Mortgage Terms

Originator
The company that takes your loan application and works with you to close the deal. This company could be a retail lender or a mortgage broker.

Retail Lender
A retail lender has loan officers who take your application, processors who process the application, and underwriters who approve or decline your loan. A retail lender could be a bank, savings and loan, or a mortgage banker.

Mortgage Broker
A mortgage broker typically processes your application and sends it to one or more wholesale lenders for final approval.

Wholesale lenders have underwriters who approve/decline your loan. A mortgage broker has access to a variety of wholesale lenders and often offers the most choice in loan programs.

Wholesale Lender
A wholesale lender only works with mortgage brokers. They take completed loan packages and underwrite them. They offer mortgage brokers discounted pricing in return for the up front work done by the mortgage broker. Some companies may have both a retail and a wholesale division.

Investor
Lenders may keep your loan in their portfolio or they may sell your loan after the close of the transaction to an investor. If lenders portfolio the loan, they only have to follow internal guidelines to approve your loan, and so are the final decision-makers. If lenders sell your loan, then they also have to the meet the investors guidelines to approve your loan. In this case they may have to obtain investor approval. Portfolio lenders tend to be more flexible but they generally have higher rates.

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Refinance Your Second Mortgage

A 2nd mortgage is a secured loan on your property, with your home serving as collateral. Depending on the particular terms of your second mortgage, you could be able to refinance if you wish to reduce your monthly payments or are in need of extra cash. Refinancing a 2nd mortgage can be an option for those who want to pay off their mortgage (excluding any home equity lines of credit), reduce the interest rate they currently pay on their second mortgage, or simply want reduce their monthly payments. Refinancing a 2nd mortgage can also be an option if the homeowner wants to pay off the mortgage, including home equity lines of credit, and receive cash.

You can refinance your second mortgage even if your credit is less than perfect. Second mortgages are an excellent means of reducing monthly payments and getting extra cash for bills, remodeling needs, or any reason the homeowner sees fit. If your interest rate on your 2nd mortgage is substantially above the current interest rates being offered by most lenders, you may be able to refinance your second mortgage. Sub-prime loans are available for second mortgage refinances and even with adverse credit, you may be able to lower the amount of interest you pay on your second mortgage. A poor credit rating is no reason not to explore the possibility of refinancing your 2nd mortgage.

Lenders are standing by to give you a no-obligation quote on refinancing your second mortgage. You can get quotes from several different lenders with one simple application, reducing the number of inquiries on your credit report. Often you can submit your application with no initial credit inquiry at all. Now is the perfect time to think about refinancing your second mortgage. You could be approved in less than twenty-four hours and begin saving money each and every month.

Refinancing your second mortgage is a fast, easy process and with the availability of multiple quotes from one simple application you will be assured you are receiving the lowest rate and best terms possible for your individual situation. If you have poor credit, you may still be able to refinance your 2nd mortgage. Mortgage lenders work with any credit situation and may be able to save you money by refinancing at a much lower interest rate that you currently pay. Get multiple quotes on refinancing your second mortgage from one fast, simple online application. The potential decrease in your interest rate could save you money on your payments each and every month.

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What to Really Expect for Low Closing Cost Mortgage

Closing on a property is a very challenging time for a would be homeowner. Being informed, either through your mortgage broker, your real estate agent, or through self knowledge is the best thing you can be when going through this procedure.

A good real estate agent can help you tremendously. They should know the local market well enough to help you save money in whatever way they can. Since closing costs are handled differently in different areas, having a professional with experience in that area is your best bet. They can give you a better idea of what costs are customarily paid by the buyer, and which ones are paid by the seller.

The mortgage broker you deal with can make a big difference in your closing costs too. H

ave them show you several programs suited to your needs. There are lots of ways to structure closing costs based on your points and down payment.

After finding a property, you will want to get qualified by your mortgage broker. Your mortgage broker will send you a Good Faith Estimate within 3 days as required by law. A GFE is a list of your closing costs from your lender. There may be additional closing costs that the lender does not control, so always be prepared to pay for other items also. A good number to be prepared to pay would be to double the GFE amount.

Closing costs on average are from 3% to 5% of your loan amount, and the exact amount will be told to you the day before the closing. All closing costs are to be paid at the settlement of the mortgage loan.

