Mortgage Approvals Fall (Again)

The number of new mortgages being approved has fallen to a twelve month low. One hundred and seven applications were approved in April down from one hundred and eleven thousand in the previous month.

High interest rates have begun to put pressure on prospective home owners, and banks are taking a closer look potential customer’s finances to see if they will be able to afford any more interest rises, many suspect a further rate hike in August.

House prices are continuing to soar as new home building slows and the number of affordable property on the market decreases. Typically first-time buyers have to borrow almost three and a half times their annual income, with interest payments also eating into their incomes. The growing cost of home-ownership is now deterring many prospective first-time buyers, who previously may have tried to get on the property ladder. Over the past twelve months the average home has accumulated £17,000 in value.

Those who do want to get on the property ladder are increasingly turning to family for financial assistance. Over a third of young first-time buyers say they would need help to be able to get on the first rung of the property ladder. A survey from the Council of Mortgage Lenders found that forty percent of young home-buyers said that they expected financial help from their parents. The survey also found that twenty three percent of buyers now on the property ladder got financial help from their mum and dad. This figure rises to thirty nine percent among the under thirties, and up to seventy six percent for the under twenty fives.

But it’s not all doom and gloom for would be home owners. With such a competitive market mortgage lenders are now becoming more "creative" in the mortgages they offer to first-time buyers.

The on-going struggle of first time buyers to get that first foot on the property ladder is well known and mortgage lenders have capitalised on this with products such as one hundred percent, graduate and interest free, often, though not exclusively, aimed at first time buyers. Many more lenders are now increasingly conscious of the plight of first time buyers, offering more "innovative" mortgage options to suit the needs of people entering the housing market for the first time.

James Quinton is a writer based in the UK. He has had articles published worldwide. Compare mortgage rates online.

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The Ongoing Struggle (For First Time Buyers)

With interest rates now up to five point five percent and another interest rate hike expected in August, it is not surprising that only one in ten first time buyers are currently making it onto the property ladder.

The situation is further confounded by deep-pocketed buy-to-let investors investing in the properties typically favoured by first-time buyers; this is generating an acute shortage of affordable starter homes for would be homeowners. It is also becoming increasingly difficult for first time buyers to find property valued under the stamp duty threshold of one hundred and twenty five thousand pounds.

Commentators are calling for the Government to intervene and address the growing problem of lack of affordable property, one option would be the abolishment of stamp duty for first time buyers. The one percent tax on the average price of a first time buyer’s property is one hundred and eighty thousand pounds - a lot of first time buyers have no savings for a deposit let alone for paying stamp duty.

The mortgage approval rate has also fallen as lenders become wary of how much debt first buyers can take on. First time buyers are also being advised to show caution when considering a mortgage that is worth more than the property they are buying - some first time buyers are looking at one hundred and twenty percent mortgages, with the view to using the extra money to pay for the fees involved with buying.

But there could be a ray of hope for struggling FTB’s (First Time Buyers) as the property market is showing the first signs of slowly and lenders are coming up with inventive ways like co-buying and rent-a-room mortgages to help get FTB’s onto the property ladder and FTB’s will always be welcomed by sellers as they have no chain.

James Quinton is a writer based in the UK. He has had articles published worldwide. Compare mortgage rates

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Who Needs Estate Agents? Sell Your Home Privately!

Estate agents have long been the bane of home sellers who are wary of the value of service that they, the estate agents, offer. With the proliferation of the internet (it is estimated that eighty nine percent of buyers use the internet when conducting their initial searches) and the myriad of property search engines available online it comes as no surprise that you can now sell your home yourself, cutting out the middle man - and their charges!

There are many websites dedicated to bring the private home selling market together and it is thought that last year fifty thousand homeowners sold their property privately. These sites will charge you a one off fee to advertise on their site (your property will also be featured on all the leading property search engines as well).

Selling your home privately seems to have more benefits than going through an agent, most notably the massive monetary savings that can be made from not paying the estate agents commission charges; private home selling websites point out that it is usually the home owner who sells their property as more often than not the seller ends up showing potential buyers around their property with the estate agents simply supplying possible buyers for the seller – something that the internet can now do for you.

It is possible to do both, advertising with an estate agent as well as doing it yourself, without suffering any financial penalties. This can happen so long as your contract with the estate agent specifies that they are the sole agent rather than the sole selling agent. The sole agent means that they will market your property but if you find a buyer yourself you will not have to pay their fees, a sole selling agent means that if you find a buyer yourself you will still have to pay their fees. One plus point is that the estate agent will give you a market valuation for your property – something that you’d have to work out yourself otherwise.

The one thing you will need to do before you sell is to get a mortgage for the new property you will be buying. This of course is possible to do yourself via the internet which will also cut out the need for a mortgage broker and thus saving yourself even more!

James Quinton is a writer based in the UK. He has had articles published worldwide. Compare mortgages rates online.

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House Mortgage- Are They All the Same?

