Would it surprise you to learn that ‘no cost’ mortgage loans often cost homeowners more money than home loans with standard closing costs?
Whoa! Stop the presses. What do you mean? No cost means no cost… right? Well, not exactly.
The truth is that no cost loans exist only in the world of marketing and advertising. In the real world there is no such thing a ‘no cost’ loan at all. Let me explain.
As most people know the mortgage industry has long been portrayed as an abstruse and deceptive business. No wonder with the onslaught of bold advertisements claiming impossibly low interest rates, free appraisals, and other fancy hooks and enticements.
And then there’s the granddaddy of them all - no closing cost loans.
Now think back for a minute. When was the last time you received a ‘no cost’ visit to your home from an electrician, plumber, or carpenter? How about no cost dry cleaning? Or how about the last time you had your automobile repaired with no labor costs? Exactly… never.
So why on earth would a small army of service-related employees and companies that are involved in mortgage transactions agree to work for free? Are we to believe that mortgage brokers, appraisers, closing agents, title representatives, underwriters, and loan processors all perform these duties without cost? Heavens no. They don’t and they never will.
So who is paying for all these fees? Your new mortgage company? Fat chance.
You are.
But wait! My mortgage company told me they are paying all of those fees right? Not exactly.
So how do they pull this off? Simple. They give you a higher interest rate on your loan than the interest rate you actually qualify for. In fact, it is tiered so the higher the interest rate they can ‘stick you for’ than your true qualifiable rate the more commissions they earn. This commission in the industry is called a yield spread premium. This premium can be quite large. Large enough to pay all of your closing costs and still compensate them handsomely for their work
Of course a mortgage company offering such a product probably won’t explain this premium to you or offer you a choice to select a standard cost loan. The implied offer is that they pay the costs
But in the end make no mistake about it – YOU PAY.
Let’s look at an example:
Say you borrow $250,000 and the loan has $4,000 in standard closing costs included in the new loan amount. Because of your good credit you qualify for a 30 year fixed interest rate of 6.125%. Your monthly principal and interest payments are $1,519.03.
With a ‘no cost’ mortgage your new loan amount is $246,000 (subtracting the $4,000 costs rolled in) at an interest rate of 6.875%. Your monthly principal and interest payments are $1,616.04.
In this example your payments on the ‘no cost’ loan are costing you an extra $97.01 every month. But since you saved $4,000 up front this is still OK until you get to about the three and a half year mark. That’s the break-even point for the standard cost loan and the point where the no cost loan starts costing you some serious money. In fact every single month you’re paying almost a hundred bucks more for that ‘free’ loan.
If you happen to remain in that loan for 15 years you’ll end up spending over $20,200 more for your ‘free’ loan than you did for a standard closing cost loan. And you’re only halfway thru the term. Not such a no brainer after all is it?
In my opinion it’s time for the mortgage industry to grow up and stop this form of deceitful childish marketing. To earn the trust of skittish homeowners simply by telling them the truth. Believe me, they can handle it. Today’s borrowers are smarter. They’ve heard enough horror stories by now to force them to obtain more information and avoid making bad decisions. Information such as this.
In today’s rapidly changing and bubbly real estate market with near-record foreclosures and rising interest rates it will be the smart homeowner who will win. My suggestion is to learn all you can and locate a loan professional who will shoot straight with you right out of the gate.
Bill Burniece is a consumer advocate and mortgage planner. You'll find more informative free reports from him at: Get To Own
Bill recently launched a FREE Resource Website for homeowners that want to stop their foreclosure and avoid being ripped off - located here:
http://ezinearticles.com/?The-Real-Truth-About-No-Closing-Cost-Loans&id=612912
Wednesday, June 27, 2007
The Changing Face of ARM Leads
If you are a loan officer or mortgage broker intrigued by the $1.5 trillion market in adjustable rate mortgages (ARMs) that the Mortgage Bankers Association says are scheduled to reset this year, you might be tempted to visit (or send someone to) the county records office to look for refinance leads. You might want to browse the Internet, instead.
The problem with public records is that they provide only basic property and loan information. Contact information is years out of date and often invalid. Worst of all, there is no way of knowing if the phone numbers are on the National Do Not Call Registry.
ARM leads have undergone significant changes recently. Not a facelift. More like an extreme makeover. Enterprising companies have found ways to merge data from multiple databases to create ARM leads rich with property and loan information.
The level of detail is astounding. For sometimes as low as $12.50 per lead, buyers find out ARM details such as the first reset date and payment amount change, the next reset date, the limit on how much the interest rate can change per reset, available equity amount, and combined loan to value. Yes/no flags indicate interest-only loans and loans with negative amortization. Buyers also get details about the first loan, including lender name, loan purpose, loan amount ($100,000 minimum), loan origination date, mortgage term and maturity date. The same information is provided for second mortgages when applicable.
The new ARM leads contain enough details about the property that a savvy loan officer or mortgage broker can practically prepare a quote before calling the homeowner. The lead provides the address (with nine-digit ZIP), of course, but also the Assessor’s Parcel Number (APN) code, property carrier code, year built, property value, automated valuation model (AVM) value and confidence score, sale date, sale price, title company name, and whether or not the property is owner occupied. Details about the home, such as number of rooms, number of bedrooms and baths, square footage, and lot size are also part of the lead.
Enhanced leads contain contact information for each person on the deed. Most importantly for those trying to contact the homeowner about refinancing, the phone numbers have been validated for accuracy and checked against the National Do Not Call Registry to make sure they can be called. The lead even provides the date and time the phone number was verified as DNC-compliant.
With more than three million ARMs scheduled for their first (and largest) resets in 2007 and 2008, millions of Americans are desperate to refinance. Mortgage brokers and loan officers can use today’s made-over ARM leads to contact these consumers as much as 120 days ahead of their reset date. Chances are, they will be welcomed with open arms.
Bradley Steffens is the author of twenty books, coauthor of seven, and editor of the 2004 anthology, The Free Speech Movement. His Censorship (1996) was included in the 1997 edition of Best Books for Young Adult Readers. Read his latest work, Ibn al-Haytham: First Scientist (2006)
http://ezinearticles.com/?The-Changing-Face-of-ARM-Leads&id=612920
The problem with public records is that they provide only basic property and loan information. Contact information is years out of date and often invalid. Worst of all, there is no way of knowing if the phone numbers are on the National Do Not Call Registry.
