Is Fixed Rate Mortgage Deals Right for you?

Fixed rate mortgages are mortgages where the monthly payments stay the same for the period of the mortgage deal. Many borrowers like this type of mortgage because it gives them certainty over their monthly payments for the period of the deal. Others are attracted by these at times when they are concerned that interest rates might rise over the coming months.

Whilst they have the clear benefit of certainty of payment it is possible that borrowers can fail to realise the potential impact on their finances when their fixed rate deal ends.

It is estimated that more than 1.3 million fixed rate mortgages will come to an end in 2007. Many of these were taken out in 2004 and 2005 when mortgage rates were significantly lower than they are today. We are already starting to see huge numbers of people struggling with their mortgage payments.

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Recent research from mform.co.uk has shown that up to 8 million people are now struggling with their mortgage payments. It is likely that those that have come to the end of their fixed rate mortgages are feeling the pinch most. The increase on the monthly payments on an average mortgage on a typical standard variable rate today compared to a cheap two year fixed rate mortgage taken out in 2005 could be as much as 60%. This would clearly have an effect on anyone’s finances if it has not been budgeted for.

So what can you do? Well the fact is that 2 and 3 year fixed rate mortgages are not as cheap as they were in 2005. Therefore the most you can do is look to minimise the increase in cost that you will have. This is best done by looking at the whole of market – a mortgage comparison site that compares all lenders is needed for this. But don’t just look at the headline rate – look at the true cost of the mortgage over the period of the deal that you want. The cheapest true cost might not have the cheapest headline rate!

And once you have your new mortgage deal, still keep an eye on interest rates from time to time before it expires so that you know the impact it would have on your finances if you had to take a new mortgage out.

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Homeowners's Bankruptcy Mortgage Information

Bankruptcy attorneys estimate that one in every 53 U.S. households filed for bankruptcy in 2006. Most of these people didn’t lose the farm in Vegas or drink away their life savings. Chances are their financial problems stemmed from one of three sources: job loss, divorce, or unexpected and expensive medical emergencies.

Most homeowners who file for bankruptcy do not lose their homes. Bankruptcy laws are designed to satisfy creditors and protect debtors. Putting a family out on the street helps no one.

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Ted Janger of The American Bankruptcy Institute stresses that, “It is important to have competent counsel advise you, both about the choices among chapters and about how best to make sure that bankruptcy operates to solve your financial difficulties, rather than just as a hiatus.”

Establishing Credit After Bankruptcy
For people who got into trouble with credit, the thought of using it again can be frightening. It’s a catch-22. To be considered a good candidate for a new mortgage or car loan, consumers have to rebuild their credit. If they don’t, when a prospective lender looks at their credit report, all they will see is the bankruptcy. There won’t be a new track record of handling credit responsibly or of improved financial management skills.

It doesn’t seem logical, but after people have successfully filed for bankruptcy, they will receive a flood of new credit offers. If they accept a few well chosen ones and pay more than the minimum payment each month, this will appear as positive data in their credit report.

One form of new credit would be a first mortgage refinance or a new second mortgage. Either transaction would depend on the amount of equity in the home and be subject to any guidelines established by the bankruptcy court.

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Why Choose an Interest-Only Mortgage?

You’ve heard the word before, interest-only mortgage. The term has been tossed around until everyone knows the words, but the meaning has become a little murky. An interest-only mortgage can be a great thing for borrowers, but why? Who should get them? What’s the difference between and interest-only mortgage and a traditional mortgage? Let’s dig into what an interest-only mortgage is, why someone would want one and who should actually get them.

An interest-only mortgage is a loan which in which the interest is paid off first, before the principle is paid. If an interest-only mortgage is chosen, the borrower and lender agree on a specified time period, usually five to ten years, during which only the interest is paid. The principal amount of the loan is not reduced by these payments. They borrower has the right to pay more than the interest if they wish too, but it is not required under these terms. This results in lower initial payments for the borrower, sometimes by a substantial amount.

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• Low Interest Mortgages
  Getting a lower interest rate on your mortgage loan can result in a lower monthly payment or can allow you to afford a more expensive home for the same monthly payment...

A traditional mortgage is called a “fully amortized mortgage” and payments consist of both interest payments and money directed towards the principle loan amount. These payments are higher than in interest-only mortgages, but the principle amount is reduced much more quickly. Assuming the interest rate stays the same during the life of the loan, a traditional mortgage maintains the amount of the original payment for the life of the loan, while an interest-only mortgage increases in payment size after the initial interest paying period.

Who should get an interest-only mortgage? Anyone with a legitimate need for lower initial payments; they must be prepared to deal with the consequences of choosing this type of mortgage, however. While it is true that an interest-only loan will save you money, that is only the case in the first part of the loan. Since the payments increase after the interest is paid off, the benefits are only applicable for the first part of the life of the loan.

An interest only loan is great for buyers who expect to have a windfall before the loan goes to principle. Borrowers with fluctuating incomes find interest-only loans attractive as well; when income is high, they can pay over the amount and reduce the principle but during low income periods they only have to pay the lower, interest-only payment. Buyers interested in skipping the ‘starter house’ and jumping straight to the house they will eventually need find this type of loan attractive since it can ease the strain of buying a more expensive home. Many homeowners invest the extra money they save every month, putting the money into investments that will pay off before the loan payment increases. In this way they save money through the life of the loan.

• Mortgage Laws & Regulations That Consumer Need To Know
  All of the following are federal laws and regulations. Many states may have additional laws governing the mortgage process and protecting consumers...

An interest-only loan is not for everyone. Borrowers should examine any interest-only loan for actual benefits; don’t take out an interest-only mortgage if the only difference between that and a traditional mortgage is the interest-only aspect. Look for benefits like reduced future payments after a large mortgage payment and watch for deceptions like “lower interest rates” that are usually not true.

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Getting your First Home Mortgage

Buying 1st home is not an easy choice to make. There is so much involved in purchasing your new property. For one, getting your first time home mortgage loan is a big decision to make.

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However, when done correctly, you can have your dream property for life. Buying 1st home can be one of the best choices you make or it soon can become a choice you wish you never made.

However, with the right information, you can go on to get the dream home you always wanted. It is not as if desiring to buy your property is the hard part. In fact the hard part comes with getting a first time home mortgage loan. It is a big decision to make, and you will need to research to find the best mortgage rate for your needs.

• Government Mortgages Loan
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There may be a few differences in obtaining a new property mortgage loan rather than simply obtaining a loan for an existing property you own, and this is primarily in the inspection process. The largest aspect with getting a first time home mortgage loan is determined by your credit history.

You see, from the mortgage lenders point of view, it is a large sum of cash they will be giving to you. And because of this, the process to get your first time home mortgage loan is going to be one that will require your time. The amount of cash usually involved in property mortgages makes many mortgage lenders nervous especially if the loan is to purchase an existing property. Your credit history will come into play when you are trying to get a mortgage. If you have a great credit history, then the process of getting your first time home mortgage loan will be much easier, and you also will have access to many more mortgage products with the best mortgage rates.

There are many factors which determine how a lender chooses who to accept when giving a first time home mortgage loan, and no two mortgage lenders will reach the same conclusion. They all use different selection processes who to give a first time home mortgage loan to. It all boils down to how much risk the mortgage lender is willing to take.

However, rest assured as there are many mortgage lenders out their, and by researching mortgage lenders, you will find a mortgage that is right for you.