Choosing the right house mortgage that perfectly fits your budget and need is very crucial. This will decide whether you will be able to pay your mortgage for the next years. Thus, knowing first the different types of house mortgage should be the first step to take for a successful house ownership. Having said this, you now know that not all types of house mortgage are the same. They may sound similar or may look similar, but each has its own nature and modes of rate computation. Let us take a close look on the 2 types of house mortgage.

Fixed-rate mortgage.

Fixed-rate mortgage is still the more popular type of house mortgage among the two. This is because the fixed-rate mortgage fee does not change throughout the life of the loan regardless of the changes in the national interest rate. It has become more attractive to future home owners since they do not have to worry of the possibility that the mortgage rate will go up in the future, which can suddenly become unaffordable. Also, future home owners can easily budget their payment more easily with the fixed-rate mortgage making is more convenient in any year.

However, to be able to qualify for the fixed-rate mortgage, higher income is required. Also, if the interest rate suddenly goes down during the course of the loan, the borrower has to refinance their house in order get a lower rate as compared to adjustable rate mortgage where the borrower can automatically compensate with lower rate.

Another important thing to take note of with fixed-rate loan is the promotional rate mortgage companies are offering. Often, they give low initial payment the will run for several months and will shoot up after the promo expires. Moreover, during the first years of loan, your payment will go mostly to the interest rate and not to the payment of the principal which means that the mortgage company still owns most of your house for a while.

Generally, the fixed-rate mortgage is offered either in 15-year loan and 30-year term. The 15-year loan has higher monthly payment at a lower rate. The 30-year loan on the other hand has lower monthly payment but has a slightly higher interest rate. Choosing between the two relies on your capacity to pay.

Adjustable Rate Mortgage.

The adjustable rate mortgage (ARM), also know as variable rate mortgage is a short-term fixed-rate mortgage. Meaning, a fixed-rate is set from the first year of the loan and runs for the next 3, 5, or 10 years. After the fixed-rate expires, an adjustment will be made annually depending on the current interest rate condition. For example, the 30-year 10 to 1 adjustable rate mortgage has a 10-year fixed-rate mortgage, say, at 6.03%. On the 11th year, the rate will adjust on the current national interest rate and will change every year for the next 20 years.

The good thing about the ARM is that you can compensate on possible future lower rate. Also, compared to fixed-rate mortgage, the interest rate for the ARM is lower. Applying for the ARM is also easier too since the rate is lower and affordable.

The main drawback for this type of loan, however is that the rate can suddenly shoot up during the course of your loan, which can make the mortgage payment becomes unaffordable.

Based on this information, base your choice in the following criteria:

1. How much you can afford?
2. How long are you planning to stay at your house?
3. What is the interest rate’s current trend?
4. How much are you willing to gamble?

In general:

1. The type of loan approval depends on how much you can afford together with other factors such as your credit score, money at hand, assets, information about your purchase, and debts.
2. If you are planning to stay at the same house for years, a fixed-rate mortgage is a good choice.
3. If the interest rate’s current market trend is going up, the fixed-rate mortgage is a safer choice but if it is going down, then ARM can be a good choice.
4. If you do not want to worry about the fluctuation of the interest rate, fixed-rate mortgage is perfect for you; if, however, you do not care about the future changes on the interest rate, then ARM is a fine choice.

For more information on mortgage and home financing please go to:
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House Mortgage- Are You Getting the Best Rate?

Getting the best rate for a house mortgage are often associated with getting the lowest rate. The truth is, lower rates may not live up to your expectation and higher rates may be the one you are looking for, thus, low rates do not always equate to cheapest loan. We will discuss how this happens later.

Getting the best rate for a house mortgage may seem to be the biggest deal to anyone. And why not? A 0.50% difference on the interest rate, provided that other factors such as points and other charges are the same, will be able to give you save hundreds of dollars, even thousands. The question now is: how can you get the best rate for a mortgage loan?

You may have heard about “shopping around” is the way to get the best rate. Let me tell you this: “shopping around” for a mortgage loan will not give you much of a good result since loans from different lenders are tied from one index. That means, if you compare 2 house mortgages from 2 different lenders, you will only get one rate. So, there is really no difference between the programs given by Lender A and Lender B. Take note: rates are based on two sources: the economic condition and inflation, which means that every mortgage company uses one and the same rate in the same country.

But why does Lender A offers a lower rate than Lender B, you ask? It is because rate changes everyday. And mortgage companies immediately adapt any current changes. So if Lender A gives a 6.00% rate yesterday; don’t expect that it will give the same rate today. And don’t compare the rates given by 2 lenders on different days. Another reason is when Lender A transfers the cost of lowering lost rate to other charges such as points, administration fees, origination charges, underwriting and processing charges, and commitment fees. So for example, Lender A offers you a 6% while Lender B offers 6.25%, make sure that you get information about other fees and charges. This is where you should focus your attention and not on shopping for different mortgage loan. That answers the question why lower rates may not live up to your expectation.

