage transactions.Stamp Duty Stamp duty is a tax paid to the government on the purchase of a property.
SVR
The SVR, or standard variable rate, is the base rate of the lender. It is subject to change at any time depending on the lender. The SVR will fluctuate based on the Bank of England Base Rate.
Structural Survey
A structural survey is the thorough inspection of a property carried out by a professional surveyor.
Tenure
Tenure means the type of rights a person has over a property or the land it stands on. Tenure could be freehold or leasehold, for example.
Term
The term of a mortgage is the number of years over which you plan to pay your mortgage off.
Tie-in Period
A tie-in period is an amount of time for which you are bound to a lender. Tie-in periods often exist with special mortgage deals like fixed, capped, or discounted rates. If you move your mortgage to a different lender during this period, you are subject to an early redemption fee.
Title Deeds
A title deed is a legal document that validates the ownership of your property. A title deed proves your true and legal right to your property.
Transfer Deed
A transfer deed is a legal deed used for transferring the ownership of your property to a buyer.
Unencumbered
The term unencumbered means that you own your property outright with no mortgages or loans against it.
Valuation
A property valuation is a survey conducted on a property by a qualified surveyor in order to assess the value of the property. This valuation is done on behalf of your lender so that they are able to confirm the value of your property.
Variable Rate
A variable rate means that your interest rate may change from month to month thereby causing your payments to fluctuate monthly.
Vendor
A vendor is the person from whom you purchase a property.

If you would like help finding the best mortgage or remortgage deal for you, take a moment and fill out this simple questionnaire. Once you have do so, a SimplyFinance representative will contact you to introduce you to a mortgage broker that will search to find the best mortgage deal for you.
http://www.simplyfinance.co.uk

Article Source: http://EzineArticles.com/?expert=Jon_James

Mortgage Lead Info Guide

2009-12-06T15:16:00.001-08:00

Mortgage is generally defined as a method of using property as security for the payment of a debt. Many mortgage lead generators are available in the market either online or offline to help mortgage consumers to pay their debt. So, the mortgage consumer will browse through the net for internet mortgage lead generators using search engines. By filling up a normal mortgage form, the mortgage consumer’s details will be passed on to the mortgage lenders who are willing to lend loans.

The mortgage lenders will then sort those leads and get in touch with the mortgage consumers for loans. Among the various mortgage lead generators available nowadays finding the right place really would be tiring. But it is advisable to go through many companies offering mortgage leads and then settle on one reputed mortgage lead generator and mortgage lender.

The true definition of exclusive mortgage leads is defined as the leads that are only sold once to a mortgage lender. When mortgage consumers buy mortgage leads on exclusive basis, the same leads will not be sold to any other mortgage lead generators or mortgage lenders. A great writer once said “East or West, home is the best”. It is human nature that all of us would like to own a beautiful home. For some it’s easy but to most others it may seem to be the ripe grapes. Hence the prime motive of these mortgage lead companies is that, they will help those disabled to fulfill their dream.

In common, when a prospective homeowner approaches a mortgage lender for a mortgage loan, she will be asked to fill up a ‘Form of request’ for the loan, Known as the ‘Mortgage lead’. After carefully assessing the application and if it qualifies, the mortgage lender approves the loan. Since this is time consuming, people seek the help of mortgage lead generators to develop the lead and submit it to the mortgage lender. Hence in this way, the process of mortgage lead generator to send the mortgage lead form signed by the mortgage consumer to only one appropriate mortgage lender for mortgage loan is called as Exclusive mortgage leads.

Let us now look at some differences between exclusive mortgage leads and non-exclusive mortgage leads. Based on the advantages and disadvantages of exclusive mortgage leads, the following points are some benefits and main differences from that of non-exclusive mortgage leads.

The benefit of exclusive mortgage leads is that the mortgage consumer will face only less competition making the close rates higher than other leads. But in non-exclusive mortgage leads the competition is higher.
The data is shared only with one mortgage lender and hence the mortgage consumer has no choice to select some other mortgage lender if it’s an exclusive mortgage lead program. Coming to Non-exclusive mortgage leads the mortgage consumer’s details are shared with many mortgage lenders so that the consumers will have more options to choose from.
Non-exclusive mortgage leads are less expensive than exclusive mortgage leads but the confidentiality ratio is high in exclusive mortgage leads than non-exclusive mortgage lead. Hence to conclude if the mortgage consumer has a good credit profile, the chances of his or her dream home coming true are greater. Exclusive mortgage leads are a gateway through which mortgage lead generators and mortgage lenders build their business and reputation.