ARM leads have undergone significant changes recently. Not a facelift. More like an extreme makeover. Enterprising companies have found ways to merge data from multiple databases to create ARM leads rich with property and loan information.
The level of detail is astounding. For sometimes as low as $12.50 per lead, buyers find out ARM details such as the first reset date and payment amount change, the next reset date, the limit on how much the interest rate can change per reset, available equity amount, and combined loan to value. Yes/no flags indicate interest-only loans and loans with negative amortization. Buyers also get details about the first loan, including lender name, loan purpose, loan amount ($100,000 minimum), loan origination date, mortgage term and maturity date. The same information is provided for second mortgages when applicable.
The new ARM leads contain enough details about the property that a savvy loan officer or mortgage broker can practically prepare a quote before calling the homeowner. The lead provides the address (with nine-digit ZIP), of course, but also the Assessor’s Parcel Number (APN) code, property carrier code, year built, property value, automated valuation model (AVM) value and confidence score, sale date, sale price, title company name, and whether or not the property is owner occupied. Details about the home, such as number of rooms, number of bedrooms and baths, square footage, and lot size are also part of the lead.
Enhanced leads contain contact information for each person on the deed. Most importantly for those trying to contact the homeowner about refinancing, the phone numbers have been validated for accuracy and checked against the National Do Not Call Registry to make sure they can be called. The lead even provides the date and time the phone number was verified as DNC-compliant.
With more than three million ARMs scheduled for their first (and largest) resets in 2007 and 2008, millions of Americans are desperate to refinance. Mortgage brokers and loan officers can use today’s made-over ARM leads to contact these consumers as much as 120 days ahead of their reset date. Chances are, they will be welcomed with open arms.
Bradley Steffens is the author of twenty books, coauthor of seven, and editor of the 2004 anthology, The Free Speech Movement. His Censorship (1996) was included in the 1997 edition of Best Books for Young Adult Readers. Read his latest work, Ibn al-Haytham: First Scientist (2006)
http://ezinearticles.com/?The-Changing-Face-of-ARM-Leads&id=612920
Turn Your Mortgage Into A Wholesale Mortgage
Instead of paying retail for your mortgage would you like to turn your existing first mortgage into a wholesale mortgage? Would you like to cut the interest rate on your existing mortgage in half without refinancing and without making extra payments out of your pocket?
Of course you would. Who wouldn’t! Now before you say, it is too good to be true, keep an open mind. Already in Australia and the United Kingdom thousands of homeowners are doing this and drastically reducing their interest costs and how many years they pay on their mortgage. This started about 8 to 10 years ago in Australia. The estimate for Australia is that almost half of the homeowners are using this system to pay off their 30 year mortgages in less than half that time.
This system has now come to the States, and thousands of people are saving hundreds of thousands of dollars by paying off their mortgage years early. United First Financial has set up a program that helps homeowners restructure their banking relationship so that they are able to cancel years of interest payments. With their web based software and the Money Merge Account, homeowners can take control of their money and build wealth rapidly.
Currently, there are over 10,000 people using the MMA program. In April 2007, 1,200 people signed up with United First Financial to pay off their mortgage sooner.
By tying your checking account, your first mortgage and a home equity or advanced line of credit into one virtual bank account, the MMA pays down your principal on your first mortgage years ahead of the regular amortization schedule. This results in reduced interest cost and builds equity in your home years faster.
Now it doesn’t work for everyone. Families or homeowners who owe more than their home is worth are probably not going to be helped. If you can’t control your credit card spending habits, it also may not work out for you. But for many families and homeowners this is a great way to own their home years earlier. The word is spreading rapidly.
Steven Currie is a financial consultant who helps homeowners save money on their mortgages. Contact info: stevencurrie2@bellsouth.net 931-647-4333
http://www.mywaytofreedom.com/mma
http://ezinearticles.com/?Turn-Your-Mortgage-Into-A-Wholesale-Mortgage&id=614982
Of course you would. Who wouldn’t! Now before you say, it is too good to be true, keep an open mind. Already in Australia and the United Kingdom thousands of homeowners are doing this and drastically reducing their interest costs and how many years they pay on their mortgage. This started about 8 to 10 years ago in Australia. The estimate for Australia is that almost half of the homeowners are using this system to pay off their 30 year mortgages in less than half that time.
This system has now come to the States, and thousands of people are saving hundreds of thousands of dollars by paying off their mortgage years early. United First Financial has set up a program that helps homeowners restructure their banking relationship so that they are able to cancel years of interest payments. With their web based software and the Money Merge Account, homeowners can take control of their money and build wealth rapidly.
Currently, there are over 10,000 people using the MMA program. In April 2007, 1,200 people signed up with United First Financial to pay off their mortgage sooner.
By tying your checking account, your first mortgage and a home equity or advanced line of credit into one virtual bank account, the MMA pays down your principal on your first mortgage years ahead of the regular amortization schedule. This results in reduced interest cost and builds equity in your home years faster.
Now it doesn’t work for everyone. Families or homeowners who owe more than their home is worth are probably not going to be helped. If you can’t control your credit card spending habits, it also may not work out for you. But for many families and homeowners this is a great way to own their home years earlier. The word is spreading rapidly.
Steven Currie is a financial consultant who helps homeowners save money on their mortgages. Contact info: stevencurrie2@bellsouth.net 931-647-4333
http://www.mywaytofreedom.com/mma
http://ezinearticles.com/?Turn-Your-Mortgage-Into-A-Wholesale-Mortgage&id=614982
The Truth About No Closing Cost Mortgages
You hear about them on the radio all day long.
"We'll do your mortgage with no closing cost!"
You think to yourself, "Hey that sounds like a good deal." But is it? Let's exam the options.
