Reverse Mortgage Loans III

Go to Part IIII of this Wiki

Reverse mortgage great for those who dont want to move
Pub Date: Fri, 16 May 2008 10:00:00 EST
One way to find out if a reverse mortgage loan is right for you is to look at your future plans for your home. Do you plan on staying there for a long time? Or do you plan on moving or selling in the near future? If your answer to the first question was yes, then a reverse mortgage loan might be the perfect fit for your lifestyle. One of the benefits of the loan is that you don’t have to repay it as long as you live in the house. But if you plan on moving or selling the house, then your loan becomes due and you have to start repaying it. Since you don’t have to make monthly repayments on reverse mortgage loans, qualification is relatively simple, as you don’t need a minimum amount of income and bankruptcies are not an issue.

Declining Market requires 5 percent down
Pub Date: Fri, 16 May 2008 10:00:00 EST
Earlier this year, Fannie Mae implemented a policy of requiring that buyers make a 5% larger deposit on their home than the original loan program guidelines called for if the property is designated as being in a “declining market.” Unfortunately for many buyers though, there is no list of areas, counties, zip codes or any area that states where there is a declining market. The only way to find out if an area is in a declining market is with the property address, through Fannie Mae’s automated underwriting system. One other way is when the appraisal is done if the appraiser finds that the property is in a declining market. This “D market” designation means that the buyer will have to come up with 5% to put down on the property.

Seniors delaying retirement
Pub Date: Thu, 15 May 2008 10:00:00 EST
According to a new study by the AARP, seniors 45 and older are delaying retirement. The report finds that 6 out of 10 people are having trouble making ends meet, and some can’t even pay for their medication. The situation is so bad for some retirees that 11% of them are going to charity services for financial help. Social Security benefits and pension are sometimes not enough to keep up with the rising cost of living. It’s great that some supermarkets and businesses offer a discount to seniors on some days, because they need all the help they can get. Many seniors look into a reverse mortgage loan to help with the financial situation. The loan allows them to access the hard-earned equity that is locked in their home. It can be looked at as extra income, but the best part is that it is tax-free and won’t affect Medicare benefits.

Fixed Rate Loans build equity slowly
Pub Date: Thu, 15 May 2008 10:00:00 EST
Fixed-Rate Loans seem like a good deal: fixed monthly payments that will never increase, and about 40 or 50 years to pay it off. The problem with 40-Year and 50-Year Fixed-Rate Mortgages is that they build up equity too slowly. Of course the benefit is that the borrower could lower his monthly payments by stretching out the terms of the loans, but the saving are really not that significant. On a $300,000 mortgage, the savings between a 40-year and a traditional 30-year fixed rate mortgage is roughly $80. Definetely not worth the extra 10 years worth of interest. Borrowers who take out fixed rate loans pay more interest anyway, typically a quarter of a point higher than the more traditional alternative.

Will mortgage crisis affect prime loan market
Pub Date: Wed, 14 May 2008 10:00:00 EST
The home mortgage crisis was originally focused on the subprime home market and its delinquencies. However, the home mortgage default and figures released by the Bush Administration for February show that the defaults are spreading into the prime loan market. Prime rate mortgages are given only to borrowers with exceptional credit. About 2.3% of prime rate mortgage holders were at least 60 days late; this is up 1.4% from a year ago. Some speculate it might be because economic news since the first of the year has been negative: unemployment is up, state welfare is spiking upwards with applications, and every business in the tourism states (like Florida, California, and Nevada – coincidentally also the hardest hit by foreclosures) are affected by the lack of tourists. 

Interest Only Mortgage not very economical
Pub Date: Wed, 14 May 2008 10:00:00 EST
An Interest-Only Mortgage is not the greatest and most economical way to afford a home. There are different products that offer interest-only payments like the Three-Year, Five-Year, Seven-Year, and 10-year Interest-Only Option on an ARM. If you can’t afford a home, but can afford making interest-only payments, this option is still not a good choice3. Once the first three, five, seven, or 10 years (depending on the product you choose) is over, the monthly payments will quickly balloon to cover the remaining interest and all of the premium payments on the mortgage. The new payment is likely to break the average family’s budget, especially if the homeowner could only afford the interest-only payments to begin with. Unable to make the monthly payments, borrowers would then have to spend a few thousand dollars to refinance, or sell the house.

