December 21st, 2006

Dont Lose Your Shirt or Your Home Keep an eye out for crooked mortgage companies

Posted in Mortgage, 100 Mortgage Percent Refinancing, 125 Ltv Refinance Mortgage by Admin

Dont Lose Your Shirt or Your Home Keep an eye out for crooked mortgage companies

4 Tips to Make You More Aware

Everyone wants to buy their own home and the most convenient way to do this in a rush, rush world like today, is by applying for a mortgage loan. The mortgage loan business is a big one. There are hundreds if not thousands of them trying to lure you in, but you have to beware and watch out for crooked mortgage companies. These crooked companies are out there and wont care if your loose your home, your savings or even if you go bankrupt. They especially like to prey on the first time home buyer. These companies are looking out for themselves not you, so when you start your hunt for a mortgage make sure you dont fall into their trap, no matter how seductive their deals may sound. Here are a few tips to help you point out a crooked and fraudulent mortgage company.

1. Be aware if the lender doesnt give you a good faith estimate of what the closing cost will be. Under The Real Estates Settlement Act they must provide you with this information within three days once you have applied for the loan. An honest lender will give this to you without a problem as they have nothing to hide. Some of the really good lenders will even give you a good faith estimate on your prequalifying information. Also watch out for any company that wont give you information on any of the costs up front, such as interest and other fees.

2. Beware if the lender says it is ok for you to lie about any information, especially about your income on a mortgage loan to increase your chances of approval. Any sort of lying on any loan form is classified as fraud and is a criminal act. Besides if a lender does encourage you to do such a thing, use your common sense, if they give you the leeway to do it, then they will probably have no problem committing fraudulent acts upon you.

3. Beware of interest rates that are amazingly low or incredibly high. Low interest rates can be very tempting, especially when they beat everyone else by two or three percent. You may think that this will save you money, but in the long run it will only cost you more because most loans with a low interest rate like these tend to increase significantly throughout the time line of the loan. People with a less than perfect credit rating usually fall needlessly victim to high interest rates that are usually two or three percent higher than everyone else. There are many places online that offer to check interest rates against your credit and can give you an accurate estimate of how much you should be paying.

4. Be aware if you feel pressured into applying for a mortgage loan that you dont understand, cant financially afford or if you are told that you are only going to get the loan through that certain company. If you do feel unsure of anything with a loan, ask them to explain it to you in detail or go to someone else who you can trust. You may want to speak with a lawyer and ask them to go through the loan with you. If you are being pressured to go with a certain company for a loan, then dont do it. If they can offer you a loan then so too will other companies and without all of the pressure.

When seeking a mortgage loan, make sure that the contract does not differ from the original contract. Companies that ask for more signers, credit insurance, or prepayment penalty fees are probably looking for ways to make money off of you and dont have your best interest in mind. In this case, you should take your business else where.
These are just some of the things you should look out for when mortgage loan hunting so you are not caught in a trap by a corrupt company. If you are ever in doubt, dont use the company, as there are many more to choose from that will be happy to take your business and will offer you assistance with anything you are unsure of.

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November 21st, 2006

This Option may not cost you an ARM Consider your Options with Adjustable Rate Mortgages

Posted in Mortgage, 1 Home Loancom Mortgage Refinance, 100 Percent Mortgage Refinancing, 125 Ltv Refinance Mortgage, 100 Finance Mortgage by Admin

This Option may not cost you an ARM Consider your Options with Adjustable Rate Mortgages

Adjustable rate mortgages, or ARM’s, are useful types of mortgages with set plans and terms which may help you in deciding which type of loan to get when buying or refinancing a home. An ARM is flexible and changes during your term of mortgage depending on certain guidelines and adjustments. An ARM will generally start at a lower than fixed rate mortgage, then begin to fluctuate throughout your loan term. If you decide to get an ARM when getting into a loan, there are several things to know that will help decide if it is right for you.

The first thing that applies to adjustable rate mortgages is that it is based around the ideal of lowering mortgage payments when fixed rate loans begin to rise. By doing so, mortgage lenders are able to offer lower prices for those who have a mortgage. One of the principles that apply is that there is a fixed period term, where the rate will have to stay the same. Depending on the type of ARM you are thinking about getting, this rate can last anywhere from the first month you decide to get the loan to up to ten years. The thing to consider with the fixed plan is how long you will be in your home and how this fixed rate will affect you with changes.

A second part of an ARM loan is the index. This is tied to the interest rate and helps to determine the adjusted rate. The indexes can come from several different sources. These include the 12 MTA, which is a one year treasury guide that is available. Another is the LIBOR, or London Interbank Offering Rate. These are updated every one to six months. There is also the Cost of Funds Index (COFI), Cost of Savings Index, (COSI), and Cost of Deposit Index (CODI). These are not recommended before the others, as the indexes seem to fluctuate more than necessary. A last way to find an index is through a bank prime rate. These, however, are based mostly around home equity lines of credit. The way that indexes work is that each set index has a margin. The margin determines your interest rate after the fixed period. These will vary widely depending on the index and lender that you have. The index will then tell the percentage of the adjustable rate in which you will have to pay. By knowing the index that the lender is using, you can find a lower adjustable percentage rate for your mortgage.

