Mortgages Content

A HUD Reverse Mortage For Retirement?

A HUD Reverse Mortage For Retirement?

by: Charles Kirkendall

HUD reverse mortgages can be a great tool for Seniors that are looking for additional funds for retirement. Through a HUD reverse mortgage, seniors can tap into the equity from their homes without having to make repayments.

HUD Reverse Mortgage Eligibility

Homeowners must meet the following criteria in order to be eligible for a HUD reverse mortgage:

- Homeowner must be age 62 or older.

- The home must be owned free and clear or have a mortgage balance that can be paid from equity.

- The home must be a principal residence.

- The property must be a single-family home, a one-to-four unit dwelling with one unit occupied by the applicant, a manufactured home (mobile home), or a unit in condominiums or Planned Unit Developments.

- The property must meet minimum property standards.

Homeowners that qualify can receive payments in a lump sum, on a monthly basis, or on an occasional basis as a line of credit. At a later date the payment options can be restructured if circumstances change.

Guidelines on HUD Reverse Mortgage Amounts

The amount that can be borrowed on a HUD reverse mortgages is determined by the following criteria:

- The borrower's age - The older the borrower the more that can be borrowed against the value of the home

- The loan interest rate - Obviously the lower the interest rate the more that can be borrowed.

- The home's value - There is no hard limit for home value to qualify for a HUD reverse mortgage, but the amount that may be borrowed is capped by the maximum FHA mortgage limits for an area. This means that owners of a high priced home can't borrow any more than the owners of homes valued at the FHA limit.

There are no asset or income limitations on borrowers receiving a HUD reverse mortgage.

Unlike ordinary home loans, a HUD reverse mortgage does not require repayment as long as the home remains the borrowers primary residence. When the home is sold the Mortgage company recovers their principal, plus interest, and the remaining value of the home goes to the homeowner or to his or her survivors. Should the sales proceeds not cover the amount owed, HUD will pay the mortgage company for any shortfall.

The Federal Housing Administration, which is part of HUD, collects an insurance premium from all borrowers to provide this coverage. Typically the mortgage company pays for this insurance and charges it to the borrower's principal balance. This FHA reverse mortgage insurance can make HUD's reverse mortgage program less expensive to borrowers than private programs without FHA insurance.

About The Author

Charles Kirkendall writes about reverse mortgages and other Senior financial issues. Visit http://www.reverse.settle-today.com for more information and resources on reverse mortgages.

A Brief Commercial Mortgage Guide

A Brief Commercial Mortgage Guide

by: Darren Yates

Commercial mortgage loans are used when purchasing structures such as office buildings, apartment complexes, health care facilities and retail outlets. Whether it?s a hi-rise tower or a family-owned restaurant, buyers typically need additional funding to complete the transaction. Commercial mortgages are what they pursue.

Similar in many ways to residential loans, commercial mortgages require far more paperwork. Both types of loan require that the properties being purchased undergo a thorough appraisal. Both require collateral to secure the loan and protect the lender against default.

Like residential mortgages, commercial mortgages can be refinanced to take advantage of more favorable terms, or they can be re-mortgaged to establish a line of credit to use for running the business. And like residential mortgages, the lender will hold the deed to the property until such time that the loan is repaid in full.

During that time, the lender makes money off the interest on the loan. If the borrower fails to make payments on the commercial loan, the lender has the right to initiate foreclosure proceedings and take the property. Remember, the property likely is what will be used as collateral. The interest paid on the commercial mortgage usually is tax deductible; just be sure to consult with a professional first.

When you apply for a commercial mortgage, you will typically be offered two different types of loans: fixed rate loans and variable rate loans. These work the same as they do for residential mortgages.

On a fixed rate commercial mortgage, the interest rate that is negotiated and agreed to remains in effect until the loan is fully amortized. If you?re obtaining a commercial mortgage and interest rates are heading higher, a fixed rate likely is a better option. You can always refinance your mortgage should interest rates go lower than your fixed rate.