Realtors should focus on foreclosures
Pub Date: Tue, 13 May 2008 10:00:00 EST
It’s a well- known fact that eventually, the real estate market will reverse itself and home prices will settle to pre-housing boom prices. But while we are in the recovery period, many people have lost their jobs and many more are barely holding on to theirs. Realtors for example, used to make sales just by going to work and answering the phone. Those days are over, and many are having a very hard time getting the phone to ring. Other Realtors, especially the ones who have worked through previous housing slumps, are bringing their attention to the rising number of foreclosure properties. They see it as a step towards stability, meaning they must get through the foreclosures before the market can improve for everyone. 
 

Why you should avoid ARMs
Pub Date: Tue, 13 May 2008 10:00:00 EST
Like the Multiple-Choice Mortgage and Cash-Out Financing, Adjustable Rate Mortgages (ARMs) should also be avoided. ARMs are pretty popular, but they are also tough on budgets, as the monthly payments are variable in just one to three years. With One-Year and Three-Year Fixed Rate ARMs, borrowers lock in a slightly lower interest rate for that amount of time. Then the product readjusts every year in tandem with highly volatile short-term interest rates. The downside? Since 2004, the one-year ARM has increased two percentage points from around 4% to 6%. This translates to a homeowner with a $300,000 mortgage paying $4,400 more than when he or she first took out the loan. The risk of the mortgage readjusting upward is too great to justify the minimal savings, because now there is only a half a percentage point difference between the interest rate on a 30-year fixed and the one and three-year ARM. Your best bet is to lock in the interest rate on a 30-year fixed-rate product and never have to worry about what the Federal Reserve will say at its next meeting.

Why house prices rise or fall
Pub Date: Mon, 12 May 2008 10:00:00 EST
During the housing boom a few years ago, it didn’t matter if the door was painted cherry red or electric yellow, most houses were surging in value. It is generally true that house prices rise over time, the main reason being that there is only a limited amount of land which can be developed. Also, economies tend to grow and as we become more productive, our per capita incomes rise and our spending power climbs. As a result of limited supply and rising demand, house prices tend to go up. That real estate market also sold a false security, that house purchase is risk free since over the long term the prices tend to rise. But today’s real estate market is a little different, as the economy isn’t growing and as a result, housing prices aren’t going up. It will take a while for the market to catch up and neutralize to normal house prices, ones that aren’t inflated like the ones during the boom.

Heirs benefit from home appreciation
Pub Date: Mon, 12 May 2008 10:00:00 EST
One of the great benefits of a reverse mortgage is that the borrower can never owe more than the home’s value. It is comforting knowing that you wouldn’t have to take the fall for declining home values, especially in today’s real estate market. But what if the value of the home exceeds the amount of the loan? For example, if in a few years from now, your home appreciates and is worth more than when you took out a reverse mortgage, where would the difference go? In that case, the money would go to your heirs or estate. So even though your heirs might not be able to keep the house itself after you pass, they still get to keep the appreciation of the house. 
 

Understand a reverse mortgage before making a decision
Pub Date: Fri, 09 May 2008 10:00:00 EST
It is very important to thoroughly educate yourself about all aspects of a reverse mortgage loan. Many seniors who have one are satisfied with their decision, but then again, everyone’s situation is different. There are many fees associated with a reverse mortgage that you should understand. If you are currently in negotiations with a lender, make sure you ask every possible question about what you are signing so that you know almost as much as they do. Did you know that most reverse mortgage loans tack on a $35 fee each time a check is mailed? If that is the case with the product you are looking into, then maybe taking the money as a lump sum may be a better choice. Talk to someone who cares and who has your best interest in mind before you make any concrete decisions.

