When To Re-Mortgage

By: Robert. Wood

If you are struggling to keep up with mortgage payments, or just feel you are paying over the odds on your home loan, then re-mortgaging may be the answer. It can give you lower monthly payments and even save you money in the long-term so there is little to be lost from at least exploring the possibility. But once you have decided to re-mortgage, where do you start?

The first thing to do is to check the terms and conditions of your existing mortgage. This will tell if you are tied in to your deal and it there are any redemption penalties or early repayment charges. This will give you an idea of how much it will cost to re-mortgage, and whether it will be worth if for you to do so. If you are locked in to your current deal, it becomes a case of working out whether you will save money by switching to a different rate, or whether you are better served by staying put until the penalties expire. Do not forget that a new lender will value your house and then charge an arrangement fee on top which can cost more than £1,000.

If you have been with your existing lender for a long time then doing this research is often particularly worthwhile. Long-term loyalty to a lender is not often rewarded with a reduction in rates, and shopping around may well save you money.

Of course re-mortgaging is not only about saving money on your existing deal, and can be an economical way of borrowing money. Equity – the value of your home minus the value of outstanding mortgage payments – is your money, and many lenders will let you borrow against it. Releasing equity is often cheaper than taking out a personal loan but it is nevertheless important to be careful.

Though borrowing through your mortgage in this way may be cheaper than taking out a loan, the debt you incur will be secured on your home. If you are unable to keep up with these additional payments you could wind up losing your home, so this option needs careful consideration – especially if you are already struggling to meet demands.

As with all financial products, there are a million deals out there, all accompanied by a bewildering stream of small print. Before you sign a contract you should be presented with a key facts document which outlines all the mortgage charges and small print in plain English. Always go through it carefully, and never be afraid to ask your broker to explain exactly what all of it means

You can also help yourself by avoiding deals with extended redemption penalties. These were being phased out until recently, when a number of lenders reintroduced extended penalties to counter ‘rate tarts’ who chop and change between providers to get a better deal. Getting trapped by these extended deals will prevent you from re-mortgaging again in the future, and as this whole process has shown, there often better deal to be found elsewhere. Extended redemption penalties are often hidden in the small print of contracts so make sure you check carefully. As with anything else you are not sure about - ask.

About the Author:
Robert Wood - Compare Remortgage Deals
Article Tags: home, lender, money
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Helpful Tips For Mortgage Refinance

By: Rony Walker

Mortgage refinance can be a nightmare and a headache if you don't know which way to go. And taking a wrong turn could mean financially dreadful repercussions. With a bit of advice, the way ahead can be made much easier.

Tips You Sure Can Use

1. Take advantage of free lock-ins, preferably with a minimum of 60 days. Usually, it can take more or less forty-five days from the day of application to close. But there are times when two-month delays can occur, and even more! So look for lenders who are willing to offer you a free 60-day lock-in. But when it comes to mortgage refinance, you have to be cautious and ask all the right questions. You may be promised a free lock-in, but your loan officer might charge you a fee or a very high price for lock-in protection.

2. Use your rescission rights. If you don't like the way your deal has turned out right before closing, you can still re-negotiate or go back to square one. Don't force it if it's a deal turned sour for you. Keep in mind that you're given three working days from the date of closing to think things through. In case you decide you don't want the deal, inform the loan officer in writing before the three days are over. In turn, the lending firm has twenty days to refund your fees.

3. Little equity can still qualify. As long as you do your homework and search for a lender who's willing to underwrite small equity, then you're still in. And there are market players out there who cater to borrowers with as low as 5% home equity. Be careful, though, because you might be saddled with higher mortgage insurance costs because of your low equity mortgage refinance loan. In order to determine if you qualify, you can call the firm to which you forward your payments monthly and find out who owns your loan. If yours is owned by Fannie Mae or Freddie Mac, then you have better chances of getting approved.

4. Be wary of FREE application costs. Anything free would seem like a really huge blessing, but keep in mind that in terms of mortgage refinance, free can come with a price. Instead of focusing on looking for applications offered at zero cost, focus on the interest rates and points. You may be in for the shock of your life when huge fees land at your feet right before closing.

