1% Mortgage Loans... What's The Catch?

Author: Hartley Pinn

While there are several different types of 1% mortgage loans, there are really only two major keys to winning with a 1% mortgage loan.

The first key is to make sure the loan is set up correctly from the beginning.

And the second is to make sure you are using the loan correctly to gain the most benefit.

First, let's talk about how the loan works. Then we'll get into how to set the loan up correctly so you can reap the financial rewards these mortgage loans have to offer.

To start with, 1% mortgage loans have payment options. Each month when you get your mortgage statement you will have the option to make a 30 year fixed payment, a 15 year fixed payment, an interest only payment and a minimum payment at 1%.

Although you are given several payment options, you should only select the 1% minimum payment.

Why?

Because if you wanted to make a 30 year fixed, 15 year fixed, or interest only payment, you would be better off getting that type of loan. Typically, these payments are higher with a payment option mortgage loan.

If you select the 1% minimum payment your first benefit will be a significant monthly payment reduction. Your mortgage payment will likely be cut in half. Of course, this is a pretty attractive first benefit for most home owners.

To compound the effectiveness of selecting the 1% minimum payment you should save what you save. For instance, let's say you refinanced your home with a 1% mortgage loan, paid off all your credit cards, and reduced your monthly payment by $1,000 a month.

Now, if you save that $1,000 a month for yourself instead of giving it to your creditors, you will have $60,000 in cash at the end of five years - And that's with a zero percent return.

Here's the second benefit to selecting the 1% minimum payment option:

Tax savings.

If you make an interest only payment your mortgage balance will stay the same. If you make a 1% minimum payment you are actually paying less than interest only. Therefore, you are creating deferred interest which makes your mortgage balance increase each month. Before you freak out, keep in mind that deferred interest is mortgage interest and is therefore tax deductible.

Let's say your home is going up in value $2,000 a month. The 1% mortgage loan will allow you to take a small piece of that appreciation, say $500 a month, and turn it into a tax deduction.

So you are taking a small piece of your equity each month and turning it into a tax deduction. If you did not do this, all of your appreciation would be locked up in equity.

Equity is terrific and is certainly one of the many benefits to home ownership. But investing in equity will get you a zero percent return.

No one is going to cut you a check each month for the equity in your home. As a matter of fact, if you wanted to get the equity out of your home you would have to sell your home or get a loan. And you better qualify or you will not be able to get a loan.

So why not take a small piece of your equity each month, turn it into a tax deduction, and at the same time save $1,000 a month for your self? You will still have plenty of equity but with a 1% mortgage loan you will have cash AND equity.

If you do this for any length of time you will come out way further ahead financially than if you did a regular 30 year fixed or an interest only mortgage loan.

By the way, if the deferred interest is a concern, try making bi-weekly payments. Making a bi-weekly payment will reduce, and in some cases eliminate the deferred interest all together. Which means your mortgage balance would not increase.

How to set the loan up correctly:

1) The 1% payment option on these loans is only available for the first five years. But you could actually keep one of these loans for 30 or 40 years. If you select a 40 year loan your monthly payment will be lower but the payment options will not last for five years. The name of the game is to keep the 1% payment for as long as possible. So get a 30 year amortization.

2) The 30 year, 15 year and interest only payments are tied to an index. Select a slower moving index like the MTA (Monthly Treasury Average) instead of a faster moving index like the Libor (London Inter-Bank Offered Rate).

So how can you lose with a 1% mortgage loan?

Answer- depreciation.

If homes in your area are rapidly going down in value, deferred interest could cause you to become upside down in the home.

But if your area is experiencing a 3% to 5% rate of appreciation and you save what you save by making the minimum payment, a 1% mortgage loan can have an incredibly positive impact on your financial future.

For more information about 1% mortgage loans and other mortgage related topics, please visit:

http://Mortgage-Training.Mortgage-Leads-Generator.com

Please feel free to reprint this article as long as the resource box is left intact and all links are hyperlinked.

Hartley Pinn has recently created the Mortgage Leads Generator Training Course to teach people how to make over $50,000 a month working part-time (10 to 15 hrs per week) as a mortgage loan officer.

About the author: As a top producing mortgage loan officer, Hartley Pinn has been actively testing, researching, and evaluating lead generation strategies since 1995.

Mr. Pinn has written several articles on the subject and has recently created the ""Mortgage Leads Generator"" Training Course to teach new and experienced mortgage loan officers how to generate a five to six figure monthly income while cutting their work schedule down to only 10 hours a week.

Get your business on the road to success with a commercial mortgage

Author: joanee

Has it always been your dream to get your name enlisted among Fortune 500's top business people? Do you have the acumen and the passion for your business and of course that perfect business plan, which is so crucial to any business' success? Yes? Then, what are you waiting for? Get started! Oops! There is one hitch. You don't have the money to buy the commercial property that you have your eyes set on.

Guess what! There is a solution to this and the name of the solution is commercial mortgage. A commercial mortgage is quite similar to a residential mortgage. It implies drawing out a loan to purchase a property for commercial purposes. The property may be a piece of land that you want to carry out constructions on later, or a factory, a retail store, or even an eating joint. But there is a catch. Whatever property you may buy, you have to pledge it as security for your mortgage. This gives your lender a legal claim on your property until you pay back the loan.

A commercial mortgage can not only be used to finance the purchase of buildings or land for commercial purposes but may also be used for buying business assets like plant or machinery.

A commercial mortgage may be availed for anywhere between 12 months to 25 years. You also have the option of choosing between fixed rate and variable rate mortgages. A fixed rate mortgage affixes your monthly installments, while a variable rate mortgage varies the amount that you have to pay on monthly basis.

A commercial mortgage proves to be a much favourable alternative than an unsecured business loan. The reason behind this is that commercial mortgages carry a lower rate of interest because of the security they bring along. But of course your own credit worthiness has a far deeper impact on the interest rate. An exceptionally good credit record is rewarded with a low interest rate while a poor credit score will make you suffer the repercussion of an exorbitant rate of interest.

Commercial mortgage seekers who have a poor credit score can take heart in the fact that there is an ever-budding market of sub prime lenders who exclusively deal in the business of lending to people who aren't blessed with exemplary credit scores. What's more there are a lot of online sites that allow you to apply online for an adverse credit commercial mortgage.

So, don't delay your dreams anymore. Avail a commercial mortgage and get your hands on that ever-elusive capital.

About the author: webmaster

http://www.seek.uk.com

Reverse Mortgage Refinance - A simple Guide

Author: Lendgo Editor

If you have already chosen reverse mortgage as your trusted partner in the mortgage refinance jungle it's a good time to explore in details the steps involved in securing reverse mortgage. Our simple little guide details the steps involved in getting a reverse mortgage. Be prepared and the entire process will go much smoother.

1. AWARENESS

Homeowner learns about the reverse mortgage program from a news article, advertisement, word-of mouth, etc.

2. ACTION

If necessary, homeowner seeks additional information by contacting a reverse mortgage lender or the National Reverse Mortgage Lenders Association.

3. COUNSELING

Homeowner seeks counseling from a HUD-approved counseling agency, or AARP-trained telephone counselor. Counseling is mandatory regardless of which reverse mortgage product you choose. Counseling is usually conducted face-to-face, unless you use an AARP counselor. The counselor provides supplemental information on reverse mortgages, determines whether you're eligible to get a reverse mortgage, and discusses other options that may be available to assist with your daily living. The homeowner will be given a certificate to give to the lender as proof they were counseled.

4. APPLICATION / DISCLOSURE

Homeowner fills out loan application and selects payment option: fixed monthly payments, lump sum payment, line of credit, or a combination of these. Lender discloses to homeowner the estimated total cost of the loan, as required by the federal Truth in Lending Act. Lender collects money for home appraisal. Homeowner provides lender with required information, including photo ID, verification of Social Security number, copy of deed to home, information on any existing mortgage(s) on property, and counseling certificate.

5. PROCESSING

Lender orders appraisal, title work, lien payoffs, etc. An appraiser comes to your home. The appraiser assigns a value to the home and determines the physical condition of the property. If the appraiser uncovers structural defects that require repair, the homeowner must hire a contractor to complete the repairs after the reverse mortgage closes.

6. UNDERWRITING

After receiving all pertinent information and data, lender finalizes loan parameters with homeowner (i.e., determining payment option, frequency of loan interest rate adjustments) and submits loan package to underwriting department for final approval. Currently, it can take anywhere from 4-8 weeks (sometimes sooner) to complete the underwriting of a loan package.

7. CLOSING

If the loan package is approved, closing (signing) of loan is scheduled. Initial and expected interest rates are calculated. Closing papers and final figures are prepared. Closing costs are normally financed as part of the loan. Lender or Title Company has homeowner sign loan papers.

8. DISBURSEMENT

Homeowner has three business days after signing papers in which to cancel the loan. Upon expiration of this period, the loan funds are disbursed. Homeowner accesses the funds in the form of the payment option selected. Any existing debt on the home is paid off. A new lien is placed on the home. The homeowner may use the loan proceeds for any purpose. During the life of the loan, the loan ""service provider"" disburses monthly payments to the homeowner (if this option is chosen), advances line of credit funds upon request, collects any repayments on the line of credit, and sends periodic statements.