The idea of a no closing cost mortgage is nothing new. Mortgage brokers have been doing them for years. It is a perfectly legal way of doing business, so long as the borrower understands exactly what they are agreeing to. The way this works is the borrower agrees to accept a higher interest rate than they would normally qualify for in order to not have the pay any of the closing costs. The broker earns what is known as "yield point spread" or YPS (this is simply a rebate paid directly to the broker, by the lender, for originating the loan at the higher rate). The broker then simply pays for the closing costs out of their YPS rebate, leaving enough left to make doing the loan worth their time. The real winners in this scenario are the lenders, who are now making considerably more money off of the loan in interest.
Now this strategy is a good one for borrowers who are not going to hold that loan for very long. Landlords or real estate investors who only plan to hold a property for a year or two, might find it worth while to take the higher payment and interest rate to keep from having to put out thousands of dollars every time they do a mortgage transaction. Likewise for military or corporate individuals who move around every few years. Investment savvy borrowers may also find the no closing costs method useful for short term financial plans, where they can use the funds saved to invest in other arenas, such stocks, bonds, mutual funds, etc in order to earn a return on their money.
However for the average homeowner, who may keep a loan for 10, 15, or even 30 yrs or more, this strategy probably won't make much financial sense.
Let look at the following example:
Take a $150,000 mortgage where the borrower qualifies for an interest rate of 7.0%. The closing costs for the mortgage will be $6,000, however this borrower is offered a no closing cost deal at 9.0% interest. Now our borrower plans to live in this house and keep this loan for at least 10 to 15 years until all of his children have gotten out of college. He would like to also get an investment portfolio started for his retirement and is thinking he could use that $6,000 to invest in stocks, mutual funds, bonds, etc, so he is thinking that the no closing costs deal sounds pretty good. But let's see what his benefits would be (if any) for accepting the no closing cost deal.
Option #1
Loan Amount: $150,000
Closing Cost Paid: $6,000
Interest Rate: 7.0%
Loan Term: 15yr fixed rate
Monthly Payment: $1,348
Total interest over the life of the loan: $92,684
Option #2
Loan Amount: $150,000
Closing Cost Paid: $0
Interest Rate: 9.0%
Loan Term: 15yr fixed rate
Monthly Payment: $1,521
Total interest over the life of the loan: $123,852
By accepting the no closing cost deal, our borrower may be saving $6,000 up front, but he is also accepting a payment of $173 more a month, which will translate into over $31,168 more in interest over the life of the 15 yr loan. This would mean that the $6,000 worth of investments would have to be giving him a rate of return of better than $173/month to make the deal work so that he is not simply losing that money every month. Now on the flip side of this example, had our borrower paid the $6,000 up front in closing costs and accepted the lower monthly payment, then he would have the extra $173/month to slowly put toward his investment portfolio, plus the comfort of the lower payment in case of a rainy day down the road.
So is a no closing cost mortgage right for you? That's up to you. If you have definite short term plans for the property that you are purchasing and you have the financial responsibility to carry out those plans, then paying no closing costs may be an option for you. However if you are buying the home that you plan to live in for the next 10, 20, 30 years or more, then paying your closing costs and keeping your payment as low as possible will most likely make more financial sense for you. In either case, always make sure that you worked the numbers and explored all of your options so you can decide what is best for you. And lastly, don't let anyone get you emotionally tied up into accepting a no closing cost deal. Just remember, there is no such thing as a free lunch. You will pay for it, one way or another.
John Worley is residential/commercial loan officer with over 5 years experience in the real estate business. His background includes residential real estate appraisal and residential/commercial real estate investing. For more information on John's current mortgage services and other helpful informational articles, log on to http://www.rtlgeorgia.com/
http://ezinearticles.com/?The-Truth-About-No-Closing-Cost-Mortgages&id=614566
"We'll do your mortgage with no closing cost!"
You think to yourself, "Hey that sounds like a good deal." But is it? Let's exam the options.
The idea of a no closing cost mortgage is nothing new. Mortgage brokers have been doing them for years. It is a perfectly legal way of doing business, so long as the borrower understands exactly what they are agreeing to. The way this works is the borrower agrees to accept a higher interest rate than they would normally qualify for in order to not have the pay any of the closing costs. The broker earns what is known as "yield point spread" or YPS (this is simply a rebate paid directly to the broker, by the lender, for originating the loan at the higher rate). The broker then simply pays for the closing costs out of their YPS rebate, leaving enough left to make doing the loan worth their time. The real winners in this scenario are the lenders, who are now making considerably more money off of the loan in interest.
Now this strategy is a good one for borrowers who are not going to hold that loan for very long. Landlords or real estate investors who only plan to hold a property for a year or two, might find it worth while to take the higher payment and interest rate to keep from having to put out thousands of dollars every time they do a mortgage transaction. Likewise for military or corporate individuals who move around every few years. Investment savvy borrowers may also find the no closing costs method useful for short term financial plans, where they can use the funds saved to invest in other arenas, such stocks, bonds, mutual funds, etc in order to earn a return on their money.
However for the average homeowner, who may keep a loan for 10, 15, or even 30 yrs or more, this strategy probably won't make much financial sense.
Let look at the following example:
Take a $150,000 mortgage where the borrower qualifies for an interest rate of 7.0%. The closing costs for the mortgage will be $6,000, however this borrower is offered a no closing cost deal at 9.0% interest. Now our borrower plans to live in this house and keep this loan for at least 10 to 15 years until all of his children have gotten out of college. He would like to also get an investment portfolio started for his retirement and is thinking he could use that $6,000 to invest in stocks, mutual funds, bonds, etc, so he is thinking that the no closing costs deal sounds pretty good. But let's see what his benefits would be (if any) for accepting the no closing cost deal.
Option #1
Loan Amount: $150,000
Closing Cost Paid: $6,000
Interest Rate: 7.0%
Loan Term: 15yr fixed rate
Monthly Payment: $1,348
Total interest over the life of the loan: $92,684
Option #2
Loan Amount: $150,000
Closing Cost Paid: $0
Interest Rate: 9.0%
Loan Term: 15yr fixed rate
Monthly Payment: $1,521
Total interest over the life of the loan: $123,852
By accepting the no closing cost deal, our borrower may be saving $6,000 up front, but he is also accepting a payment of $173 more a month, which will translate into over $31,168 more in interest over the life of the 15 yr loan. This would mean that the $6,000 worth of investments would have to be giving him a rate of return of better than $173/month to make the deal work so that he is not simply losing that money every month. Now on the flip side of this example, had our borrower paid the $6,000 up front in closing costs and accepted the lower monthly payment, then he would have the extra $173/month to slowly put toward his investment portfolio, plus the comfort of the lower payment in case of a rainy day down the road.
