Getting a Mortgage With Friends

Property prices for even the smallest apartments are beyond the reach of many first time buyers nowadays. As a result, more and more people are clubbing together with friends to share a mortgage and ownership of a property. It’s a very good way to get on the property ladder, but as such arrangements are never normally for life and one or more party will inevitably want to sell eventually, the fine details should be agreed clearly at the outset to avoid financial loss or the loss of friendships.

The terms of a joint ownership mortgage are no different from a standard mortgage. Regardless of the amount of deposit that each person pays or the salary that they are earning, each shares equal liability for making the mortgage repayments as far as the mortgage lender is concerned. So if one person stops making repayments, the others will have to cover their share to ensure that the full repayment amounts are paid. It’s up to the joint owners to decide how they will divide the mortgage repayments and ownership of the property between themselves.

Clearly, a legal agreement is the best way to ensure that everyone understands their rights and responsibilities. This isn’t a sign of mistrust, it’s simply a guarantee of protection for everyone. Although not compulsory when taking out a joint mortgage with friends, it’s certainly wise to do so. It won’t cost much to have one drafted up by a solicitor. In fact so many people are taking out mortgages in this way that some mortgage lenders provide specially tailored joint ownership mortgages that include the drafting of a legal agreement.
Although the mortgage calculation is based on the sum of everyone’s incomes combined, the mortgage lender doesn’t give people different sizes of share in the mortgage or property. How much each person contributes towards the repayments is up to the joint owners to decide. It doesn’t have to be directly related to each person’s salary. This should be set out in the written agreement.

It can become more complicated in circumstances where individuals have put down different deposit amounts. However, again it’s up to the joint owners to decide how they want to divide the shares in ownership and in the mortgage.

If there’s only a small difference in the amount of deposits paid by everyone, it can be evened out informally by those who paid a smaller deposit making separate repayments to those who paid a larger deposit until their contributions are balanced out.

Alternatively, you may decide that each person has their deposit amount returned to them upon the sale of the property before the remaining profit is shared equally among the joint owners. This tends to work best in circumstances where the deposit amounts are low.

A common agreement for joint owners who have paid different deposit amounts, particularly if they are a large sum, is for the share in the ownership of the property to be equal but for each person’s deposit amount to be taken into account when calculating the mortgage repayments, so that those who put down smaller deposits have a bigger share of the mortgage. When it comes to one owner leaving or the property being sold, each person’s share in the profit is determined by calculating their share of the current balance of the mortgage deducted from the current market value of their share.

This is fairer than taking an equal share of the gain plus giving each person back their deposit amount, as those who have been paying more towards the mortgage as a result of their lower deposits will actually have been paying more towards the capital than those who paid lower monthly amounts because of their higher deposit.
There are several different ways in which a person’s circumstances may change, thereby affecting their share of the mortgage and property.

The details of what will happen in such situations should be ironed out in the legal agreement. If for any reason one of the joint owners wants to leave, there are various possible options:

• the person keeps their share of the mortgage and property and rents out their room
• the person sells their share to the remaining owners who can then rent out the room if they wish
• the share is sold to a third party in direct replacement of the person leaving
• the whole property is sold and all parties leave

Insurance should be taken out as part of the legal agreement to cover situations in which people are unable to continue paying their share of the mortgage for a period of time, for example because of illness, injury, redundancy or death. For illness or injury, insurance cover will normally make their repayments for them for up to a year, and if the person is still unable to make repayments after this, their share of the property will almost certainly have to be sold.

If one of the joint owners dies, life insurance will provide a lump sum to pay off the person’s share of the mortgage, and, depending on the legal agreement drawn up, their share of the property will become part of their estate. Writing a will is a sensible precaution for ensuring that the deceased’s estate is distributed according to their wishes.
There are other things you’ll need to agree such as whether third parties can live at the property, and if so, for how long. You’ll also need to decide how you’ll split the fees for buying and selling the property.

All of these issues should ideally be specified in the agreement, which is best drafted by a solicitor to ensure that it’s fair and legally binding and covers all eventualities. Joint ownership with friends should be an enjoyable experience and you wouldn’t want to lose out on friendships or money as a result of misunderstandings.

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Is There Really Zero Down Mortgages?

Yes if you could find someone such as your parents or friends to lend you 100% of the value of the house. Voila that is zero down. But this is extremely hard to come by for many borrowers.

