Bitcoin Pays a Mortgage
By [http://ezinearticles.com/?expert=Mark_A_Norton]Mark A Norton
Once upon a time in America, owning your own home was the holy grail of the American Dream. Houses were expensive, sure, but with a stable job and a fixed-rate loan from the bank, you could plan your future and expect to have a place to be in your retirement even if you had to cut back financially in other ways.
That was before the hollowing out of the American job market made it increasingly difficult to get and keep a well-paying job, or that banks started marketing 'refinancing' to let people live off the 'excess equity' in their houses, or that banks started selling subprime mortgages to allow people to buy into more house than they should have been able to afford - sustainable as long as interest rates didn't rise!
And then the subprime market collapsed and undermined the whole economy, an event the world has still not only still not recovered from, but with another collapse increasingly looking like it's on the way. There is little wonder that according to some reports 64% of Americans no longer think that owning your own home is a good investment. There has been some recovery to the housing market, but at least some of that movement is from wealthy people buying properties that they mean to rent - the Rich Dad, Poor Dad strategy of buying properties to rent is no longer a path to move up, but just another way for those who are already wealthy to keep hovering up the big bucks.
On this Fourth of July weekend, at least one individual no longer has to worry about his house due to an early and smart investment in Bitcoin. The new homeowner reports on Reddit:
2 years ago for the price of 1 monthly payment of my 30-year long mortgage I took a chance on bitcoin and bought 300 bitcoins from a friend. Yesterday I paid off my mortgage and have taken the whole family out to celebrate on the 4th. Just wanted to express my thanks to the Bitcoin community. It is amazing to feel debt free on this Independence day.
PS: I still own a lot more coins I managed to pick up during the last couple of years.
Happy Independence Day fellow Bitcoiners...
Edit: Instead of paying the bank every month for the next couple of decades, I will put it back into buying back more bitcoins. It feels a lot better than paying the Bank.
This person took the risk with Bitcoin when it was even more unknown and undeveloped than it is now, paying just six dollars per bitcoin, and is now reaping the reward.
Is this a possibility for the many people who right now out there struggling with housing and other financial problems? Probably, no. It can be for some, though. Despite a series of high-profile scandals, Bitcoin is still seeing a rise in adoption as judged by the number of wallets out there, more and more businesses are putting out 'Bitcoin Accepted Here' placards, VCs are continuing to invest ever more amounts of money in Bitcoin startups, banks are beginning to investigate Bitcoin more seriously, both as a threat and possible tool, and even China and Russia are backing away from hardline stances.
The trend for Bitcoin is positive, so people who invest now are very likely to see large returns. The only reason I say that most people won't benefit from this is that most people won't take the risk. It is important to note that there is nothing certain here - investing more in Bitcoin than you are willing to lose is never a smart idea. That being said, for some bitcoiners, like the redditor above, Bitcoin just might save the American Dream.
By Mark Norton [mailto:Editor@BitcoinWarrior.net]Editor@BitcoinWarrior.net
7/5/2014
Article Source: [http://EzineArticles.com/?Bitcoin-Pays-a-Mortgage&id=8696283] Bitcoin Pays a Mortgage
Wednesday, 24 September 2014
Mortgages and Helpful Financial Hints for First Time Homebuyers
Mortgages and Helpful Financial Hints for First Time Homebuyers
By [http://ezinearticles.com/?expert=Andrew_Stratton]Andrew Stratton
Buying your first home should be one of the most exciting and rewarding experiences you have in your lifetime. Whether you're moving into your new house solo or with a new spouse, or if you're purchasing a home to allow more space for a new addition to your family, gathering information on all the mortgages and options that are available to you can be overwhelming. It's important to do your research before you start actually looking for that ideal home. Financially, it's essential that you check your credit score and know your current assets and liabilities. In other words, get a very clear picture of your financial situation in the beginning so you won't be faced with surprises once you make the trip to the bank and start your paperwork.
Along with getting to know your current financial status and credit score, you should also know the costs to maintain and upkeep your new home, as well as what insurance costs and taxes are going to be. It's also wise to allow yourself a financial cushion in the event your new home needs some refinements. Paying the homeowner's loan itself is a large chunk of home ownership, but people often make the mistake of allowing enough money for other added expenditures that can quickly add up, leaving you with limited funds for other bills or discretionary funds.
Another important financial item to consider is the 20% down payment. Mortgages have been more affordable in recent years due to low interest rates, and the more you can afford to spend as a down payment, the lower your loan payments will be. Be sure to get all the information available to you from your lender regarding the different types of loans they offer to homebuyers. Mortgages that offer adjustable rates are great for homeowners who relocate frequently or those who can be fiscally responsible and save the money they make during the fixed rate period. Fixed rate plans work best for those who plan to stay in their home for years to come and enjoy knowing what their rate is going to be for the life of the loan.
As for the paperwork and other requirements, your bank has loan officers who will be happy to assist you from start to finish with the process. Most loan officers are well versed in real estate laws and financial planning so they can be trusted with helping you make educated decisions during the transaction. It is most beneficial to have the bank where you do your checking, savings and other financial services handle the loan for your home, whenever possible. Applying for mortgages can be time consuming and require lots of paperwork, so knowing and trusting those with whom you're working can help ease the pain of the transaction, allowing you to focus on the important details. Working with a local branch of your bank gives you the peace of mind you need for a seamless, successful first time home buying experience.
When considering mortgages in NJ, visit Somerset Savings Bank. Learn more about our services at [http://www.somersetsavings.com]http://www.somersetsavings.com.
Article Source: [http://EzineArticles.com/?Mortgages-and-Helpful-Financial-Hints-for-First-Time-Homebuyers&id=8734550] Mortgages and Helpful Financial Hints for First Time Homebuyers
By [http://ezinearticles.com/?expert=Andrew_Stratton]Andrew Stratton
Buying your first home should be one of the most exciting and rewarding experiences you have in your lifetime. Whether you're moving into your new house solo or with a new spouse, or if you're purchasing a home to allow more space for a new addition to your family, gathering information on all the mortgages and options that are available to you can be overwhelming. It's important to do your research before you start actually looking for that ideal home. Financially, it's essential that you check your credit score and know your current assets and liabilities. In other words, get a very clear picture of your financial situation in the beginning so you won't be faced with surprises once you make the trip to the bank and start your paperwork.
Along with getting to know your current financial status and credit score, you should also know the costs to maintain and upkeep your new home, as well as what insurance costs and taxes are going to be. It's also wise to allow yourself a financial cushion in the event your new home needs some refinements. Paying the homeowner's loan itself is a large chunk of home ownership, but people often make the mistake of allowing enough money for other added expenditures that can quickly add up, leaving you with limited funds for other bills or discretionary funds.
Another important financial item to consider is the 20% down payment. Mortgages have been more affordable in recent years due to low interest rates, and the more you can afford to spend as a down payment, the lower your loan payments will be. Be sure to get all the information available to you from your lender regarding the different types of loans they offer to homebuyers. Mortgages that offer adjustable rates are great for homeowners who relocate frequently or those who can be fiscally responsible and save the money they make during the fixed rate period. Fixed rate plans work best for those who plan to stay in their home for years to come and enjoy knowing what their rate is going to be for the life of the loan.
As for the paperwork and other requirements, your bank has loan officers who will be happy to assist you from start to finish with the process. Most loan officers are well versed in real estate laws and financial planning so they can be trusted with helping you make educated decisions during the transaction. It is most beneficial to have the bank where you do your checking, savings and other financial services handle the loan for your home, whenever possible. Applying for mortgages can be time consuming and require lots of paperwork, so knowing and trusting those with whom you're working can help ease the pain of the transaction, allowing you to focus on the important details. Working with a local branch of your bank gives you the peace of mind you need for a seamless, successful first time home buying experience.
When considering mortgages in NJ, visit Somerset Savings Bank. Learn more about our services at [http://www.somersetsavings.com]http://www.somersetsavings.com.
Article Source: [http://EzineArticles.com/?Mortgages-and-Helpful-Financial-Hints-for-First-Time-Homebuyers&id=8734550] Mortgages and Helpful Financial Hints for First Time Homebuyers
Do You Really Know Your Mortgage?
Do You Really Know Your Mortgage?
By [http://ezinearticles.com/?expert=Alfred_Ardis]Alfred Ardis
If you are in the market to buy a home, you are most likely looking at getting a mortgage as well. You can get financing for your home from your bank or loan provider. There are many different options when it comes to loans of this nature, and if you are not aware of all your options, you could find yourself spending too much money. Let's explore the different types of financing options for your home.
When it comes to getting a loan for your next home, there are several different options to consider. There is the fixed rate, which is simply a loan that does not appreciate or depreciate in terms of value. For example, if you agree upon a ten-year loan with a rate of five percent, that rate will not change over that period of time.
There is also the adjustable rate mortgage or ARM. ARM's come in a variety of different packages. You could have a one-month ARM that adjusts monthly, after a three-month introductory period. You could also get a six-month ARM that adjusts every six months. There are many more options for ARM's that vary in length of term and adjustment period.
A two-step financing plan is popularly broken down into two options, where the rate remains fixed for five years and then adjusts to a figure that then remains fixed for the next twenty-five years. The other option that is common is seven years and then a single adjustment, which is then locked for the next twenty-three years.
If necessary, you can take a second mortgage on your house. For example you could take one mortgage on seventy five percent of your house, and then take a second one on the other fifteen percent of your house. Taking a second loan on your house can diversify your risk and also lower your first mortgage.
Depending on your loan agreement you may have the option to refinance. Doing this should only be done when the cost of refinancing can be recovered before you sell your home, or if you can refinance to a low enough rate that the costs of doing such can be covered in your new rate.
If you find yourself with a rate that you think can get no lower than it already is, you should look into getting your rate locked. However, you should only do this if you are entirely certain your rate cannot get any lower, as locking your rate is always a gamble of sorts.
Figure out more about what kind of loans and rates you can get, and visit your lender today.
When considering financing a mortgage, Grand Rapids residents can learn more at [http://www.communitywestcu.org/loans_mortgage.asp]http://www.communitywestcu.org/loans_mortgage.asp.
Article Source: [http://EzineArticles.com/?Do-You-Really-Know-Your-Mortgage?&id=8734022] Do You Really Know Your Mortgage?
By [http://ezinearticles.com/?expert=Alfred_Ardis]Alfred Ardis
If you are in the market to buy a home, you are most likely looking at getting a mortgage as well. You can get financing for your home from your bank or loan provider. There are many different options when it comes to loans of this nature, and if you are not aware of all your options, you could find yourself spending too much money. Let's explore the different types of financing options for your home.
When it comes to getting a loan for your next home, there are several different options to consider. There is the fixed rate, which is simply a loan that does not appreciate or depreciate in terms of value. For example, if you agree upon a ten-year loan with a rate of five percent, that rate will not change over that period of time.
There is also the adjustable rate mortgage or ARM. ARM's come in a variety of different packages. You could have a one-month ARM that adjusts monthly, after a three-month introductory period. You could also get a six-month ARM that adjusts every six months. There are many more options for ARM's that vary in length of term and adjustment period.
A two-step financing plan is popularly broken down into two options, where the rate remains fixed for five years and then adjusts to a figure that then remains fixed for the next twenty-five years. The other option that is common is seven years and then a single adjustment, which is then locked for the next twenty-three years.
If necessary, you can take a second mortgage on your house. For example you could take one mortgage on seventy five percent of your house, and then take a second one on the other fifteen percent of your house. Taking a second loan on your house can diversify your risk and also lower your first mortgage.
Depending on your loan agreement you may have the option to refinance. Doing this should only be done when the cost of refinancing can be recovered before you sell your home, or if you can refinance to a low enough rate that the costs of doing such can be covered in your new rate.
If you find yourself with a rate that you think can get no lower than it already is, you should look into getting your rate locked. However, you should only do this if you are entirely certain your rate cannot get any lower, as locking your rate is always a gamble of sorts.
Figure out more about what kind of loans and rates you can get, and visit your lender today.
When considering financing a mortgage, Grand Rapids residents can learn more at [http://www.communitywestcu.org/loans_mortgage.asp]http://www.communitywestcu.org/loans_mortgage.asp.
Article Source: [http://EzineArticles.com/?Do-You-Really-Know-Your-Mortgage?&id=8734022] Do You Really Know Your Mortgage?
Tuesday, 23 September 2014
Reverse Mortgage: How It Works And How It Can Benefit You
Reverse Mortgage: How It Works And How It Can Benefit You
By [http://ezinearticles.com/?expert=Joey_Bossman]Joey Bossman
Reverse mortgages have made the subject of numerous controversial discussions, both among experts in the field, and seniors interested in making the most of their homes and ensuring their retirement plans. However, people's reluctance to this type of products is often generated by the lack of accurate information. The aim of this article is to provide you with relevant information about the mechanism of reverse mortgages, as well as the benefits they can generate.
How does it work?
A reverse mortgage can be defined in terms of a special home loan, especially designed for seniors aged at least 62, that allows you to borrow money against the equity of your home and transform it into cash you can dispose of in emergency cases or unexpected business opportunities. In simple terms, unlike conventional mortgages which require monthly payments from the homeowners' part, a reverse mortgage basically transforms the property itself into a steady income source.
Which are the benefits?
Misinformation and the fear factor often prevent elderly homeowners from benefiting from the equity in their house, an equity they have been building over time by paying their mortgages. Many seniors are not aware of the fact that a reverse mortgage doesn't imply a title transfer. That means that they will not only retain the ownership of the house, but also that, once they pass away and the loan is paid, the house will be passed on to the entitled heirs.
Another aspect worth mentioning is the fact that reverse mortgages guarantee homeowners the right to live in their houses until they die, sell the house, or decide to move. The only condition is for homeowners to be up-to-date with the correspondent property taxes and keep the house in a reasonable condition.
Moreover, if the contracted mortgage guarantees a monthly or annual income for life, any depreciation of the property's value will be the lender's responsibility. In addition, being considered equity and not proper income, payments are tax free and do not affect benefits such as social security or Medicare.
What should one do before pursuing one?
In order to avoid unpleasant surprises, seniors should do a thorough research before making a commitment and acquire a reverse mortgage. Carefully check eligibility, safeguards, pertinent taxes, payment plans, liability, interest rates etc. Information is widely reachable, both online and through direct discussions with authorized HUD or FHA counsellors or lenders.
Before making a lifetime commitment, it is highly important for seniors to carefully educate themselves and fully understand which their options are, how the loan process works, and which are their rights and responsibilities. [http://myreversemortgageloan.info]Educate Yourself Now! Understand how an FHA-Insured [http://myreversemortgageloan.info]Reverse Mortgage works and make an informed decision based on your own personal situation.
Article Source: [http://EzineArticles.com/?Reverse-Mortgage:-How-It-Works-And-How-It-Can-Benefit-You&id=8651830] Reverse Mortgage: How It Works And How It Can Benefit You
By [http://ezinearticles.com/?expert=Joey_Bossman]Joey Bossman
Reverse mortgages have made the subject of numerous controversial discussions, both among experts in the field, and seniors interested in making the most of their homes and ensuring their retirement plans. However, people's reluctance to this type of products is often generated by the lack of accurate information. The aim of this article is to provide you with relevant information about the mechanism of reverse mortgages, as well as the benefits they can generate.
How does it work?
A reverse mortgage can be defined in terms of a special home loan, especially designed for seniors aged at least 62, that allows you to borrow money against the equity of your home and transform it into cash you can dispose of in emergency cases or unexpected business opportunities. In simple terms, unlike conventional mortgages which require monthly payments from the homeowners' part, a reverse mortgage basically transforms the property itself into a steady income source.
Which are the benefits?
Misinformation and the fear factor often prevent elderly homeowners from benefiting from the equity in their house, an equity they have been building over time by paying their mortgages. Many seniors are not aware of the fact that a reverse mortgage doesn't imply a title transfer. That means that they will not only retain the ownership of the house, but also that, once they pass away and the loan is paid, the house will be passed on to the entitled heirs.
Another aspect worth mentioning is the fact that reverse mortgages guarantee homeowners the right to live in their houses until they die, sell the house, or decide to move. The only condition is for homeowners to be up-to-date with the correspondent property taxes and keep the house in a reasonable condition.