9. REPAYMENT

Homeowner does not make any monthly mortgage payments to lender during the life of the loan. The loan is repaid when the homeowner ceases to occupy the home as a principal residence. The loan may be repaid by the homeowner or the heirs/estate, with or without a sale of the home. The repayment obligation can't exceed the home's value or sales price.

To find more information about mortgages and home loans , please visit www.lendgo.com

About the author: This article was written by an editor at www.lendgo.com - A consumer guide to home loan, credit card, credit repair, and credit reports. For more information regarding these topics simply follow the links: Mortgage Refinance - Credit Card

How To Buy A Home With A Reverse Mortgage

Author: Imtiaz.s

A reverse mortgage loan is very much like a home equity loan. First we'll look at the similarities between the two and then let's discuss how to buy a home with a reverse mortgage.

First a reverse mortgage is a lump sum payment or annuity that is paid from a lender or insurance company to supplement or provide income. As the homeowner you repay the mortgage obligation when you sell or vacate the residence. When you die your estate is responsible to pay back the loan. The amount owed will never exceed the value of your home. If the home is sold and the proceeds exceed the amount owed, the excess money goes back to you or in the case of your death, your estate.

Further, when you buy a home with a reverse mortgage it is not considered taxable income and does not affect Social Security or Medicare benefits.

A home equity loan on the other hand, is a mortgage loan that is secured by the residual equity in your home. To calculate equity, you subtract mortgage debt from your home value. Home equity loans allow a homeowner to make repairs or other home improvements, refinance other debt, or use for miscellaneous purposes. Unlike a home equity line of credit, a home equity loan is an amortizing loan.

When you buy a home with a reverse mortgage you are paid either a lump sum amount or annuity based on the amount of equity in your home. For example, a monthly payment of $1,000 for the next 120 months would be a 10 year monthly annuity.

Aside from programs which help you buy a home with a reverse mortgage there are various other types of reverse mortgages. One type is for homeowners who want to tap into their equity but not draw out the entire amount. Here an annuity or lump sum would be paid out. Another reverse mortgage program is a home equity conversion mortgage. Affiliated with FHA (the Federal Housing Administration) this program combines the features of a home equity loan and a line of credit. Here you receive a fixed payment and can also draw on a credit line for additional cash.

The buy a home with a reverse mortgage program uses the new home as a source of repayment. You make a down payment and use the reverse mortgage loan for the rest of the home's purchase price. You repay the loan with interest and other financing costs, when you sell the home, no longer use it as a primary residence, or in the case of your death, your estate would cover the outstanding loan. Most types of homes are eligible.

Tremendous growth in the housing market over the last few years has given many homeowners a considerable boast in equity. As a result, some of these homeowners are now looking to buy a home with a reverse mortgage.

Take for instance, the homeowners who purchased their homes in the early 1960's for a modest price and now in their retirement years find their home has doubled or even tripled in value.

With this kind of equity to play with many homeowners are looking to buy a home with a reverse mortgage. This could be a country home or a cottage property. Or, the funds could even be used for luxury vacations, recreational vehicles, boats - you name it!

If you were to buy a home with a reverse mortgage you would be able to pay cash for the second 'vacation' home while continuing to live in your primary residence for as long as you wish or are able. Once you die, your primary residence would be sold to pay back your reverse mortgage loan, while the second home would become part of your estate.

To participate in these reverse mortgage programs, you and any co-borrowers must be at least age 62. In order to buy a home with a reverse mortgage you also must have no mortgage debt on your home. Further there are usually no income requirements to participate in the above mentioned programs.

According to Fannie Mae, a positive feature of reverse mortgage programs is that you're never obligated for more than the loan balance or the value of the property, whichever is less; no assets other than the home are used to repay the debt. A reverse mortgage has neither a fixed maturity date nor a fixed mortgage amount.

If you're seriously looking to buy a home with a reverse mortgage it's important that you do your homework. Take the time to comparison shop between lenders. Seeking the advice of at least three reverse mortgage lenders is always wise.

About the author: for more info please visit http://www.premiumsecret.com

Mortgage Interest and Your Tax Liability

Author: Tony Robinson

As you begin your search for the perfect home, and you research your mortgage loan options, the tax consequences of a mortgage loan with mortgage interest doesn't ever cross the minds of most consumers. But as you decide which product you need, or think you need, the tax repercussions and benefits should play a role, even if it's a small one, in the final decision.

For many consumers, the first thought that's given to their tax return, and tax liability, comes from the mortgage lender. Quite often, mortgages are touted as being one of the best venues for reducing your tax liability at the end of the year. Yes, your mortgage interest payments will reduce your tax liability, but is that your ultimate goal? Is that why you're looking at mortgage packages? No. Your ultimate goal in choosing a mortgage is to pay for your home. Every situation in this case, and this case would apply to the average consumer shopping for a mortgage loan, is probably not going to get that much benefit from the tax deduction that comes from their mortgage interest payments. The average consumer should first look at their monthly payment and choose a mortgage based on affordability, not tax liability.

The smart consumer will not allow the flashy ads displayed by many mortgage lenders to influence their mortgage loan decision. The smart consumer will examine the interest level, the term of the mortgage loan, the affordability of the monthly payment, and base their decision upon their ability to pay in relation to the mortgage that achieves their primary purpose: the payout of the loan.

You and I rarely consider the impact of any financial decision on itemized deduction statement; however many of those decisions do affect itemized deductions. Our itemized deductions and major portion of our tax liability? No. Do they contribute to a reduction in tax liability? Yes. The relativity of the contribution when contrasted to the required time in examining the actual benefit we derive from the itemized deduction calculations warrants the point mute. It's just not worth the effort. If you happen to be in your mid-40s and your purchasing your first home, I would suggest that you consult a financial adviser prior to making a mortgage decision; however most individuals in their mid-40s would already realize the benefit of a financial adviser. A young couple purchasing their first home would truly benefit from the interest deduction, not to the extent however off more than $40-$50 of the bottom-line for their tax liability. As you age, and your way to earning power increases, the benefit of the itemized deduction decreases. Does the average person understand how tax is configured? No. The only person who can truly enlighten a consumer would be a tax professional, and many average individuals would spend more money in the determination of the benefit than they would reap.

The new guy on the mortgage loan law, known as the interest only mortgage loan will bring the greatest benefit to the consumer. The interest-only lawn in the amount of interest you can deduct on your tax return are one and the same, but does the benefit of the mortgage interest deduction outweigh the added expense of an additional five years on the mortgage loan?

What about the mortgage loan refinance? Any equity you remove from your home in the form of cash that can be used to pay down or pay all high interest credit card accounts will transfer a nondeductible expense to your deductible expenses. However you should remember the trade-off you now owe more against your home, and you have used your equity reserves. Was the deduction worth the trade? Many times the answer is no. For many consumers, paying off high-interest credit card debt only increases the probability of additional credit card charges. In other words, not only have use your equity, you've returned to high-interest debt.

Prior to a final decision of your mortgage along product, take a moment to review your tax situation. Each situation is unique. The lower your income, the greater the benefit, but rarely is the benefit worth the cost. Behold, the Tax Man, cometh.

About the author: Tony Robinson is a Real Estate Investor, Webmaster and International Author. Visit http://www.ezy-mortgage.com/ for his tips on mortgages.

Trendy Indiana Mortgage Refinancing and Second Mortgage Programs: A Brief Review

Author: Chris France

The combination of rising interest rates (although still historically low) and rising home prices has caused the robust mortgage market to slow from its record pace. This has motivated Indiana lenders to either introduce creative new loan products or to more aggressively market existing products. If you have not shopped for a in a while, you will find numerous new products from which to choose. Following is a brief review of some of the new and popular products available today.

Interest Only - With this loan program you are paying only the interest on your Indiana mortgage and are not paying any principal. This reduces your monthly payments and can allow you to afford a larger home or save more money on a mortgage refinancing or home purchase loan. If used carefully, you can also free up cash flow that can be used for investment purposes or to pay down high interest rate debt.

Negative Amortization - These are often marketed using the phrase ""option arm"" or ""choice mortgage"". With this loan type, your payment does not cover all of the monthly interest. Often, your mortgage balance is increasing and the underlying interest rate is usually a monthly variable rate. These loans are used to dramatically reduce your monthly payment and can be used for an Indiana mortgage refinancing or home purchase. This program should be reserved for the more sophisticated borrower and it is important that you understand the terms of the loan. Click here for more information about Indiana Mortgage Refinancing and Indiana Second Mortgage Solutions .

40 Year Amortization - Rather than paying off in 30 years, this loan pays off in 40 years. As with the Negative Amortization and Interest Only, this program is used to reduce your monthly payment.

Stated Income / Reduced Income Documentation Loans - There are a variety of these loan products available, but they are primarily used to for individuals with difficult to verify income. These can be used for Indiana Mortgage Refinancing, Indiana Second Mortgages and Home Purchase Loans . As lenders have become more comfortable with credit scoring, these products have become very popular. Essentially the lender is relying on the credit score for their loan decision. They realize that borrowers with higher credit scores will pay their mortgage and they do not need to fully verify their income.