Next try the banks, credit unions and private mortgage lenders. Do they offer a zero down program. Yes possibly.

The way they will structure a zero down mortgage is as follows:

Scenario I: they may offer two separate mortgages. One conventional mortgage for 80 percent of the market value of the house and then a second mortgage or line of credit for the remainder twenty percent. In this case there is no requirement to buy mortgage insurance. This can save you quite a bit on insurance fee.

Scenario II: they may offer one single high ratio mortgage. High ratio mortgage is a mortgage for 81 percent up to 100 percent of the house market value.

That's sounds too good to be true. But it is true. There are however certain conditions to be fulfilled:

Firstly, the mortgage needs to be insured. There are two major mortgage insurance companies in Canada. the Canada Mortgage and Housing Corporation (CMHC) - a Canada Government corporation, and

Genworth Financial- a public corporation. They will charge you a premium for the mortgage insurance from 0.5% to 3.1% depending on the ratio of borrowing to the value of the property. The higher the ratio the higher is the premium. You do not have to deal with the insurance providers as the mortgage lenders will do all the paper work for you. It is hassle free as far as you are concerned.

It is interesting to note that the interest rate on insured mortgages is the same rate as the mortgage rate on conventional mortgages. In other words you are not paying an arm and a leg in interest.

Secondly, the lenders want to make sure that you will be able to make all your monthly debt repayments, including the mortgage, credit card, car loan, consumer loan etc. You have to show to them that you have a proven track record of properly managing your debt obligations.

The lenders will also assess your job and salary and make sure as far as possible that your job is a good steady permanent job and your salary is high enough to fulfill all your monthly debt repayments.

If the above sounds like you, you have a good chance of being approved for a zero down mortgage.

The lenders will also assess the location and type of the property you are purchasing and make certain that it is in a high demand area of the city. They want to make sure that they can sell the property easily in case of default by the borrowers. They also believe that the value of the property will likely go up year by year. Same time next year hopefully some equity would have been accumulated in the property.

We are lucky that in Canada there has been little problem with high ratio mortgages. But in the States last year several high profile sub-prime lenders have got themselves in hot water for lending too aggressively to high risk borrowers. Billions have been lost but that's their problem.

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Types of Buy to Let Mortgages

Buy to let mortgages are relatively new financial products, introduced onto the market in the mid-1990s. These mortgages allow a person to purchase a house or flat with the intention of letting it. A buy-to-let mortgage allows you to obtain the financing needed to buy the property based on the rental income rather than your actual personal income.

It will be relatively easy for you to arrange the mortgage; as long as the projected rental income is greater than 130% of the calculated interest payment, you can purchase the property. In recent months, lenders have relaxed their lending criteria, and have approved mortgages for 110% or even 100% of the monthly payments. However, there may be higher arrangement fees or interest rates imposed in exchange for the reduced rental cover.

The best buy-to-let mortgage for you will depend on many factors, specially the size of the deposit and the purchase price. The deposit level added to the amount you are willing to borrow dictates the maximum purchase price.

It is important to calculate the maximum purchase price so you know what you can afford to buy and then determine the realistic monthly rent that you can achieve. There is no point looking at a property that will not attract sufficient rental income to at least cover your out goings.

Loan To Value
Lenders will have a loan to value (LTV) requirement that stipulates the amount required as a deposit against the purchase price of the property. Most lenders require at least a 10% deposit and often require 15% or more. A 15% deposit results in an LTV of 85%. IN general the larger the deposit that you provide (creating a lower LTV), the lower the risk for the lenders and the better the mortgage deal you will be able to negotiate.

If you ready to arrange a buy to let mortgage, there are three primary options in repaying the loan: repayment mortgage, interest-only mortgage, or a mixed interest and repayment mortgage.

Repayment Buy To Let Mortgages
Repayment mortgage payments consist of an amount that goes to interest payments and an amount to cover a fraction of the capital. This means that at the end of the term all the capital elements of the mortgage will be paid off so you own the property outright. In the early years of a mortgage, virtually all of your payments will cover interest while only a small portion will go to the principal.

For instance, on a £100,000 mortgage for 25 years with a 7.5 per cent interest rate, after ten years of monthly payments, you would still have £79,188 outstanding on your loan. It is only in the second half of the mortgage that the proportions are reversed, and applications to principal progressively increase until you finally pay off the loan at the end of the term.