So is a no closing cost mortgage right for you? That's up to you. If you have definite short term plans for the property that you are purchasing and you have the financial responsibility to carry out those plans, then paying no closing costs may be an option for you. However if you are buying the home that you plan to live in for the next 10, 20, 30 years or more, then paying your closing costs and keeping your payment as low as possible will most likely make more financial sense for you. In either case, always make sure that you worked the numbers and explored all of your options so you can decide what is best for you. And lastly, don't let anyone get you emotionally tied up into accepting a no closing cost deal. Just remember, there is no such thing as a free lunch. You will pay for it, one way or another.
John Worley is residential/commercial loan officer with over 5 years experience in the real estate business. His background includes residential real estate appraisal and residential/commercial real estate investing. For more information on John's current mortgage services and other helpful informational articles, log on to http://www.rtlgeorgia.com/
http://ezinearticles.com/?The-Truth-About-No-Closing-Cost-Mortgages&id=614566
Mortgaging Lending - Are Promises Meant to Be Broken?
I shall return. This, arguably, is one of the most famous promises in world history. American General Douglas MacArthur made it after his fortress in the Philippines became the target of Japanese air attacks during World War II. MacArthur was then forced to flee to Australia. On March 20, 1942, MacArthur made his famous promise to return to the Philippines to continue helping to defend the islands. About two and a half years later, MacArthur proved that he did not just talk the talk. He walked the walk - literally! On October 20, 1944, about two and a half years after making his famous promise, MacArthur waded through the waters near Leyte Island in the Philippines.
Like MacArthur, you, too, made a promise when you borrowed from your mortgage lender. While this promise is not as historic, it is no less binding or serious. In fact, your home backs up the vow you make to your mortgage lender.
I Shall
In modern times, we rarely hear people use the word "shall" when they make a promise. Today, the word could make its user seem a little old-fashioned or even arrogant. But the word certainly makes one's vow to keep a promise, seem absolute. Promising with the word "shall" is equivalent to someone saying "mark my words," "my word is my bond," or "my word is as good as gold." The "shall" in mortgage lending is the collateral you put up to secure your loan. When you use the services of a mortgage lender, your collateral fortifies your promise to repay.
From Hens to Houses
What is collateral? Collateral can be as informal as holding onto our friends' Michael Jordan rookie card or tissue box cover collection until they pay back money that is due. In a nutshell, collateral is a type of security to the lender, such as a mortgage lender. This is reserved for situations wherein the borrower neglects to pay back the loan taken out. Four forms of formal collateral are used in secured lending:
* business proceeds (in cash)
* intangibles (of which contract rights and accounts are two examples)
* paper (such as documents)
* trade goods (products)
What is special about the home mortgage that a mortgage lender provides is that the collateral and the asset being financed are the same object!.
Lending Without Collateral
What happens when borrowers of loans have no collateral? Instances like these sometimes arise when one does business with a mortgage lender.
In developing countries where many people lack collateral, microfinance and microlending have become a fad. Dr. Muhammad Yunus won a Nobel Prize in 2006 for his work in the field. He discovered in the 1970s that giving out small loans not only improved the lives of poor businesspeople, these loans were also returned with interest, and promptly! Microfinance is not a new concept. In fact, microlending may have existed since currency was invented. For example, Jonathan Swift, Irish author of "Gulliver's Travels" in 1726 - on which a Disney cartoon was based - created his own microlending system. The amount and term of the loan was limited, and the interest rate was low. In the case of Swift's system, the rate was 8%. While microlending is practical in developing countries, the higher cost of living in industrialized nations makes it necessary for a mortgage lender to require collateral.
Today, we rarely use the term "shall" when making verbal promises to our bosses, teachers, or friends. Still the saying that a person is as good as his or her word holds as true now as when MacArthur made his famous vow in 1942. So when we take out a mortgage from a mortgage lender, collaterals such as houses help ensure we strive to keep our end of the bargain.
Want to know more about mortgage lenders? Visit WhatAboutLoans.com and learn more about loans like home loans for women with bad credit and how to compare mortgage quotes.
http://ezinearticles.com/?Mortgaging-Lending---Are-Promises-Meant-to-Be-Broken?&id=621430
Like MacArthur, you, too, made a promise when you borrowed from your mortgage lender. While this promise is not as historic, it is no less binding or serious. In fact, your home backs up the vow you make to your mortgage lender.
I Shall
In modern times, we rarely hear people use the word "shall" when they make a promise. Today, the word could make its user seem a little old-fashioned or even arrogant. But the word certainly makes one's vow to keep a promise, seem absolute. Promising with the word "shall" is equivalent to someone saying "mark my words," "my word is my bond," or "my word is as good as gold." The "shall" in mortgage lending is the collateral you put up to secure your loan. When you use the services of a mortgage lender, your collateral fortifies your promise to repay.
From Hens to Houses
What is collateral? Collateral can be as informal as holding onto our friends' Michael Jordan rookie card or tissue box cover collection until they pay back money that is due. In a nutshell, collateral is a type of security to the lender, such as a mortgage lender. This is reserved for situations wherein the borrower neglects to pay back the loan taken out. Four forms of formal collateral are used in secured lending:
* business proceeds (in cash)
* intangibles (of which contract rights and accounts are two examples)
* paper (such as documents)
* trade goods (products)
What is special about the home mortgage that a mortgage lender provides is that the collateral and the asset being financed are the same object!.
Lending Without Collateral
What happens when borrowers of loans have no collateral? Instances like these sometimes arise when one does business with a mortgage lender.