5. Make intelligent comparisons of interest rates. You can do this by sticking to a constant number of points. Equate each point a .25 of 1% change in the interest rate. Your goal here is to work with a lender who offers the lowest interest rate. If numbers are too confusing for you, then ask around. There are always people who are willing to share their experiences with you.

Don't be lazy when it comes to your mortgage refinance. Keep in mind that you're doing this to save some money. It's like upgrading a car to a more efficient, cost-effective model, but you don't like to get ripped off while you're still in the process of securing for the best deal. So keep your wits about. Don't be afraid to ask questions, and don't sign or give in to anything before you're satisfied that what you're doing is in line with your overall goals.

About the Author:

Arrange for a mortgage refinance the right way. Check out home mortgage rates with a mortgage calculator before signing anything. Visit WhatAboutLoans.com.

Article Tags: free, loan, refinance

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I’ve Been Paying On My Mortgage And My Balance Went Up!?

By: Drew Tyler

There are going to be plenty of surprised folks in the near future when they go to sell, refinance, or use some equity in their home and they find out that they’ve gone backwards. Some of my new clients have asked me, “How can it be that I made my $2000 monthly payment on time each month for over a year, and I now owe $15,000 more than when I started?” “I even got this great 1% interest rate,” they exclaim.

“When you got this loan, did your broker or lender mention the words ‘Option ARM’ or ‘MTA Option’,” I’ll ask them. I typically hear, “Uh…yeah…I think that sounds kinda familiar.”

Nine times out of ten, consumers will get hurt if they have various payment options. Payment options are made worse by being coupled with an adjustable rate mortgage (ARM). Very few borrowers have 1) sufficient understanding of “negative amortization” and, 2) the discipline to make the appropriate payment to avoid negative amortization.

Let me break down what I just said into a bit more detail:

The MTA Option ARM is, first of all, and adjustable rate mortgage. Lenders or brokers that sell this type of loan will certainly use “1% interest rate!” as a selling point. Unfortunately, this rate will not last. When the rate on this loan adjusts, it will be based on the monthly treasury average (MTA). Typically, there is a margin that will be added to the MTA (the actual margin on your loan should be disclosed in your loan’s note which you received at closing). Let’s say, for example, your MTA Option ARM carries a margin of 3.25. Let’s also assume that the monthly average yield on the treasury market is 5.25% when the rate is due to adjust; the new rate will be 5.25 + 3.25 = 8.5%.

The Option ARM gives the borrower payment options, hence the name. The three payment options are a normal principal and interest payment (PI), interest only (IO), or a third smaller amount that doesn’t even cover the interest charges. With the smallest payment option, the deferred interest is simply tacked onto the loan balance; this is called negative amortization. You now understand how people can make regular payments only to see their loan size increase; they’ve been making the smallest payment possible, so they can “afford” a larger home.

Now, the lender will not allow this increase in loan size to go on indefinitely. It wouldn’t make sense for them to assume the risk on a loan when the balance now far exceeds the value of the home. Therefore, once the loan amount reaches a certain percentage of the value of the home, the lender will require the borrower to begin making a normal PI payment. It is very possible that by this time the rate has adjusted from the 1% to 7.5%, 8%, or more. This rate adjustment will also severely impact the new payment. The borrower was used to paying, say, $800 per month. Now they are shocked to find out that they have to start paying $1,800 per month, and the balance on their loan has gone up $20,000.

In this case the people owe more than the house is worth, so they can’t sell it. They can’t afford the higher monthly payment. Maybe their credit was shaky to begin with, so the easiest this to do is to walk away from the home and let it go into foreclosure.

It is unfortunate that many people found themselves in these loans that can be quite confusing to consumers. Bad loans such as these are major contributors to the extreme number of foreclosures we are seeing now, and the problems in the subprime market.

I have never sold a single MTA Option ARM, and won’t (there are only a couple of instances in which one might make sense, but that is beyond the scope of this article). There are very few ethical, honest, high-quality mortgage professionals today. I am proud to be one of the few.

