Private Second Mortgages that Are Silent
Posted by: admin in Real Estate, tags: Assistance Programs, First Time Home Buyers, Home Improvements, Money Loan, Mortgage Loan, Private Money, Purchase Transaction, Revenue Bond, Robert Bruss, Second Mortgage
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
What Is Private Mortgage Insurance?
Posted by: admin in Real Estate, tags: Bad Reputation, Calculate Mortgage, Half A Percent, Home Loans, Insurance, Insurance Cost, Insurance Homeowners, Mortgage Loan, Pmi, Private Insurance
Private mortgage insurance or PMI as is known is a form of insurance new homeowners are required to purchase. This is particularly so if their down payment is 20 percent or less of the property’s valued price or sale price. The main reason for private mortgage insurance is to protect lenders in the case the new homeowner defaults on their home loan.
Although private mortgage insurance has a bad reputation since it only protects lenders, it is actually a good thing. Reason is it has allowed millions of people to be able to buy homes with smaller down payments. Previously, these people would not have been able to afford a home had the down payment remain the same. Another important reason is private mortgage insurance can help you qualify for home loans.
Cost of Private Mortgage Insurance
The cost actually varies depending on the mortgage loan and the monthly down payment. Usually, it is half a percent. To calculate your private mortgage insurance, you can use this estimated formula:
Annual private mortgage insurance = 100 – (percentage of down payment paid) * (sale price of house) * 0.05
Let’s take an example. Suppose you brought a $500,000 house. You pay a 20 per cent down payment. So using the formula as above:
Annual private mortgage insurance = (100 – 20) * $500000 * 0.005 = $2000
Your monthly mortgage insurance will be around $167.
One important point to note is you should always keep track of your payments and notify your lender when you have reached 80 percent equity of your house. Even though the Homeowner Protection Act requires lenders to notify you of how long it will take you to pay, it is still better to keep track of it yourself.
There are some cases where lenders make homeowners continue their private mortgage insurance all the way through the lifetime of the loan. This usually applies to high risk borrowers. Therefore your payment history and credit rating such as your FICO score plays an important part as well.
Some people hate paying private mortgage insurance for years. There are some ways around it.
One way is to pay more interest on your home loan. Some lenders will waive the private mortgage insurance requirement if you agree to pay a higher interest rate. Since mortgage interest is tax deductible, it can be a good idea to go ahead.
Another way to avoid paying private mortgage insurance is to prove to the lender that the value of your home has risen. If the value of your home has risen significantly, your home have already have the 20 percent or more equity you need to cancel the mortgage insurance. However, it does take time for the lender to verify your claim, sometimes as long as a year.
By: Ricky Lim
Second Mortgage Rates
Posted by: admin in Real Estate, tags: Best Interest, Credit Card Debt, Different Companies, First Mortgage, High Interest, Home Renovations, Interest Payment, Lenders, Mortgage Loan, Second Mortgage Rates
People who are looking to get a loan that has a low interest rate should consider getting a second mortgage loan. These loans offer low interest loans for people who want to do home renovations, debt consolidation, or even pay off some medical expenses. Second mortgage rates are very comparable to first mortgage rates and are much lower than unsecured loans. These loans are very popular because of their relative ease of approval and low interest rate.
If you are looking to get a second mortgage loan, the first place you should look is the internet. There are many different lenders that are available online who specialize in these second mortgage loans. The benefit of using the web is you can see side by side comprehensive quotes from different companies online. This allows you to get the best interest rates for you mortgage loans. Get comprehensive quotes from different lenders to ensure that you get the best possible rate for your second loan.
People who have a lot of high interest credit card debt should consider getting a second mortgage loan to consolidate this existing debt. By putting all of your debt into one single low interest payment, you can save a lot of money on interest every month. These loans are very useful to help people reduce the total amount of debt that they have. Remember that second mortgage rates are much lower than other forms of unsecured debt. If you can eliminate your high interest credit card payments, you can save a lot of money every month.
By: S Kung
What Are Mortgage Points On Mortgage Loans?