There are two types of closing costs

• Non-recurring closing costs are the ones that you pay once and never have to pay again.
• Recurring closing costs you pay repeatedly over the course of your home ownership. These would be items like property taxes or homeowner insurance. Property taxes placed in escrow are one of the largest expenses at closing.

The following is an alphabetic listing of the items that may be on your GFE. Some items listed here may not be on your GFE.

Loan Origination Fee (1% of the amount borrowed)
Loan Discount fee
Loan Application fee
Points to be paid
Lender's attorney fees
Buyer's attorney fees
Appraisal fee
Credit Report
Lender's Inspection fee
Mortgage Broker commission or fee
Tax service fee
Processing fee
Underwriting fee
Wire transfer fee
Interest from the day of settlement to the date of the first mortgage payment
Private Mortgage Insurance (PMI)
Hazard Insurance premiums
Property taxes from the day of settlement to the end of the tax year
Settlement or closing/escrow fee
Notary fee
Title search & Title insurance to protect your lender
Title insurance to protect you
Recording fees
Tax stamps
Pest inspection

Your closing procedure will go smoothly when you are armed with the right information and guided by the right professionals. Good Luck & Happy Buying!

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Great Mortgage Online - How To

People who are looking for a mortgage today have many more options than those who were searching for a mortgage a few years ago, thanks to the Internet. Consider how technology has changed the way we do many things, including shopping for products and services - including loans and mortgages. This change is largely due to the sheer number of people who log onto the Internet every day and businesses that see the opportunity to tap into that market.

When people looked for a mortgage using only local lenders, options were greatly limited. If you couldn't find a good deal in your immediate area, you could make the drive to neighboring cities and begin the application process all over. Today, thanks to the hundreds of lenders who use the Internet to market their service, you are no longer bound by geographic restrictions. Instead, you can shop for a mortgage from lenders across the country and even around the world.

Another great benefit of searching for a mortgage from an online lender is that these lenders are in direct competition for your business. For the consumer, this means that you're more likely to find great rates on the mortgage you're applying for. Because you're shopping with multiple lenders at the same time, it's also easy to compare the terms of those loans making it easier to choose a mortgage that suits your circumstances.

Remember that you still have to be smart about the shopping process. Don't offer up personal financial information such as social security numbers, bank account numbers and other identifiers until you are making an application. During the shopping process, you should be able to get interest rates, terms and other information without providing that kind of identification. Be wary of up-front fees and lenders that guarantee you'll be approved for a mortgage regardless of credit history. Take time to check out the company's privacy policy on the website before you apply online and verify that the company actually exists. A reputable lender will have a home office with a physical address and real people who answer the phone when you call.

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Comparison of Mortgage Brokers And Banks

My career in the mortgage industry has provided me with many opportunities to work with both mortgage brokers and banks. I believe mortgage brokers are great tools for consumers in search of the best financing options available. A mortgage broker differs from a bank representative in some important ways. The broker can shop and find the best deal for a home buyer or refinancing deal. The bank only sells its own products. The mortgage broker takes one application and one credit report and utilizes all of the resources to find the best rate and mortgage program available. In my role as the mortgage broker I am an expert working hard specifically for the consumer.

Mortgage Brokers Can Show You All The Possibilities
As a mortgage b
roker I may work with up to one hundred lenders all over the country. The consumer never knows about many of these companies because mortgage brokers have exclusive access to them. When a bank turns down a mortgage application for any reason, the bank is finished with that potential customer. A mortgage broker is not through -- he or she moves forward to find the next best lender. If a customer does the mortgage research alone mortgage companies want to pull a credit report before giving any details about products and programs you qualify for. All of these credit inquiries may lower your credit score and when it is time to qualify for the mortgage this is critical. My goal with every customer I work with is to find the best rate. This money all comes from essentially the same places: investors on Wall Street. Customers with good credit will be quoted a similar rate from a bank.

Tap Into Broker Knowledge And Thrive Under Special Circumstances
Consumers dealing with more credit challenges may find they have more choices with a mortgage broker. A lack of a down payment, a short time in business or the inability to prove all of your income may be a problem and a skilled mortgage broker will be able to find a solution. I can find specialty programs many lenders don’t have or don’t know about. Mortgage brokers shop around the country and they have the knowledge and expertise to get someone with unique circumstances approved.