ALT A Programs - The ""ALT"" is short for Alternative and the ""A"" refers to the borrower category. These are categories of mortgages that fall outside the more stringent guidelines of Fannie Mae and Freddie Mac. Generally these mortgage refinancing programs allow for more flexibility with regards to loan to values and income documentation requirements and can be used for home purchase, mortgage refinancing and second mortgages.

Hybrid Second Mortgages - Traditionally, your options for an Indiana second mortgage were either a fixed rate, fixed term loan or a variable rate, open ended line of credit. Now, you can have the benefit of both. You can start your second mortgage as a variable rate home equity line of credit and then lock in all or a portion of it to a fixed rate for a fixed number of years.

About the author: Chris France is a professional mortgage planner with over 10 years lending and banking experience. For additional questions or comments about this article, please contact Chris France at American Mortgage Funding Corp or christopher.france@branch.cfic.com or 1-800-943-9472.

The Bad Credit Mortgage Company - How To Avoid Predatory Mortgage Lending Companies

Author: Carrie Reeder

One of the most important parts of choosing a bad credit mortgage company to work with is avoiding predatory lenders. Predatory lenders run smooth operations, and specialize in taking advantage of those who are inexperienced or think that they have few or no other loan options. However, thoughtful and informed mortgage company shopping will go a long way towards avoiding predatory lenders and the hook, line and sinker methods they employ.

Watch The Hook - If a bad credit lender is trying to hook you - making first contact and aggressively selling their services - be suspicious. When avoiding predatory lenders, you'll have to be alert, as some use more subtle types of hooks than the blatant hard sell. They may sprinkle their conversation with such phrases as 'bad credit, no problem,' and make it all seem very easy. A predatory lender may try to rush you, perhaps pushing you towards a deal, saying it may not be available much longer. They are interested in making their fees, and you keeping the house is not important to unscrupulous bad credit lenders. In fact, it's better for them if you don't.

Beware of The Line - Knowledge is the best way of avoiding predatory lenders when seeking a bad credit lender. Predatory lenders count on their victims not having a lot of knowledge about the lending process, legal or financial. If you do a little research prior to seeking a lender, you have less of a chance of being fooled by some of the lines predatory lenders use. You won't be lured into a loan that is too high under the premise that you'll be able to refinance after a year or so for a lower rate. A legitimate new home loan bad credit lender will advise you against an arrangement that consumes more than 30% of your monthly income. You'll know to read every word of the contract to make sure that it matches exactly what you were told. With research, you'll know what common lending rates and fees are and be able to compare with clarity, rather than be taken a smooth line.

Avoid The Sinker - Often, predatory lenders prey upon those that they consider to be in a financially precarious position. They prey on people who feel as though they don't have a lot of choices when it comes to lenders. Unprincipled new home loan bad credit lenders take advantage of these situations by offering arrangements that court loan repayment failure. These include balloon payments, a large sum due at the end of the mortgage, prepayment penalties, which punish the borrower for paying off the loan early, generally through sale or refinancing, and mandatory arbitration clauses, which do not permit you to bring a complaint against the lender to court.

When it comes time to shop for a bad credit lender, do your research first. There are numerous resources available to help you in avoiding predatory lenders. And, remember, no matter how bad your credit may be, you always have a choice. Making the choice to wait is always better than accepting a predatory loan arrangement.

About the author: View our recommended lenders for Ba d Credit Mortgage Loans .

Last Year's Great Mortgage is This Year's Disaster

Author: Charles Essmeier

The market for real estate in the United States seems to have slowed down from the fever pitch of just a year ago. There are a number of reasons for this; rising interest rates and sticker shock among buyers are just two of them. Whatever the reasons, sales of homes seem to be slowing, and that trend will probably continue in the near future.

That being the case, several types of loans that have recently been very popular have suddenly become poor choices of financing for those buying homes. While some types of loans, such as the 30 year, fixed-rate mortgage, are usually safe choices, others, such as the interest-only adjustable rate mortgage (ARM) and the Option ARM have suddenly become not only poor choices, but potentially dangerous ones, as well.

The interest-only ARM was a great choice just a year or two ago among real estate investors. It permitted the buyer to make low monthly payments for the first few years of the loan that compensated the lender only for the interest that accrued on the loan. Payments did not apply even one cent towards reducing the principal. After a period of 3-5 years of interest-only payments, higher payments that applied a portion to the principal would kick in. Buyers, especially investors, weren't too worried about not paying towards the principal, as prices were rising so rapidly that the buyers were building equity in the property just the same. That is no longer the case, and anyone who takes out an interest-only mortgage today might find that, in five years time, he or she owns just as little of the property as they do today.

The Option ARM is even worse in today's climate. This somewhat flexible loan allows the buyer to make four choices each month regarding how much to pay - a ""minimum"" payment, an interest-only payment, a payment based upon a 30-year repayment schedule and one based upon a 15-year repayment schedule. Those who really cannot afford the house in question most often use this type of loan. The touted ""minimum"" payment, which seems quite small, is really misleading. That payment not only contributes nothing towards the loan principal, but it doesn't even cover that month's accruing interest on the loan. After making a minimum payment, the outstanding balance on the loan will actually increase . When prices were going up, this type of loan was seen as bullish. With house prices stabilizing, and even beginning to fall in some markets, this type of loan will leave many borrowers owing more than their homes are worth.

As times change, so do the needs of homebuyers. At the moment, it seems that housing prices are either stabilizing or falling. That being the case, a loan designed for people in a market where prices continually go up is probably a bad choice today.

About the author: ©Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including HomeEquityHelp.com, a site devoted to information regarding mortgages and home equity loans .

Mortgage practices in UK

Author: Prince Mathew

Mortgage brokers help you pick the right home loan from the thousands on offer. Brokers can offer guidance on products from a range of providers. They search the market for you and do all the secretarial groundwork in setting up the loan.

Having pounds 20,000 for a pounds 160,000 home; you need a loan of 120,000. If you are with a percentage broker they may end up charging anything from pounds 400 to pounds 2500 for their service.

Some brokers do not levy fees and earn from procreation fee from the lender whose products they advocate and you buy from.

Many fee-charging brokers also receive commission and hence your fees get rebated.

For special deals like self-certification, buy-to-let or mortgages for people with poor credit records, the fee is more as more endeavor is required.

Fee based brokers may seem appealing but they have their critics. Commission brokers again can be your choice. Whether you are offered the best product for your need or the product, which offers them the best commission, is a question you need to consider.

Some brokers work for a panel of lenders and hence you get limited deals.

The best scenario for you would be to provide the lender with all the information and they come back to you with different options to choose from.

About the author: Prince Mathew is a freelance writer of Kentmortgagepractic e , Dealing with Kent Mortgage Service you will be offered courteous and personal service that you expect from professional brokers in Kent.

Low Interest Rate Mortgage Refinance Loan - Benefits Of A No Obligation Refi Quote

Author: Carrie Reeder

Getting a low rate refi loan may decrease your monthly mortgage payments by a few hundred dollars. For this matter, homeowners consider obtaining the lowest possible rate a primary concern. Before accepting a refi offer, researching and comparing offers are essential.

Benefits of a Low Rate Mortgage Refi Loan

If you are hoping to save money on your mortgage payment, refinancing your current mortgage is the solution. Refinancing is not ideal for everyone. Prior to applying for a new loan, take into consideration current mortgage rate, length of time you plan on residing in your home, and credit score.

If your current mortgage rate is comparably low, perhaps one percentage point higher than current averages, you may not realize huge savings from a refinancing. Moreover, if your credit is less than perfect, some lenders may not offer superb low rates.

Secondly, refinancing benefits homeowners who plan on living in their home for more than seven years. If you plan to move in a few years, the closing costs and fees paid will outweigh the savings.

Savvy Buyers Shop Around

If contemplating a refinancing, shop around for the best loan package. No obligation quotes are offered by various lenders. You have the option of choosing a local lender or an online lender. Before making a decision, request a quote from your present mortgage company. This is beneficial for two reasons. One, a good payment record has been established. Two, present lenders may waive some fees. Although current lenders may remit a great offer, do not make an immediate decision. First, obtain quotes from three additional lenders.

What are Online No-Obligation Quotes?

If you request a quote from an online lender, the lender will assess your stated credit rating, income, desired loan amount, and submit an estimated loan offer. Quotes include terms, interest rate, closing costs, and estimated monthly payments. This way, you can review several loan options before finalizing your decision. After acquiring three additional quotes, compare all four lender offer's side-by-side. Pick the lowest rate mortgage refi loan. Lastly, complete an online application. At this time, the lender will review your credit report and offer a final approval notice.

About the author: Carrie Reeder offers advice about Mortgage Refinance Loans Online.

Bad Credit Home Loan Mortgage Services - 3 Crucial Things To Watch Out For

Author: Carrie Reeder

When you are seeking out bad credit home loan mortgage services, there are 3 crucial things to watch out for. Predatory lenders are common among bad credit home loan lenders so it's important to watch for signs of a shady lender.