Another point which comes to your aid is that mortgage lenders are normally more ok with a new property mortgage loan because they can guarantee the quality of the house. And this is due to when buying your new property, there are many checks done which protects not just you, but also the mortgage lender.

This is in the best interest of both of you, as it means you won't be buying a house which has potential problems. After all, you would not want to buy your new property, only to find that there are structural problems with the property! That is why there are many parts involved in getting from seeing a property you want to buy, and finally getting the keys to move in. The whole process can be the best thing that you initiate.

Search for the best mortgage rate, and learn about any hidden fee's and costs. In the end, you will have a property which you can be proud of.

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Alternatives to Remortgages

Unlocking equity that has built up in a property can be achieved through a number of means including remortgages.

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Remortgages are carried out by home owners who want to release the equity in their home and apply for a new mortgage at the same time. Remortgages can either be carried out with the same mortgage lender that the borrower has their existing mortgage with, or with a different lender altogether.

All remortgages that release equity will result in the balance of the new mortgage being higher than the balance of the old mortgage. The old mortgage is paid off with the funds from the remortgage and the excess is given to the borrower and will represent the amount of equity that has been released.

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While remortgages are extremely popular in the UK, there is an alternative method of equity release that will not require the home owner applying for a new mortgage and redeeming their existing one.
Second mortgages are a popular and effective alternative to remortgages. Second mortgages are also known as secured loans and are loans that are secured against the equity in the borrower’s home.

Instead of applying for a brand new mortgage, the borrower will keep their existing mortgage and secure a second mortgage against the releasable equity in their property. As opposed to remortgages, second mortgages must be issued by a different lender to the lender that issued the existing mortgage.

Both remortgages and second mortgages options have advantages and disadvantages.

Because second mortgages are similar to personal loans in that they are issued for a shorter term than remortgages, they can be the most sensible option when the finance is required for a short period of time.

However, remortgages can involve paying large application and brokerage fees. The longer the time period you stay with the mortgage the more value you will receive out of paying for those fees.

Second mortgages usually incur smaller fees than remortgages. There is no need, therefore, to keep the second mortgage active for a long period of time to gain some pay-back from any fees that may be incurred in securing the loan.

Some second mortgages also offer facilities such as a cheque book and ATM card for draw downs, and a deposit book for making repayments.

Not all second mortgages offer such options so it is advisable to shop around if you require them. Also keep in mind that extra fees may be incurred so ensure that you actually require the extra facilities before signing on the dotted line.

If you require any advice on remortgages, contact an independent mortgage adviser for help.

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Adjustable Rate Mortgage

The adjustable rate mortgage is a type of loan which will be secured on a home which has an interest rate and monthly payment that will vary.

So You Want to Refinance: An Insiders Guide to Refinancing Adjustable Rate Mortgages and Home Loans by Kristina, Benson "A must-have for any home owner looking to refinance." Homeowner Are you paying more than you need to? In this book a mortgage lending insider reveals her answer to this question - and more - in her best selling So You Want to Refinance. If you are baffled by the dizzying array of mortgage companies, sales pitches, and loan products, this book is for you.

The adjustable rate will transfer a portion of the interest rate from the creditor to the homeowner. The adjustable rate mortgage will often be used in situations where fixed rate loans are hard to acquire. While the borrower will be at an advantage if the interest rate falls, they will be at a disadvantage if it rises.

In places like the United Kingdom, this is a very common type of mortgage, while it is not popular in other countries. The adjustable rate mortgage is excellent for homeowners who only plan to live in their homes for about three years. The interest rate will typically be low for the first three to seven years, but will begin to fluctuate after this time. Like other mortgage options, this loan allows the homeowner to pay on the principle early, and they don't have to worry about penalties. When payments are made on the principle, it will help lower the total amount of the loan, and will reduce the time that is necessary to pay it off. Many homeowners choose to pay off the entire loan once the interest rate drops to a very low level, and this is called refinancing.

One of the disadvantages to adjustable rate mortgages is that they are often sold to people who are not experienced in dealing with them. These individuals will not pay back the loans within three to seven years, and will be subjected to fluctuating interest rates, which often rise substantially. In the US, some of these cases are tried as predatory loans.

There are a number of things consumers can do to protect themselves from rising interest rates. A maximum interest rate cap can be set which will only allow interest rates to rise at a specific amount each year, or the interest rate can be locked in for a specific period of time. This will give the homeowner time to increase their income so that they can make larger payments on the principle. The primary advantage of this loan is that it lowers the cost of borrowing money for the first few years.

Homeowners will save money on monthly payments, and it is excellent for those who plan on moving into a new home within the first seven years. However, there are risks to this type of mortgage that must be understood. If the owner has problems making payments, or runs into a financial emergency, the rates will eventually rise, and the owner who cannot make payments may lose their home.

One term that you will hear lenders talking about is caps. The cap can be defined as a clause that will set the highest change possible for the interest rate of the loan. Homeowners can set up a cap on their mortgage, but they will need to make a request from the lender, as the cap may not be present on the rate sheets that are presented.

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Texas Mortgage Loans

Texas mortgage loans are very popular and useful for a variety of purposes. In the form of a debt consolidation loan, a new mortgage can help get homeowners out from under mounting bills. Texas mortgage loans are also a popular way to pay for improvements that increase the livability and market value of homes.

According to the May 2006 Economic Outlook put out by Freddie Mac, “…cash-out (mortgage loans), a major source for home improvement funds, remained at a high level: 88 percent of families who refinanced in the first quarter also converted part of their accumulated home equity into cash or consolidated their mortgage debt.”

Texas mortgage loans are easier to get than other forms of borrowing since the loan is secured by tangible property. They come at lower interest rates than other forms of borrowing such as credit cards or unsecured loans and have some great tax advantages not available on other forms of borrowing.

“If you find yourself in need of a sum of money, whether it's to renovate your home, purchase a new car or consolidate debt, a home equity loan can be a very smart financial tool.” - Everyone’s Money Book

Turning home equity into cash makes more sense than borrowing against the value of your life insurance policy. Such a withdrawal will be deducted from the face value of the policy, thus depriving your beneficiaries. A mortgage loan is smarter than drawing on your retirement funds. If you don’t pay the money back in five years, the IRS will assess taxes and penalties. And a mortgage loan is way better than borrowing from family and friends.

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Mortgage Financing Loans

Mortgage financing is a loan obtained to purchase real estate. All mortgages have two features in common: principal and interest. Read more about mortgage FAQs.

What types of mortgage financing loans are available?
Fixed Rate Mortgage Loans: Payments remain the same for the life of the loan. Housing cost remains unaffected by interest rate changes and inflation. Adjustable Rate Mortgage Loans: Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits.

Is there special mortgage financing for first-time homebuyers?
Yes. Lenders now offer several affordable mortgage financing loans that can help first-time homebuyers overcome obstacles such as bad credit. Lenders may now be able to help borrowers who don’t have a lot of money for the down payment and closing costs or have quite a bit of long-term debt.

What factors affect mortgage loan payments?
The amount of the mortgage financing, the size of the down payment, the interest rate, the length of the repayment term and payment schedule will all affect the size of your loan payment. So will a low credit score in that it will put your mortgage financing at a higher rate.

How does the interest rate factor in securing mortgage financing?
A lower interest rate allows you to borrow more money than a high rate with the same monthly payment. Interest rates can fluctuate as you shop for bad credit mortgage financing, so ask lenders if they offer a rate “lock-in” which guarantees a specific interest rate for a certain period.