A repayment mortgage is usually considered a good option if you can put down a large deposit so that the rental payments cover the larger monthly mortgage repayments that are required for a repayment mortgage. The tenants are literally buying your property for you, however be aware of tax laws which dictate that the capital repayment elements of your monthly mortgage payments cannot be reclaimed as a legitimate expense against your tax bill.

Interest-Only Buy to Let Mortgages
With this mortgage, you pay the interest only on your loan during the life of the mortgage. At the end of the term, say 25 years, you will have to pay back the principal. Borrowers usually pay this balance by either selling the property or by cashing in a savings plan � such as an endowment, pension plan, or an individual savings account (ISA) � scheduled to mature at the same time as when the mortgage balance becomes due. This option assures you of the lowest monthly payment, freeing up more money for your developing your property portfolio.

Most buy to let landlords obtain interest only mortgages because the lower monthly payments mean larger loans can be taken out against the property and yet still meet the lenders mortgage to rent ratios. Using the capital gain in one property to finance the purchase of another property with an interest only mortgage is a common way of building a portfolio of buy to let properties.

Mixed Buy To Let Mortgages
This type of mortgage allows you to combine into your monthly payment an amount for part repayment and part interest-only. Your monthly payment thus consists of the amount due on interest charged for the whole loan amount, plus an amount due on capital repayment, over the agreed term. You will have to provide for a repayment vehicle, either a savings or an investment plan, to settle any outstanding balance of the loan that may remain when the mortgage matures, or sell the property.

As noted above, be careful about claiming the capital repayment elements of a mixed mortgage against your tax bill as only the mortgage interest can be claimed as a legitimate expense. The tax inspectors are cracking down on this at present so you may be caught out with a claim for under payment of tax and associated penalties.

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Foreign Property Mortgages Management

If you are considering buying a holiday home abroad and you don't have your suit cases packet full of cash then you will need to consider alternative means of funding your purchase. Just like buying any property you can take out a loan in the form of a mortgage to assist you in raising the money required.

Buying a home abroad isn't always as simple as it sounds and you may have overlooked some of the inevitable complications associated with this kind of purchase. A lot of people spot an area they want to live in or even a property they would like to buy when they are on holiday; at a time when you are away from work and the stresses of your day to day life at home you may be a little less capable rational decisions than normal. Researching the location you want to buy in, the property markets and the travel arrangements should help to give you a bigger picture and help you decide whether you really do want to commit.

Have you considered what the location of your property is like in the winter? The place may be delightful in the summer but what happens in the off-season and what impact could the winter climate have on the property? Do you really want to go on holiday to same place every year? Is it convenient and financially viable to travel regularly to and from your second home?...All these things should be considered.

Thanks to the economic growth in Britain property tends to generally increase in value year on year but this may not be the case for property price trends in foreign climes, so it may be best to rent out your property when you are not using it in order to fund the upkeep of the property and to replace profits that you otherwise might gain from it's capital.

When you are shopping for a mortgage to fund the purchase of your property abroad there are several options available to you that you may want to consider:

• The first option is to extend the mortgage you have on your existing property, this can be a cheaper way to fund the purchase of a foreign property; but don't forget that if you can't keep up with repayments you might lose both properties as a consequence.
• The second option is to take out a secondary mortgage especially for your second property. There are quite a few companies and high street lender that will offer services specifically designed for buying holiday homes outside of the UK, you should compare rates between as many as you can to ensure to get the best deal at a competitive rate.
• Another option that you may want to consider is taking out a mortgage in the country that your holiday home is located. This will involve taking a loan in another currency and there are some risks associated with this kind of commitment. For instance the conversion rate; if the currency in question moves against the pound you could end up paying more for your mortgage. If you do take this option you will need to study closely past trends in currency fluctuation and asses the risks accordingly.

There can be hidden costs when buying a property abroad which you may want to cover with the loan but this will increase the amount you will have to borrow and of course pay back. You should take into account legal fees, valuation costs, taxes, and currency conversion fees.

If you don't fluently speak the language of your chosen destination you may also have to pay for a translator to serve as a middle-man for negotiations with foreign estate agents and so on. Don't forget also the costs of maintaining and insuring your home abroad, you may require specialist insurance for liability etc if you are intending to rent out your home especially if you are intending on hiring any domestic staff.

