Commercial Mortgage Loans – Private (hard Money) Lending Is The Only Game In Town

The banks, Wall Street brokers and Hartford insurance companies have two very serious problems on-their-hands. First, if assets they hold continue to drop in value, they are at risk of becoming statutorily insolvent. And second, there is no viable market for loans they originate. They are in a situation that will not allow them to let a single dime out of the vault; if they can’t recover their capital by selling a loan they simply can’t write the loan. To make a long story short: banks couldn’t lend even if they wanted to.

Where does that leave the commercial real estate investor? Their buildings still need to be refinanced, their projects still need to move forward. Where are they supposed to get the funding they so desperately need?

The trend in commercial real estate finance is towards private, rather than institutional sources of financing. Private commercial mortgage lenders, often called “hard money” lenders, have stepped in and are funding many deals that, due to the credit crunch, the banks and other traditional lenders have turned away. Unlike banks and Wall Street firms, private, hard money lenders tend to hold or “portfolio” the loans they issue. This means that they are not dependant on the secondary mortgage market; they can originate commercial mortgage loans regardless of the current credit situation.

Private lenders are not regulated or controlled by the Government; they are funded by private entities or wealthy individuals. Hedge funds and private equity firms often act as private mortgage bankers, lending money on behalf of their investors. Other hard money firms are funded by large “commercial mortgage pools” that get their capital by pooling contributions of many smaller investors. A private mortgage is generally underwritten based on the equity in a building or development project. They are not usually credit driven like conventional financing is.

Borrowers like the fact that lending decisions and funding can happen very quickly when dealing with a private funding source. Multi-million dollar loans can be arranged and closed in a matter of a few weeks with a minimal amount of documentation. The rates and points that hard money lenders charge are significantly higher than what a bank or institutional lender would charge, but, in today’s economic environment, borrowers and project sponsors are happy to get any loan at all. No one is quibbling over interest rates now-a-days.

We are in strange and confusing times when it comes to financial matters. Banks are flush with cash but refuse to lend it out. The Government is pouring hundreds of billions of dollars into the system but it just doesn’t seem to loosen up. With all the traditional, conventional lenders in crisis, it seems that hard money has become the only game in town. Years ago private lending was considered shady and somewhat suspect, but today hard money is main stream business, private lenders are well funded and highly sophisticated. Private commercial mortgage lending is in-fact, the fastest growing segment of commercial real estate finance. When the history of this period is written many accolades will be given to the private financiers who stepped in and filled the funding void that the credit crisis created.

By: Glenn Fydenkevez - President, MasterPlan Capital LLC

Article Directory: http://www.articledashboard.com

Tags : Mortgage , Money , Commercial , Hard Money , Mortgage Loans

Private Mortgage Insurance – What You Need to Know to Avoid Overpaying

If you are in the process of taking out a mortgage and your lender is requiring you to purchase Private Mortgage Insurance, there are several things you need to know. Private Mortgage Insurance is expensive and can add hundreds of dollars to your monthly payment amount. Here are several tips to help you avoid paying this unnecessary expense or even drop Private Mortgage Insurance if you are currently paying it.

Private Mortgage Insurance is usually required for borrowers purchasing their homes with less than a 20% down payment. This insurance protects your mortgage lender from certain losses if you default on the loan. Private Mortgage Insurance is an unnecessary expense as there are loan programs that can help purchase your home without it.

80 / 20 Mortgage Loans & Private Mortgage Insurance

The easiest way to avoid paying Private Mortgage Insurance is to purchase your home using an 80/20 loan. 80/20 mortgages are actually two loans, one for 80% of the purchase price and a second loan for the remaining 20%. These loans are typically from two separate lenders; because your home is secured by two mortgages the interest rate on your second mortgage is typically higher. The advantage of using these two loans to purchase your home is that you will not be required to purchase Private Mortgage Insurance.

Mortgage Refinancing to Drop Private Mortgage Insurance

If you are currently paying Private Mortgage insurance on your existing mortgage, refinancing the loan could help you drop this costly expense. Private Mortgage Insurance is normally cancelled once you have 20 percent equity in your home; however, you do not have to wait this long. Mortgage Refinancing could save you a lot of money in Private Mortgage Insurance premiums.

You can learn more about your mortgage options, including costly mistakes to avoid by registering for a free mortgage tutorial.

To get your free mortgage tutorial visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free mortgage refinance information guide today at: http://www.refiadvisor.com

Mortgage Refinancing Costs

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

Private Mortgage Insurance Tax Deductible

The private mortgage insurance allows the borrower to acquire a mortgage in which the down payment is less than twenty percent. The borrowers pay the private mortgage out of their pocket. Now, the private mortgage insurance is tax deductible for US residents.

Actually, the mortgage insurance is either government or private. Whether the mortgage insurance is government or private, the mortgage insurance is tax deductible.

To acquire the mortgage insurance is an alternative for piggyback second mortgage. The piggyback second mortgage is plain simply a second mortgage. The borrower acquires another mortgage on top of the first mortgage for down payment.

The tax deductible applies for modest income earners. That means the borrower earns up to $100,000. In case the borrower earns over the $100,000, the borrower can only write off the private mortgage insurance partially.

Additionally, the tax deductible only applies to new mortgage. The mortgage financing must have happen in the calendar year 2007. Unless the borrower made a mortgage refinancing for the mortgage on or after the calendar year 2007, the tax deductible will not be allowed.

This is good news to the millions of Americans. Millions of Americans pays for the mortgage insurance. The mortgage insurance only cancels out when the home equity or total amount paid goes over twenty percent of the principal amount.

More importantly, the mortgage insurance will be made affordable with this turn of event.

Like the mortgage interest tax deduction, the mortgage insurance tax deduction benefits millions of American. Now, the borrowers or home owners have a choice between mortgage interests of second mortgage or mortgage insurance premiums as tax deduction.

Dennis Estrada is a webmaster of mortgage calculators, mortgage refinancing, and piggyback second mortgage website which calculate the monthly payment, bi-weekly payment, affordability, refinance, annual percentage rate, discount points, and more.

