Mortgage Tips

Closing Costs With Your Mortgage

admin — Mon, 14 Jun 2010 12:12:26 +0000

When applying for a mortgage, it is important to understand that you are going to be responsible for paying costs associated with it. The fees are known as closing costs and can add up quickly.

If you have never applied for a mortgage before, you may be under the impression that it is a simple scenario where a lender gives you a big chunk of change and then expects a monthly payment for the rest of your life. In fact, the lender is going to want some money paid up front. This money comes in the form of closing costs and they can accumulate pretty quickly. While closing costs vary from real estate deal to deal, here are the ones you can expect to run into.

Lender’s Fees can be a harsh wake up call when it comes to closing cost. A lender is going to charge you fees for the origination of your loan and they can be very high. The fees can be attributed to process, underwriting, credit checks and a host of odd little tasks. They can add up quickly to thousands of dollars, so make sure you get a written quote from the lender before applying.

Appraisal Fees are a near constant when it comes to closing costs. As the name suggests, these fees are paid to an appraiser who values the home you are going to purchase. Technically, the fees are not really closing costs because they are paid at the time of the inspection, but they are generally grouped as such when closing costs are discussed. The amount of the fee depends on the property and part of the country you are in. Fees of $300 to $600 are pretty typical.

Title and Escrow – These two fees are nearly always present in any real estate deal. Title refers to the title insurance a lender will require you to obtain. Escrow refers to an independent third party that will act as an agent to hold document and money and issue them as well per the escrow instructions agreed upon by the parties. The fees for title insurance depend on the property while escrow fees vary from area to area.

Impound Accounts are not per se a closing cost, but they are something you should be aware of. The exact nature of an impound account depends on the lender’s requirements. In loaning you money, a lender may require you to pay PMI, homeowner insurance premiums and property taxes in to an impound account. Obviously, these numbers can grow pretty large, particularly with property taxes. It is important that you gain a full understanding of what will be required of you in this regard as buyers can be cash poor after escrow and run into trouble trying to meet the impound obligations.

If it is your first time applying for a mortgage, don’t be startled by all of the fees mentioned above. The key is to educate yourself on what is required for your specific situation and then go into the deal with your eyes open.

By: Raynor James

Finding the Best Home Mortgage Solutions

admin — Sun, 13 Jun 2010 15:07:45 +0000

Are you looking to purchase a home? Do you want to find home mortgage solutions that can make all the difference? If you are looking to purchase a home, this article will guide you through to find the best home mortgage solutions. Don’t get a mortgage until you read this latest article. Discover the information you need, to be able to get the best options.

There are many different lenders out there, and they can make all the difference. So, what makes one lender different than another? It is several factors.

For example, look at 2 different lenders and the packages they offer, and what you will find is that they have a different level of interest charges.

Another thing that they will have, is that they will actually have different hidden charges. This is a big thing, and makes all the difference.

Another point to remember, is that there are different types of mortgage, such as fixed, and adjustable home mortgage solutions.

So, how do you know which is best? Firstly, you want to make sure that you go through and find the lowest interest rates, but this often has the most expensive hidden fees. So, finding a balance is essential.

Another point to remember, is that the term, and type is of importance. If you really want to save, you need to factor in all these points.

The result is that you can find some amazing options.

There are all different lenders out there, with all different packages. Many lenders have a lot of different packages. So, looking at the differences makes sense.

Remember that some of these packages have a specialist factor, so they may be for people with a mobile home, etc. So, make sure that you are getting exactly what you need.

There are a number of ways to research, but I have found that going online is a great method for finding the best options.

By: Kozsar Bliss

Mortgage Calculator or Amortization Table?

admin — Sun, 13 Jun 2010 07:14:33 +0000

Both a mortgage calculator and an amortization table can be used to find out the monthly payment required on the property you would like to buy, but they approach the calculation differently.

Although they have similar functions, the mortgage calculator and the amortization table each have their own place in your mortgage control system.

Mortgage calculators range from ones that calculate a simple loan, to those that can work out exactly how much you can afford, to those that will determine how much you can borrow for a home loan depending on your current situation. Mortgage calculators are a good way for you to get a general idea of what you need.

An amortization table, on the the other hand, is an extensive spreadsheet of every detail of each type of loan, length of loan, interest rate, and many other factors that can confuse a novice.

A mortgage calculator may not give you as much information as an amortization table, but it may present basic information clearer and quicker. Once you have a good idea what you want in a loan, then an amortization table can help you delve deeper into the long-term ramifications of the loan.

They can be used separately, but their strength lies in a combination of both to enable a closer watch of the financial picture of your mortgage.

