Showing posts with label Mortgage. Show all posts
Showing posts with label Mortgage. Show all posts

Sunday, October 19, 2014

About Reverse Mortgages

A reverse mortgage is a kind of loan which is available for the persons who are at the age of 62 years or are older. In this, you can convert the equity part of your home into cash. It helps retirees. Because in their oldage their retirement amount is limited and it is very difficult for them to survive. Due to that they had to live in old ages which are very difficult for them. But now those days had gone. And reverse mortgage is a boon for the persons who have crossed their age of sixty. The persons can live in their residential places without selling them. 

Types of reverse mortgages:

The first one is HECM. HECM stands for home equity conversion method. It is created and regulated by a department. It is handled by the U.S. department of Housing and Urban Development. 

It is a government loan which is issued by a private bank. And it is insured by the Housing Administration named Federal. It is a part of HUD. There are many rules and regulations in this mortgage.

Proprietary reverse mortgage

These mortgages are different from HECMs. There are changes in this mortgage within time. These mortgages are privately insured by the banks and the mortgage companies that offer them. These mortgages are also called jumbo mortgages.

Features of reverse mortgage

  1. You are always owner of your home. You never lose ownership of your property. The lender can’t grab your property until you vacate it permanently or till your last survival. You are the owner of your property and your house till your last breathes.
  2. The amount of funds of reverse mortgage in California depends on his age, the amount of the property he or she possesses. The other factors are interest rates and upfront costs. The area of the property also a major factor to get reverse mortgages.
  3. Citizenship is also a factor which is counted. The person must be a senior citizen of the country.
  4. The best feature of this mortgage is that there is no need to pay any kind of installments to the lender back. In this mortgage, lender gives you amount at the end of each and every month. Because of this feature of these mortgages, these are called reverse mortgages. These are totally opposite to the traditional mortgages.
  5. You are secure even after your retirements.
  6. It is like you are getting salary at the end of every month. You get monthly income without working or without going anywhere.
  7. Your life is easy till your last breathe.
  8. Reverse mortgages helps you to lead a peaceful and simple life which includes no tensions and worries.
  9. There is no tension to pay installments. No bank comes at your house to remind you that you have to pay your installments.
  10. You are a reputed person who can live his life with a standard.
In this way reverse mortgages help you to lead a peaceful and luxurious life.

Sunday, July 6, 2014

Research and Right Renovation Sells Well

Selling or buying property is a tricky affair. Especially when you are selling your house for making money you need to be extra prudent. One indiscreet step and you will have to regret it for the rest of your life. Having decided to sell property one has to look for the right price for it. In fact finding the appropriate price is the only effort that you have to apply and wait for the right buyer, without getting impatient. If you are the type that succumbs to bargaining then you need to over-price it suitably and on the other hand if you are the fixed price tough seller then you may quote the right price and sell it. One has to acknowledge that it takes a lot of smart research and despite all the effort that you may put it is very hard to do a property price prediction over short time periods. Interest rates pay a key role in determining the price and if they remain low, then house prices will be down in nominal terms.

Buy Sell Property

Enhance the property

Even for the select few that understand market trends and bank policies very well, the market can be intriguing sometimes, with the challenge lying in predicting short term trends. For the majority of us we may choose what lies within our control and proceed to carry out the tasks such as enhancing the value of the property that we plan to sell.This is one area that most of us either overdo, spending money unnecessarily or makes improvements to parts of the house that doesn’t really matter to the buyer and can therefore not be of any consequence. So how do you know where to put your money so that it fetches the maximum returns? So this is the right time and you have a valid reason to consult with an experienced realtor even before you start investing in adding value to your house by improving it. Any worthy consultant can save you from investing your hard earned money in unnecessary upgrades.

Some common mistakes

  • Spending money on high-end electrical and kitchen fixtures: Though the buyer would appreciate such improvements, it is better to settle for an affordable lower-price brand and be assured that it would not break a deal.
  • Leaving the old carpet untouched: People willing to buy your house should be able to envision their stay in it, while the dirty grout, torn and worn carpet, and miscellaneous clutter will put off a buyer as it gives the impression of an ill-maintained house that also lacks sufficient storage.
  • Painting the whole house: If your home can do with a few touches here and there, then do not go about purchasing paint cans for the whole house.
One simple philosophy is to replace or fix only that part which needs fixing. This way you would save your money from spending on upgrades that doesn’t fetch returns on your investment.

