Im interested in a Two family detached building with a ILLEGAL 1 br apartment downstairs…How does the bank look on this? I know they do not even consider the income but can it stop us from getting a mortgage on the property?
The second video on how to read a mortgage rate sheet.
In 2006 Peter Schiff tells over 1000 mortgage brokers they are about to be out of jobs. Watch how he completely nails the coming real estate/mortgage debacle before anyone else even realized it was coming.
Choosing a Mortgage Company
You will potentially be dealing with your mortgage company for the next thirty years, therefore; it is important to choose your mortgage company wisely. The best way to choose a mortgage company is to ask those around you for their experiences. Talk to friends or relatives who have recently purchased a home and ask if they were happy with the service from their mortgage company. By doing this you can begin to build a list of companies that you want to approach.
Real estate agents can also be a good source for mortgage company recommendations. Because they see people working through the financing process daily, they develop a feel for which companies are easy to deal with, and which are not as easy. Although word of mouth is an excellent way to develop a list of potential mortgage companies, it should not be your only method used. Everyone has a different financial situation, and what works for one person may not be the best choice for someone else.
Using the list of mortgage brokers that you have compiled, you can make appointments to go in and personally speak with each one. This will give you a feel for the personality and demeanor of each company. Also, if you have trouble getting your calls returned, or setting up appointments as a prospective customer, it is unlikely that your situation would improve if you had your mortgage through the company.
What to Expect from the Mortgage Company
A mortgage company is a service industry. It is important to remember this. Many people find the mortgage approval and home buying process so intimidating that they forget that they should shop for a mortgage company that they are happy with. A mortgage company should be happy to quote you specific interest rates, and let you know when you should lock in these rates. They should also tell you what the specific costs are in acquiring a loan. This means a good faith estimate on closing costs, discount and origination fees that must be paid and any other costs that may be involved when purchasing a home.
The mortgage company should be upfront about all of the technical details of the loan. They should let you know if there is any penalty for pre-payment, the amount of money required for a down payment, and what documents you will need to provide for loan approval. The mortgage company should also let you know what guidelines you must meet to qualify for a loan with them. This will include credit history, your income, employment history, your assets and liabilities and any other specifications they require.
Many states offer specialized home buying programs. The well established home mortgage company should be familiar with the various programs in your state, and provide you with information about these. If you believe that you may qualify for one of these programs, the mortgage company should help you complete any necessary paperwork and determine if you qualify.
The mortgage company should be willing to tell you how long it will take to process the loan, and if they guarantee it will be processed by a certain date. They should also provide you with any information that may slow down the loan processing process, and their method for dealing with problems.
After the Loan Closes
Once you close on your mortgage, you may never see or think of your mortgage company again. You make your monthly payment, and sometime, years down the road, you receive the title to your home. While this happens occasionally, it is not as common as you may think. You may move, and decide to sell your home. Interest rates may drop, making the decision to refinance attractive, or, you may have trouble making your monthly payment due to job loss or medical problems.
Before selling your home, you must know how much you owe on it. Your mortgage broker should be able to determine the balance of the loan and provide you with this information easily. If you decide to refinance, consider staying with the same mortgage company. Often, the mortgage company will negotiate lower closing fees or no closing costs if you refinance through the same company that currently holds your mortgage.
Finally, if catastrophe strikes and you are unable to make your mortgage payment, it is imperative that you get your mortgage company involved early in the process. They can provide you with resources for help in making or delaying payments, and let you know if foreclosure is imminent. As tempting as it is to bury your head in the sand at this time, remaining proactive can help you hand on to your home, or allow you to sell your home before foreclosure proceeding begin.
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Governor Huckabee answers a question about the state of the mortgage industry and whether the government should be involved in bailing out lenders.
My fiance and I are trying to buy our first house but our bank won’t give us a mortgage because I have a bankruptcy on my credit from 2 1/2 years ago and they say it needs to be 4 years old first. I’m wondering if there is any other company out there that will give a mortgage any sooner. Most places give you anything after bankruptcy because they know you can’t claim bankruptcy again for 7 years. Please help!