How large of a down payment do I need?
There are mortgage financing loans now available that only require a down payment of 5% or less of the purchase price. But the larger the down payment, the less you have to borrow, and the more equity you’ll have. Mortgages with less than a 20% down payment generally require a mortgage insurance policy.

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2nd Mortgage Quick Tips

2nd mortgages can be tempting because you can get a large amount of money. However, there are some common pitfalls you should keep an eye out for. Take a quick glance over these 2nd mortgage quick-tips. You’ll be in a better position to negotiate the best 2nd mortgage.

2nd Mortgage Quick-Tips
Watching these factors will help your 2nd mortgage be a success:

• The APR. Don’t take the first 2nd mortgage rate you see. Contact at least one bank, one credit union, and one dedicated mortgage lender about your 2nd mortgage.
• Try to avoid 2nd mortgages with default penalties applied when you miss a payment or are late. We all think it won’t happen to us, but a clerical error can become very expensive. The interest rate on your 2nd mortgage could increase dramatically.
• If things change, you don’t want to pay a hefty prepayment fee to get your 2nd mortgage off the books. Flexibility is important, so avoid locking yourself in.
• Beware of 2nd mortgages that are bundled in with voluntary insurance policies. While this coverage may be useful, you may or may not need it bundled into your 2nd mortgage. Furthermore, you may already have adequate coverage outside of the mortgage.
• Know about any balloon payments in the deal. Some 2nd mortgages start with low, easy-to-afford payments (at the cost of a huge payment at the end). Read the contract carefully to see if this is why a particular 2nd mortgage is so attractive.

Complete Idiot's Guide to Mortgages, 2nd Edition by Jamie Sutton, CFP, CLU, AFC, Edie Milligan Driskill Covers everything homebuyers and re-financers need to know. Coverage includes an overview of the application process, overcoming qualification hurdles, finding the right type of loan, when and how to refinance to save money, and much more.

2nd Mortgage Costs
Now, before you apply for a 2nd mortgage, prepare for and budget for the costs. In addition to committing to a monthly payment, you might have some up-front costs to get your 2nd mortgage processed.

• Appraisal fees for your 2nd mortgage
• Points
• Application costs for the 2nd mortgage, which may not be refundable if you’re declined!
• Other closing costs. For example, they may do a title search for your 2nd mortgage, along with other processes. Just ask for a printed list of these miscellaneous fees.

As with anything, sometimes you get what you pay for. I recommend using a reputable lender that you can trust for your 2nd mortgage, and one who will simply disclose all the costs. If you find a deal that sounds too good to be true, you’re probably missing something in the fine print.

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Simple Things That Make A Big Difference To Your Mortgage Loan

What To Know About Yourself In Advance
Predatory Mortgage Lending
Your credit report: You must know how you stand and whether everything it contains is accurate and updated. If not, have it corrected. Next comes how much you want to spend on your new home, whether you need to make a down payment or not and as a consequence of that, how much you need to ask for.

Related to this point is the period of the loan, which determines the monthly payment, adjusted to your budget. This should be done before shopping for a loan, since you want to know what you need and therefore, what to ask the lender for. Then comes the part where you determine the adequate lender for you.

Taking Some Necessary Precautions
Mortgage Refinance and Credit Repair
If you are a credit card holder and have several with an outstanding balance, you might want to pay off some and leave the essential ones, not more than three. This decreases the amount of debt you have, giving you a better credit rating.

Saving time is also a necessary precaution. Get your loan pre-approved first and THEN start shopping for a house.

What To Know About The Mortgage Loan
Well, the outstanding points are that a mortgage loan is of low risk to your lender, since it is backed by the property you are buying. On the other hand, you risk the loss of the property if you do not pay the loan. However, the payment terms are long, making the installments smaller and easier to pay, reducing the risk of default.

Find out the APR, what fees it includes and how it affects your monthly payments. Do not evaluate a loan only for the APR, which is not just the interest rate by itself.

And Now, The Lender
The loan you are looking for is a long term one, so if you make a bad deal, you will be sorry for a long time! Get free quotes before applying for real and when you do, ask for a copy of the contract to take home and read carefully. If you are denied this right or are urged to sign up, just be calm, say good-bye and look for another lender.

Last Considerations
As I have said above, lack of knowledge is no excuse for a bad deal. You have the obligation to find out what expenses there are and account for such items as closing fees, application fees, and everything NOT included in the APR. Escrow is another item to consider, since there might be a middle party connecting you to the seller.

Last but not least, there should be a life insurance and probably an additional mortgage insurance, to cover the payments in case of the borrower’s death and a payment default due to unexpected events, respectively. Leave no stone unturned. A little effort now will make all the difference in the world in the future.

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Mortgage Amortization Schedule May Contain Shocking Details

When many first-time home buyers get their mortgage amortization schedule for their proposed loan, they file it away with all kinds of other paperwork they never intend to look at. This can be a huge mistake for several reasons. The biggest, perhaps, is the simple fact not paying attention to this important document can cost you a ton of money.

The Complete Idiot's Guide to Mortgages, 2nd Edition by Jamie Sutton,CFP, CLU, AFC, Edie Milligan Driskill Covers everything home buyers and re-financers need to know, includes an overview of the application process, overcoming qualification hurdles, finding the right type of loan, when and how to refinance to save money, and much more.

A mortgage amortization schedule is nothing more than the month-to-month breakdown of what a loan costs. You can use an amortization schedule calculator to prepare one. The schedule shows exactly how you can apply monthly payments to a loan as interest builds up, and you eventually pay off the loan. The first-time buyer who pays attention to the mortgage amortization schedule will readily see that a $100,000 loan will cost a whole lot more than $106,000 to pay off at a 6 percent interest rate. Having a good understanding of the mortgage amortization schedule and how it works for a particular loan can arm a homeowner with facts you might need down the road to help guide financial decisions.

For example, understanding exactly where you are on a mortgage amortization schedule and finally realizing greater principal reduction with payments might steer you clear of a refinance when it could end costing you a bundle in the long run. It might also help guide use of any extra cash that might be available. Principal reduction payments, for example, can take a basic mortgage amortization schedule and throw a big monkey wrench into it by taking away some of the principal the lender calculates interest payments against.

Anyone who has never seen a loan amortization schedule will likely be in for a start the first time they review one. They can look rather scary. Even if you find the lowest rate loan possible, these schedules show little principal decline during the first few years of a loan. This means a $1,000 payment a month over the course of a few years might only reduce principal by a few thousands dollars even though you paid out $24,000. This happens because you normally pay for a large chunk of the initial compounding of interest. Since the principal amount is at its highest, compounding at a rate of 6 or 7 percent can add a huge lump to what the loan costs.

As a mortgage shopper, you should pay attention to the amortization schedule when it's given to you. Doing so can help guide decisions and might even give you some great ideas for paying off your mortgage quicker. If you are looking at a simple interest mortgage, lenders will allow principal reduction payments. Banks don't love this necessarily, but they will apply the payments to reduce the principal if told to do so. This can quickly change the mortgage amortization schedule and have it working in your favor and not the bank's.

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Stop Giving Away Your Equity

Do you know that every year you're giving away the hard-earned equity in your home by paying more than you have to in interest? Most home owners don't realize they can cut up to seven years off of the length of their mortgage, saving thousands of dollars in the process. Think it doesn't add up to a lot?