With a variable rate commercial mortgage, the interest rate will fluctuate during the payback period. Interest rates are determined by the US Federal government. Make sure you understand how variable rates are determined. Also, find out from the lender how often the rate on a variable rate mortgage will change. It?s fine as long as the interest rate is decreasing; it?s the increases that you need to worry about. Make sure, too, that should the interest rates increase, you can still afford the monthly payments. With some variable rate loans, the rate is fixed for the first few years, and then converts to a variable rate loan.

When applying for a commercial mortgage, also ask about the Early Redemption Charge (ERC). Remember, lenders make money off the interest on the loan. When the loan is repaid in full sooner than anticipated, the lender loses money. To avoid losing money, lenders often include an ERC which can amount to a substantial, one-time sum. If you discover an ERC in the fine print, try to negotiate it away. If you?re not successful, take your business elsewhere.

Applying for a commercial mortgage means that you?re about to make a serious investment. Be sure you know exactly what you?re signing before you sign the documents. You have a right to ask questions, renegotiate more favorable terms and do whatever else you feel is necessary. It?s your money and your future. Good luck!

About The Author

Darren Yates

Commercial Lifeline are Commercial Mortgage and Bridging Finance specialists.

Download our free Commercial Mortgage guides by visiting our Commercial Mortgage Guide page.

This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the link above is intact.

articlesubs@gmail.com

Should you Get an Interest-only Home Mortgage?

Should you Get an Interest-only Home Mortgage?

by: Mark Lambie

Before you consider taking out an interest-only mortgage, you should first understand what they are. Unlike traditional, fixed-rate mortgages, interest-only mortgages allows the borrower to initially pay the interest on the principal for a short period of time, rather than making payments on both the principal and the interest. This is how it works: say, for example, you've taken out a mortgage for $100,00.00, which would require a monthly payment of around $1,000.00. However, with an interest-only mortgage, the same payment would only amount to around $695.00. You could use the extra money to pay existing debts, like credit cards or student loans, or perhaps invest it.

The concept of an interest-only home loan is not a new one. A descendant of the jumbo market, these types of mortgages were initially geared towards those who intended to utilise the excess cash for other types of investments. This is an ideal option for the market-savvy investor, as it frees up some income for other projects. However, this type of mortgage has now entered the mainstream market, and is available to most home buyers.

There are many benefits associated with taking out interest-only loans. They allow younger buyers to take advantage of a developing real-estate market, giving them the opportunity to afford a slightly higher priced home.

Before taking out an interest-only mortgage, there are few things that you must take into consideration. While the thought of only having to pay for interest for the next few years may seem very tempting, you must remember that when the interest-free grace period is over, you will have higher payments than you would have with a traditional mortgage. Many young couples do not account for this, assuming that they will be earning more money in the future, not anticipating that they may face financial hardships down the road, thus putting their home at risk.

While there are many advantages to taking out an interest-free mortgage, it is important to remember that the grace period will not last forever and that the monthly payments will eventually go up. As long as you make financial plans for the future, taking advantage of an interest-only mortgage could allow you to increase your financial well-being, bringing you peace of mind.

About The Author

Mark Lambie is the founder of http://www.the-loan-house.com a website that allows consumers to quickly and easily get mortgage information.

12 Quick Tips For Getting A Mortgage

12 Quick Tips For Getting A Mortgage

by: T. O' Donnell

1. Watch out for the 'Deal Of A Lifetime', the deal that seems too good to be true. The company may be saving money by cutting back on their level of service.

2. When getting a fixed rate: get a written statement which details the interest rate, how long the rate is fixed for, and the conditions attached.

3. When interest rates fall: try and leave your repayments as they are. You will therefore be paying more than the minimum each month. You'll repay your loan much earlier. When rates rise again you may not have to change your payment.

4. Consider a fifteen or twenty year term. Try to pay off your mortgage quickly. Use a mortgage calculator with an amortization function, and see what's possible.

5. Keep your mortgage as small as possible. Aim for *comfortable* affordability.

6. Try not to 'churn' your mortgage. Each time you refinance you'll probably incur completion costs and non-refundable fees.

7. Beware of prepayment penalties. Many 'no fee' credit lines have a pre-payment penalty. This can be very expensive if you are planning to refinance or sell your house in a few years time.