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

Tage : Mortgage , Insurance , Private , Tax

100% Mortgage Financing – A Way To Avoid Private Mortgage Insurance

Ideally, traditional mortgage lenders want new homebuyers to have a 20% down payment when purchasing a new home. Thus, if purchasing a $200,000 home, you should be prepared to have $40,000 as a down payment.

Unfortunately, many people do not have this kind of money lying around. For this matter, private mortgage insurance (PMI) was created as a way for mortgage companies to recoup their money if a homeowner defaults on the loan. There are various loans available to assist people with down payments. In some instances, homeowners can obtain 100% financing, and avoid PMI

What is Private Mortgage Insurance?

Because Americans are earning less money, and home prices are steadily increasing, the majority of the population is unable to save the recommended down payment of 20%. In order to make owning a home possible, mortgage companies created a particular mortgage insurance, (PMI), for people with less than 20% to put down on a home. This insurance protects the lender if you default on the mortgage.

How to Avoid Paying Private Mortgage Insurance

On average, PMI may increase your mortgage payment by $100 – sometimes less, sometimes more. However, there are ways to avoid paying this additional insurance. The obvious involves having at least 20% as a down payment. If this is not an option, homeowner may agree to a higher interest rate. Another tactic entails getting approved for 100% financing.

How Does 100% Mortgage Financing Work?

100% mortgage financing makes it possible to buy a home with no money down. Also referred to as a piggyback loan or 80/20 mortgage loan, 100% mortgage financing involves obtaining a first mortgage for 80% of the home cost, and a second mortgage, or home equity loan, for 20% of the home cost. Together, the first and second mortgage allows a home purchase with no money down, and no private mortgage insurance.

Published At: www.Isnare.com
Permanent Link: http://www.isnare.com/?aid=39524&ca=Finances

Million Pound Mortgages On The High Street - Maximum Mortgage Limits

Finding and arranging a large mortgage used to be easy. Lenders used to fall over themselves to arrange a million pound plus mortgage and many had specialist high value departments who offered a premium application service to their well healed prospects.

Falling house prices, funding issues, bank closures and mergers and the FSA’s proposed guidelines on income requirements and interest only mortgages have left a gap in this market and many people looking for a large mortgage come up against barriers which can turn even the most simple application into a major challenge.

Over the next few weeks, Enness Private Clients will explore each of the issues and give some useful guidance along the way. Topics will include income requirements and self certification, interest only mortgages, property types, buy to let mortgages and offset mortgages

We will however start with:

Maximum Loan Amounts

Funding constraints caused by the drying up of the wholesale credit market and increased capital requirements have left lenders short of money to lend. This has been well documented and government intervention was required to (some say not fully) improve the situation.

As a result, many high street lenders imposed limits on the maximum mortgage they will grant, instead focusing on a higher number of individual mortgages which both spreads risk and improves profitability (Ten £100k mortgages will generate 10 arrangement fees, One £1m mortgage will only generate one arrangement fee. The margin on the loan will be the same).

A quick survey of the high street lenders and their published products shows the limits - Nationwide £1m, Santander £1m, Woolwich £1m, Coventry £1m, Birmingham Midshires £1m. Some of these lenders will exceed their published maximums in some circumstances, but the application will have to be strong, the loan to value below 70% and occasionally there will need to be an existing relationship between the clients and the bank.

A one million pound mortgage is a lot of money and will require an annual family income in excess of £200k - so this is not a problem which affects or is an issue to very many people. There are however more than 132000 properties valued at more than £1m in the UK, an increase of 393% in the last decade (The Independent, 11 July 2001). There is therefore a solid market for these mortgages

So where are these lucky individuals getting their mortgages? This has been a major shift in the market and is the Private Bank who has stepped in to help.

Private banks work on a case by case basis and mortgages over £1m are not an issue if the application supports it. These lenders assess on a case by case basis and the application is often more detailed than a similar one on the high street so the decision to lend is justified. Private Banks are delighted to be collecting so many high valued clients in so much as we have been approached by more than 5 new lenders in the last month who have requested we offer their products to our clients.

The problem for the borrower is that these lenders very rarely advertise (you will never see Coutts at the top of the best buy table in the money section for example!) so access can be difficult. The banks often have minimum entry requirements (such as a minimum asset level) and their criteria is very seldom listed on their website so finding the right one may involve a round of interviews before the client can find one suitable. As a result, the client will almost certainly require the help of a Large Mortgage Broker.

Tag : mortgage,mortgage calculator,mortgage rates,mortgage refinace

Mortgage Life Insurance

Mortgage life insurance repays the entire or most part of the mortgage, when the borrower becomes critically ill from disease or accident, or suffers from death. So, the mortgage life insurance protects the family, co-borrowers, or co-guarantors from repaying the entire mortgage.

Depending on the insurance policy, the insurance company pays for the entire mortgage or maximum amount. For example, the insurance company pays up to maximum of $600,000. If the mortgage went over the maximum amount, the insurance company repays the portion of the mortgage up to the maximum amount.

The borrower usually purchases home thru mortgage. It takes a huge amount income to pay off the mortgage. In case of critical illness, debilitating accident, or depressing death of the borrower, the family needs to replace the loss of income to pay off the mortgage. With mortgage life insurance, the family does not need to worry about repaying the mortgage.

Mortgage life insurance differs from private mortgage insurance also known as PMI. The PMI protects the mortgage lenders in case of default of mortgage payment. The mortgage lenders risk the inability to re-sell the property high enough to pay off the mortgage. When the borrower lacks enough money for twenty percent down payment, the mortgage lenders requires PMI. As soon as borrower pays off or the home equity reaches twenty percent, the mortgage lenders automatically cancel the PMI premiums.

Mortgage life insurance is voluntarily. It is the decision of the borrower to sign up for the mortgage life insurance. In order to see the need, the borrower must sit with a certified insurance agent. The insurance agent will analyze the overall financial picture of the borrower.

The insurance policy starts at the same day of the approval on mortgage. Even though the borrower has not paid the first mortgage payment, the borrower still gets the benefit.