(Click “More Info” to see full video script!) www.60MinuteLoanModification visit for a free CD on Mike Rockwood’s experience modifying 5 of his own home loans - and how you can too. Ask Mortgage Modification questions on our forums at http For me, the housing market implosion became personal. If youre reading this article its likely that the crisis has become that way for you, too. So much power and so little accountability! These lenders have dirty secrets that they wish you did not know …
Offset mortgage providers are increasing in number, and it is predicted that offset mortgages will account for 30% of all UK secured lending by 2009.
What are offset mortgages?
Offset mortgages allow homeowners to link the balance on a savings and current account with their mortgage, while still allowing instant access to their money. The amount in the savings and current account is calculated on a monthly or daily basis and used to reduce or ‘offset’ the interest payments due on the mortgage. For example: your mortgage might be £200,000, but you have £20,000 in your savings account and £3,000 in your current account. This means you will only pay interest on £177,000.
Choosing the best offset mortgage
There are over 30 offset mortgage providers in the UK market and about 250 offset products in the market – but with so many to choose from, how do you choose the best offset mortgage deal for you?
You could traipse up and down the high street visiting all the banks and building societies, and obtain the latest information on their offset mortgages. Or you could save your shoe leather and consult an independent mortgage broker. They will calculate whether an offset mortgage is suitable for you. They have the latest deals from offset mortgage providers at their fingertips, and they will help clarify which is the best offset mortgage deal for you, as each lender is different. For example: two offset mortgage providers offer different deals on a mortgage of £150,000. One offers a two- year fixed rate at 5.29% and the other one offers a two-year fixed rate at 6.33%. On face value the offset mortgage provider offering 5.29% looks the better deal, however the fee for the mortgage is 2.5% of the loan value which totals £4,249. The fee on the 6.33% deal is £99. A borrower opting for the 5.29% offset mortgage deal would pay £1,430 more than the 6.33% borrower.
Who could benefit from an offset mortgage?
Self-employed people: the self-employed are often paid without any tax deduction. They save their money over the year in preparation of their tax bill and an offset mortgage offers them a handy way to obtain maximum benefit from their money, but still have it available when the tax bill is due. A Regulated Mortgage Survey (RMS) revealed 21% of offset borrowers in 2006 were self-employed, compared to 16% of non-offset borrowers. For the self-employed some offset mortgage providers combine their self cert products with offset features.
Savers: A general guide is about 10% of the value of the mortgage in savings. However in some cases, savers only need about 5% of the mortgage debt in savings to make the offset deal worthwhile.
Higher-rate taxpayers: Higher-rate tax payers lose 40% of any interest earnt on savings accounts to the taxman. With an offset mortgage no interest is paid on accounts linked to an offset, so there isn’t any tax to pay. Some offset mortgage providers allow ISAs to be linked to an offset mortgage. Although savers do not receive any interest, they avoid forfeiting their right to save up to £3,000 in an ISA per year. Once the mortgage has been paid for, then they start receiving interest on the ISA. Some borrowers have managed a 0% mortgage because they have enough in their ISAs, savings and current account, to offset their whole mortgage.
Conclusion
Offset mortgages are increasing in popularity as more borrowers recognize the benefits an offset mortgage offers them. More offset mortgage providers are entering the market, which is good for the borrower as it offers more choice, however, without the advice from an independent mortgage broker, it can be difficult to choose the best offset mortgage deal.
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WSB TV Atlanta - Illegal Aliens and Mortgage Loans part 1
When comparing mortgages there are various factors to be taken into consideration. This article covers the following mortgage specific considerations, with more to follow in part two onwards.
- Total Cost Calculation
- Overall APR
- Arrangement fees
- Portability
- Early Repayment Charge
- Term of mortgage / Age of borrower
Total Cost Calculation
For many the major consideration when taking out a mortgage is how much the monthly payment will be. This is understandable as most people know what their level of income is and how much they can reasonable afford to pay in financing a mortgage. Unfortunately, it is this assumption that can cost you dearly. All too often those applying for a mortgage look only at the interest rate and the monthly payment, making the judgement that the lower the rate and monthly payment the better the mortgage.
In most cases the opposite is true because of total overall cost. Total cost refers to the overall cost of both the monthly payment plus any combined fees for the arrangement of the mortgage, such as a lenders arrangement fee or booking fee, a valuation fee, solicitors fee etc, and based on a specific period in years.