Mortgage Facts

2009-12-06T15:15:00.000-08:00

So you want to buy a home but you don't know what you can afford. Unless you're a multi-millionaire, the first thing you need to do is talk to a mortgage loan officer. Getting pre-qualified for a loan gives you an idea of what you can afford in a home. It is an estimate of what the bank would be willing to loan you, based on your income.

Assuming all goes well and you are pre-qualified, you are then able to get serious about the buying process and make an offer on a home you are interested in. If your offer is accepted, you will then need to return to the loan officer for pre-approval for a loan.

This is where the bank or loaning institution gets serious. The loan officer will need to know not only your full income, but your full credit history. Unfortunately, any outstanding debts or missed payments can negatively impact your ability to get a home loan. The bank needs to know that you can pay them back, or they won't lend you money. They will also need financial details such as pay stubs, bank statements and tax information.

If for some reason you don't qualify for as high a loan as you want, perhaps because you just recently got a better paying job but your employment history was at a lower income, it is possible to get a co-signer who can increase the amount you are eligible for. A co-signer should be a close friend or family member with a higher annual income than you. Their income will then be added to yours, making your pre-approved loan amount higher. Consider, though, that a co-signers dept is also added to your debt, so choose them wisely. Also know that any bad credit history you have will not be cancelled out by their good credit. Anyone considering becoming a co-signer needs to realize that they then have certain legal responsibilities to that property, and they need to know exactly what they are.

The home you can afford, and your loan eligibility, are impacted by the amount you may have saved for a down payment. A loaning institution may favor you if you have a hearty down payment already. A higher down payment not only looks good to lenders, it saves you money in the long run because it is not added to your mortgage, meaning you don't pay interest on it. It is the amount that you have paid outright for your home, and makes you that much closer to being mortgage free.

Mortgage Tips - Info and Explanations - Conclusion

2009-12-05T08:58:00.000-08:00

Today's first tip is the option many lenders have of skipping a payment. While this won't save you money, it does provide a full month's worth of mortgage payment in your hand which may not be a bad thing when the credit card bills arrive in January. First and foremost, you need to make sure your lender has some type of program in place which you can find out by contacting them.

You cannot just skip a payment without proper authorization from the bank; they frown on that to put it mildly. Also, this does not mean you never make the payment; it is just appended to the back of the mortgage as one additional payment. If you are already on an accelerated payment program, you may never notice unless this becomes a yearly habit, which is not recommended. When used wisely and responsibly it can be beneficial.

The other useful tip is having your mortgage payment date moved. There is no hard and fast rule about mortgages having to come out on the 1st of the month or the 15th and the 30th if you pay twice a month. If you get paid on the 30th or the 31st, having all your mortgage payment processed on the next day on the 1st it may make life easy. If you juggle several bank accounts though or make monthly transfers to cover mortgage payments at the end of the month, talk to the bank about adjusting the payment date until the 5th, or the 7th, or whatever date works to make your payment process easier and more efficient.

As always, there may be a slight interest payment adjustment to keep the banks from going broke, but if it makes your life easier to pay later take advantage of it. This can also be established when you initially set up the mortgage, you can ask for the payment to be processed on a certain date. For landlords this is an incredible option as it allows you to deposit rent checks without any undue pressure. Especially if you know the mortgage payment doesn't come out for a few days after you deposit it.

The final tidbit I have is for someone selling his or her home. Unless you have an open mortgage without any payout penalties involved, you are liable to get hit with some interest penalties for paying off your mortgage. These penalties as an average work out to approximately three months payments, but fluctuate depending on how close you are to the end of the mortgage term.

You can reduce this penalty by having your lawyer take advantage of making a payment to reduce the mortgage amount prior to paying it off. A typical mortgage allows the homeowner to make either additional monthly payments or a bulk payment once a year and depending on the lender ranges from 5 to 10% of the monthly or yearly payment. If you can have the 10% paid down first, prior to paying out the mortgage, you reduce the outstanding mortgage amount. You then pay the penalty on the smaller amount of remaining mortgage saving anywhere from a few dollars to several hundred.

Buried amongst the last three weeks of mortgage information I hope there have been some bits that help you stay informed and allow you to make good decisions about your current mortgage, or your upcoming one. As always, consult with a mortgage broker for the best sources of information and be sure to go in as knowledgeable as you can.