Research is paramount

Before you start posting ads, research is paramount and it not just earns that extra bucks but also save you from spending unnecessary money in the name of renovation. Your background work should include:
  • Finding out the type of property that sells in your area. Is it the two or three or four bedroom houses, with or without garages?
  • Visiting a few well developed houses and compare them with your property.
  • Finding out the people’s needs and the investment capabilities in and around your area.
  • Talking to the real estate agents and consulting with them to ascertain your property value.
Armed with this knowledge set aside a realistic budget to develop your property and start looking for prospective buyers. Do worry too much about pricing and be reasonably flexible as it all depends on the market needs and ultimately based on supply and demand. You just need to make that decent sum without under-pricing your property. For more information please click here

Wednesday, February 26, 2014

Benefits of Mortgage Payment Protection

If you are unable to work due to accident or sickness, you can get payment by going for mortgage payment protection insurance.The payment will begin either 31 days or 60 days from the date of unemployment. However, there are best payment plans through which you will get backdated payment as well. The payment will be to the extent of the first 12 months of unemployment. The time frame is fixed so that you will attend work at the earliest. When you avail the mortgage protection insurance, the payment will be paid to your back account or to your mortgage company directly.

Mortgage Payment Protection

What are the benefits?

When there are sufficient funds to manage your financial obligations in spite of all the odds, there will not be any requirement to go for payment protection insurance. On the other hand, if you want absolute peace of mind in spite of loss of job through various uncertainties, you should go for payment protection insurance. Mortgage payments should be done as per the agreement with the company on or before the due date. If you fail to fulfill the commitment, the property will be seized. You might get notice from the court as well. It will be a great deal of time and effort to deal with hefty penalties and court rulings. Hence, to avoid all kinds of uncertainties and embarrassing situations, you should want to utilize the mortgage payment protection insurance. By going for the best insurance, you will get maximum payment. The installment premium should be less so that there will not be any burden on your monthly expenditure.

How to get the best mortgage protection payment?

In order to purchase the best mortgage protection insurance, you should want to go through the details of various insurance products available in the market. When there are a number of products and insurance carriers, it will be difficult to settle for the best. You might want to go through the price comparison websites as a shortcut for this process. It is true that you will be exposed to numerous options through the premium comparison charts.

It is also important to understand the fact that you might not find some insurance companies that charge a very low premium and deliver maximum benefits. For example, Ant insurance offers insurance policies to protect income at very low premium and the benefits are very high. You will get maximum payment when you go through the uncertainty. Price comparison websites will list insurance plans of companies from which they get commissions. If an insurance company objects to pay any commission to the website, their products will not be listed. Hence, necessary care should be taken to make the most of your investment.

Steps to get the best mortgage payment protection

You can get the best mortgage payment protection when you cannot work due to various reasons. The accident, sickness or redundancy will not deter you anymore from withholding your payments. You will be able to pay promptly to your mortgage company from which you availed the loan for your house. You should go through the quotations from 3 or more companies. By spending a little time through the online search process, you can save great amount.

By not narrowing down your search for price comparison websites, you will be able to make the most of your time and effort. The best mortgage payment protection will let you manage payment right from the first month without fail. Thus, your credit score will not be affected and you will enjoy better terms with various lenders. You can purchase mortgage redundancy insurance so that your unemployment will be protected.

Sunday, February 9, 2014

Best Mortgage Options after Bankruptcy

Bankruptcy is the legal proceeding in which the properties of the debtor is being seized and acquired by the lending agencies on the event of payback failure of the loan. Bankruptcy is one stage where the victim searches for various options to become debt-free. In such situations, it is very common that we again choose loan options which are charged with very high interest rates than usual. But we fail to understand that such an act would again push us to a bankrupt situation when we are not able to manage the repayment of interest as well as the principle at website. 