The list of expenses can be long and all these factors will have an effect on how much you can afford to pay back on your second mortgage. The key to success is to look well ahead and plan for every likely financial eventuality.

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Guide To Council House Mortgages

The Right to Buy scheme allows tenants living in a council property the chance to buy their home at a price lower than the full market value. Tenants can borrow the money to buy their property with a Council House Mortgage (also known as a Right To Buy mortgage). The discounts available vary depending on the area you live in and how long you have been in your council house for.

Most people who are going to buy their home will need a mortgage, which is a particular type of loan. There are various kinds of mortgages available from banks and building societies, so it always important to make sure you get the right mortgage deal for you.

Mortgages are generally available for a period of up to 25 years or sometimes longer, whereby the mortgage holder will pay a monthly amount that covers either the interest on the loan only, or a larger amount that pays off both the interest and a certain amount towards the capital of the loan.

When you contact your local council or landlord about your interest in the Right To Buy scheme, they will inform you of the Open Market Value (OMV) of your property. The OMV is the full value of your house: i.e. the amount you would expect to pay for that property normally. They will also let you what discount you are eligible for. From this you can work out the Right To Buy (RTB) value of your property – in other words, the amount you’ll actually pay.

The amount you need to borrow for your Council House Mortgage will depend on the Open Market Value of your property minus any discount you are eligible for minus any cash you may be able to put towards the purchase (known as a deposit).

There are lots of Right To Buy lenders who will provide a mortgage enabling you to buy your council house. Most will lend up to 95%, whilst others will lend the full 100% of the Right To Buy price.

Some specialist mortgage lenders will allow you to borrow up to 85% of the OMV of your house. So you may be able to borrow more money than you need to buy your house. Here’s an example: say your house is valued at £100,000, and you’re entitled to a 25% discount from the council.

Open Market Value = £100,000
Discount = 25% or £25,000
Right To Buy (RTB) Price = £100,000 - £25,000 = £75,000

Some lenders will offer you up to 100% of the RTB price, in this case:
100% of £75,000 = a maximum mortgage of £75,000
But some specialist lenders will offer you 85% of the OMV, in this case:
85% of £100,000 = a maximum mortgage of £85,000

As you can see, you could get an extra £10,000 by choosing a specialist Council House Mortgage company. You then have the opportunity to use this extra money to improve your new home by fitting double glazing, central heating or even a new kitchen.

Taking out a Council House Mortgage is a big step, so it is well worth taking time and looking around to find the best mortgage lender and mortgage deal to suit you.

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Overview of Capped Mortgages

Capped rate mortgages have variable interest rates that will not rise above a certain upper limit. The interest rate can rise or fall during the term of the mortgage, however it will not rise above the capped upper limit.

Interest on capped rate mortgages is usually charged at the lender’s Standard Variable Rate (SVR) and any changes to this rate will affect the amount of monthly repayments due.

The lender’s SVR normally rises and falls roughly in line with changes to the Bank of England Base Rate (BoEBR). The base rate is assessed each month by the Bank of England’s Monetary Policy Committee (MPC) and any changes to the rate are reflected in lenders’ SVRs shortly afterwards.

While capped rate mortgages have variable interest rates, unlike other variable rate products, capped rate mortgages offer the borrower some protection against interest rate rises with the “cap”.

The capped rate is an agreed upper limit that the SVR cannot exceed during the term of the mortgage, therefore any rises in the lender’s SVR below the cap will be passed on to the borrower, while any rises above the cap will not.

Conversely, any falls in the lender’s SVR below the cap will be passed on to the borrower, therefore reducing the amount of monthly repayments due. The borrower will therefore be protected against rises in interest rates above a certain point, but will benefit from any falls in interest rates.

Because of this, capped rate mortgages are ideal for borrowers who are expecting interest rates to rise and become popular during times of steadily rising interest rates. By taking out capped rate mortgages during periods of historically low interest rates, borrowers can secure themselves against excessive future increases in interest rates while still benefiting from any reductions in rates.

Capped rate mortgages may also have an associated “collar” below which the borrower’s rate cannot fall. These products are known as cap and collar mortgages. Any reduction in the SVR below the collar will not be passed on to the borrower.

It is important to note that most lenders charge an arrangement fee for their capped rate mortgages and the SVR attached to these products are usually slightly higher than for discounted mortgages.