By: Karen Kirby

The Mortgage Jungle

admin — Sun, 13 Jun 2010 02:08:31 +0000

Owning a home is one of the main ingredients of achieving the “American Dream.” You’re probably reading and hearing about the mortgage crisis in America right now. It’s real, but the main thing to remember is that, like all crises, it will pass – eventually.

The mortgage crisis that we’re facing right now is the direct result of predatory lending practices by lending institutions. People were “qualified” for a mortgage for which they weren’t actually qualified. The subprime mortgage rate combined with adjustable rate mortgages and unadulterated greed was like a balloon filled with too much air. It burst! Lots of people got hurt, and the end isn’t yet in sight.

Nevertheless, owning a home is still part of the American dream, and people are still buying homes. If you are one of those that dream of owning your own home, there are some facts about mortgages that you do need to be aware of. Mortgages are not all created equally.

The Fixed Rate Mortgage: A fixed rate mortgage means that the interest rate will not change for the duration of the loan. If the mortgage is for 30 or even 40 years, the rate that you agree to when you buy the home is the rate that you will still be paying when you make the final mortgage payment. The interest of a fixed rate mortgage isn’t tied to market fluctuations – good or bad.

The Adjustable Rate Mortgage: Unlike a fixed rate mortgage, the interest charged on an adjustable rate mortgage is tied directly to market fluctuations. If you get the mortgage when the interest rate is low, when the interest rate rises, your monthly payment will increase. On the other hand, if the interest rate decreases, your mortgage payment will decrease.

There are other types of mortgages available; the balloon mortgage and the jumbo mortgage are two examples. The main thing is that you investigate your options before you sign on the dotted line.

By: Milos Pesic

The Four Most Important Questions to Ask Before Refinancing Your Mortgage

admin — Sat, 12 Jun 2010 04:16:44 +0000

Thinking of refinancing your home mortgage can seem overwhelming, with so many options on the market. If you break your thought processes into four categories it will be a whole lot easier for you to focus: Think about the term of your mortgage, your current interest rate compared to the new rates on offer, are you staying put or planning to move in the short term future, and do you have enough credit to find a mortgagee happy to take over your loan?

The mortgage term is how long the loan is spread over, and then there is the payback period meaning how long will you be with the new financier before you have made back to money it cost for the refinancing. These costs include appraisal fees, bank fees, lawyer fees and early pay out fees assigned to your current mortgage. Some lending institutes will allow you to absorb those charges associated with transferring into your home mortgage so you don’t pay anything in cash at the time.

Probably the most important thing for you to understand is exactly how much your interest rate will go down. If the new rate is over two percent less than the old one, refinancing is probably going to be worth your while. Any less than that and the recovery period or payback time will be too long and will result in more of a loss to you.

For those people who are hoping to move home in two years or less refinancing beforehand is not a good idea. The refinancing costs for doing the mortgage twice over will be too high leaving you noticeably behind.

Lenders looking to refinance your loan for you are focused on the LTV or loan-to-value ratio. This means the amount of your mortgage in comparison to your home’s appraised value. In some cases the mortgagee will only refinance if the new loan is to be 90% or less of the homes value, but every bank and lender has their own LTV limits. In some cases simply paying refinancing costs yourself will give you a better LTV.

If you do your research, refinancing your home mortgage can save you thousands in interest, but it can lose you the same if you don’t do it right. Check if you know someone who can recommend a lender to refinance with, or take time to see a variety of different ones and make your own informed decision. See below for more information on Mortgage Refinancing.

By: Charley Hwang

Commercial Mortgage – Flexible Finance Solution For Business Intended Properties

admin — Thu, 10 Jun 2010 17:03:34 +0000

Commercial mortgage is the loan purchased by a borrower to finance a property for business purposes. The lender has a legal claim over the financed property until and unless the borrower repays the loan in full. With the help of commercial mortgage, one can purchase:

• Shops and offices
• Factories and warehouses
• A piece of land
• A brand new building

Commercial loan can also be used to buy an already existing business. For example, a running hotel or a retail store can be purchased using commercial mortgage. Here are some other aspects of commercial mortgage that are useful to know.

Eligibility Criterion’s

A Commercial Finance expects the borrower to fulfill certain eligibility criterion’s for the loan. For example, a good credit score is one of the most important requirements for the approval of commercial mortgage. Loan-to-value ratio is another thing considered by the lender. It is the expectation of the lender from the borrower to make some contribution in the purchase. Stability and profitability of the borrower’s business is another factor that can affect the lender’s decision to approve commercial finance.