Mortgage Info You Can Actually Understand

2009-12-05T08:54:00.000-08:00

This is a great time to Refinance Your Home or Buy a New Home -- the Mortgage Rates are so low, these days! It's always worth a shot to find out what the costs of switching over to a new mortgage would be, to see if that's the right move for you.

Whether you are building your own house, buying a new property, gathering funds to do a renovation project, or Refinancing your current Mortgage at a much Lower Rate, you’ll be looking for Funding -- Money, Money & More Money! Here are some commonly asked questions regarding funding for a Mortgage or a Home Improvement Loan.

Where should I go first to get a Mortgage?

You can go to the Loans Department of your regular bank, or you can go directly to a Mortgage Broker. (Click on the Mortgage Company Ads on http://www.buildyourownhouse.ca to see if that's the easiest way for you to get the money you need... At the very least, it'll tell you how much you're qualified for, and the on-line Lenders have Rates the Banks have a hard time competing with. It's all about Saving Money, so check into it all, first -- it's a big financial decision! You can always take your information you've gotten On-line to the Bank -- if they can't or won't match it, there's your decision right there! ha,ha!).

Keep in mind that it is generally easier to work with a Broker, since they have the ability to be a lot more flexible than a conventional bank. Also, their rates will often be considerably lower than what the banks are offering, too, so shop around – this could save you a fair bit of money. Brokers can often get a mortgage for clients that a bank won’t even touch, and they’ll do it at your convenience, for the most part, so you can have a more relaxed meeting with them.

What questions will a Broker ask somebody who’s looking for a Mortgage?

There are three main things you will be required to provide:

i.Verification of Income

ii.How much and where the Down Payment is coming from

iii.Personal information for Credit Checks (Birthday, Social Security Number, Address, Job Letters, Pay Stubs, 3 years worth of Tax Returns, 3 months worth of Bank Statements, any current Retirement Savings Funds…)

Your Banker or Broker will want to confirm your ability to qualify by doing a GDS Ratio (Gross Debt Ratio) and a TDS Ratio (Total Debt Ratio).

A Gross Debt Ratio is determined by taking the Mortgage Payment, the Property Taxes, and a Heat Component (really hot areas will be exempt from this, I’m guessing!), which is usually around $50.00. These numbers are added together. That number is multiplied by 12, then divided by your Gross Income Amount. This number can’t exceed 32% of your Gross Income. Some banks &/or brokers may have different criteria, but this is a commonly used method to see if a client can qualify for a mortgage.

The Total Debt Ratio takes the above information (the GDS Ratio) along with all other debts and payments (whatever else you have to pay per month – credit cards, support payments, etc.) to make sure that the Grand Total of all of your payments, including the new mortgage and taxes, won’t exceed 40% of your Gross Income.

N.B. Don’t get too hung up on the math – that’s the job of the banker or broker. This is just info to give you a good understanding of how they get their numbers.

What if someone has a job that is technically referred to as “Part-time”, but they make a “Full-time” wage. Can they qualify for a Mortgage?

You can apply through a Mortgage Broker (probably your best bet) to see how much your Gross Income will allow you to qualify for. It is particularly beneficial if you have a solid work history (have been at the job for a few years, or more). A Broker will know how to present the documentation to help you get a mortgage. This is particularly important, now, since so many companies and Government Services hire ‘Part-time’ or ‘Contract’ employees. These can be career positions, and you can be there for fifteen years, and still be flatly turned down by the regular banks. Don’t give up on your dream to own your own home because you’re in a situation like this – call a Mortgage Broker, and give it a shot. If that still doesn’t work, try another one. What’s the harm? At the very least, you can get an honest answer of what you need to do in order to become qualified. Either way, you’ll be that much closer to owning your own place, and that’s the goal!

Is there an easy way to calculate a Mortgage?

There’s a formula that I use that is relatively accurate, give or take a hundred dollars, or so. At the very least, you’ll get a ballpark idea of your monthly payment (not including the Tax portion), and whether you can qualify for that amount. Remember that when you’re qualifying for Mortgage money, if you’re even $80.00 over what they think you can pay, you won’t get the mortgage. It’s best to Pre-Qualify for a mortgage, and ask how much you will qualify for before you go house-hunting. Keep in mind that as the Interest Rates get lower, the more you’ll be able to qualify for. Don’t go crazy, though, since all the costs go up as you increase in house size, and the monthly operating costs might end up being higher than you thought, then you’ve got a big house and a crappy lifestyle. Stay within your means; stay happy and comfortable.

