Monday, March 23, 2009

Mortgage Refinancing For Undertaking Home Improvements

So, you have been thinking about making home improvements but you lack the cash to do so? You feel that it is the right timing and you regret that you have not saved for this situation? You do not need to despair. If you have been paying your mortgage installments and you have some equity available on your home, you can refinance your home loan and take some cash out of your home equity.

With a Cash out refinance home loan you can refinance your current mortgage for a higher loan amount than your outstanding debt and thus obtain extra cash for whatever purpose you desire. You can easily use the money to make home improvements and thus, you would be using as collateral for the loan the very same property that you are going to improve.

Cash Out Refinance Mortgages

Cash out refinance home loans are just like regular refinance home loans, only that you actually refinance for a higher loan amount than your outstanding mortgage making use of the equity you have built on your home. Thus, you get a fair extra amount to use for whatever purpose you can think of.

For example: Let's say you own a property worth $100,000 and you still have to pay a mortgage loan of $60,000. This implies that there is $40,000 worth of property that can be used as collateral. Though some lenders are willing to finance up to 100% of the property or even more, most of them will only lend up to 85%. Thus, in a common scenario you can request a refinance mortgage loan of $85,000, use $60,000 to repay the previous loan and keep $25,000 for other purposes.

Home Improvement Loans

When these loans are used for home improvements, they are actually raising the value of the property that is used as collateral for the loan. Thus, the lender is benefiting from the fact that the asset guaranteeing his money is more valuable and thus, the risk involved in the transaction lowers.

Some lenders will consider loans used for home improvements to be of a lower risk and thus will offer you special loan conditions, including lower interest rates, longer repayment programs and thus lower monthly payments. All this benefits can be easily obtained by just requesting a loan specially tailored for home improvements.

Interest Rate

Usually the interest rate charged for these loans is a bit higher than a regular home loan. But this is true only under the same credit circumstances. If your credit score has improved since you requested your current home loan, chances are that you might get a lower interest rate and general better loan conditions by refinancing your home loan.

Thus, consider checking your credit report prior to applying to know where you stand and what you can expect by refinancing your current mortgage with a cash out refinance home loan. Also check that there are no prepayment penalty clauses in your previous home loan since this can increase the costs turning refinancing more onerous than you thought.

About The Author:
Melissa Kellett is an expert loan consultant who has worked for twenty years in the financial industry and helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and many other types of loans and financial products. If you want to learn more about Government Guaranteed Student Loan and Easy Credit Loans you can visit her site www.speedybadcreditloans.com/

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Friday, March 20, 2009

Strategies to Help You in a Mortgage Refinancing Loan

Is your credit rating a little shaky?

If it's time to renew your mortgage, you may be wondering if you'll have problems finding lenders. Depending on your information, it is certainly possible (and probable) to get mortgage refinancing with bad credit.

Do you really need a bad credit loan? If the following statements apply to you then the answer is 'yes'.
  • You have a credit score of 620 or lower

  • You have missed two or more 30 day mortgage payments in the past year

  • Or you have had at least one 60 day delinquency in the past two years

  • You are struggling to meet your monthly expenses
If this describes your current situation don't panic, you're not doomed. You may well qualify for a bad credit mortgage refinance. In addition to the above facts, lenders take into consideration your home collateral and your ability to repay the loan. So, if your house is worth more than the money left owing on it and you can make your payments then you are probably a good candidate.

Believe it or not, there are even some positives to mortgage refinancing with bad credit.
  • A bad credit home loan may help you to avoid declaring bankruptcy

  • You may be able to free up some cash for home improvements

  • It gives you a fresh chance to repair your credit

  • It may be possible for you to consolidate your bills into one monthly payment

  • Mostly, it can relieve the feeling of burden and pressure
Once you've decided to go ahead and refinance your home, don't just start applying haphazardly. Repeated credit applications and credit checks can actually hurt your chances at getting a bad credit mortgage refinance loan. Before approaching any lender, do your homework.

The first thing that you need to do is get a copy of your credit report. You can get it from one of the three main reporting bureaus: Equifax, Experian, and Transunion. Check the report over to make sure all the information is accurate. If you spot any mistakes, get them cleared up before applying for your loan.

After you've done that, you'll have a realistic picture of your credit situation. It is copies of the final, accurate report that you need to give to the lenders when shopping for your bad credit mortgage refinancing loan. Do not let anyone do a new credit check on you until you've decided which lender you're going to work with.