Posted by: admin in Real Estate, tags: Boundaries, Fractions, Loan Origination, Mortgage Discount, Mortgage Interest, Mortgage Loan, Mortgage Loans, Mortgage Points, Mortgage Rate, Variations
Since mortgage points can save you a lot of money, it is important for you to understand what they are and how they work.
The interest rate defines the amount of your monthly payments and thus, your monthly installments could be defined using 1% of your mortgage loan amount as a factor. That is exactly what a mortgage point is: the unit that describes how expensive or inexpensive the costs of a mortgage loan are and any variations are also computed in mortgage points.
Different Mortgage Points
The interest rate charged for the loan can be minced into smaller portions and the reason for the raise or the reduction can be identified. Thus, whenever a variable reduces the interest rate by one point, we say it reduces the risk involved in the transaction. On the other hand, whenever a variable raises the interest rate by one point, it is said to be the reason for origination of risk.
For instance, certain points can be purchased. This actually implies a down payment on your loan that obviously reduces the interest rate you’ll end up paying for your mortgage loan. These points are therefore discount points and the cost of them will vary according to the loan amount you have required when you applied for the loan. A Mortgage point is equal to 1% of the loan amount.
Flexibility and Limits
There’s a lot of flexibility when it comes to mortgage points. You can obtain mortgage discount points by paying in advance the equivalent to 1% of the total amount of the loan. Origination points are charged for administrative costs, closing fees and different fees and costs charged by the lender for a particular loan.
However, there are limits that cannot be bypassed. Your interest rate cannot be reduced or increased beyond reasonable boundaries. The limit depends on the type of loan and lender but on common mortgage loans it usually reaches around four points.
Each mortgage point can be divided into fractions and usually does as many variables only reduce or increase the interest rate half a point or a quarter of a point. Thus, you can purchase half a mortgage point too to obtain an interest rate reduction.
Acquiring Discount Points
The benefits of acquiring discount points are variable and depend mainly on the length of the repayment program and your plans as regards to the property. If you plan to retain ownership of the property for many years, then, getting discount points is a smart idea because you can spread the payments over the whole life of the loan and get low monthly installments you’ll be able to afford without sacrifices while you enjoy the property.
But, if you don’t want to retain ownership of the property for such a long time, it makes no sense to put money down, when you will be selling the property in the near future and you could transfer the costs to the next owner by accepting a higher interest mortgage loan with no down payment that you won’t have to repay in full.
By: Kate Ross
Mortgage Leads in a Mortgage Crisis
Posted by: admin in Real Estate, tags: Find Mortgage, Generation Web, Homework, Lead Company, Loan Officer, Mortgage Loan, Own Mortgage, S Market, Salesmanship, Starters
For any loan officer that is looking for mortgage leads in today’s market, let me first start by saying congratulations to you.
They say that only the strong survive. So if you are still originating loans in this day and age, it says a lot about your ability, your experience, your salesmanship, and your determination.
When it comes to mortgage leads, you want to make sure that you are getting a good quality lead. A mortgage lead that provides you with current and accurate information. A lead with these standards coupled with your experience highly increases your chances of closing a deal.
So how do you find mortgage leads like this you may ask. Well, for starters, you need to take your time and do your homework. You need to research the lead companies you are considering.
Here are some very important if not crucial things to consider when researching mortgage lead companies. To begin with, call the mortgage lead company. Make sure there is someone there for you to speak with.
Why is this important?
In the event that you may need a refund for one of your mortgage leads. You will definitely want someone to speak with should the need arise, and most likely it will.
Secondly, make sure the mortgage lead company you are considering generates their own mortgage leads. You want to be absolutely sure that they generate their mortgage leads from lead generation web sites that they own and operate. Steer clear of the mortgage lead companies that do not.
Look for low minimum deposit requirements or some free leads to give the company a test run. This says a lot about the confidence the company has in their mortgage leads. Also, this is a way you can feel out a mortgage lead company with very little commitment on your part. Stay away of the lead companies that require large minimum deposits.
Keep in mind, over the last couple of years, a lot of loan officers as well as mortgage lead companies have dropped out of the industry or have gone out of business. So, the competition has dwindled.