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Right to Buy Mortgages

Under current government legislation (The 1981 Housing Act) council, housing association and housing trust tenants in the UK have the right to buy their homes. This can be a good starting point for first time buyers as homes are often available at generous discounts providing a valuable first foot hold into the property market.

House prices are currently so high in Britain many young people and first time buyers have been left behind and been subsequently frozen out of the property market altogether, this often can be one of the only feasible ways to get onto the property ladder.

After a tenant has lived in the property for a preliminary period (normally 2 years) the tenant then has the right to purchase the property often at a discounted rate. The price you are entitled to buy the property for is dependant upon the type of property and how long you have resided in it. Under the right-to-buy scheme, council tenants are entitled to a 32% discount on the value of their house after they have lived in it for two years, followed by a further 1% deduction for each additional year, up to a maximum of 60%. For flats the available discount rises to 70%. In addition to the discounts on the property discounts on loans and mortgages may also be available depending on your status and eligibility. Surprisingly some mortgage schemes can offer such favourable rates that mortgage repayments are often cheaper then tenants current rent payments so buying your council property could favour you dramatically short and long term.

Mortgages for this kind of property purchase are offered by specialist companies and vary quite dramatically to conventional type mortgages. The mortgages are usually offered for the market value of the home rather than the discounted rate that you purchase it for. For instance if you have lived in the property for ten years and purchase it with a 40% discount you will still be eligible for a mortgage of up to 70% of the properties true market value leaving you with surplus cash.

The right to buy scheme has been designed with mortgages working in this manner so that surplus cash can be mainly used for home improvements and renovations to your property. This means the potential for increasing the value of your home by making home improvements is far greater than when you were a tenant of your local council or housing authority when often houses were rarely if ever renovated or given home improvements.

If you can't or simply choose not to buy a house privately and you are eligible to have the right to buy your residence through this or similar schemes, you should seriously consider this option. It will however be advisable to seek sound professional advice before considering any purchase or mortgage arrangements.

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Flexibility & Convenience of Online Mortgage Loans

If you're thinking about purchasing a new home, or in the market for a mortgage, you may be wondering what options there are for you based on your income and budget.

Traditionally, when you wanted to buy a house, you went to your bank and you received a mortgage with fixed rates and payments.

Mortgage options available today are more flexible, but may incur increased risk for the buyer. Applying for mortgage loans online offers a convenient way too process a loan in the comfort of your own home.

Flexibility and Savings
It's never been easier to negotiate Mortgage loans online. While the conditions and terms of the mortgage remain the same as a traditional bank mortgage, the primary benefit for the consumer is the flexibility in loan applications and processing.

In addition, the stress free environment is ideal for most people when compared to a banking atmosphere. Savings are passed on to the consumers by cutting commissions, eliminating lender fees, and offering competitive rates from a pool of mortgage lenders.

Mortgage services
Internet mortgage services allow consumers to research interest rates and prospective mortgage lenders. After providing basic information such as; mortgage amount, amortization period, employment and credit history, a quote will be provided to you. The list of lenders will generally be higher if your credit rating is good.

Although there are some lenders who can service consumers with bad credit, the better your credit rating, the more likely you are to qualify for mortgage loans at competitive prices. The online mortgage process can allow for great savings over traditional lending channels.

Negotiating a mortgage can be a stressful and demanding time for anybody. The time it takes to research mortgage lenders for their products can be better spent with more productive matters.

The mortgage loans online services will find the best rate for your financial situation and hold your hand through the process.

This saves time by pre-clearing you information with the mortgage lenders, aligning the consumer with the best deal with prospective lenders who want your business.

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What is a Fixed Rate Mortgage

As the term implies, with a fixed rate mortgage the mortgage rate is fixed for a set period of time, so no matter what movements occur in the lender's standard variable mortgage rate, the borrower's arrangement is fixed and, therefore, so are the monthly fixed rate mortgage payments.

A fixed rate mortgage would suit someone who likes to know where they stand. A fixed rate mortgage, as suggested by the name, is a mortgage where equal repayments are made every month.

Fixed rate mortgages allow you to easily manage and plan your monthly expenditure - because the payment will be the same every month and you won't be affected by any rises in the base rate. If the interest rates rise above the fixed rate on your mortgage, you will see the real benefits of the fixed rate mortgage.

A fixed rate mortgage makes it easy to plan ahead, because as the name suggests, the interest rate on your mortgage stays fixed.