Avoid Cash Out Mortgages
Pub Date: Fri, 09 May 2008 10:00:00 EST
Another type of mortgage that should be avoided is the Cash-Out Financing. These products are also called 103s, 107s, and 125s. The problem with this loan is that, as this housing bust has proved, you can’t count on home appreciation to build equity. Lenders allow homeowners to take out a mortgage for more money that it is actually worth, usually an additional 3%, 7%, and even 25%. A few years ago, this type of loan wasn’t considered risky, as the real estate market was booming and home prices were moving higher at a fast pace. But today, as home prices are on the downward slope, many end up owing much more than they expected. In addition, lenders will often charge 50% more for one of these highly leveraged products.

House will consider new foreclosure bill
Pub Date: Thu, 08 May 2008 10:00:00 EST
The American Housing Rescue and Foreclosure Prevention Act will be considered by the House this week. Part of the act would include a voluntary FHA program which would provide mortgage refinancing assistance to allow families to stay in their homes, protect neighborhoods, and help stabilize the housing market. Some other highlights of the Act include making permanent the temporary loan limit increases in the economic stimulus bill, bringing the Federal Home Loan Banks (including Fannie Mae and Freddie Mac) under a single independent regulator with broad safety and soundness powers, including conservatorship and receivership authority. For reverse mortgages, this act would expand the program by authorizing a nationwide loan limit equal to 132% of the current conforming loan limit, capping and reducing loan origination fees; and adding consumer protections. Are these reforms enough to prevent foreclosures? Read the rest of the bill and decide for yourself.

One mortgage to avoid
Pub Date: Thu, 08 May 2008 10:00:00 EST
For first time buyers trying to take advantage of the foreclosure market, it may be smart to avoid certain types of mortgages. One of the mortgages that should be avoided is the Pay-Option Adjustable Rate Mortgage (ARM). It is considered the riskiest mortgage around and the main reason to avoid it is because you could end up owing more than you borrowed. The product offers borrowers a low initial interest rate and then allows them to choose one of four monthly payments, the lowest which doesn’t even cover all of the interest due on the mortgage. It’s too dangerous to make the minimum payment because after a few months, a homeowner could owe more to the bank than was initially borrowed. 

Reverse mortgage loans on the rise
Pub Date: Wed, 07 May 2008 10:00:00 EST
A key determination as to how much you can receive with a reverse mortgage loan is this: the older the borrower and the more valuable the home and the less owed on it, the more money is available. HUD statistics show that more 107,000 reverse mortgages were issued in 2007, up 1,280 percent from 2001. It is estimated that numbers for 2008 are on pace to increase about 3 percent from 2007. Seniors are hearing about reverse mortgages and are really accepting it. In the 1980s when reverse mortgages had just hit the market, they gained a bad reputation as predatory lenders tried to get borrowers to invest their money in unstable places. Now it is more secure to get a reverse mortgage, but it is still important to gather information about it and really understand it before deciding if it is right for you.

Predictions of the foreclosure market
Pub Date: Wed, 07 May 2008 10:00:00 EST
What is the future of the foreclosure market? Credit Suisse estimates that over the next five years, an astounding 6.5 million families, or one out of 8 American homeowners will end up in foreclosure. This estimate takes into consideration the 1.2 million loans already in foreclosure in addition to the coming flood of new foreclosures which could put 12.7% of homeowners with mortgages out of their homes. You might be wondering when all this will be over. Credit Suisse predicts that housing prices will fall by 10% in 2008 and 5% in 2009. After 2009, the home prices will grow by 3%. If their prediction is close to what might actually happen, then its obvious 2008 is the worst year for sellers, and things might be slowly looking up after New Years.