But like I said in the 2nd paragraph of this article, only the strong survive. So chances are, the majority of mortgage lead companies that have survived the mortgage crisis have done so because of their ability to produce a good quality mortgage lead. There really is no other reason as to why they are still up and running. But please, please, please, take your time and do your research any way.
By: Jay Conners
Third Mortgage Loans – The Basics of 3rd Mortgage Loans
Posted by: admin in Real Estate, tags: Equity Loans, Foreclosure Loan, Mortgage Debt, Mortgage Home Loans, Mortgage Lenders, Mortgage Loan, Mortgage Loans, Second Mortgages, Superior Mortgage, Third Mortgage
Even when you already have a first and second mortgage on your home, you may want to secure a third mortgage. You may use the cash for some value-adding feature to your home, like a swimming pool or a new kitchen may be the reason. However, securing a third mortgage is not very easy.
A third mortgage loan stands subordinate to the first and second mortgage liens that exist. For this reason, it is very difficult to find lenders offering third mortgage home loans. The risk is much greater for the lender in case of a foreclosure. If the loan does get approved, which is difficult, it would be at a much higher rate of interest as compared to the earlier mortgages.
A third mortgage is a hard equity loan. The approval usually depends on the LTV or Loan to Value and SSR or Superior mortgage to Subordinate mortgage ratio.
LTV is expressed as a percentage of the present appraised value of the house, as against the total outstanding mortgage debt(s). Lenders expect the LTV for hard equity loans in the case of first mortgages to be sixty five percent and between fifty to sixty five percent, in the case of second mortgages. For third mortgages, it is anything between fifty to sixty percent.
The SSR is calculated by dividing the amount of the superior mortgage loan amount by the amount of the subordinate mortgage and expressed as a ratio between the two. For example, if the superior mortgage were for $100000 and the subordinate mortgage for $25000, the SSR would be 4:1. For hard equity lending, the SSR is usually in the range of 1:1 – 7:1. With a low LTV and SSR, a third mortgage loan may possible.
In a foreclosure proceeding, the first mortgagee is given preference over the subordinate/subsequent mortgagees as a general rule. This means that the entire debt of the first mortgagee is first satisfied, after which any remaining amount is applied towards the debt satisfaction of the second mortgagee. If anything is left after that, only then is the third mortgage paid off.
By: C.L. Haehl
Mortgage Rate Predictions As Your Guiding Information
Posted by: admin in Real Estate, tags: Accurate Prediction, Accurate Projections, Financial Chaos, Hard Time, Loan Refinancing, Mortgage Loan, Mortgage Rates, Mortgage Refinancing, Prospective Borrowers, Slowing Down
There are so many people who would always like to know what the projections of where interest rates are going. And for people who are in the market for mortgage loan or refinancing, mortgage rates predictions can provide you with the guiding information on how you will go about your refinancing or home buying. Use mortgage rates predictions as your guiding information to make a better decision in your home loans or refinance matters. This will give a peek of what is ahead in terms of interest rate.
But be cautious about the phrase mortgage rates predictions because some lenders use this to tell their prospective borrowers of misleading information. As the phrase suggest, it is only a prediction and not what is going to be. In reality, it is very difficult to make an accurate prediction as to where rates are going. Because there are so many factors that affect this. Even the experts and economist have a hard time trying to piece out what would be an accurate projections and calculations. Currently, with all the financial chaos and turmoil in the world markets and financial industry, it becomes more and more difficult.
If you ever try to predict where mortgage rate will be on the next six months, you will be surprise that those models they use before will not work that well anymore. What traditional models that these experts are using will not be that effective. With government bail outs and intervention on mortgages and insurance as well as other financial institutions, the models now are way out of what they use to be. It can make even the seasoned expert look like a fool. Especially when the two major indicators are going the opposite directions, the patterns which they use to predict will become unworthy.
On one side you have a fast and furious slowing down economy that would put pressures on mortgage rates to fall. And you have an abundance of homes and real estate properties that are for sale but almost no buyer. This will put more pressure for mortgage rate to fall. On the other side you have a climbing inflation brought by rising energy and food prices that have never been seen before. These new heights that most people and economist have never seen before makes it more difficult to calculate and predict where rates will be going.