How Does the Mortgage Broker Get Paid?
In the mortgage industry brokers are an integral part of the equation to get the best value for your money. I am the middleman between the customer and the lender. Mortgage lenders compensate mortgage brokers for completing a large portion of the work. When a mortgage broker markets and originates the loan lenders only have to deal with basic negotiations that involve an educated party (the broker), the approval process, and execution of the loan. The cost for banks and mortgage companies do not differ.

Compare a Mortgage Broker to a Buyer’s Agent

A mortgage broker is like a buyer’s agent for your mortgage.

A buyer’s agent represents the home shopper’s best interest. The agent is an educated real estate professional dedicated to representing only the purchaser. With this representation the homebuyer can save money and have better deals negotiated.

As a mortgage broker, I negotiate the term of a loan with only my customer’s individual needs and desires in mind. As a consumer it can be difficult to find advisors and representatives completely committed to your best interests. A mortgage broker is the key to uncovering all the possibilities and securing the best mortgage rates you can find. Be sure to choose wisely and you can reach your highest home investment potential.

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Flexible Mortgage Tips

Outlined below are some useful flexible mortgage tips. The most prominent addition in recent years to the mortgage industry has been the flexible mortgage. As the name implies, it offers greater flexibility than the traditional mortgage.

Flexible mortgages are fast becoming the most popular way of taking out a new mortgage. The reason for this is that this type of mortgage allows you to take control of your mortgage and not the other way round.

Unlike some traditional mortgage loans that still charge mortgage interest on an annual basis, fully flexible mortgages calculate interest daily, which means that any overpayments you make are immediately credited against your loan, thus reducing your interest costs. It means you get the maximum benefit from your overpayment benefits immediately, since you don't need to wait for an annual interest calculation.

Many self-employed people whose income varies from one month to the next find flexible mortgages particularly helpful. They can make overpayments when earnings are at the annual peak and cut payments when earnings fall again.

Some flexible mortgages allow you to withdraw sums you have overpaid into your mortgage account for emergencies.

A flexible mortgage allows you to make additional or lump sum payments in excess of your scheduled amount, enabling you to pay off your mortgage early. By reducing the capital amount of your mortgage in this way, you are also reducing your monthly interest payments. You may take this money back at any stage or use it to take a repayment "holiday".

This gives you the flexibility to manage your mortgage payments to suit your cash flow needs as your circumstances change. These Flexible Mortgages allow you to repay capital early, take back some cash you have paid in and postpone payments. Some are run as substitutes for current and savings accounts, so all your money is working to minimise interest on the mortgage.

Some mortgage lenders offer a current account arrangement with their flexible mortgages. You can pay your monthly salary into the account thereby reducing the amount outstanding and the interest payments. For the rest of the month, you can use the account for day-to-day expenses and to pay direct debits. Some lenders require borrowers to pay in their salaries as soon as the account is up and running.

The advantage of a flexible mortgage is that all money is controlled within one account and savings can be used to offset the debt. With flexible mortgages interest is only paid on the balance outstanding at the end of each day, leading to less overall interest payments.

The flexible mortgage allows you to pay the mortgage back quicker than your agreed monthly repayments stipulate. Traditional mortgages would charge you for repaying early, but with a flexible mortgage you can repay early, save on the interest, and reduce the total amount owing.

Truly flexible mortgages will allow you to underpay - however this will only usually be offered if you have overpaid enough to cover the difference. In the same way as you can with underpaying, if you are keeping up with repayments and have ideally overpaid, you will be able to payment holidays.

The flexible mortgage will not charge you for moving mortgage lenders as most traditional mortgages will. You are free to overpay, underpay and swap mortgage lenders without financial penalties.

There are no standard repayment methods. Each mortgage provider will specify the extent of flexibility on its Flexible Mortgage and the interest rate may be variable or fixed.

Before taking out a flexible mortgage, make sure you are aware of how you handle your finances. If you are inclined to raid your savings on a regular basis, a flexible loan is unlikely to suit you.

Most mortgage lenders offer an annual statement showing the balance of the account, the number of overpayments you have made and how much interest you have saved.

Many flexible mortgage providers now offer tracker rates, so you can now enjoy the elements of a flexible loan while following the rise and fall of interest rate movements.

If you simply want to be able to make the odd lump-sum repayment or to overpay on a regular basis, it may be a good idea to look at what else is on offer in the mortgage market. As the flexible mortgage becomes even more popular, many lenders are offering conventional mortgages with flexible elements.