Just because you're looking for a mortgage refinancing loan for bad credit does not mean that you should not use caution. Search out reputable lenders online and request information. Be sure that they're licensed.

Once you've chosen a lender who offers you an acceptable rate, get the quote in writing. That will lock in the numbers so they can't change if interest rates do before you finish the application process. The only thing that can influence your pro-offered rate is if your credit score has changed from what it was on the copy that you submitted for the quote.

As soon as everything is finalized, you'll have your mortgage refinancing with bad credit. It really is not that hard and the benefits can make your life easier.

About The Author:
An author on Mortgage Refinance Loan and if you would like more information on Refinance Bad Credit then be sure to visit website. You will find some easiest staples that you will understand in one sitting.

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House Hunting and Reverse Mortgages: Where to Find Both

House hunting can be very time consuming. Prospective home owners often spend months searching for the right home and may even make several offers on home throughout the process. Many of these offers will end up not working out for various reasons such as if the owner will not come down on the listing price or if the inspector finds the home to be less than the asking price. However, before you can even begin the process of finding a home to purchase, you will have to know where to begin looking for those homes.

Searching for homes is much like searching for other things in life such as reverse mortgages. With the reverse types of mortgage, you will likely have to find reverse mortgage lenders to help you through the process and to find out if you are qualified for a loan. When you first begin house hunting, you will probably first want to find a bank where you can get pre approved for a loan to buy a house. There really is no use in taking the time to look at homes in the first place if you are not pre approved to take out a loan to buy the homes. It does not matter too much which bank you choose to do the paper work to get you pre approved because you can usually get your final loan through another bank if you wanted to.

Although the next step with reverse mortgages after meeting with reverse mortgage lenders to see if you qualify for the loan would usually be to complete the paper work and get the money, the process takes a little longer with house hunting. After you are pre approved to buy a home, you can then start looking at different homes in your area. You will normally want to choose a realtor to help you with this process because that way they can do all of the work in finding all of the homes in your area in your specific price range. One way to find a realtor that can help you with this is to ask the banker for any recommendations when you are working on getting pre approved.

Whether you are working on reverse mortgage or are house hunting, you will want to make sure you take your time so that you do not rush into a decision that you are not completely happy with. Buying a home is a very big decision that you will not want to take lightly because you will likely live there for several years and may even raise a family there. Although at some point in the search you might get tired and want to be done with the process, usually the best thing that you can do is take a few days off and then come back to begin the search again so that you do not just choose a house because you are tired of looking. Hopefully this will help you find the home that you have been dreaming of.

About the Author

More information on reverse mortgages is just a click away.

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Wednesday, March 18, 2009

Maximizing Your Response From Mortgage Leads

If you have been in the mortgage business for a long time, you already know the ins and outs of the trade. You know how much the business has changed ever since the start of the financial crisis. Earlier it was easier to get qualified mortgage leads. The percentage of Internet mortgage leads that fructified was a lot higher, and home owners were more patient, but not anymore.

In this market, being a mortgage broker is a difficult business. The lenders are worried about their money, and home-owners are worried about the values of their homes, and whether they will be able to pay for them. How can you make new loans on your mortgage leads when the values of homes have dropped? That’s why most of the Internet mortgage leads are proving to be duds.

The second reason is that the Internet mortgage leads from most sources aren’t being kept up to date. Earlier when the market was hot a lot more people were applying for loans and families were interested in refinancing their mortgages, but now the mortgage market is dull, and the mortgage leads are ineffective because people are so worried about their mortgages that they don’t want to change a thing.

In such a competitive market, you need to pursue your mortgage leads in a highly scientific manner so that you can get the most results and turn every prospect into a customer. The secret is not to be selling mortgage. Nobody wants to buy a fresh mortgage, but everybody wants to understand how they can save money on the mortgage and enter into friendlier terms that will let them keep their houses. You can convert your Internet mortgage leads into long term sales if you become more of a counselor than a salesman.

Instead of asking the consumers if they want to refinance, or if they want a new mortgage, try to ask if they need help or advice with managing their mortgage and their property. By establishing rapport with them in this manner you can be the person to help sell them a fresh mortgage. Many of your customers may not immediately turn into sales this way, but by establishing a relationship with the consumers whom fill out Internet mortgage leads, you can ensure business later when they need to buy a mortgage, or business can come your way through references.