The Formula – remember, it’s a ballpark number…

On a 25 year Term, you would take the Percentage Rate (say, 5%) and multiply that out by the number of thousand (say, $100,000.), which would give you a mortgage payment of about $500./month (5 X 100 = $500.), plus Taxes. So if you’ve found a house for $165,000.00, and the rate is 5%, (based on a 25 yr. Term), the payment would be around $825.00, plus taxes, per month. (5 X 165 = 825)

We use this formula all the time – it’s functional to see if you can even come close to being able to afford a particular property. If you always find yourself looking at the properties worth $300,000., when you can actually afford a $75,000. property, do the math, figure out what you can really buy, and get that. It’s better to buy something already in your range, save your money, wait until your place has gained in equity, then make the move up. Have your Broker or Banker let you know how much you can spend, and have that up-dated every year, or so, depending on how long it takes you to find a place to purchase, especially when the rates are fluctuating so much. Also, your Broker will tell you the exact payment.

Can I qualify for a Mortgage based on the lowest rates out there?

Different Lending Institutions will have different rules, but you will generally have to qualify under their 3 Year Rate, which will be higher than the lowest rates available. Some institutions will use the 5 Year Rate (primarily regular banks).

What’s the difference between an Open and a Variable Rate Mortgage?

An Open Mortgage is one that can be paid out at any time, but you will pay a higher Rate for this privilege. This is a good choice if you’re not sure how long you’ll be staying in the home. You’ll save on the possible Penalty Payments you would have to pay if you had a Fixed Rate Mortgage, and had to move before the pre-chosen Time Period had elapsed.

A Variable Rate Mortgage (my favorite!) is not fully Open, but it can easily be converted into an Open Mortgage, so you would still save on any potential Penalty Payments. With this Mortgage, you’ll usually get better than Prime Rates, and the flexibility to move if something better comes along…! The other thing I really like about this one is that you can usually make payments directly on the Principle, which will reduce your mortgage faster than almost any other method. Your monthly mortgage payment will be as low as possible, so with the extra money that you might have kicking around, put it in a Savings Account, then make the payments annually (or more – ask you Broker how often and when you can pay off the Principle).

One thing about this type of Mortgage that might seem off-putting, initially, is the fact that the interest rates actually fluctuate within the mortgage. This is not necessarily a bad thing, especially if the rates go down after you’ve established the mortgage. The important thing to remember is that the amount you pay per month will always be the same – the only thing that changes is the amount that will come off the Principle. If interest rates start to rise, make an extra effort to set aside some money to pay directly to the Principle.

My biggest Financial Pet Peeve is the whole notion of making two payments per month (or Bi-Weekly Payments) that are really high in an effort to pay off the Mortgage faster (usually a 15 year term). This drives me crazy, since it often puts a lot of unnecessary financial pressure on a family. That’s a lot of money to come up with in a month, and if disaster strikes, they’ll be in serious trouble very quickly. I always think that it’s better to establish the lowest possible monthly expenditures, then if you still have a big wad of cash left over, great – put that toward the mortgage. Using the Variable Rate Mortgage will give you the lowest mortgage payment.

Here’s a quick example: If you have a mortgage of $100,000. @ 5% (using a 25 Year Term), using the Variable Rate Mortgage, your monthly payment would be about $500/month, plus taxes. If you have the same mortgage in a Fixed Rate Mortgage (also a 25 year term), @ 6%--remember that the Variable Rate is lower – the monthly amount would be about $650, plus taxes. (Note that a Fixed Rate Mortgage is calculated differently from a Variable Rate Mortgage) If you were to sign up for the two-payment a month plan, that’s $1300/month. The spread ($500/month to $1300/month) is $800. Multiplied out by a year is $9,600 – that would be a huge Lump Sum Payment directly on your Principle.

Keep in mind that only a tiny amount of your regular monthly mortgage payment goes toward the Principle in a new mortgage – have a good look at your Statement, the next time it comes in. Even if you were to put half that amount on the Principle, you would still be making a major dint in it. And your financial life won’t be so stressful, which will make the rest of your life much nicer, too, since financial stress is one of the leading causes of divorce, but that’s a whole other story…

What’s a Fixed Rate Mortgage?

A Fixed Rate Mortgage is a mortgage that will have the same rate for the amount of years you have chosen to lock in at. Typically, there are 1 Year, 2 Year, 3 Year, 5 Year, 10 Year, 15 Year, and 25 Year time periods. If you choose to move before the time period is up, you will be required to pay a Pay Out Penalty, so keep that in mind if you’re not completely sure how long you’ll be there.

What’s the best way to get money for a Home Renovation Project?