A third part to ARMs is the caps. This restricts the rate change to move no less than two percent, and no higher than six percent. This allows you to not have to pay high rates at one period of time because of the index and margin guides that are available. There are also start rates that are applicable with ARMs. These will vary by lender and index, and will most likely depend on how much you put as your down payment and what your credit rating is.

ARMs are helpful in offering you four different types of payments based on the index and caps. The first type is the minimum payment option. This is the lowest of the options. You do not pay the principle or the interest on the loan. The interest that is then not paid is simply put into an interest due, which increases the loan balance. This is also known as deferred interest or negative amortization. The next option is through the interest only payment. This will allow you to defer interest without having to make a principal reduction payment. The interest only payment will always have a restricted amount of time for you to pay the loan. The next type of ARM is a 30 year payment. With this type of payment, every payment will go towards principle and interest at a consistent pace. The fourth type of payment is the fifteen year payment. This is the same type of ARM as the 30 year option, but it is paid at an accelerated pace.

By using ARM as an option for a loan or for paying off a mortgage, one is able to see more flexibility in their payments, which can help them with finances and to pay off a loan with more ease. Before getting into an ARM loan, it is important to know what types of rates and terms apply so that you can get the best deal.

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November 11th, 2006

More house than you need? Shop around before signing

Posted in Mortgage, 125 Ltv Refinance Mortgage, 100 Finance Mortgage by Admin

More house than you need? Shop around before signing

There was a time when all mortgages meant comparing the fixed interest rate mortgages of a handful of lenders. Today, however, the search for mortgages is more detailed and perhaps just a little too complicated to maneuver easily. Adding to the confusion are the many, many types of loans, loan programs of mortgage brokers, lenders, bankers, credit unions, finance companies, among others.

Considering theres just so much to learn, finding the perfect mortgage that fits your needs is difficult: no, it doesnt start with an application, but with a thorough knowledge of the system. True, it takes time to understand, but isnt it better to know the subject before getting into it?

Being in this market will tell you that theres one rule that dominates in the home mortgage industry: That you never go solely according to the mortgage interest rate. Instead, it makes good sense to take a close look at the jargon surrounding a mortgage program. You could even check back with lenders or a mortgage broker or shop on the Web for comparative rates. Ask your mortgage lender a few key questions given here that will help you decide the kind of loan that suits you. You can also get information from web sites, newspapers, mortgage books and consumer seminars.

How soon can I expect my mortgage loan application to take?
Typically, a loan application for a home mortgage takes about 45-60 days to come through. Of course, there have been times when theyve taken just 30 days too! But really the time taken depends on how soon the lender can get the property appraised, a credit report and employment details and bank accounts verified.

Which documents will I have to furnish?
A certificate proving your income and assets will be necessary to get a home mortgage loan. However, lenders ask for different documents, so it depends on whom you meet.

What would qualify me for a home mortgage loan?
Your lender will look at your credit history, income, employment status, assets and debts before granting you a home mortgage loan. If youre a first time home buyer, you stand a better chance of being granted a loan.

How much would I have to pay as a minimum down payment?
First, finalize the down payment amount on your home mortgage loan. Based on this your lender can offer you a range of interest rates, loan terms and perhaps even refuse to consider private mortgage insurance. While some loans demand a 20 percent down payment; others are lower than that.

How much mortgage interest would I have to pay annually?
To compare well against different lenders rates on your home mortgage loan, ask them for their annual percentage rate or APR of the mortgage interest.

How much would I have to pay by way of origination fees on the loan?
Origination fees are usually paid as prepaid mortgage interest on your entire home mortgage loan. Your lender might ask you to pay this in points at closing time just so that you get a lower interest rate on your home mortgage loan.

Can the interest rate also be locked in?
The interest rate of your home mortgage loan is variable, so it would be wiser for you to lock in the rates for a specified time period rather than have a floating rate till closing. Ask your lender for any fee for locking in a rate and if you could lock in points.

What is meant by the good faith estimate of closing costs?
Mortgages, including home mortgage loans, are accompanied by a whole litany of fees. So, ask your lender to show you the whole list of estimated closing costs before you actually apply for the loan. And bear in mind that certain fees must be paid upfront, for instance the credit report, property appraisal and loan application fee.

Will I also be asked to pay a prepayment penalty on the loan?
This is a matter for mortgage home loan shoppers to consider. You would need to know the duration of the penalty period and how the fee will be calculated. While some penalties stand at one percent of the loan amount, others arent that simply calculated.

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