Think again. Let's lowball it and say you have an $80,000 mortgage and are paying an interest rate of 7 percent. How much will a bi-weekly payment method save you, versus paying the conventional mortgage off over 30 years?

Believe it or not, you would be saving over $25,000. The more your loan amount or the higher your interest, the more money this you can save. When you pay your mortgage bi-weekly, there are a number of factors that come into play.

You're reducing the term of your loan by up to eight years, you're paying less interest over the life of your loan and you're building up equity in your home sooner because more of your money is going towards principal than interest. The savings don't end there.

Due to the fact that your mortgage will be paid off years in advance, you will be able to discontinue your private mortgage insurance earlier than you would if you were paying over a full 30 years, thereby saving you even more money.

The bi-weekly mortgage method is also a wonderful option for people who want to pay off their homes in a shorter period of time than the conventional thirty year mortgages allow, but who don't qualify for a standard 15 year mortgage. It offers homeowners more convenience and flexibility than a fifteen year mortgage.

With a fifteen-year mortgage, if you want to change to a thirty-year mortgage, you would have to refinance. With the bi-weekly payment plan, if your circumstances temporarily change you and need to pay on a monthly basis for a period of time, there is no refinancing necessary.

So how much is someone going to charge you to save you thousands of dollars and build up quick equity in your home? There are various services available to homeowners that will take control of this process for you.

If you use them, you're wasting some of the money you're going to be saving by using this payment method in the first place. There is really no reason to enlist the help of a company to do this for you, when with the proper tools and information, you can do it yourself.

Unless you're independently wealthy and don't care where your money goes, then you will definitely want to look into paying off your mortgage on the bi-weekly plan, and learning how to do it on your own.

Reverse Mortgage Formula: How to Convert Home Equity into Tax-Free Income by Tom Kelly Show you how to convert part of the home equity into tax-free income, letting seniors easily borrow against the value of the home without selling it.

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The Advantages of Purchasing a Home after Bankruptcy

Planning on purchasing a new home after a bankruptcy? Today, more lending companies are catering to individuals who have a bad credit history or even those who have just survived a bankruptcy. Bad credit mortgage loans or sub prime loans give these individuals a chance to move on with their lives. So if you’re ready to take on a new responsibility, then go ahead. There’s no reason why your plans should be hindered. In fact, acquiring a home loan after bankruptcy does have its advantages. Let’s take a look at these advantages.

Boost Your Credit
Just because you’ve had bad credit problems in the past mean you can never change your credit worthiness. Bankruptcy does not have to be the end of the road. You can always start anew by getting a home loan after your bankruptcy has been discharged. Yes, it is very possible to boost your credit even after bankruptcy.
Since the only way to increase your credit score is to show that you are a good payer, obtaining a mortgage loan gives you a chance to achieve this. All your financial transactions are reported to the major credit bureaus so you can be assured that making timely payments will have a positive result on your credit. By submitting your monthly payments for your mortgage loan in time and without any miss, you will be able to rebuild your damaged credit reputation.

Build Up Your Home Equity
Renting a home also involves monthly fees. Most homes or apartments for rent are costly especially if you look for ones located in respectable communities or villages. If you have a large family, you may be renting a larger apartment with a more expensive monthly rate. Your tenant collects your monthly rent and that’s about it. But if you will purchase a home and apply for a mortgage loan, it’ll be like saving your money for the future.

By purchasing your own home and obtaining a mortgage loan, your monthly fees will not be vain. The money you pay for your mortgage loan is in fact an investment. After 15 or 30 years, you can proudly say that you are the sole owner of your home without paying monthly bills. And there’s more to that. The value of a home increases over time, so once you’re done with your mortgage, you can even sell your home for a higher price.

Obtain a Home Equity Loan
Having your own home gives you the option to apply for a home equity loan. A home equity loan will enable you to get cash that is within the value of your home. Once approved, you can withdraw money from your home equity loan at any time during the duration of your loan’s term. You can use this cash in starting up a business or to help you when emergencies arise. You may also use the money from your home equity loan to pay debts that you may have with other creditors. 

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4 Important Questions to Ask Before Refinancing Your Mortgage

Thinking of refinancing your home mortgage can seem overwhelming, with so many options on the market. If you break your thought processes into four categories it will be a whole lot easier for you to focus: Think about the term of your mortgage, your current interest rate compared to the new rates on offer, are you staying put or planning to move in the short term future, and do you have enough credit to find a mortgagee happy to take over your loan?

The mortgage term is how long the loan is spread over, and then there is the payback period meaning how long will you be with the new financier before you have made back to money it cost for the refinancing. These costs include appraisal fees, bank fees, lawyer fees and early pay out fees assigned to your current mortgage.

Some lending institutes will allow you to absorb those charges associated with transferring into your home mortgage so you don't pay anything in cash at the time. Probably the most important thing for you to understand is exactly how much your interest rate will go down. If the new rate is over two percent less than the old one, refinancing is probably going to be worth your while. Any less than that and the recovery period or payback time will be too long and will result in more of a loss to you.

For those people who are hoping to move home in two years or less refinancing beforehand is not a good idea. The refinancing costs for doing the mortgage twice over will be too high leaving you noticeably behind. Lenders looking to refinance your loan for you are focused on the LTV or loan-to-value ratio. This means the amount of your mortgage in comparison to your home's appraised value.

In some cases the mortgagee will only refinance if the new loan is to be 90% or less of the homes value, but every bank and lender has their own LTV limits. In some cases simply paying refinancing costs yourself will give you a better LTV. If you do your research, refinancing your home mortgage can save you thousands in interest, but it can lose you the same if you don’t do it right. Check if you know someone who can recommend a lender to refinance with, or take time to see a variety of different ones and make your own informed decision.

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Three Steps to Saving Money on Second Mortgage

A mortgage, whether a first mortgage for a home purchase or a second mortgage for debt consolidation is a financial product in a competitive market. There are over 19,000 mortgage lenders in the U.S., and there can be variations among them when it comes to fees, rates, and terms.

When shopping for a second mortgage, here are three steps that could save you thousands of dollars over the life of the loan.

• Compare information - Obtain information from several lenders. Second mortgages are available from a variety of financial institutions: commercial banks, mortgage companies and credit unions. Since rates and points can change daily, you will want to check the Internet or your local newspaper often when shopping for a second mortgage.
• Negotiate the best deal - Have lenders write down all the costs associated with the second mortgage, then ask if he or she will waive or reduce one or more of the fees, or agree to a lower rate to secure your business. There is no harm in asking. Once you are happy with the terms, ask for a written “lock-in” from the lender.
• Know your rights - The Equal Credit Opportunity Act prohibits lenders from discriminating on the basis of race, color, religion, national origin, sex, marital status, age, whether all or part of the applicant’s income comes from a public assistance program, or whether the applicant has in good faith exercised a right under the Consumer Credit Protection Act.

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The Benefits of a Fixed Rate Mortgage

A vital question that faces most homeowners at some stage is whether or not to opt for a fixed rate or variable mortgage. The age-old weighing up of security over potential savings is one that has plagued buyers for decades, and one to which there is no definitive right or wrong answer.

Both variable and fixed rate mortgages have advantages and disadvantages, but with the right financial advice it should be easy to understand which type of mortgage relates to your situation and can provide you with the best chance of financial freedom in years to come.