The secret to staying in the mortgage market right now is not to be greedy. Instead be a good listener and know your facts well. If you can give useful information to one of your mortgage leads, they will never forget you, and they will come to you for business again and again. Your Internet mortgage leads can become a lifelong customer this way.

Another thing you need to remember is that when you buy non-exclusive Internet mortgage leads you are competing with other mortgage brokers who have bough the same leads. To get an edge over the competition, you need to do something extra. You need to prove that you’re a better broker than your competition. And you can impress your mortgage leads by showing them that you’re better informed, you care about their interests, and that you’re not just there to make some quick money.

By: Groshan Fabiola

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Sunday, March 15, 2009

5 Considerations When Comparing Mortgage Refinance Rates

Getting a mortgage loan is not something you can take out, bring home and then forget about. It does have its risks. To really maximize the kind of deal you get over the long term, you will have to watch out for fluctuations in mortgage loan rates, which, fortunately or unfortunately, change incrementally day by day. Sometimes , It might even happen several fluctuation in one day. Here's some consideration when comparing mortgage refinance rates to get the best rates possible for your loan:

1.Provide your credit report.
You could always get mortgage rate quotes, even without a credit report. However, to get the exact loan rate accurately , your lender will ask you to provide your credit report. If you want the exact figures, get a copy of your report first before you start shopping for mortgage refinance rates.

2.Ensure all fees included.
Getting a mortgage loan refinanced means you will have to pay for certain fees. If you're dealing with a reliable lender, they will be willing to give you all the information you need. Others, unfortunately, will simply withhold that information.

3.Check how often the lender make loan recalculations.
The best way to treat a mortgage loan – or any loan for that matter – is to get out of it as fast as you can. This is why it's always a good decision to have a personal payment plan set up before you take out a loan. A bi-monthly payment scheme, for example, will help you pay off the loan earlier and avoid additional charges.

Check with your lender to determine how often they make loan recalculations. Yearly recalculations are disadvantageous to you, so when comparing mortgage refinance rates, look for companies that recalculate frequently – daily if you can find them or at the very least, monthly.

Why is this important? In the future, you could have the opportunity to get a good amount of cash from a bonus or a promotion and would like to use that to pay off your loan. If your lender does not recalculate often, you could be stuck on the old interest rates, regardless of how much money you put in. If your lender recalculates often, you could start paying for your loan at newer, lower interest rates.

4.Take advantage of lock-in period.
Take advantage of a good mortgage refinance rate by having it locked in by your lender. A lock period is the period of time in which the current or agreed-upon rate is honored by the lender. It means, the rate will stay that way within a specific amount of time. This can range from a minimum of 15 days to a maximum of 60 days.

The lock-in period you choose will of course depend on how long you want to keep the interest rate and on how much you can afford to pay. Shorter lock periods will have more affordable mortgage rates while longer periods will charge higher rates. When comparing mortgage refinance rates, try to compare the lock-in periods as well.

5.Be careful of what you see.
Most consumers are reeled in by clever advertising promoting low interest rates. However, not every consumer will probably land this rate because their qualifications vary. Furthermore, some companies' advertised rates may be locked in only for about 15 days. Unless you could close within that period, it may not be worthwhile to consider comparing these rates at all.

Furthermore, if you try to compare mortgage refinance rates without having your credit report run, always study the pre-approval estimate terms of the loan carefully. You do not want any surprises in the future, particularly if they are disadvantageous to your finances.

By: Sutiyo Na

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

Thursday, March 12, 2009

Some Information In Relation To Mortgages

People looking for a mortgage often find themselves in a position whereby they are stifled. And this is not just because of the amount of information that is out there. It is also because of the nature of the information that is out there, as well. The amount that a person takes in, is very much dependent on any knowledge that they already had, and even this may be subject to understanding a load of heavy bureaucratese. What with the modern world of Internet, people can actually go through the entire process of obtaining a mortgage online, which is not a great deal of use if they have such a limited understanding of the product that they are about to spend tens of thousands of pounds on. 85% of British people openly admit to there being parts of their mortgage that they do not understand, and when given the cost of a property, this is quite worrying. This is why more people should be using a mortgage broker.