In developing countries where many people lack collateral, microfinance and microlending have become a fad. Dr. Muhammad Yunus won a Nobel Prize in 2006 for his work in the field. He discovered in the 1970s that giving out small loans not only improved the lives of poor businesspeople, these loans were also returned with interest, and promptly! Microfinance is not a new concept. In fact, microlending may have existed since currency was invented. For example, Jonathan Swift, Irish author of "Gulliver's Travels" in 1726 - on which a Disney cartoon was based - created his own microlending system. The amount and term of the loan was limited, and the interest rate was low. In the case of Swift's system, the rate was 8%. While microlending is practical in developing countries, the higher cost of living in industrialized nations makes it necessary for a mortgage lender to require collateral.
Today, we rarely use the term "shall" when making verbal promises to our bosses, teachers, or friends. Still the saying that a person is as good as his or her word holds as true now as when MacArthur made his famous vow in 1942. So when we take out a mortgage from a mortgage lender, collaterals such as houses help ensure we strive to keep our end of the bargain.
Want to know more about mortgage lenders? Visit WhatAboutLoans.com and learn more about loans like home loans for women with bad credit and how to compare mortgage quotes.
http://ezinearticles.com/?Mortgaging-Lending---Are-Promises-Meant-to-Be-Broken?&id=621430
Methuselah Loans - Payable for 969 Years?
Methuselah loans are not called Methuselah for nothing. In the bible, Methuselah lived to be 969 years old. No, Methuselah loans are not payable for 969 years. They're aptly named, however, because they are loans will will outlive home loan lenders.
Are Some Things Better Aged?
Some things get better with time. Wine, for example, tastes better as it ages. Leather looks more supple and distinguished the longer it survives. When it comes to loans, however, age may not always spell "better" for home loan lenders. There is no shortage of loans that give home loan lenders more than enough time for repayment. In Japan, during the real-estate boom that ended disastrously two decades back, 99-year mortgages were offered for some time. In the 1980s, 40-year mortgages began appearing in the U.S market. It wasn't long before 50-year mortgages also became staple offering for home loan lenders.
At present, 50-year mortgages remain more of a novelty than a realistic option. In fact, only a handful of brokers provide them to home loan lenders. What is common is the 40-year loan, which gained a toehold in the industry after the very reputable firm, Fannie Mae, bought them and resold them to investors. Today, around 5 percent of the mortgages in the U.S are payable within 40 years.
The Forty-Year Hitch
Home loan lenders might think 40 years is a wonderful span for debt repayment. After all, with repayment spread out over such a long period of time, they'd have less to pay monthly, right? The answer is no. This logic wouldn't be farther from the truth. 40-year and 50-year mortgages cost more in interest. Even worse, they build up less equity compared to most loans. There are 40-year mortgages that offer home loan lenders a fixed rate for the entire 40 years. These loans, however, charge a quarter of a percentage more than a 30-year mortgage of a similar property. Moreover, market experts caution home loan lenders that 40-year mortgages are often pitched to sell interest-only or option mortgages, both of which build no equity.
Fifty and Feeble
Home loan lenders will find that 40-year and 50-year mortgages are very much alike, except for the ten-year difference. If 40-year mortgages take you years to build equity, 50-year mortgages take you forever. When it comes to deciding which mortgage term to get, consider this rule of thumb. The term should be directly proportional to how long you intend to stay in your home. If you expect to be a homeowner for some time, take a 30-year loan.
Methuselah loans are given that name for a reason. Do not make the mistake of getting one, unless you're certain you're certain you'll live as long as Methuselah did.
In need of a home loan lender? Visit WhatAboutLoans.com to read more about mortgages, such as no money down home loans, or get a free mortgage quote!
http://ezinearticles.com/?Methuselah-Loans---Payable-for-969-Years?&id=621435
Are Some Things Better Aged?
Some things get better with time. Wine, for example, tastes better as it ages. Leather looks more supple and distinguished the longer it survives. When it comes to loans, however, age may not always spell "better" for home loan lenders. There is no shortage of loans that give home loan lenders more than enough time for repayment. In Japan, during the real-estate boom that ended disastrously two decades back, 99-year mortgages were offered for some time. In the 1980s, 40-year mortgages began appearing in the U.S market. It wasn't long before 50-year mortgages also became staple offering for home loan lenders.
At present, 50-year mortgages remain more of a novelty than a realistic option. In fact, only a handful of brokers provide them to home loan lenders. What is common is the 40-year loan, which gained a toehold in the industry after the very reputable firm, Fannie Mae, bought them and resold them to investors. Today, around 5 percent of the mortgages in the U.S are payable within 40 years.
The Forty-Year Hitch
Home loan lenders might think 40 years is a wonderful span for debt repayment. After all, with repayment spread out over such a long period of time, they'd have less to pay monthly, right? The answer is no. This logic wouldn't be farther from the truth. 40-year and 50-year mortgages cost more in interest. Even worse, they build up less equity compared to most loans. There are 40-year mortgages that offer home loan lenders a fixed rate for the entire 40 years. These loans, however, charge a quarter of a percentage more than a 30-year mortgage of a similar property. Moreover, market experts caution home loan lenders that 40-year mortgages are often pitched to sell interest-only or option mortgages, both of which build no equity.
Fifty and Feeble
Home loan lenders will find that 40-year and 50-year mortgages are very much alike, except for the ten-year difference. If 40-year mortgages take you years to build equity, 50-year mortgages take you forever. When it comes to deciding which mortgage term to get, consider this rule of thumb. The term should be directly proportional to how long you intend to stay in your home. If you expect to be a homeowner for some time, take a 30-year loan.
Methuselah loans are given that name for a reason. Do not make the mistake of getting one, unless you're certain you're certain you'll live as long as Methuselah did.
In need of a home loan lender? Visit WhatAboutLoans.com to read more about mortgages, such as no money down home loans, or get a free mortgage quote!
http://ezinearticles.com/?Methuselah-Loans---Payable-for-969-Years?&id=621435
Clinton County Ohio Mortgage Refinancing
After you select a Clinton County mortgage loan type, learn the refinance mortgage rates and complete your shopping for a lender, you must submit an application and sign numerous forms that allow your lender to contact your employers and banks. Just as there are national guidelines for qualifying, there also are national standards for application forms and required information. Most Clinton County lenders will request some or all of the following so you should gather the information ahead of time:
Applying for a Home Loan In Clinton County Ohio: Prequalification, shopping, application, verification, underwriting, settlement.