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Online Mortgage Loan Advantage

The main advantage of applying for online mortgages is their convenience. It is relatively easier to apply for an online mortgage than it is for an offline mortgage. The Internet is a wonderful tool and one which you can take full advantage of when looking for the best deals in online mortgages. Many online mortgage lenders offer competitive packages for home buyers and most of these offer free online mortgage quotes for your perusal. As a perk, some of these sites also offer free online mortgage calculators to help you calculate the costs and gains of the loan programs they have to offer.

The Benefits of Online Mortgages
Borrowers can stay involved with their mortgage dealings by applying for a mortgage online. With traditional mortgages, lenders may not give out enough information, leaving the borrower practically in the dark throughout the whole process. Online mortgages dispel of this practice as sending information over the Internet can be done much faster and easier. So now, borrowers can stay in the know with the information that is readily available on the Internet.

Online Mortgage Applications…the Best Way to apply for a Mortgage
Based on the benefits listed above, online mortgages may be the best type of mortgage for you. Generally, mortgage brokers who conduct their business online charge lower fees compared to traditional brokers. What's more, online rates are updated everyday, thus keeping you aware of the changes in interest rates.

Online mortgage applications are quick. An online application form takes about four minutes of your time filling it up. Approval can then be given within 24 hours. This is a far cry from the several business days it usually takes for traditional mortgage applications to be approved. In this regard, online mortgages are less time-consuming and even initially paper-free.

The Disadvantages
There are always two sides to every coin. As with all things, online mortgages, for all their many benefits, do have a certain disadvantage. And this certain disadvantage is enough to cause some people from engaging in such. Because part of the transaction is done online, people are hesitant to pursue online mortgages. The very faceless nature of online mortgages makes them difficult to trust. There is, after all, much sensitive information that you would have to give out when you apply for a mortgage. Such information may include your social security number, your full name, your address, your monthly income, et cetera. Thus, it is therefore advisable that you only conduct these types of online transactions with an established institution.

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Choosing a Mortgage Company

Just as there are many types of mortgages and mortgage deals to choose from, there are also many sources where you can go to get a mortgage. Your key choices are to use a mortgage broker, a more general financial adviser, or shop around yourself and go direct to the mortgage company. For many people, choosing a mortgage company means finding a mortgage company offering the lowest APR rate.

If you decide to use an adviser you can choose between a specialist mortgage broker and a general financial adviser. A general adviser will look at all your financial affairs if you want, not just your mortgage. As opposed to mortgage companys who can only offer their own products, an adviser can look at the whole market for you and consider mortgages from a number of mortgage companys. Advisers can also offer you advice and information tailored to your needs. In the UK, All firms or Individuals arranging or advising on mortgages must be authorised to do so by the Financial Services Authority (FSA). If you are unhappy with advice from an authorised firm you usually have the right to complain and may be able to claim compensation.

As an alternative to using a financial adviser, you can arrange a mortgage directly with a mortgage company – like a building society, bank or specialist mortgage company. A mortgage company will only recommend their own mortgage products although they may have several you can choose from.

When choosing a mortgage company, you should consider the competitiveness of the mortgage company’s rates, their fees and penalties, their customer service and their reputation. You’ll also want a mortgage company you can trust, and someone you can work with effectively. Remember you’ll have to deal with this company for many years to come.

• Building Societies
  Building societies are mortgage experts, they offer specialist advice and they usually offer very competitive rates. Many national ones have a branch in most major towns and cities while the smaller ones tend to specialise in catering for home buyers in particular areas. For example, the Cambridge Building Society specializes in helping people who live in Cambridgeshire.
• High Street Banks
  Banks usually have years of lending experience and they have more branches and greater coverage across the United Kingdom. Their standard rates tend to be higher than those of building societies but they often offer the best introductory offers on mortgage deals. Some of the big banks now have special arrangements with building societies where the building society is the one that handles all the mortgage business for the bank.
• Specialist Mortgage Lending Companies
  Specialist mortgage companys lend to a particular type of niche market. Many of these specialise in providing mortgages for people in special circumstances who would not normally be offered a loan by their bank or building society. This includes people with adverse credit, the self-employed, part-time employed and those purchasing overseas properties. Many mainstream mortgage companys have established specialist subsidiaries for non-standard mortgages such as these. You may have to deal with them over the phone, by mail or over the internet as most of them do not have a wide network of branches across the country.
• Insurance Companies
  Some insurance companies offer mortgages and other financial products together with their range of insurance products. They may sometimes offer certain deals in association with other financial institutions such as banks but they do not specialise in this area and they may not necessarily offer the best rates.
• Intermediaries and Mortgage Brokers
  Instead of going directly to the mortgage company for a mortgage, you can approach an advisor or broker to search the market for the best mortgage deal for you. Some intermediaries are tied to particular mortgage companys and they may only offer products from their mortgage company. Others are independent so they have a much wider market to choose from. A credit broker is a firm or person who introduces you to a mortgage company for the purpose of borrowing money. The task of the credit broker is to obtain the loan you require on terms that are acceptable to you.

