How Can You Assume A Mortgage?

Finding a house with an assumable mortgage these days could prove to be a real find - but it is not very common. Typically only the FHA and the VA uses assumable mortgages, which basically means that another person can simply take over the house and payments. Here is some information that you need to know if you are thinking about taking over an assumable mortgage.

Getting a house with an assumable mortgage can make things easier for you. It means that you may be able to save considerable money, as well as have a speedier process involved. It can really be to your advantage, too, because the lower interest rates that are probably on it will enable you to save money. Not having closing costs and a few other expenses can also mean saving even more. You will, however, if the mortgage was obtained after 1989, need to be approved by either the FHA or VA before you can assume the mortgage.

The greatest amount of savings can be gained if you can simply pay cash for the house - the balance between the value of the mortgage and what the house is selling for. For instance, if the house is selling for $125,000, and the mortgage is worth $85,000, then the amount of cash you would need is $40,000.

In most cases, though, you would probably need to finance the balance that is needed, and this, of course, would be at the current market rate of interest. It is this financing that will slow the process down. For this amount, you would need to go through the whole gamut of getting a mortgage - including approval, finding a lender, closing costs on the amount borrowed, and more.

One matter about this that you need to consider, however, is the interest rate. Assumable mortgages are usually adjustable rate mortgages. This means that there is a fixed interest rate period of time, and after that, the interest rate becomes adjustable according to the market - either monthly, or yearly. If the current trend shows that this rate may rise to nearly unreachable payments for you before long, then you may do well to consider simply financing the whole thing. Having it set at a fixed rate is certainly safer if you see the rates increasing.

Assuming a mortgage does mean that you need to be approved by the lender of the mortgage. You will need to get a package from the lender that describes all the requirements that need to be met. While there will be some fees attached, it still will be cheaper than getting it financed. You need to be sure, however, that this really is the case. If interest rates start rising rapidly, you will need to consider financing the whole thing. To be sure, you should sit down and calculate both scenarios and see which one will be cheaper over the full length of the mortgage, or mortgages involved.

A seller of a house with an assumable mortgage should make sure that he or she has it in writing that are indeed freed from any liability of the mortgage. They also need to be sure to hold that document carefully just in case any questions should arise later if the new buyers default on payments.

Joe Kenny writes for the Loans Store, offering buy to let mortgage offers, or view the latest your mortgage and credit rating
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Why You Should Compare Interest Rates When Mortgage Refinancing

If you are a homeowner with good credit and are refinancing your home with a conventional mortgage, the interest rate you receive along with the fees you pay should be your primary consideration when choosing a lender. Many homeowners accept the first favorable loan offer they receive; however, you can save yourself a pile of cash by carefully comparison shopping and negotiating for the best mortgage rate. Here are several tips to help you find the perfect mortgage when refinancing your home loan.

Most homeowners comparison shopping for a mortgage loan simply end up with the best of the worst mortgage offers available to them. Because they accept a retail mortgage rate instead of the one they qualified, these homeowners overpay thousands of dollars every year. How do you refinance with a wholesale mortgage rate? Homeowners who understand Yield Spread Premium can negotiate with their loan originator to keep the mortgage rate they were approved.

What is Yield Spread Premium? Your mortgage company or broker marks up the interest rate you qualified to get a bonus from the wholesale lender behind your loan. They do this because the lender pays one percent of your loan amount for each quarter percent you agree to overpay. Throw in origination fees, discount points, and closing costs and it’s very easy to waste thousands of dollars when refinancing.

The good news is that you can pay less when refinancing your home loan. Doing your homework before comparison shopping will help you avoid the costly mistakes other homeowners make with their mortgage loans. You can learn more about refinancing your mortgage while avoiding pitfalls like Yield Spread Premium with a free mortgage video tutorial.

To get your FREE six-part Mortgage Refinancing Tutorial, 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 free video tutorial: "Mortgage Refinance - What You Need to Know," 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

Mortgage Refinancing

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Mortgage Refinancing Basics You Need to Know

Understanding the basics of the mortgage process is an excellent way to prepare when choosing the perfect mortgage. The process of obtaining a new mortgage is complicated; however, the basics are easy enough for even the most inexperienced homeowner. Here are several tips to get you on the right track when refinancing your mortgage.

There are three basics concepts you need to understand before refinancing your mortgage. When comparison shopping for a new loan, you’ll compare these items before choosing a lender.

I. Mortgage Term Length
Term is the length of time you have to repay the loan. Common mortgage term lengths include 15 or 30 year loans; however, there are now 40 and 50 year terms. The longer the term length you choose, the lower your monthly payment will be. The disadvantage of choosing a longer term length is that you will qualify for a higher mortgage rate and pay more to the lender over the lifetime of your loan.

II. Interest Rate
The interest rate you qualify determines how much you will pay for financing your home over the term of the mortgage loan. You have the choice of a fixed-rate or adjustable rate mortgage. The mortgage rate associated with fixed-rate loans stays constant of the lifetime of the mortgage. The interest rate for an adjustable-rate mortgage starts with a low introductory rate and generally increases over the life of the loan.