However, if you take your time and pay attention to details, you will be able to find the best mortgage services for your individual financial situation.

Choose a Reputable Lender - Be sure that you are dealing with a reputable company. There are things that should put your guard up right away. Watch to see if the broker is aggressively pursuing the opportunity to give you a loan - particularly if they contact you first - beware. The old adage does apply, and if they offer services or terms that seem too good, and do not conform to the norm, watch out. Carefully research those offering bad credit home loans, checking up on their business reputations and getting a feel for what services and terms are typical.

Read The Fine Print - The next of the 3 crucial things to watch out for has to due with having a clear understanding of the terms and conditions offered by those providing bad credit home loan mortgage services. There are many predatory lenders out there and understanding how they operate will help you to steer clear of them. Outrageously high interest rates and fees, balloon payments - a large lump sum due at the end of the agreement - and a loan amount that is based on the value of the house, rather than on your income are just a few of the signs that you may be entering into a predatory loan, one in which they are betting on profiting from your failure, one that they helped to design.

Try To Stay Logical - Perhaps the most important of the 3 crucial things to watch out for, the one that will help you to avoid the vast majority of the negative experiences that can happen when making use of bad credit home loan mortgage services, is your own desire. Be careful that your desire to own a house does not override your common sense, making you vulnerable to predatory lenders. Honestly assess your income and what you can afford, being sure to leave room for the unexpected - such as temporary unemployment due to sickness or layoff. Leave some room in your budget for savings that may carry you through a temporary difficulty.

As long as you invest time and effort in careful research of potential providers of bad credit home loan mortgage services and keep these 3 crucial things to watch out for in mind, the odds are that you will find the right services for you. Bad credit home loan mortgage services can help you achieve your goal of homeownership. Being aware of the 3 crucial things to watch out for can help you to make loan agreements that will let you keep that home you've worked so hard to buy.

About the author: View our recommended lenders for Po or Credit Mortgage Loans .

Home Mortgage Loans For People With Bad Credit - Pro's And Con's Of Interest-Only Loans

Author: Carrie Reeder

Buying a home with poor credit is just as easy as buying a home with perfect credit. Years ago, many people with a low credit rating believed homeownership was unattainable. Fortunately, there are various loan programs designed to help people with low income, bad credit, and no down payment purchase a house. Included among these programs are interest-only loans.

What are Interest-Only Mortgage Loans?

Interest-only mortgage loans became popular in the early 2000's. The concept of interest-only loans is very unique. Ordinarily, monthly mortgage payments consist of a portion of the payment being applied to the principal balance, and a portion applied to the interest. In order to payoff a mortgage in 15 or 30 years, a specific amount of money must be paid each month.

On the other hand, if you obtain an interest-only mortgage loan, you pay only the interest for the first few years. Interest-only periods vary. Homeowners may opt for a three, five, seven, or ten year interest-only loan. After the interest-only period ends, the homeowner must begin making payments toward the principal and interest.

Why is an Interest-Only Loan Beneficial?

If you live in a booming housing market, an interest-only loan may be your only option for buying a home. Many are attracted to these loans because the initial mortgage payments are low. For example, a $200,000 conventional loan has a monthly payment of about $1200. With an interest-only loan, the mortgage would be about $800 a month. Hence, if you are buying in an overpriced market, affordable living is within reach.

Pitfall of an Interest-Only Loan

Once the interest-only period ends, you still owe the original loan amount. When homeowners begin making payments towards the interest and principal balance, mortgage payments may increase 40%. Most homeowners are unable to afford a mortgage increase. If you plan on living in your home for several years, an interest-only loan may not be a good option. On the other hand, if you earn a sizeable income and can afford a higher mortgage, you may benefit from this type of loan.

Another option involves selling your home before the interest-only period ends. If home values in your area have increased significantly, you may capitalize from the equity. However, if the housing market takes a nosedive and home values decline, you may be unable to sell your home.

About the author: Visit ABC Loan Guide for advice about mo rtgage loans for people with bad credit .

Refinance & Mortgage Tips: Down Payment From 401k Or 403b Retirement Annuities

Author: Tristan Hunt

If you are purchasing a home and have a substantial portion of your assets inside of a retirement account such as a 401K, 403B or other retirement product or annuity, you may choose the increasingly popular option of tapping those funds to make a down payment on your new home. Like any other accounts you may have in your name, such as brokerage accounts and bank checking, savings and money market accounts, most popular retirement accounts qualify as assets to be counted toward your ""reserves"", a measure used by mortgage lenders to determine how many months of payments you must have in order to serve as a buffer covering payments you might miss if there were any interruption of your income.

Retirement accounts such as 401(k) or 403(b) annuity accounts are generally administered or sponsored in whole or in part by your employer. In addition to serving as excellent documentation of your earnings and savings, your 401K or 403B accounts can be used in a variety of ways to help finance your new home purchase. Depending on the specific restrictions applied to your account, you may have the option of withdrawing money directly from the account or ""borrowing"" money in the form of a loan (against your own funds) which is repaid at a generally low rate of interest. Regardless of whether you cash money out of your account or take a loan against it, be sure to thoroughly document any details of the transaction, including any withdrawal or loan application paperwork, demand drafts, cashier's checks, deposit tickets, etc. for the purpose of substantiating this source of funds to your lender.

Lenders do treat down payment money from retirement accounts differently from program to program and state to state, sometimes from case to case. In particular, borrowing money in the form of a loan may increase what the lender's perceives as your monthly debt obligations, because even though you are borrowing money from your own account, you are still obligated to make a payment every month which you wouldn't have to make otherwise, and lenders will often consider this to be detrimental to your qualifying DTI or Debt to Income Ratio, making it harder to borrow as much money as you may need. On the other hand, cashing out any type of retirement account will always create a taxable event and sometimes also a penalty fee, which generally accounts to more than the nominal interest rate common to the loan option. Speak with your loan officer about the requirements of your individual program and weight the options with him/her or another trusted financial professional.

You may also consider speaking to your employer about any down payment assistance programs which may be available to you as part of your benefits package. These can come in many forms, but it is important to clarify with your employer that any down payment assistance granted does not amount to a loan and that there is no expectation of payment. Why would an employer want to help you make a down payment? Call them old fashioned, but most companies do want their employees to stick with them, and if your employer helped you achieve ownership of your dream home, how would you feel about them? As with the 401K, 403B or other retirement account options, down payment assistance from your employer should be documented in detail and all copies of communication, checks, deposit tickets and statements of account, along with signed records stipulating that the funds are given freely and not to be repaid, should be kept for submission to your lender.

About the author: Tristan Hunt is a seasoned financial professional with a wealth of experience in the mortgage industry, advising clients on debt consolidation, refinancing & investor loans . Website: http://www.RefinanceOne.net

Mortgage Interest and Your Itemized Deductions

Author: Tony Robinson

For the average consumer who has managed to acquire credit card debt, automobile loans, and various other small debts, is the mortgage interest, especially with an interest only loan an answer to mortgage interest deductions and elimination of non-deductible interest?

What options does the average consumer have in accommodating the tax need in relation to the housing need? What about the interest only loan option on a new mortgage? Today's housing and mortgage market has seen a tremendous growth in mortgage packages, variety and amount. The mortgage interest deductible on the interest only loan option, once thought to have gone the way of the Edsel automobile, is back today and in use by the masses. The mortgage market has seen an unbelievable increase in the interest only loans from just a mere sliver of the market a few years ago, to around 25% of the market share today. That's huge growth, especially when you talk less than 5 years to experience that growth. What benefit does the mortgage interest (especially the interest only loan) bring to the table, and does this benefit the homeowner as a taxpayer? This is one question the mortgage lender probably won't be able to answer for you, and one you probably won't think to ask. But you should, because it's one question that can make a difference to you and to your tax return and the amount of the mortgage interest that will actually provide you with a tax deduction.

The interest only loan and the amount of interest you can deduct on your tax return are one and the same if your income levels are low enough; the concern for the average consumer is the total dollar value they get to take off their tax return. Quite often, the deductions for the consumer aren't enough to contribute to the bottom line, because the income level the percentage of deductible interest is calculated on is simply too high. Higher dollar amounts in interest will usually mean a greater possibility of a greater deduction.

That would be the only advantage to the interest only loan as far as the taxpayer is concerned, unless of course, they use the money saved from the interest only loan to fund a 401k, an IRA, or an MSA (that's a topic for a completely different paper). The mortgage interest and especially the interest only loan is sold to the consumer as a way to afford more house, pay off credit card debt, or provide a means to fund a savings of some kind, and that's true, it can be used for that purpose. And if you're considering paying off those high interest credit cards, the mortgage interest you're charged on the interest only loan is fully deductible, while the credit cards are not; a word of caution, however, make sure you don't turn around and use those credit cards again, putting yourself right back where you started from, just with a bigger interest payment and less house equity.