As the borrower pays off the mortgage, the mortgage decreases. Naturally, the coverage decreases as well. When the borrower paid in full amount of mortgage, the coverage is gone. And, the borrower no longer needs to pay the premiums.

When the borrower engages in mortgage refinancing, the borrower needs to qualify to the new mortgage for mortgage life insurance again.

Dennis Estrada is a webmaster of mortgage calculators, Mortgage Refinance Closing Cost, and Private Mortgage Insurance Tax Deductible website that gives access to many resources

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

Zero Down 80 20 Mortgage Loans: How to Purchase Your Home with No Money Down

If you are a homebuyer lacking the necessary 20% down payment to purchase you home, an 80/20 mortgage could get you the financing you need. An 80 20 mortgage is basically two loans covering 100% of the purchase price. Here are the basics of 100% financing to help you decide if this type of loan is right for you.

The 80 20 mortgage is actually two loans covering 100% of the purchase price. Your primary mortgage will cover 80% of the purchase price; the remaining 20% will be a second loan often referred to as a “piggyback” loan. This type of mortgage has the additional benefit of not requiring Private Mortgage Insurance. Private Mortgage Insurance (PMI) is an insurance policy that many borrowers are often required to purchase that can add hundreds of dollars to your payment amount.

Another advantage of a piggyback mortgage is that the loan typically comes with a fixed interest rate. You may have the option of taking out a line of credit for your second mortgage; if you take the equity line of credit your loan will have an adjustable interest rate. The interest rate on your second mortgage will be higher than your primary mortgage because this lender assumes a greater risk.

To learn more about your no money down mortgage options, register for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing: What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free guidebook today at: http://www.refiadvisor.com

80 20 Mortgage Loan

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

High Value Mortgages - Using Other Assets As Security

Although the use of non-property assets to assist with land purchases is not new, it is becoming increasingly more popular. In this new era, where equity is king, and cash can sometimes be difficult to realize, offering additional security is a viable alternative for some.

We all have clients that are ‘asset rich and cash poor’ so rather than being a barrier to business, we have sought to innovate and use the private banks more flexible approach to underwriting and wealth management, to gain an advantage for our clients.

Typical assets would be;

• share portfolios,

• cash on deposit (but in locked accounts),

• bonds and stock options where bonuses have been deferred.

• Other property

• Cash not in the UK

We have been asked to consider many asset classes, ranging from gilts, to the more exotic; such as yachts, vintage wine, antiques and paintings. Although this is somewhat rarer it goes to show that banks are willing to negotiate and take a view on what is now acceptable security.

The most frustrating point for us was seeing many deals which had merits but simply weren’t fitting inside the box with high-street lenders. By having direct links to credit committees we have been able to articulate and demonstrate the best points of a case rather than try to go through an automated system.

Although some cash will generally be needed and usually the asset will have to be moved under the lending bank’s management, it allows clients that have a lack of liquidity to access rates and risk profiles that wouldn’t normally be available to those that are highly leveraged.

Tag : mortgage,value mortgage,mortgage rates,mortgage loans

Steps to Consider when Looking for a Mortgage

The process of applying for a mortgage can be long and complicated, especially if you are a first time buyer, have poor credit, or have special mortgage requirements. Whether you’re a first time buyer or a seasoned pro, it’s good to refresh yourself on the important steps you should consider when you’re shopping for a new mortgage.

Step One: Your Finances

Regardless of any other circumstances, the first step in applying for a mortgage (or any other large loan, for that matter) should always be a thorough investigation of your finances, including your credit rating. This is an important first step, even though your lender will eventually want to examine your finances more thoroughly. Having a rough idea of your financial situation, and the amount of money you can afford to borrow, is going to be important when it comes time to choose a mortgage type and speak with potential lenders.

To examine your finances, look at your total monthly income, and total monthly debts, to find out how much you can afford in the way of mortgage repayments each month. In addition, check out your credit score. If your credit rating is over 700, good news, you should not have any trouble getting a mortgage. Under 700, you’ll probably be looking at a higher interest rate on your loan. To get a handle on fixing your credit, make sure you pay bills on time, and check your credit report for any obsolete information or errors.

Step Two: What Kind of Mortgage?

Generally you’ll be deciding between a fixed rate mortgage or an adjustable rate mortgage. If you plan to move or refinance within five years or so, a balloon mortgage may also be a viable option.

In most cases the main point to consider, apart from your finances, is how long you plan to stay in the home. A fixed rate mortgage gives you long-term peace of mind, in knowing that your mortgage repayments will never increase, so it’s a good option when you know you’ll be living in the home long term. The lower initial repayments of an adjustable interest rate or a balloon mortgage, on the other hand, can be useful if you know you will sell the home within a few years.

Step Three: Comparing Mortgage Quotes and Choosing a Lender

Once you’ve decided on the type of loan you want, it’s time to start getting quotes from lenders. Doing this before you start house-hunting can be very useful. Getting pre-approval gives you leverage when you make an offer on the property, and it saves time at closing too.

Try to get all your quotes within the same 14 day period, to make sure your credit rating isn’t affected by your credit inquiries. Getting all your quotes within a short space of time will also make comparing those quotes more accurate.

The problem is, it’s not always easy to get reliable quotes. Unscrupulous lenders often advertise very low rates to attract potential customers, but aren’t able to deliver on the advertised rates. Tell prospective lenders you can apply for a mortgage immediately, and most will be more likely to quote accurate rates they can deliver on.

Narrow down your list of lenders, and ask questions to help make your final decision. Ask about points and interest rates, closing costs, private mortgage insurance, pre-payment penalties, and anything else that’s important to you.

Once you’ve chosen your lender and applied for the mortgage, you should receive an Annual Percentage Rate and a Good Faith Estimate within three days. The GFE is required by law but lenders aren’t required to guarantee the estimate, so if a lender is willing to supply a written guarantee, consider that a good sign.

