Archive for September, 2009

30
Sep

Mortgage Anyone?

Author: admin

Have you ever wondered why the standard terms for mortgages are 15 and 30 years rather than 10 and 20 or 25 and 50?  I have, but was never able to find a satisfactory answer. Then I discovered something interesting. Since this country was founded, downturns in the economy have occurred on an average of once every 14.5 years. This similarity may, of course, be sheer coincidence. But I’m suspicious.

Why?

Well, if you amortize a standard 30 year mortgage at six percent interest, you’ll discover that the lender gets all of the money it has invested back in 13 years and 11 months.

Now look at what happens to a home buyer who takes out a mortgage just after an economic downturn, pays on it for 14 years, a downturn strikes, and then for whatever reason cannot sell his home and defaults. The lender gets the house and the buyer has lost all the money he/she has put into it.

But look at what happens to the lender. It has already gotten its initial investment back, so in reality it loses nothing. But now it has a house to sell. How much has the lender paid for this house? Nothing! So it sells the house to another buyer by providing another mortgage. Now if the initial buyer had continued to pay the loan to term, the lender would have earned about as much as the initial investment. But now everything the second buyer pays is pure profit, not just the computed interest. In reality, the total amount of the mortgage loan is earned interest on an investment of zero. Wouldn’t you like to find a way of doing that?

Of course, such situations don’t come about often. Although the average time between economic downturns is 14.5 years, downturns happen at varied intervals. And even in downturns, many people forced to sell their homes usually can. But it doesn’t take many who can’t to make lenders a lot of money. Just five people forced into the situation described with $100,000 loans would net a lender a hefty one million free dollars. If the loans are larger, the lender nets even more. And, of course, the numbers are different for different interest rates. But the principle is the same. Lenders almost always get their initial investments back in half a loan’s term or less.

©2009 John Kozy

Retired professor of philosophy and logic who blogs on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer for various private companies. He’s an active blogger. His pieces can be found on http://www.jkozy.com/.

Article Source:http://www.articlesbase.com/mortgage-articles/mortgage-anyone-1288422.html

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30
Sep

Things To Watch Out For When Obtaining Commercial Mortgages

Author: admin

If you want to get the best deal on your commercial mortgage, you have to shop around and scrutinize several lenders’ offers. Choosing the best deal will depend on the current situation of your business but you should always keep one thing in mind while shopping around for deals; that the larger security you can submit, the better your chances are for getting a handsome deal with impressive interest rates.
The interest rates and repayment terms are to be checked before obtaining the deal. Also to be checked is the prepayment or early payment charges or penalties. Commercial mortgages are used for buying commercial property for business expansion or diversifying or for raising capital for other business activities.
You might seek a commercial mortgage for many business reasons. You might have a business contract lined up for which you need a sound amount of money or there may be new areas of business which you want to explore; buying more stocks may be necessary at this point of time or the current machinery in your factory might need an immediate replacement. Whatever the reason may be, you must be sure about your repayment capacities before choosing your commercial mortgage deal. Talk with your accounts and finance managers and set a repayment budget before signing the deal.
What do they ask for? Any financial lender, irrespective of private or a bank, would ask to see your business’ –

  • Audited financial statements for the last 3 years minimum
  • Future financial projections of your company including profit and loss account and cash flow
  • In case of partnership, the personal financial history of all the stakeholders
  • A full-proof business plan

Commercial remortgage The reason behind opting for commercial remortgage is same as the reason why a borrower opts for a commercial mortgage. A business owner might have a ballooning loan for which he would feel the need of money. Unlocking the capital that has been developed in the previously mortgaged commercial property might seem like a good idea and it is indeed a good option to make use of the money that your commercial property has kept locked for all this while.

Christina Smith is a financial advisor who has real good knowledge on commercial remortgage and Commercial mortgage . He recommends you to visit http://www.dynamicbiz.co.uk/

Article Source:http://www.articlesbase.com/mortgage-articles/things-to-watch-out-for-when-obtaining-commercial-mortgages-1285550.html

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30
Sep

You can Get A Mortgage even with Bad Credit

Author: admin

Nowadays, you can get a mortgage even if you have bad credit. Bad credit no longer has to be an obstacle standing in your way to a home loan. Bad credit mortgages are for people having a problem getting a loan or a mortgage to purchase a home due to poor credit issues. There are many lenders who deal with home loans for people with poor credit. But these people have to pay more in interest. Generally, the lower your credit score, the higher your interest charges.