About the Author:

Drew Tyler is an experienced and successful mortgage professional. To gain more insight into the mortgage industry, and make yourself a more educated borrower, please visit http://www.competingloans.net.

Article Tags: loan, option, payment

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Adjustable Mortgage Rates – Current Trends

By: Kuntal Mehta

Adjustable mortgage rates as their names suggests are not fixed. They tend to vary depending on geographical locations also. That is to say that they can vary between different states, depending on the economic policies, which are prevalent in your state. The difference in mortgage rates from state is state is primarily because of the difference in interest rates. One can literally see hundreds of articles in newspapers and online resources daily, related to the varying interest rates and the reasons for the same. This is also true in the case of different states. Since the adjustable mortgage rates are subject to economic conditions, the varying economic conditions in different states may mean, different rates of interest. Interest rates tend to vary from state to state. Since interest rates are open to fluctuation, shopping for adjustable mortgage rates is a difficult proposition, when compared to fixed rate mortgages.

Whatever states you may be living in, adjustable mortgages are not for risk averts. Since the rates are subject to market conditions, you have to be ready to pay, for instance, a higher amount as repayment, once the interest rates go up. It is fine as long as the interest rates are stable or low, it becomes a risky proposition, once the interest rates go up. This is the reason why a prudent and informed decision is to be made before going in for adjustable mortgage loans.

It is important that you find out from the lender about the prevailing interest rates in your state, adjustment intervals and margins, before you go in for a adjustable rate mortgage. You can also find out from reliable resources about the basic rate and index in your state, as they are the factors that decide the rate, for particular states. One can get detailed information on the prevalent rates of interest in each state, by going through online resources, dedicated to each state. You can also find out more about the prevalent interest rates in your state from your close acquaintances. One also needs to go through the ‘fine print’ of a lender’s quote, to find out about the various intricacies involved in a adjustable rate mortgage.

Adjustable mortgage rates today are perhaps one reason for the booming real estate business. People are literally bombarded with advertisements proclaiming the lowest adjustable mortgage rates, through literally every kind of media available. Younger people, just into their mid –careers are lured by the adjustable nature of the mortgages and don’t think twice before joining the bandwagon.

Adjustable rate mortgages are based on a money market index, which decides whether your payment, goes up or down, through the life of the mortgage, depending on various economic factors. They are unlike fixed mortgage rates, where you need to pay a fixed amount throughout the life of the loan. In case you go in for an adjustable rate mortgage and if the rate of interest were to go down, your repayment will go down and vice-versa.

Adjustable rate mortgages mostly come with a ‘cap’, which decides the maximum amount a rate can change at one given point of time. The maximum amount can vary from the original rate over the life of the loan. This is where adjustable rate mortgages are considered a risky proposition. Market conditions are never so easily predictable, more so, over a long period of time. With repayment terms increasingly getting longer, sometimes, even as long as 30 years, as in the case of housing loans, one can never be sure , what will happen down the line. Therefore it is necessary; you take into consideration several factors before going in for adjustable rate mortgages.

Several lenders also offer something known as ‘conversion option’. This option allows you to convert your adjustable rate mortgage to a fixed rate mortgage, during a future point of time. Check whether your lender offers this option because it is a good thing to go in for, in case interest rates begin to rise. You can also consult your friends or colleagues or other family members. They will be able to give you valuable tips on prevalent adjustable rate mortgages. One can and should if we say so seek that advice of a qualified financial consultant or advisor, before opting for adjustable mortgage loans. Since they are aware of the latest trends in each state, they are best placed to give you professional advice.

About the Author:

KJ specializes in helping homeowners receive competitive home loan quotes. For a free Mortgage Refinancing Advice and Quotes and to find the best mortgage rates visit http://www.homeandfamilybills.com

Article Tags: adjustable, rate, rates

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Help And Advice When It Comes To Raising Finance For Property Development

Author: Sean Horton

When it comes to raising finance for property development then you should take as much advice and help as possible. The best way to get help is to go with a specialist. A specialist website will not only provide the advice needed to get the most out of your venture but can also lead to you getting the cheapest rates of interest and best deal. Interest rates for property development loans will vary on the individual's circumstances but a broker is able to search with the whole of the market place.