You don't need to sign a mortgage agreement which contains any significant prepayment penalty, if you have good credit. One of the smartest things you can do with a mortgage is to prepay it.

8. Don't look for a home without being pre-approved. You will have much more negotiating power with the vendor, and may be able to save thousands of pounds.

9. Get a full, professional survey. Human beings can be perverse; happy to spend ?150,000 on a house after a half-hour viewing, but be-grudge spending ?500 finding out whether it's worth buying in the first place!

10. Find out the true value of your home-to-be. Get more than one independent appraisal. Compare it with the prices of similar-sized houses for sale in the same area.

11. Start gathering documents. Provide your mortgage company with documents in good time; don't let your rate lock expire!

12. Verbal (oral) agreements are worthless. When buying or selling property, always get it in writing.

A mortgage is the biggest financial committment most of us will ever make; worth spending a little time on, to get it right!

About The Author

T. O' Donnell (www.tigertom.com/mortgages-uk.shtml) offers mortgage quotes, advice, an ebook and a mortgage calculator, in London, UK.

A Guide to Buying a New Home

A Guide to Buying a New Home

by: John Mussi

If you've decided to make the leap from renting a home to owning a home, you might be a little overwhelmed at the prospect of shopping for homes and applying for mortgage loans.

While mortgage loans can seem a bit confusing at first, you'll find that they aren't nearly as bad as they might seem once you've taken the time to learn more about the mortgage loan process.

While this is by no means to be considered a complete list of everything that might come up while shopping for a new home, you'll find below a brief guide to the process of shopping for a home and applying for a mortgage loan.

Searching for a home

The first part of buying a new home is, obviously, finding the home to buy. While there are obviously a large variety of homes available on the market today, it's important to make sure that you stay within the range of what you can afford. After all, you're going to be making payments on your house for years? don't get in over your head before you even get started.

You should also begin figuring how much of a down payment you're going to be able to make, since the larger your down payment is the lower your monthly payments will be.

Realtors vs. direct sellers

You may wonder whether it's better to buy a house that's up for sale from a realtor or one that's being sold directly from the homeowner. There are several factors that can be brought into consideration when comparing the two, but the bottom line is that the realtor has the financing contacts to help you along and knows the real estate business much better than you do.

Discussing your options with realtors early on is also a great way to find out which properties are for sale as well as about how much the monthly payments on a mortgage will be for each.

Mortgages

When it comes time to take out a mortgage loan, you'll find a lot of options presented to you. The term of the mortgage can vary greatly, though most mortgages are for between 15 and 30 years.

You also might have to choose from a variety of payment options ranging from standard payments to balloon payments in which you begin with smaller payments and have a larger sum to pay at the end.

You should also take into consideration other expenses such as closing costs, insurance, and taxes before deciding how much you can afford to borrow.

A realtor or financial attorney can assist you in making these decisions as well as working you through the actual mortgage and purchase process.

Refinancing your mortgage

After you've been making payments for a few years and have paid off a significant portion of your mortgage, you might want to consider refinancing to make repayment of the remaining debt that much easier. Refinancing can allow you to use the equity that you've built up in your home to secure you a new loan, which is used to pay the outstanding balance on the original mortgage loan.

The refinancing loan will have a new loan term, a new (and hopefully lower) interest rate, and a much smaller amount to repay than the original mortgage? meaning that you'll be able to enjoy a reduction in your monthly payments.

This can not only speed up paying off your house, but can also give you a little more money each month to do with as you please.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.

4 Things You Shouldn't Do When You're Buying A Home

4 Things You Shouldn't Do When You're Buying A Home

by: Suvadip Das

1. Don't Make a Major Purchase

You've just found out your credit is A . That's great news, because a new car would look fantastic in the driveway of your new home. But hang on--if you are depending on a mortgage to move in, you'd best wait until after closing to buy the car.

An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment. If you tack on a higher car payment, the bank might decide you cannot afford the home.

Using cash to purchase the car could also create a problem, since banks consider cash reserves when approving your mortgage. If you make a major purchase before closing, talk to your loan officer before you do it.

2. Don't Change Jobs Unless It's Necessary

Lenders like to see a consistent job history. They aren't usually as nervous if you change jobs within the same field, but it's better to stay put until the keys to the house are in your hand.