Why has the market experienced such growth? It's not totally related to the tax benefit; the home mortgages of today satisfy a common desire for the consumer: instant gratification of bigger and better. Such is the case when it's time to make those needed repairs, or house expansion. A second mortgage makes it possible to retain the same monthly mortgage payment, and still pull a lot of equity out of your home. This may sound like the ultimate solution, but is it really? It also adds to the amount of interest an individual can deduct at the end of the year; and if income levels are growing, the interest expense must grow in order to keep up. Now, this is a somewhat skewed way of looking at the benefit of a mortgage, but it figures right into the same scheme as the elimination of credit card debt and saving for 401(k) s as a valid reason to borrow money against your home. The mortgage and the resulting interest are great tools, when used by the right people, in the right situation. For the average consumer and long-term homeowner, unless you think a better deduction on your tax return is worth the forfeiture of equity in your home, you'd better think twice before re-financing with a second mortgage that generates more interest, but less equity.

About the author: Tony Robinson is a Webmaster and International Author. Visit http://www.tax-portal.com/ for his tax tips.

Advantages and Disadvantages Of A Reverse Mortgage

Author: Imtiaz.s

Betty and John, are in their mid-seventies and are currently weighing the advantages and disadvantages of a reverse mortgage as a way of freeing up some cash.

The couple purchased their home 45 years ago for about $14,000 since then home values have skyrocketed and recent single family homes in their neighborhood have been selling for a minimum of $160,000. Like Betty and John, if you're considering a reverse mortgage it's important to do some research prior to making a decision. You not only need to understand the basic principles of this kind of mortgage but you also need to look at all the advantages and disadvantages of a reverse mortgage.

Essentially a reverse mortgage is a loan that permits homeowners 62 years of age and older to borrow against the equity in their homes without having to sell it. Further, you don't have to give up the title or take on a new monthly mortgage payment.

A reverse mortgage loan is tax-free and needs only to be repaid when the borrower (or in the case of Betty and John, when the surviving spouse) dies or sells the home. At which time, the reverse mortgage loan must be repaid in full, including all interest and other charges.

When examining the advantages and disadvantages of a reverse mortgage it's also important to consider both the process and the related costs of obtaining a reverse mortgage.

Unlike a conventional mortgage, with a reverse mortgage, the homeowner (the potential borrower) must meet with a reverse mortgage counselor. References for counselors can be obtained from banks offering reverse mortgages or the U.S. Department of Housing and Urban Development (HUD).

The purpose of these meetings which may take place in person or on the telephone is for the homeowner to learn about reverse mortgages and discuss alternative options. It also helps you decide which kind of reverse mortgage may be best.

As well as exploring the advantages and disadvantages of a reverse mortgage, it's wise that the potential borrower, also compare costs between various lenders and request a Total Annual Loan Cost estimate for each.

Further to discussing the advantages and disadvantages of a reverse mortgage with a counselor, you also need to understand that there are certain costs involved in the reverse mortgage process. Costs may include application fees, closing costs, insurance, appraisal fees, credit report fees, and quite possibly a monthly service fee.

Remember too that since a reverse mortgage allows you to continue living in your home, you're still responsible for property taxes, insurance and repairs. If these payments are not maintained, the loan could become due in full.

A reverse mortgage may also affect eligibility for federal or state assistance as well as Medicaid. That said, any reverse mortgage money that is received is tax-free and does not affect Social Security or Medicare benefits.

The condition of your home is also a large part of the approval process. It must be structurally sound and in good repair. If it's determined that home repairs need to be done, the costs can also be financed through the reverse mortgage loan.

The total amount a homeowner can borrow all depends on the kind of reverse mortgage selected, how much equity is in the home, the loan's interest rate and most importantly, the age of the borrower. Typically the older a person is, the more they can expect to receive.

A borrower can receive reverse mortgage payments in one of the following ways: in a lump-sum payment; fixed monthly payments; a line of credit or a combination of any of the above. Most homeowners go for the line of credit option which allows them to draw on the loan whenever money is required.

About the author: for more info http://www.premiumsecret.com

Turning Disadvantages Of A Reverse Mortgage To Your Advantage

Author: Imtiaz.s

When it comes to a reverse mortgage, wise consumers weigh the advantages and disadvantages of a reverse mortgage prior to signing on the dotted line.

Let's start on a positive note, you could do what most borrowers do and opt for the reverse mortgage line of credit. Just think about how you would then be able to draw on the loan whenever money is required for daily living expenses, medical bills, prescription costs, home repairs, etc. A reverse mortgage could really enhance your retirement years including in-home care expenses in later years. Furthermore, your reverse mortgage income does not affect regular Social Security payments or Medicare benefits. And lenders cannot foreclose on the loan for the life of the borrower.

Okay, that's all well and good but how do I turn the major disadvantages of a reverse mortgage into a positive? It's all in the perspective. For every negative there is a positive to obtaining a reverse mortgage.

It's true a reverse mortgage loan may affect your eligibility for state and federal government assistance programs such as Medicaid but it also gives you an important financial cushion and does not (as mentioned above) affect your regular Social Security payments or Medicare benefits.

About the author: for more info please visit- http://www.premiumsecret.com

Mortgage Loan For Poor Credit - Secrets Revealed

Author: Bill Smith

The market for mortgage loan is a huge one. Pretty much anyone with good or bad credit can get a mortgage loan. Many of the mortgage companies are now opening up to people with bad credit in the past.

Many loan and mortgage lenders specialize in giving loans to the population with poor credit. If does not matter, how poor your credit it, chances are bright you will get a mortgage loan.

When credit is sub par, you will need to work harder to get the loan you deserve. In most cases, interest rates you pay on the loan will be higher. Hence, it is imperative that you call up at least a few mortgage loan lenders to get the best possible loan. Bottom line is poor credit cannot hold you down if you are determined to get the mortgage loan or a refinance loan.

You will be classified as having sub par credit or poor credit if you have a bankruptcy on your credit report. A Chapter 7 filing for bankruptcy will lessen the chances of a mortgage loan compared to a Chapter 13 filing. A foreclosure lawsuit is another important entry in your credit report. It can also have a negative impact on interest rates being charged on your mortgage loan. If you have a debt collection agency chasing you, it gets noted in your credit report and this will also influence you chances of getting a mortgage loan. Any judgement against you will result in a poor credit.

Your poor credit perspective is actually given by a score called as FICO score. This score is stored with your credit file referred to by your creditors. The higher you FICO, the better are your chances of getting a loan with the rates you dreamt of. A grading of A, B, C and D is given based on your FICO score. A grade of D is classified as a poor credit rating.

It is best advised to contact multiple mortgage loan lenders and get the best quote possible when dealing with poor credit.

About the author: Jack Harris is a refinance loan and mortgage loan specialist.

Buying A House After Bankruptcy - Finding A Bad Credit Mortgage

Author: Carrie Reeder

Buying a house after a bankruptcy takes a little research to find a bad credit mortgage with reasonable rates and terms. But it can be done with the help of online lenders. By comparing financing offers, you can quickly find a home loan with good terms.

Finding The Right Mortgage

With a credit score less than 650, you will need to apply for subprime financing with rates slightly higher than conventional home loans. Surprime financing is offered by traditional lenders, as well as specialized bad credit lenders. To get the most borrowing power, choose an adjustable rate or interest only mortgage. To further reduce your rates, plan on a down payment of 20% or more. Large cash reserves or a low debt ratio will also help you qualify for lower rates. But researching lenders is the surest way to find the lowest rates. Remember too that with subprime lending, you don't pay for private mortgage insurance, even with less than 20% equity.

Before You Start Your Search

Before you start your subprime mortgage search, get a copy of your credit report. Check it for accuracy of your bankruptcy, and then use it to get loan quotes. That way lenders won't have to access your report and further lower your credit score with unnecessary credit inquires.

Securing Mortgage Terms For The Future

When you start comparing mortgage offers, make sure the terms are favorable for your future financial goals. If you plan to refinance when your credit score improves, makes sure there aren't any fees for early payment. This is also a benefit if you move before the loan is paid off. Another important factor to consider are closing costs, especially if you are planning a future refi. Paying extra thousands for a slightly lower rate doesn't make sense if you don't keep the loan for seven years or more. Even with the lower interest charges, you won't see a savings. So take a look at the APR for a general idea of the total loan costs. But then look at the breakdown of the closing costs and interest rate to find the financing that works best for you and your financial situation.

About the author: View our recommended po or credit mortgage lenders online.

The Advantages And Disadvantages Of Online Mortgage Lending

Author: Imtiaz.s

Online mortgage lending appears to be the way of the future. However, there are some important things to consider when dealing with online mortgage lenders.

Let's start with the advantages of online mortgage lending.

Online mortgage lending is a growing field that is starting to seriously compete with traditional 'in person' lenders. The process is relatively easy. The important thing to remember is to make sure your know the ins and outs of any and all online home mortgage loans prior to submitting your personal information.

In some cases, you'll find online mortgage lending fees can be much cheaper than traditional 'in person' lenders.

Further, when it comes to online mortgage lending you may discover a greater range of mortgage loan programs available. Among the highlights of these programs may be lower rates of interest and flexible repayment terms.