General information you'll need for the steps for a refinancing mortgage in Clinton County Ohio: Social Security numbers for each applicant, current address and prior addresses for the past two years, name and address of current mortgage lender (if any)
Employment Information You'll Need For a refinancing mortgage in Clinton County Ohio: Addresses of current employers and prior employers for the past two years, W-2 forms or 1099s (sometimes required if you are paid by commission or if you work out of a trade union hiring hall), past two years' tax returns and current profit-and-loss statement (if self-employed)
Assets
- Bank accounts (account numbers, bank name, address, and approximate balance)
If your income from salaries is sufficient to qualify you, some Clinton County lenders will let you exclude information on investments and other income. If not, after you learn the refinance mortgage rates Clinton County Ohio, you need to provide the following information:
• Stocks and bonds (copies of brokerage statements or stock certificates)
• CDs, money market funds, IRAs (account number, bank name, address and approximate balance)
• Family trusts, pensions, and other annuities
• Cash value of whole life insurance policies
• Automobiles (copy of registration or title)
• Statement of personal property (furniture, etc.)
• Other real estate (mortgage lender's name and address, loan number, monthly payment amount)
Debts Must Be Addressed After You Learn the Refinance Mortgage Rates Clinton County Ohio
You must provide information on your debts, including the creditor's name and address, loan number, monthly payment, and approximate balance required for each loan.
You also will need to provide the following information:
• Charge accounts and credit cards (provide a copy of last monthly statements)
• Car loans
• Mortgage loans
• Personal loans
• Student loans
• Other installment loans
Miscellaneous
Other information that may be needed in a Clinton County mortgage refinancing:
• Copy of signed sales contract (for home purchase) or copy of deed (for refinance)
• Condominium or co-op documents (if applicable and lender does not already have them)
• Alimony, child support, and separation maintenance payments due (copy of divorce decree or separation agreement)
• VA Certificate of Eligibility, DD-214, or Statement of Service (VA loans only)
• Copy of real estate tax bill for the past year
• Copies of utility bills (required by some lenders for FHA or VA loans)
See how friendly and easy an Ohio mortgage in Clinton County or an Ohio mortgage refinancing in Clinton County can be:
http://www.ohio-mortgage-services.citymax.com/page/page/4449276.htm
http://ezinearticles.com/?Clinton-County-Ohio-Mortgage-Refinancing&id=619858
Applying for a Home Loan In Clinton County Ohio: Prequalification, shopping, application, verification, underwriting, settlement.
General information you'll need for the steps for a refinancing mortgage in Clinton County Ohio: Social Security numbers for each applicant, current address and prior addresses for the past two years, name and address of current mortgage lender (if any)
Employment Information You'll Need For a refinancing mortgage in Clinton County Ohio: Addresses of current employers and prior employers for the past two years, W-2 forms or 1099s (sometimes required if you are paid by commission or if you work out of a trade union hiring hall), past two years' tax returns and current profit-and-loss statement (if self-employed)
Assets
- Bank accounts (account numbers, bank name, address, and approximate balance)
If your income from salaries is sufficient to qualify you, some Clinton County lenders will let you exclude information on investments and other income. If not, after you learn the refinance mortgage rates Clinton County Ohio, you need to provide the following information:
• Stocks and bonds (copies of brokerage statements or stock certificates)
• CDs, money market funds, IRAs (account number, bank name, address and approximate balance)
• Family trusts, pensions, and other annuities
• Cash value of whole life insurance policies
• Automobiles (copy of registration or title)
• Statement of personal property (furniture, etc.)
• Other real estate (mortgage lender's name and address, loan number, monthly payment amount)
Debts Must Be Addressed After You Learn the Refinance Mortgage Rates Clinton County Ohio
You must provide information on your debts, including the creditor's name and address, loan number, monthly payment, and approximate balance required for each loan.
You also will need to provide the following information:
• Charge accounts and credit cards (provide a copy of last monthly statements)
• Car loans
• Mortgage loans
• Personal loans
• Student loans
• Other installment loans
Miscellaneous
Other information that may be needed in a Clinton County mortgage refinancing:
• Copy of signed sales contract (for home purchase) or copy of deed (for refinance)
• Condominium or co-op documents (if applicable and lender does not already have them)
• Alimony, child support, and separation maintenance payments due (copy of divorce decree or separation agreement)
• VA Certificate of Eligibility, DD-214, or Statement of Service (VA loans only)
• Copy of real estate tax bill for the past year
• Copies of utility bills (required by some lenders for FHA or VA loans)
See how friendly and easy an Ohio mortgage in Clinton County or an Ohio mortgage refinancing in Clinton County can be:
http://www.ohio-mortgage-services.citymax.com/page/page/4449276.htm
http://ezinearticles.com/?Clinton-County-Ohio-Mortgage-Refinancing&id=619858
Mortgage Net Branch Technology Has Evolved
There are many experienced loan officers and mortgage professionals that spend many hours of their day constantly scouring the internet and making phone calls to find a mortgage net branch. Well thanks to the latest technology help is on the way. Some of the top recruiters in the industry have put their heads together and started a site called mortgage net branch.
A mortgage net branch has certain niches and weaknesses as does any lender and a net branch such as one of your better companies like Apex Lending, Inc can have all of the strong points about their program available for anybody that is thinking about possibly going out on their own and becoming a mortgage net branch. There are other companies such as Amerifund Lending where you can find out what their monthly fee's are as well as any upfront costs.
I personally spend a lot of time reporting all of the latest in industry news for the mortgage observer and now with the start of http://www.mortgagenetbranch.tv I can find a lot of important information about any net branch in half the time. Apex Lending, Inc has been around for a long time and they are very careful who they bring on as a loan originator so make sure that you always keep a good credit score because if you have any credit or background issues you may need to look at joining a different mortgage net branch. The new technology is not intended to be just a web site. It's going to have a You Tube type of setup where the host will actually talk to the viewers and give them good information.
Premier Group Financial is another company that you may hear them talking about as well as many other net branch type of companies. They are a good company as well although there may be some strengths that they have that maybe another net branch doesn't offer. Some companies offer the ability to do business in more states and some others are signed up with certain lenders that might appear to be attractive.