Mortgage Options after Bankruptcy

Steps involved in choosing a best mortgage loan

1. Checking credit report and maintaining proper documents

As soon as you become bankrupt, your unpaid dues would reflect in your credit history which results in the inability of further loan claim. It is also essential for you to maintain proper documents related to the debt repayment failure following bankruptcy. This is because of the reality that you attempt for other credit options without clearing the older dues and that erodes your credit score. Do not forget to organize your debt report, bankruptcy papers, tax records, foreclosure documents, etc. You may not use it for that time, but it helps you later while applying for other mortgage loans.

2. Applying for credit cards

Credit cards will be helpful during this phase since the secured ones report to any of the major credit concerns. It requires maintaining a particular amount that equals your credit limit. With the help of this card, you can easily purchase things at particular intervals and pay the bills on time to reveal your liability. Another option is an unsecured store credit card which can be used to purchase at a higher interest rate. Major thing to be kept in mind is that you should not drag your balance more than 30 percent from your credit limit.

3. Purchase a large loan

When you put the above things in order then you are in a position to try out bigger options. By maintaining a fair credit score after bankruptcy, you can check out to try a sizable loan such as a car loan or student loan. Be careful in handling these loans and see to that it fits your budget. Do not put yourself in trouble again by purchasing high interest loans. Try to pay back the loans on time and if possible with larger amount than expected. This is to reveal the knowledge you gained from your previous bankrupt situation.

4. Finally VA or FHA loans

The Federal Housing Administration (FHA) or Veteran Affairs (VA) loans are offered by the federal government which is issued by an intermediate government approved no credit check loan lender. FHA does not bother your previous bankruptcy unless and until you have established a fair credit history as mentioned above. VA loans require a funding fee which is collected by the U.S. Department of Veteran Affairs. In such mortgages where the government is involved, you have to be prepared to express your past due problems and the concerns you have regarding the loans at present and that you would avoid such bankrupt situation in future.

Friday, January 10, 2014

The Cheapest Houses Across the Globe

Thanks or no thanks to the global financial crisis of 2008 we have seen house prices plummet in countries across the world in the past number of years. However, as our infographic reveals, the recession isn’t solely responsible for all the cheap houses out there.

Cheapest Houses

Take for example, the Nano flat-pack house which is made in India. You can purchase this house for a measly $700. Yes, believe it or not, a whole new house for less than a 1000 bucks. The house uses coconut fibre for wall cladding and interiors and has a life expectancy of 20 years! Of course, there may be extra costs involved in the actual building process, however, it won’t add up to anything close to what your average house costs.

Advancements in building technologies isn’t the only reason for slashed priced housing. In Australia, a six bedroom, three bathroom home that sits on a huge block, was valued at $630,000 but sold for just $1000 at an auction. The explanation – the house was seized by a Sheriff and sold without a reserve price after the owner incurred debts of up to $96,000. Supposedly, he incurred the debts after going guarantor for a friend on a failed deal–that friend failed to pay, and is now in China!

Find out about some other really interesting factors from around the world that have led to the cheapest houses ever in our infographic below.

Wednesday, January 1, 2014

Be A Mortgage Broker or Mortgage Bankers?

The duty of both the mortgage broker and the mortgage banker is to help provide the prospective home owner, a secure and reliable home financing. A mortgage banker works for a specific a bank, whereas the mortgage broker does not represent a single institution but works in association with multiple lending institutions to find the best deal for his client. In other words, a broker works as a middleman between you and any other lending institution.

Mortgage Broker

A Banker is Institutional

A mortgage banker typically works in the loan department of banks or any other lending institution. He guides the prospective loan applicants in completing their mortgage processes, right form evaluation of property to collecting of financial information. Plus he highlights the various lending options available within that institution. It’s generally their task to assist clients till the last, when the deals cracked.

Mortgage Broker Shops

A mortgage broker on the other hand first works with the prospective buyer and determines his requirements. He then shops at various lending institutions in order to get the best loan package that comfortably suits the borrower’s situation. A broker can in this way compare various loans at different institutions to suit his clients’ needs, whereas a banker cannot.

Salary of a Banker

A mortgage banker is a full time bank employee, who gets paid every month in the form of a salary. Various financial institutions even offer certain financial incentive or bonus to their mortgage bankers for their exceptional performance. As the banker can only grant loans through his institution, it is therefore his first responsibility to make sure the loans are properly secured and the borrower completely qualifies all prerequisites to qualify for the loan.