Seniors with or without mortgage can qualify for reverse mortgage
Pub Date: Tue, 06 May 2008 10:00:00 EST
According to the latest census data from 2000, 74.9 percent of owners 70 and older had no mortgage on a primary dwelling. Sometimes there are people in the middle of their working years that are lucky enough to have their homes paid off. These figures represent the ones banks would love to serve, and they probably did not get caught up the housing boom. With a houseful of equity, and a qualifying age (62 and older), many seniors qualify for a reverse mortgage Although you can still qualify if you have a mortgage, there still needs to be substantial equity to get a reverse mortgage. The reason is that a reverse mortgage is a loan against your home, which takes the equity and pays it to you. Without equity in your house, there is no money to be paid out.

Access equity in your home tax free
Pub Date: Tue, 06 May 2008 10:00:00 EST
One of the greatest benefits of a reverse mortgage loan is that it is tax-free. Seniors can draw money out of their home, which is usually their most valuable asset, without any tax consequences. With falling property values all over the nation, seniors can get more out of their home without selling it at a loss, and at much lower interest rates compared to home equity loans. Three years ago it may have been easier to sell a home and move. But today, times are rough and with property declining 15 to 25 percent locally, seniors are doing what they can to stay and keep their homes. The money that comes from a reverse mortgage loan can be used in any way, there is no limit on how you can spend it. Also, it isn’t considered an extra income so it doesn’t affect your Social Security or insurance benefits.

Seniors coping with rising prices
Pub Date: Mon, 05 May 2008 10:00:00 EST
How are seniors on a fixed income coping with the rising cost of food, gas and many other everyday staples? Some are relying on families to make ends meet, others are thinking about selling their home, just for extra money. Still, other seniors are looking into reverse mortgages. This type of loan is designed just for seniors who are 62 or older and offers homeowners the ability to borrow money against the equity of their houses. You can choose to receive the money as a lump sum option, a credit line, or as monthly payments. A reverse mortgage loan is a great option for some seniors, but it is wise to do thorough research before making any financial decisions.

Reverse mortgage will never exceed home value
Pub Date: Mon, 05 May 2008 10:00:00 EST
Great news for seniors who have a reverse mortgage protected by the FHA, or for those who are thinking about getting one: the meltdown in home values does not affect your loan! One of the many dilemmas affecting homeowners is that as their home’s value is going down, their mortgage begins to exceed the value of their home. This presents a major problem, because even if they are able to sell their home, they won’t get the same amount that they paid for it, and probably not even enough to cover their mortgage. That is one of the great benefits that reverse mortgage loans (HECMs in particular, as it is backed by the FHA) have over their counterparts that people will never owe more than their home is worth. If the home eventually loses value and the outstanding value of the loan is higher, the homeowner and the lender is still fully protected and will never have to pay the difference.

Jobless rate falls but economy is still troubled
Pub Date: Fri, 02 May 2008 10:00:00 EST
The problematic economy that we are facing today is affecting everyone. Aside from affecting grocery and gas prices, this falling economy is stripping many hard workers of their jobs. The Labor Department reported that in March, a total of 81,000 people lost their jobs. Economists were predicting that for April, about 75,000 more would lose their jobs, but thankfully that number was much lower: 20,000. That is still a significant number, it means that in the past month 20,000 more people are jobless. As of April, there were 7.6 million people unemployed; this number is up from 6.8 million last year. This economic situation seems like a domino effect: a severe housing slump, hard to get credit and financial turmoil have forced people and businesses to be more cautious in their spending. In turn, that hurts the economy. 

Choosing a reverse mortgage lender
Pub Date: Fri, 02 May 2008 10:00:00 EST
When choosing a reverse mortgage lender, it is important to review and compare certain factors. For example, it is important that lenders provide different fixed and variable interest rate options to choose from. This shows that the company realizes there is no formula that will suit everyone’s needs, as everyone’s situation is different. It is also important that the lenders are understanding and don’t try to pressure you into investing the funds into an annuity or any other scam. If your lender refuses to answer any questions or explain any unfamiliar terms, then it is probably best that you find another lender. You should be completely comfortable with your lender and feel secure when making an important financial decision. Contact us today and we will lead you in the right direction, where your needs come first.