This means that as a fixed rate mortgage customer, even if the Bank of England Base Rate changes, the interest rate on your mortgage remains constant over a fixed period of time. This makes your budgeting easier, because you can plan ahead knowing exactly how much your monthly repayments will be.

The fixed rate period can be anything between six months and five years, but it's always best to refer to a financial services professional before deciding what period of fixed interest rate to choose.

The biggest advantage of a fixed rate is that irrespective of fluctuations in interest rates, your monthly repayments remain the same throughout the period of the fixed rate - usually six months to five years.

A fixed rate mortgage is suitable if your mortgage repayments take up a large proportion of your income as it protects you from rises in interest rates. However, you would not benefit from any reduction in the lenders standard variable rate.

Fixed rate mortgages generally incur a penalty if redeemed within the fixed rate period.

The advantage of a fixed rate mortgage is that you know exactly how much your mortgage will cost, and for how long. If interest rates on your mortgage rise, well the fixed rate will not. Conversely, however, when mortgage rates drop, your fixed rate mortgage will not drop with them.

The key benefit of a fixed rate mortgage is that you are able to accurately budget your repayments for a set period of time. In addition, fixed rate mortgages are an excellent option, if it becomes apparent that interest rates may be rising over the coming years, as you can protect your mortgage repayments against rises by choosing a fixed rate mortgage.

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How To Buy A House & Choose a Mortgage Broker

There is no doubt that the market for houses has been on fire recently. More and more people are taking advantage of low interest rates and easy mortgage loan terms to go from being renters to being home owners. With so many people entering the market, it is inevitable that questions will arise.

There are many things to consider when buying your first home. Some of the most important steps to buy a house are:

Learning the home buying process
Start by learning as much as you can about how the home buying and mortgage application process works. Read as much as you can about buying a home. Check out the many books in your local library that offer hints to first time home buyers. Read financial web sites on the internet for tips for first time home buyers. You may even want to sign up for a class aimed at first time homeowners. Many towns and cities offer these kinds of classes, and they can be a great source of information for the buyer looking for his or her first home.

Find out the pre-qualified price range
It is important to find out how much you can borrow before you start looking for a home. Talk with several mortgage lenders in your area and get pre-qualified for a particular price range. The mortgage lender will be able to help you determine how much you can borrow based on your annual income. In general, mortgage lenders recommend that all home related expenses, including the mortgage payment, insurance premiums and real estate taxes, do not exceed 28% of your monthly income.

Get Pre-approved for mortgage loan
The next step is to get pre-approved for mortgage financing. This is similar to getting pre- qualified for a price range, but it is a more formal process. You will need to supply proof of your income for the pre- approval process to move forward. Most lenders will want to see income tax returns from the past two years as proof of the income you are claiming.

House hunting
After you have been pre-approved for your mortgage loan, it is time to actually start house hunting with a realtor (find out why you need to find a realtor before buying a house?). Your mortgage lender will give you a letter stating that you have been pre-approved for a mortgage and the amount you are authorized to borrow. You will need to present this letter to the real estate agent when you get started. It is important to get pre-approved for a mortgage loan before beginning your home search. The real estate agent and real estate company will be much more willing to work with you if they know you can afford the home you are looking at. In addition, sellers will take your offer much more seriously if it is accompanied by a pre- approval letter from your mortgage lender.

Make an offer
Once you have found a home that meets your needs, it is time to make an offer on the property. You will already know the most you can spend from the pre-approval process, and you probably will have your own ideas on what the property is actually worth. In addition, your real estate agent can guide you through the negotiation process and offer procedures. A copy of your pre-approval letter will be presented as part of the written offer. This will ensure the seller that your offer is legitimate.

Negotiation process
If the seller accepts your first offer, congratulations. Your negotiations are over and you're ready to start preparing for your move. More likely, however, is that the seller will come back with a counter-offer. This negotiation process can go on for a short or long amount of time, depending on factors like the motivation of the seller, the local real estate market, and a host of other factors. The real estate agent will be a good guide through the negotiation process. After all, he or she will have been through this process many times before.

Provide copy of Purchase and Sale Agreement to mortgage broker
After the negotiation process has been completed, you will need to present your mortgage broker with a copy of the Purchase and Sale Agreement for the home.

Work to close the mortgage loan
After presenting the Purchase and Sales Agreement, you will need to work with the mortgage broker to ensure you meet all the conditions required for the closing of the mortgage loan.