The best way to get the best rate is sticking to your game. Not because a broker gives you an attractive rate means you have to give it a bite. Know first what type of mortgage plan you can afford and stick to it. You are actually hunting for the best rate and not fishing for a mortgage plan. Don’t let mortgage companies talk you into other programs.

The second best way to get the best rate is by knowing the dynamics of the current economy. As was mentioned, the interest rate is influenced by inflation and economy. Inflation is affected by the economy and in theory, if the economy is down; the rate goes down with it. However, knowing the status of the economy days from now is like walking through a road in pitch black. There is trend of course and in general, you can predict the economic status next week or next month.

Timing is very important if you want to get the best rate for your loan. But even experts cannot tell you when is the right time to get your mortgage because they too are walking in the dark. It is a 50-50 gamble actually. Waiting or purchasing the loan now will rely on you and how strong your gut is. Who knows? You may get it right.

The length of the term also is one factor that determines if you get the best rate or not. A 15-year loan has lower interest rate than the 30-year loan. Although you may pay higher monthly mortgage for a shorter term, you pay less in total. If you can afford a shorter term, then you will definitely get a good savings.

Finally, to get the best rate is to actually dig for information. You may already know this but I will tell you still: the Regulation Z of the Federal Truth in Lending Law requires that if the mortgage companies or any other institutions quote the consumer rates, must quote the APR as well. That means; you have the right to know every rate and charge the company offers. This allows you to compare each quote including junk rates and mortgage rate.

For more information on mortgage and home financing please go to:
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House Mortgage- How to Save

If you want to get the utmost savings when buying a house, pay in cash. But since it is next to impossible and only a handful does this, you are stuck with applying for a house mortgage which is just another term for borrowing money from banks or other lending institutions. And since you are borrowing a large amount of money, you have to pay the principal with a considerable amount of interest. But house mortgage should not have to be expensive. There are ways to save when applying for a loan. Here are some of those:

Improve your credit score. Buying a house could be the best investment you can have in your lifetime. That is why before you buy one, you must carefully assess your personal credit status that will definitely affect how much you will pay to your lender. Banks and mortgage companies check your credit score to know if you are not a credit risk to them. And the better your credit is, the lesser interest rate they will give. Thus before applying for a house mortgage, try to improve your credit score first (unless you are applying for bad credit mortgage loan). Improving your credit rating however is not an overnight process. So don’t be desperate enough to believe on online ads offering you a chance to improve your credit score instantly. What you should do is to pay your bills on time, all the time.

Save on down payment and target a shorter term mortgage. You can certainly get a lower interest when you buy a house at 50% down payment instead of 0% down. This is because you owe your lender less and the less you owe means the less interest you pay. Making sure that you pay as much as you can for down payment will definitely give you tremendous savings in the future. Savings can also come with the term you choose. If you think you can afford a 15-year mortgage instead of a 30-year, go for it! Shorter loans have lower interest rate as compared to longer loan.

Attend house auctions. Auctions are always a great venue to buy affordable property. Ask your bank about this option.

Strive to become pre-approved and not just pre-qualified. Getting in a pre-approved status will set you in a position where you can bargain your terms with home seller better. Home sellers are more willing to ask more when there in no ‘upon approval’ clause since they are assured of the sale.

Use mortgage calculator. Mortgage calculator will give you information about your mortgage including the monthly fee. This will help you realize if you can really afford a house or not.

Do not rush. Although there maybe other buyers aside from you, do not always believe when the broker tells you that “you should buy the house NOW because the market is hot and tomorrow it might already be sold to other buyer.” This or similar line to this is always used by brokers to convince you to buy the house immediately or else it will be sold to another costumer. The truth is, although there several home buyers out there, few will take interest on the particular house you want to buy. Remember this: if the house is on sale for more than a month, there is no reason to believe what your broker has said. Take time to assess if you can afford or like the house. Do not say “yes” immediately. Go home and think it over. Discuss it with your wife or husband.

Know how to negotiation. Future homeowners often believe that the brokers have fixed rate so they don’t even bother to ask for discounts or request for other payment options. You on the other hand should assert this chance.

Don’t forget to ask questions. You can negotiate for a better price well if you know your broker is talking about. Ask questions about the added cost, the interest rate, and other factors that can change the amount you will pay for the mortgage. Then, ask for the possibility of adjusting some of these individual fees to make the purchase more affordable.

Finally, pay in advance. If you have already purchased a house and started paying to your creditors, make prepayments. This will help you lower the amount of money you pay for the interest. Again: the less you owe, the less interest you pay. A good history of advance payment will help you negotiate with your lenders a better payment options in the future.

For more information on mortgage and home financing please go to:
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House Mortgage- The Top Ten Things You Should Know

The excitement to own your dream house can put you in the position where you become very impulsive in dealing with the house broker and mortgage company. This can result to bigger problems later on as you start paying your monthly mortgage. The thing is, the process of buying a house involves gathering correct information and careful assessment on all the aspects including capacity to pay the mortgage, the type of house to choose, the kind of term you need, the amount of mortgage payment you can afford, the broker and lending company to choose, etc. Take a look of the top 10 things you should know about house mortgage.