When will reverse mortgage limits increase ?
Pub Date: Thu, 1 May 2008 10:00:00 EST
Many seniors are waiting for an increase in loan limits for reverse mortgages. The Economic Stimulus Act of 2008, which just recently passed, included a temporary increase in loan limits for all “forward” mortgages, but left out Home Equity Conversion Mortgages (HECMs, which account for nearly 85% of the reverse mortgage market). Currently, the loan limits for HECMs are the existing “floor” of 48% of the conforming loan limit or $200,160, as well as the “ceiling” of 87% or $362,790. Those numbers in between are limited to 95% of the local median home value. The problem is that many seniors are waiting for the higher loan limits so that they could obtain a higher reverse mortgage or refinance an existing one. They will have to wait for the FHA Modernization Bill to pass, as it would increase the loan limit for HECMs to a single national limit of $417,000. 

Is housing market to blame for commodities running out?
Pub Date: Thu, 1 May 2008 10:00:00 EST
People around the country are beginning to worry about what may be a food shortage. There are many contributing reasons as to why this is possible. Traditionally, there has been enough food for almost everyone on the planet. But the world is bumping up against maximum capacity in many commodities like oil, which is getting more expensive to get to. There is only so much food available and with the value of the US dollar spiraling downward over the past few years, other countries are now able to out bid the US for commodities we need. The plunging economy as a result of the housing market really needs to get back on its feet before our everyday necessities get any more expensive. Americans have been known to overspend, but are we ready to face reality? 

Foreclosure filings continue to rise
Pub Date: Wed, 30 Apr 2008 10:00:00 EST
Foreclosure filings continue to increase all over the country, and in Alachua County, Florida, it has gone up by 175%. Many reasons contribute to delinquent mortgages: loss of income, job loss, or health reasons that make it impossible to make the monthly payment. The rising insurance costs, property tax rates, and rising cost of everything from gas to food just doesn’t help. Most situations involve people who live in their home as a primary residence, not an investment property. Unfortunately, some situations involve seniors on a fixed income who can afford their mortgage, but increasing insurance and property tax payments make it unaffordable and impossible to make the mortgage payments. In this situation, a reverse mortgage loan may help by providing funds from the equity in their home so that the seniors can pay for the mortgage, insurance, property tax, and they won’t be in trouble if the rates increase again, because they will have enough. Florida’s foreclosure filing on one of every 282 homes is up 112% from a year ago which is the third worst foreclosure rate in the nation, behind Nevada and California.

Foreclosures driving down neighboring property values
Pub Date: Wed, 30 Apr 2008 10:00:00 EST
It is interesting how everything in the housing market is connected. As the real estate market is already down, when foreclosed or short-sale homes sell for less, this drives down neighboring property values and home equity. At the end of the day, that affects everyone’s ability to borrow. The credit crunch resulting from the housing downturn isn’t getting any better, as more people are paying their mortgages with credit cards, and this risk to the credit markets has led to higher rates. The most important thing for debtors is to contact their lenders, and then contact a HUD-approved counseling agency. They may be able to work with homeowners and their lenders, and state housing money may be available. 

Types Of Mortgage Which One Is Right For You
Pub Date: Tue, 29 Apr 2008 10:00:00 EST
So, you are planning to buy your perfect house or commercial property but don’t know what your options are in the mortgage department. Well, there are tons to choose from and they are all tailored to your specific needs. If you have a great job and money isn’t an issue, you can make higher payments and possibly pay off your loan in as little as 10 to 15 years. For many people though, they don’t have great jobs and need to best plan for their budget. Most mortgage differ in just a few ways. They may require balloon payments up front or toward the end of the loan period or they might be influenced monthly by ever changing interest rates. Fixed rate loans are very popular because you are guaranteed to have the same bill every month regardless of interest rates. If you are on a budget, this is a great option. Adjustable rate loans differ from fixed rate as they fluctuate with current interest rates. Don’t worry though, they usually have a cap so you won’t be paying twice as much as the month before. The cap is usually just a couple percent. These are just a couple of popular types of home loans. If you plan on getting a commercial loan, you will have many more mortgage types available. Some of these have very low payments for the first year until your business is established and they they increase so you can pay them off quickly. The best bet is to research the different types of loan you are interested in and discuss them with your broker. 