III. Fees and Other Expenses
Mortgage loans come with a variety of fees that must be paid before the process can be completed. Many of these charges come from third parties; you can shop around and compare fees and extras from a variety of lenders. When comparison shopping for your mortgage, it is important to negotiate with your lenders to avoid paying Yield Spread Premium with your mortgage interest rate. Also, make sure you are comparing “oranges to oranges” with the types of loans you compare.

You can learn more about refinancing your mortgage while avoiding costly mistakes like Yield Spread Premium with a free mortgage video tutorial.

To get your FREE six-part Mortgage Refinancing Tutorial, 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 free video tutorial: "Mortgage Refinance - What You Need to Know," 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

Refinancing Mortgage

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Learn More about Refinancing

Long-term interest rates have been at near historic low levels for quite some time and thus, more people are looking for places to rent, making it easy to benefit from these investments. Your investment property loan may have terms that were very attractive when you first made the purchase, but due to changing market conditions may no longer be as favorable as they could be today. When interest rates fall, refinancing the mortgage on your investment property becomes very attractive because refinancing offers ways to leverage the equity in your property, lower your monthly payment and increase your cash flow.
Increase Your Cash Flow

You can drastically increase your cash flow by refinancing the mortgage on your investment property. If you've built up considerable equity in the property, you could turn that equity into cash by doing a cash-out refinance. If you refinance to a lower rate and/or increase the term of your loan, that could also lower your monthly mortgage payment and increase your cash flow even more. Using the Quicken Loans Rate and Payment Calculator can help you find out how much equity you have to borrow against and give you suggestions on what loan may work best for you.
Secure Advantage Loan - Low, adjustable rates and flexible payments each month
Upgrade Your Property and Raise the Rent

The home equity in your investment property can be used to fund improvements to your property and boost your cash flow. The great benefit of refinancing and making home improvements to your investment property is that it increases its market value, thereby allowing you to increase the amount of rent you charge to your tenants. With a Home Equity Line of Credit, you could:

* Build an addition to increase living space
* Upgrade the floors, doors, kitchen appliances and cabinetry
* Remodel the bathroom(s) with nicer fixtures
* Upgrade the furnace or central air
* Replace the roof
* Paint or re-side the house to enhance the exterior appearance

Buy An Additional Investment Property
You can use a home equity loan out of your primary residence or cash-out refinance out of your investment property to invest further in real estate. Equity in your property increases each year as the mortgage loan is paid down. Any increase in the value of the property will increase your equity in addition to the principal paid. To capitalize on that return, you can tap into that added equity, turn it into cash by refinancing and then apply it toward funding further investment properties. A Quicken Loans home loan expert can help you determine how to use a home equity loan to finance other properties.
Spend Your Money in Other Ways

The opportunity to use equity you have earned in your investment property is a major benefit of home ownership. The beauty is that you can refinance and convert the home equity into cash and then use it for whatever you choose. Making improvements to your property or purchasing additional investment properties are good examples of how refinancing can work to your advantage. The cash from your home equity can also be used to:

* Boost your retirement savings
* Invest in stocks or other markets
* Take the vacation of your dreams
* Buy a new car or boat
* Consolidate debt
* Help fund your children's college tuition

Home equity loans provide an easy source of cash and can be a valuable tool for those who invest in real estate. Using the equity in your investment property can help you increase your investment power and increase your long-term wealth. A Quicken Loans home loan expert can help you determine which refinancing options are best for you. Call us at 800-251-9080 to speak with home loan expert or fill out our short application online and a home loan expert will contact you.

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Handling Objections with the Option Arm

Handling Objections with the Option Arm. Nowadays, there are hundreds of Loan Officers and Mortgage people who have the Pay Option Arm at their disposal, but there are very few that actually know and understand how to sell it, the right way. I’m sure there are all kinds of people reading this right now saying “I know the right way to sell it, bla-bla-bla.” If you do, great! I give you props for doing so. BUT, there are a lot of Loan Officers that don’t know and don’t know they don’t know. Get it? I’m hoping this little article will help shed some light on what I’m talking about. Here’s what I mean; if you can handle the objections, you can sell the Option Arm. If you understand the objections, you can answer them properly. I’ll give you a brief “this is what I’m talking about” here. Almost every objection you get when presenting the POA properly will be a version of one of these:

1. I’m afraid of the rate increasing too quickly and going too high.
2. I’m afraid my payments will increase and I can’t afford them anymore.

There may be other minor ones, but let’s tackle these.

“I’m afraid of the rate increasing too quickly and going too high.” This one is simply overcome by explaining the indexes to the borrower, in a way he/she can understand! That’s the key, keeping it simple. Don’t overwhelm the borrower with fancy mortgage terms, just stay with the basics. The index is the only “moving part” of the POA. So, making the borrower feel comfortable with the index is the key to overcoming this objection. NOTE: Which ever index you decide to sell, make sure you can explain it to the average person who doesn’t understand the first thing about mortgages. I always ask myself, did you explain it in a way your Grandmother would understand it? You may be able to explain some indexes better than others, but you have to figure that out on your own.