When you seek to employ a broker, you have two choices available to you. You have the extremely thorough broker who uses the market in its entirety, in order to get a mortgage for clients. Whole of market brokers, as they are referred to, will derive their results from all of the mortgage providers in the country, and they will evaluate which deals are the best for the client. The service that they offer is one based on efficiency, which means money being saved for the client. A good broker is going to give their client a service that will involve comparing thousands of mortgages, using an extensive database that they have access to. Such a broker sounds far more appealing to one who is reliant on a comparatively small panel of lenders. While the service may initially be faster, (obviously) there is not much of a chance of the client being given the best deal.

There is also some level of variance in the way that fees are handled. Some brokers charge for commission and fees. There are others though, known as independent brokers, that ask for fees only, with any commission earned, available for rebate. It is notable that the majority of brokers do deal with the sub-prime market. This means that they will deal with people that have had credit problems in the start, and they will not charge any extra for this, either. It is only through regulation, that this is the case, though.

If a mortgage has been secured by a really good mortgage broker, then the product should be a really good one. Some manage to get added protection with the mortgage, so that in adversity, the proprietor has a security net to be thrown into. One really good aspect of a really good broker, is the fact that they can generally wangle deals with their skills, that a lesser broker would not be able to.

It is the most important decision that can be made, because for the vast majority of people in Britain, getting a mortgage is going to be the biggest financial commitment of their lives. A good broker is therefore essential if you want to make the most of this massive commitment. It is basically a choice between staring blankly at a load of jargon, or paying someone to completely elucidate, and make sure that you purchase something in the best possible circumstances that are available.

By: Rudi ONeil

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

Tuesday, March 10, 2009

How To Get The Best Mortgage Rates

First, make sure you are comparing current mortgage rates for the same type of mortgage. Mortgage rates and closing costs can change significantly from one day to another, so if you are comparing offers from multiple lenders it must be done on the same day. For example, if you are shopping mortgage rates and have a quote for a 30 year fixed at 5.75%, only compare it to other 30 year fixed quotes at 5.75%.
Next, compare the total of all points and lender fees for each mortgage (from section 800 to 813 on the Good Faith Estimate), that is the price of the mortgage. The lender with the lowest cost has the best mortgage rates.

If you are refinancing, you will also need to review the cost of title insurance, closing/attorney, and appraisal.

Is your credit rating a little shaky?

if it's time to renew your mortgage, you may be wondering if you'll have problems finding lenders. Depending on your information, it is certainly possible (and probable) to get mortgage refinancing with bad credit.

Do you really need a bad credit loan?

If the following statements apply to you then the answer is 'yes'.
  • You have a credit score of 620 or lower
  • You have missed two or more 30 day mortgage payments in the past year
  • Or you have had at least one 60 day delinquency in the past two years
  • You are struggling to meet your monthly expenses
If this describes your current situation don't panic, you're not doomed. You may well qualify for a bad credit mortgage refinance. In addition to the above facts, lenders take into consideration your home collateral and your ability to repay the loan. So, if your house is worth more than the money left owing on it and you can make your payments then you are probably a good candidate.

Believe it or not, there are even some positives to mortgage refinancing with bad credit.
  • A bad credit home loan may help you to avoid declaring bankruptcy
  • You may be able to free up some cash for home improvements
  • It gives you a fresh chance to repair your credit
  • It may be possible for you to consolidate your bills into one monthly payment
  • Mostly, it can relieve the feeling of burden and pressure
Once you've decided to go ahead and refinance your home, don't just start applying haphazardly. Repeated credit applications and credit checks can actually hurt your chances at getting a bad credit mortgage refinance loan. Before approaching any lender, do your homework.

The first thing that you need to do is get a copy of your credit report. You can get it from one of the three main reporting bureaus: Equifax, Experian, Transunion. Check the report over to make sure all the information is accurate. If you spot any mistakes, get them cleared up before applying for your loan. After you've done that, you'll have a realistic picture of your credit situation. It is copies of the final, accurate report that you need to give to the lenders when shopping for your bad credit mortgage refinancing loan. Do not let anyone do a new credit check on you until you've decided which lender you're going to work with.

Just because you're looking for a mortgage refinancing loan for bad credit does not mean that you shouldn't use caution. Search out reputable lenders online and request information. Be sure that they're licensed.

Once you've chosen a lender who offers you an acceptable rate, get the quote in writing. That will lock in the numbers so they can't change if interest rates do before you finish the application process. The only thing that can influence your pro-offered rate is if your credit score has changed from what it was on the copy that you submitted for the quote.
As soon as everything is finalized, you'll have your mortgage refinancing with bad credit. It really isn't that hard and the benefits can make your life easier.