3. Don't Give an Earnest Money Deposit Directly to a For Sale By Owner Seller

Your good faith deposit should go into a trust account. Some for sale by owner sellers don't understand that funds are to be applied to your expenses at closing.

There are incidents about sellers who spent the deposit money prior to closing. When the transactions didn't take place for valid reasons--such as financing or repair issues, the buyers had to fight for a refund.

Find an attorney or other neutral party who will hold the deposit for you until closing day and make sure your contract dictates what happens to the funds if the transaction doesn't close.

4. Don't Let Your Emotions Take Over

Keep a cool head during the entire home buying process, especially during and after an inspection. Be realistic. No home is perfect, especially older homes. It's not unusual for new owners to take care of some repairs themselves. Don't let the seller's refusal to do a small repair kill the deal on a home you truly love.

On the other hand, don't fall so much in love with the house that you'll buy no matter what needs to be done--unless you're absolutely sure you can handle it emotionally and financially. Decide what type of repairs you can realistically tackle, then stick with the decision.

About The Author

Suvadip Das is a research fellow in management and a web developer. Web design including keyword enriched articles is his passion. He works for Freelance Writer Organization and various websites including http://www.super-mortgages.com - More information on similar topics can be found at http://www.super-mortgages.com/First-Time-Home-Buyer and http://www.super-mortgages.com/Residential-Mortgage-Loans.

gokhan_karahan@yahoo.com

1st And 2nd Mortgage Refinance Loan

1st And 2nd Mortgage Refinance Loan

by: Carrie Reeder

Refinancing a first and second mortgage requires some extra considerations. Depending on your equity, you may find that combining the two mortgages results in a higher interest rate. You may also find that you have to carry PMI with the refinanced mortgage.

Will Refinancing Benefit You?

Refinancing two mortgages allows you to consolidate your loans into one payment, often lowering your monthly bill. You may also find lower rates under the right circumstances.

Those with a large amount of equity benefit most from consolidating loans since they qualify for the lowest rates. It is important to look at interest savings, not just monthly numbers which can be misleading.

However, if you have less than 25% equity, you may end up qualifying for higher rates. With less than 20% equity, you will also have to pay for private mortgage insurance. Even with these factors, you may still find that you will save money by refinancing.

Have You Done Your Research?

To see if refinancing makes sense for you, research mortgage lenders. You can quickly go online and request quotes and terms. Look at the different offers, and work out the numbers. An online mortgage calculator can help you figure out monthly payments and interest costs.

An easy way to compare cost is to first add up your interest payments for both mortgages. Use this number to compare interest payments with each potential mortgage.

You also need to factor in the cost of refinancing. Just like with your original mortgage, you will have to pay fees and points. You want to be sure that you can recoup these costs with your interest savings.

Why Do You Want To Refinance Both Mortgages?

While refinancing both mortgages is convenient, you may decide to refinance only one or both separately. With your main mortgage, you can expect to get low rates.

A second mortgage will usually qualify for higher rates, but you can lock them in. You may also choose to convert from a line of credit to an actual mortgage. Again, you will want to investigate financial packages before signing up with a lender.

About The Author

Carrie Reeder is the owner of http://www.abcloanguide.com, an informational website about various types of loans.

View our recommended mortgage http://www.abcloanguide.com/refinance.shtml lenders.

Adjustable vs Fixed Rate Mortgages

Adjustable vs Fixed Rate Mortgages

by: Max Hunter

Mortgage rates can either be fixed for the duration of your loan or can be adjustable. An adjustable rate mortgage is a loan that is set up with an interest rate that changes based on pre-determined criteria, primarily tied to the federal interest rate. If the interest rates are up, then your interest rate on your loan will be higher, if the interest rates are low than the interest rate on your loan will go down.

Adjustable rate mortgages (ARM) are generally fixed interest rates for a period of time and then become adjustable. Generally speaking the introductory interest rate for an ARM loan will be lower than a fixed rate mortgage. This is done in order to lower initial payments and allow people to take out larger mortgages, or give them smaller payments for the introductory period. This is attractive to people who may know that their income will be increasing over that period of time.