Is Housing Market Stabilizing
Pub Date: Tue, 29 Apr 2008 10:00:00 EST
In this economic downturn, hard-working consumers are really getting hammered. Multiple factors are affecting them, like slow economic growth, job insecurity, home values going down, and paying more for gas and food. It seems that the country’s housing market could determine the shape and length of the current economic situation. Hopefully it won’t be much longer, as some stability might be coming from the housing market. The median U.S. home price rose to $200,700 last month from $195,600 in February, according to the National Association of Realtors. The Office of Federal Housing Enterprise Oversight report that the home-price index showed prices rising a seasonally adjusted 0.6% in February from January, which shows the first monthly gain since June. Let’s hope that this trend continues and that home sales will stabilize soon. 

Subprime Mortgages
Pub Date: Mon, 28 Apr 2008 10:00:00 EST
It sounds terrible. Subprime Mortgage. But in reality it has many different benefits that other loans do not. A subprime loan typically has a higher interest rate than other loans because the people who need it usually have a poor credit history or very low credit score. These high interest loans do make people pay a lot more for a house they want but actually have some benefits. There are many financial institutions that specifically deal with subprime lenders. This means they know how to help those with poor credit.

Some banks also offer prime and subprime mortgages because they know their community well and some areas just don’t have the types of jobs that prime mortgages will need to ensure their monthly payments. It can be embarrassing to go to a local bank if you live in a relatively small town so you may want to choose a subprime only lender. A good benefit of a subprime mortgage is that you don’t have to take the time to raise your credit score. This can take years of payments and credit building and many people just don’t have the time for all of that. They realize they made some late payments here and there but are past that and want to own a home. Not everyone with bad credit got it by not paying their bills on time. Many times, wives and husbands who are irresponsible can annihilate their significant other’s credit and even after divorce, it’s still bad. A subprime mortgage to many people is a chance for a new beginning.

Signs Of Good Mortgage Brokers
Pub Date: Mon, 28 Apr 2008 10:00:00 EST
A good mortgage broker is something every potential homeowner or experienced real estate investor needs to have on their side. There is no shortage of brokers out there and they come in all shapes and sizes with various personalities. What people don’t realize is that if you have a very helpful and friendly broker, it can really make a difference in your entire attitude about getting a loan. When you have a good mortgage broker, you will usually have a pretty stress-free loan process and they will be able to explain it all to you simply and easily.

So how do you know if you have a good broker? There are some very simple things that will tell you right away if your broker is good or not. One of the best ways to judge a mortgage broker is just with common sense. Does your broker like to talk and have an excited attitude? That can definitely improve the experience for you but there are other factors to consider. Punctuality is very important and someone missing dates can be infuriating. If your broker says they will call at 6 pm and they miss it every time, it might be a problem. You really want someone very punctual. The broker should be able to list off mortgages and programs by heart as well. It’s not a good sign if they are flipping through a book every few minutes to look up terms and arrangements. A good way to tell if your mortgage broker is good is to make sure they are willing to answer any question imaginable without getting frustrated. Ask them something a couple times in one sitting just to see what they do. If it’s obvious they are annoyed and don’t ask why you repeated it, they might not be paying attention and just reciting some spiel they use on everyone.

Private Mortgage Insurance
Pub Date: Fri, 25 Apr 2008 10:00:00 EST
When you first buy a home, it can be very frustrating and complicated but it can also be extremely exciting. There is no feeling like being able to call a home your own and have the freedom to decorate it and change it any way you want. Do you want old wrecked cars on your lawn? Go for it. Finally build a duck pond of your own. Sure, it’s YOUR house and you can do what you want. Unfortunately, life happens and sometimes you won’t quite be able to make your loan payments all the time. This is where private mortgage insurance comes in. When you first buy your home, most lenders expect you to pay a large down payment of at least 20 percent or get some kind of insurance loan protection program that’s called private mortgage insurance. This insurance coverage will protect the lender just in case you are ever unable to make your monthly payments. This insurance doesn’t cover anything else though. If your home catches fire or something, you better hope you have some other types of insurance. This is only to cover you if you fail to make your payments. Even if you don’t need it, it doesn’t hurt to get private mortgage insurance just in case. No job is 100 percent reliable and if you have to relocate or change jobs, you won’t have to worry about your house payment if you happen to go a week or two without pay. It’s better to be safe than sorry.