About The Author:
Paul C Ewen is authentic author on Mortgage Refinance and if you would like more information on Refinance then be sure to visit my website. you will find some easiest stapes that you will understand in one sitting.

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Sunday, March 8, 2009

The 15 Year Mortgage Plan To Pay Off Your Home

Home appreciation is not a realistic motive for owning a home, nor a means for achieving personal wealth. Now, a more practical view is to see your home as a long term place to live, while thinking ahead to prepare for a financially secure future.

When buying or refinancing a home, most people will take the path of low payment over a plan to eventually pay off the mortgage. The idea of owning a home free and clear of any mortgage may be a low priority to many people, but it’s only a matter of time, 15 years, or maybe even less.

A 15 year fixed rate mortgage can provide a realistic goal of being mortgage free, while saving thousands of dollars on interest payments, instead of a 30 year mortgage. For example, on a $200,000 loan, a 15 year mortgage could save as much as $120,000 over the life of the loan when compared to a 30 year mortgage term.

There has been an ongoing debate about the pros and cons of paying off a mortgage. Behind the argument for not paying off your mortgage is the reasoning that you could invest the extra money and earn a higher return, while keeping your money more liquid. That may have been a good reason in the past, but the rate of return on investing is questionable, compared to the fact that every dollar paid to reduce a mortgage balance provides a guaranteed return equal to the interest rate on the mortgage.

Another debating point about keeping a mortgage has been the tax deduction benefit. In order to get an accurate picture of the tax benefit, compare the standard deduction allowed to itemized deductions with mortgage interest. If you paid $20,000 in mortgage interest for the year and received a $2,000 net tax write off, is that a good reason to prolong your mortgage?

What are the benefits of a 15 year mortgage?

• Provides a fixed term strategy to eliminate your monthly mortgage expense.
• Incorporates the retirement of your mortgage into your overall retirement plan.
• Long term investment that guarantees a rate of return by reducing your debt.
• A future with less financial stress and the security of really owning your home.
• Saving a large amount of interest expense on a 15 year term instead of 30 years.

The goal of living without a house payment is attainable. If you can afford a 15 year mortgage, you set a timetable to one day enjoy the benefits owning your home free and clear. You also have the option of shaving a few years off the term by paying a little extra towards the principal balance each month. By the way, 15 year mortgage rates are usually lower than 30 year rates.

By: Rick Smith

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

Perils Of Purchasing A Property Subject To The Current Mortgage

It is possible, though not common, to close a deal on a property by taking the place of the previous owner on the mortgage loan. There are however, some safety measures you need to take in order to avoid the perils that this kind of transactions implies. The assistance of an attorney is suggested on these deals due to the complexity of the resulting contract.

There are several issues to consider: Who is the proprietor of the house, who is obliged to repay the loan, what are the legal rights of the previous owner, what are the legal rights of the new owner and finally what are the legal rights of the bank or lending institution. As you can see, it is a complex matter because there are actually two separate contracts: The loan contract that obliges the lender and the taker and the property transfer contract which obliges the new owner and the previous one.

Purchases Without Cancellation Of The Outstanding Mortgage

A mortgage ties the property to the loan and not the proprietor. Though the borrower is legally obligated to repay the mortgage loan, the debt will follow the property regardless of who the owner is until it is fully paid off. This is an important fact because the consequences of this will have many implications on the outstanding relations between the owner, the debtor and the lender.

If there is a purchase without the cancellation of the outstanding mortgage, the debtor keeps owing the remaining of the mortgage balance to the lender and the property keeps being tied as collateral of the loan. The owner has then an asset affected as security of a loan taken by a third party.

Up to this point the situation is probably clear but you may wonder why on earth would someone want to do such a thing. The reason is quite simple: If someone no longer wishes to reside in a property but cannot sell it normally for a fair price and thus cancel the loan or if he cannot afford the payments of the mortgage loan any longer, it is possible to reach an agreement with a buyer who wants to purchase the house and that can take care of the payments to keep the lender from repossessing the property.

Contracts And Perils

Who runs the greater risk? This question is not simple to answer as it depends on how payments are handled. If the one paying the loan is the actual borrower (with the money handed by the new owner), the later one risks repossession of the property in the even that the payments are not made. If the new owner does not provide the money for making the payments or agrees to take care of the payments and does not make them, then the borrower who is the one that legally owes the money will be affected by the consequences of lack of payment on his credit score and history. If the lender takes the debt to legal grounds he may also have to answer with his assets if the money obtained from the sell of the property is not enough to cover the debt.