Also, borrowers with a bad credit history may find online mortgage lending to be the answer to their prayers. In most cases, web-based lenders offer more alternatives to those with less than desirable credit ratings.

About the author: for more info please visit- http://www.premiumsecret.com

Mortgage Forum:The Mortgage Lender

Author: David Smith

When the going gets tough and the tough just keeps on going, mortgage lenders may seem like godsend angels at your doorstep. Mortgage Forum

Due to some unavoidable circumstances, more and more people are getting deeper into debt. As a result, many people are seeking alternatives for dealing with their financial problems, and ways they can minimize and consolidate their expenses. One way to do this is by securing a mortgage.

Basically, a mortgage is a legal record or document designed to protect the mortgage lender against delay of payment or the debtor's refusal to pay the debt.

A mortgage lender can be any financial institution or even an individual who has the capacity to lend money to the borrower. There are, actually, various types of mortgage lenders. The key in selecting a mortgage is to choose the right one that fits your needs. Look for a mortgage that has the capacity to lend you the right amount of money at a reasonable rate of interest.

The most common and well-known mortgage lender is the bank. You can opt to choose the bank as your mortgage lender for reliability, convenience, and nippy approval on loans. Banks generally work faster in processing your loans as compared to other mortgage lenders. Banks are also a one-stop center for all your lending needs.

You can also secure a mortgage through a mortgage broker. A mortgage broker is a type of mortgage lender that usually acts as a middleman and finds the appropriate loan that best fits your needs.

Finally, you may want to consider credit unions and thrifts as other types of lending institutions where mortgages can be secured.

Whatever type of mortgage lender you choose; your credit history will have a definite influence on the placement of a mortgage and availability of money.

Whichever form of mortgage you choose, be sure to do your homework before making a final decision. Get recommendations from friends or relatives who know reliable mortgage lenders. As a final step in the process, be sure to check the mortgage lender's credentials so you can be certain that your financial transactions will be secure and dependable.

You really have to pay more attention on these things. After all, it's your money that's at stake if things will not go on smoothly. So, it would be better to be sure with your mortgage lender even if it means you're the one who is asking for favor.

About the author: Visit the Mortgage Forum Today http://www.emortgageforum.com to find more information! Mortgage Forum

Negotiate and Mortgage Rate Compare Says The Better Business Bureau

Author: Imtiaz.s

You should always mortgage rate compare to find the best mortgage to meet your needs before refinancing. Mortgage rate compare by contacting at least three different mortgage lenders. Despite your reason for refinancing - lower monthly payments or to build equity faster, three lenders are better than one.

Record numbers of homeowners are jumping on the refinancing bandwagon in an effort to lower their mortgage interest rates. According to the Better Business Bureau (BBB) refinancing is not for everyone and or those that decide that it is, it's best to mortgage rate compare before signing on the dotted line.

Industry experts claim that homeowners are refinancing in record numbers. While this is all well and good for some it may not be for others. It's true with a good refinancing package you can potentially shave hundreds of dollars off your existing mortgage but it isn't for everyone.

The Better Business Bureau recommends homeowners mortgage rate compare and take the time to negotiate the best deal possible. The association however also suggests that homeowners should proceed with caution when it comes to dealing with some lenders.

About the author: for more info please visit- http://www.premiumsecret.com

1st And 2nd Mortgage Refinance Loan - Consolidate 1st And 2nd Mortgages Into One Low Payment

Author: Carrie Reeder

Refinancing both your first and second mortgages will result in one low monthly payment that could save you thousands in interest charges. By combining both mortgages, you qualify for lower rates than if you refinance separately. You can see a significant savings with your second mortgage refinance, which is often several points higher than your first mortgage rates. You will also save on application fees and other closing costs.

Strategies To Lower Your Mortgage Payment

You have a couple of options to lower your mortgage payment when refinancing. The first choice is to find a low rate mortgage. So even if you choose the same length for your loan, you will still see a savings in your monthly mortgage bill. Adjustable rate and interest only loans will give you the lowest payments, at least at the beginning of your home loan. But a fixed rate loan can also give you reasonable rates with security that they won't rise in the future.

The other option is to extend your loan term, especially in the case of your second mortgage which usually is for five to ten years. By consolidating your loans to a thirty year loan, you lengthen your payment schedule for principal, so you have a smaller payment. However, your interest rate and charges will be higher than with a shorter term.

Getting The Best Loan

Once you determine the type of loan and terms you want, do your shopping for a good lender to save even more money. Lenders will vary in how much they charge for closing costs and interest rates. The APR will tell you how loans compare overall, both in terms of rates and closing costs.

But if you are planning to move or refinance again in the future, then be wary of paying high closing costs. Even if they secure you a lower rate, you will only see a savings if you keep the mortgage for several years.

Don't base your lender decision based on posted loan rates. Ask for a personalized loan quote based on your general information. With more accurate numbers, you can make an informed choice as to who has the best financing for you.

About the author: View our recommended lenders to choose the best mortgage refinance company for you.

Buying or Selling, is the Mortgage Your Only Option?

Author: Tony Robinson

Today, thanks to the ever-increasing use of the internet to seek out homes for sale, and the increased participation of homeowners in the buying and selling process, there is greater interaction between the buyer and seller. Not only is this good for public relations, it is also an excellent opportunity to explore other funding options, for the buyer and for the seller.

It is normal on the part of the buyer to assume their only option when purchasing a home is to obtain a mortgage, but the traditional lending process. This is not always the case, and today more than ever, buyers and sellers are coming together with creative and accommodating ways to affect the purchase, or sale, of the home depending upon your status as buyer or seller.

Quite often, individuals interested in purchasing a home lack the 20% down payment often required from the lender. Provided the seller has established equity of the home, there are other options for the buy and sale agreement. Seller financed mortgages are the most common alternative mortgage option exercised; seller financed mortgages however, are not the only option that can be considered. In this article, were going to take a look at some of the alternative mortgage options that are rarely exercised, but that do provide tremendous benefit to the buyer and seller.

As a seller, the conditions must exist that allow you to offer the buyer alternative options. Your mortgage balance must be considerably less than the fair market sale price or your hands are basically tied. Imagine a scenario: you're ready to sell your home, the buyer is ready to purchase your home, and they simply do not have a 20% down payment. What they do have is a 5% down payment, and the desire to work with the seller and the mortgage lender. You're asking price for the home is $80,000 and the appraised value of the home is $85,000; your existing mortgage is $50,000 and the lender requires the proposed buyer to provide a $16,000 down payment. How can a solution be reached? If you, as the seller are willing to take a second lien on the property, there is a workable solution. The fact that the home appraises for more than the asking price, automatically provides the buyers with a $5,000 level of equity, so they only need $11,000 more to reach a 20% down payment. They have $4000; in order to accommodate the buyers, you could accept $74,000 in upfront mortgage money from the lender, and take a second lien on the $6000 difference. This method works only if you're willing to take the second lien, and the buyers are credible and reputable individuals.

Taking second liens or second mortgages are increasing in popularity as a means to sale increasing value real estate in today's rapidly expanding market. There are other spins offs from the basic formula described, however the scenario above is the most common and provides the buyer and seller with the basis for expanding with creative add- ons. Of course, the seller financed mortgage is still the meat and potatoes of the alternative financing industry. How does the seller financed mortgage work? Generally, it works in this manner: if the seller owns the home outright he or she may choose to finance a mortgage for the buyer, and set up an amortized loan. Thanks to the readily available personal computer, loans can be constructed that would have only be available via an accountant or lending institution, 20 years ago.

Of course, how you decide as a buyer or seller to ultimately close a deal, will depend on many factors, this may be just one of the more important aspects. How well you know each other, credit ratings, and the dollar value of the mortgage will also affect your decision.

Regardless of the final decision, the opportunity exists to explore other avenue other than the traditional mortgage lending institutions, or mortgage companies. And, sometimes, you never know, the deal from the seller financed mortgage may open more doors than just a mortgage for homeownership!

About the author: Tony Robinson is a Real Estate Investor, Webmaster and International Author. Visit http://www.ezy-mortgage.com/ for his tips on mortgages.

How Real Estate Drives the Interest Only Mortgage Market

Author: Tony Robinson

The real estate market and the mortgage market are great friends; they generally are seen hand in hand, wherever they may go! One fuels the other's ambitions. Never a truer statement has been made and they (the real estate and the mortgage market) seem to feed off each other, as they both have continued to grow over these last few years.

If a potential buyer has the greater possibility of securing a mortgage, the greater the opportunity to sell a home or buy a home becomes; Whenever the opportunities increase for the buying and selling of real estate, then the prices for real estate increase. Can you clearly see the relationship now and how one drives the other? As the mortgage market has expanded, and the possibilities broadened, so have the prices of homes, the new home construction market, as well as the commercial development of real estate.

The potential for problems exist when this all happens too quickly, or when the growth in one area exceeds the average growth rate of other areas. This is the case with the real estate market and the interest only mortgage. Much of the growth in the mortgage market has been with interest only loans. Many analysts put the interest only segment of the mortgage market at almost 23%. That's a huge hunk of the entire mortgage market and this segment has been responsible for most of the overall growth. It would also seem that it has played a tremendous role in fueling real estate prices. Is this a rollercoaster ride, waiting for the drop, if so, let's hope we're all buckled in!