Moreover, if the contracted mortgage guarantees a monthly or annual income for life, any depreciation of the property's value will be the lender's responsibility. In addition, being considered equity and not proper income, payments are tax free and do not affect benefits such as social security or Medicare.
What should one do before pursuing one?
In order to avoid unpleasant surprises, seniors should do a thorough research before making a commitment and acquire a reverse mortgage. Carefully check eligibility, safeguards, pertinent taxes, payment plans, liability, interest rates etc. Information is widely reachable, both online and through direct discussions with authorized HUD or FHA counsellors or lenders.
Before making a lifetime commitment, it is highly important for seniors to carefully educate themselves and fully understand which their options are, how the loan process works, and which are their rights and responsibilities. [http://myreversemortgageloan.info]Educate Yourself Now! Understand how an FHA-Insured [http://myreversemortgageloan.info]Reverse Mortgage works and make an informed decision based on your own personal situation.
Article Source: [http://EzineArticles.com/?Reverse-Mortgage:-How-It-Works-And-How-It-Can-Benefit-You&id=8651830] Reverse Mortgage: How It Works And How It Can Benefit You
Property Management Is the New Trend in 2014
Property Management Is the New Trend in 2014
By [http://ezinearticles.com/?expert=Ken_Bosworth]Ken Bosworth
Buyers are facing a tough battle when it comes to purchasing a home these days. The real estate market is low in inventory, high on demand, and its forcing many buyers to rent homes for more than they would ever dream of renting for.
The real estate market is a challenging place in 2014. Many potential buyers have found themselves in bidding wars against not only the average joe home buyer but investors as well. This has made buying a home extremely difficult. In highly coveted areas, like the city of San Francisco, you will see properties where bidding is $100,000 more than the home is valued, and those numbers keep rising. This has forced many people to settle for homes outside of the city, renting homes in place like Oakland, Berkeley, or Piedmont in some of the more well established areas.
Property management in Oakland and surrounding cities has seen an influx of investors seeking to take advantage of the rising number of renters and increased rents that seem to outpace mortgages. It is now cheaper to own a home than it is to rent, but how long will this last? Property Management companies in Hayward, along with San Leandro have more clients than ever.
Is this sustainable? There are approximately 2 million more people slated to come to California in the coming years. Can the housing market keep up with the pace? Or will the [http://blackdiamondholdings.com/property-management/]property management boom flourish for years to come?
Ideally, if you find yourself in the unlucky position of having to rent a home, make sure to do all your home work and find a property management company that has been in the business for some time. Renting from investors directly is tricky, and you can find yourself paying a pretty penny in rent but not getting the service you need when something goes wrong in the home. A reputable property management company is the only way to go in a market that is chalked full of amateurs.
I personally found myself without heat for 3 days when dealing with a less than eager please landlord. After our refrigerator went out and he refused to fix it, I knew we were in trouble. He refused to extend our lease because we want him to fix the problems that would arise in the home. Just one year later, we were forced to move again. Thank God that we did! We now live in a home that is managed by a great company and that takes care of the property. After just one month, they replaced the carpets, repaired the sinks and toilet, and put in a new fence. I am confident we will get the help we need, when we need it.
Choose a reputable company like Black Diamond Holdings in Oakland for your property management needs if you reside in the San Francisco Bay area.
Article Source: [http://EzineArticles.com/?Property-Management-Is-the-New-Trend-in-2014&id=8657606] Property Management Is the New Trend in 2014
By [http://ezinearticles.com/?expert=Ken_Bosworth]Ken Bosworth
Buyers are facing a tough battle when it comes to purchasing a home these days. The real estate market is low in inventory, high on demand, and its forcing many buyers to rent homes for more than they would ever dream of renting for.
The real estate market is a challenging place in 2014. Many potential buyers have found themselves in bidding wars against not only the average joe home buyer but investors as well. This has made buying a home extremely difficult. In highly coveted areas, like the city of San Francisco, you will see properties where bidding is $100,000 more than the home is valued, and those numbers keep rising. This has forced many people to settle for homes outside of the city, renting homes in place like Oakland, Berkeley, or Piedmont in some of the more well established areas.
Property management in Oakland and surrounding cities has seen an influx of investors seeking to take advantage of the rising number of renters and increased rents that seem to outpace mortgages. It is now cheaper to own a home than it is to rent, but how long will this last? Property Management companies in Hayward, along with San Leandro have more clients than ever.
Is this sustainable? There are approximately 2 million more people slated to come to California in the coming years. Can the housing market keep up with the pace? Or will the [http://blackdiamondholdings.com/property-management/]property management boom flourish for years to come?
Ideally, if you find yourself in the unlucky position of having to rent a home, make sure to do all your home work and find a property management company that has been in the business for some time. Renting from investors directly is tricky, and you can find yourself paying a pretty penny in rent but not getting the service you need when something goes wrong in the home. A reputable property management company is the only way to go in a market that is chalked full of amateurs.
I personally found myself without heat for 3 days when dealing with a less than eager please landlord. After our refrigerator went out and he refused to fix it, I knew we were in trouble. He refused to extend our lease because we want him to fix the problems that would arise in the home. Just one year later, we were forced to move again. Thank God that we did! We now live in a home that is managed by a great company and that takes care of the property. After just one month, they replaced the carpets, repaired the sinks and toilet, and put in a new fence. I am confident we will get the help we need, when we need it.
Choose a reputable company like Black Diamond Holdings in Oakland for your property management needs if you reside in the San Francisco Bay area.
Article Source: [http://EzineArticles.com/?Property-Management-Is-the-New-Trend-in-2014&id=8657606] Property Management Is the New Trend in 2014
The Best Mortgage Deals
The Best Mortgage Deals
By [http://ezinearticles.com/?expert=Shalini_Mittal]Shalini Mittal
Buying a home is one of the biggest purchases that you can make in a lifetime and this means that you should be most careful with every step you take towards your dream home. Mortgage advice plays an important role, whether you are a first-time home buyer, a renovator or an investor. This makes it possible for you to make decisions that will be most beneficial towards owning a home. Considering that you might not have the full amount to get your dream home, the advice will help you in choosing a mortgage plan that will favor you from every angle.
Mortgage Brokers
There are professional mortgage brokers that you can use to make the right decision when buying a home. They offer amazing services as they are aware of the mortgage providers in the area and what they have to offer. Mortgage brokers will help you in reducing the rates for the home that you are buying making sure you reap value with every cent that you channel into your dream home or property investment. They are independent in the services they offer and therefore do not work with any specific lender. This makes it possible for them to table different offers for you before helping you make the right choice depending on your respective financial capabilities and what you think is valuable enough for the home you are buying. Mortgages can be different, but with the help of professionals, it is easy to make the best choice.
Choosing Mortgage Brokers
Mortgage brokers offer the same services, but on different terms. This can determine the kind of service that you get to enjoy. It is important to consider the essential facts about your broker so that you can be sure you are using the best with the potential of fetching you what you really deserve.
Accreditation:
Only accredited brokers will guide you effectively through the home buying experience. You can be sure that the process will be legal and legitimate when using the services of such brokers. They will be in a position to offer you imperative mortgage information based on current trends in the market without being biased. This is important in ensuring that you make the best choice for the mortgage.
Variety:
Good mortgage brokers should offer you rates to compare before helping you make a decision. Brokers working with different lenders and banks will offer a huge variety of choices to choose from to make sure that at the end of the day you enjoy the best with your mortgage. Avoid using brokers who limit you to a certain lender because they limit the mortgage choices you could have had to cut on rates for your home.
Service:
When choosing a mortgage broker, you should check for the period of processing your request. A good broker should serve you with the mortgage information that you need within a few hours. You should also enjoy personalized services to match your mortgage needs.
Click Here to Know more about [http://www.newfoundlandmortgage.org/]Newfoundland Mortgage.
Article Source: [http://EzineArticles.com/?The-Best-Mortgage-Deals&id=8662598] The Best Mortgage Deals
By [http://ezinearticles.com/?expert=Shalini_Mittal]Shalini Mittal
Buying a home is one of the biggest purchases that you can make in a lifetime and this means that you should be most careful with every step you take towards your dream home. Mortgage advice plays an important role, whether you are a first-time home buyer, a renovator or an investor. This makes it possible for you to make decisions that will be most beneficial towards owning a home. Considering that you might not have the full amount to get your dream home, the advice will help you in choosing a mortgage plan that will favor you from every angle.
Mortgage Brokers
There are professional mortgage brokers that you can use to make the right decision when buying a home. They offer amazing services as they are aware of the mortgage providers in the area and what they have to offer. Mortgage brokers will help you in reducing the rates for the home that you are buying making sure you reap value with every cent that you channel into your dream home or property investment. They are independent in the services they offer and therefore do not work with any specific lender. This makes it possible for them to table different offers for you before helping you make the right choice depending on your respective financial capabilities and what you think is valuable enough for the home you are buying. Mortgages can be different, but with the help of professionals, it is easy to make the best choice.
Choosing Mortgage Brokers
Mortgage brokers offer the same services, but on different terms. This can determine the kind of service that you get to enjoy. It is important to consider the essential facts about your broker so that you can be sure you are using the best with the potential of fetching you what you really deserve.
Accreditation:
Only accredited brokers will guide you effectively through the home buying experience. You can be sure that the process will be legal and legitimate when using the services of such brokers. They will be in a position to offer you imperative mortgage information based on current trends in the market without being biased. This is important in ensuring that you make the best choice for the mortgage.
Variety:
Good mortgage brokers should offer you rates to compare before helping you make a decision. Brokers working with different lenders and banks will offer a huge variety of choices to choose from to make sure that at the end of the day you enjoy the best with your mortgage. Avoid using brokers who limit you to a certain lender because they limit the mortgage choices you could have had to cut on rates for your home.
Service:
When choosing a mortgage broker, you should check for the period of processing your request. A good broker should serve you with the mortgage information that you need within a few hours. You should also enjoy personalized services to match your mortgage needs.
Click Here to Know more about [http://www.newfoundlandmortgage.org/]Newfoundland Mortgage.
Article Source: [http://EzineArticles.com/?The-Best-Mortgage-Deals&id=8662598] The Best Mortgage Deals
What Exactly Was the Mortgage Crisis?
What Exactly Was the Mortgage Crisis?
By [http://ezinearticles.com/?expert=Andrew_Stratton]Andrew Stratton
Buying a home is extremely expensive, and since most people don't have access to hundreds of thousands of dollars, they must rely on a mortgage. This type of loan is typically low in interest and paid over a long period of time, between 15 and 30 years. Traditionally, a lending institution, such as a bank, would make this loan after carefully determining if the borrower would likely be able to pay back the amount. This was done using a number of qualifying stats, like annual salary, credit score, and credit history. If a person were deemed unlikely to pay back the borrowed amount, the mortgage would be denied. But, this practice changed at some point after World War II.
Certain economists insisted that the key to an economically stable life was to own a home; however, a large portion of America had bad credit or no credit at all. So, the government began a drive to pressure financial institutions to relax the guidelines on providing home loans. The issue became truly dangerous when Congress repealed the Glass-Steagall Act. This act created firm restrictions on what banks could do with the money invested with them, separating them from higher risk investment houses and brokerages. When the act was repealed, any bank could engage in high-risk investment practices. This situation resulted in the sub-prime mortgage crisis.
A sub-prime loan is lent out to individuals with bad credit at initially low monthly rates, so that they can begin living in their own home. After some time, the monthly rate increases, and borrowers are required to pay a series of large "balloon" payments. In the majority of these situations the borrowers ended up in default and then lost their homes in a foreclosure. So why would the banks make these bad loans?
This is where the loss of the Glass-Steagall Act comes into play. The potential future payment on these loans represented an asset. Since assets have value, they can be sold. In turn, banks packaged hundreds of bad loans with some good loans and sold them as mortgage securities. These securities were given different ratings by the S&P, but due to the sheer volume of securities and certain amount of misdirection involving paperwork, it was never quite clear how toxic any given security was. Eventually, the truth came to light. As millions of individuals began to lose their homes from defaulting on loans, the securities became more and more toxic, resulting in a panic. Massive losses on these securities caused the collapse of a major institution that had been insuring the investment against this exact event.
The overall impact was a dramatic loss of wealth for the most impoverished Americans, as well as the massive losses in retirement accounts, because the money from those accounts had been invested in the toxic securities. Plus, multiple violations of regulations for the paperwork surrounding the mortgages have left millions of homes in a state of being foreclosed but unsellable. The recovery will take decades, and individuals have lost faith in many of the major banking institutions.
Don't rely on a big bank for financial planning, come to Community West Credit Union in Grand Rapids. Mortgage loans with us are secure and virtually risk-free. For more information, visit [http://www.communitywestcu.org/loans_mortgage.asp]http://www.communitywestcu.org/loans_mortgage.asp.
Article Source: [http://EzineArticles.com/?What-Exactly-Was-the-Mortgage-Crisis?&id=8688186] What Exactly Was the Mortgage Crisis?
By [http://ezinearticles.com/?expert=Andrew_Stratton]Andrew Stratton
Buying a home is extremely expensive, and since most people don't have access to hundreds of thousands of dollars, they must rely on a mortgage. This type of loan is typically low in interest and paid over a long period of time, between 15 and 30 years. Traditionally, a lending institution, such as a bank, would make this loan after carefully determining if the borrower would likely be able to pay back the amount. This was done using a number of qualifying stats, like annual salary, credit score, and credit history. If a person were deemed unlikely to pay back the borrowed amount, the mortgage would be denied. But, this practice changed at some point after World War II.
Certain economists insisted that the key to an economically stable life was to own a home; however, a large portion of America had bad credit or no credit at all. So, the government began a drive to pressure financial institutions to relax the guidelines on providing home loans. The issue became truly dangerous when Congress repealed the Glass-Steagall Act. This act created firm restrictions on what banks could do with the money invested with them, separating them from higher risk investment houses and brokerages. When the act was repealed, any bank could engage in high-risk investment practices. This situation resulted in the sub-prime mortgage crisis.
A sub-prime loan is lent out to individuals with bad credit at initially low monthly rates, so that they can begin living in their own home. After some time, the monthly rate increases, and borrowers are required to pay a series of large "balloon" payments. In the majority of these situations the borrowers ended up in default and then lost their homes in a foreclosure. So why would the banks make these bad loans?
This is where the loss of the Glass-Steagall Act comes into play. The potential future payment on these loans represented an asset. Since assets have value, they can be sold. In turn, banks packaged hundreds of bad loans with some good loans and sold them as mortgage securities. These securities were given different ratings by the S&P, but due to the sheer volume of securities and certain amount of misdirection involving paperwork, it was never quite clear how toxic any given security was. Eventually, the truth came to light. As millions of individuals began to lose their homes from defaulting on loans, the securities became more and more toxic, resulting in a panic. Massive losses on these securities caused the collapse of a major institution that had been insuring the investment against this exact event.
The overall impact was a dramatic loss of wealth for the most impoverished Americans, as well as the massive losses in retirement accounts, because the money from those accounts had been invested in the toxic securities. Plus, multiple violations of regulations for the paperwork surrounding the mortgages have left millions of homes in a state of being foreclosed but unsellable. The recovery will take decades, and individuals have lost faith in many of the major banking institutions.
Don't rely on a big bank for financial planning, come to Community West Credit Union in Grand Rapids. Mortgage loans with us are secure and virtually risk-free. For more information, visit [http://www.communitywestcu.org/loans_mortgage.asp]http://www.communitywestcu.org/loans_mortgage.asp.
Article Source: [http://EzineArticles.com/?What-Exactly-Was-the-Mortgage-Crisis?&id=8688186] What Exactly Was the Mortgage Crisis?
Top 8 Mortgage Mistakes To Avoid
Top 8 Mortgage Mistakes To Avoid
By [http://ezinearticles.com/?expert=Josh_Mezger]Josh Mezger
Every day, there are people who commit some huge mortgage mistakes. As this is one of the biggest financial duties you will make in your life, it is vital you learn how to avoid committing common mistakes a lot of people make. You will be managing or paying for your mortgage for the next 10 to 30 years, so be sure to read the tips below to have a pleasant property buying experience.
1. Not shopping around
Compared before, when only 4 major banks provide 1 or 2 types of mortgages, now there are numerous options for home loans you can acquire from a several diverse types of lenders. Do not immediately accept the first offer. Understand that the lender you will choose will acquire six figures from you over the loan's life. Look around and compare the features and costs of the various types of loans. Find the type of loan that is right for your circumstance.