The only solution to avoid these problems is to get a couple of lawyers to outline a comprehensive contract with stipulations protecting both parties. And, on our humble opinion, it is preferable to obtain a new mortgage loan and cancel the previous one. There are plenty of lenders willing to provide financing if collateral is provided (even with bad credit).

About the Author

Devora Witts is a certified loan consultant who instructs people regarding Quick Unsecured Loans and Guaranteed Debt Consolidation. To get aid with your financial situation you can visit her at http://www.badcreditloanservices.com

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Friday, March 6, 2009

Reverse Mortgage: Who is Eligible?

If you have ever taken out a loan, you probably know that it can be a stressful undertaking. First, you have to find out if you even qualify to take out a loan. Then you have to decide how much money you want to borrow and if you are eligible to borrow the amount that you need. This process does not have to be so stressful however, especially if you do a little research before you dive into the process of taking out a loan.

If you are looking into your options for borrowing money, you may have heard of a reverse mortgage and are probably wondering not only what this type of mortgage is, but who is eligible to apply for it. If you are a home owner, you have met the first criteria in qualifying for this type of mortgage. The second criterion is a little trickier and involves figuring out how much of the value of your home you own.

Basically, in order to qualify for a reverse mortgage, you must own a portion or all of the value of your home. So, if the majority of the value of your home is still tied up in your traditional mortgage, this reverse type of mortgage may not be the right option for you. However, if you have paid off most or all of your traditional mortgage and own a large portion of the value of your home, you may be a perfect candidate for this reverse type of mortgage.

If you meet the criteria of being a home owner and owning the majority of the value of your home, it is probably a good idea to make your next step to speak with reverse mortgage lenders. These professionals will be able to not only find out if you truly qualify to take out a reverse mortgage, but they can also figure out how much your qualify to borrow on the value of your home.

When you meet with reverse mortgage lenders, it can help to have a list of questions prepared to bring with you to the meeting. Taking out this type of loan is a big decision, so be sure to have all of your questions and concerns addressed before moving forward with your decision. The other good thing about meeting with these lenders is that they will discuss the terms of your reverse mortgage with you. These terms can include such things as when you will be required to begin repaying the money that you borrow and any other special conditions to your loan.

There are many things to take into consideration when you are thinking about borrowing money. You will first need to decide which type of loan is right for you and then make the important decision of how much money you need to borrow. It is also very important to take into consideratio

About the Author

More information on reverse mortgages is just a click away.

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Wednesday, March 4, 2009

Important Details About An Interest Only Mortgage Loan

An alternative form of mortgage that has been seeing a growing popularity in recent years, the interest only mortgage loan allows a borrower to pay only the interest on the money that they borrow for a specified period of time. Once that time period has expired, the full loan amount is due; this allows many borrowers to save up money for the mortgage payment during the initial payment period without having to struggle to meet a large payment amount every month. These loans can be very useful for those who are on an infrequent or irregular pay schedule, especially when they will be seeing a larger influx of money at a later date from investments or large surges in income. These loans are not for everyone, but provided that you are fully informed about how the loans work you may find that they are exactly what you have been looking for.

Interest only mortgage loans can be very useful when you are trying to purchase a house or other property but will not be able to afford full mortgage payments at this time. Since you are only paying the interest on the principal amount that you borrow instead of making payments for both the interest and the principal, the amount of each payment is going to be significantly lower. When the total amount finally becomes due, you will have to pay only the principal because you have been taking care of the interest as it was accrued. With most interest only mortgage loans, this will give you between five and seven years to save up the money that you need or to make investments that will pay off the principal amount once it becomes due.

This is not to say that paying off your interest only mortgage loan is your only option when the final loan amount becomes due, of course; most lenders will offer you the option to refinance the remainder of your loan for an additional term, in some cases changing both the term and the interest rate on the refinanced loan so that you can get a better deal when repaying the original mortgage amount. Some borrowers will take advantage of this in order to refinance the principal into a more standard mortgage type, using the time that they were paying only the interest on their original loan to save up enough money to be able to better meet the full payments that go with a traditional mortgage.