You have to remember that when there is a rising inflation, this will bring rates to go up. And the higher the inflation rate is the higher yield that lenders will demand in order to loan money to prospective borrowers.Most lenders will always want a real return of at least two percent above whatever inflation is. The real reason why we have inflation is that mostly because of the government’s central banks or Federal Reserve printing more money.
If you believe or still in doubt about mortgage rates predictions, which would be entirely up to you. But the good thing about knowing where mortgage rates are going is for your information guidance and has you making an informed decision. It would benefit you a lot if you where mortgage rate goes when you are in the market for a home loan or refinancing your existing mortgages or home loans.
By: Juling Gabas
Avail Missouri Mortgage For Fixed or Adjustable Interest Rates
Posted by: admin in Real Estate, tags: Approval Applications, Interest Payments, Mortgage Dallas, Mortgage Expert, Mortgage Loan, Mortgage Loans, National City Mortgage, Pre Approval, Rate Period, Year Adjustable Rate Mortgage
In fact, the Missouri mortgage is in no way different, you ought to be pre-approved for online mortgage loan from the lender prior to the time you begin looking around for a place of your own. Most sellers these days won’t consider you as a potential buyer if you aren’t reproved. The main basics of Missouri mortgage are enumerated as under:
Five year adjustable rate mortgage – meaning that you have to pay interest only for first ten years and after ten years principal and interest payments are to be paid. Payment quoted above includes interest-only for the initial fixed rate period. After 5 years, the rate will adjust every 6 months You need to consult a Missouri mortgage expert enabling you to understand the finer aspects of mortgage plan.
Ten year interest only loan – Mortgage rate is fixed for 30 years, interest-only payment due for the first 10 years. After 10 years, principal and interest payments are due. Payment quoted above includes interest-only.
Thirty years fixed rate – You will have 360 equal monthly payments. Payment quoted above includes principal and interest. The best loans can either be the loan with the lowest total costs, least long-term monthly payment, the least initial monthly payment or the quickest equity build-up depending on your situation. During the time that a creditor is deliberating over whether to pre-approve your application, they will closely scrutinize your credit report, look at your credit score as well as other related information, and include your income-to-expense ratio. Then they reach their decision Creditors do not usually charge a payment for pre-approval applications.
Missouri mortgage like National City mortgage or Mortgage Dallas loans can be availed through various lenders or bankers who maintain their web site regularly and therefore ensure to reply you back instantly on line. These online mortgage lenders will take your application and submit it to hundreds of lenders and then provide you with the 4 best offers. This is a great way to get the lowest rates and terms that fits to your needs. On line mortgage option I n fact has made the things easier and full information can be obtained at the flick of the button on your computer and therefore has undoubtedly reduced paper work and time wasted on correspondence. Just clicks the options apply now button on the home page of the lender or banker and begin filling your online application. With online mortgage calculators you can even estimate the future monthly payments to check whether a specific loan will fit your budget.
By: James Arther
Home Mortgage Refinance Tips For Homeowners With Bad Credit
Posted by: admin in Real Estate, tags: Comparison Shopping, Home Loan, Loan Comparison, Loan Options, Loan Types, Mortgage Lenders, Mortgage Loan, Mortgage Provider, Qualifying For A Mortgage, Refinancing Your Home
Are you a homeowner with bad credit? If so, do not think that qualifying for a mortgage refinance with good terms and conditions is not possible. Credit problems just mean that their will be a little more work involved in finding good interest rates. I have included several tips to finding the best refinancing deal, even with bad credit.
Be on the Lookout for Predatory Mortgage Lenders
Their will always be mortgage lenders and banks who prey on homeowners with bad credit looking to refinance. Sometimes, they just overcharge you, and do not necessarily care if you go into default on your home mortgage. They do this with the intention of taking your home from you should you (and you probably will with their terms, rates, and conditions) miss a few payments and sell it at a home auction. Due to you actually having bad credit, it is common practice that you would have to pay a higher rate for your home loan refinance. Also, the lender may require an additional point or two as a qualifying condition for the loan. Comparison shopping different mortgage lenders for different loan types will save you a lot of money.