2. Not Checking Your Credit First
Check your credit first before beginning your quest to buy a home. Try to find out if you have problems with your credits. Learning about certain issues in your credit allows you to find resolution before getting the loan. Understand that credit issues can affect the amount you are able to borrow from your lenders.
3. Not Learning the Total Housing Payment
Many first time home buyers commit the mistake of not having a complete understanding of the total mortgage payment. While they are able to include, interest, insurance, taxes and principal in their budget, many fail to include insurance premium and property taxes.
4. Borrowing too much
Even though you managed to get approval of borrowing large amounts of money, you should not hastily accept it. If someday things do not go in your favour and you find it extremely difficult to pay for the loans, then you could lose your home, stamp duty, deposit and other investments.
5. Getting a 15-Year Mortgage without Financial Security
While, monthly payments are higher, there are benefits from acquiring a fifteen-year mortgage. One, the duration to pay off your loan is lesser compared to the traditional thirty-year mortgage. Two, you will pay lesser interest due to the duration of the loan.
6. Not Reading The Documents
Although, your real estate agent will do his/her best to protect and guide you during the property buying process, your agent cannot manage your mortgage loan as this is between you and the lender. Mistakes can happen and it is possible for your lender to miss out or fail to explain some details within your loan. So, when meeting up with your lender to sign the documents, make sure to thoroughly read each page and ask questions.
7. Don't Underestimate Your Housing Payment
The payment for your house does not only consist of the mortgage payment, you will also have to pay for property taxes, homeowner's insurance and some required homeowner's associated fees. Aside from taking these payments into consideration, you will also have to think about your home's repairs and maintenance.
You should study and understand your personal income and expenses in order to learn how much you can truly afford. Make sure to allocate enough money for potential expenses in order to avoid bad surprises that many home owners experience when purchasing a home.
8. Not planning for interest rate rises
Your mortgage can experience interest rate fluctuations, unless you are on a completely fixed loan. It is hard to determine the changes in interest rates over the six months duration, so much more for the 25 year mortgage. Taking this into consideration, you need to secure yourself by planning for at least 2 interest rate increases over the first year of your loan when certain movements will provide the most effect on your monthly payments.
You will be fine as long as you are cautious and perform the necessary research. It is important that you completely understand your financial situation so you won't just make any hasty financial changes throughout the home buying process. Have the time to study and learn your financial options. Remember the mortgage mistakes you need to avoid and you will have a smooth real estate transaction.
Home financing can be a crucial component of any real estate transaction. At joshmezger.com you will discover some amazing mortgage information that may be able to support you with the purchase of your next [http://www.joshmezger.com/mortgage.html]Perth apartment.
Article Source: [http://EzineArticles.com/?Top-8-Mortgage-Mistakes-To-Avoid&id=8694768] Top 8 Mortgage Mistakes To Avoid
By [http://ezinearticles.com/?expert=Josh_Mezger]Josh Mezger
Every day, there are people who commit some huge mortgage mistakes. As this is one of the biggest financial duties you will make in your life, it is vital you learn how to avoid committing common mistakes a lot of people make. You will be managing or paying for your mortgage for the next 10 to 30 years, so be sure to read the tips below to have a pleasant property buying experience.
1. Not shopping around
Compared before, when only 4 major banks provide 1 or 2 types of mortgages, now there are numerous options for home loans you can acquire from a several diverse types of lenders. Do not immediately accept the first offer. Understand that the lender you will choose will acquire six figures from you over the loan's life. Look around and compare the features and costs of the various types of loans. Find the type of loan that is right for your circumstance.
2. Not Checking Your Credit First
Check your credit first before beginning your quest to buy a home. Try to find out if you have problems with your credits. Learning about certain issues in your credit allows you to find resolution before getting the loan. Understand that credit issues can affect the amount you are able to borrow from your lenders.
3. Not Learning the Total Housing Payment
Many first time home buyers commit the mistake of not having a complete understanding of the total mortgage payment. While they are able to include, interest, insurance, taxes and principal in their budget, many fail to include insurance premium and property taxes.
4. Borrowing too much
Even though you managed to get approval of borrowing large amounts of money, you should not hastily accept it. If someday things do not go in your favour and you find it extremely difficult to pay for the loans, then you could lose your home, stamp duty, deposit and other investments.
5. Getting a 15-Year Mortgage without Financial Security
While, monthly payments are higher, there are benefits from acquiring a fifteen-year mortgage. One, the duration to pay off your loan is lesser compared to the traditional thirty-year mortgage. Two, you will pay lesser interest due to the duration of the loan.
6. Not Reading The Documents
Although, your real estate agent will do his/her best to protect and guide you during the property buying process, your agent cannot manage your mortgage loan as this is between you and the lender. Mistakes can happen and it is possible for your lender to miss out or fail to explain some details within your loan. So, when meeting up with your lender to sign the documents, make sure to thoroughly read each page and ask questions.
7. Don't Underestimate Your Housing Payment
The payment for your house does not only consist of the mortgage payment, you will also have to pay for property taxes, homeowner's insurance and some required homeowner's associated fees. Aside from taking these payments into consideration, you will also have to think about your home's repairs and maintenance.
You should study and understand your personal income and expenses in order to learn how much you can truly afford. Make sure to allocate enough money for potential expenses in order to avoid bad surprises that many home owners experience when purchasing a home.
8. Not planning for interest rate rises
Your mortgage can experience interest rate fluctuations, unless you are on a completely fixed loan. It is hard to determine the changes in interest rates over the six months duration, so much more for the 25 year mortgage. Taking this into consideration, you need to secure yourself by planning for at least 2 interest rate increases over the first year of your loan when certain movements will provide the most effect on your monthly payments.
You will be fine as long as you are cautious and perform the necessary research. It is important that you completely understand your financial situation so you won't just make any hasty financial changes throughout the home buying process. Have the time to study and learn your financial options. Remember the mortgage mistakes you need to avoid and you will have a smooth real estate transaction.
Home financing can be a crucial component of any real estate transaction. At joshmezger.com you will discover some amazing mortgage information that may be able to support you with the purchase of your next [http://www.joshmezger.com/mortgage.html]Perth apartment.
Article Source: [http://EzineArticles.com/?Top-8-Mortgage-Mistakes-To-Avoid&id=8694768] Top 8 Mortgage Mistakes To Avoid
UK House Prices Fall for the First Time This Year
UK House Prices Fall for the First Time This Year
By [http://ezinearticles.com/?expert=Matt_D_Lambourne]Matt D Lambourne
Average house prices have fallen for the first time this year, analysis from online property portal Rightmove has found.
During the month of July, asking prices dipped by 0.8 per cent compared to June. It takes the average value to �270,159 and causes annual growth to fall from 7.7 per cent to 6.5 per cent.
Homes in London have remained the most stable, decreasing by just 0.4 per cent. The North and East Midlands experienced the largest declines at 1.9 per cent each.
Experts believe that changes to the way in which mortgages are regulated has played a role in the fall. Banks and building societies are now required to conduct more stringent affordability checks than before due to fears that increased lending could cause a property bubble, particularly in Greater London and south-east.
Under the Mortgage Market Review, lenders are now only permitted to loan money at 4.5 times a person's income in 15 per cent of their cases.
Miles Shipstone, Rightmove director and housing market analyst, believes that concerns over possible interest rate rises have been a factor as well as people thinking more about their summer holiday and the FIFA World Cup.
He said that confidence amongst buyers has been knocked by the suggestion that mortgages are becoming more difficult to obtain and the worry that repayments are likely to rise.
Simon Bradbury from Thomas Morris Estate Agents believes the market is just "catching its breath" rather than slowing down. He pointed out that there has been continual prices increases this year and it was inevitable that values would be scaled back in some regions.
Putting that to one side, 2014 has still been hailed as 'The year to move' because of government-backed schemes such as Help to Buy allowing many people get a foot onto the property ladder without the need for a large deposit.
Help to Buy is also assisting people moving for the second or third time in what Rightmove has dubbed "the middle market". Research by the agency suggests that the scheme will be utilised by as many as 27,000 house movers in the next 12 months.
While first-time buyers are of great importance to the market, third-timers account for the bulk of purchases at 46 per cent.
For vendors, the good news is that average selling times have also fallen this year from 75 days to 65.
JWK Solicitors offer a broad range of legal services including [http://www.jwksolicitors.co.uk/solicitors-for-you/moving-home/]conveyancing and are Legal 500 listed for their [http://www.jwksolicitors.co.uk/solicitors-for-business/aviation/]aviation law practice.
Article Source: [http://EzineArticles.com/?UK-House-Prices-Fall-for-the-First-Time-This-Year&id=8700837] UK House Prices Fall for the First Time This Year
By [http://ezinearticles.com/?expert=Matt_D_Lambourne]Matt D Lambourne
Average house prices have fallen for the first time this year, analysis from online property portal Rightmove has found.
During the month of July, asking prices dipped by 0.8 per cent compared to June. It takes the average value to �270,159 and causes annual growth to fall from 7.7 per cent to 6.5 per cent.
Homes in London have remained the most stable, decreasing by just 0.4 per cent. The North and East Midlands experienced the largest declines at 1.9 per cent each.
Experts believe that changes to the way in which mortgages are regulated has played a role in the fall. Banks and building societies are now required to conduct more stringent affordability checks than before due to fears that increased lending could cause a property bubble, particularly in Greater London and south-east.
Under the Mortgage Market Review, lenders are now only permitted to loan money at 4.5 times a person's income in 15 per cent of their cases.
Miles Shipstone, Rightmove director and housing market analyst, believes that concerns over possible interest rate rises have been a factor as well as people thinking more about their summer holiday and the FIFA World Cup.
He said that confidence amongst buyers has been knocked by the suggestion that mortgages are becoming more difficult to obtain and the worry that repayments are likely to rise.
Simon Bradbury from Thomas Morris Estate Agents believes the market is just "catching its breath" rather than slowing down. He pointed out that there has been continual prices increases this year and it was inevitable that values would be scaled back in some regions.
Putting that to one side, 2014 has still been hailed as 'The year to move' because of government-backed schemes such as Help to Buy allowing many people get a foot onto the property ladder without the need for a large deposit.
Help to Buy is also assisting people moving for the second or third time in what Rightmove has dubbed "the middle market". Research by the agency suggests that the scheme will be utilised by as many as 27,000 house movers in the next 12 months.
While first-time buyers are of great importance to the market, third-timers account for the bulk of purchases at 46 per cent.
For vendors, the good news is that average selling times have also fallen this year from 75 days to 65.
JWK Solicitors offer a broad range of legal services including [http://www.jwksolicitors.co.uk/solicitors-for-you/moving-home/]conveyancing and are Legal 500 listed for their [http://www.jwksolicitors.co.uk/solicitors-for-business/aviation/]aviation law practice.
Article Source: [http://EzineArticles.com/?UK-House-Prices-Fall-for-the-First-Time-This-Year&id=8700837] UK House Prices Fall for the First Time This Year
How to Buy a Home When You're Not Married
How to Buy a Home When You're Not Married
By [http://ezinearticles.com/?expert=Heather_Nicole_Hamilton]Heather Nicole Hamilton
While the majority of home buyers are married couples, fair housing prices are leading more and more married couples (who might never marry) to purchase homes together. From 2001 through 2011, married couples accounted for almost 62% of home buyers, while unmarried coupled made up a lousy 7.5%.
Weddings are expensive, which might be one reason why couples are putting off marriage in lieu of homeownership. Instead of continued rent, many couples want to make their money work by paying it toward something--but they aren't all that interested in marriage quite yet. Modern love looks different from that which our parents shared--but homeownership, in all of its forms, is exciting.
If you find yourself in a similar situation, there are a few tips and tricks that can help you along your way.
First, you'll need to look at both of your financial statements. This includes bank statements, credit cards, student loans, any retirement accounts, etc. Share your credit reports as well--you'll need to know what you're getting yourself into, married or not.
Next, figure out what you both think you can afford. Look for houses that fall within the range, and don't tempt yourself by going outside of those restrictions. Decide how much each of you is capable of contributing and decide whether or not you'd like to apply for a home loan together. Keep in mind that a house payment should not account for more than 30% of your monthly income.
You might decide to make equal payments, or you may opt to have each contributor pay 30% of their individual earnings, making the payments a bit more fair.
No matter what, you should sign a contract. While you may not be able to imagine a situation in which the two of you split up, things can happen. A home is a big purchase, so it's important to cover all of your bases.
Your contract might include things such as who gets the house in a split up, how much of the house each person owns (it can vary based upon your agreement), and who gets the house if one partner passes away.
You'll also want to review the tax implications. Many people choose to own homes because they allow for you to deduct mortgage interest payments come tax time. If you're combining separate income tax returns, you'll both get mortgage deductions, though they'll be different.
Finally, if you're planning to be married eventually, you'll need to take expenses related to your wedding into account. Homeownership is not without its costs, so you may consider cutting back on your wedding related expenses. You might also consider waiting to buy a house until after the marriage is official. You'll get tax breaks and the process will be easier.
Luckily, no matter your thoughts or timeline for marriage, there are options to get you into a house that you own at any stage of life, provided you're financially secure and able to tackle the task. A little research, some planning, and a lawyer will get you squared away--so happy hunting!
Article Source: [http://EzineArticles.com/?How-to-Buy-a-Home-When-Youre-Not-Married&id=8703681] How to Buy a Home When You're Not Married
By [http://ezinearticles.com/?expert=Heather_Nicole_Hamilton]Heather Nicole Hamilton
While the majority of home buyers are married couples, fair housing prices are leading more and more married couples (who might never marry) to purchase homes together. From 2001 through 2011, married couples accounted for almost 62% of home buyers, while unmarried coupled made up a lousy 7.5%.
Weddings are expensive, which might be one reason why couples are putting off marriage in lieu of homeownership. Instead of continued rent, many couples want to make their money work by paying it toward something--but they aren't all that interested in marriage quite yet. Modern love looks different from that which our parents shared--but homeownership, in all of its forms, is exciting.
If you find yourself in a similar situation, there are a few tips and tricks that can help you along your way.
First, you'll need to look at both of your financial statements. This includes bank statements, credit cards, student loans, any retirement accounts, etc. Share your credit reports as well--you'll need to know what you're getting yourself into, married or not.
Next, figure out what you both think you can afford. Look for houses that fall within the range, and don't tempt yourself by going outside of those restrictions. Decide how much each of you is capable of contributing and decide whether or not you'd like to apply for a home loan together. Keep in mind that a house payment should not account for more than 30% of your monthly income.
You might decide to make equal payments, or you may opt to have each contributor pay 30% of their individual earnings, making the payments a bit more fair.
No matter what, you should sign a contract. While you may not be able to imagine a situation in which the two of you split up, things can happen. A home is a big purchase, so it's important to cover all of your bases.
Your contract might include things such as who gets the house in a split up, how much of the house each person owns (it can vary based upon your agreement), and who gets the house if one partner passes away.
You'll also want to review the tax implications. Many people choose to own homes because they allow for you to deduct mortgage interest payments come tax time. If you're combining separate income tax returns, you'll both get mortgage deductions, though they'll be different.
Finally, if you're planning to be married eventually, you'll need to take expenses related to your wedding into account. Homeownership is not without its costs, so you may consider cutting back on your wedding related expenses. You might also consider waiting to buy a house until after the marriage is official. You'll get tax breaks and the process will be easier.
Luckily, no matter your thoughts or timeline for marriage, there are options to get you into a house that you own at any stage of life, provided you're financially secure and able to tackle the task. A little research, some planning, and a lawyer will get you squared away--so happy hunting!
Article Source: [http://EzineArticles.com/?How-to-Buy-a-Home-When-Youre-Not-Married&id=8703681] How to Buy a Home When You're Not Married
How to Make a Budget for a New Home
How to Make a Budget for a New Home
By [http://ezinearticles.com/?expert=Abishek_Kumar]Abishek Kumar
So, you've landed a well-paying, stable job, and you're beginning to get your finances in order. You've decided that it's time you invest in some property, and you begin to look for homes that you can afford to buy. However, before you start looking at houses and taking out loans from the bank, you need to ask yourself exactly what kind of property you can afford. Create a reasonable budget, and stick to it. Over-stretching the budget and purchasing a house you can't really afford is going to cause you a fair amount of financial problems, and it is best to avoid such situations.