Broker Commission

A mortgage broker functions by representing the borrower, rather than the lending institution and therefore, he is liable to get a commission for every deal, and not a salary. His sole responsibility is to get the borrower the best possible deal, irrespective of the lending institution. Generally he’s paid a commission from the difference between the rates he gets from the banks or other financial institutions and the rates he provides to the prospective borrower.

Becoming a Mortgage Broker

In order to become a mortgage broker you are not required to have a professional college degree. However enrolling yourself into a permanent mortgage brokering course can help you maintain an edge in the competitive mortgage broking market.

The mortgage broking courses are so designed so as to transform a normal mortgage broker into a specialist who has the capability to survive even in the toughest of market conditions. To be a mortgage broker you need to learn how to add value to your customers and to differentiate yourself form the others by working smarter. All these abilities are imbibed by the mortgage brokers through continuous training.

Author bio: John is a specialist Redrock Brokers consultant and provides Mortgage broking course in Australia. John’s knowledge and experience in mortgage finance has personally assisted his clients around Australia to achieve their business, financial and investment goals.

Monday, October 28, 2013

Important Things to Know About Home Loans

It can be confusing for people as to which home loan they should choose. This is understandable as each have different kinds of debt, interest rates and other policies to comprehend. Below is a detailed explanation of some of the most common home loans available.

Home Loans

Fixed rate home loan

A home loan with a fixed rate lets you enjoy a static interest rate which will not change during the duration of your mortgage. This is the most used plan provided by banks and credit groups. This loan lets you enjoy a fixed monthly fee to pay. This can give you an ease of mind in knowing you’re monthly expenses won’t increase because of the mortgage.

The only disadvantage you may have here is when interest rates go down. This period allows those with other house loan plans the benefits of reduced monthly fees. However, you can benefit from the period when interest rates are rising.

Your payment is mostly used to settle the interest of the loan during some of the first period of your mortgage. Once the interest is paid, the rest of your monthly expenses are used to cover the principal. You can discuss with your lender if you want to pay the principal first. You also have the option of increasing your payment in order to settle your debt faster.

Adjustable rate mortgages

Adjustable Rate Mortgage (ARM) loans are the opposite of fixed rate loans. However, most ARM loans provide a fixed rate during the last half of the mortgage period. Availing of this loan allows you to enjoy a very low initial rate of interest. For the first months or years, you may pay less each month in comparison to a fixed rate loan.

The disadvantage of taking an adjustable rate mortgage loan is the period when the rates are high. During this time, your monthly payments also increase. However, you can also enjoy the period when the rates are low. This is when your loan payment is lowered.

Balloon payment home loan

The balloon payment home loan is derived from the final payment of the mortgage. You only pay the total interest fee throughout the period of the loan. However, the entire principal owed must be payed right away at the end of the mortgage. The term “balloon” is based on the large fee being asked from you on the due date.

This loan is usually taken by individuals who believe they can get the finance to cover the “balloon” in the future. For those who are not able to pay the due date fee, they have the option to take another financial loan to cover the expensive principal. However, there are risks which can occur.

The balloon payment home loan should not be taken without fully considering your financial status. This plan is suitable for you if your salary is low, but you’re expecting a promotion or a raise in the future. The monthly fee of the balloon payment loan is much lower than other plan which is perfect for most people.

Everything mentioned above can help you clarify some of the common home loan plans. This will allow you to choose which is suitable for your financial status.

Taryn Jacob is a Senior Financial Advisor for over 2 years now. She’s a graduate of Banking and Finance at Melbourne Business School then later moved to Brisbane. Ventured to do journalistic practice, she currently writes for Heritage Bank specialising in home loans.

6 Reasons Why Mortgage Broker Mentoring is a Must

Broker mentoring is a must if you dream to earn a name for yourself in the field in the time to come. It’s a lucrative field but do not let yourself fall into the world of fantasy without first getting trained by the best. Get yourself enrolled into a mortgage broking course, for example.

Mortgage Broker

Listed below are 6 reasons that explain why having a mortgage broker is a must.