Check first with the Financial Institution that’s carrying your Regular Mortgage. They may be able to provide the money you need to renovate. You could borrow on your Equity (the spread between how much you owe for the property and its current appraisal rate) in the form of a Home Improvement Loan or a Home Equity Loan. Keep in mind that you can use a Home Equity Loan for other stuff, as well. Your bank should be able to offer you a Blended Rate, and should waive the Pay Out Penalties. If they won’t offer that, or give you any loan, call a Broker, and see what they can do. They’re not miracle workers, but they can often help when the regular route won’t come through for you.

The easiest way these days is to check out companies on the Internet. You'll get your response a lot faster, and probably get a better rate, too! I'll find some for you and post them here!

The bank wants to do an Appraisal on my house before they’ll give me a Home Improvement Loan. Is that standard?

Yes. (You’ll need this for the Home Equity Loan, too.) The financial institution needs to know the current value of your home to make sure that their backs are covered. Makes sense. You will probably have to get a ‘Before and After Appraisal’, quotes from the respective contractors to show proof of renovation, and a description of the type of renovations you’re planning. It’s much easier to borrow against the Equity, so try this route, first. Talk to your Lender before you get too involved to see what you can actually get, and when. If you have to pay for the whole job out of your own pocket first (as is often the case, which is craaaazy, since if you had the cash just sitting there, you wouldn’t be at the bank, anyway….ah, the joy of financing!), make sure that you find a source for material that will provide a payment plan (many home improvement stores will do this), and a contractor who doesn’t mind being paid at the end of the job when you’re money comes in.

N.B. Just a little aside – I’ve seen some ‘warnings’ out there that you should nevah’, evah’ pay your contractor up front or in the middle of a job, or only pay them when you are ‘completely satisfied’. Please. There are some people who are never satisfied with anything, even if they get exactly what they requested. This is such complete crap. You would never work for an employer for a year, then at the end of that year, he would sit back and decide whether he should pay you. That’s crazy. Be smart about it, though. Get everything in writing, both of you agree to it, then sign the quote. You will often be required to pay for materials up-front, since the contractor doesn’t know you anymore than you know him…Generally, you will make payments as the work progresses, which is easier than getting one big bill at the end, but if you have extenuating circumstances (like the bank won’t give you the money until the end of the project), then tell your contractor that at the beginning. All projects work more smoothly when there’s open and complete communication.

How do you get a Builder’s Loan?

Apply for a Builder’s Loan the same way you would apply for a regular mortgage. If you are a new Builder, you may require a ‘New Home Warranty’ on the property. That’s pretty difficult, if it’s your first house, so you may be calling a Broker right away! They’re usually more flexible in getting you the capital you’ll need to bring the house to fruition, but if you already have a good relationship with your banker, give them a crack at it. This might be easier in a rural area, where it is more common for people to build on their own, so the financial institution will already know how to manage this scenario.

When will we get our money?

The money is separated into 3 or 4 sections, or ‘Draws’. Generally, you will get the funding in Three Stages:

i.Sub-floor

ii.Lock Up

iii.Completion

Can we get money to get to the Sub-floor Stage?

This is where careful and creative financing comes in… hopefully, you’ll have that swack of cash in the bank (at least twenty thousand), and a fair bit of equity in your home. You’ll probably need to sell your current property before you start building your new house, so you can use the equity spread from that sale to get the new house started. If your land is already paid for, you’ll find this stage easier. Some Developers will allow a new builder to put 5% down on the land, then they can pay the balance when the mortgage money comes in. This is relatively rare, so if you find this deal and like the location, go for it.

Talk to your Excavator, Foundation Contractor and Framer to see if you can make partial payments until the First Draw comes through. They’re in the business, so they’ll understand your situation. A lot will depend on how busy they are and the relationship you establish with them. Some Suppliers (lumber, ICF Blocks, etc.) may have a payment schedule, too, so it doesn’t hurt to ask if you need to.

A Personal Line of Credit from the bank, along with your regular credit cards (again, if you have an Air Miles credit card, now is the time to use it -- you'll really rack up the points, then you can take a well deserved trip at the end of your house-building adventure!), personal loans, etc. will all come into play, now. You might want to make sure you have an alternate source of funds for a ‘just in case’ scenario. It’s best to plan out all the possibilities before you get started so that nothing will catch you off-guard.

What kind of Appraisals will the Bank do?