This article will give you a fair idea of how to draw a suitable budget and will enable you to estimate a ballpark figure before investing in a new home.
1) Start Off Conservatively
Place a cap on your budget from the initial stages itself. Establish a range. What's the maximum amount you're willing to pay for a house? Make sure that the house you finally choose falls within this pre-established range of affordability.
2) Make a Wish List
Come up with a list identifying what exactly you're looking for in a house, and the locality in which it is situated in. Ask yourself what is absolutely essential, and what you can make do without. Get a basic idea of the neighborhood and the standard of living in that area, and ask yourself whether it suits your personality and way of life.
3) Prioritize The Features
After compiling the list of home and locality features that you think are relevant, prioritize them according to importance. This will allow you to eliminate one or the other, if necessary, after you have drawn your budget.
4) Jot Down Your Finances
Ask yourself the following questions: Do I have enough cash for the down payment? How much will the closing cost of the house be? Figuring out the answers to these questions can help you decide what kind of loan you should take. Typically, down payments range from 5% to 20% of a home's cost price.
5) Figure Out Your Mortgage
Do some math and figure out your mortgage. The standard rule for monthly mortgage payments is that it should be between 25% to 33% of your monthly gross income. I recommend you follow the 20/28/36 rule which suggests that you:
a) Make a down payment of 20%
b) No more than 28% of your Gross Annual Income should go to mortgage, insurance, homeowner's fees, and real estate taxes.
c) No more than 36% of your Gross Annual Income should go to mortgage, home expenses, and other debt expenses such as credit card debt, car loans, and educational loans.
Note that you must calculate your mortgage affordability with the help of a mortgage calculator or a home affordability calculator. This will help you in estimating your budget..
6) Get Qualified For A Loan
Review your finances with a professional, and establish whether the house of your choice is feasible or not, and whether it falls within your budget. This will give you a fair idea of your standing as a home buyer in the current market.
7) Start Searching For Suitable Houses
Now that you've finished creating your wish list, you've done the math and created your budget, and you've spoken to banks about feasibility and prospective loans, visit the neighborhood of your choice and look for houses that cater to your requirements. See whether the neighborhood and houses you had in mind fit your budget.
8) Make Tradeoffs
After you have scoured the neighborhood and visited a number of houses, go back to your list and strike off the features that you think you can live without. Solidify the things that are important to you, and identify the features that you cannot compromise on. This will help make your search for the perfect house a little easier.
9) Find A Trustworthy Broker
Find a good and trustworthy real estate agent who will help you find houses according to your budget. Insist on sticking to the budget you've drawn up. Let him review your accounts, income, preferences, and needs, as this will give him a clear idea of what kind of house you're looking for, and what will best suit you.
I am an avid writer, whose focus is more towards highlighting civic issues our society faces on a daily basis. I provide tips on property investment, write on real estate market price trends in India, and provide an insight on the latest residential projects. For more property related queries, you can visit http://www.commonfloor.com
Article Source: [http://EzineArticles.com/?How-to-Make-a-Budget-for-a-New-Home&id=8706468] How to Make a Budget for a New Home
By [http://ezinearticles.com/?expert=Abishek_Kumar]Abishek Kumar
So, you've landed a well-paying, stable job, and you're beginning to get your finances in order. You've decided that it's time you invest in some property, and you begin to look for homes that you can afford to buy. However, before you start looking at houses and taking out loans from the bank, you need to ask yourself exactly what kind of property you can afford. Create a reasonable budget, and stick to it. Over-stretching the budget and purchasing a house you can't really afford is going to cause you a fair amount of financial problems, and it is best to avoid such situations.
This article will give you a fair idea of how to draw a suitable budget and will enable you to estimate a ballpark figure before investing in a new home.
1) Start Off Conservatively
Place a cap on your budget from the initial stages itself. Establish a range. What's the maximum amount you're willing to pay for a house? Make sure that the house you finally choose falls within this pre-established range of affordability.
2) Make a Wish List
Come up with a list identifying what exactly you're looking for in a house, and the locality in which it is situated in. Ask yourself what is absolutely essential, and what you can make do without. Get a basic idea of the neighborhood and the standard of living in that area, and ask yourself whether it suits your personality and way of life.
3) Prioritize The Features
After compiling the list of home and locality features that you think are relevant, prioritize them according to importance. This will allow you to eliminate one or the other, if necessary, after you have drawn your budget.
4) Jot Down Your Finances
Ask yourself the following questions: Do I have enough cash for the down payment? How much will the closing cost of the house be? Figuring out the answers to these questions can help you decide what kind of loan you should take. Typically, down payments range from 5% to 20% of a home's cost price.
5) Figure Out Your Mortgage
Do some math and figure out your mortgage. The standard rule for monthly mortgage payments is that it should be between 25% to 33% of your monthly gross income. I recommend you follow the 20/28/36 rule which suggests that you:
a) Make a down payment of 20%
b) No more than 28% of your Gross Annual Income should go to mortgage, insurance, homeowner's fees, and real estate taxes.
c) No more than 36% of your Gross Annual Income should go to mortgage, home expenses, and other debt expenses such as credit card debt, car loans, and educational loans.
Note that you must calculate your mortgage affordability with the help of a mortgage calculator or a home affordability calculator. This will help you in estimating your budget..
6) Get Qualified For A Loan
Review your finances with a professional, and establish whether the house of your choice is feasible or not, and whether it falls within your budget. This will give you a fair idea of your standing as a home buyer in the current market.
7) Start Searching For Suitable Houses
Now that you've finished creating your wish list, you've done the math and created your budget, and you've spoken to banks about feasibility and prospective loans, visit the neighborhood of your choice and look for houses that cater to your requirements. See whether the neighborhood and houses you had in mind fit your budget.
8) Make Tradeoffs
After you have scoured the neighborhood and visited a number of houses, go back to your list and strike off the features that you think you can live without. Solidify the things that are important to you, and identify the features that you cannot compromise on. This will help make your search for the perfect house a little easier.
9) Find A Trustworthy Broker
Find a good and trustworthy real estate agent who will help you find houses according to your budget. Insist on sticking to the budget you've drawn up. Let him review your accounts, income, preferences, and needs, as this will give him a clear idea of what kind of house you're looking for, and what will best suit you.
I am an avid writer, whose focus is more towards highlighting civic issues our society faces on a daily basis. I provide tips on property investment, write on real estate market price trends in India, and provide an insight on the latest residential projects. For more property related queries, you can visit http://www.commonfloor.com
Article Source: [http://EzineArticles.com/?How-to-Make-a-Budget-for-a-New-Home&id=8706468] How to Make a Budget for a New Home
A Mortgage Professional May Be Able to Find Lower Loan Rates
A Mortgage Professional May Be Able to Find Lower Loan Rates
By [http://ezinearticles.com/?expert=Gert_Martens]Gert Martens
A low interest rate is always better than a higher one. When people are checking with banks, they may not understand how to compare them to figure out which one is a better option. A mortgage professional may be able to sit down with them and figure out which loan rates will be their best options.
Every bank will have a different rate that they are charging for interest. They will have many different things that they are going to have available for customers. Most banks require the homeowner to hold some kind of insurance also.
Not all of them are required to roll that cost into the house payment each month. Sometimes, it is easier for the customers, but other times, it may not be as easy. There are several things that people need to figure out when they are planning to finance anything.
The first thing that they need to figure out is how big of a payment they can afford. This is something that is going to greatly affect the amount of the home loan that is available to them. They need to think ahead. Just because they can be financed for, a certain amount does not mean that they are going to be able to afford that payment.
Everybody has something different that they need to check on. There are many options when buying a home. This is something that needs to be taken seriously. People need to know what kinds of homes that they are able to afford too.
Loan rates will vary from day to day just like any other loan rates. The type of loan that someone is applying for will also be taken into consideration when determining the rate. Secured loans will most likely have a lower rate than other ones.
This is something that is extremely important to consider. Everybody has options when it comes to financing anything. They need to know what the average market it for the rates though. A mortgage professional is going to keep track of all of this for them.
This is something that is extremely important so that people know whether they are getting a good deal or not. Not all banks are going to loan to the same people either. Credit scores are very important to consider when people are determining where they are going.
Certain things can affect when someone gets a loan. If someone has paid everything on time for their entire life, there are situations that banks will deny them a loan. One of the most common things that is considered is how much credit a person already has.
Owing a lot of money out to companies already can indicate that a person may not be able to make another payment. Their income as well as the credit that they already have is a big factor. This is something that needs to be taken seriously. Their income can determine how much they can afford to pay each month.
There are many things that people are going to have to figure out when they are buying a house, car or anything else on credit. There are different loan rates for different pieces of property. Some of these things will require a down payment while other things do not require a down payment.
Loan rates can vary just like any other loan. When people are making a big purchase, they want to be sure that they be protected when they sign those papers. They need to read the fine print and know whom they are dealing with. Sometimes, hiring a mortgage professional can assist them with this.
When consumers are looking to purchase a home, very few of them are going to pay cash for it. They will be looking for the best financing options that they can find. Every bank is offering a different interest rate and different repayment terms. Dominion Lending Centres are going to be there to help consumers find the best place to finance this large purchase. They have teamed up with many different kinds of financial companies and banks to bring consumers the best options. To see what is available and how Dominion Lending Centres can help, check them out at [http://www.gertmartens.ca]http://www.gertmartens.ca.
Article Source: [http://EzineArticles.com/?A-Mortgage-Professional-May-Be-Able-to-Find-Lower-Loan-Rates&id=8706864] A Mortgage Professional May Be Able to Find Lower Loan Rates
By [http://ezinearticles.com/?expert=Gert_Martens]Gert Martens
A low interest rate is always better than a higher one. When people are checking with banks, they may not understand how to compare them to figure out which one is a better option. A mortgage professional may be able to sit down with them and figure out which loan rates will be their best options.
Every bank will have a different rate that they are charging for interest. They will have many different things that they are going to have available for customers. Most banks require the homeowner to hold some kind of insurance also.
Not all of them are required to roll that cost into the house payment each month. Sometimes, it is easier for the customers, but other times, it may not be as easy. There are several things that people need to figure out when they are planning to finance anything.
The first thing that they need to figure out is how big of a payment they can afford. This is something that is going to greatly affect the amount of the home loan that is available to them. They need to think ahead. Just because they can be financed for, a certain amount does not mean that they are going to be able to afford that payment.
Everybody has something different that they need to check on. There are many options when buying a home. This is something that needs to be taken seriously. People need to know what kinds of homes that they are able to afford too.
Loan rates will vary from day to day just like any other loan rates. The type of loan that someone is applying for will also be taken into consideration when determining the rate. Secured loans will most likely have a lower rate than other ones.
This is something that is extremely important to consider. Everybody has options when it comes to financing anything. They need to know what the average market it for the rates though. A mortgage professional is going to keep track of all of this for them.
This is something that is extremely important so that people know whether they are getting a good deal or not. Not all banks are going to loan to the same people either. Credit scores are very important to consider when people are determining where they are going.
Certain things can affect when someone gets a loan. If someone has paid everything on time for their entire life, there are situations that banks will deny them a loan. One of the most common things that is considered is how much credit a person already has.
Owing a lot of money out to companies already can indicate that a person may not be able to make another payment. Their income as well as the credit that they already have is a big factor. This is something that needs to be taken seriously. Their income can determine how much they can afford to pay each month.
There are many things that people are going to have to figure out when they are buying a house, car or anything else on credit. There are different loan rates for different pieces of property. Some of these things will require a down payment while other things do not require a down payment.
Loan rates can vary just like any other loan. When people are making a big purchase, they want to be sure that they be protected when they sign those papers. They need to read the fine print and know whom they are dealing with. Sometimes, hiring a mortgage professional can assist them with this.
When consumers are looking to purchase a home, very few of them are going to pay cash for it. They will be looking for the best financing options that they can find. Every bank is offering a different interest rate and different repayment terms. Dominion Lending Centres are going to be there to help consumers find the best place to finance this large purchase. They have teamed up with many different kinds of financial companies and banks to bring consumers the best options. To see what is available and how Dominion Lending Centres can help, check them out at [http://www.gertmartens.ca]http://www.gertmartens.ca.
Article Source: [http://EzineArticles.com/?A-Mortgage-Professional-May-Be-Able-to-Find-Lower-Loan-Rates&id=8706864] A Mortgage Professional May Be Able to Find Lower Loan Rates
Mortgage Calculators Show Options for Consumers Looking for a Home
Mortgage Calculators Show Options for Consumers Looking for a Home
By [http://ezinearticles.com/?expert=Gert_Martens]Gert Martens
When people are considering purchasing a home, they need to know what their options are. Each loan is going to have different payments and be for different amounts. Mortgage calculators are going to be able to provide many different options for people by showing them what consumers have available to them.
Every loan will be for a different amount. This is something that is true for any area of the world. Those mortgage rates can vary from one loan to another or change from day to day.
Knowing what the interest rate is will help tremendously on figuring out what the payments are. This is something that people can play a factor in for getting the best rate. If they make other payments when they are supposed to and have some credit to go on, they will be able to get a better rate on their mortgage.
Figuring out a monthly payment on any kind of loan will require people to enter what their down payment will be too. The higher amount that is used as a down payment, they lower the payments are going to be. This is something that is going to be very helpful in the planning process.
Every plan can be changed as time goes on. The longer that a person waits to get a mortgage, the more money that they will be able to get. This is something that people have to consider closely. A fixed rate mortgage and a variable rate mortgage is something that has to be taken into consideration also.
There are many options that everyone is having when people try to figure out their payments. They may not know how their down payment affects their monthly payment either. This is why many individuals will only put down the minimum amount for their down payment.
Everybody has something different that they want to see in a mortgage. Many people want a low down payment as well as low monthly payments. This is not always possible though.
The amount of the payment can depend on many things. This is something that is very important. Everybody needs to make sure that they understand their loan before they are signing papers.
There are some mortgages that people will pay on for a short time and then have a huge payment at the end of the loan. This is can be very frustrating if people are not prepared for this large balloon payment. It is important to know how much that is going to be after all of the interest is figured in.
Many people forget about the interest when they are figuring out their payments for their loans. This is something that is going to be very important to figure out. There are many different ways that banks can figure the interest. It is important to be on the same page with them.
There may be other charges that are added into a loan payment also. It depends on what the bank requires though. This is something that should be checked into as well. If someone thinks that they are paying one amount and then the bank sends them a payment book or monthly statements that say a different amount, this can mess up their budgeting.
A mortgage calculator can help a person figure out what their monthly mortgage payment should be without adding in any of the extras. Most people will have a good idea of how much the extras that are added in will cost them. Having the insurance on their home is required by many banks.
When consumers are looking to purchase a home, very few of them are going to pay cash for it. They will be looking for the best financing options that they can find. Every bank is offering a different interest rate and different repayment terms. Dominion Lending Centres are going to be there to help consumers find the best place to finance this large purchase. They have teamed up with many different kinds of financial companies and banks to bring consumers the best options. To see what is available and how Dominion Lending Centres can help, check them out at [http://www.gertmartens.ca]http://www.gertmartens.ca.
Article Source: [http://EzineArticles.com/?Mortgage-Calculators-Show-Options-for-Consumers-Looking-for-a-Home&id=8706858] Mortgage Calculators Show Options for Consumers Looking for a Home
By [http://ezinearticles.com/?expert=Gert_Martens]Gert Martens
When people are considering purchasing a home, they need to know what their options are. Each loan is going to have different payments and be for different amounts. Mortgage calculators are going to be able to provide many different options for people by showing them what consumers have available to them.
Every loan will be for a different amount. This is something that is true for any area of the world. Those mortgage rates can vary from one loan to another or change from day to day.
Knowing what the interest rate is will help tremendously on figuring out what the payments are. This is something that people can play a factor in for getting the best rate. If they make other payments when they are supposed to and have some credit to go on, they will be able to get a better rate on their mortgage.
Figuring out a monthly payment on any kind of loan will require people to enter what their down payment will be too. The higher amount that is used as a down payment, they lower the payments are going to be. This is something that is going to be very helpful in the planning process.