Comparison Shopping Different Mortgage Lenders
When you are comparison shopping different mortgage lenders for the best home refinancing deal, be sure to research all the different loan options the lenders offer. Using the internet makes this process much easier as comparison shopping a wide a variety of loans, quickly, is just a few clicks away. Also, do not forget to consider your current mortgage provider. Sometimes a phone call or letter can improve your home loan terms enough that you will not even need to refinance at all.
Check your Credit Rating prior to Refinancing your Home Mortgage
It is very important that before you even get started looking for a mortgage refinance, make sure your credit is in as good of shape as it can be. If you have mistakes in your credit report it will hurt your overall score. This will effect the interest rates you are eligible for and cost you a lot of money. Be sure to request your free credit report from each of the big three credit reporting agencies. Carefully check these reports for any inaccuracies and quickly report them. This is a common mistake homeowners searching for a refinancing deal tend to make.
Refinancing a home loan can be very financially beneficial if it is done right. However if it is done wrong it will cost you a lot of money, and possibly your home. Make sure to do some research and refinance the right way today.
By: Michael Petrone
Brief Overview of Mortgage
Posted by: admin in Real Estate, tags: Adjustable Rate Mortgage, Adjustable Rate Mortgages, Confines, Fixed Mortgage, Fixed Rate Mortgage, Lifespan, Low Interest Rates, Mortgage Loan, Mortgage Rate, Predictability
For many homeowners out there, the term “mortgage” is known all too well; this can either be a good thing or a bad thing. A mortgage is basically loan that is taken out to secure a particular house or property, but within the confines of a mortgage lays the promise by the borrower to pay back the mortgage. A mortgage has been a huge cause of financial problems for many individuals, especially if they do not pay it back on time. Considering that a mortgage is most likely the largest loan that an individual will ever take out, it would probably be best to follow the lender’s guidelines as best as possible.
When one applies for a mortgage, he or she does not merely apply for a mortgage as there are a few different types of mortgages. The four main types of Home Loans are: Fixed-rate mortgages, Adjustable-rate mortgages, Balloon/reset mortgages and reset mortgages.
Fixed-Rate Mortgages:
First time homebuyers will find comfort in a fixed-rate mortgage because one of the main advantages that come with a fixed-rate mortgage is the fact that it is stable. Regardless how long the term of your fixed-rate mortgage is, the monthly payments will most likely remain the same. This adds in an element of predictability, allowing you to figure out all of your expenses pretty easily. Other distinct advantages that can associate themselves with a fixed-rate mortgage are the aspects of low risk, long-term planning and even protection against inflation.
Adjustable-Home Loans:
A lot of people find adjustable-rate mortgages appealing because they usually start out with really low monthly payments coupled with low interest rates. However, it is important to remember that the monthly payments as well as the interest rates can change throughout the lifespan of an adjustable-rate mortgage. All adjustable-rate mortgages have adjustment periods that help lenders determine when the interest rates can change on a particular adjustable-rate mortgage.
Balloon/Reset Home Loans:
Balloon/reset mortgages are popularized by the fact that they have low monthly payments. However, while these types of mortgages do offer extremely low monthly payments, the entire amount of the mortgage must be paid off in full after the term is over. If the loan is not paid off in full by the end of the term, the there is usually a reset option that literally resets your interest rates back to what they were in the beginning of the term. A lot of people will sometimes call this type of mortgage a two-step mortgage because of the way they are laid out.
Reverse Mortgages:
A reverse Home Loans is essentially a baby because it was created not too long ago. A reverse Home Loans is basically a mortgage that does not have to be paid back until the home or property that the mortgage is securing is sold, the owner of the home dies or the owner of the home no longer resides there. This is why a reverse mortgage is particular appealing to homeowners who are a bit on the older side. Reverse mortgages also pose distinct tax advantages as well as supplemental retirement income for individuals.
With every Home Loans comes responsibility; it is of extreme importance that you do take a mortgage lightly as it could very well be the biggest loan you ever take out. Not paying off a mortgage can have extreme consequences financially that could potentially devastate. Make sure you do some in-depth research on mortgages before getting involved with them.
By: Sumit Dadhich