Getting a mortgage with bad credit is a good idea. With a mortgage, you will have your own home. As long as you pay your mortgage regularly, you will repair your credit.

It takes time to get approved a mortgage if your credit is poor. Initially, your mortgage interest rate will probably be higher than someone with good credit. But as you slowly repair your bad credit, credit score will improve. In the future lower interest rates will be available to you.

As a matter of fact, taking a bad credit mortgage is beneficial for you. Instead of concentrating on your bad credit, you can redirect your focus on rebuilding your credit. In addition, paying your mortgage timely will help you build up a good credit history, which enables you to take a standard loan in the future.

Bad credit is not permanent and with some hard work can often be turned around. The important aspect of looking for a bad credit mortgage is to make sure that as a borrower, the debt will not be insurmountable.

Click to find more on Home Loan, Bad Credit Mortgage and Bad Credit

Article Source:http://www.articlesbase.com/mortgage-articles/you-can-get-a-mortgage-even-with-bad-credit-1285264.html

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29
Sep

Thinking Of A Mortgage Loan Modification? Evaluate Your Current Mortgage First

Author: admin

Homeowners have different reasons why they need a mortgage loan modification. Many are prompted to apply for a new loan because of lower interest rate. Some are changing from adjustable rate to fixed rate. Others want to tap the equity of their home for home improvement, take a vacation or pay for college tuition.

But whatever it is, mortgage refinancing provides an opportunity to save money. But how will you know if you can really save by refinancing your current loan, and if the savings you will get is worth the cost?

The following steps provide a guide in evaluating your current mortgage loan:

1.) Examine your current loan. Interest rate is the most significant (but not the only) factor that influences your monthly mortgage payment. Check the rate you are paying and compare it to the current rate offered. If the current is low, is it low enough that you can actually save on monthly payments? As a rule, consider refinancing if the current rate is 2% lower than that of your current loan.

Is your rate fixed or adjustable? If it is fixed, then it is easier to determine if it is right to refinance, but you have to consider other factors too. If it is adjustable, determine the movement of your monthly payment when rate changes. Your loan documents have this information. If this is not clear to you, your financial advisor can explain whether it is wise to refinance.

2.) Compare the current interest rate with your loan’s interest rate. It is clear to see that a 2% drop on interest rate would mean hundreds of dollars worth of savings on monthly mortgage payment. For example, a $200,000 mortgage with a 30-year term at 8% interest would equate to a monthly fee of $1,467. The same mortgage with 6% interest would only require you to pay about $1,200 a month.

This is just a rough calculation as there are specific factors that need to be considered when determining you rates such as your credit score and loan-to-value ration. Also, factors such as points that you pay upfront and other fees determine the actual monthly savings you can get. Don’t assume, therefore, that as long as you refinance on a lower rate, you will get the savings you expect.

3.) How long are you going to stay in your home? Among all other issues, this could be the question that will determine whether you need refinancing or if you are going to save after all. Think of it this way, taking another loan even if you plan to move after a year or two would only mean spending more on fees than really getting the savings you are gunning for. As a rule, remember this: the longer you plan to stay in your house, the more it makes sense to refinance your mortgage.

4.) Determine the break-even point. Computing the break-even point is simple: know the total cost you have to pay upfront when you refinance. Then, find the difference between the monthly mortgage of your new loan and your first loan – that would become your monthly savings. Divide the cost of your loan with monthly savings to get the number of months before you reach the break even point.

So if you purchase the loan for $4000 and you will save $100 a month, it will take you 40 months or 3 years and 4 months to recoup the cost of the loan. On the 41st month, that’s the only time you begin to get the savings.