Every plan can be changed as time goes on. The longer that a person waits to get a mortgage, the more money that they will be able to get. This is something that people have to consider closely. A fixed rate mortgage and a variable rate mortgage is something that has to be taken into consideration also.
There are many options that everyone is having when people try to figure out their payments. They may not know how their down payment affects their monthly payment either. This is why many individuals will only put down the minimum amount for their down payment.
Everybody has something different that they want to see in a mortgage. Many people want a low down payment as well as low monthly payments. This is not always possible though.
The amount of the payment can depend on many things. This is something that is very important. Everybody needs to make sure that they understand their loan before they are signing papers.
There are some mortgages that people will pay on for a short time and then have a huge payment at the end of the loan. This is can be very frustrating if people are not prepared for this large balloon payment. It is important to know how much that is going to be after all of the interest is figured in.
Many people forget about the interest when they are figuring out their payments for their loans. This is something that is going to be very important to figure out. There are many different ways that banks can figure the interest. It is important to be on the same page with them.
There may be other charges that are added into a loan payment also. It depends on what the bank requires though. This is something that should be checked into as well. If someone thinks that they are paying one amount and then the bank sends them a payment book or monthly statements that say a different amount, this can mess up their budgeting.
A mortgage calculator can help a person figure out what their monthly mortgage payment should be without adding in any of the extras. Most people will have a good idea of how much the extras that are added in will cost them. Having the insurance on their home is required by many banks.
When consumers are looking to purchase a home, very few of them are going to pay cash for it. They will be looking for the best financing options that they can find. Every bank is offering a different interest rate and different repayment terms. Dominion Lending Centres are going to be there to help consumers find the best place to finance this large purchase. They have teamed up with many different kinds of financial companies and banks to bring consumers the best options. To see what is available and how Dominion Lending Centres can help, check them out at [http://www.gertmartens.ca]http://www.gertmartens.ca.
Article Source: [http://EzineArticles.com/?Mortgage-Calculators-Show-Options-for-Consumers-Looking-for-a-Home&id=8706858] Mortgage Calculators Show Options for Consumers Looking for a Home
Tips for Buying a House in Any Market
Tips for Buying a House in Any Market
By [http://ezinearticles.com/?expert=Karen_S_Musselman]Karen S Musselman
First a disclosure.
I'm not a realtor or banker. I'm a homeowner. But by following these tips for buying a house, we've been able to keep our house even during the worst of a bad economy, and even after I lost my job due to a disability.
Tip #1: Don't Rush Into Buying a House!
Take your time! If you're renting and you're not being forced to move, make a list of what you must have and what is most important for your first house.
This should include how many bedrooms and bathrooms you need, how big the rooms need to be, if it has a garage, how much land is necessary, etc.
I was renting a really nice apartment before I moved into my husband's house, which he was also renting. When we decided it was time to start looking for our first house together, we sat down and made our list.
We weren't being forced to move. In fact, our landlady didn't want us to move! But she also wasn't willing to make some necessary repairs to the rental or reimburse us for the repairs if we decided to make them ourselves.
My husband had been renting the house for almost 10 years and we were ready to move on. But the first thing we decided was we weren't going to go backwards. With two young children, we needed to buy the same size house with the same size yard and a garage in a good school district, or we'd just stay put a while longer.
No need to rush into something we'd end up not liking later on!
And by taking our time, we found the perfect house to make our new home!
Tip #2: Make a Budget!
This is where a lot of new homeowners go terribly wrong! They get word from the mortgage company that they're prequalified for X amount of a mortgage, but don't sit down and figure out if they can even afford it!
There are at least two crucial things you need to figure out in your budget before you even go to a mortgage company to get prequalified.
How much more can you afford to pay on a mortgage over what you're paying now for rent or your current mortgage?
What kind of a cut in pay would you take if one of you, or both of you lost your job or ended up on disability? Would you still be able to sustain yourself and not lose your house?
Tip #3: Stick to Your Budget!
Here's what happens sometimes. Couples get all excited that they're "qualified" for this huge mortgage. So they run out and look for houses in that price range and end up with a lot more house - and mortgage - than they can really afford.
And then they end up working extra just to keep the house and nothing else. It's sad, actually.
Here's what we did. Our lender prequalified us for a $300,000 mortgage. And we're like, what planet is he living on?
We took our time and only looked at houses in the $150,000 and less price range. And it's a good thing we did too! Four short months after we made settlement, I was out of work, and my husband was already on disability before we bought the house.
So now both of us were out of work! Good thing we didn't have this huge mortgage on our heads! That was almost 10 years ago and we still have our house! And we made sure to buy a house with an extra "bedroom" since we both work from home to supplement our disability.
Meanwhile, when the economy took a huge downturn, and it still hasn't recovered, For Sale signs are going up all over the place as couples and families downsize from a house they couldn't really afford in the first place.
Or they're walking away from their homes and letting the bank take the properties while they go back to renting or moving in with other family members.
Tip #4: Follow These Tips for Buying a House in ANY Market
The bottom line - don't ever just go with what the mortgage companies or banks tell you is what you can afford. They're not using the right numbers anyway. If they prequalify you for a certain amount, cut it in half and look for properties in that price range.
Today's economy is too uncertain to rely on someone else's numbers. You need to do your own budgeting, and stick to it!
Follow these tips for buying a house - in any market - and you shouldn't have to struggle later on.
Karen Musselman works from home and provides "Online Marketing Help Without the Hype," from her home office, including tips on [http://ksmusselman.com/online-video-marketing]video marketing. Working at Home with KSMusselman also provides [http://ksmusselman.com/sfi-training-videos/]training videos for members of the marketing company she's a member of. Stop by Karen's blog today for more online marketing help.
Article Source: [http://EzineArticles.com/?Tips-for-Buying-a-House-in-Any-Market&id=8710896] Tips for Buying a House in Any Market
By [http://ezinearticles.com/?expert=Karen_S_Musselman]Karen S Musselman
First a disclosure.
I'm not a realtor or banker. I'm a homeowner. But by following these tips for buying a house, we've been able to keep our house even during the worst of a bad economy, and even after I lost my job due to a disability.
Tip #1: Don't Rush Into Buying a House!
Take your time! If you're renting and you're not being forced to move, make a list of what you must have and what is most important for your first house.
This should include how many bedrooms and bathrooms you need, how big the rooms need to be, if it has a garage, how much land is necessary, etc.
I was renting a really nice apartment before I moved into my husband's house, which he was also renting. When we decided it was time to start looking for our first house together, we sat down and made our list.
We weren't being forced to move. In fact, our landlady didn't want us to move! But she also wasn't willing to make some necessary repairs to the rental or reimburse us for the repairs if we decided to make them ourselves.
My husband had been renting the house for almost 10 years and we were ready to move on. But the first thing we decided was we weren't going to go backwards. With two young children, we needed to buy the same size house with the same size yard and a garage in a good school district, or we'd just stay put a while longer.
No need to rush into something we'd end up not liking later on!
And by taking our time, we found the perfect house to make our new home!
Tip #2: Make a Budget!
This is where a lot of new homeowners go terribly wrong! They get word from the mortgage company that they're prequalified for X amount of a mortgage, but don't sit down and figure out if they can even afford it!
There are at least two crucial things you need to figure out in your budget before you even go to a mortgage company to get prequalified.
How much more can you afford to pay on a mortgage over what you're paying now for rent or your current mortgage?
What kind of a cut in pay would you take if one of you, or both of you lost your job or ended up on disability? Would you still be able to sustain yourself and not lose your house?
Tip #3: Stick to Your Budget!
Here's what happens sometimes. Couples get all excited that they're "qualified" for this huge mortgage. So they run out and look for houses in that price range and end up with a lot more house - and mortgage - than they can really afford.
And then they end up working extra just to keep the house and nothing else. It's sad, actually.
Here's what we did. Our lender prequalified us for a $300,000 mortgage. And we're like, what planet is he living on?
We took our time and only looked at houses in the $150,000 and less price range. And it's a good thing we did too! Four short months after we made settlement, I was out of work, and my husband was already on disability before we bought the house.
So now both of us were out of work! Good thing we didn't have this huge mortgage on our heads! That was almost 10 years ago and we still have our house! And we made sure to buy a house with an extra "bedroom" since we both work from home to supplement our disability.
Meanwhile, when the economy took a huge downturn, and it still hasn't recovered, For Sale signs are going up all over the place as couples and families downsize from a house they couldn't really afford in the first place.
Or they're walking away from their homes and letting the bank take the properties while they go back to renting or moving in with other family members.
Tip #4: Follow These Tips for Buying a House in ANY Market
The bottom line - don't ever just go with what the mortgage companies or banks tell you is what you can afford. They're not using the right numbers anyway. If they prequalify you for a certain amount, cut it in half and look for properties in that price range.
Today's economy is too uncertain to rely on someone else's numbers. You need to do your own budgeting, and stick to it!
Follow these tips for buying a house - in any market - and you shouldn't have to struggle later on.
Karen Musselman works from home and provides "Online Marketing Help Without the Hype," from her home office, including tips on [http://ksmusselman.com/online-video-marketing]video marketing. Working at Home with KSMusselman also provides [http://ksmusselman.com/sfi-training-videos/]training videos for members of the marketing company she's a member of. Stop by Karen's blog today for more online marketing help.
Article Source: [http://EzineArticles.com/?Tips-for-Buying-a-House-in-Any-Market&id=8710896] Tips for Buying a House in Any Market
Saturday, 20 September 2014
What Is Rent to Buy? Everything You Need to Know!
What Is Rent to Buy? Everything You Need to Know!
By [http://ezinearticles.com/?expert=Yasmin_Ffion_Scott]Yasmin Ffion Scott
Rent to Buy is a worldwide scheme, designed for people wishing to live in their dream houses, which they intend to buy in a few year's time.
Rent to Buy is also known as Rent to Own, Let to Own or Lease to Buy. The scheme is designed to ease the transition between renting and buying and allow people to be able to afford to buy their own home quickly and hassle free.
Firstly, when you have found the right house that you want to Rent to Buy, you, as the Buyer, have to put down a deposit on the property. This deposit will be significantly less than most require, and you can put down as much as you want. The difference is: with a small deposit, you will have to pay more monthly rent towards the property, whereas with a larger deposit, you can look forward to paying a smaller monthly rate.
Now, you may be wondering what happens with the rent you pay towards this property that you intend to buy in several years. Basically, the rent you pay to the homeowner covers the mortgage they pay on the property, but it also includes a deposit towards your future mortgage on the property. So, when you can take out this mortgage and buy the property, you won't have to borrow as much, meaning that your interest rates and mortgage bills would be reduced significantly.
You negotiate the terms in your individual contract with the homeowner, and we help you manage this process from start to finish. Each contract differs depending on the buyer and homeowner individually.
Here is an example of a Rent to Buy:
Mike and Leah recently bought their first home with us, as recent graduates they both had a salary but needed another 2-3 years to be eligible for a great rate on a mortgage. However, they did have �2000 in savings and another �2000 loaned from their parents to put towards their first home.
They set their heart on a 6 year old, 2 bedroom, 2 bathroom property with a garden and driveway for 2 cars, situated on a large privately owned estate in Bridgend, South Wales.
This is the deal that was structured to suit their situation:
Purchase price: �119,995
Getting started money (deposit): �4,000
Monthly rent: �450
Monthly 'top-up': �150
Mike and Leah will build up their deposit using their 'top-up' payments and have 5 years to purchase the house outright.
Deposit
Year 1: �1800
Year 2: �3600
Year 3: �5400
Year 4: �7200
Year 5: �9000
If they wait 5 years to buy their home, they will have built up a �13,000 (�9000 top-up payment + �4000 down payment). So would only need an 89% mortgage.
If they exercised their in 2 years, they would have built up a mortgage deposit of �7600 (�3600 + �4000 down payment). So they would have built up a 6% deposit for their mortgage in only 2 years.
We hope we have explained this scheme fully, and that Rent to Buy is something that appeals to you.
Whatever your Rent to Buy or Rent to Sell needs, Homes With Options will help you. We will provide you with a scheme and contract to suit you, and we'll manage the process from start to finish. Find out more information on our website, or through getting in contact with us directly!
Live in your dream home today! Contact us: http://www.homeswithoptions.co.uk
Article Source: [http://EzineArticles.com/?What-Is-Rent-to-Buy?-Everything-You-Need-to-Know!&id=8716754] What Is Rent to Buy? Everything You Need to Know!
By [http://ezinearticles.com/?expert=Yasmin_Ffion_Scott]Yasmin Ffion Scott
Rent to Buy is a worldwide scheme, designed for people wishing to live in their dream houses, which they intend to buy in a few year's time.
Rent to Buy is also known as Rent to Own, Let to Own or Lease to Buy. The scheme is designed to ease the transition between renting and buying and allow people to be able to afford to buy their own home quickly and hassle free.
Firstly, when you have found the right house that you want to Rent to Buy, you, as the Buyer, have to put down a deposit on the property. This deposit will be significantly less than most require, and you can put down as much as you want. The difference is: with a small deposit, you will have to pay more monthly rent towards the property, whereas with a larger deposit, you can look forward to paying a smaller monthly rate.
Now, you may be wondering what happens with the rent you pay towards this property that you intend to buy in several years. Basically, the rent you pay to the homeowner covers the mortgage they pay on the property, but it also includes a deposit towards your future mortgage on the property. So, when you can take out this mortgage and buy the property, you won't have to borrow as much, meaning that your interest rates and mortgage bills would be reduced significantly.
You negotiate the terms in your individual contract with the homeowner, and we help you manage this process from start to finish. Each contract differs depending on the buyer and homeowner individually.
Here is an example of a Rent to Buy:
Mike and Leah recently bought their first home with us, as recent graduates they both had a salary but needed another 2-3 years to be eligible for a great rate on a mortgage. However, they did have �2000 in savings and another �2000 loaned from their parents to put towards their first home.
They set their heart on a 6 year old, 2 bedroom, 2 bathroom property with a garden and driveway for 2 cars, situated on a large privately owned estate in Bridgend, South Wales.
This is the deal that was structured to suit their situation:
Purchase price: �119,995
Getting started money (deposit): �4,000
Monthly rent: �450
Monthly 'top-up': �150
Mike and Leah will build up their deposit using their 'top-up' payments and have 5 years to purchase the house outright.
Deposit
Year 1: �1800
Year 2: �3600
Year 3: �5400
Year 4: �7200
Year 5: �9000
If they wait 5 years to buy their home, they will have built up a �13,000 (�9000 top-up payment + �4000 down payment). So would only need an 89% mortgage.
If they exercised their in 2 years, they would have built up a mortgage deposit of �7600 (�3600 + �4000 down payment). So they would have built up a 6% deposit for their mortgage in only 2 years.
We hope we have explained this scheme fully, and that Rent to Buy is something that appeals to you.
Whatever your Rent to Buy or Rent to Sell needs, Homes With Options will help you. We will provide you with a scheme and contract to suit you, and we'll manage the process from start to finish. Find out more information on our website, or through getting in contact with us directly!
Live in your dream home today! Contact us: http://www.homeswithoptions.co.uk
Article Source: [http://EzineArticles.com/?What-Is-Rent-to-Buy?-Everything-You-Need-to-Know!&id=8716754] What Is Rent to Buy? Everything You Need to Know!
What Makes Mortgage Rates Rise and Fall?
What Makes Mortgage Rates Rise and Fall?
By [http://ezinearticles.com/?expert=James_DeLoney]James DeLoney
The first place to start when trying to understand how mortgage rates rise and fall is where the money to fund mortgages comes from. Mortgage money comes from a variety of sources, including deposits at banks, but most of the funds come from investors through what is collectively known as "capital markets." Capital markets are where investors go to purchase securities like Treasury notes, corporate bonds, or Mortgage Backed Securities (a package of home loans bundled together into one asset).
Mortgage Backed Securities, the main funding source for home loans, compete against other long-term securities like bonds and treasury notes for the same investment dollars. Since Mortgage Backed Securities compete against these other securities, lenders will adjust homes loan rates to make the return on Mortgage Back Securities competitive relative to other securities. The gold standard of long-term investment securities is the US Treasury Note.
30 year mortgages are traditionally priced using the yield on 10 Treasury notes. The reason for this is simple. US Treasury notes are backed by the "full faith and credit" of the United States, so they are the benchmark for many securities, including Mortgage Backed Securities.