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What Home Refinance Can Do For You

Basically, a home refinance is paying off one home loan with another loan. So the question is, should you refinance or not? How do you know when it is right for you to get a home refinance mortgage? In other words, when does home refinance make sense for you?
What Home Refinance does for you

Whenever interest rates drop, as they sometimes do, homeowners might have the opportunity to save money on their loan payments. As a rule of thumb, lower interest rates translate into lower mortgage loan rates. Home refinance allows you to take advantage of low mortgage rates. With a new loan for a relatively lower interest rate, you can save a few bucks on every monthly payment that you have to make.

The decision-making process of home refinance involves one basic calculation. And that is if your savings from reduced mortgage payments are greater than the up- front costs. This then is where the basics of home refinance decision lie.

Use a Home Refinance Calculator
Nearly all types of financial calculator require a simple rule of thumb. Often, when we want to calculate our loan finances, we are told to look for a minimum interest rate improvement of, say, two percentage points from our existing mortgage before getting serious about home refinance.

However, when it comes to home refinance mortgage, such rules of thumb can be very misleading. The cut in interest rate which you need in order to come out ahead with your home refinance venture may vary dramatically. More often than not, interest rate cuts depend on how long you plan to hold the new mortgage, how many years you have already paid on the current mortgage, and the increasingly available opportunities for cutting closing costs.

Thus, it is hard to come up with just one rule that can cover all possible scenarios involved in home refinance with reasonable accuracy. So how do you know when it's right for you to refinance your home?

Do a little math
You can take the specific numbers that match your unique situation. Find out how much remains on your loan and what rate you are currently paying. Input all these figures into an online calculator (you can find lots of websites that hosts these useful tools for free).

For instance, you can use a calculator to find what your home refinance costs might be. You can then use the figures you get as a guide when you're surveying potential lenders for the loan that's just right for you.

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Adjustable vs Fixed Rate Mortgages

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 vs Fixed Rate Mortgages
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.

Adjustable vs Fixed Rate Mortgages
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.

Adjustable vs Fixed Rate Mortgages
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.

Adjustable vs Fixed Rate Mortgages
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.

Adjustable vs Fixed Rate Mortgages
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.

Adjustable vs Fixed Rate Mortgages
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.

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Commercial Mortgages Explained

If you are thinking of buying a commercial property either to use as a business venture or to sell on as an investment then you are going to need a commercial mortgage. Just as there are many different types of property available for all types of business ventures there are different types of commercial mortgage.

The type of commercial mortgage you will get will depend on the type of business which you are intending to set up, for example solicitors, doctors, vets and such would more than likely be able to get a 100% commercial mortgage for their business. This is because these are generally classed as professional businesses while others are generally seen as non professional.

A 100% mortgage will use the property that you are intending to purchase instead of asking you to pay a deposit. However when going for a 100% commercial mortgage there may be other fees included which you will have to pay out for and these include valuation fees and legal fees, however in the majority of cases these fees can be added onto the mortgage providing of course there is enough security in the property you are intending to purchase.

However in the majority of cases the lender will offer a mortgage of between 70% and 80% of the total value of the property which you are intending to purchase. This means that you will have to find the rest of the money yourself, of course this could leave you with a substantial amount of money to find towards the property and this should be taken into account when going for the mortgage.

Ways that you can get this money include asking for a business overdraft, releasing equity, using 50% of the total value of your pension fund towards the cost or handing over a share of the business in return for financing.

Depending on your knowledge of financial matters it could be in your best interests to talk with a financial advisor before committing your self to a commercial loan.