1. The less you owe; the less interest you pay. Getting off on the right foot will maximize your savings. Start right by not settling for the minimum down payment that the house seller requires. Save for your down payment early. The higher you pay for your down payment, the lesser you owe. And the less you owe, you less interest you pay. Also, paying your mortgage sooner than your scheduled date is very effective too.

2. Getting approved for a mortgage doesn’t mean you have already owned a house. Whether you take the 15-year or 30-year mortgage, the case still remains the same: your equity does not make you the owner of the house yet, at least during the first few years or even halfway on your mortgage payment.

3. ARMs or the Adjustable rate mortgage come in different varieties. ARMs are often understood as mortgage with interest that goes up and down every year. Take note of this: there are several types of ARMs that you need to know. There is the 1 year ARM with 2/6 caps. Meaning, the annual percentage rate is fixed for the first year and may change once a year afterwards. The 3 to 1 ARM has a fixed rate for the first 3 years of the term and may change at least once a year on the succeeding years. The 5 to 1, 7 to 1, and 10 to 1 have fixed APR during the first five, first seven, and first 10 years respectively and may change once a year after the fixed-rate expires.

4. Asking your brokers to lower down the interest rate will give you significant savings. It may sound elementary but only few realize it during the processing stage of the mortgage. Be your own advocate and ask for better deal. Do not assume that the rate posted on the listing is final.

5. You can get savings by paying your points. When you pay points, you lower the interest rate down. And by lowering your interest, you will pay less. However, this may only be effective if you are planning to stay at you house or sticking at your mortgage for a long time. But if you don’t, skipping the points is a better idea.

6. Examining the cost of your mortgage carefully will give you small information on how to save. Asking for a detailed list or itemized is of the estimate cost of mortgage will tell you clearly how much you will for your loan from the beginning of the loan to the closing cost.

7. Your broker’s fee is negotiable. Brokers compete against other brokers and the last thing they want to happen is for a sure buyer to slip out of their hands. So if you are buying a house, do not forget to negotiate the price with your broker. I tell you, if you are committed in buying a house through a broker while playing “hard to get”, he or she will certainly give you discounts if you will just ask.

8. Job stability is very important. House mortgage is a long term loan and thus, must be planned carefully. Make sure that you have a good source of income during the entire period of the loan. Otherwise, there is a good tendency that your house will be foreclosed and you on the verge of bankruptcy.

9. Credit rating affects your mortgage interest rate. Unless you are applying for a bad credit house mortgage (which is a bad idea), make sure that you improve your credit rating first. This will give you advantage of getter a better deal with your mortgage company. Having a good or excellent credit score makes you a less-risk borrower and thus, the company will give you lower interest rate.

10. When in doubt, seek professional help. It is okay to admit that you do not know what to do. Take time to seek professional help so that you will be guided as to what actions you should take to owning a house.

For more information on mortgage and home financing please go to:
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House Mortgage- What Coverage You Need

In many instances, people do not give much importance on homeowners insurance shopping than in home buying since they are still in a cloud 9 with their new purchased house. The result is, new homeowners end up getting an insurance policy with too little coverage or paying more than what they should have. This mistake of course is not yet realized after a fire or other loss.

Moreover, people are often mistaken with the thought that the cost of their homeowner’s insurance policy should equal to the cost of their house or the house’s current market value. Others let the broker to take care of their homeowner’s insurance policy, which in turn creates a problem since brokers can only help with the decision making on what policies you should but do not exactly know what type of policy you and your house require. Thus, it is very important to take the first hand and identify types of coverage you need in order to ensure that you protect your most important asset.

The types of insurance coverage you need may include protection against theft, fire, earthquake, hurricane, or other natural calamities and accidental damages called insured perils.

There are certain degrees of protection that a homeowner’s insurance can give to your home.

First, there is the guaranteed replacement. Although this type of coverage is rarely offered by many companies, this is the best protection you can get. Say your home is originally worth $200,000, but over the years you have made some improvements to it: a new patio; a landscaped garden; and a kitchen expansion. These increase the value of your home plus the appreciated value, say $400,000. If your home was destroyed by a fire, the guaranteed replacement assures you that you get the $400,000 condition of your home. Since, it seems to be obvious that you are a winner in this type of coverage, the guaranteed replacement costs higher than other types of coverage.

Second, is the actual cash value. This type of policy covers cost of replacement the property or the house at its depreciated value at the time of loss.

Then, there is the extended replacement cost. This type of coverage gives you the actual cash value plus an extended replacement cost. Suppose that the amount of replacement costs $150,000 with an extended replacement cost of 200%. At your claim, you will get the replacement cost plus the extended replacement cost: 100% for the RC and another 100% for the ERC totaling to $300,000.

Same with the house coverage, there is also a level of protection to your property.

The actual cash value replaces your personal property at the cost of its original amount minus depreciation.