Since home loans are competing for investment dollars with Treasury notes, in most cases when the yield on Treasury notes increases, lenders must raise mortgage rates in order to keep Mortgage Backed Securities competitive with Treasury notes. The opposite happens when Treasury note yields fall; lenders lower mortgage rates.
So if mortgage rates typically go up when Treasury yields rise, and down when yields fall, what makes Treasury yields go up or down? This is where things get extremely complicated, and the easy answer is that there are a multitude of market factors that determine the movement of Treasury yields. But for the sake of this discussion, let's boil down those market factors and try to make sense of when and why mortgage rates move.
Because most investors don't hold bonds until they mature, the current market value of bonds affects the bond yield. As bond prices increase, the yield decreases. So as the bond market improves, and bond prices increase, the Treasury note yield goes down. Since 30 year loan rates are pegged to 10 year Treasury notes, when bond and Treasury yields go down, mortgage rates go down.
So what makes bond prices go up or down? One major factor affecting bond prices is inflation. As a general rule, when economic times are good and employment is high, inflation tends to rise. Inflation is the enemy of long-term bond holders. The reason for this is simple. Bond holders are paid yearly interest, but the true value of these interest payments is reduced by inflation.
Typically, as the economy improves bond prices goes down as investors begin pricing inflation into the value of bonds and treasuries. Remember that we learned earlier that bond prices and bond yields moves opposite of each other. When bond prices go down, yield prices go up. So if mortgage rates track the yield on US Treasuries, when bond prices go down, mortgage rates go up.
Other factors that affect mortgage rates are employment, homes sales, and consumer confidence. Mortgage rates are more susceptible to economic activity than treasuries, mainly because the average home buyer may lose their job or be unable to make their mortgage payment, while the US Treasuries are considered the safest investment in the market. For this reason, jobs reports, Consumer Price Index, Gross Domestic Product, Home Sales, Consumer Confidence, and other data on the economic calendar can move mortgage rates significantly. http://www.jamesdeloney.com
Article Source: [http://EzineArticles.com/?What-Makes-Mortgage-Rates-Rise-and-Fall?&id=6460559] What Makes Mortgage Rates Rise and Fall?
By [http://ezinearticles.com/?expert=James_DeLoney]James DeLoney
The first place to start when trying to understand how mortgage rates rise and fall is where the money to fund mortgages comes from. Mortgage money comes from a variety of sources, including deposits at banks, but most of the funds come from investors through what is collectively known as "capital markets." Capital markets are where investors go to purchase securities like Treasury notes, corporate bonds, or Mortgage Backed Securities (a package of home loans bundled together into one asset).
Mortgage Backed Securities, the main funding source for home loans, compete against other long-term securities like bonds and treasury notes for the same investment dollars. Since Mortgage Backed Securities compete against these other securities, lenders will adjust homes loan rates to make the return on Mortgage Back Securities competitive relative to other securities. The gold standard of long-term investment securities is the US Treasury Note.
30 year mortgages are traditionally priced using the yield on 10 Treasury notes. The reason for this is simple. US Treasury notes are backed by the "full faith and credit" of the United States, so they are the benchmark for many securities, including Mortgage Backed Securities.
Since home loans are competing for investment dollars with Treasury notes, in most cases when the yield on Treasury notes increases, lenders must raise mortgage rates in order to keep Mortgage Backed Securities competitive with Treasury notes. The opposite happens when Treasury note yields fall; lenders lower mortgage rates.
So if mortgage rates typically go up when Treasury yields rise, and down when yields fall, what makes Treasury yields go up or down? This is where things get extremely complicated, and the easy answer is that there are a multitude of market factors that determine the movement of Treasury yields. But for the sake of this discussion, let's boil down those market factors and try to make sense of when and why mortgage rates move.
Because most investors don't hold bonds until they mature, the current market value of bonds affects the bond yield. As bond prices increase, the yield decreases. So as the bond market improves, and bond prices increase, the Treasury note yield goes down. Since 30 year loan rates are pegged to 10 year Treasury notes, when bond and Treasury yields go down, mortgage rates go down.
So what makes bond prices go up or down? One major factor affecting bond prices is inflation. As a general rule, when economic times are good and employment is high, inflation tends to rise. Inflation is the enemy of long-term bond holders. The reason for this is simple. Bond holders are paid yearly interest, but the true value of these interest payments is reduced by inflation.
Typically, as the economy improves bond prices goes down as investors begin pricing inflation into the value of bonds and treasuries. Remember that we learned earlier that bond prices and bond yields moves opposite of each other. When bond prices go down, yield prices go up. So if mortgage rates track the yield on US Treasuries, when bond prices go down, mortgage rates go up.
Other factors that affect mortgage rates are employment, homes sales, and consumer confidence. Mortgage rates are more susceptible to economic activity than treasuries, mainly because the average home buyer may lose their job or be unable to make their mortgage payment, while the US Treasuries are considered the safest investment in the market. For this reason, jobs reports, Consumer Price Index, Gross Domestic Product, Home Sales, Consumer Confidence, and other data on the economic calendar can move mortgage rates significantly. http://www.jamesdeloney.com
Article Source: [http://EzineArticles.com/?What-Makes-Mortgage-Rates-Rise-and-Fall?&id=6460559] What Makes Mortgage Rates Rise and Fall?
What Are Mortgage Points On Mortgage Loans?
What Are Mortgage Points On Mortgage Loans?
By [http://ezinearticles.com/?expert=Kate_Ross]Kate Ross
Since mortgage points can save you a lot of money, it is important for you to understand what they are and how they work.
The interest rate defines the amount of your monthly payments and thus, your monthly installments could be defined using 1% of your mortgage loan amount as a factor. That is exactly what a mortgage point is: the unit that describes how expensive or inexpensive the costs of a mortgage loan are and any variations are also computed in mortgage points.
Different Mortgage Points
The interest rate charged for the loan can be minced into smaller portions and the reason for the raise or the reduction can be identified. Thus, whenever a variable reduces the interest rate by one point, we say it reduces the risk involved in the transaction. On the other hand, whenever a variable raises the interest rate by one point, it is said to be the reason for origination of risk.
For instance, certain points can be purchased. This actually implies a down payment on your loan that obviously reduces the interest rate you'll end up paying for your mortgage loan. These points are therefore discount points and the cost of them will vary according to the loan amount you have required when you applied for the loan. A Mortgage point is equal to 1% of the loan amount.
Flexibility and Limits
There's a lot of flexibility when it comes to mortgage points. You can obtain mortgage discount points by paying in advance the equivalent to 1% of the total amount of the loan. Origination points are charged for administrative costs, closing fees and different fees and costs charged by the lender for a particular loan.
However, there are limits that cannot be bypassed. Your interest rate cannot be reduced or increased beyond reasonable boundaries. The limit depends on the type of loan and lender but on common mortgage loans it usually reaches around four points.
Each mortgage point can be divided into fractions and usually does as many variables only reduce or increase the interest rate half a point or a quarter of a point. Thus, you can purchase half a mortgage point too to obtain an interest rate reduction.
Acquiring Discount Points
The benefits of acquiring discount points are variable and depend mainly on the length of the repayment program and your plans as regards to the property. If you plan to retain ownership of the property for many years, then, getting discount points is a smart idea because you can spread the payments over the whole life of the loan and get low monthly installments you'll be able to afford without sacrifices while you enjoy the property.
But, if you don't want to retain ownership of the property for such a long time, it makes no sense to put money down, when you will be selling the property in the near future and you could transfer the costs to the next owner by accepting a higher interest mortgage loan with no down payment that you won't have to repay in full.
---
Kate Ross is a professional consultant at Speedybadcreditloans.com where she publishes <a target="_new" href="http://www.speedybadcreditloans.com/financial-articles.html">informative financial articles</A> about Bad Credit Loans, Free Goverment Grants and Leasing, among other subjects.
Article Source: [http://EzineArticles.com/?What-Are-Mortgage-Points-On-Mortgage-Loans?&id=583363] What Are Mortgage Points On Mortgage Loans?
By [http://ezinearticles.com/?expert=Kate_Ross]Kate Ross
Since mortgage points can save you a lot of money, it is important for you to understand what they are and how they work.
The interest rate defines the amount of your monthly payments and thus, your monthly installments could be defined using 1% of your mortgage loan amount as a factor. That is exactly what a mortgage point is: the unit that describes how expensive or inexpensive the costs of a mortgage loan are and any variations are also computed in mortgage points.
Different Mortgage Points
The interest rate charged for the loan can be minced into smaller portions and the reason for the raise or the reduction can be identified. Thus, whenever a variable reduces the interest rate by one point, we say it reduces the risk involved in the transaction. On the other hand, whenever a variable raises the interest rate by one point, it is said to be the reason for origination of risk.
For instance, certain points can be purchased. This actually implies a down payment on your loan that obviously reduces the interest rate you'll end up paying for your mortgage loan. These points are therefore discount points and the cost of them will vary according to the loan amount you have required when you applied for the loan. A Mortgage point is equal to 1% of the loan amount.
Flexibility and Limits
There's a lot of flexibility when it comes to mortgage points. You can obtain mortgage discount points by paying in advance the equivalent to 1% of the total amount of the loan. Origination points are charged for administrative costs, closing fees and different fees and costs charged by the lender for a particular loan.
However, there are limits that cannot be bypassed. Your interest rate cannot be reduced or increased beyond reasonable boundaries. The limit depends on the type of loan and lender but on common mortgage loans it usually reaches around four points.
Each mortgage point can be divided into fractions and usually does as many variables only reduce or increase the interest rate half a point or a quarter of a point. Thus, you can purchase half a mortgage point too to obtain an interest rate reduction.
Acquiring Discount Points
The benefits of acquiring discount points are variable and depend mainly on the length of the repayment program and your plans as regards to the property. If you plan to retain ownership of the property for many years, then, getting discount points is a smart idea because you can spread the payments over the whole life of the loan and get low monthly installments you'll be able to afford without sacrifices while you enjoy the property.
But, if you don't want to retain ownership of the property for such a long time, it makes no sense to put money down, when you will be selling the property in the near future and you could transfer the costs to the next owner by accepting a higher interest mortgage loan with no down payment that you won't have to repay in full.
---
Kate Ross is a professional consultant at Speedybadcreditloans.com where she publishes <a target="_new" href="http://www.speedybadcreditloans.com/financial-articles.html">informative financial articles</A> about Bad Credit Loans, Free Goverment Grants and Leasing, among other subjects.
Article Source: [http://EzineArticles.com/?What-Are-Mortgage-Points-On-Mortgage-Loans?&id=583363] What Are Mortgage Points On Mortgage Loans?
What Is Mortgage Terms?
What Is Mortgage Terms?
By [http://ezinearticles.com/?expert=Jim_Power]Jim Power
When looking at getting a mortgage, there are some terms
that you should familiarize yourself with so you know what
your mortgage lender is talking about. Below is a list of
the most commonly-used "mortgage phrases" and their
meanings to help you understand them better:
Adjustable Rate Mortgage (ARM) - A mortgage in which the
interest rate is adjusted periodically based on an index.
Appraisal - The determination of property value based on
recent sales information of similar properties.
Asset - Valuable items, encumbered or not, owned by a
person, corporation, or entity.
Biweekly Mortgage - Mortgage loan payments that requires a
payment twice monthly, yielding thirteen payments per year
instead of twelve. This significantly reduces the time a
principal is paid off.
Closing - Final arrangements to transfer title of property
as well as allocate charges and credits.
Closing Costs - Closing costs are fees paid by the borrower
when a property is purchased or refinanced. Costs incurred
include a loan origination fee, discount points, appraisal
fee, title search, title insurance, survey, taxes, deed
recording fee, and credit report charges.
Credit Report - A report to a prospective lender on the
credit standing of a prospective borrower. Used to help
determine creditworthiness. Information regarding late
payments, defaults, or bankruptcies will appear here.
Debt-to-Income Ratio (DTI) - The ratio of aggregate monthly
debt to aggregate monthly income.
Down Payment - Money paid by a buyer from his own funds, as
opposed to that portion of the purchase price which is
financed.
Earnest Money Deposit - A deposit made by a potential home
buyer to show that they are serious about purchasing the
property.
Equity - The difference between the current market value of
a property and the principal balance of all outstanding
loans.
Fixed-Rate Mortgage - A mortgage where the interest rate
does not change for the life of the loan.
Good Faith Estimate - An estimate of charges which a
borrower is likely to incur in connection with a loan
closing.
Gross Monthly Income - The total amount the borrower earns
per month, not counting any taxes or expenses. Often used
in calculations to determine whether a borrower qualifies
for a particular loan.
Interest Rate - The percentage of an amount of money that's
paid for its use over a specified time period.
Lender - The bank, mortgage company, or mortgage broker
offering the loan.
Loan - The principal, or amount of total borrowed money,
that is repaid with interest.
Loan Officer - An intermediary between lending institutions
and borrowers, loan officers solicit loans, represent
creditors to borrowers, and represent borrowers to
creditors.
Loan-To-Value Ratio - The relationship between the amount
of the mortgage loan and the appraised value of the
property expressed as a percentage. A LTV ratio of 90 means
that a borrower is borrowing 90% of the value of the
property and paying 10% as a down payment. For purchases,
the value of the property is assumed to be the purchase
price, for refinances the value is determined by an
appraisal.
Mortgage - A legal document that pledges property to a
creditor for the repayment of the loan, and is the term
used to describe the loan itself.
Mortgage Broker - A mortgage company that originates loans,
joining the borrower and lender for a real estate loan,
earning a placement fee.
Origination Fee - The fee imposed by a lender to cover
certain processing expenses in connection with making a
loan. Usually a percentage of the amount loaned.
Pre-Approval - A term used to mean that a borrower has
completed a loan application and provided debt, income, and
savings information that has been reviewed and pre-approved
by an underwriter.
Principal - The amount of debt, not counting interest, left
on a loan.
Purchase Agreement - A written contract signed by the buyer
and seller stating the terms and conditions under which a
property will be sold.
Refinancing - The process of paying off one loan with the
proceeds from a new loan, using the same property as
security.
You'll probably hear several of these phrases from your
mortgage lender when getting a loan. Whenever you don't
understand something, be sure to ask him or her to explain
it in layman's terms to be sure you understand the whole
mortgage process.
Jim Power is writer for the mortgage saving information site [http://mortagesave.com/] where there is more information to be found interest only mortgage [http://mortagesave.com/how-to-get-an-interest-only-mortgage/] can be found.
Article Source: [http://EzineArticles.com/?What-Is-Mortgage-Terms?&id=892720] What Is Mortgage Terms?
By [http://ezinearticles.com/?expert=Jim_Power]Jim Power
When looking at getting a mortgage, there are some terms
that you should familiarize yourself with so you know what
your mortgage lender is talking about. Below is a list of
the most commonly-used "mortgage phrases" and their
meanings to help you understand them better:
Adjustable Rate Mortgage (ARM) - A mortgage in which the
interest rate is adjusted periodically based on an index.
Appraisal - The determination of property value based on
recent sales information of similar properties.
Asset - Valuable items, encumbered or not, owned by a
person, corporation, or entity.
Biweekly Mortgage - Mortgage loan payments that requires a
payment twice monthly, yielding thirteen payments per year
instead of twelve. This significantly reduces the time a
principal is paid off.
Closing - Final arrangements to transfer title of property
as well as allocate charges and credits.
Closing Costs - Closing costs are fees paid by the borrower
when a property is purchased or refinanced. Costs incurred
include a loan origination fee, discount points, appraisal
fee, title search, title insurance, survey, taxes, deed
recording fee, and credit report charges.
Credit Report - A report to a prospective lender on the
credit standing of a prospective borrower. Used to help
determine creditworthiness. Information regarding late
payments, defaults, or bankruptcies will appear here.
Debt-to-Income Ratio (DTI) - The ratio of aggregate monthly
debt to aggregate monthly income.
Down Payment - Money paid by a buyer from his own funds, as
opposed to that portion of the purchase price which is
financed.
Earnest Money Deposit - A deposit made by a potential home
buyer to show that they are serious about purchasing the
property.
Equity - The difference between the current market value of
a property and the principal balance of all outstanding
loans.
Fixed-Rate Mortgage - A mortgage where the interest rate
does not change for the life of the loan.