The managers at many of the satellite and net branch companies do recommend that there is a right way and a wrong way to do your homework and ask questions when searching for a net branch. Make sure you ask good questions. Don't be offended when they net branch company asks you certain questions. You need to remember these are the people that will be signing your paychecks. They may want to make sure that you will be a good fit for them as well as them being a good fit for you. Many of the managers say that they deal with many people that seem to have the idea that it's all about them and that the net branch company will do whatever possible in order to recruit them. They say that's a turnoff and that those people should go work for the less credible companies that will basically hire anybody and their brother regardless of what their credit and background looks like.
The other thing they say is that many prospects get upset when they hear about fees. Anybody that has ever had real success in life realizes that you have to give in order to get. It's one thing to be frugal but it's another thing to be cheap and that if a company has a $99 per month technology fee that you need to instead look at that as a 'cost of doing business' fee. It takes money to make money and if the net branch can provide you with all of the tools in order to be successful then who really cares about a monthly fee. In order to get, you need to first give.
Richard Hadermann is a announcer for The Mortgage Observer podcast which can be downloaded from http://www.mortgageobserver.net He reports on all of the latest news in the mortgage industry.
http://ezinearticles.com/?Mortgage-Net-Branch-Technology-Has-Evolved&id=608259
A mortgage net branch has certain niches and weaknesses as does any lender and a net branch such as one of your better companies like Apex Lending, Inc can have all of the strong points about their program available for anybody that is thinking about possibly going out on their own and becoming a mortgage net branch. There are other companies such as Amerifund Lending where you can find out what their monthly fee's are as well as any upfront costs.
I personally spend a lot of time reporting all of the latest in industry news for the mortgage observer and now with the start of http://www.mortgagenetbranch.tv I can find a lot of important information about any net branch in half the time. Apex Lending, Inc has been around for a long time and they are very careful who they bring on as a loan originator so make sure that you always keep a good credit score because if you have any credit or background issues you may need to look at joining a different mortgage net branch. The new technology is not intended to be just a web site. It's going to have a You Tube type of setup where the host will actually talk to the viewers and give them good information.
Premier Group Financial is another company that you may hear them talking about as well as many other net branch type of companies. They are a good company as well although there may be some strengths that they have that maybe another net branch doesn't offer. Some companies offer the ability to do business in more states and some others are signed up with certain lenders that might appear to be attractive.
The managers at many of the satellite and net branch companies do recommend that there is a right way and a wrong way to do your homework and ask questions when searching for a net branch. Make sure you ask good questions. Don't be offended when they net branch company asks you certain questions. You need to remember these are the people that will be signing your paychecks. They may want to make sure that you will be a good fit for them as well as them being a good fit for you. Many of the managers say that they deal with many people that seem to have the idea that it's all about them and that the net branch company will do whatever possible in order to recruit them. They say that's a turnoff and that those people should go work for the less credible companies that will basically hire anybody and their brother regardless of what their credit and background looks like.
The other thing they say is that many prospects get upset when they hear about fees. Anybody that has ever had real success in life realizes that you have to give in order to get. It's one thing to be frugal but it's another thing to be cheap and that if a company has a $99 per month technology fee that you need to instead look at that as a 'cost of doing business' fee. It takes money to make money and if the net branch can provide you with all of the tools in order to be successful then who really cares about a monthly fee. In order to get, you need to first give.
Richard Hadermann is a announcer for The Mortgage Observer podcast which can be downloaded from http://www.mortgageobserver.net He reports on all of the latest news in the mortgage industry.
http://ezinearticles.com/?Mortgage-Net-Branch-Technology-Has-Evolved&id=608259
When Can I Refinance My Home?
There are a number of different reasons you may want to refinance your home mortgage loan, the most common reason being that people want to lower the monthly payments, mainly by lowering the interest rate.
There are a couple of things that you must consider when you are looking at refinancing your home mortgage loan. You need to work out in your own mind how much money it will really save you, you should take into consideration the closing costs, and any other refinancing fees.
The things you must consider include:
* Seasoning period
* Early Payoff penalty
* Closing costs and any fees
* Break even analysis
The seasoning period is a clause that most lenders add into their contracts. This simply means that you are not permitted to refinance your mortgage until you have lived in your home for one or two years. This is to prevent you from refinancing too early.
Some lenders also add in early payoff penalties, these are fees or fines that must be paid to exit the mortgage. You could well find that you current mortgage already includes these, and so you would have to pay them to refinance the mortgage. If you do refinance your mortgage then you may have to pay off these penalties before you can take out the new loan.
Most important, you should be very careful not to take out a new loan that comes with a prepayment penalty, nobody knows what might happen in the future, so it’s not worth signing such a thing.
It is important to work out exactly how much your home refinance loan will cost you, don’t just work out the internet. You should also remember that you must pay the closing costs, and the fees.
At the start of the loan you will be paying out more than you have saved, but it comes a time when you will break even. This breakeven point is where you recover the amount of money that it cost you to refinance the loan, which includes all the fees, and closing costs.
If you plan on living in the home for only a little time then you must calculate this breakeven point. Once you have recovered all of the costs from refinancing, it may be a good time to refinance again!
You work out the break even point by looking at how much you save each month, and then comparing that with the costs. You can use these figures to work out how many months it will take you to break even.
Most mortgage policies will require you to wait one or two years before refinancing your home, but every policy is different. You should ask advice about your mortgage before refinancing.
You can also find more info on Purchase Points When You Refinance and Refinance a Manufactured Home. Mortgagerefinanceloanhelp.com is a comprehensive resource to get help in Mortgage refinance Loan.
http://ezinearticles.com/?When-Can-I-Refinance-My-Home?&id=620047
There are a couple of things that you must consider when you are looking at refinancing your home mortgage loan. You need to work out in your own mind how much money it will really save you, you should take into consideration the closing costs, and any other refinancing fees.
The things you must consider include:
* Seasoning period
* Early Payoff penalty
* Closing costs and any fees
* Break even analysis
The seasoning period is a clause that most lenders add into their contracts. This simply means that you are not permitted to refinance your mortgage until you have lived in your home for one or two years. This is to prevent you from refinancing too early.