The replacement cost coverage replaces your lost personal property at its current market value. If you opt for this type of coverage, you will have to pay for additional premium compared to the actual cash value coverage.

The guaranteed replacement demands higher premium but it does not apply any cap or maximum pay-out. Increasing your deductibles will help you lower your premiums and make this coverage affordable.

Another coverage you should look into is personal liability coverage. A typical insurance coverage includes $100,000 worth of personal liability coverage. This can be used to pay out medical cost and legal expenses if a guest or a member of your family is injured at your home. Many mortgage lenders and insurance professionals would require or advice you to get $300,000 to $500,000 worth of personal liability coverage. This can be acquired with extra amount. You may also consider purchasing a personal umbrella coverage which begins once your liability coverage is exhausted. For example, your guest sues you for $700,000 for a severe injury he had at your home. After your home policy pays out $500,000, your personal umbrella will take care of the remaining amount. Personal umbrella costs a couple of hundred dollars annually but will give you somewhere close to a million dollars worth of coverage. This small investment will definitely give you a peace of mind.

Home, personal property, and personal liability are the most important coverage you need to have for your homeowner’s insurance. Discuss with your insurance company or broker what options are offered and the cost of each coverage.

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Adjustable Rate Mortgage (ARM) Explained

Adjustable-rate mortgages were heavily sold by mortgage brokers and bankers the last 5 years and many borrowers looking for low payments eagerly signed the loan papers. At the time ARM mortgages offered low introductory interest rates and low payments for the borrowers the took them. The downside to all the ARM mortgages sold during that time is that from now through 2012 many homeowners will see their ARM mortgage rates will begin to adjust and their monthly payments will increase. At the time when ARM mortgages were being sold many homeowners did not understand the loan that was being offered to them, instead of asking the right questions many just signed the loan papers! Years later they are in for a big shock when the mortgage rate adjusts for the first time and their payment is hundreds of dollars higher then the month before! Many home owners will turn to refinancing to save them from increased payments and financial stress, but they should still understand the ARM mortgage they currently have. Not only will this help them determine the right time to refinance there existing ARM mortgage but also closely examine any of ARM program offered to them in the future.. Adjustable rate mortgages have their own language and terms that can confuse the potential borrower. Here are some key adjustable rate mortgage terms that you should know as a borrower. Use these definitions to your advantage when applying for your next mortgage.

1. Interest Rate Cap. The interest rate cap is the highest the ARM mortgage can adjust up to over the life of the loan.. Many of these caps are as high as 14% for a sub prime ARM

2. Periodic Cap. The periodic interest rate cap is the maximum the interest rate can increase or decrease at each adjustment period. An adjustment cap of 2% is common for most adjustable mortgages.

3. Loan Index. A number that is added to the margin of your adjustable mortgage to determine your interest rate. LIBOR is a common index that stands for the London Inter Bank Offering Rate. It is the average interest rate that London banks trade on deposits. Generally the LIBOR index is the most volatile, it can fluctuate the biggest amount and the most frequently.

4. Initial interest rate. This is the initial interest rate on the mortgage note. The introductory interest rate for ARM'S are generally much lower then a standard fixed rate mortgage. Your initial interest rate is locked in for a set period of time, generally 2-10 years. After that, it will adjust to the current rate which is arrived at by adding a Margin and Index.

5. Loan Margin. A margin is a constant numerical value that the lender adds to the index (LIBOR, MTA, COFI, etc.) associated with your adjustable rate mortgage in order to compute your interest rate. As the index value changes, so will your interest rate.

6. Rate adjustment. The act by a lender of changing the rate charged on an adjustable-rate loan. The loan contract specifies when the rate adjustment is made. The new rate is the combination of the index and a margin, subject to a periodic cap.

7. Loan Recast. Loan recast is specific to Pay Option or Pick a Pay type negative amortization ARMS. When the loan recasts the payment structure is reset so the loan is still paid in full at the end of the amortized time frame. Many pay option ARMS will recast at 5-7 years or when enough interest has been deferred that the loan balance is at 110-125% of the original loan amount

These terms should help the average borrower understand their adjustable mortgage a little bit better and plan accordingly. Although the ARM does have advantages the fixed rate mortgage is still the best for borrowers who intend to stay in their homes long term.

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Home Equity Conversion Mortgages

The Home Equity Conversion Mortgages (HECM) is a type of reverse mortgage which allows seniors to convert the portion of the home equity into cash. The homeowner can stay in the home while the homeowner uses the home equity. With the cash, the homeowner can use the cash into any expenses such as medical, home improvements, and home repairs.

This reverse mortgage type is one of the three basic reverse mortgage types. It is also known as Federally Insured Reverse Mortgage. Hence, Federal Housing Administration (FHA) backs the Home Equity Conversion Mortgages. The FHA works under the US Department of Housing and Urban Development (HUD).

The banks, credit union, mortgage companies, and savings and loan companies can provide the services. FHA must approve the financial institution before the financial institution can offer this type of reverse mortgage.