To find out more about mortgage loan modification
visit Mortgage Loan Modification Help

Article Source:http://www.articlesbase.com/mortgage-articles/thinking-of-a-mortgage-loan-modification-evaluate-your-current-mortgage-first-1282166.html

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29
Sep

Why Work With A Mortgage Modification Specialist?

Author: admin

Understanding that low rate is the best time to refinance your mortgage is pretty straightforward. On reality, however, the process of getting a new loan and how you could possibly get savings through mortgage modifications under low rates, and even the ins and outs as well as the financial terms require some expert advice.

Since you are placing your property on the line as well as putting yourself at risk when you buy out your previous loan and take a new one, it is important to know exactly what’s in it for you and how you can benefit from that move with the help of a mortgage refinance specialist who understands how this loan works.

Proper Guidance – Finance is a fairly difficult subject to understand and making a wrong move can be costly. So if you are thinking of carrying the whole process single-handedly, good luck. But if you want to play safe and do it wisely, a specialist will be able to help you. Since the whole process of getting out from your current loan and getting a new one require a lot of paper work, fees, and computations, the help of a professional who understands the subject is very handy. Not only you’ll be kept on the right track, you’ll be able to get access on information you cannot access on your own, including the history and trend of rate.

Proper advice – You are not in any obligation to work with any specialist when taking a new loan, but it is greatly recommended to get their service to guide you to the right process. Bad advice can lead to bad credit debt, so do not just get it from anyone. Get help from an experienced professional who has the expertise that can help you get the best rate. Remember that not because the rate is low, it already means you should make a move. Specialist can help determine whether you really need to refinance your mortgage.

Should you get an adjustable rate instead of fixed rate? Is it better to take a 30-year loan instead of 15? What percentage points should I pay to get the best rate? At my current state, is it wise to use refinancing to consolidate debt, pay college tuition, get a vacation, or improve my house? These questions may be difficult to answer without the help of a person who knows everything about the subject.

Personalized loan – Every loan is different, each is unique. So not because your neighbor says that he saved a lot by refinancing his mortgage, it doesn’t mean that you can save too by just following the same process your neighbor took. For one thing, there are several factors that influence the rate you get and the monthly payment you have to pay should the new loan went through. And taking them into consideration one-by-one should mean spending an awfully heavy amount of time. With the help of a professional, you will get the loan that fits your need.

Free, no-obligation pre-qualification – Yes, you don’t need to always pay for the service you get. If you are on the stage of determining whether refinancing is right for you, speak with a specialist. He or she will be able to help you decide if you need it or which refinance will fit you best.

To find out more about mortgage loan modification
visit Mortgage Loan Modification Help

Article Source:http://www.articlesbase.com/mortgage-articles/why-work-with-a-mortgage-modification-specialist-1282174.html

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29
Sep

Vital Pieces Of Mortgage Loan Modification Advice

Author: admin

Who doesn’t want to be relieved of paying a high interest rate in a monthly basis? The goal of home mortgage loan modification all about saving money. It is actually an option preferred by several homeowners. You might be asking how much money you can save as you settle with this option. Well, you should understand that it will depend on you. How much savings do you really want to gain? The following insights will open the possibilities on the reduction of your total monthly expenses by refinancing your home.

Refinancing a Mortgage Defined

Refinancing a mortgage means applying for another loan plan that will pay off your existing debt. As you avail of a new package, you will have to shoulder different terms and conditions. This option is meant to lessen the monthly interest charges that you have to pay for.

Why You Need to Consult an Expert

The mortgage brokers are the experts who specialize in home loans, refinancing loans, home equity loans, mortgage rate computation, and all other types of mortgages. They are the people with whom you can work with if you want to get the best deal out of refinancing your home. They have studied and earned their credibility through the years of serving the homeowners. It is also by consulting an expert that you get to learn the advantages and disadvantages of refinancing, your chances of paying for a lower interest rate, your home’s equity and cash out benefits, and many more.

You should also know the requirements, the qualifications to become eligible for refinancing, and the other types of loans that may fit your needs. Nevertheless, you will be able to save more time and money if you talk to the right person who knows everything about refinancing.