Interest Rate Options

The commercial loans are available with two interest rate options. First is the commercial Fixed Rate Mortgage in which the rate of interest remains unchanged for a fixed term of the mortgage period. The standard variable rates are paid by the borrower once the fixed rate term ends. The second option is the commercial variable rate mortgage, in which the rate of interest changes according to the base rate decided by the Bank of England.

Commercial Mortgage Repayment

One way of repaying the Commercial Mortgage is through a set number of equal payments. Each payment consists of one part as the interest and remainder as the principal. A variation to this is the equal payments with final balloon payment. In this, a set number of small monthly payments are made with a final balloon payment at the end. Interest only payments require the borrower to pay only the interest through monthly payments while the principle is paid as a balloon payment at the end.

Benefits of Commercial Mortgage

The borrower retains the complete ownership of the property. The interest payments on commercial finance are tax-deductibles. Moreover, the borrower has the feeling of owning a commercial property while the monthly payments remain less than or equal to the amount he would otherwise pay as rent.

This is a boon to the small and big business owners of Mortgage. Make sure to deal with a reputed commercial lender.

By: Suzanne Wiiliams

Private Second Mortgages that Are Silent

admin — Thu, 10 Jun 2010 13:29:11 +0000

A silent second mortgage is typically a second mortgage offered at preferential (subsidized) terms to those who qualify. These are generally offered by the state through one of three federally authorized programs, the Mortgage Revenue Bond (MRB) program. These programs typically entail a 97% FHA loan and a 3% silent second mortgage that is offered at below-market rates or forgiven entirely after a certain period of time.

Counties and municipalities also offer Mortgage Assistance Programs (MAP) to first-time home buyers that buy in their communities which assist in providing down payment to complete the purchase of the home. These generally come in the form of a silent second mortgage placed on the property at the time of closing that is forgiven after a certain period of time as long as the owner doesn’t sell nor do a cash-out mortgage refinance. Counties and municipalities also offer silent seconds for home improvements and renovations. Check with your local redevelopment agency for more information.

A silent second mortgage for investment properties is different than it is for residential properties. It generally entails second or junior mortgage loan on the property that does not require a scheduled payment until the rental income levels have reached a pre-determined point.

Silent second mortgages are even sometimes used as a workaround for when home owners are behind on their mortgages. Rather than foreclose, the lender might modify the loan by reducing the rate, or offer a “silent second,” in which payments on the past-due amount are deferred until the house is sold.

The riskiest form of a silent second mortgage is an unrecorded private money loan from the seller to the buyer during a purchase transaction. An example of this is an 80/10/10 plan where the borrower puts down 10%, the seller lends the borrower 10%, and the first mortgage is 80%. However, Robert Bruss, author of the nationally syndicated “Real Estate Mailbag”, states that an unrecorded silent second mortgage can be dangerous for the seller because if the buyer doesn’t make the payments to the seller, the seller can’t foreclose to get the property back.

By: Maria Ny

Picking a Mortgage Broker

admin — Wed, 09 Jun 2010 18:32:31 +0000

The key to getting the best financing for your home purchase is to use a mortgage broker to shop the various loans available. Before you can do that, you need to know how to pick one.

A mortgage broker is an independent loan professional. Put another way, he or she is not affiliated with a particular lender. Instead, the broker helps clients shop are large number of lenders for the best loan rates. This can be particularly helpful when finding wholesale lenders that do not deal directly with the public. Regardless, using a mortgage broker versus a lender is similar to shopping for a new car across a variety or dealers versus just going to one dealer and hoping not to get skinned alive.

While a mortgage broker can be a key ally in finding a good loan, you obviously need to pick the right broker. As with any profession, there are excellent brokers and ones that are not so great. Here are a couple of points to raise when you interview brokers.

Variety of Lenders – You are going to a broker to get the best deal. This means the broker needs to shop the loan across a wide variety of lenders. Ask the broker how many lenders he or she works with. Also ask the broker which lenders accept his or her business and which do not.

Alternative Loan Proposals – A good loan broker will never try to force feed you a particular loan. Instead, they will discuss your situation with you and then suggest a few proposed loan programs. At this point, a quality mortgage broker will also prepare a profile of the different loans and how your payments, interest rates and so on would look with each loan. All loans have benefits and drawbacks, so you want to be able to evaluate different proposals.

Staffing – A mortgage broker is not done when they find you a loan. They are responsible for submitting the documents and dealing with the lender if there are any questions or problems. Essentially, the broker is responsible for handling the paperwork and red tape. A quality broker will have an assistant and processor to help stay on top of your loan. He or she should be willing to identify them to you, even introduce you.