There are four requirements for homeowner to quality. First, the homeowner must be sixty two years old or over. Second, the home is a principal residence of the homeowner. Third, the homeowner received reverse mortgage counseling. Fourth, the homeowner owns the home. Or, the home is almost paid off.

The reverse mortgage counseling is a free counseling from HUD. The HUD wants the homeowner to know the consequences, and benefits before the homeowner uses the reverse mortgage. For a while, the homeowner pays for the reverse mortgage counseling. Now, the HUD instructed the financial institution to deal with homeowner that dealt with free reverse mortgage counseling only.

There are five requirements for the home to qualify. First, the home is a principal residence. Second, the home can be a single family residence. Third, the home can be one to four units as long as the homeowner occupies one unit. Fourth, the home is manufactured or mobile home. Fifth, the home is FHA condominiums.

The maximum claim amount of reverse mortgage depends on the age, home value, and interest rate. For example, the interest rate is nine percent. The homeowner who is sixty five years old can use twenty six percent of home equity. The homeowner who is seventy five years old can use thirty nine percent of the home equity. The home owner who is eighty five years old can use fifty six percent of the home equity.

The homeowner receives the home equity in the form of monthly payment, credit line, lump sum payment, or combination. The home secures the reverse mortgage. The homeowner do not repay as long as the homeowner lives in the home. The homeowner still owns the home. It is still the responsibility of the homeowner to pay the repairs, maintenance, property tax, and insurance.

Dennis Estrada is a webmaster of mortgage calculators, reverse mortgage types, and reverse mortgage website.

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How to Find the Best Lender When Mortgage Refinancing

Most homeowners collect half a dozen mortgage quotes, pick the one with lowest interest rate, and walk away thinking they’ve got a good deal when refinancing. The problem with this approach is that you are simply getting the best of the worst retail loans available. Here are several tips to help you refinance your mortgage with the lowest wholesale rate possible.

What exactly is the “best” lender when refinancing your mortgage? Ask five different homeowners what makes a good lender and you’ll surely get five different answers. If you’re in the market to refinance your mortgage the best lender is the one that gives you the lowest interest rate and fees for your situation. How do you make sure that you get the lowest rate when refinancing? Find a mortgage company that doesn’t charge you Yield Spread Premium when refinancing and you’ll be ahead of 97% of homeowners out there.

Never heard of Yield Spread Premium? This markup of your mortgage interest rate only serves to give your loan originator a fat bonus check. You’re already paying a perfectly reasonable origination fee for this person’s work; however, your interest rate is marked up for a second commission. Yield Spread Premium is added to your interest rate because the wholesale lender behind your loan pays 1.0% of your mortgage amount for every .25% you agree to overpay. That’s a lot of money and a perfectly legal incentive for ripping you off.

Despite the ridiculous truth about this markup and the raging debates in Congress, most homeowners have never heard of and happily pay Yield Spread Premium when refinancing their mortgages. The good news for you is that by learning to recognize Yield Spread Premium you can avoid paying too much when refinancing your mortgage. You can learn more about avoiding Yield Spread Premium when refinancing with a free mortgage toolkit.

To get your FREE Mortgage Refinancing Video Toolkit, visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this "Mortgage Refinancing Toolkit," which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com.

Get your free mortgage refinancing tutorial today at: http://www.refiadvisor.com

Arizona Refinance Mortgage Rate

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Get Your Life Back With Reverse Mortgage Association

As you get older the options for you to earn income become increasingly limited. However, just because you retire and switch your source of income to social security, your invested savings or a 401K you established while working does not mean that you have to live a life of abject frugality or poverty.

The Reverse Mortgage Association is an association that is dedicated to helping you regain your financial independence in your old age. There is simply no reason why you have to start getting cheap about everything you purchase simply because your finances have switched over to a fixed income. If you want to keep your financial independence and you are over 62 years of age, then a reverse mortgage from the Reverse Mortgage Association may be just what you need to keep lifestyle intact.

Many people decide they want to retire and then realize that they did not have enough money reserved for the lifestyle they wanted or they may live in luxury for a few years and then become overwhelmed by financial burdens that creep for one reason or another. This lack of preparation for the future forces them back into the workforce most often with reduced earning capacity. The Reverse Mortgage Association does not want you to fall into that same retirement trap.

With a reverse mortgage, the bank pays you for your house while you keep living in it for as long as you want. This gives you a steady flow of money that can help you at a time when you need it most to pay for the late-in-life activities you enjoy or cover unexpected bills and expenses. The benefits of reverse mortgage are that you get a steady source of income while being able to live in your house as long as you want. When you desire to move or when you pass away, the ownership of the house is then passed to the Reverse Mortgage Association instead of becoming part of, and potentially a burden of, your estate.

To find relevant details on something specific such as reverse mortgages ask your friends and co-workers for info they may have found out on it. You can also look up various groups on the web that discuss things such as newsgroups and forums. There is one on so many topics and you can post your own question. See below for more information on Reverse Mortgage Association.