Step Four: Interest Rates and Points

Another important part of the application process is buying points, and locking in your interest rate. By purchasing points, you can buy down your interest rate, potentially saving thousands of dollars over the term of the mortgage. However points must be paid in cash when you close on the house, so if your cash flow is tight, it may not be an option. Also check out whether buying points will actually save money, as sometimes the money you spend on points may turn out to be more than the amount you save over the mortgage term.

Finally, a note on locking in your interest rate: It’s tempting to try and ride the market for as long as possible, hoping to lock in a low rate, but this requires some very careful attention to detail. Waiting even one day too long could leave you locked into a rate you can’t afford in the long term.

About the Author

Rachel Jackson is a freelance writer who writes about topics and pertaining to the mortgage industry such as how to refinance home mortgage

Article Directory: http://www.articlerich.com

Second Mortgage Loan For You

Second mortgage or remortgage is a secured loan that is taken against the same property against which a previous loan exists. These are also referred to as subordinate loans since the first mortgage is reimbursed before the second mortgage gets any money in case the loan goes to default. At present, second mortgage interest rates are affordable as in most cases rate of interest is far below the main lending rate. Moreover, converting the equity or right of ownership of a home into a line of credit is very much possible with second mortgage. These are the main reasons why second mortgage is becoming more and more popular nowadays.
Various types of second mortgages/subordinate mortgage/remortgage:

1. A traditional second mortgage

2. A home equity loan

3. A home equity line of credit (HELOC)

If you are planning to get a second mortgage, you should first identify the various pros and cons. Most importantly, you need to evaluate the need and determine what you are going to achieve if you go for a second mortgage. A number of factors determine how favorable a second mortgage deal you would get. Hence, it is better to consult an expert. An expert mortgage consultant will help you ascertain your need, and help you prepare yourself for an appraisal.

In fact, an appraisal is necessary for second mortgage, just as it is for the first mortgage. The appraisal will determine the financial obligations, both for the borrower and the lender. Visit www.castlemortgagegroup.com for all information on second mortgage. At Castle Mortgage, you will come across some of the most experienced consultant who will help you will all your needs that arise of a private mortgage insurance (P.M.I.) on second mortgage.

Myself webmaster of http://www.castlemortgagegroup.com dealing in all type of mortgage loans in Florida, Georgia & Alabama with home equity loans, Florida Mortgage Loans, refinance loans, constructions loans.

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

Mortgage Advice For Frequently Asked Mortgage Questions

As you start your search for a mortgage, there are a few questions you need to ask yourself in order to narrow your search and know what you're looking for. Unfortunately, the answers to those questions aren't always easy. For some honest mortgage advice on the answers to your mortgage questions, keep reading.

Fixed Rate Mortgage or ARM?

If you plan to stay in the house you're planning to purchase for longer than 7 years or simply want stability in your monthly payments, pick the fixed rate mortgage if you can afford it. A fixed rate will allow you consistent payments month-after-month for the duration of the mortgage loan.

Alternatively, an ARM (Adjustable Rate Mortgage) is great for families who know they'll be out of their house in less than 7 years. Before you take on an ARM, ask your lender what your worst case scenario would be based on your annual rate adjustment cap. Make sure you could financially handle a potential sharp spike in your monthly mortgage payments.

How Large Should My Down Payment Be?

Ask yourself how much of an interest rate reduction you'll get with a higher down payment and whether a lower down payment will result in having to pay expensive private mortgage insurance. Mortgage insurance is often required by the lender to cover their risks when the buyer's down payment is too low.

Typically, investing in a larger down payment results in a return on the investment that's equal to the mortgage interest rate. Now, if dropping your down payment puts you in a different category (for example, below 20% or below 5%) that can affect the return significantly.

Do I Want an Interest-Only Mortgage?

An interest only mortgage offers homeowners an option to pay only interest, but for a specified period of time. This results in a lower required monthly payment and the buyer is still free to make payments on the principal.

Interest only mortgages should only be used though by borrowers who actually need them. For example, a good candidate might be a freelancer or contractor who has a fluctuating income and wants the freedom to make extra payments on the principal while still having a smaller monthly commitment.

Other examples include individuals who need the cash flow for high-yielding investments (earning more than 9% over the long term) or families who are expecting to make higher incomes in a few years, at which point they can begin making some significant principal payments.

Should I Accept a Pre-Payment Penalty?

A pre-payment penalty is a clause in your mortgage agreement that says you'll pay a penalty if you pay off the mortgage too early or seek to make extra payments. On the surface, you might assume the lending institution would welcome the faster repayment of its loan. However, doing so actually results in some financial loss through lost interest payments.

Typically, prepayment penalties disappear after a few years. If you opt for a fixed rate mortgage and plan to remain in the house for a long time, you can often exchange a pre-payment penalty for a lower rate!

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=256005&ca=Real+Estate

How The Credit Crunch Is Affecting Mortgage Lending In 2009

The current economic crisis has had a profound affect on UK property developers and landlords alike. A causal relationship between the two means that whilst prospective landlords are not eager to buy property at a time of low lending and credit, companies and individuals at the beginning of the building chain are also not inclined to invest any money in the construction of houses that are likely to remain empty for a long while. Over the last month there have been many announcements and changes within the mortgage lending industry, and so I thought I would discuss the major ones in a simple article.

In the middle of February there was a significant amount of news concerning house prices in the country. Despite the presumption that they would fall, it seems that different (but well-regarded) sources such as Nationwide and Halifax were giving very different statistics on the matter. The problem here is that both banks have varying criteria for their mortgage products and so their results can differ significantly. As a result, Halifax reported that UK house prices had increased by 1.9 percent, whilst Nationwide had shown a decrease by 1.3 percent. Similarly, both banks publish their results at different times during the month (Nationwide publish during, and Halifax at the end), meaning the results are not from exact same time period.

At about the same time, a more certain set of statistics were released by the Department of Communities and Local Government concerning a countrywide lull in building new houses. They reported that the amount of houses set for development (just over 16,000) in December 2008 was 58 percent lower than it was a year before, whilst the private sector statistics were even worse (at 64 percent lower). As expected, lack of finance has been to blame for the biggest decline ever in this area, with little being available for residential and buy to let mortgages also.