Second Mortgage What Is It Exactly
Pub Date: Fri, 25 Apr 2008 10:00:00 EST
Everyone has heard a friend or relative complain about having to take out a second mortgage but don’t really know what that means. Let’s find out! The real term for this is called a home equity loan. This is a common loan type that homeowners can use for whatever they want. A home equity loan requires that you use your house for collateral just like a normal home loan. There are different types of home equity loan out there and you can always use the money for whatever you want. College, bills, and home repairs are some common uses. You will need outstanding credit to be approved for this kind of loan though. A closed end type home equity loan gives you a big chunk of money immediately and you can’t get another loan until this one is fully paid. The amount you can get depends on factors such as how much your home is worth, your income, credit score, and similar things. A closed end loan usually comes as a fixed rate type and allows you up to 15 years to pay it off. An open ended home equity loan is a little different. This loan will let you borrow money whenever you have a need for it. The loan lender will set up a line of credit that is pretty much based on all the same factors as the closed end loan. These usually have an adjustable rate and you can make payment for 10, 15, or even 30 years. So why are these called second mortgages? Because you are adding yet another loan payment that uses your house as collateral and adding another monthly payment. Though tempting, it can cause you a lot of problems in the future. 

Fixed Rate Mortgage
Pub Date: Thu, 24 Apr 2008 10:00:00 EST
A fixed rate mortgage is one of the most common types of home loan in the USA. It’s very easy to understand and set up and helps people know exactly what type of commitment they are making financially. It has one main benefit over all other types of loan. Stability. No matter what happens with fluctuating interest rates, you are guaranteed the same payment each month for the entire term of your loan. This really helps give people peace of mind because they don’t have to wonder if their next loan payment will be higher than the previous one. Some people are very meticulous when it comes to bills and don’t want to feel like they are gambling on the real estate market. This is what helps make a fixed rate mortgage so appealing. The payments don’t change so you have a much better chance of being able to save up money for home repairs, vacations, and new purchases. This loan is also good for people who have to travel a lot. Knowing your payment will be the same when you get back from a far away place can really help your state of mind. Most lenders who will give you a fixed rate mortgage will give you the option to pay off some of the principal early without any penalties. This can be a great way to lower your overall amount of payments or decrease the monthly payments. The interest you pay all depends on the real estate market when you get that loan. It can help to talk to a real estate agent who can recommend if you should buy now or wait for a more suitable time. Copyright© StealTheseArticles.com

Factors Of Mortgage Approval
Pub Date: Thu, 24 Apr 2008 10:00:00 EST
When applying for a mortgage, the lender you have chosen will take many factors into account. These factors not only influence what type of loans you can qualify for but also what your monthly payments will be and how many years you will take to pay the loan off completely. Knowing these factors and doing what you can to improve them all can make a tremendous difference when you go and see your lender and start the process that will get you your new property. Some of the basic factors apply for just about any loan but are especially important if you are trying to get a mortgage. The big one is, yep, credit. How good is your credit? Get copies of all of your credit reports from the 3 major consumer reporting companies and check each one for errors. Many times they have errors that can be corrected in just a few weeks and that helps boost your score. If you have credit cards, pay them off as well as any other outstanding bills. A nice large down payment will always improve your chances of being approved. If your credit isn’t completely top notch, the bigger the down payment, the more likely you will get improved. If your credit is great, you can still put down as much as possible to lower the monthly payments or decrease the total loan time. Above all else, don’t lie to your lender. If you tell them you are a supervisor of a power plant and they find out you are a UPS man who has only had the job for 6 months, you will be totally screwed. Be honest and your lender will do their best to work with you. Even if you take out a reverse mortgage loan, it is important to be completely honest about your income situation because lenders may help guide you in the right direction. Copyright© StealTheseArticles.com 