The standard type of mortgage is variable; that is the rate of interest repayments is variable against the Bank of England base rate. An alternative to that is the fixed rate mortgage, which sets a fixed rate of interest to provide buyers with a guarantee of exactly what price they will be required to pay for their borrowing. The main question faced by prospective borrowers is whether to gamble and secure a rate, which may ultimately be higher throughout the duration of repayment, or whether they want to rely on the base rate for lending as a guide to the extent of their repayments. Either option could be considered a gamble against the interest rates, and both can provide their own financial benefits at the end of the day.

With a standard type of mortgage, economic security is the order of the day, and if the economy goes through a stable period, you are more likely to have to repay less over time. While rates are low, that is also the time to secure a fixed rate mortgage, securing your interest rate forever more to avoid the insecurity of relying on a fluctuating rate.

The problem with fixed rate is that the rate is generally fixed at a proportionately raised rate above the base rate before it is fixed, therefore it can prove to be expensive if the economy ultimately performs well over the duration of the mortgage repayments. One of the major benefits of a fixed rate mortgage is the ability to budget accurately. With the uncertainty of a variable mortgage, it can often be hard to manage your finances, and if interest rates increase in may eventually find it impossible to live within your planned budget, making for a tough financial situation ahead.

However, the fixed rate mortgage guarantees a level of repayment which, although it may be high, is at least fixed to allow secure budgeting over the longer term. Either way, selecting a mortgage comes down to your individual circumstances, and although it may be a tough decision it is important to make sure you fully consider the available options before committing yourself. It comes down to a choice between security and the potential for savings over the term of the mortgage. With appropriate guidance and advice, you should be able to make the decision that best suits your needs and circumstances to provide you with the best option.

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It's Not About Rate: The Right Way To Get A Mortgage by Richard Cohen ISBN: 1425991785 ISBN-13: 9781425991784 About how to make the loan process understandable, uncomplicted, and smooth.

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Become A Mortgage Broker & Remain Sane

They is not difficult to become a mortgage broker; however, many people get discouraged because they are not aware of the shortcuts that are available to them. If you want to know how to become a mortgage broker without losing your mind, here are a few simple steps to guide you along the way.

First of all, you should be aware of the basic process of how to become a mortgage broker. There are certain licensing requirements set forth by the state which require you to pass an exam. Many states also have requirements regarding criminal history that exclude felons and people that have been convicted of crimes of moral turpitude. If you do not have a criminal record, or at least one that prohibits your licensing, and you can pass the exam, you can be a mortgage broker. Where do people get discouraged? During the exam process, it is easy to second guess yourself and your abilities, as the test is not exactly easy.

The biggest mistake people make in trying to become mortgage brokers is studying for and taking the exam on their own. While you may not be able to have someone in there to help with the exam, you can certainly get help in preparing for it. There are several training courses and study classes you can take that will cover the material on the test, answer any questions you have, and provide sample tests. These study courses are invaluable when it comes to preparing for and passing the test.

Another consideration to make is the knowledge and encouragement you can obtain from a mentor. In the same manner that knowing what is on the test can help you pass, knowing what awaits you on the road to being a mortgage broker can help you succeed. There is no reason to travel alone when someone is available to show the way.

On the other hand, you can always do it the hard way. You can order books that are hard to read and seem to complicate things; you can decide to figure things out for yourself and not ask for help when you need it; and you can choose to get discouraged and quit. It is a lot more difficult to be successful when you do things the hard way. However, now that you know the easy way, it's look much more inviting?

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Who Need Subprime Second Mortgage

This is a right time to apply for subprime second mortgage. The boom in non-prime lending means that subprime second mortgages are readily available to borrowers. These are few things that you need to know about Subprime Second Mortgage application.

Subprime lenders are providing first mortgages, second mortgages and home equity loans to those who don't qualify for conventional financing requirements. Many of the more than 19,000 mortgage lenders in the U.S. offer some form of subprime mortgages.

Subprime borrowers are people with a FICO score of 620 or lower. In fact, the “sweet spot” for the subprime industry consists of borrowers with credit scores between 620 and 640. Bad credit means you will pay more when you borrow money. However, a subprime second mortgage could still save you thousands of dollars over other forms of borrowing.

Prior to the widespread availability of subprime loans, many deserving people with poor or insufficient credit histories could not get a mortgage. Now these folks are able to become proud homeowners as part of the American Dream.

A subprime second mortgage makes sense when you don’t want to refinance your first mortgage but want to access your home equity for legitimate reasons such as home improvements, debt consolidation, medical bills or college tuition. As an added bonus, the interest paid on a second mortgage is usually tax deductible.

Borrower Beware
Recent research reveals that subprime mortgages are three times more likely to happen in minority neighborhoods. Even affluent minorities are more likely than whites to take out subprime mortgages. The AARP notes that older female borrowers held 45% of subprime mortgages and only 28% of prime mortgages.

Some dishonest lenders will try and exploit the financial troubles of borrowers by offering easy-but-expensive credit that could lead to them eventually losing their homes. Or, these disreputable people resort to exorbitant fees, prepayment penalties or balloon payments to snare the unwary.

Learn more about how to avoid Subprime Second Mortgage fraud, and get a free loan quote at Easy Second Mortgages. Even if you have bad credit, you may still qualify for a good second mortgage.

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Low Interest Mortgages

Your purchasing a home and need to find the lowest possible interest rate on your mortgage loan. Getting a lower interest rate on your mortgage loan can result in a lower monthly payment or can allow you to afford a more expensive home for the same monthly payment. Here are some suggestions that can help you to get a lower interest rate on your mortgage loan.

Increase Your Down Payment - One of the most important components for loan pricing is the loan to value percentage (loan amount / home value) of your loan. Borrowers using 95% or 100% loan to value financing will find themselves paying a much higher interest rate. If you have access to more money for your down payment, you can get a lower interest rate at 80% or 90% loan to value and use the different interest rates to determine the best use of your available funds.

If you are refinancing your home, getting cash out of your house above the 70% loan to value will cost more than at under 70% loan to value and the interest rates really rise for loans at 80% and 90% loan to value ratios. When researching interest rates, be sure to ask about the interest rate for lower loan to value percentages.

Shorten The Term of Your Mortgage - Lenders will charge lower interest rates for loans with shorter terms. For fixed mortgage loans, try a 20 year or 15 year term instead of the standard 30 year fixed rate. A 20 year term can reduce your interest rate by as much as 1/8% while a 15 year term may save you up to 1/2% of an interest rate. The drawbacks include a higher monthly payment and stricter guidelines for underwriting, but the total interest that is paid over the life of the loan will be dramatically reduced with a shorter term.
Improve Your Credit Score - Lenders often give lower mortgage rates for customers with exceptionally good credit, especially on large loan amounts, loan amounts in excess of $400,000. To qualify, you will need a credit score of at least 780, which is a score achieved by less than 20% of all credit scored borrowers.

Paying Discount Points - Consider paying discount points, or higher fees, for a lower interest rate. One discount point, 1% of the loan amount or $1,000 per $100,000 borrowed, will give you a lower interest rate on any quoted mortgage program. You will need to analyze the cost of the lower interest rate against the monthly savings that the lower rate will bring for your mortgage payment.
If you would pay $2,500 to lower the interest rate by 1/4% on a $250,000 loan, this amount can save you approximately $600 per year in interest. If you plan to live in your house for more than 4 years ($600 for 4 years), then paying a point to get a lower interest rate will save you money past the 4th year for the remaining length of the mortgage loan.