First, the Appraiser will inspect the Land, the House Plans, and your Proposed Budget. The amount of money provided for the Builder’s Loan will be based on the Cost to Complete the house, not including the value of the land. The Land will be included with the final appraisal for the Completion Mortgage (Take Out Mortgage).

The Appraiser will come out to your property to do Progress Inspections at the Three Stages – Sub-floor, Lock-up and Completion. You should anticipate a one to two week waiting period for the Draw Money to come through. During that time, the bank will most likely have a lawyer check the Title each time.

It’s an involved process, but it does work, so stick with it and figure it out! Remember that if one institution can’t get you the money, try a Broker or two…eventually, it’ll all work out!

One more thing -- What is Escrow??? I know, you hear that all the time! It's that seemingly very long period that your Lawyer holds onto your money while all the conditions are met on the House Deal. Make sure you ask your Lawyer for a good idea of the time-frame you might expect, and be sure not to leave yourself too tight (moneywise!) during this annoyink period!

Just so you know, a Real Estate Lawyer will be very pleasant to deal with ... they don't seem to deal with a lot of animosity, like many other types of Lawyers, and that probably accounts for their serene expressions! ha,ha,ha! They're there to help you get into or out of your home, so don't worry -- it won't hurt a bit!

Where You Can Find Good Mortgage Info

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There is a wealth of information on the internet, a lot of which is very useful, however, to ensure you are getting the right advise it is always advisable to go to a credible source. If you are looking to buy your first property or wish to review your options there are plenty of sources of information both offline and online that you can trust.

The financial services authority is always a good start they can offer practical advice as well as some useful tools like mortgage calculators, budget calculators as well as items you should be aware of, fees and costs that can be high.

They can also offer mortgage information for those concerned about mortgage payments which is a huge issue at the moment so if you are worried about making your mortgage repayments head over to their website now.

There are many other different information sources like popular news channels offering their own guides and professional organisations authorised by the financial services authority.

If you are looking to buy your first home or would like to review the options available to you, a mortgage broker can be of huge benefit. They have a wealth of mortgage info available to consumers. Established mortgage brokers have expert knowledge of the field so will be fully up to date with the latest developments in the market, incentives such as the government share equity schemes and the products currently on the market.

A mortgage broker can advise you on what is the best course of action for you, the products that are likely to suit your circumstances, as well as help you through the application process.

Mortgage brokers can be a great help and often offer their services for free meaning no obligation on you're part. The alternatives would be to go to your bank or existing provider and choose from their limited range or contact each lender to find the best deal for you. You could use a comparison site but if you don't fully understand the terms it can leave you with an uncertain decision. I know what my choice would be.

Exclusive Mortgage Lead Info Guide

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Before understanding all about exclusive mortgage leads we will first try to define mortgage leads and then we will proceed further. This article will provide you with all the basics that you need to know about exclusive mortgage leads with its advantages and will help you identify the differences between exclusive mortgage leads and Non-exclusive mortgage leads.

Mortgage is generally defined as a method of using property as security for the payment of a debt. Many mortgage lead generators are available in the market either online or offline to help mortgage consumers to pay their debt. So, the mortgage consumer will browse through the net for internet mortgage lead generators using search engines. By filling up a normal mortgage form, the mortgage consumer’s details will be passed on to the mortgage lenders who are willing to lend loans.

The mortgage lenders will then sort those leads and get in touch with the mortgage consumers for loans. Among the various mortgage lead generators available nowadays finding the right place really would be tiring. But it is advisable to go through many companies offering mortgage leads and then settle on one reputed mortgage lead generator and mortgage lender.

The true definition of exclusive mortgage leads is defined as the leads that are only sold once to a mortgage lender. When mortgage consumers buy mortgage leads on exclusive basis, the same leads will not be sold to any other mortgage lead generators or mortgage lenders. A great writer once said “East or West, home is the best”. It is human nature that all of us would like to own a beautiful home. For some it’s easy but to most others it may seem to be the ripe grapes. Hence the prime motive of these mortgage lead companies is that, they will help those disabled to fulfill their dream.

In common, when a prospective homeowner approaches a mortgage lender for a mortgage loan, she will be asked to fill up a ‘Form of request’ for the loan, Known as the ‘Mortgage lead’. After carefully assessing the application and if it qualifies, the mortgage lender approves the loan. Since this is time consuming, people seek the help of mortgage lead generators to develop the lead and submit it to the mortgage lender. Hence in this way, the process of mortgage lead generator to send the mortgage lead form signed by the mortgage consumer to only one appropriate mortgage lender for mortgage loan is called as Exclusive mortgage leads.