More recently however, there has been some good news coming from such banks as Northern Rock and Lloyds/HBOS. In late February, the former announced they had £5 billion to lend in 2009 for residential mortgages, which increases competition in the sector and may be an incentive for others to offer more on the buy to let front. Following this, at the beginning of March Lloyds/HBOS announced they would increase their mortgage lending budget from £9 billion to £12 billion this year displaying a gradual shift in the accessibility of credit for borrowers.

By: David John Martin-11606

Article Directory: http://www.articledashboard.com

Mortgage Refinancing: Using a Mortgage Calculator

A mortgage calculator is a useful tool to help you budget for your new mortgage. A good mortgage calculator allows you to calculate your monthly payments based on your desired interest rate, taxes, and insurance. Here is how this useful tool can help you avoid common mistakes when refinancing your mortgage.

Mortgage calculators can provide you valuable information about your mortgage. A good mortgage calculator will show you monthly payment information and amortization tables to help you understand how your mortgage works. Amortization with a mortgage calculator describes the process of paying interest and principle graphically; using a mortgage calculator can help you get your head around a complicated financial concept like amortization.

To use a mortgage calculator you will need to provide the amount of the mortgage principle, your interest rate, the amount of your property taxes, and private mortgage insurance if you pay it. The calculator will figure your payment amount and show how the interest is paid over time. Mortgage loans are front loaded with interest; at the beginning almost all of your payment is pocketed by the mortgage lender for the interest due. As time passes, the ratio of interest to principle gradually reverses and more of your payment goes to pay back the loan.

If you are in the process of refinancing our mortgage a mortgage calculator can help you budget to avoid taking out more mortgage then you can afford. There are dozens of free mortgage calculators available online for you to use; your mortgage lender of choice will probably offer one on their website as well. To learn more about refinancing your mortgage and how to avoid costly mortgage mistakes, register for a free mortgage guidebook using the links below.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing: What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free guidebook today at: http://www.refiadvisor.com

Baltimore Mortgage Refinance

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

80 20 Mortgage Basics

If you are a prospective homeowner wanting to secure financing to purchase your home but do not have the 20 percent down payment required by most mortgage lenders, an 80/20 mortgage could be your answer. Here is what you need know about financing your home with an 80/20 mortgage loan.

In many parts of the country the average price for a home has gone up significantly over the past few years. This makes it difficult for many people to qualify for the financing they need using a traditional mortgage lender. Many of these individuals have turned to 80/20 mortgages to secure 100 percent of the mortgage financing they need.

What is an 80/20 Mortgage?

An 80/20 mortgage is actually two loans. You will have a first mortgage for 80% of your homes value and a second mortgage for the remaining 20%. By using this 80/20 mortgage you will avoid paying Private Mortgage Insurance which can add hundreds of dollars to your monthly mortgage payment.
In addition to your 80/20 mortgage some lenders offer financing for 103% of the asking price on your home. This allows you to finance your closing costs and minimizes the cash you will need out of pocket to close on your home.

How to Get an 80/20 Mortgage

A good place to start shopping for an 80/20 mortgage is a mortgage broker. Mortgage brokers have access to a variety of unconventional mortgage lenders and programs to help get people qualified to purchase their homes. If you use a mortgage broker be sure to shop from a variety of offers and read all of the small print. You will need to do your homework to avoid overpaying for your mortgage. To learn more about your mortgage options and how to avoid common mortgage mistakes that can cost you thousands of dollars, register for a free mortgage guidebook using the links below.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of Mortgage Refinancing: What You Need to Know, which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free guidebook today at: http://www.refiadvisor.com

8020 Mortgage

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

5 Important Steps to Uncovering Mortgage Fraud

There are numerous con artists and scammers that prey upon homeowners who are having a hard time making payments on their mortgages, promising to save their homes and get rid of their debts.

These deceiving alleged foreclosure or mortgage consultants often use lists purchased from private businesses to target troubled borrowers. They may also offer to easily stop foreclosure or save hopeless homeowners from foreclosure through e-mail, phone calls, advertising, or in person.

If one suspects they're dealing with foreclosure fraud or wrongful foreclosure look for these types of common foreclosure fraud scams:

• Scam artists may "guarantee" to save one's home from foreclosure. They will tell someone to make his mortgage payments directly to them so they can forward payments to his lender when really they may pocket his money and leave him in worse shape on his loan.

• Scam artists create Web sites that resemble federal Web sites and use business names similar to those used by government agencies. These scammers use this scheme to fool someone into thinking they are approved by, or associated with, the federal government.

• Many con artists will persuade someone to transfer the title of their home to them with promises of new and better financing. They may say to him that he can rent his home and eventually buy it back. But, if he does not comply with the terms of the rent-to-buy agreement, he can very likely lose his money and home. These con artists have no intention of ever selling one's home back and they don't care that this is considered illegal wrongful foreclosure.

• Some scam artists may claim bankruptcy will solve one's problems. But in actuality filing for bankruptcy is rarely a permanent solution to prevent foreclosure. Filing for bankruptcy stops any collection and foreclosure action while the bankruptcy court administers the case. Eventually, one must make payments on his mortgage, or the lender has the right to foreclose.

• Several con artists use wrongful foreclosure legal arguments to persuade someone that they can "eliminate" one's debt and that he is not obligated to pay back his mortgage. They make inaccurate claims about applicable laws and finance, such as nonexistent laws that allow one to erase his debts or that imply that banks do not have the authority to lend money.

Tag : mortgage,mortgage fraud,uncovering,fraud

How To Choose The Best Deal With Home Loan Mortgage Refinance

Home Loan Mortgage Refinance refers to replacing the existing mortgage with the new one when required. Many circumstances lead the people to do so. Refinancing your mortgage gets you number of benefits but to get these benefits, it requires you to choose the best deal. If you choose wrong lender and fail to get the appropriate deal, you may have to incur loses in spite of enjoying benefits.