Searching online for information and providers which offer commercial loans is the best way to go when looking for a loan of this type. Not only can you get the right information but you can also fill in an online form which will give you a quote for the loan. This way you are able to compare and shop around for the best deal possible on your commercial loan.

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Online Mortgages Priority

Mortgages first appeared in the English feudal system and have continually served as a means to obtain land ownership without paying for the total price of the land. The mortgage is essentially a contractual relationship creating an interest in land, but it is not a loan as many people often confuse it. Most mortgage agreements involve a promise to repay a debt, but is not a debt in itself, but rather, is evidence of a debt. Essentially, the mortgage is a transfer of either a legal or equitable interest in the land on the condition that the interest will be returned when the terms of the contract are performed. If the borrower fulfills all of the obligations of the mortgage contract, the transfer then becomes void and title automatically passes back to the mortgagor.

The principle generally governing what priority a mortgage is usually first in time, first in right, though modifications to this principle can be made in the course of the process. First in time priority generally belongs to the first party to deliver that specific security instrument for recording, though most states will not enforce this general principle if the person attempting to record has actual knowledge of a previously unrecorded claim. In a minority of states, statutes provide for a true first in time circumstance where the first to record takes priority regardless of knowledge of a previously unrecorded claim. When dealing with the priority of mortgages, it is necessary to check how your particular jurisdiction treats this type of situation. The priority of a mortgage will often be the difference between payment and non-payment, therefore, a firm understanding of jurisdictional differences is critical in obtaining the strongest legal position.

Due to both the increased use of online mortgage applications and the increased solicitation by online mortgage companies, determining the true priority of all liens on a particular piece of property can be a challenging task. Like mortgages obtained from a mortgagor with a true physical office, online mortgages will generally be held to the first in time first in right principle. However, like most mortgages, they may also be subject to any leases involving the land. In the event of a forced foreclosure, when lease was executed before a mortgage, the purchaser of the property in the foreclosure auction would still take subject to the lease. Conversely, if a lease is entered into after a mortgage is recorded, the purchaser of the property would take free of the lease. Specifically, further problems can be encountered when first and second mortgages are applied for close in time to each other, and especially when one of those mortgages was obtained from an online mortgage company.

When faced with potential foreclosure due to financial difficulties, the first step in determining who takes priority when dealing with a combination of leases, first, second and all subsequent mortgages, is to examine where the debt instrument was obtained and, more specifically, when the instrument was effectively recorded. Because online mortgage companies may lack a physical presence in your particular jurisdiction, it may take a significant amount of time to perfect the recording, if it ever. As long as subsequent mortgagees or lenders record the debt instrument without notice of the online mortgage, they will take priority over the unrecorded online mortgage, especially in ‘race-notice’ statute jurisdictions. While not all jurisdictions are first in time, first in line (‘race-notice), most states are, and this specific distinction can determine the priority of any online mortgage application. Whether you represent such an online mortgage company or a consumer subjecting his or her property to various liens and mortgages, it is important to accurately understand the method of record perfection and its relation to establishing priority of a claim. An attorney experienced in real estate and borrowing transactions can be an invaluable tool in determining your rights as a consumer or company attempting to establish the order of lien priorities.

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100% Financing Mortgages

100% finance mortgages are mortgages with zero money down required at the time of the initial loan. The main advantage of this type of loan is the ability to buy a home with almost no money down. Providing 100% financing of the purchase price of your home, this mortgage is specifically designed for homebuyers who have limited available cash, but excellent credit.

100% financing offers complete financing of your property. The other option, 80/20, finances your mortgage with two loans. If you have a strong credit profile but have limited funds to commit to a down payment, then an 80/20 mortgage is just right for you. Lenders typically require a down payment of at least 20 percent of the purchase price. If the loan amount is for more than 80 percent of the purchase price, PMI is usually required. You can avoid paying PMI by getting a second mortgage ('piggyback loan') to back up your first mortgage.

The first mortgage is provided for 80 percent of the cost of the home and the 'piggyback' second mortgage is for the remaining 20 percent. The 80 percent first mortgage can be a fixed-rate (15-year or 30-year), adjustable-rate (usually 5/1, 7/1 or 10/1 fixed period ARM) or interest-only loan. The 20 percent second mortgage can be a home equity line of credit that changes with the prime rate. Combined, the two loans allow you to purchase 100% of your home with no money down. Both loans may be carried by your lender, but sometimes the seller or a second lender is required to carry the 20% mortgage.