Prime market for pitching reverse mortgage
Pub Date: Wed, 23 Apr 2008 10:00:00 EST
Marketing for reverse mortgages are expected to get more intense as the housing market continues to fall. About 80 percent of seniors own a home and many seniors have equity in their homes; a study by the National Reverse Mortgage Lenders Associations estimated that homeowners 62 and older had about $4.3 trillion in home equity. With the market situation being ripe to sell reverse mortgages, many predatory lenders will take advantage of the situation. This is why it is important to really understand if a reverse mortgage is right for your situation, and that you are not being rushed into some quick-fix investment scheme. Borrowers must fully understand all the fees that come with a reverse mortgage loan, before signing any documents.

Reverse Mortgage Alternative
Pub Date: Wed, 23 Apr 2008 10:00:00 EST
For seniors between 65 and 85 who want to access the equity tied up in their homes, it seems that they have to refinance or take out a reverse mortgage loan. But there is another way. EquityKey is an option designed to tap the billions of dollars of equity tied up in seniors’ properties. Unlike a reverse mortgage, EquityKey’s equity share program does not charge interest on money taken out of the home. Instead, the future appreciation of the property is split between EquityKey and the homeowner based on its present market value. Click here to learn more about EquityKey and its benefits. 
 

What Is A Mortgage
Pub Date: Tue, 22 Apr 2008 10:00:00 EST
Every homeowner knows what a mortgage is but do you? Many people have heard that term on movies, television shows, and commercials but don’t really know what it really means. To put it simply, it’s a loan where you are using your house as collateral. The difference between this and a normal loan is that your house becomes your backup just in case something happens and you are unable to continue payments. Mortgages come in many different forms depending on what you are looking for with regards to financing. Some examples are the fixed rate and adjustable type. These differ in how the payments are set up and whether or not each payment will be influenced by current interest rates across the country. Before you decide to buy a home, it’s very beneficial to do as much research as possible. You should try to learn about each different type of mortgage and what the payments actually consist of. Do they change each month? Should you put a lot of money down before setting up payments? It can be very complicated and stressful for almost anyone due to the sheer ending cost of it all. Owning a home is a dream for many people and you will want to make sure you are well educated on home ownership before you even speak to a broker. If you already own a home, but are looking to tap into the equity, a reverse mortgage loan may be an option. Click here to learn more and find out if a reverse mortgage is right for you.

Adjustable Rate Mortgage
Pub Date: Tue, 22 Apr 2008 10:00:00 EST
Another common type of home loan is the adjustable rate mortgage or ARM. With this type of loan, the interest rate will fluctuate depending on the 6 different real estate indexes. The interest rate changes so the lender of the loan gets a proper margin. That’s due to the fact that the indexes influence the cost of funding that loan in the first place. Basically, your lender lets you take on a little bit of the interest risk instead of just the lender like in a fixed rate loan. This type of loan can be great if the interest on your home loan consistently falls for a long time. You don’t have to worry that much about the interest rates because even if they jump drastically, there are limits on how much your payments will increase. These limits are called caps and mean that no matter the size of the interest jump, you won’t pay more than a certain increase in a certain time period. As an example, let’s say a lender gives you an adjustable rate mortgage. It has a 1 percent cap for any 6 month time frame and a 4 percent total cap for the entire loan. Your payments can increase as much as 4 percent at the maximum until the loan is paid off. That’s not too shabby if you consider when interest drastically drops, you save a ton of money. Every area in the country has different interest rates so you should read up on it before you opt to go with an adjustable rate mortgage. Local newspapers usually include interest rates and predictions so that is a great place to go to keep an eye on things. If you already own a home, but are looking to tap into the equity, a reverse mortgage loan may be an option. Click here to learn more and find out if a reverse mortgage is right for you.