The most important thing to be taken care while availing Home Loan Mortgage Refinance is the cost of the loan. Lenders impose a number of charges in the name of processing fee like, Lender fee or funding fee, Attorney fee, Appraisal fee, Credit report fee, Document preparation and recording fee, Origination or underwriting fee etc.

With this you should also consider the interest rate offered by the lender, compare the interest rates offered by different lenders and processing fees. A cut throat competition in market lets you get the refinance loan at reasonable price. You should also check whether the interest offered by the lender is fixed or adjustable.

You should also check the closing fee of the loan. Sometimes it happens that you get enough money any how so that you repay your complete loan at once, then it requires closing fee to be paid to the lender. If the closing fee is high then, either you will have to go with burden of loan otherwise, you will have to pay a big amount for this which would lead you to save nothing. Therefore, this condition should be taken care in advance. Closing fee includes- Flood determination, State and local taxes, Surveys and home inspection fees, prepaid private mortgage insurance or PMI, Prepaid amounts towards interest, hazard insurance, taxes, etc.

After comparing the quotes and finding the best lender you need, you can also negotiate with lender. Write all the fees together and negotiate with lender. This way you can find the best of best deals. Your ultimate aim towards finding the best deal with Home Loan Mortgage Refinance is to save as much money as you can. Home Loan Mortgage Refinance gets you rid from a lot of financial troubles you are facing.

By: Christen Scott

Article Directory: http://www.articledashboard.com

Tag : mortgage,mortgage refinance,mortgage rates,mortgage loan

Identifying and Avoiding Mortgage Fraud

Recent financial industry distress publicly attributed to widespread mortgage loan defaults has generated mounting pressure on federal prosecutors to increase investigations into incidents of mortgage fraud across the nation. On February 6, 2004, CNN reported that the FBI warned that mortgage fraud was becoming so rampant that the resulting “epidemic" of fraud could trigger a massive financial crisis. Mortgage fraud has now become so prevalent that the United States Department of Justice and the Federal Bureau of Investigation have been forced to create an entirely new category for tracking these cases. According to a CBS news report, the number of FBI agents assigned to mortgage related crimes increased by 50 percent from 2007 to 2008. Prosecutors and investigators on both the state and local levels are also feverishly organizing task forces and creating real estate fraud departments to counter this burgeoning wave of crime.

CRIME & PUNISHMENT

The primary focus of these investigations appears to be on borrowers, investors, mortgage brokers, appraisers and real estate agents. Some of the charges levied against these perpetrators have included making false statements on loan applications, bank fraud, mail fraud, wire fraud, conspiracy to launder funds and a number of applicable state laws. However, the primary legal vehicle implemented by federal prosecutors has been section 1014 of Title 18 of the United States Code which declares mortgage fraud as a federal crime encompassing anyone who willfully overvalues any land or property, or knowingly makes any false statement, for the purpose of influencing a financial institution upon a loan application, purchase agreement or other related documents. A violation of the federal mortgage fraud law (18 U.S.C. § 1014) alone is punishable by up to thirty years imprisonment and a one million dollar fine.

MORTGAGE FRAUD SCHEMES

The most effective way to avoid prosecution for mortgage fraud is to identify mortgage fraud schemes prior to any actual involvement. Most mortgage fraud offenses fall into one of two general categories: “fraud for housing" and “fraud for profit". Fraud for housing often involves fraudulent acts committed by a borrower, often coached by his or her mortgage broker or real estate agent, to obtain a loan for the ultimate goal of acquiring a home. These fraudulent facts generally pertain to the falsification of facts and documents during the loan application process to enable the borrower to obtain financing that he or she would otherwise not be qualified to receive. Conversely, fraud for profit typically involves a more concerted plan to abuse the entire real estate transactional process for pecuniary gain.

FRAUD FOR HOUSING

Income Fraud

This occurs when a borrower inflates his or her amount of income to qualify for a loan or a larger loan amount. Although recent reductions in the use of “stated income" or “no-doc liar loans" has somewhat curbed income fraud, daring borrowers are increasingly generating more fraudulent documents to falsify income. Information technology and photocopy equipment have become so advanced that very convincing documentation, such as income statements, savings accounts and tax returns, can be produced on demand.

Employment Fraud

In order to justify overstated income in a loan application, borrowers will claim self-employment in a non-existent company or represent having a higher position in a company than the borrower actually holds.

Failure to Disclose Liabilities

The debt-to-income ratio is an important part of the loan underwriting criteria used to determine a borrower's eligibility for mortgage loans. Consequently, borrowers will conceal financial obligations like newly acquired credit card debt, other mortgages, and private loans to artificially reduce their debt-to-income ratios.

Occupancy Fraud

Generally occurs when a borrower states on a loan application that he or she intends to occupy a property as a primary residence to secure a lower interest rate when the borrower actually intends to obtain the loan to acquire an investment property.

FRAUD FOR PROFIT

Equity Skimming and Cash-Back Schemes

A straw buyer is typically implemented as the buyer of the property due to his or her creditworthiness and resulting ability to obtain favorable financing. Unknowing straw buyers can be manipulated by mortgage brokers and real estate agents to purchase a property as a primary residence with the broker or agent later serving as a property manager to collect anticipated rental income. After the escrow closes and the mortgage and real estate brokers collect their commissions, they proceed to collect rental income and fail to make the mortgage payments.

Complex schemes can involve a knowing straw buyer, an appraiser who intentionally overstates the property's value, a dishonest seller that intentionally inflates the selling price, and a dishonest settlement officer that makes undisclosed disbursements from the loan proceeds. All of these conspirators collaborate to collect portions of the proceeds of an inappropriately large loan before eventually letting it go into default.

Appraisal Fraud or Price Inflation

This fraud occurs when a dishonest appraiser intentionally overstates the value of a property or when an existing appraisal is altered to reflect a higher value. When a home is overvalued, more money can be obtained by the seller in a purchase transaction or by the borrower in a cash-out refinance.