Some lenders also add in early payoff penalties, these are fees or fines that must be paid to exit the mortgage. You could well find that you current mortgage already includes these, and so you would have to pay them to refinance the mortgage. If you do refinance your mortgage then you may have to pay off these penalties before you can take out the new loan.
Most important, you should be very careful not to take out a new loan that comes with a prepayment penalty, nobody knows what might happen in the future, so it’s not worth signing such a thing.
It is important to work out exactly how much your home refinance loan will cost you, don’t just work out the internet. You should also remember that you must pay the closing costs, and the fees.
At the start of the loan you will be paying out more than you have saved, but it comes a time when you will break even. This breakeven point is where you recover the amount of money that it cost you to refinance the loan, which includes all the fees, and closing costs.
If you plan on living in the home for only a little time then you must calculate this breakeven point. Once you have recovered all of the costs from refinancing, it may be a good time to refinance again!
You work out the break even point by looking at how much you save each month, and then comparing that with the costs. You can use these figures to work out how many months it will take you to break even.
Most mortgage policies will require you to wait one or two years before refinancing your home, but every policy is different. You should ask advice about your mortgage before refinancing.
You can also find more info on Purchase Points When You Refinance and Refinance a Manufactured Home. Mortgagerefinanceloanhelp.com is a comprehensive resource to get help in Mortgage refinance Loan.
http://ezinearticles.com/?When-Can-I-Refinance-My-Home?&id=620047
Why Trigger Leads Are A Good Thing
Trigger leads are all about offering choices to consumers. Too many times, especially in the sub prime market, you'll find lenders that offer deals with little or no net benefit all the while charging 5-7 points front and back on the deal.
Many states have adopted strong predatory lending laws to try to police your industry from RAPING often poor, financial uneducated consumers who have for years swallowed the line of BS that "this is the best rate we can get you - or the is the only deal you qualify for" when it just isn't true.
When multiple lenders compete for the same borrowers that was told he had no good options you'd be surprised how often a number of MUCH better offers surface. The NAMB took the issues of triggers all the way to the FTC. You know what they said - they are not outlawing triggers. You know why, they don't have the authority.
Triggers don't violate the FCRA, they offer often disenfranchised borrowers choices, and too many mortgage brokers have forgotten how to earn business. Too many years of being just order takers. Too many times grossly misleading consumers to take their "best deal" when in fact it was only the best deal for the broker and not the consumer.
The NAMB also stoked the flames of identity theft concerns regarding triggers - WHAT A JOKE!
NEVER on a trigger lead is the borrower's SSN, date of birth, or any other information that isn't already public info given out. Nothing on a trigger lead is giving an identity thief anything that takes him closer to stealing your mojo.
Trigger leads have been around forever. It's only in the last 18 months that they have been effectively used in the mortgage industry. Apply for a credit card...guess what, you get 10 more offers in the next week. Why, a trigger is generated at the bureau and sold to credit issuers...is anyone screaming about that - NO!
Same in the insurance and automotive industries too. Every American with a phone number can opt-out of the bureaus marketing lists. But it's funny, I don't see consumers complaining. A call from a mortgage company based on a trigger is somehow more annoying than any other mortgage cold call that interrupts their dinner? I think not!
The NAMB will always talk about the 1%-2% of THEIR OWN MEMBERSHIP that are flat out unethical. Trust me, it isn't a trigger lead that makes them lie to a prospect. They do it with teaser rates on direct mail, phone calls to non-FCRA regulated lists, etc. Triggers aren't to blame. Competition makes America great. Triggers EXPOSE the very brokers that cry foul when they have their prospect move to a better deal.
That is truly the rest of the story of trigger leads.
Jack Johnson is President of http://www.MortgageTriggers.com the nation's largest independent provider of mortgage trigger leads.
http://ezinearticles.com/?Why-Trigger-Leads-Are-A-Good-Thing&id=615198
Many states have adopted strong predatory lending laws to try to police your industry from RAPING often poor, financial uneducated consumers who have for years swallowed the line of BS that "this is the best rate we can get you - or the is the only deal you qualify for" when it just isn't true.
When multiple lenders compete for the same borrowers that was told he had no good options you'd be surprised how often a number of MUCH better offers surface. The NAMB took the issues of triggers all the way to the FTC. You know what they said - they are not outlawing triggers. You know why, they don't have the authority.
Triggers don't violate the FCRA, they offer often disenfranchised borrowers choices, and too many mortgage brokers have forgotten how to earn business. Too many years of being just order takers. Too many times grossly misleading consumers to take their "best deal" when in fact it was only the best deal for the broker and not the consumer.
The NAMB also stoked the flames of identity theft concerns regarding triggers - WHAT A JOKE!
NEVER on a trigger lead is the borrower's SSN, date of birth, or any other information that isn't already public info given out. Nothing on a trigger lead is giving an identity thief anything that takes him closer to stealing your mojo.
Trigger leads have been around forever. It's only in the last 18 months that they have been effectively used in the mortgage industry. Apply for a credit card...guess what, you get 10 more offers in the next week. Why, a trigger is generated at the bureau and sold to credit issuers...is anyone screaming about that - NO!
Same in the insurance and automotive industries too. Every American with a phone number can opt-out of the bureaus marketing lists. But it's funny, I don't see consumers complaining. A call from a mortgage company based on a trigger is somehow more annoying than any other mortgage cold call that interrupts their dinner? I think not!
The NAMB will always talk about the 1%-2% of THEIR OWN MEMBERSHIP that are flat out unethical. Trust me, it isn't a trigger lead that makes them lie to a prospect. They do it with teaser rates on direct mail, phone calls to non-FCRA regulated lists, etc. Triggers aren't to blame. Competition makes America great. Triggers EXPOSE the very brokers that cry foul when they have their prospect move to a better deal.
That is truly the rest of the story of trigger leads.
Jack Johnson is President of http://www.MortgageTriggers.com the nation's largest independent provider of mortgage trigger leads.
http://ezinearticles.com/?Why-Trigger-Leads-Are-A-Good-Thing&id=615198
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