For more information on Reverse Mortgage Association or visit http://www.reversemortgagetipsonline.com/Articles/How_the_Reverse_Mortgage_Association_Can_Help_You_Get_Your_Life_Back.php, a popular website that offers information on Reverse Mortgages. Please leave the links intact if you wis


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African American Homeowners Guide to Home Equity Lines Of Credit

More and more lenders offer home equity lines of credit (or HELOC's). Home equity lines of credit allow a homeowner to use their homes equity. Like a revolving charge card, the home equity line of credit also has a specific limit.

Many people use the line of credit for home improvements, to finance a child's education, home repairs or other expenses.

Also, under the tax law--depending on your specific situation--you could deduct the interest because your house secures the loan.

Before deciding on a HELOC, you should weigh the costs of a home equity line against the benefits. A traditional second mortgage could work more to your advantage. A second mortgage loan is when you receive a lump sum loan. See the HELOC vs. Second Mortgage comparisons below.

So, comparison shop for the credit terms that best meet your borrowing needs without posing undue financial risk on yourself. Remember, failure to repay the amounts you've borrowed could put your home at risk of foreclosure.

What Else Should I Know About A HELOC?

With a home equity line of credit, bank will approve you for a specific amount of credit or credit limit. This is the maximum amount you may borrow. Most lenders decide the credit limit on a home equity line by taking a percentage (say, 80 percent) of the home's appraised value and subtracting from the balance owed on the existing mortgage.

For example,

Appraised Value $100,000

Percentage X.80%

Percentage of Appraised Value $80,000

Less Balance Owed 50,000

Potential Credit Limit $ 30,000

Note: Your lender will also consider your credit history, fico score, income and expenses in addition to your homes equity.

Most HELOC plans set a specified period where you can borrow money, such as 10 years. At the end of this "draw period," you can to renew the credit line if approved by the lender. Some plans do not allow renewals; in that case you won't be able to borrow more money once the period has ended. Some plans may call for payment in full of any outstanding balance at the end of the period. Others may allow repayment over a fixed period (the "repayment period"), for example, 10 years.

Once approved for a home equity line of credit, you will receive special checks should you want to withdraw money from your HELOC. On some plans, homeowners can use a credit card or other means to draw on the line of credit.

Many plans may want you to borrow a minimum amount each time you draw on the line (for example, $300) and to keep a minimum amount outstanding. Some plans may also require that you take an initial advance when setting up the plan. These are facts you want to consider when shopping for the best HELOC for your needs.

Make sure you read the agreement carefully, examining the terms, conditions and cost of available plans.

Quiet Dangers of HELOC's Although many homeowner's like the convenience and ease of having home equity lines of credit, you should go with caution. Here's a few examples.

Most Have Variable Rather Than Fixed Rates. That means your payments will change, often upward. That's why it's important to find out which index the lender uses to decide your rates. You'll also want to know how often the value of the index changes. Plus you'll want to find out how high it has risen historically and the margin.

Don't Ignore Hidden Cost of a HELOC In the excitement of getting approved, many homeowners overlook the true cost of a home equity line of credit. For example, the cost of setting up a HELOC is similar to the cost you pay when you bought your house. For instance, a property appraisal fee or estimate, a loan origination fee, annual maintenance fees, even a prepayment fee if you close your account too soon. Other restrictions could apply as well, such as renting or leasing your home and more.

Lines of Credit vs. Traditional Second Mortgage Loans.

While considering a home equity line of credit, you should also consider if a second mortgage loan could better meet your needs. A traditional second mortgage can give you a fixed payment. . In most cases, the payment schedule will give you the security of equal payments that will pay off the entire loan within the loan period.

You might also think about a second mortgage as opposed to a home equity line, if for instance, you need a specific amount for a set purpose, such as a new roof or plumbing.

Conclusion Now that you have a clearer view of what a HELOC is, you can make a more intelligent and informed decision on which direction to go. You also have the facts that will help you protect yourself.

Roy Primm Founder and Publisher of BlackHomeOwnerNews.com the largest source of information for black homeowners. Subscribe to free newsletter and receive the latest home value increasing tips, free government grants benefiting homeowners. Get free ebook 99 Ways To Live Better On Less Money at ...ShoppersCoach.com

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Do You Qualify For A Home Repair Grant?

If you’ve ever had damage done to your home or been involved in an unfortunate situation of having rain or snow engulf your dwelling. A home repair grant may be the perfect answer for your situation. This article will help you discover some places to look for help and how to find out if you qualify for a home repair grant.

The good news

They always say - the good news is the best place to start, and this article is no exception. Did you know that a home repair grant does not need to be paid back? Most home repair grants are either privately funded or government funded. There are grants for many different classes of people. From seniors to handicapped individuals in need of home repair grant assistance.