The New Appraisal Fraud: Price Deflation

When done legitimately, a short sale occurs when a borrower that owes more than his or her property is worth sells the property below market value and the lender agrees to accept the lower repayment amount and forgive the difference. A new hybrid of fraud has emerged where an appraiser or a real estate agent drastically devalues the property in an appraisal or broker's price opinion (BPO) so that the home will sell with ease at a price well below market value. Of course the new buyer is in collaboration with the seller, agent and appraiser, so all of the conspirators proceed to sell the home at a higher price for a big profit.

Identity Theft

Identity theft fraud occurs when a victim's identity is assumed by another to obtain a mortgage without ever intending to make any payments on the loan. The perpetrators often abscond with a portion of the loan proceeds and sometimes are daring enough to lease the property and collect some deposits and rental income before disappearing.

The Buy and Bail

This completely new scheme is perpetrated by a home owner who cannot sell the home because more is owed on the property than its worth. Because no lender will provide the owner a loan for a second primary residence, the owner tells the lender that he or she plans to rent out the current home despite having no intention of doing so. Sometimes a falsified rental agreement is used to further support the falsehood. Once the second home is purchased, the owner “bails" on the original home and fails to make any further mortgage payments.

AVOIDING & PREVENTING FRAUD

Mortgage fraud frequently emanates from groups that complete an abnormal amount of similar transactions or churn out many offers to purchase at once. These outfits may appear disorganized or unprofessional due to the large amount of transactions they are attempting to manage. It is also no coincidence that mortgage fraud has significantly increased as housing values have decreased since most fraud schemes involve a financially distressed or otherwise vulnerable seller. It is equally important to remember that agents owe a very strict fiduciary duty to act in their clients' best interests. So before reporting a client to your local authorities, speak with legal counsel or your state real estate licensing department to ensure that your proposed actions don't constitute a breach of your fiduciary duty to your client.

Real estate agents are in a unique position that enables them to identify and even prevent the occurrence of fraud by recognizing the red flags, asking appropriate questions, and giving the principals in their transactions the full picture of what consequences are associated with participating in mortgage fraud. While a lot of damage has been done in the real estate market, we can prevent more of the same from occurring in the future.

About The Author:
Brian S. Icenhower, Esq., BS, JD, CRB, CRS, ABR, a California Association of Realtors Director, practicing real estate attorney, a real estate expert witness and litigation consultant, a prosecution consultant of Tulare County District Attorney Real Estate Fraud. He may be contacted at bicenhower@icenhowerrealestate.com, or www.icenhowerrealestate.com.

http://www.articleclick.com/

Reverse Mortgage Types

The reverse mortgage helps the seniors over sixty two years old to use the equity of the home to supplement an existing income. Reverse mortgage is loan advance to the home without repayment unless the owner moves, dies, or sells the home.

In the United Kingdom, reverse mortgage is more common as lifetime mortgage. Hence, the owner never needs to repay as long as the owner lives in the home. The reverse mortgage lenders distribute the cash as lump sum, regular payment, credit line, or combinations.

In the United States, the basic types of reverse mortgage are single purpose reverse mortgage, federally insured reverse mortgage, and proprietary reverse mortgage. There may be more types in different countries, but the main idea is very similar.

Single Purpose Reverse Mortgage

The government agencies and non profit organizations offer this type of reverse mortgage. It is generally low costs. Although the government agencies may be local or state, the mortgage is available in a few locations only. The purpose of reverse mortgage is specific such as home repair, home improvements, and property taxes. And, the owner earns low or moderate income.

Federally Insured Reverse Mortgage

The U.S. Department of Housing and Urban Development (HUD) backs this type of reverse mortgage. This type is more commonly known as Home Equity Conversion Mortgages (HECM). The upfront costs are high especially if the owner stays in short period of time. So, this reverse mortgage is costlier than Single Purpose Reverse Mortgage.

It is the opposite of Single Purpose Reverse Mortgage in which the reverse mortgage loan can be used in any purpose. And, the mortgage are widely available anywhere. There are also no income or medical requirements.

Proprietary Reverse Mortgage

The private companies backed or owned this type of reverse mortgage. It is generally the most expensive type of reverse mortgage. However, the owner may get more than other types of reverse mortgage. Generally, it works the same way as the Federally Insured Reverse Mortgage.

Dennis Estrada is a webmaster of mortgage calculators, reverse mortgage, and jumbo mortgage loan website.

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

Save Money On Your Home Mortgage With Mortgage Cycling

Imagine that you have $40,000 in cash to finally remodel your old kitchen into that beautiful chef style kitchen you have always wanted. One with granite counter tops, and beautiful stainless steel appliances. There are actually methods that enables you to do this. One of them is called Mortgage Cycling and more than likely, you will have built enough equity with this plan to remodel more than just your kitchen. Perhaps the entire house needs a facelift or the the kids, and you, would love to add a swimming pool.

The possibilities with that extra money are endless and the best part is, not only does this make your home more attractive and comfortable, it also increases your homes overall value. Imagine that you have those extra thousand dollars to put down on a second home or an investment property. With a mortgage cycling plan you will be able to own multiple properties in a shorter period of time. You can combine the power of Mortgage Cycling with real estate investing and you could easily provide yourself with a very successful living..

We all know that investing in real estates have been great investments over the last century.

There is also the option of using the equity to provide a solid education for your children by sending them to the best schools. If you have ever wanted to send your children to exclusive, private school or college but could not afford it, then this plan gives you that opportunity. You can also be able to boost your retirement plan by tens of thousands of dollars and you could either retire years earlier or have that much more money to retire on.

If you have the chance to pay off your mortgage in a few short years would you take that chance? At the same time you could free up a huge chunk of cash every single month. The money that used to be an expense every month can then be part of your income. Some people make an extra $800 per month in their pocket, for others it is an extra $1,800 per month.

A biweekly mortgage can be good but it can only cut 8-10 years from your mortgage. Now you do not even have to hassle with a biweekly mortgage. With mortgage cycling you will pay off your mortgage in 10 years or less. Can anyone turn down an alternative like that?