Whether or not to choose an ARM or a fixed rate mortgage has been debated for as long as there have been ARMs. Though people feel strongly in both camps, simple mathematics can assist you in determining which mortgage is best for you and your personality. Your personality? Yes. Some people are not comfortable with any uncertainty in their lives. The idea of having an uncertain mortgage payment in the future may cause them more stress than the money they are saving is worth. Therefore, factor your own comfort level into the equation.

Generally speaking, ARMs are 2, 3 or 5 years, though they can be longer or shorter. At the end of that period your interest rate will become variable unless you sell your home or refinance. If you think that the likelihood of your selling or refinancing within the period of the ARM is strong, than the lower interest rates of the ARM loan will be of great benefit to you. If you think it is unlikely that you will sell or refinance within that period, then you may not benefit from an ARM.

Bob and Robyn are a young married couple just starting out. Bob is in advertising sales and Robyn is a teacher. Bob is fairly confident that his income will continue to increase over the next several years as he works his way up to becoming an account executive. Robyn's income is more predictable and is on an upward trend. Being a young couple they do not have the finances for large mortgage payments.

Bob and Robyn are presented with two mortgage proposals for their $150,000 mortgage. Proposal one is a 30-year fixed rate mortgage at 6% and the other is a 5-year ARM at an introductory rate of 5.25%. The fixed rate mortgage payments would be $899.33 per month, not including taxes. The ARM would have a 5-year period where payments would be $828.31 per month, not including taxes. Bob knows that even if he can afford the extra $70.00 per month for the fixed rate mortgage, that $70 per month may be better spent knocking down principle during the ARM period. He is further confident that as his salary increases, he is likely to upgrade his home within five years or refinance to make home improvements. Bob and Robyn took the ARM loan.

John and Catrina are a married couple with three grown children. John has been employed at the same company for 18 years and Catrina has been with her company for 12 years. They have consistent and stable income. Neither John nor Catrina expect any substantial increases in their salaries. After their last child moved out of the home they decided to downsize and buy a smaller home. They have a substantial down payment and will only be taking a mortgage of $100,000 on their new home. John and Catrina are presented with the same loan options as Bob and Robyn were. John and Catrina, however, know that it is unlikely they will sell or refinance in the next five years. They are comfortable with the payment schedule and, therefore, prefer the certainty of the fixed rate mortgage.

There are countless websites that offer mortgage calculators to determine your mortgage payment. For your convenience we offer one on our site (if you are not going to have one on your site, we can remove this, though I think it'd be good to have one on your site). You can review the different payment schedules based on the interest rates quoted for the fixed-rate and the ARM. Once you know the different payment amounts you will be able to determine which loan makes the most sense for you and your unique circumstances.

Your mortgage professional should also be able to assist you in reviewing the options and making the best decision for you. The more open and honest you are with your mortgage professional the more helpful they will be. It is only if they are armed with full and honest information that they will be able to make recommendations to you.

About The Author

Max Hunter is the author of many credit related articles. If you are looking for help with Home Loans or any other type of credit issue please visit us at http://www.creditcardunlimited.com.

A Guide to Common Short-Term Loans

A Guide to Common Short-Term Loans

by: John Mussi

While some of the most well-known loan types are for large amounts of money and are repaid over several years (such as mortgages and automotive financing loans), there are a variety of loans that are designed for smaller amounts and for shorter periods of time. Some of these loans come from banks or other common lenders, whereas others come from specialty lenders that deal specifically with these types of short-term loans.

If you're in the market for one of these shorter-term loans, or if you're just wanting to see exactly what options are available, then the information presented in this article is for you.

Below you'll find information on the short-term loans that are commonly offered by traditional lenders such as banks, as well as other common types of lenders and a few specialty lenders that aren't as common but that deal almost exclusively in short-term loans.

Traditional Lenders

While many people think of traditional lenders such as banks as the source for larger loans like mortgages and finance loans, most of them also offer a wide variety of short-term loans for smaller purchases or temporary financial needs. These loans can be either secured or unsecured depending upon what the loan will be used for and the credit history of the borrower, though the secured loans tend to carry with them somewhat lower interest rates than the unsecured loans.