The Benefits to Enjoy with Refinancing

Mortgage refinancing means that you can save thousands of dollars, lessen the tenure of your own mortgage, heighten your cash flow, and offer you the low interest rates, among others. It is your duty to find the right mortgage broker who can advise you with everything that you can benefit from. Take note that an honest mortgage broker will always consider the potentials that will work to your advantage and lead you to the best deals.

Refinancing as a Money-Saving Opportunity

Generally, a new mortgage will convert your high interest payments into a lower one. This process will then provide you with every opportunity to spend less money on your monthly payments and save more.

Some homeowners decide to shorten the term of their loans. For example, if you refinance your 30-year-mortgage into a 15-year-mortgage, you get to pay lower interest rates. However, you will have to settle a larger monthly bill but the catch is that you are able to save more because you can pay off your debt in a shorter time. On the other hand, some homeowners change the mode of their interest rates from an adjustable rate into a fixed rate loan. Whichever is your choice, you must always be abreast of both the rewards and drawbacks of refinancing your mortgage.

Furthermore, home mortgage refinance packages let you consolidate your debts so that you don’t have to pay for more. The thing is, you allow yourself to save money because instead of paying different interest charges, you simply roll them into one and reduce the amount that you have to settle.

To find out more about mortgage loan modification
visit Mortgage Loan Modification Help

Article Source:http://www.articlesbase.com/mortgage-articles/vital-pieces-of-mortgage-loan-modification-advice-1282170.html

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28
Sep

Refinance Home Mortgage Bad Credit - You Can Do A Poor Credit Refinance!

Author: admin

In today’s economy, it is not uncommon for people to struggle with paying their bills. Many individuals have either lost their jobs or have had their work hours decreased enough to make a huge difference in their income. Due to these and other situations, many may find themselves stuck between a rock and a hard spot by not being able to meet their monthly financial responsibilities. They want to know what they can do to help them to get out of this situation.  One way may be is Refinance Home Mortgage Bad Credit.

Not being able to pay the mortgage leaves one with few options. Either you are faced with foreclosure or attempting to obtain a loan to Refinance Home Mortgage Bad Credit. Refinancing may seem unreasonable for someone with poor credit but in reality it maybe the only option for those wishing to save their home.

No one wants to endure the negative process of foreclosure. Nevertheless, obtaining a Poor Credit Refinance loan will present its own challenges.

There are some facets that must be understood prior to engaging in a refinance of this kind. One with poor credit must be prepared to pay a higher interest rate than a person that presents with a good credit history.

In addition, your refinancing fees will probably be higher and there maybe additional fees that you will be required to pay due to your bad credit. However, your ultimate goal is to lower your monthly payment and at the same time save your home. Both of these can be obtained through diligence and patience.

Another consideration that needs to be understood is that the institution offering you a Refinance Home Mortgage Bad Credit loan is in effect taking a larger risk due to your credit history. This causes the institution to carry higher mortgage insurance on your loan. This increase in the mortgage insurance is then passed on to you causing you to pay more for this type of insurance that will cover any losses in the event that you are unable to repay the loan.

One extremely positive facet of this process is if you have acquired equity in your home you maybe able to use it to your benefit. If this is the case then during the Refinance Home Mortgage Bad Credit loan process, one can access this extra money to help pay off other financial responsibilities and assist you during this financially difficult time.

If you already have a FHA mortgage loan you may be able to refinance with a FHA Streamline Refinance Mortgage.  The FHA Streamline Refinance Mortgage loan is quicker and easier to do because there is a lot less paperwork and costs.

You can get more information on FHA Streamline Refinance Mortgage by clicking on the link at the bottom of this article.

In the long run, if you get a Refinance Home Mortgage Bad Credit loan it may not only decrease your monthly mortgage payment, save your home, but it can also help you get out of debt.  The good thing is you can do most of your research on the Internet.  Now is time to take action and do your research!

Click Poor Credit Refinance for more free advice on refinancing your mortgage with bad credit.

If you have a FHA loan click FHA Streamline Refinance Mortgage to learn more about refinancing your FHA mortgage.

Article Source:http://www.articlesbase.com/mortgage-articles/refinance-home-mortgage-bad-credit-you-can-do-a-poor-credit-refinance-1277923.html

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