Each lender has their own criteria for deciding who will meet the required qualifications for a zero-down loan. Most sub-prime lenders require any bankruptcies or foreclosures to have been at least twelve months ago. A conventional loan requires these to be discharged for two to four years ago.

While a credit score of 600 or higher is best, large cash reserves can also qualify you. Six to twelve month’s worth of cash reserves in the form of savings, money market, or other liquid assets are considered ideal.

If you choose 80/20 financing with the seller carrying the second mortgage, you can qualify with sub-prime lenders with a score of 560.

You will also want to decide what type of mortgage you want. An ARM is easier to qualify for and has lower rates. A fixed rate mortgage offers the safety of a constant interest rate over the life of your loan.

Typically an ARM will be a better deal if you plan to refinance within a couple of years. After you have improved your credit history, you can refinance for a conventional mortgage with low interest rates.

The two main benefits of 100% financing are: constant monthly payments - with a fixed rate mortgage, your monthly principal and interest payments stay the same throughout the life of your loan, so you are protected against any unexpected interest rate increases; frees up cash - existing funds can be used for closing costs or other needs, rather than a home down payment.

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Advantages of a Reverse Mortgage

A reverse mortgage is a loan that enables senior homeowners, age 62 and older, to convert part of their home equity into tax-free* income without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower (s) permanently leaves the home. This offers the senior to enjoy all the benefits of living in his or her home with out the worries of making mortgage payments.

The main advantages of a reverse mortgage :
• Remain independent. A reverse mortgage allows you to remain in your home and retain home ownership.
• Stay in your home. It allows you to remain in your home and retain home ownership.
• No monthly mortgage payments. You need not pay back the reverse mortgage loan nor make any monthly mortgage payments until you permanently move out of the home.
• Tax-free money. Because the money you receive from a reverse mortgage is not considered income, it is tax free* and will not affect your Social Security or Medicare benefits.
• Freedom and flexibility. The money you get from a reverse mortgage is yours to use in any way you choose.

The benefit of this type of loan is that it frees up a senior’s income for them to use any way they want from daily living expenses, home improvements, and healthcare expenses, paying off existing debts, or simply enhancing your retirement years. For many people, the money provides a "financial security blanket," in case unexpected expenses arise.

One of the biggest falsehoods of a reverse mortgage is that the Lender actually owns your home that is 100% false. A reverse mortgage is just like any other loan you own the property and you have a pay off you will have to make to the lender at sometime in the future. The only difference is you don’t have to make a monthly mortgage payment and this will free up money for you to use in any way you would like.

Another Falsehood with reverse mortgage
Is that it is possible for my loan balance to become greater than the value of my home? You can never owe more than what your home is worth. What’s more, since the reverse mortgage is what is known as a "non-recourse" loan, the lender cannot seek repayment from your income, your other assets, or your estate. In other words, the house stands for the debt.

A reverse mortgage may be the best mortgage solution for a retired person over the age of 65 reverse mortgages will give you peace of mind and security

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Beware Of Exploding Mortgages

The subprime mortgage problems of recent weeks and months has not gone away by a long chalk. There will undoubtedly be interest rate rises to follow on from the eruption.

The loan environment is about to get much worse as marginal loans get reset. Lenders have used “exploding ARMs” (Adjustable Rate Mortgages) before which start at attractively low interest rates, but then reset within two or three years, generally to the London Interbank Offered rate PLUS six percentage points.

Over the next five years, there will be resets for around $1 trillion worth of ARMs. But the problem is even closer, for from June to October 2007, over $100bn of ARMs are set to change, and they are all in the subprime category. As interest rates have gone up in the recent past, these loans that were on low rates are now set to hit 11% or even higher – up more than four points.

In addition to that the number of delinquencies is on the increase, far exceeding target levels when loan pools were sold to investors; and the most recent borrowers probably have little or no equity in their house. This may leave them “upside down” – or with more owing on their mortgage than the value of their home.

Home prices have already flattened, and all this bad news suggests worse is to come. Marginal loans are in trouble as they are backed by assets (subprime) which are not performing as hoped, and consumers will find it ever harder to buy as their financing becomes restricted.