Seniors age 55 and older

Some cities have special programs that will offer a one time home repair grant to seniors age 55 and older. This can be a wonderful blessing if you are on a limited or fixed income. You would need to check with your local city officials to find out the exact requirements and availability in your specific area. But, this might be a great option to consider.

Private home repair grant

Often time’s private individuals, prominent business people, and others will offer assistance through a private home repair grant. You might find this information at your local chamber of commerce or perhaps you might find local businesses running ads in your local newspaper offering assistance for home repair to qualifying individuals. One of the local realtors in my area has been helping individuals for several years with their needs. He usually offers to help with food expenses as well. This can be a real win – win situation for both you and the business person.

Disabled individual may qualify too

There are special programs available for certain disabled individuals who need assistance through a home repair grant. Check your city for disabled assistance programs to see if they can give you further information.

The internet is always a good place to search

The internet is a great place to start when trying to find information. You will find qualifications forms and many types of grants being offered. This will give you some things to compare. Although many of the programs online will be specific to a certain area; you may be able to find local listings, and direct numbers of people to contact for home repair grant assistance. Regardless of your situation it never hurts to do some checking around if you are in need of assistance.

Find more helpful home improvement tips by visiting http://best-home-improvement-projects.com where you will find helpful home improvement tips, advice and resources including information on easy home improvement projects, kitchen repair and Home Repair Grant.

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10 Biggest Mistakes of Novice Investors in Australia

Following are the 10 most common mistakes made by new real estate investors

1. Falling in love with the property:

You need to stop thinking like a homeowner and start thinking like a business owner.

2. Not performing your due diligence:

This is more than just an inspection of the property, although essential. It's also a thorough investigation of your area's current rental market. What are the vacancy rates and average rents for comparable properties? What's the average age of the rental housing stock? How is the neighbourhood zoned? What are the government regulations about rental properties?

3. Forgetting the rule of home improvements:

It will always take three times the money and twice as long as you estimate to get a property ready to rent. Or is that twice the money and three times longer? Either way, you need to build that extra cost into your expenses.

4. No cash reserves:

Ask anyone in real estate long term (or any other business, for that matter), and they will tell you the two most important words for survival are cash flow.

In order to stay in real estate long term, you need cash reserves. Buying real estate with a small or zero deposit is easy; handling negative cash flow, repairs, and other expenses in the meantime is the trick. In fact, if you can handle the bad times, you will always come out on top.

Lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept less than qualified tenants, and give into tenants' demands for fear of vacancy. When you have a sufficient cash reserve, you act rationally.

5. Not pre screening tenants:

New landlords can get very excited about prospective tenants who show up, take one look at the place, hand them a cash deposit, and want to move in that weekend, do not do it. When selecting renters make them fill out an application, and check their credit, employment and rental history before you take a dollar from them. It is a much more expensive -- and potentially nasty -- headache to evict a bad tenant than to have a property sit vacant for a couple of months.

6. Investing blind:

Real estate is one of the few investments in which risk is directly proportional to knowledge. True, it has a higher learning curve than investing in the stock market, but there is no proof that having knowledge of the stock market reduces risk.

I read a comment on a real estate discussion group on the Internet, in response to an inquiry as to whether a particular seminar or training program was worth the money, someone answered, "Why waste your money on that stuff? Just use your money as a deposit and learn as you go."

This is probably the worst advice you could ever give a beginner. Money for deals is easy to find if you can find good deals. But, you will not know what a good deal is without having first invested in your education!

The more knowledge of investing techniques, financing, acquisition, negotiating and, of course, your local marketplace, the less risky your investments will be. A bargain real estate purchase will generally always be a safe investment; a bargain stock purchase is not. After all, who says the company you bought into will be in business next year?

7. Investing long-distance:

Unless your rental property is in a spot you love to visit regularly, such as a lake or the beach, keep your rentals very close to home. Otherwise, you will eat up your profits by driving back and forth to manage the property or by paying someone to make repairs for you.

8. Paying too much for the property:

If you are embarrassed to make a low-ball offer to a seller, do not invest in real estate. You can never know a sellers circumstances and an offer you think will be unacceptable may be very acceptable to the seller. Do not assume anything.

9. Not studying the competition:

Why does the guy across the street rent his property the same day someone moves out and yours sits vacant for months? He might not be very picky about whom he rents to, but he also might have lower rents or have gone to a little extra effort to present the property.

10. Being under-insured:

Insurance on rental property goes beyond insuring the building against fire or natural disaster. You need to look at comprehensive landlord insurance. There are too many horror stories about destroyed rental properties to not take out this type of insurance. Most major insurance companies now offer this product, which will not only cover you for damage to the property but also loss of rent.

* Jennifer Schelbert Dip. Fin. Serv. /FinMBM is a director of Mrs. Mortgage Pty Ltd, a licensee for Choice Aggregation Services, a member of COSL and a full member of the Mortgage Finance Association of Australia.

Phone: 61 3 9315 9750

http://mrsmortgage.com.au

Disclaimer: This document is for information purposes only, and must not be relied upon as a substitute for professional services or legal advice

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