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Best Mortgage Type for You?

Q) I need to refinance my mortgage this year, and I am trying to decide what the best loan option is for me. My friends and family have told me to stay away from adjustable rates, but it seems like I may get a better payment that way. What are the pluses and minuses of adjustable rates versus fixed rates?

A) This is a great question and it will depend a lot on your unique situation, long- and short-term goals, and how long you intend to be in your home. Let's take a look at both options and who might benefit from the different loan types the most.

Adjustable rates mortgages, also known as ARMs, have received a lot of bad press over the last few months in the news. However, when you know the ins and outs of an ARM you might find it meets your situation better than a fixed-rate loan. An ARM works like this: The interest rate is typically lower initially than a fixed rate, and in many instances this rate is fixed for a pre-determined amount of time--say three, five, or seven years. At the end of the fixed term, the rate adjusts based on several factors, a fixed margin (usually between two and four percent) and an adjustable index, like the Wall Street Journal Prime rate. The amount your initial rate can go up or down is also governed by "caps" usually two to six percent above or below the initial rate. Despite these caps, which are designed to protect the borrower, there can still be a large payment shock if your rate goes from five percent to 11 percent.

So who are these types of loans best suited for? Here are a couple of scenarios where an ARM may make more sense than a fixed rate:

1. You know you are moving out of the home before the ARM is set to adjust, and want to take advantage of the better rate.
2. You have gone back to school, and need the lower payment for the next three to five years while juggling the costs of school, home, family, etc.
3. You are taking the savings you gain with an ARM to pay down other, higher interest debt.
4. You have children in college, and need a lower payment for the next few years to support them.

Fixed-rate loans are still the most popular type of loan because of the payment security they offer. Fixed rate loans are traditionally offered in 10, 15, 20, 25, 30, and now 40 year terms. When you refinance with a fixed-rate mortgage, let's say for this example a 30-year fixed rate, you will have a payment that will never fluctuate, and will pay the loan off in 360 equal payments. Traditionally, the longer the term of the loan, say 30 years vs. 15 years, the higher the interest rate will be. So in some instances a shorter term will allow you to pay off your mortgage faster, and at a better rate.

So who is best suited for this loan?

1. People who will be in their home long-term and want payment consistency
2. People that are on a fixed income
3. People adverse to the risk of an adjustable rate
4. People in a declining housing market

As you can see, both loans offer distinct benefits for different situations. The key as always is to assess your personal situation, work with a reputable lender, and customize a loan to meet your needs.

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Predatory Mortgage Lending

Before shopping for a new home, car or credit card, it pays to check your credit report and make sure it's accurate. If you spot any errors or old problems, correcting your credit report can be a lengthy but worthwhile effort. If your credit just isn't up to snuff, there are steps you can take to strengthen your credit profile. Finally, there are lenders for folks with less-than-perfect credit and more Mortgage Lenders PLUS.com articles you can turn to for help.

Checking your credit report - If you are applying for a loan or credit, records of your previous dealings with someone else's money are vital. Whether you get that mortgage or credit card, or not, may depend on a network of credit reporting agencies that either share information with, or are owned by, three major credit bureaus. This report is often a critical factor in credit scoring systems that lenders use to issue credit cards as well as mortgages or other loans.

So, if you're considering making a major financial move it's a good idea to check your credit report to know where you stand. That way you can be aware of, and/or take care of, problems before they jump up and derail your plans.

If you find problems, or if potential creditors discover them, you can take steps to rebuild damaged credit and clean up that record.

If you've made mistakes in paying previous loans, bounced checks, made late payments or had other problems, you may still be able to reduce the amount of damage they will do to your credit with explanations or some basic repair.

Predatory Lending can be Lenders, Appraisers, Mortgage Brokers and Home Improvement Contractors who:

• Sell properties for much more than they are worth using false appraisals.
• Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
• Knowingly lend more money than a borrower can afford to repay.
• Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
• Charge fees for unnecessary or nonexistent products and services.
• Pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.
• Target vulnerable borrowers to cash-out refinances offers when they know borrowers are in need of cash due to medical, unemployment or debt problems.
• Strip homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
• Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.

How to Spot a Predatory Loan

• Balloon payments.
• High interest rates.
• Monthly payments you can't afford.
• Penalties for early pay-off of the loan.
• Unauthorized refinancing of your loan.

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Mortgage Laws & Regulations That Consumer Need To Know

Following is a brief description of the major laws and regulations meant to govern the mortgage lending process, protect mortgage borrowers, and govern the practices of financial institutions with regard to mortgage lending and protection of borrower financial information. All of the following are federal laws and regulations. Many states may have additional laws governing the mortgage process and protecting consumers.

Truth in Lending Act
Enacted in 1968, the Truth in Lending Act (TILA), which is part of the Consumer Credit Protection Act, is a federal law that sets forth certain written disclosure requirements. Disclosures required by the act include:

• Finance Charge - this is the amount charged to the borrower for a loan
• Annual Percentage Rate (APR) - this is the actual realized interest rate taking into account other items such as pre-paid interest (points) and certain other charges
• Amount Financed - this is the amount that the consumer is actually borrowing
• Total of Payments - This is the total amount of payments made over the life of a loan
• Total Sales Price - This is the total amount of a real estate purchase including the down payment and mortgage amount

The Truth in Lending Act also sets forth advertising requirements for lenders as well as rescission rights for consumers. The rescission rights in TILA allow consumers 3 business days to back out of a loan transaction.

For additional information on the Truth in Lending Act see: FDIC Consumer Protection.

Fair Housing Act
Also adopted in 1968, the Fair Housing Act prohibits discrimination in housing related transactions (purchase and rental) based upon race, color, sex, religion, national origin, familial status (with or without children), or handicap.

Lenders advertising their compliance with the act will display the Fair Housing Logo as well as the "Equal Housing Lender" slogan.

For more information see: Fair Housing--it's Your Right

Real Estate Settlement Procedures Act
Adopted in 1974, the Real Estate Settlement Procedures Act (RESPA) is another consumer protection law. It covers purchase loans, assumptions, refinance loans, property improvement loans, and equity lines of credit for one to four unit residential properties.

RESPA serves two functions:

1. It requires certain disclosures to borrowers
2. It prohibits certain practices that can drive up the closing costs of a loan

The required disclosures spelled out by RESPA include:

• Required at the Time of the Loan Application
  • The Good Faith Estimate (GFE) of settlement costs
  • A special consumer information booklet (for purchase transactions only)
• Disclosures Before Closing
  • An Affiliated Business Arrangement (AfBA) Disclosure if there is a relationship between the lender and any other party providing services in relation to the loan
  • A HUD-1 Settlement Statement
• Disclosures At Closing
  • A HUD-1 Settlement Statement
  • An Initial Escrow Statement
• Disclosures After Closing
  • An Annual Escrow Statement
  • A Servicing Transfer Statement in the event of transferring servicing for the mortgage

RESPA also provides further consumer protection by prohibiting kickbacks, fee-splitting, unearned fees in return for referrals for settlement services; prohibiting the seller from requiring the use of a certain title insurance company; and places limits on escrow accounts.

For more information see: Your Rights and the Responsibilities of the Mortgage Servicer or RESPA Statute Real Estate Settlement Procedures Act

Equal Credit Opportunity Act
Adopted in 1975, the Equal Credit Opportunity Act (ECOA) prohibits credit discrimination on the basis of sex, race, marital status, religion, national origin, age, or receipt of public assistance. ECOA regulates application content, acceptable and unacceptable questions, and verbal or written discouragement of an application.