Good Faith Estimate - An estimate of charges which a
borrower is likely to incur in connection with a loan
closing.
Gross Monthly Income - The total amount the borrower earns
per month, not counting any taxes or expenses. Often used
in calculations to determine whether a borrower qualifies
for a particular loan.
Interest Rate - The percentage of an amount of money that's
paid for its use over a specified time period.
Lender - The bank, mortgage company, or mortgage broker
offering the loan.
Loan - The principal, or amount of total borrowed money,
that is repaid with interest.
Loan Officer - An intermediary between lending institutions
and borrowers, loan officers solicit loans, represent
creditors to borrowers, and represent borrowers to
creditors.
Loan-To-Value Ratio - The relationship between the amount
of the mortgage loan and the appraised value of the
property expressed as a percentage. A LTV ratio of 90 means
that a borrower is borrowing 90% of the value of the
property and paying 10% as a down payment. For purchases,
the value of the property is assumed to be the purchase
price, for refinances the value is determined by an
appraisal.
Mortgage - A legal document that pledges property to a
creditor for the repayment of the loan, and is the term
used to describe the loan itself.
Mortgage Broker - A mortgage company that originates loans,
joining the borrower and lender for a real estate loan,
earning a placement fee.
Origination Fee - The fee imposed by a lender to cover
certain processing expenses in connection with making a
loan. Usually a percentage of the amount loaned.
Pre-Approval - A term used to mean that a borrower has
completed a loan application and provided debt, income, and
savings information that has been reviewed and pre-approved
by an underwriter.
Principal - The amount of debt, not counting interest, left
on a loan.
Purchase Agreement - A written contract signed by the buyer
and seller stating the terms and conditions under which a
property will be sold.
Refinancing - The process of paying off one loan with the
proceeds from a new loan, using the same property as
security.
You'll probably hear several of these phrases from your
mortgage lender when getting a loan. Whenever you don't
understand something, be sure to ask him or her to explain
it in layman's terms to be sure you understand the whole
mortgage process.
Jim Power is writer for the mortgage saving information site [http://mortagesave.com/] where there is more information to be found interest only mortgage [http://mortagesave.com/how-to-get-an-interest-only-mortgage/] can be found.
Article Source: [http://EzineArticles.com/?What-Is-Mortgage-Terms?&id=892720] What Is Mortgage Terms?
What Are Mortgage Rates Based On? - Rates Are Based on Many Things
What Are Mortgage Rates Based On? - Rates Are Based on Many Things
By [http://ezinearticles.com/?expert=Reese_Evans]Reese Evans
What are mortgage rates based on? So many factors go into determining mortgage rates. It's one thing to come up with the rates we see listed at banks and in the paper but then it's a whole other equation to come up with a rate that is offered to you when you apply for your mortgage. That rate depends on several personal factors. It's not just federal agencies that are responsible for the increase or decrease of mortgage rates, it can depend on everyday people like us.
Short term loan rates that are based on the Prime rate, like car loans, credit cards and home equity loans are automatically lowered when the Feds cut rates. Longer term loans such as mortgages aren't because they are based on competing investment options, for instance investing in stocks rather than real estate.
When the Fed cuts rates, it send a signal to the stock market that the economy is doing well, making stocks more appealing as an investment. People start taking money out of the mortgage backed securities and bond market and put it into the stock market, thus lowering the demand for mortgage backed securities and bonds.
With people investing more in the stock market, the companies that issue bonds and mortgage backed security investments raise the rates to entice investors back into the fold with higher yields, essentially higher rates. The return on mortgage backed securities is based on the income stream from the payment on mortgage loans. In order to raise the yields/rates on mortgage backed securities, the actual rates on the underlying mortgages must rise. That is why mortgage rates can rise when the Fed cuts interest rates.
What are the mortgage rates based on that the lenders give you? They calculate this rate by adding interest onto some average lending rate. That added cost is known as the margin. This is how the lender makes their money and they are not going to tell you what the margin is. It's like not knowing the sticker price on a car so you can't negotiate. The best way to negotiate is to get quotes from several different lenders. They will look at your risk profile and come up with a rate for you. You can then determine which lender you want to work with based partially on their offered rate.
Mortgage rates are based on many other factors besides the security market. Your offered mortgage rate can depend on the mortgage amount, down payment amount, income, debt to income ratio, market value of property, FICO or other credit scores and the type of property.
Stop asking what are [http://www.real-estate-in-the-know.biz/general/what-are-mortgage-rates-based-on.html]mortgage rates based on and Get In The Know. Get information about buying and selling homes, different mortgage types and other real estate information at [http://www.real-estate-in-the-know.biz]Real Estate - Get In The Know
Article Source: [http://EzineArticles.com/?What-Are-Mortgage-Rates-Based-On?---Rates-Are-Based-on-Many-Things&id=2299737] What Are Mortgage Rates Based On? - Rates Are Based on Many Things
By [http://ezinearticles.com/?expert=Reese_Evans]Reese Evans
What are mortgage rates based on? So many factors go into determining mortgage rates. It's one thing to come up with the rates we see listed at banks and in the paper but then it's a whole other equation to come up with a rate that is offered to you when you apply for your mortgage. That rate depends on several personal factors. It's not just federal agencies that are responsible for the increase or decrease of mortgage rates, it can depend on everyday people like us.
Short term loan rates that are based on the Prime rate, like car loans, credit cards and home equity loans are automatically lowered when the Feds cut rates. Longer term loans such as mortgages aren't because they are based on competing investment options, for instance investing in stocks rather than real estate.
When the Fed cuts rates, it send a signal to the stock market that the economy is doing well, making stocks more appealing as an investment. People start taking money out of the mortgage backed securities and bond market and put it into the stock market, thus lowering the demand for mortgage backed securities and bonds.
With people investing more in the stock market, the companies that issue bonds and mortgage backed security investments raise the rates to entice investors back into the fold with higher yields, essentially higher rates. The return on mortgage backed securities is based on the income stream from the payment on mortgage loans. In order to raise the yields/rates on mortgage backed securities, the actual rates on the underlying mortgages must rise. That is why mortgage rates can rise when the Fed cuts interest rates.
What are the mortgage rates based on that the lenders give you? They calculate this rate by adding interest onto some average lending rate. That added cost is known as the margin. This is how the lender makes their money and they are not going to tell you what the margin is. It's like not knowing the sticker price on a car so you can't negotiate. The best way to negotiate is to get quotes from several different lenders. They will look at your risk profile and come up with a rate for you. You can then determine which lender you want to work with based partially on their offered rate.
Mortgage rates are based on many other factors besides the security market. Your offered mortgage rate can depend on the mortgage amount, down payment amount, income, debt to income ratio, market value of property, FICO or other credit scores and the type of property.
Stop asking what are [http://www.real-estate-in-the-know.biz/general/what-are-mortgage-rates-based-on.html]mortgage rates based on and Get In The Know. Get information about buying and selling homes, different mortgage types and other real estate information at [http://www.real-estate-in-the-know.biz]Real Estate - Get In The Know
Article Source: [http://EzineArticles.com/?What-Are-Mortgage-Rates-Based-On?---Rates-Are-Based-on-Many-Things&id=2299737] What Are Mortgage Rates Based On? - Rates Are Based on Many Things
Will the Bank Reject Your Short Sale Offer?
Will the Bank Reject Your Short Sale Offer?
By [http://ezinearticles.com/?expert=Michelle_O._Johnson]Michelle O. Johnson
In order for a short sale to go through, the bank needs to agree to it and they need to accept your offer. There are no real certainties when it comes to short sales, and it can be very difficult to predict exactly what the banks will do. Just because you put in a good offer does not mean that the bank will accept it. They might even decide they do not want to do any type of this at all. Still, most of the time, the reasons that a bank will reject an offer falls into several different categories. Understanding these and addressing them helps to reduce the possibility that the bank could reject your offer.
The Price
Banks like to make money, naturally. This means that, if the offer you put into the bank is too low, then the bank is likely to reject it. Although you can get good deals on properties going through short sales, you and your agent need to be realistic about the price you offer for the property. Agents should do comparative market analysis and come up with a reasonable offer that the bank is more likely to accept.
Incomplete Paperwork
Sometimes, the buyer will feel that everything is going fine with the short sale only to realize later that the bank rejects the offer due to a problem with the paperwork. Banks can lose documentation. In fact, it happens more often than banks might like to admit. It's a good idea to make copies of all documents, just so you have them in case the bank does lose them. Working with a professional agent versed in short sales can help to ensure a better chance of success in this regard.
Qualifications
The seller and the buyer both need to qualify for the sale. First, the seller needs to meet the bank's short sale requirements. These can differ based on the lender, but they usually require that the seller is behind on payments and underwater on the mortgage.
The buyer also needs to qualify to buy a home. The lenders will go through the credit history and all of the normal checks when it comes to buying a home. If the buyer does not qualify for some reason, the offer will naturally receive a rejection from the bank. By submitting a prequalification letter, it can help to gain credibility with the seller's bank, and improve the chance of the sale actually happening.
These are just some of the many reasons that the bank might eventually renege on the offer that you put forth. Banks can be very hard to predict, and going through a short sale without help is simply not a smart move. You really do need to have the help of an agent who has experience in the field of short sales. A good agent will let you know the process and make sure you are doing everything the right way to improve your chance of getting the short sale to go through.
Author Profile: Owner and Broker of Tri-State Realty, LLC, specializing in Property Listings, REO and Short Sale real estate in Maryland, Washington, D.C. and Virginia.
Article Source: [http://EzineArticles.com/?Will-the-Bank-Reject-Your-Short-Sale-Offer?&id=8709279] Will the Bank Reject Your Short Sale Offer?
By [http://ezinearticles.com/?expert=Michelle_O._Johnson]Michelle O. Johnson
In order for a short sale to go through, the bank needs to agree to it and they need to accept your offer. There are no real certainties when it comes to short sales, and it can be very difficult to predict exactly what the banks will do. Just because you put in a good offer does not mean that the bank will accept it. They might even decide they do not want to do any type of this at all. Still, most of the time, the reasons that a bank will reject an offer falls into several different categories. Understanding these and addressing them helps to reduce the possibility that the bank could reject your offer.
The Price
Banks like to make money, naturally. This means that, if the offer you put into the bank is too low, then the bank is likely to reject it. Although you can get good deals on properties going through short sales, you and your agent need to be realistic about the price you offer for the property. Agents should do comparative market analysis and come up with a reasonable offer that the bank is more likely to accept.
Incomplete Paperwork
Sometimes, the buyer will feel that everything is going fine with the short sale only to realize later that the bank rejects the offer due to a problem with the paperwork. Banks can lose documentation. In fact, it happens more often than banks might like to admit. It's a good idea to make copies of all documents, just so you have them in case the bank does lose them. Working with a professional agent versed in short sales can help to ensure a better chance of success in this regard.
Qualifications
The seller and the buyer both need to qualify for the sale. First, the seller needs to meet the bank's short sale requirements. These can differ based on the lender, but they usually require that the seller is behind on payments and underwater on the mortgage.
The buyer also needs to qualify to buy a home. The lenders will go through the credit history and all of the normal checks when it comes to buying a home. If the buyer does not qualify for some reason, the offer will naturally receive a rejection from the bank. By submitting a prequalification letter, it can help to gain credibility with the seller's bank, and improve the chance of the sale actually happening.
These are just some of the many reasons that the bank might eventually renege on the offer that you put forth. Banks can be very hard to predict, and going through a short sale without help is simply not a smart move. You really do need to have the help of an agent who has experience in the field of short sales. A good agent will let you know the process and make sure you are doing everything the right way to improve your chance of getting the short sale to go through.
Author Profile: Owner and Broker of Tri-State Realty, LLC, specializing in Property Listings, REO and Short Sale real estate in Maryland, Washington, D.C. and Virginia.
Article Source: [http://EzineArticles.com/?Will-the-Bank-Reject-Your-Short-Sale-Offer?&id=8709279] Will the Bank Reject Your Short Sale Offer?
What Does a Mortgage Broker Do and 8 Reasons Why You Should Use One
What Does a Mortgage Broker Do and 8 Reasons Why You Should Use One
By [http://ezinearticles.com/?expert=Brad_Kirwan]Brad Kirwan
A mortgage broker doesn't physically lend you money, the role of a broker is to aid borrowers in finding an appropriate loan, based on the borrowers specific requirements.
Brokers have a panel of lenders from which they recommend a loan. They have to become accredited with the lender to offer their products, and are required to keep up-to-date with their latest offers.
The loan you choose from a broker is the same loan a bank, building society, non-bank or credit union would offer you the borrower, directly.
Most brokers don't charge fees for residential loans, the lender pays a commission, and this does not affect the type of loan or the interest rate you receive.
A Mortgage broker must have all of the following to be able to give credit assistance:
Hold an Australian Credit Licence or be an appointed Credit Representative of an Australian Credit Licence Holder.
Hold a Diploma of Financial Services (Finance/Mortgage Broking Management).
Achieve 30 hours per year of Continuing Professional Development (CPD).
Hold Professional Indemnity Insurance.
Maintain an Internal Dispute Resolution procedure & register.
Hold External Dispute Resolution membership.
Hold Industry Body membership.
Fully disclose all commissions.
So now you know what a mortgage broker is, the following are 8 great reasons why using a broker for your next home loan may well be the smartest move to take.
Save you time
The choices available in the mortgage market can seem limitless and completely overwhelming. You can choose to research the subject, the lenders and their products yourself, or work with a broker, who already has that knowledge.
Save you money
Only use a broker that offers a free service, comparing hundreds of different home loans from various lenders, making it easier to find if there is a better home loan for you. All you have to do is ask your broker.
Give you choice
A good mortgage broker has a panel of over 30 Lenders and over 600 different loan types from which to choose.
Find the right loan
The best deal is not necessarily the cheapest rate. Your broker will look at your circumstances and future plans in-depth, this enables them to recommend a loan that is right for you. Having an appropriate loan which works for you can help you build wealth.
Help you avoid pitfalls
Many products seem to offer a great deal but they could have penalties, fees and charges you aren't aware of. Or, they may not offer the flexibility you need in the future. Your broker can help you avoid taking out a loan you might later regret.
They come to you
Brokers come to you, appointments are conducted in the comfort of your own home, or your office, at a time that suits you, days, evenings or weekends.
Do all the leg work
Your broker will prepare your application, submit your application and work with the lender throughout the process up to settlement.
And after settlement
This is where it all counts, your mortgage broker should continue their service after settlement of your loan with regular updates and reviews of your circumstances, your aims and goals can change and your loan needs may also change.
I have been helping people with their home and investment finances since 2004. I am based on the Gold Coast but no matter where you are in Australia I can assist you with all your home loan needs.
For more tips and articles visit our website blog at http://www.oceanhomeloans.com.au/blog
Article Source: [http://EzineArticles.com/?What-Does-a-Mortgage-Broker-Do-and-8-Reasons-Why-You-Should-Use-One&id=8723528] What Does a Mortgage Broker Do and 8 Reasons Why You Should Use One
By [http://ezinearticles.com/?expert=Brad_Kirwan]Brad Kirwan
A mortgage broker doesn't physically lend you money, the role of a broker is to aid borrowers in finding an appropriate loan, based on the borrowers specific requirements.
Brokers have a panel of lenders from which they recommend a loan. They have to become accredited with the lender to offer their products, and are required to keep up-to-date with their latest offers.
The loan you choose from a broker is the same loan a bank, building society, non-bank or credit union would offer you the borrower, directly.
Most brokers don't charge fees for residential loans, the lender pays a commission, and this does not affect the type of loan or the interest rate you receive.
A Mortgage broker must have all of the following to be able to give credit assistance:
Hold an Australian Credit Licence or be an appointed Credit Representative of an Australian Credit Licence Holder.
Hold a Diploma of Financial Services (Finance/Mortgage Broking Management).
Achieve 30 hours per year of Continuing Professional Development (CPD).
Hold Professional Indemnity Insurance.
Maintain an Internal Dispute Resolution procedure & register.
Hold External Dispute Resolution membership.
Hold Industry Body membership.
Fully disclose all commissions.
So now you know what a mortgage broker is, the following are 8 great reasons why using a broker for your next home loan may well be the smartest move to take.
Save you time
The choices available in the mortgage market can seem limitless and completely overwhelming. You can choose to research the subject, the lenders and their products yourself, or work with a broker, who already has that knowledge.