A number of lenders will allow you to make payments on the principal when it comes due instead of having to pay the entire amount at once, though it is important that this is negotiated beforehand so that you do not expect to be able to make payments when they are not offered. This is not without its drawbacks, of course, since the interest rate that is charged on these payments will generally be higher than what was being charged when you were only paying the interest. Even if the interest rate does not change, you will still have a significantly higher amount to pay each month since you are paying against principal as well as having to keep up with the interest that is being applied to your balance each month.

Many people who are in the process of advancing in their careers find interest only mortgage loans very appealing, since it lets them save money now while they’re still working their way up the corporate ladder. By the time that the principal amount becomes due or they have to refinance, there is a good chance that these same individuals will be making significantly more money than they were when the loan was first taken out. This can be especially useful if the loan features a fixed interest rate, since that will allow these borrowers to keep the same rate even as they receive cost-of-living increases on top of any raises or other advances that they might receive as they advance their careers. This is a great option since the interest stays at a fixed amount allowing you to pay that first.

Not everyone will see the same benefit from interest only mortgage loans, of course. For those who have steady but moderate incomes, the savings from an interest only mortgage loan may not be enough to cover the full amount of the principal when it becomes due. These individuals may be better served by a more standard mortgage loan, or will need to plan in advance to refinance the loan once the interest only period expires. Should one of these individuals still be interested in an interest only mortgage, their mortgage lender may be willing to work with them to develop a refinancing plan so that they will already have an idea of exactly how they should refinance their loan when that time arrives.

About The Author:
About Author:
Brian Jenkins is a freelance writer who writes about economic issues and financial products pertaining to the mortgage industry such an adjustable rate mortgage or the lowest mortgage rate.

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Sunday, March 1, 2009

Mortgage Modification | Adjustable Rate Mortgage | Fixed Rate Mor

The loan structure is one of the first decisions you’ll have to make when taking out a mortgage. The two main types of mortgages are fixed-rate and adjustable rate, the main difference being the way your interest is calculated. Each structure has its own pros and cons, and it’s important to know which one best suits your situation. This article lists some of the basic differences between the two.

Fixed-rate Mortgages
A fixed-rate mortgage, as the name suggests, uses a single interest rate for the life of the loan. The main advantage of this loan is stability: because the rate never changes, your monthly payments remain the same regardless of the market situation. Fixed-rate mortgages are typically offered in 10-year, 20-year, and 30-year plans. Some loans also have a bi-weekly option, which allows you to make extra payments and pay off your loan sooner.

On many fixed rate mortgages, you start off paying more interest than principal in your early payments. But since your principal gets smaller each year, the situation eventually reverses and more of your payments are counted against the actual cost of the loan.

The fixed rate doesn’t apply to property taxes and insurance premiums—these are controlled by the government and your insurance provider respectively. But since your monthly payments are mostly made up of principal and interest, you can expect fairly stable payments with only minimal changes.

Adjustable Rate Mortgages
An ARM bases its interest on a third-party index that determines the market interest rate. This means that your interest rates can change from time to time, depending on current market indicators. Some of the commonly used references are the Certificate of Deposit Rate (CD), the Treasury Security Rate, and the Cost of Funds Index (COFI) of the Federal Home Loan Bank.

To protect borrowers from drastic increase, most ARMs impose a cap on either the payment itself or the change in interest rate. For example, a mortgage may allow a maximum increase of 2% each year, no matter what the current rate is. Others may cap the actual amount your payments can go up. Ideally, this will be a “lifetime cap”; that is, the cap applies throughout the life of the loan.

ARMs typically have an introductory period where you pay a fixed or low interest rate for the first few years. This scheme is designed to attract more borrowers, especially in the sub-prime market. Many people take advantage of this structure by enjoying the introductory rate, and then selling or refinancing the home when the rates shift back to normal.

If you are in an adjustable rate mortgage that you cannot afford you may qualify for a loan modification. Mortgage Loan Modification allows you to work out better terms with your lender, and pause the foreclosure process while negotiations are under way. This is especially ideal for people in adjustable-rate sub-prime loans, which have reverted to higher rates in recent years. To know more about mortgage loan modification consult your mortgage loan modification attorney.

About the Author

The Loan Modification Department is composed of a team of Mortgage Loan ModificationAttorneys, Mortgage Professionals, and Hardship Analysts. Lead by Expert Mortgage Loan Modification Attorney, Marc R. Tow, Loan Modification Department has helped thousands of American Home Owners save their Homes and decrease their loan payments. For more information Just Call 800-738-1170 or Visit our website http://www.cdloanmod

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