For more information see: Facts for Consumers Equal Credit Opportunity

Home Mortgage Disclosure Act
Adopted in 1975, the Home Mortgage Disclosure Act (HMDA) requires that lenders report public loan data on both approved and denied loans.

For more information see: the Home Mortgage Disclosure Act (HMDA) web site

Community Reinvestment Act
Enacted in 1977, the purpose of the Community Reinvestment Act (CRA) is to encourage financial institutions (insured depository institution's) to help meet the credit needs of the communities in which they serve, including low- and moderate-income neighborhoods. The act requires that insured depository institution's be periodically evaluated.

For more information see: the Community Reinvestment Act (CRA) web site

Fair Credit Reporting Act
Adopted in 1978, the Fair Credit Reporting Act (FCRA) is designed to promote accuracy and ensure the privacy of the consumer credit information from consumer reporting agencies such as credit bureaus. The act has been amended numerous times since enactment.

For more information see: Fair Credit Reporting

New Homeowner's Protection Act
Adopted in 1998, the Homeowner's Protection Act (HPA), also known as the PMI Act, establishes rights for homeowners and rules for lenders regarding private mortgage insurance (PMI) cancellation. The act applies to mortgages obtained on or after July 29, 1999.

For more information see: Private Mortgage Insurance (PMI) New Law Requires Lenders to Cancel PMI

Fair Debt Collection Practices Act
Adopted in 1977, the Fair Debt Collection Practices Act requires that debt collectors treat borrowers fairly by prohibiting certain methods of debt collection. It prohibits unfair, deceptive, or abusive practices, including over-charging, harassment. It also prohibits disclosing consumers' debt information to third parties.

For more information see: Fair Debt Collection

Gramm-Leach-Bliley Act
Adopted in 1999, the Gramm-Leach-Bliley Act includes provisions to protect consumers' personal financial information. It has three parts pertaining to privacy requirements:

1. The Financial Privacy Rule - The financial privacy rule requires financial institutions to give their customers privacy notices that explain their information collection and sharing practices. The act also gives customers the right to limit some sharing of their information.
2. The Safeguards Rule - The safeguards rule requires financial institutions to have a security plan to protect the confidentiality and integrity of personal consumer information.
3. Pretexting - The Gramm-Leach-Bliley Act prohibits the use of false pretenses, including fraudulent statements and impersonation, to obtain a consumers' personal financial information.

For more information see: The Gramm-Leach Bliley Act

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Government Mortgages Loan

Government loans are simply mortgage loans that are insured or guaranteed by the federal government. They are most typically fixed rate or adjustable rate mortgages. Government loans account for 20% of all mortgage loans. There are three types of government mortgages.

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FHA Loans
The Federal Housing Authority (FHA) is part of the U.S. Department of Housing and Urban Development (HUD). The FHA does not actually lend money to borrowers. What the FHA does is insure loans (called 203(b) Mortgage Insurance) so that they are shielding lenders from loss should a borrower default on the loan. This effectively reduces the lender's risk allowing them to provide easier qualification for a loan, lower down payments, and lower closing costs. So an FHA Loan is a loan made by a lender that is insured by the FHA.

Features of FHA Loans
FHA loans are an excellent vehicle for the first-time home buyer. FHA loans are available as fixed rate mortgages (FRMs) and adjustable rate mortgages (ARMs). Some of the features of an FHA loan include:

• Available for 1 to 4 unit properties, as well as condominiums and manufactured homes
• Less stringent qualifying requirements
• Down payments can be as low as 3% (or 97% loan-to-value)
• FHA regulates closing costs
• Most closing costs and fees can be included in the loan
• Gifts for down payments and closing costs are allowed
• Will allow a home purchase two years after a bankruptcy
• Will allow a home purchase three years after a foreclosure

Qualifying for an FHA Loan
Because an FHA loan is insured by the FHA, many of the qualification criteria are not as stringent as they would be. The borrower does, however, have to be able to afford the loan. For that reason, a borrower's monthly housing costs should not exceed 29% of their monthly income (this is some times referred to as the housing ration). Remember that total housing costs include mortgage principal and interest, property taxes, and homeowner's insurance (often referred to as PITI).

In addition, a borrower's monthly expense to to cover all debt, home and consumer debt (car loans, personal loans, student loans, credit cards, etc.) should not exceed 41% of their monthly income.

To obtain an FHA loan, individuals need to apply to a HUD approved lender.

FHA Loan Limits
FHA loan limits vary by location. It should be noted, however, that FHA loans are oriented toward lower-income borrowers. As such, the FHA loan limits make an FHA loan appropriate only for lower cost homes. For example, the FHA loan limits for a couple of sample cities are:

               Boston,     MA Wichita, KS
1-Family   $362,790   $200,160
2-Family   $461,113   $256,248
3-Family   $560,231   $309,744
4-Family   $646,421   $384,936

To look up the FHA loan limits in your area see: https://entp.hud.gov/idapp/html/hicostlook.cfm

Other HUD Loan Programs
HUD also has other specialized programs to help certain identified groups purchase a home. These programs include:

• Firefighter/Emergency Medical Technician NextDoor
• Officer Next Door (law enforcement officers)
• Teacher Next Door
• Hurricane Evacuees discounted sales
• Homeownership for public housing residents
• Indian Home Loan Guarantee Program

For More Help
To get more advice on FHA and other HUD loan programs, contact a HUD-approved housing counselor or call (800) 569-4287.

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HCFP Loans
The United States Department of Agriculture (USDA) provides loans and grants to individuals and rural communities for housing and community facilities though Housing and Community Facilities Programs (HCFP). HCFP provides funding for single family homes, apartments for low-income persons or the elderly, housing for farm laborers, as well as funding for community facilities such as childcare centers, fire and police stations, hospitals, libraries, nursing homes, schools, and more.

Housing and Community Facilities Programs for Individuals
Housing and Community Facilities Programs are available for:

• Single family housing for rural Americans
• Home renovations and repair
• Rental assistance programs for the elderly, disabled, or low-income rural residents of multi-family housing

The remainder of this article will focus on the home ownership and renovation programs.

HCFP Direct Loan Program
The Direct Loan Program makes assistance available to individuals or families in the form of a home loan at an affordable interest rate. Most borrowers have an income level below 80% of the median income for the community in which they live (see here for the income limits on the Direct Loan Program for single family homes). There are also loan limits for loans made under the Direct Loan Program that vary by community (see here for the loan limits for the Direct Loan Program).

More information on the Direct Loan Program may be found on the USDA Rural Development Housing & Community Facilities Programs site: http://www.rurdev.usda.gov/rhs/sfh/brief_rhdirect.htm

HCFP Loan Guarantee Program
Under this program HCFP guarantees loans made by private lenders, similar to FHA or VA loans. With the HCFP Loan Guarantee Program, a borrower may borrow up to 100% of the appraised value of the home (100% LTV). Borrowers may have up to 115% of the median income for their area (see here for income limits)

More information on the Loan Guarantee Program may be found on the USDA Rural Development Housing & Community Facilities Programs site: http://www.rurdev.usda.gov/rhs/sfh/brief_rhguar.htm

HCFP Mutual Self-Help Housing Program
This program helps very-low- (50 percent of the area median income) and low-income (between 50 and 80 percent of area median income) individuals or families to construct their own home. Borrowers participating in a HCFP mutual self-help project perform approximately 65 percent of the construction on each other's homes under qualified supervision.