Let's take a moment to look at the four areas that contribute to this continued upward growth, and their impact on real estate.

The price of existing homes on the market is a pretty easy one to figure out; if you have your home for sale, quite naturally it will bring a comparable price to the other homes in your area. How does this serve to drive real estate prices? This concept works with a Domino effect, in that when one home increases in value, it also affects the homes around it driving the price, further upward.

The new home construction market is heavily reliant on building material prices to determine the building cost and the contractor's profitability. If building construction is on the increase quite naturally, the prices of building materials are on the increase; when you have an optimistic and growing economy, you will have increases in building material cost.

The other big drive in the real estate market comes from the development of commercial property. In resort areas, particularly the development of real estate property for commercial purposes tends to quickly affect the surrounding areas real estate prices. Many of today's commercial mortgages have reached loan limits well over $1 million; in fact, some of the residential mortgage loans in certain resort areas are approaching the have the million-dollar mark.

Now, when you combine all of these contribute factors, a mortgage market that is extremely optimistic with its lending capital, you have the makings of a market segment, with the potential for a bubble effect. What happens in a bubble effect economy? The bubble continues to grow until it bursts. This is what many analysts and economists fear: that too many consumers are betting the farm on a continual, optimistic spurt of growth. What could cause our booming economy to rupture? In reality, many conditions can contribute and provide the needed catalyst.

Well, what if there is a continual increase in pricing but there is generally a continual downward spiraling of the ride we're on? Well, if there should be a tremendous downward turn in the investment market, if there is a continuing loss of jobs in this country, or if there are any natural occurrences that lead to disasters that are beyond governmental or company control, you could see a possibility for disaster. Does that mean it will happen? No. It just means that the potential exists. But in the defense of the housing and real estate market, if you're going to be risky, that's the place to be. It's one of the safest risky businesses that exist.

About the author: Tony Robinson is a Real Estate Investor, Webmaster and International Author. Visit http://www.ezy-mortgage.com/ for his tips on mortgages.

Mortgage Products: The 15 Year ARM

Author: Tony Robinson

As you begin to traverse the actual home appraisal, the loan amortization, your down payment, and all the dots that must be connected in order to make the dream a reality, you suddenly realize that you may not be able to afford a payment on the Fixed Rate Mortgage plan. What other options are available? Well, there's the Adjustable Rate Mortgage that is a close first cousin to the Fixed Rate mortgage, just a little riskier. What products are available with the Adjustable Rate Mortgage? What advantages does the Adjustable Rate Mortgage option offer, and what are they drawbacks, if any? This article examines the advantages and disadvantages, if any, of the Adjustable Rate Mortgage and the 15 Year ARM option.

The Adjustable Rate Mortgage, or ARM, is a more affordable option for homeowners who have a fairly tight monthly budget, and who have a need for bigger house, lower payment. The typical ARM customer wishes to build equity in their home; however they need the lowest monthly payment possible, for a certain number of years. The homeowner this program most benefits is the individual who expects income increases to occur within a few short years, but also has an expanding family with a need for space. The 15 Year ARM is one of the more used ARM options, simply because of the attractive monthly payment, and the length of time the homeowner has to build more equity in an affordable payment.

An ARM works in this way: when you set up your mortgage on an ARM, the interest rate you have will only be set for a very short period of time, normally only 6,9, or 12 months. At the end of that period, the interest rate will be re-evaluated, and if the rates have increased based on the prime, your interest rate will also increase; once again, for a short, set period of time. The benefit derived from this type of loan, during today's economy, is that the interest rates are at an all time low. That equates to big savings for current home buyers, and homeowners who refinance.

The 15 Year ARM allows the mortgage loan to operate as an adjustable rate mortgage for 15 years, automatically converting to a fixed rate loan after that 15 year period has expired, for another 5, 7, or 10 years.

The disadvantage to this type of loan occurs when interest rates begin to rise. As the rate rises for the lending institution, it also rises for you, the homeowner. The home mortgage product market can be very confusing, and quite frustrating if you don't take the time to fully research and understand your mortgage options.

Another great benefit to the ARM, when interest rates are low, is that it allows you to build equity faster than with a standard fixed rate mortgage. But if interest rates begin to rise, quickly, your opportunity for building equity quickly, is greatly diminished, because more of the payment is directed to the interest on the loan. If you fall into the category of the typical homeowner, ARMs aren't as attractive as the fixed rate mortgage; but let's face it the typical homeowner category seems to be shrinking. All in all, if you are buying a home, and your income level is expected to increase over the next 10 years, or your expenses are going to drastically decrease, you would probably benefit from the standard 15 Year ARM that converts to a FRM. All the other complicated options still simply do not benefit the average homeowner today. Now, if you don't happen to be average, and you have a financial advisor that can work with you closely, I'd recommend that you consider all those other options, but only with the assistance of a trained financial analyst. After all, your home is a purchase you definitely do not want put at risk. The 15 Year ARM is a good, solid product that allows the homeowner to build equity, with a low interest payment each month, while also providing the lending institution the opportunity to reset an interest rate, if they should begin to rise quickly. This is one of the greatest reasons banks tend to promote the ARMs as much as they do the standard FRMs: they're fairly safe, time-tested products.

About the author: Tony Robinson is a Real Estate Investor, Webmaster and International Author. Visit http://www.ezy-mortgage.com/ for his tips on mortgages.

Mortgage Products: The 15 FRM

Author: Tony Robinson

In order to understand the theory behind the fixed rate mortgage, you have to understand the mindset of the mortgage banker and the mortgage borrower of thirty or forty years ago. The Great Depression left a tremendous impression on the minds of this country, so much so, that one of the popular mortgage products of the turn of the century, the interest only loan, was shelved, never to be heard from again. Not until the recent explosion in real estate prices and the mortgage industries efforts to accommodate home buyers of all types has there been such mortgage variety.

The trend after the depression, through post-war America, and really until the late 1990s was the fixed rate mortgage. That's the type of mortgage the bank offered, and the public generally didn't consider anything else. Why did so many individuals, as well as banking institutions popularize the fixed rate mortgage? This loan type, more than any other product available, was a security blanket for the banker, and the homeowner. The banker, offering the mortgage loan, was assured of a 20% down payment and a secure monthly payment with a fixed interest rate that would benefit the bank. The homeowner received a set monthly payment amount that was affordable, and a fixed number of years to repay the loan, usually 15, 20, or 30.

This article will discuss the 15 year fixed rate mortgage, and the advantages offered by the 15 versus the 20 versus the 30 year option. We have really already established the ""why"" when it comes to the fixed rate mortgage option in general, but we need to look at now, the term of the fixed rate mortgage. ""Why"" would you choose the 15, or the 20, or the 30? Well it really depends on two factors: where you are in your life, and what you can afford.

If you happen to be in your 20s, with a lifetime to pay for your home, but not a lot of income, and two children to raise the 30 year option would get you the house, with as low a monthly payment as possible. Granted, you will pay more in interest, but you won't have to pay out quite as much each month. If money is tight, a lower payment can mean the difference between buying a home and renting a home.

If you're in your mid-to-late thirties, still quite a long way from retirement, the kids are almost grown, and your monthly income is substantially greater than it was 10 years ago, the 15 or 20 year mortgage would suit your needs. Most often, the homeowner will choose the 20 year option, and make principal payments when affordable.

But let's say you're in your late 40s and the amount of time until retirement is growing ever short; you have your children raised, and your monthly income is nice to look upon. What option would you take? For most, it is the opportunity to pay for the home as quickly as possible, thus the 15 year fixed rate mortgage is the mortgage of choice.

Many homeowners who purchase a home in their mid-to-late forties are purchasing their second home; some even have a substantial amount of equity, or down payment for the home. If this is the case, the 15 year fixed rate mortgage, works to an even greater advantage, in that the homeowner has substantial equity, a lowered monthly payment, and a preset monthly payment amount. The interest is tax deductible, and they are now secure in the knowledge that their home will be fully paid out prior to retirement.

When trying to decide which mortgage is the mortgage for your situation, you need to have a mortgage broker or banker that has an excellent understanding of your financial status, your goals and objectives for your mortgage purchase, and your ability to absorb unexpected expenses or change. All of these factors affect your ability to repay a loan, the choice you will make on a loan, and the satisfaction you will have during the servicing of your mortgage loan.

For these reasons, and others, the fixed rate mortgage, especially the 15 year fixed rate mortgage is often the mortgage product of choice, especially for the baby boomers, and the forty-something homeowners today.

About the author: Tony Robinson is a Real Estate Investor, Webmaster and International Author. Visit http://www.ezy-mortgage.com/ for his tips on mortgages.

Interest Only Mortgage versus Balloon Notes

Author: Tony Robinson

You would think the interest only mortgage and the balloon have nothing in common, but they do; they're closer than the FRM and the ARM in terms of comparative benefits. To fully appreciate the balloon note option, since for many years it's taken the brunt of the ""bad product"" review; let's compare it to the interest only mortgage.