Some industry watchers feel that there should be more regulation to protect consumers from this sort of future problem when they sign up to a seemingly great deal. But others feel that regulation would be stifling and anti competitive.

The problem is that some products were advertised with such low interest rates that it would be almost impossible to resist. Take one percent as an example. Who is going to look to the future of exploding ARMs when one percent is on offer?

The elimination of the 30 year bond in 2001, thereby forcing foreign central banks to buy the 10 year note than underpin mortgages, seemed to have the intention of boosting house prices.

There has also been a banking cartel which has been a root cause of problems. Regulation of mortgages won’t fix that. Recklessness and imprudence have been studiously ignored. Thus, more regulation in one area will simply show up another area where regulation is weak – creating another potential bubble. Banks have shown little concern for making loans so long as they don’t get the problem (that is, they don’t have to give up any assets), and charge lofty fees as they go. They will look to offload the problem to pension funds, risky hedge funds and foreign investors.

Remember these: the 1980s oil finance bubble; the S&L fiasco; Long term Capital Management; the NASDAQ bubble. All these investment bubbles were blown up with bad loans and leveraged speculation using other people’s money.

And who suffers in the end?
As ever, the general public has to pay the price.

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Mortgage Refinancing To Avoid Debt Problems

Some people are more financially educated than others. They are very tuned in to budgeting and money management. Debt can occur from numerous reasons and some consumers can pay attention to the signals at a very early stage. If you have obtained a mortgage and you find that for some reason your financial capabilities can't cope with the expenses, refinancing your mortgage might be a reasonable solution.

A Mortgage Can Create a Debt Problem
Debt usually is build because of high interest unsecured loans, credit cards or payments. A mortgage can add to that. If for some reason you find that the mortgage payments happen to be high consider refinancing to a longer term or simply change your repayment plan. Information about mortgage refinance should be obtained before signing any documents to prevent potential loss.

Regardless of the payment terms you chose, a mortgage may cause a debt problem. A person that has a mortgage to repay is so involved in preventing any loss to his home, unconsciously creating a situation where the mortgage turns into the highest priority monthly payment.

Default Payments and Bad Credit
When a mortgage or any payments needed to be made to creditors are in default, the persons credit ratings drop. If you are in a case where you are a few months behind on your mortgage payments you are in a higher risk of your house being repossessed. By taking action in the right time and refinancing, you can avoid bad credit problems. It would be best to first improve your credit and then refinance, but, if you cannot wait consider getting a bad credit mortgage refinance loan.

The Lowest Interest Rate Isn't Always the Best
Although the interest rate is important, I find it to be more like candy for the eye. It is a way to attract clients and a good one too! When you apply for a mortgage be sure you can afford the terms you have chosen and ALWAYS calculate and estimate how much money you will need to pay every month. Be sure to obtain more mortgage refinancing information, before signing the deal. More on this article...

Mortgage Loan Planning & Seeking Pre-Approval

The Benefits of a Professional Consultant
Choosing a good lender is a key element in managing your mortgage. A professional consultant won’t just provide a loan, they will help you select the one most beneficial to you and your long-term goals, and then, help you manage that debt over time. There are not many lenders out there who provide this type of personalized service.

Seeking Pre-Approval
What’s the difference between pre-qualification and pre-approval?
Pre-qualification is the starting point in your search for mortgage financing. A quick snapshot is taken which includes income, existing debt, savings, length of employment, etc. All of these factors will then be analyzed to determine your loan eligibility.

Pre-approval is written documentation that shows you have the support of a lender who is willing to finance you. It means your loan application has been reviewed by an underwriter.

Based on your income, debt ratio and savings, the underwriter provides the dollar amount you are eligible to borrow. Now you can shop around for houses that fit into that loan amount category.

Here is the nice thing about the pre-approval: It gives you the leverage to shop as a cash buyer! With a pre-approval in hand, you now have the power to negotiate. The seller will take your offer much more seriously knowing you are already approved by a lender. Full credit approval can save you up to 15% on the purchase price of your home.

What will my monthly payments be?
The amount of your monthly payment depends on what loan program you choose. We like to provide our clients with an easy-to-read spreadsheet that narrows your choices down and compares different loan programs that meet both your current and long-term goals. You will have the opportunity to select a program you feel comfortable with before you make an offer on a home. More on this article...