More information on the Mutual Self-Help Housing Program may be found on the USDA Rural Development Housing & Community Facilities Programs site: http://www.rurdev.usda.gov/rhs/sfh/brief_selfhelpsite.htm

HCFP Home Repair Loan and Grant Program
HCFP offers loans and grants for home renovation to very-low-income individuals or families who own their own home. Loans made under this program are 1% loans that may be repaid over a 20-year period.

More information on the Mutual Self-Help Housing Program may be found on the USDA Rural Development Housing & Community Facilities Programs site: http://www.rurdev.usda.gov/rhs/sfh/brief_repairloan.htm

Rural Development Real Estate for Sale
Rural Development real estate for sale includes:

• Government owned real estate and potential foreclosure sales for single family homes (SFH)
• Government owned real estate and potential foreclosure sales for multi-family housing

More information on the Rural Development real estate for sale may be found on the USDA Rural Development Real Estate for Sale site: http://www.resales.usda.gov/

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VA Loans
Since its inception in 1944, the VA loan program has been intended to provide a benefit to veterans for their service to the United States. Similar to FHA loans, VA Loans are not loans that are made by the Department of Veterans Affairs. A VA Loan is a loan that is partially guaranteed by the VA allowing for some very favorable loan features for veterans.

VA Loans are available from lenders who participate in the VA Home Loan program.

Features of VA Loans
VA Loans are available as the following types of loans:

• Traditional fixed rate mortgages (FRMs)
• Graduated payment mortgages (GPMs) whose payments start low and gradually rise to a level payment in the loan's sixth year
• Hybrid adjustable rate mortgages (ARMs) where the initial fixed rate period is at least 3 years
• Traditional adjustable rate mortgages
• In some areas, Growing Equity Mortgages (GEMs) where gradually increasing payments are applied to the principal, resulting in an earlier payoff of the loan

Some of the attractive features of VA Loans include:

• Available for purchasing a home, a unit in a VA-approved condominium, building a home, for home improvements, to refinance an existing home loan up to 90 percent of the VA-established reasonable value, to purchase a manufactured home and/or lot
• No down payment requirements (may finance up to 100% of the cost of the home)
• Limitations on closing costs
• No private mortgage insurance (PMI)
• Will allow a home purchase two years after a bankruptcy
• Will allow a home purchase three years after a foreclosure
• Default assistance to avoid foreclosure
• Mortgage assumability subject to VA approval of the assumer's credit
• No prepayment penalties
• The VA performs loan servicing and offers financial counseling to help veterans avoid losing their homes during financial difficulties

Qualifying for VA Loan
According to the VA, more than 27 million veterans are eligible for VA Loans. Qualifying for a VA Loan is relatively straight forward. The eligibility requirements are:

• The applicant must be an eligible veteran who has available home loan entitlement. The rules of eligibility require some minimum number of days of active duty which vary depending on whether or not the duty was during wartime or peacetime. Visit the VA's General Rules for Eligibility to determine your eligibility. Please note that certain categories of spouses may be eligible for VA Loans, such as the spouse of a veteran who died while in service or from a service connected disability.
• The loan must be for an eligible purpose.
• The property must be owner-occupied by the veteran within a reasonable period of time after closing the loan.
• The veteran must have reasonable credit.
• The income of the veteran and his or her spouse must be sufficient to to cover housing expenses as well as other expense obligations.

The VA Loan Application Process
The process of applying for a VA Loan is also pretty straight forward. The first step is for the veteran to apply for a Certificate of Eligibility (COE). One may be obtained by completing VA Form 26-1880, Request for a Certificate of Eligibility, and sending it, along with proof of military service, to an eligibility center (see http://www.homeloans.va.gov/contact.htm for eligibility center locations and contact information). Proof of military service may be obtained using Standard Form 180, Request Pertaining to Military Records. Veterans may also ask any lender that they are working with to try and obtain a COE through ACE (Automated Certificate of Eligibility).

The next step is for the veteran to find a home that they wish to purchase and sign a purchase agreement. After that, the lender (usually) will order an appraisal from the VA. The formal mortgage application to the lender is the next step. Most loans are authorized on an automatic basis and are approved and closed upon receipt of the appraised value determination. After that it is time for the veteran to close the loan and move in to their new house.

VA Loan Limits
While there is no loan limit for VA Loans, lenders typically pay up to 4 times a Veteran's entitlement, which is $36,000, or 25% of the Fannie Mae/Freddie Mac loan limits in effect at the time for larger loan amounts. As of 2006, this effectively makes the upper VA Loan limit $417,000. Many lenders may have limitations of their own. VA Loans are typically 15 year or 30 year loans. The maximum VA Loan term is 30 years and 32 days.

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Understanding Remortgages

When you choose to remortgage, you get a new mortgage that replaces your existing mortgage. Remortgage is an option when the market interest rates drop significantly. You no longer need to be stuck with a mortgage deal for the rest of your life when you can consider various remortgage options to improve your finances.

Why Remortgage?
Borrowers could choose to remortgage for a number of reasons depending on individual needs and constraints. By remortgaging one can take advantage of the competitive mortgage deals on offer currently.

• Save money with a better deal: Borrowers can save a great deal of money by choosing to remortgage their existing mortgage deal. One can begin by finding out what interest he/she is paying on their current mortgage and find out if whether there is a deal with a lower interest rate. Online remortgage options provide the borrower the convenience of applying online through a simple and secure online application form.
• Raise money for home improvements, dream holiday, new car etc: A remortgage could turn out to be the most cost effective option if you are planning home improvements, a holiday or even a car purchase. You could also release any money locked up in your home to raise cash for your various needs.
• Consolidate debts: Borrowers could also consider remortgage as the quickest and one of the easiest ways to deal with bad debts. One can take advantage of low interest rates and borrow to consolidate expensive debt and save on interest rates.
  

Remortgages helps you take advantage of booming markets and newer remortgage deals. It also helps you move to a more flexible mortgage plan which will suit your needs and constraints better. According to your needs, you could also reduce the duration of paying off loans.

Remortgage does come with a multitude of benefits, but it is always a wise option to do some research before opting for a remortgage. Online remortgage options have provided borrowers a chance to compare offers, obtain free quotes and finally apply for a remortgage through a safe and secure online application form.

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Mortgage Refinance and Credit Repair

Million of Americans have credit problems. Those who own homes can use a mortgage refinance to help with credit repair. Mortgage refinance involves taking out a new mortgage to pay off the original loan. Depending on your equity, the new mortgage can be for more than the amount of the old loan. This money can then be used to for debt consolidation, which can improve your credit rating.

The mortgage refinance business is very competitive. Make sure you don’t get conned by unscrupulous lenders. Jack Guttentag, the Mortgage Professor, cautions, “The refinancing market is something of a jungle, but you are safe if you observe one basic principle: You cannot save money on a refinance unless the interest rate on the new mortgage is below the rate on the existing one.

“Some con artists will show you that your total interest payments will decline if you refinance into their higher-rate loan. However, they get that result by assuming that you will repay your new mortgage (but not your old one) on an accelerated (biweekly) schedule.

“Some others … get (a lower) result by extending the term. If your current mortgage does not have many more years to run, an extension of the term can reduce the payment by more than the higher rate increases it. If you do it, you pay for it big time in the form of a higher loan balance in future years.”

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