Most short-term loans of this type are for a period of six months, though some will last for nine months or a full year depending upon their use, the amount borrowed, and the options presented by the bank or financial institution.

Other Common Lenders

In addition to the short-term loans that are offered by banks and other traditional lenders, there are a variety of short-term loans that are available from common non-traditional lenders such as finance companies, loan offices, and online lenders. These loans tend to share much in common with the short-term loan offerings of banks, though more often than not the loans offered by these non-traditional lenders are only offered as secured loans. The interest rates on these loans can vary from lender to lender, and may be higher or lower than those offered by banks and traditional lenders.

Specialty Lenders

Some specialty lenders also exist, offering short-term loans to individuals that might not be able to get the loans elsewhere. Often these lenders require very specific collateral to secure the loans, such as car titles or other items of value, and may not offer the best interest rates that you might be able to find for that particular loan. The advantage of these lenders is that they often process the loans quickly and you can get the money that you need the same day as the loan application. These loans are usually six-month loans, though some are one year loans.

Choosing the Loan that's Right for You

In order to choose the loan that's right for you and your needs, it's important to shop around and compare the loan rates and terms of various lenders. In order to do this, you should take the time to request quotes from the different lenders that you're considering, and then compare the quotes to each other so that you can decide which loan offer is the best one for your needs.

Compare the quotes based upon the interest charged, the collateral (if any) that's required for the loan, and the repayment terms and amount of time that you have to make all of the payments. This way you can decide which loan is best for you and your needs.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.

A Look at Common Types of Loans

A Look at Common Types of Loans

by: John Mussi

People sometimes wonder about common types of loans, especially with all of the different types of loans available.

There are many common types of loans that may fall into the same categories, as well as some common types of loans that are only different in one or two small ways.

Below are the descriptions for several common types of loans, including some of the factors that may restrict who is eligible for the loan and how much interest different individuals might have to pay for the loan.

Of course, this doesn't cover all of the loans that are offered? only the loans that you are most likely to encounter.

Secured and Unsecured Loans

Most if not all common types of loans fall into one of two categories? secured loans and unsecured loans.

Secured loans are those loans that use some object of value, which is referred to as collateral, as a guarantee of repayment and a method of offering lower interest rates.

Unsecured loans, on the other hand, require no collateral but almost always have a higher interest rate than secured loans.

Both of these types of loans may be affected by your credit rating, and secured loans may be affected by the value and type of your collateral.

Student Loans

Student loans are one of the common types of loans that provide money for a person to continue their education. These loans are often supported by the government, allowing them to be unsecured loans while maintaining lower interest rates. Many student loans have a deferred repayment option, allowing the student to put off repaying the loans until after they've finished school.

Auto Financing

Another of the more common types of loans is auto financing, which is a secured loan that is used to purchase a car, truck, or other vehicle. The vehicle that is purchased serves as the collateral for the loan, allowing a person to purchase the vehicle without having to put up additional collateral to secure the loan. Since most vehicles are higher value items, auto financing is often available to individuals of a variety of credit ratings.

Mortgage Loans

Mortgage loans are loans that are used to purchase or refinance a house or real estate, and are one of the most common types of loans. Much like auto financing, mortgage loans require no additional collateral since the purchased property serves as the collateral to secure the loan.

Mortgage loans tend to vary in interest rates and repayment terms, with common repayment options sometimes lasting as long as 30 years for larger mortgages. These loans can be gotten from a variety of lenders, including standard banks, finance companies, and online lenders.

Homeowner Loans

Very similar to mortgages, homeowner loans are loans that are taken using a house or other piece of real estate as collateral.

The major difference between homeowner loans and mortgage loans is that homeowner loans are taken out on property that the borrower already owns, and uses equity (which is the portion of the property's value that's already been paid for) as a major determining factor in interest rates and other loan terms.

Most individuals who own a home or real estate can qualify for homeowner loans (with sufficient equity), regardless of their credit rating.

Like mortgage loans, homeowner loans can be obtained from traditional banks, finance companies, online lending services, and other lenders? a growing trend in recent years, however, is for homeowner loans to be gotten via online services because of the increased convenience and anonymity of online lenders.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.