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=116620&ca=Finances

Choosing the Right Mortgage - Basic Mortgage Terms and Features

Choosing the Right Mortgage – Mortgage Basics

There is an astounding range of commercially available mortgage products, which makes choosing the right mortgage increasingly difficult without a firm grasp of mortgage basics. Here we try to give the consumer struggling to understand the basics of what a mortgage is, how it operates, and what features are right for him or her, the basic terms and distinctions that will allow the consumer facing an all-important mortgage decision – perhaps for the first time – to begin to choose the right mortgage from the thousands of mortgage products available on the market. But a word of caution – there is an incredible range of mortgage products commercially available. Before making a final decision on which mortgage is right for you, it would only be prudent to consult with an experienced and knowledgeable mortgage broker.

What Is a Mortgage?

A mortgage is a loan – but a loan that is secured, in this instance, against a home and/or piece of land. The person who borrows the money to buy a house is the mortgagor and the person, company or bank etc. who lends the money is the mortgagee. In most instances, the person buying the house will be required to pay some amount, perhaps as little as 5 per cent, as a down payment on the house or property. A mortgage from a commercial or private lender is secured to pay the balance of the purchase price. The mortgagee/lender provides the balance of the money to buy the house on the ‘closing date’ (i.e., the day the deal for the house is completed and the property ownership changes) and the mortgagor/purchaser pays back the money borrowed to purchase the house over time, usually over a number of years.

Key Mortgage Terms & Concepts

Amortization Period – A mortgage is written based on an understanding that the mortgagor/borrower will pay back the money borrowed over a number of years, rather than months. When purchasing a home that is typically worth several times what the purchaser earns in a year, it is understood that a the number of years will be needed to fully pay off the mortgage. The ‘amortization period” is the number of years that it will take to pay off the mortgage in full under the terms of the mortgage that is agreed to. The usual amortization period is 25 years, although shorter and longer amortization periods are available.

The amortization period sets out how long it will take to pay off the mortgage in monthly payments. Monthly payments consist of two parts – one part goes towards paying the ‘principal’ (the amount of money borrowed) and other part goes towards paying the ‘interest’ (the fee charged for borrowing the money.) The longer it takes to pay back the principal – i.e., the longer the amortization period – the greater the amount of interest that will be paid over the life of the mortgage.

Term – A mortgage agreement will not typically be for the full length of the amortization period. It is too difficult for either party – mortgagor and mortgagee – to foresee all the changes in financial circumstances over such an extended period. Accordingly, the parties – mortgagor/borrower and mortgagee/lender – will agree to a mortgage covering a specific number of years of the mortgage – e.g., 5 years. When the term of the mortgage expires the mortgagee is paid in full for the money that was borrowed to purchase the home. Typically, since it is anticipated that the mortgage will be paid off over the length of the amortization period, at the end of the term the mortgagor will have to negotiate a new mortgage – either with the initial mortgagee/lender or a new mortgagee. This process of ‘refinancing’ is normal, yet is an excellent way for prudent borrowers to re-examine their financial circumstances – for example, to see if their circumstances have changed so that they can shorten the amortization period and pay their mortgage off more quickly, thereby cutting down on the total interest they will pay in purchasing their home.

Fixed-Rate vs. Variable-Rate Mortgages – In a fixed-rate mortgage, the same interest rate is charged throughout the entire mortgage term. In a variable-rate mortgage the interest rate will change based on changes in interest rates that are being charged in the market.

Since interest rates do change based on the financial markets, risk is being assigned and the mortgage rates for both fixed-rate and variable-rate mortgages will reflect who is taking the risks – the mortgagor/borrower or the mortgagee/lender. When mortgage rates are relatively high it is the borrower who takes the risk that interest rates will not fall lower than the rate he or she agrees to for a fixed-rate mortgage. So when mortgage rates are relatively high, mortgagee/lenders will usually be willing to offer fixed-rate mortgages for a lower interest rate than the current interest rate for a variable-rate mortgage. The opposite is, of course, true. When mortgage rates are relatively low – as they are now – the mortgage/lender assumes the risk that interest rates will not go up. Since there is always the risk that rates will go up, a fixed-rate mortgage will have a slightly higher interest rate than a variable-rate mortgage when interest rates are relatively low. (The advantage of a fixed-rate mortgage is, of course, that the mortgagee will always know the cost of his or her mortgage payments over the term of the mortgage.)

Open Mortgages vs. Closed Mortgage – With an open mortgage some or all of the balance of the mortgage can be repaid during the term of the mortgage without a financial penalty. This is particularly advantageous, if the home purchaser has to move for employment or other reasons and if one’s financial circumstances change. Under a closed mortgage, no extra payments or changes in the mortgage can be made before the end of the mortgage term without a penalty being charged. Such penalties can be onerous for the homeowner who is forced by circumstances, such as a change of job, to relocate before the term of the mortgage expires.

Open mortgages can also prove to be very advantageous for the prudent homeowner who is able to make periodic payments directly to the principal owing under the mortgage. Each mortgage payment is split between interest costs and money that goes towards paying off the principal of the loan. If the borrower makes periodic payments over and above the regular mortgage payments that are required (the amounts and timing of which are usually set out in the mortgage itself), these payments directly reduce the amount owing under the mortgage. Doing so effectively reduces the amortization period of the mortgage, since in every subsequent mortgage payment more money will be going to pay off the principal of the mortgage and less money will be going towards the interest costs.

The Importance of Mortgage Advice

While this covers some of the mortgage basics that the consumer will need to choose the right mortgage product, it is important to note that there are quite literally thousands of mortgage products to choose from – each with its own intricacies and detailed terms. Accordingly, the prudent mortgage shopper should consult with someone with advanced expertise in the products and range of choices that are available on the market, given the borrower’s circumstances. An accredited mortgage broker will have the expertise and knowledge to assist the borrower in choosing the right mortgage for his or her situation. Moreover, since an accredited mortgage broker typically receives his or her fee from the lender, a mortgage broker with expertise and knowledge of the thousands of mortgages that are commercially available can assist the borrower in understanding and choosing the right mortgage from the thousands that are available at no cost to the borrower.

Tag : mortgage,mortgage rates,mortgage refinance,mortgage loan,bad credit mortgage

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=266447&ca=Real+Estate