The old balloon note, long the product to be avoided, has suddenly become a better friend, even to the more reserved bank mortgage officers. In utilizing the balloon note option, a borrower makes amortized principal and interest payments on the note, as if it were a 30 year note; the catch: if it's a 5 year balloon, the entire balance of the unpaid principal is due at the end of five years, if it's a 10 year balloon, then the entire unpaid balance is due at the end of 10 years. The unsavory aspect of these types of notes has always been the huge payment that was due at the end of a specified amount of time. If the buyer isn't able to find financing at the end of the 5 or 10 year term, or if the property has dropped in value, it's a great way to be bankrupt, or have the property foreclosed on. If you intend to sell your home within a 5 year period, the balloon note option is an excellent alternative that offers a lower monthly payment. But, suppose you don't sell the home? Well you either must come up with the balance of the note, or find an alternative mortgage product. The biggest problem here occurs as you try to deal with the variables in the situation, when the balloon note matures.

When the note matures, if the interest rates are high, or if the real estate market is experiencing a slump, you may be forced to accept a higher interest rate, or produce a very big down payment with a new note. Either solution means that the conditions aren't favorable for the homeowner. But is this so very different from the interest only mortgages?

The interest only mortgages are interest only for a specific term of time; then the principal and interest become due on the note, at a much higher monthly rate. The only difference here is that the lending institution is locked into a 20 or 30 year note. But the borrower is no better off, if he or she cannot afford the payments at the higher level, there still exists a greater potential for bankruptcy or foreclosure.

Thanks to the booming real estate market, and the expansion of the mortgage product market, the increase in purchasing power has enabled many prospective homeowners to actually make a dream a reality. However at some point, the market will cease to boom, and the mortgage market will cease to expand. Will the consumer that purchased the interest only mortgage or the balloon note, be able to afford the consequences, should the home suddenly not be worth the original loan amount? Let's hope for the sake of the unwary homeowner, this is a situation we do not soon encounter. And, for the most part, I don't believe we will. Thanks to the natural disasters along the gulf coast, and the continued demand for real estate, building materials, and existing housing, the prices we're currently experiencing, along with the growth we've seen for the past couple of years, should continue.

There are other, more stable loan products available, but these products don't provide the kind of flexibility for the mortgage lender or the borrower, that the interest only mortgages and balloon notes do. They also don't pose the risk these two loans. The interest rates, however, are very competitive on the interest only and balloon, and I don't' look for the general public to decide in favor of safety over savings. After all, nothing ventured, nothing gained.

Now, you see the old balloon note looks a little sharper than he did before the interest only mortgage moved in. At least with the balloon note a part of the monies paid each month are applied to the principal balance. With the interest only mortgage, all of the payment monies are applied to the interest, so at the end of the interest only term, you still owe as much principal as you did in the beginning. It would seem to me, it's six of one, half a dozen of the other. The borrower really isn't making any progress, either way.

About the author: Tony Robinson is a Real Estate Investor, Webmaster and International Author. Visit http://www.ezy-mortgage.com/ for his tips on mortgages.

Mortgage Refinance After Bankruptcy!

Author: Elizabeth Grant

If you are considering remortgaging your home after Bankruptcy, there are many factors to consider in the decision making process. Here we discuss some of the essentials topics that will enable you to decide if releasing equity from your home is your best option.

Becoming bankrupt

If you are in a bad debt situation and are thinking of declaring yourself bankrupt, then the first thing you should do is get legal and financial advice to make sure that this is your best option. Don't leap ahead to thinking about refinancing after bankruptcy if you haven't even decided if bankruptcy is the best thing for you.

Once you have taken the decision to become bankrupt, or you have been declared bankrupt by your creditors, you will need to take some time to deal with the immediate consequences of bankruptcy and work out your next moves. Think about what you want to achieve in the future. If your house has had to be sold, or part-sold in order to clear your debts, then you may want to look into mortgage refinance after bankruptcy so that you can see what your options are.

My options

If you have been declared bankrupt, but your period of bankruptcy has ended because all your debts have been cleared, you can look at your options for the future. These might include:

-Employment. If you were self-employed before bankruptcy, then you may want to consider being an employee. This can remove the stress of self-employed earnings and can also put you in a better position when it comes to applying for loans or mortgage refinance after bankruptcy.

-Debt. The experience of being declared bankrupt should have convinced you to take a different attitude to debt, and make sound financial plans, with help and advice where needed, to ensure that you don't run into such big problems again.

-Restrictions. Expect some restrictions to be placed on you, even though you have been discharged from bankruptcy. Most credit applications will ask if you have ever been declared bankrupt and you must answer honestly. Your chances of getting a loan at standard rates may be affected by your bankruptcy for some time.

-Advice. Even after your period of bankruptcy is over, it is worth retaining some of the advisers you had to use. Not only will they know your financial background, but they should be well-placed to advise you in the future.

Getting Advice

If you are thinking about mortgage refinance after bankruptcy, then all the above considerations apply to you. A mortgage lender will want to know that you are serious about not returning to a position of bad debt and they will also be reassured if you are in full or part-time employment. There will be restrictions placed on you because of your credit history and you will need professional mortgage advice to ensure that you get the best mortgage product for your needs. If you don't already have a mortgage adviser, then talk to an experienced mortgage broker who can talk you through the mortgage refinance products that are available to you, and advise you on how to approach your application to get the best results. Whilst getting mortgage refinance after bankruptcy is a good idea, because it can give you access to lower interest rates than some other mortgage deals, you will need to take advice to make sure it's the right route at the right time.

About the author: Elizabeth Grant writes exclusively for The Mortgage Broker specialist websites. To read more of Elizabeth's articles on Adverse Credit Mortgages please visit the Adverse Mortgage Centre .

Mortgage Companies: Specialty Guys

Author: Tony Robinson

Let's talk about the specialty guys, the mortgage interest companies. Why do they exist in what do they do for the average consumer? Actually a lot. Mortgage interest companies exist for the pure and simple reason of originating mortgage loans. If mortgage loans are your specialty then quite naturally you would assume you're very good at what you do. And most of the mortgage companies are very good at what they do. So much so, that real estate prices and mortgage loan products have seen a threefold increase. What does this mean for the consumer and what does this say about our mortgage companies?

What this means for the consumer is that now there are being offered a wide range of the affordable, and quite accommodating loan products. What does this say about our mortgage companies? That today more than ever mortgage companies are creative with their efforts to accommodate a growing and varied range of customers. Mortgage companies offer mortgage loans that range from interest only, 1% interest only, to the standard fixed rate mortgage loan product. This article will take a moment to examine the mortgage companies and the mortgage products offered by these mortgage companies.

If you need to apply for a mortgage today, you only have to go online to find your nearest mortgage company and a detailed list of the mortgage products they provide. Even if you don't want to complete the application online, you are supplied with all the necessary information to make an informed and educated mortgage decision without ever leaving the comfort of your home. Almost all of the mortgage companies in existence today make use of the online environment to advertise their business and their business products. But, this is not the only avenue for advertising the mortgage companies will use. Many of the mortgage companies today use advertising venues via the newspaper billboards and radio. By far the largest vehicle of advertising used by the mortgage companies today is through the use of the television; it is via the television that you will most often hear about mortgage-company's and the mortgage products offered.

Mortgage companies compete for your business by offering lower then standard interest rates, and extremely unusual by traditional lending standards, mortgage products. The increase in the number of interest-only loan products is a testament to the use of non- traditional products in order to increase customer base. However, the consumer is a winner as far as the interest rate expense because many of the specialized mortgage companies can offer a lower interest rate than your local and traditional lending companies, such as banks. Due to the specialty of the mortgage company and the mortgage product interest rates are sometimes a full 2 to 3% lower then the rate offered through the traditional lending institution.

Factor in the advent of the online mortgage companies, such as Quicken Loans, and you have an even lower interest rate offering due to a lower overhead expense. What role has the online mortgage company played in lowering interest rates, and pulling from the traditional and physical-existence mortgage companies? The influence has been quite great; many consumers have shopped the online environment in order to obtain the low interest rates offered. Companies such as Quicken and Ditech have experienced phenomenal growth thanks to the online mortgage company existence and television advertising.

The government has greatly encouraged the growth and competitive nature of the mortgage company industry through the use of government programs such as Fannie Mae and Freddie Mac, and has empowered the mortgage companies with a means to sell existing mortgages in order to originate new ones. Apparently, the government wishes to encourage the success of the specialty companies with the specialty rates!

I believe the existence of mortgage companies, the ever-increasing range of mortgage products and a continued increase a real estate prices has helped to contribute to the stabilization of an extremely low interest rate, which in turn has fueled the growth of the mortgage companies and the range of products offered. As you can see, this is a market of interconnected affectation and the consumer seems to be the greatest benefactor. So carry on specialty guy!

About the author: Tony Robinson is a Real Estate Investor, Webmaster and International Author. Visit http://www.ezy-mortgage.com/ for his tips on mortgages.