Finance can be taken out when it comes to residential or commercial property. Both types of finance will be based on the circumstances of the individual rather than a set rate of interest. The actual rate which is set out will depend on the type of property you want finance for and the sector at the time of going for finance. However as a guideline you can expect to pay a rate of interest between 1.5% and 2.5%. A broker will of course be able to negotiate with the lender on your behalf and will known where to go to get the best deal for your circumstances.

As the majority of people find raising finance for property development confusing a specialist website will be able to offer all the advice needed to get them started. What's more the advice and information that is offered will be free of charge by way of articles and FAQs. When you are ready to take out finance then a broker will work with the individual from start to finish and this can be the best way to get your proposal together. A good proposal will get the project off to the best of starts.

The majority of finance needed for property development projects will run into tens of thousands of pounds. As this is so the majority of loans are often taken on an interest only basis. An interest only loan means that you will only repay the interest part of the loan. However when the term of the loan reaches an end there will be the capitol left to pay. This will have to be paid in a lump sum and usually a lender will need some assurance that you do have the assets available for this. If you are willing to pay more each month for the repayments then a repayment loan would pay off the total amount borrowed during the loans term. A little of your monthly repayment would be taken off the capitol and the interest.

Loan to project costs are taken into account when it comes to the actual amount you are able to borrow. With the majority of lenders this will be in the region of 70% to 75% which means that you have a shortfall to make up. This rate will be based on the projected gross property development values, however if the property developer is experienced then 100% funding may be possible.

When looking to raise finance for property development there is much more to be taken into account. A broker can always get access to lenders you cannot which means you get the cheapest rates possible for your circumstances.

Article Tags: Mortgage Advice

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Property Development Mortgages Can Be Found Cheaper Online

Author: Sean Horton

If you are considering getting quotes for property development mortgages then give some thought to going with a specialist when it comes to getting your quotes. A broker will work on your behalf to make sure you get a loan which will be tailored to your specific needs. A property development mortgage is unlike a residential mortgage. There is no set rate of interest but instead it will depend on the individual's circumstances.

There is a rough guide to the rates that the majority of lenders offer. This is usually somewhere between 1.5% and 2.5% above the Bank of England base rate. Factors that will determine this will be what you are intending to do with the loan you are taking and how much experience you have in the property development business. By working with a broker you will be assured they will search with the entire market place of lenders to secure you the cheapest loan. However in the majority of circumstance a broker will have an idea which lender will be able to give you the cheapest and best deal.

As property development mortgages are usually taken out in the range of £150,000 plus they are taken out on an interest only basis. An interest only mortgage means that the amount you pay each month will come entirely off the interest. As a result you will be left with paying off the full amount of the capitol you borrowed once the mortgage reaches its term. However the monthly repayments would be considerably lower than if you had taken a repayment mortgage. The repayment mortgage has the advantage in that at the end of the term you are left owning nothing as the repayments are taken off both the capitol and interest. Lenders will usually offer terms from 1 year to as many as 20 or more if you are taking on a huge project.

When it comes to the amount you are able to borrow this will usually fall somewhere in the range of 70% to 75% of the purchase price and building costs combined. The loan to project costs will be based on the gross property development values. In some cases you can raise 100% but this is usually only offered to those who are very experienced when it comes to property development and who match other criteria.

Property development mortgages are easier and cheaper to obtain when you work with a broker. They can find you the best loan in the shortest time possible and the majority of lenders prefer to work alongside a broker rather than an individual. A broker can help you to put together all you need for your proposal and a validated proposal that has had the influence of a broker will get the mortgage off to the best start possible. When you have found a suitable mortgage you do have to read the terms and conditions that come with it. Hidden costs can be found here and this is where you will find how much you have to pay in total, the amount of interest added and any other costs which could be added on.

Article Tags: Mortgage Advice

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