Home inspection prior closing
Prior to closing, you will want to make sure to have a thorough home inspection performed by a qualified and certified home inspector. A home inspection will protect you from flaws in the construction and condition of the home that are not obvious to the naked eye. Home inspections can uncover things like foundation cracks, termite infestation and other home quality issues.

Hand over down payment
After the home inspection has been performed and the report has come back clean (or all the items uncovered have been repaired), it is time for the buyer to actually hand over the money for the down payment and sign the loan documents.

Collect the house key
After the closing of the loan, the fun part of home buying begins. Your real estate agent will hand over the keys to your new home and you can actually move in and enjoy your beautiful new home. Welcome to moving day!

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Reverse Mortgage - Good Financial Planning Tool?

Simply stated, a reverse mortgage is a loan that enables homeowners (age 62 and older) to convert part of the equity in their home into a tax-free income without having to sell the home, give up the title, or take on a new monthly mortgage payment. More and more homeowners are using this to supplement their retirement income, pay for health care, modify their home, or just get some cash for emergencies. Since this is a new product, some people have misconceptions of what a reverse mortgage is. The bank doesn't give you money and take your house. Let's look at some of the most common questions.

Are reverse mortgages for desperate people? No. It is an excellent financial planning tool used from people of all walks of life.

How do I qualify? You must be 62 or if both parties are on the mortgage, then you both must be at least 62. And, you must have equity in your home.

What if I still owe on my home? You may still qualify even if you have a balance on your first mortgage. The proceeds must be used to pay off the mortgage, first.

How much can I get? This depends on several factors such as, the age of your home, the value, your age at the time of closing, and interest rates.

Is it just monthly payments? No. You can get a lump sum, line of credit, monthly payments or a combination of monthly income and a line of credit.

But, won't I have to pay taxes on these monthly payments to the government? No. The funds are tax-free. Its your money, not additional income.

Should I seek a lawyer or receive some counseling before I get a reverse mortgage. Yes. You must be counseled before receiving a reverse mortgage. You don't have to talk to a lawyer or accountant, but it would be advised.

Who owns the title to my house? You still own the title.

What happens when I die? Once your home is passed on to your heirs, the mortgage becomes due. Your heirs may pay the mortgage and keep the home or sell the home and pay off the home. They may keep any excess sales proceeds.

What if I owe more than the house is worth? You can't. Your repayment amount will never exceed the value of the home at the time the loan comes due. Also, there are no prepayment penalties.

What if I move? If you move, then the mortgage becomes due and must be repaid.

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Factors That Affect Your Mortgage Rate

The amount of your loan can increase your interest rate if the amount financed exceeds the conforming loan limits established by Fannie Mae and Freddie Mac. The conforming loan limit changes at the beginning of each year.

Shorter loans, such as 20 year or 15 year note, can save you thousand of dollars in interest payments over the life of the loan, but your monthly payments will be higher. An adjustable rate mortgage may get you started with a lower interest rate than a fixed rate mortgage, but your payments could get higher when the interest rate changes.

A larger down payment greater than 20% will give you the best possible rate.

Down payments of 5% or less should expect to pay a higher rate as you are starting with less equity as collateral. If you've got the cash now and want to lower your payments, you can pay on your loan to lower your mortgage rate. It's a simple concept, really: In exchange for more money up front, lenders are willing to lower the interest rate they charge, cutting the borrower's payments. Closing costs are fees paid by the lender, if you don’t want to pay all of the closing costs, expect a higher rate which will pay the lender additional interest over the life of the loan.

Credit quality and debt-to-income-ratio affect the terms of your loan through FICO Score. If you have good credit and your monthly income far surpasses your monthly debt obligations, you will get approved at a lower interest rate. However, if your monthly income barely covers your minimum debt obligations, even if you have a credit report, you will not receive the lowest available interest rate.

	Increase	Decrease
Amount of Loan	Rates Up	Rates Down
Length of Loan	Rates Up	Rates Down
Adjustable Rate	Rates Down	Rates Up
Down Payment	Rates Down	Rates Up
Discount Points	Rates Down	Rates Up
Closing Costs	Rates Down	Rates Up
Credit Quality	Rates Down	Rates Up
Income Level	Rates Down	Rates Up
Lock In Period	Rates Up	Rates Down

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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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