An example based on an interest only mortgage of £100,000
A £100,000 2 year fixed rate mortgage at a mortgage rate of 4.85% with a £499 lender arrangement fee and a £300 valuation fee has a total cost of £ 10,499 over 2 years
A £100,000 2 year fixed rate mortgage at a mortgage rate of 4.59% with a £1499 lender arrangement fee and a £300 valuation fee has a total cost of £ 10,979 over 2 years
In the example above, had the lower rate been taken, then the monthly payment would have been £21.66 per month less, but the net overall total cost would have been £480 more over a 2 year period, after the addition of the higher arrangement fee. This may not seem a huge difference over two years, but if the same decision were taken every two or three years over a typical 25 year mortgage term, the cost in additional interest would come to more than £10,000 pounds. In addition, as no capital is repaid with an interest only mortgage, the outstanding balance at the end of the term would also include the lenders arrangement fees that were added to the loan bringing the balance up to around £112,000.
Overall APR
Annual Percentage Rate (APR) is the total cost of borrowing which depends on the nominal rate of interest and on whether interest is charged annually, monthly, quarterly, daily or on some other basis. Comparison of the APRs of different providers is a facility for providing a direct and fair comparison of costs since the method of calculation is laid down in the Consumer Credit Act 1974. It is possible to compare the total amount payable by the end of the mortgage term. These are important comparisons if you are concerned about the total cost of the loan as well as the monthly outlay.
A word of caution however. The APR reflects the comparison of cost over the full mortgage term. If however the mortgage is changed after say a three year fixed rate period, the APR is not a good rate to use for comparison, and you would be better to look at the ‘Total Cost Calculation’ of the mortgage product as detailed in the section above.
Arrangement fees
An arrangement fee is generally payable to the lender to reserve the mortgage funds and is common amongst all lenders. The size of an arrangement fee can vary from a couple of hundred pounds up to one percent or more of the mortgage value, which can be a sizeable sum.
Many lenders now offer lower interest rates offset by a higher arrangement fee. Don’t be misled by the attractive rate as the overall cost often works out to be more than a slightly higher interest rate with a lower arrangement fee.
You should look very carefully at any conditions associated with the arrangement fee, as in some instances the arrangement fee will be payable on or before completion, although generally the option to add the arrangement fee to the loan is available.
Some lenders expect you to pay the arrangement fee when you submit your mortgage application (and may be reluctant to refund it if you decide not to proceed with their mortgage offer). For those lenders that allow the arrangement fee to be added to the loan, you will end up paying more interest over the term of the loan.
Portability
How often do you envisage moving house in the future? Having the facility to transfer the mortgage to a new property if regular moves are predicted, may be advantageous. For example, lets say you have taken a five year fixed rate mortgage which has an early repayment charge during the five year fixed rate period, but you then have to relocate due to work commitments. Being able to ‘Port’ (transfer) the mortgage to a new property means you can transfer the mortgage without incurring the lenders early repayment penalty charge.
Early Repayment Charge
When a loan is redeemed, there may be an early repayment charge levied by the lender depending on the type of mortgage you wish to take. Fixed, discounted and tracker mortgage rates usually charge a penalty of between 3% and 5% of the original loan amount if the loan is redeemed at any time during the fixed, discounted or tracker rate term.
Nowadays, it is common practice to waive any early repayment charge when an existing loan is transferred to the borrower’s new property, especially where a fixed rate mortgage is involved. This provides continuity to the borrower, and helps retain the business and existing client for the lender.
Term of mortgage / Age of borrower
Whichever method of repayment is selected for your mortgage, the shorter the term, the more expensive will be the monthly cost. If total peace of mind is required then a standard capital repayment mortgage should be selected. This is the only type of mortgage that guarantees that the mortgage will be paid in full if all mortgage payments are made.
When choosing either a Pension, ISA backed mortgage, contributions look more attractive over longer terms as the tax incentives have a compounding effect on the investment returns in the fund and will, therefore, generally become more competitive. There are no guarantees however, and fund values can go down as well as up. When considering a pension mortgages your age and the term of the mortgage are particularly important considerations as pensions are unable to provide any capital to repay the loan until at least age 50. For instance a first time buyer aged 22 would end up with a term of at least 28 years if the pension option was chosen.
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