Save you money
Only use a broker that offers a free service, comparing hundreds of different home loans from various lenders, making it easier to find if there is a better home loan for you. All you have to do is ask your broker.
Give you choice
A good mortgage broker has a panel of over 30 Lenders and over 600 different loan types from which to choose.
Find the right loan
The best deal is not necessarily the cheapest rate. Your broker will look at your circumstances and future plans in-depth, this enables them to recommend a loan that is right for you. Having an appropriate loan which works for you can help you build wealth.
Help you avoid pitfalls
Many products seem to offer a great deal but they could have penalties, fees and charges you aren't aware of. Or, they may not offer the flexibility you need in the future. Your broker can help you avoid taking out a loan you might later regret.
They come to you
Brokers come to you, appointments are conducted in the comfort of your own home, or your office, at a time that suits you, days, evenings or weekends.
Do all the leg work
Your broker will prepare your application, submit your application and work with the lender throughout the process up to settlement.
And after settlement
This is where it all counts, your mortgage broker should continue their service after settlement of your loan with regular updates and reviews of your circumstances, your aims and goals can change and your loan needs may also change.
I have been helping people with their home and investment finances since 2004. I am based on the Gold Coast but no matter where you are in Australia I can assist you with all your home loan needs.
For more tips and articles visit our website blog at http://www.oceanhomeloans.com.au/blog
Article Source: [http://EzineArticles.com/?What-Does-a-Mortgage-Broker-Do-and-8-Reasons-Why-You-Should-Use-One&id=8723528] What Does a Mortgage Broker Do and 8 Reasons Why You Should Use One
The 8 Steps to Buying an Investment Property
The 8 Steps to Buying an Investment Property
By [http://ezinearticles.com/?expert=Brad_Kirwan]Brad Kirwan
Purchasing your first investment property can be a daunting prospect, following these 8 steps will have you well on the road to success.
Build a team of experts to support you
Examples of the type of expert that you will need to have on your team are solicitors, accountants, finance brokers, property coaches/mentors, property managers, valuers, quantity surveyors and insurance brokers.
Establish your borrowing position
Contact your mortgage broker and ask them for an assessment of your borrowing position. Knowing your borrowing position and what you can do to improve it helps you to plan and work out the type, number and profile of the properties that you can afford to buy.
Establish the right entity to buy your property in
The question you will next face is what entity you should purchase the investment property in. Should it be in your own name, your spouse's, child's or partner's name? Or should it be in a trust (hybrid, discretionary or unit trust), a company or a combination of the above?
Also, how many properties should you purchase in the one entity and why? How should you structure the purchase to provide maximum asset protection while at the same time providing you with maximum leverage, minimum tax and the best return on your investment?
Establish the right buying strategy
What kind of property should you buy? Should it be a capital growth (negatively geared), cash flow neutral, positively geared or a cash flow positive property? What kind of return do you need to get from the property in order to sustain it and/or your lifestyle?
Establish your buying rules
Buying rules will help you focus your search on properties that fit your buying strategy... Typical questions that you should ask yourself when establishing your buying rules are:
What kind of properties should you purchase - houses, units, townhouses or apartments?
How many bedrooms should it have?
What yield should the investment property provide?
Should you buy new or established properties?
Find the investment property
The first step is to select three areas of buying interest that relate to your strategy (I.e. cash flow or capital growth). Use the many internet property websites available as a means of finding properties in your search areas and then apply the buying rules that you have established to zero in on the right property.
Contact three [http://www.oceanhomeloans.com.au/8-questions-you-must-ask-your-investment-property-manager/]property managers in your search area and ask them what tenants are looking for when looking for a rental property.
You could also contact three real estate agents in your search area, give them an overview of your buying rules and then ask them to contact you with any properties that match your property profile.
Crunch the numbers
Before you "fall in love" with the property make sure the deal is viable, make sure you analyse the property financials to make sure the property fits your buying strategy.
Negotiate the price
When you have found the investment property that you want to buy and the numbers work for you, put in an offer in writing, this should be done quickly. Add "subject to" clauses such as subject to finance, subject to satisfactory building inspection, give yourself plenty of time in the contract "subject to" clauses to compete your due diligence investigations.
I have been helping people with their home and investment finances since 2004. I am based on the Gold Coast but no matter where you are in Australia I can assist you with all your home loan needs.
For more tips and articles visit our website blog at http://www.oceanhomeloans.com.au/
Article Source: [http://EzineArticles.com/?The-8-Steps-to-Buying-an-Investment-Property&id=8727386] The 8 Steps to Buying an Investment Property
By [http://ezinearticles.com/?expert=Brad_Kirwan]Brad Kirwan
Purchasing your first investment property can be a daunting prospect, following these 8 steps will have you well on the road to success.
Build a team of experts to support you
Examples of the type of expert that you will need to have on your team are solicitors, accountants, finance brokers, property coaches/mentors, property managers, valuers, quantity surveyors and insurance brokers.
Establish your borrowing position
Contact your mortgage broker and ask them for an assessment of your borrowing position. Knowing your borrowing position and what you can do to improve it helps you to plan and work out the type, number and profile of the properties that you can afford to buy.
Establish the right entity to buy your property in
The question you will next face is what entity you should purchase the investment property in. Should it be in your own name, your spouse's, child's or partner's name? Or should it be in a trust (hybrid, discretionary or unit trust), a company or a combination of the above?
Also, how many properties should you purchase in the one entity and why? How should you structure the purchase to provide maximum asset protection while at the same time providing you with maximum leverage, minimum tax and the best return on your investment?
Establish the right buying strategy
What kind of property should you buy? Should it be a capital growth (negatively geared), cash flow neutral, positively geared or a cash flow positive property? What kind of return do you need to get from the property in order to sustain it and/or your lifestyle?
Establish your buying rules
Buying rules will help you focus your search on properties that fit your buying strategy... Typical questions that you should ask yourself when establishing your buying rules are:
What kind of properties should you purchase - houses, units, townhouses or apartments?
How many bedrooms should it have?
What yield should the investment property provide?
Should you buy new or established properties?
Find the investment property
The first step is to select three areas of buying interest that relate to your strategy (I.e. cash flow or capital growth). Use the many internet property websites available as a means of finding properties in your search areas and then apply the buying rules that you have established to zero in on the right property.
Contact three [http://www.oceanhomeloans.com.au/8-questions-you-must-ask-your-investment-property-manager/]property managers in your search area and ask them what tenants are looking for when looking for a rental property.
You could also contact three real estate agents in your search area, give them an overview of your buying rules and then ask them to contact you with any properties that match your property profile.
Crunch the numbers
Before you "fall in love" with the property make sure the deal is viable, make sure you analyse the property financials to make sure the property fits your buying strategy.
Negotiate the price
When you have found the investment property that you want to buy and the numbers work for you, put in an offer in writing, this should be done quickly. Add "subject to" clauses such as subject to finance, subject to satisfactory building inspection, give yourself plenty of time in the contract "subject to" clauses to compete your due diligence investigations.
I have been helping people with their home and investment finances since 2004. I am based on the Gold Coast but no matter where you are in Australia I can assist you with all your home loan needs.
For more tips and articles visit our website blog at http://www.oceanhomeloans.com.au/
Article Source: [http://EzineArticles.com/?The-8-Steps-to-Buying-an-Investment-Property&id=8727386] The 8 Steps to Buying an Investment Property
How To Get Mortgage Ready - We Can Help!
How To Get Mortgage Ready - We Can Help!
By [http://ezinearticles.com/?expert=Yasmin_Ffion_Scott]Yasmin Ffion Scott
Whether you're a first time buyer or someone looking to get back onto the property ladder, acquiring a mortgage can be difficult. It is definitely a massive financial commitment, and you might find yourself uncertain as to whether you can truly afford the full costs of a owning your own home. Plus, when you start looking into securing your mortgage, you will find the process can get quite complicated, particularly with the new rules and regulations in place.
Firstly: what is a mortgage?
A mortgage is simply a loan taken out to purchase a property or land. Mortgages differ to regular loans as the mortgage is secured against the property, meaning that if you can't keep up the repayments, the lender can take the property back. The average mortgage runs for 25 years, but the term can be longer or shorter.
You can acquire a mortgage from a bank, building society or specialist mortgage lender. However, it isn't really that simple to get approved for a mortgage loan. Before they approve, each potential lender has to go through a thorough check, including a credit check, to make sure you can truly afford the costs of the mortgage repayments and the property upkeep. This is the part where most people can stumble.
Mortgage Checks
When deciding when to lend to you, the mortgage lender will take all of your incomings and outgoings into account. You may have to produce bank statements and payslips to prove that your finances are viable. These checks can sometimes feel quite invasive, as your outgoings include any debts, household bills, and even various costs of living.
The rules for mortgage checks got tougher after April 2014. They have now introduced "stress tests" and other questions to make sure you would be able to keep up with your mortgage repayments and property costs if your interest rates went up or if your circumstances changed. They mainly focus on the future, and look ahead to asking questions about any future changes that could affect your circumstances, such as if you are planning to have a baby, retire, or any other substantial changes.
This is where Homes With Options can help!
With us, you can move into your future home and start building up your mortgage deposit through your monthly rental payments. Also, with the extra time of renting the property before you commit to a mortgage, you are able to save up extra towards your home and make those essential changes.
If you have had difficulty becoming mortgage ready previously, this will secure your chances of getting approved immediately once your Rent-to-Buy term ends. Also, we will help you through the entire process, making sure you secure a solid mortgage loan.
Before you take out a Rent-to-Buy scheme with us, we will test your mortgage eligibility. We can test straight away whether you would be ready for a mortgage now, or in a few years' time. Then, you have the time to sort out your finances and situation to become fully mortgage ready.
A Rent-to-Buy scheme is basically an easy way of saving towards your mortgage and property. However, the main difference is that you can live in your future home while you save. That way, you are investing in your future and all of your finances go towards your future property.
Renting nowadays can be just as costly as mortgage repayments, which does make it difficult to save for a future property at the same time. With rental costs on the rise constantly, throwing money away on rent will only make it harder to save for your future.
The current schemes last 3-5 years on average, which is usually enough time to contribute to a good mortgage deposit, and sort out your finances to become fully mortgage ready.
When you are ready to apply for a mortgage after our scheme, your chosen mortgage lender would also take the scheme into consideration. It will help to prove that you are serious about owning your own home, and prove that you can afford your future mortgage repayments.
Example:
Dean and Lucy recently bought their first home with us. As they are both self-employed, they struggled to prove their earnings to the mortgage lenders who asked for three years' worth of accounts. They had a fantastic �5,000 to put towards their deposit that they had saved over time.
They fell in love with a lovely potential family home: 3 bedrooms, 2 bathrooms with a large garden and off road parking.
This is how their deal worked:
Purchase Price �99,995
Deposit (which is usually 1%-3% of the asking price) �5,000
Monthly Rent �300
Monthly 'top-up' �150
Dean and Lucy will build up their deposit using their top-up payments and have 5 years to purchase the property.
Deposit:
Year 1: �1,800
Year 2: �3,600
Year 3: �5,400
If they wait 3 years to buy their home, they will have built up a �10,400 (�5,400 top-up payments plus �5,000 deposit), which is just under 10.5%. This means they would only need a 90% mortgage and would now have the 3 years accounts requested previously.
Hopefully, this is a good solution for someone who wants to get on the property ladder, and secure a mortgage loan easily!
Through Homes With Options, we will help you secure a mortgage, whether you're a first time buyer or simply looking to get back onto the property ladder.
We will sort out your ideal home through our flexible Rent-to-Buy scheme, which will help you become financially compatible and fully mortgage ready!
Contact us today: http://www.homeswithoptions.co.uk
Article Source: [http://EzineArticles.com/?How-To-Get-Mortgage-Ready---We-Can-Help!&id=8716811] How To Get Mortgage Ready - We Can Help!
By [http://ezinearticles.com/?expert=Yasmin_Ffion_Scott]Yasmin Ffion Scott
Whether you're a first time buyer or someone looking to get back onto the property ladder, acquiring a mortgage can be difficult. It is definitely a massive financial commitment, and you might find yourself uncertain as to whether you can truly afford the full costs of a owning your own home. Plus, when you start looking into securing your mortgage, you will find the process can get quite complicated, particularly with the new rules and regulations in place.
Firstly: what is a mortgage?
A mortgage is simply a loan taken out to purchase a property or land. Mortgages differ to regular loans as the mortgage is secured against the property, meaning that if you can't keep up the repayments, the lender can take the property back. The average mortgage runs for 25 years, but the term can be longer or shorter.
You can acquire a mortgage from a bank, building society or specialist mortgage lender. However, it isn't really that simple to get approved for a mortgage loan. Before they approve, each potential lender has to go through a thorough check, including a credit check, to make sure you can truly afford the costs of the mortgage repayments and the property upkeep. This is the part where most people can stumble.
Mortgage Checks
When deciding when to lend to you, the mortgage lender will take all of your incomings and outgoings into account. You may have to produce bank statements and payslips to prove that your finances are viable. These checks can sometimes feel quite invasive, as your outgoings include any debts, household bills, and even various costs of living.
The rules for mortgage checks got tougher after April 2014. They have now introduced "stress tests" and other questions to make sure you would be able to keep up with your mortgage repayments and property costs if your interest rates went up or if your circumstances changed. They mainly focus on the future, and look ahead to asking questions about any future changes that could affect your circumstances, such as if you are planning to have a baby, retire, or any other substantial changes.
This is where Homes With Options can help!
With us, you can move into your future home and start building up your mortgage deposit through your monthly rental payments. Also, with the extra time of renting the property before you commit to a mortgage, you are able to save up extra towards your home and make those essential changes.
If you have had difficulty becoming mortgage ready previously, this will secure your chances of getting approved immediately once your Rent-to-Buy term ends. Also, we will help you through the entire process, making sure you secure a solid mortgage loan.
Before you take out a Rent-to-Buy scheme with us, we will test your mortgage eligibility. We can test straight away whether you would be ready for a mortgage now, or in a few years' time. Then, you have the time to sort out your finances and situation to become fully mortgage ready.
A Rent-to-Buy scheme is basically an easy way of saving towards your mortgage and property. However, the main difference is that you can live in your future home while you save. That way, you are investing in your future and all of your finances go towards your future property.
Renting nowadays can be just as costly as mortgage repayments, which does make it difficult to save for a future property at the same time. With rental costs on the rise constantly, throwing money away on rent will only make it harder to save for your future.
The current schemes last 3-5 years on average, which is usually enough time to contribute to a good mortgage deposit, and sort out your finances to become fully mortgage ready.
When you are ready to apply for a mortgage after our scheme, your chosen mortgage lender would also take the scheme into consideration. It will help to prove that you are serious about owning your own home, and prove that you can afford your future mortgage repayments.
Example:
Dean and Lucy recently bought their first home with us. As they are both self-employed, they struggled to prove their earnings to the mortgage lenders who asked for three years' worth of accounts. They had a fantastic �5,000 to put towards their deposit that they had saved over time.
They fell in love with a lovely potential family home: 3 bedrooms, 2 bathrooms with a large garden and off road parking.
This is how their deal worked:
Purchase Price �99,995
Deposit (which is usually 1%-3% of the asking price) �5,000
Monthly Rent �300
Monthly 'top-up' �150
Dean and Lucy will build up their deposit using their top-up payments and have 5 years to purchase the property.
Deposit:
Year 1: �1,800
Year 2: �3,600
Year 3: �5,400
If they wait 3 years to buy their home, they will have built up a �10,400 (�5,400 top-up payments plus �5,000 deposit), which is just under 10.5%. This means they would only need a 90% mortgage and would now have the 3 years accounts requested previously.
Hopefully, this is a good solution for someone who wants to get on the property ladder, and secure a mortgage loan easily!
Through Homes With Options, we will help you secure a mortgage, whether you're a first time buyer or simply looking to get back onto the property ladder.
We will sort out your ideal home through our flexible Rent-to-Buy scheme, which will help you become financially compatible and fully mortgage ready!
Contact us today: http://www.homeswithoptions.co.uk
Article Source: [http://EzineArticles.com/?How-To-Get-Mortgage-Ready---We-Can-Help!&id=8716811] How To Get Mortgage Ready - We Can Help!
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