*Tip: Have your Account Rep explain it to you until you fully understand it* Once you’re borrower is comfortable with how stable, or unstable, the index actually is, you’re ready for the next objection:

“I’m afraid my payments will increase and I can’t afford them anymore.”

Now this is the time to earn your money. You have to really understand how the payment is figured and how the increases are figured. Not just by using your calculator, but by explaining it to your borrower as well. Don’t always assume the payments are in 5 year increments. There are a few Lenders that actually have a 10 year recast, so know who they are and what their parameters are. Here’s a tip, the simpler you can make it for your borrower, the more of an “expert” you’ll become in their eyes. Just a couple of quick tips about the Pay Option Arm. Go out there and sell!

Andrew has sold and has trained other Mortgage Professionals on how to sell the Pay Option Arm. He is the author of the e-book titled The A.R.M. Factor: Guide to Understanding and Selling the Pay Option Arm. He writes a free weekly newsletter entitled "The Mortgage Mailbag". Get more details at http://www.MortgageMailbag.com

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What is an Assumable Mortgage?

In an assumable mortgage, a buyer is able to take over the seller’s existing loan, essentially taking the place of the seller. The loan balance remains the same and hopefully, so does the interest rate.

Types of Assumable Loans

So, what types of loans today are assumable? Many ARM’s have an assumability option, although you will have to check with your broker or lender to find out for certain. The advantages of taking out an assumable loan is seen when you’re ready to sell your home, and a qualified buyer can avoid the closing costs of obtaining a first mortgage. Also, your mortgage may carry a rate below what the market is offering, effectively increasing the value and marketability of your home. Fixed rate conventional loans are less likely to be assumable because lenders have been burned in the past having to honor a low interest rate during a time when the market interest rates are much higher. That is when mortgages started carrying “due-on-sale” clauses.

FHA and VA Loans

The majority of loans that are assumable are FHA and VA loans. Since the late 1980’s, lenders have required that the new borrower meet the lender’s qualification requirements. Previously, FHA and VA loans had been assumable by anyone. There are three levels of assumption with different sets of liabilities and obligations. They are assignment, subject to, and novation. Look for future articles here that will examine these differences more in-depth.

Fees and Rate Adjustments

Check with the lender to find out what fees or rate adjustments are required in the mortgage assumption. Depending on the terms of assuming the mortgage, it may make more sense to take out a new loan altogether. FHA charges an assumption fee of $500 and a credit report fee. VA loans charge a $255 processing fee , a $45 funding fee and the VA itself receives a funding fee of 0.5% to 1% of the loan balance.

Cash for Difference Between Loan Balance and Sale Price

Borrowers who benefit the most from assumable mortgages are those that have the cash to pay the difference between the seller’s loan balance and the agreed upon sales price. For example, you are, purchasing a $200,000 home and have 10% to put down as a down payment. The seller’s assumable mortgage balance is only $40,000, which will require to obtain a second mortgage or other type of financing for roughly $140,000. Because second mortgage rates are almost always higher than those of first mortgages, it would probably make much more sense to take out a new 80-10 piggyback loan.

Mortgage Sanity provides help and information for people about many different aspects of the mortgage process. Visit http://www.mortgagesanity.com for help with your mortgage loan.

Recommended Mortgage Lenders Online - We maintain a list of recommended mortgage companies online and update the list regularly.

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The Risks of Getting 100% Financing

It’s great to be able to get your dream home for no money out of your pocket, but you need to consider the risks below when deciding if doing so is a smart move for you.

No Equity
Since you will be borrowing all of what your home is worth, you will leave yourself with no equity. Because of this fact, it will be more difficult to sell your home if you decide to do so. You will also not have many refinancing options available for several few years. This lack of equity virtually guarantees that you will be saddled with your current mortgage for many years.

High Interest Rates
With 100% financing, you will almost always garner higher interest rates than on mortgage loans with considerable down payment. Higher rates, and therefore higher payments, mean that you will be taking on a greater, monthly financial burden.

Mandatory Escrow and PMI
By exceeding 80% financing, most conventional lenders will force you to create an escrow account to cover your annual real estate taxes and homeowner’s insurance. You will also be required to pay private mortgage insurance (PMI), which is an insurance policy to compensate the bank for their heightened risk on high loan-to-value mortgages. These mandatory monthly additions to your mortgage payment can increase your monthly bill by several hundred dollars, causing you extreme financial distress.

Remember that 100% financing is a great option for those with little upfront cash who want to buy a home. However, these mortgages can also limit your financial flexibility greatly. Before entering into one, you must carefully consider the risks mentioned here. Once you sign the papers, you will be committing yourself to a long term financial responsibility, especially nowadays as property appreciation has begun to slow nationwide.

Recommended Mortgage Lenders Online For 100% Financing - We maintain a list of low rate mortgage lenders and update the list frequently. Try applying with one of our recommended lenders first.

FAQ's About Mortgages After Bankruptcy- Read this article to learn some information on getting a mortgage loan after a bankruptcy.

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