As weird as it may sound, there is one final area that you need to ask about. Will the broker give you his or cell phone number? Most do, but some don’t. If a broker refuses to give you the number, move on. It is a very bad sign.

By: Sergio Haros

201 CMR 17 Compliance Checklist For Mortgage Brokers! Are You in Compliance?

admin — Wed, 09 Jun 2010 02:49:23 +0000

If you are a mortgage broker or mortgage originator doing business in Massachusetts you need to understand how MGL93H and Regulation 201.CMR.17 impacts how you need to handle personal information and manage your business in the future. Effective March 1, 2010 licensed mortgage brokers are responsible for the safety and security of any Massachusetts residents personal information that is collected, handled or stored by you or your staff. Your mortgage business must have a written plan, known as a WISP “Written Information Security Plan” in place and being followed, to not only protect the safety and security of the personal information of your clients, but also to protect your business. Below is a checklist to help you get organized and develop the plan you will need to comply.

The Commonwealth of Massachusetts enacted MGL 93H which defines security breaches and regulations for the safeguarding of personal information of any Commonwealth of Massachusetts resident. Regulation 201 CMR 17.00 implements the provisions of the law and describes what you need to have in place in order to achieve compliance.

What Does 201 CMR 17 Mean For My Mortgage Business?

201 CMR 17.00 sets the minimum standards for the protection of personal information of any Massachusetts resident. It does not matter if this personal information is stored in a filing cabinet, a desk drawer or on your network database, you are responsible for its safety and security as set forth in 201 CMR 17. Massachusetts, like many states is responding to the growth of identity theft and is putting responsibility on those businesses (such as a mortgage broker) to follow a set of requirements in order to effectively protect personal data from those that might use it inappropriately or illegally. As a mortgage broker these regulations impact how you do business and who you do business with. If your originators, processing staff or even others that may be involved with a loan transaction such as an attorney, real estate agent or credit bureau have access to or store personal information about your borrowers or prospects (that reside in Massachusetts) such as their name, along with:

Address Social Security number Credit card number Driver’s license information Other state issued identification information

then these regulations will affect them also and you are responsible for taking steps to comply and control the collection, handling storage and distribution of this personal information. This means that you need to protect yourself and your business and only share personal data with businesses that you verify are in compliance with 201 CMR 17.

This regulation is not just about clients and customers. If you are located in the Commonwealth of Massachusetts and have employees who reside in Massachusetts and you keep employment applications, a copy of a drivers license, a personnel file or payroll information on them than 201 CMR 17 applies to you and you must comply.

So What Steps Do I Take To Be in Compliance?

The key to CMR 201 17.00 is the development, implementation, maintenance and monitoring of a comprehensive written information security plan (WISP). This WISP is meant to address handling and storage of any records containing personal information. In addition to creating and maintaining a WISP, you will need to identify the components of the program. This includes:

Designation of one or more employees to maintain the wISP. Identify and assess reasonably foreseeable internal and external risks to the security and confidentiality of any personal information you handle of store Develop security policies and procedures for employees and the handling of personal information. Limit the amount of personal information collected to what is necessary to perform the transaction. Identify all areas, storage and devices used to store personal information and develop a plan for its security.

201 CMR 17.00 goes further to address Computer System Security Requirements. The Commonwealth of Massachusetts has outlined technology requirements in order to be compliant. These requirements should be discussed with an IT professional. They impact not only your server, but desktop computers, laptop computers, network scanners and copiers. Things to discuss include:

Securing user authentication protocols Securing access control measures such that restrict access to records as well as manage passwords and users. Encrypting data during transmission as well as any data on mobile devices such as laptops and PDAs. Ensuring that there are current versions of security software such as anti-virus on systems. Training employees about information security

A lot of publicity regarding the theft of personal information has been linked to laptop computers by the media. Personal information can be compromised and stolen while being stored on computers or transmitted electronically, but this critical data can also be stolen while sitting on a desk or in am unlocked file cabinet in paper form also. Even how you dispose of this information is important to consider, as you are responsible for even what you throw away into the dumpster. Shredding and a disposal service a key components of any effective Mortgage Company WISP. The goal of MA MGL 93H and 201 CMR 17.00 is to change how a business views personal information and important steps that need to be taken for its proper collection, use, storage, transport and destruction.

Securing personal information not only protects your clients, but also your business against fines and lawsuits and make sure you are in compliance with 201 CMR 17 and develop and implement a Mortgage Company WISP now.

By: Bill Sifflard

Understanding Mortgage Loan Modification

admin — Mon, 07 Jun 2010 19:55:41 +0000

Millions of people in the United States are facing a difficult situation in that they are having serious problems with their mortgages.