Wealth of Knowledge

For the reason your mentor has experienced various seasons in the field for long both as an entry level professional and high level manager, he can teach you some really helpful tricks used in the game. Something that took him his lifetime in learning can be learnt by you in a few sessions. By learning from a good mentor will help you to strike really good deals in the time to come. Mortgage broker mentoring provides you with this knowledge without having to fail a hundred times. That’s the real catch.

Contacts Matter

it’s not only about learning the nuances of the game all the time. Experienced mentors also carry lots of high profile contacts with them and you can benefit from them if you mentor thinks you to be the right candidate in making. It’s always about approaching the right contact in the business, if you want to make a big sale.

Discovering Opportunities

when new to the game, you will always find yourself landed in confusion in discovering who will be the best client for you. You may get involved with a less profitable client at the expanse of a good one. This is where an experienced mentor comes into picture. He will always assist you in finding the right kind of opportunities.

Point Of Reference

the job of mortgage broking involves dealing with a lot of paperwork. You are expected to be perfectly acquainted with the nitty-gritties of the job. It’s possible that your client may not even be able to arrange the most basic documents required for borrowing a loan. During such tough times, you can always seek advice from your mentor.

Every Trick isn’t mentioned in Books

you cannot learn everything by reading the course books. There will always be some real life experiences of your mentor which may turn out to be helpful for you. Mortgage broker mentoring is not about spoon-feeding a student but enabling him to find his own path when traditional ways are closed. You may analyze their personal experiences and employ them as reference in times of need.

Emotional Support

a mortgage broking course can only help you in entering the field of mortgage broking. It doesn’t guarantee you an instant success. There always lies a probability you may struggle to secure adequate number of deals in the early part of your career. These are the times where you can easily fall back upon your mentor and gain some emotional strength. So, for all these reasons having a mentor is a mandatory requisite for a novice in the field.

Author Bio: Andrew is a specialist Redrockbroker consultant and provides Mortgage broker training. Andrew’s knowledge and experience in mortgage finance has personally assisted his clients around Australia to achieve their business, financial and investment goals.

Thursday, September 5, 2013

Top Home Buying Mistakes

It is surprising that despite it being the most important investment of their lifetime, people still commit serious, sometimes stupid home buying mistakes. On most of the occasions these gaffes can be avoided by being more careful and knowledgeable. If you are also thinking of fulfilling your lifelong dream of buying a house here are some mistakes that you shouldn’t commit at any cost. After all a house is the most valuable investment you will ever own.

Property Buying

Poor research

Before plunging into house hunt it is essential you know your family’s needs and limitations. Understand your finances and avoid wasting time looking at houses which you wouldn’t be able to pay for out of your pocket. Do not fall in love with a house at the first site and make a decision in haste. Make sure that you know the neighborhood where the house is located. A bad neighborhood will make your deal as good as dead. You surely do not want to invest your money in a crime infested region.

Rogue real estate agent or no real estate agent

You will be making your home buying process a whole lot more difficult by choosing a bad real estate agent. However, it is even worse to go house hunting all by your own without any real estate agent by your side. If you have someone with the knowledge of how things work in real estate buying or selling, chances are less that you will be taken for a ride. While buying the house you want an agent who understands your preferences, and works for your best interests rather than working for the seller’s side. You can ask your friends to refer someone who they have dealt with earlier and trust. The final step before hiring an agent is interviewing at least a couple of them.

Letting your emotions betray you

It is a sin to show your love for the property before the deal is signed. Even if you think that your house is a steal of a deal, do not let it expressed in your actions or words in front of the seller or seller’s agent. If the seller finds out that you are already swept over by the property he will decidedly play the cards to his advantage, quoting a higher price that he ideally would have.

Overestimating your budget

Setting the right budget is elementary to your peaceful stay at the house. For, if you buy a house that is way beyond your budget then you will live the rest of your life struggling hard to pay for other expenses such your kids education or your retirement plans. If you think financing your purchase by a bank will keep everything under control, then you might be in for a rude shock when mortgages will suck the life out of your monthly spending. Therefore, keep in mind your existing monthly expense and then only decide how much you can afford to mortgage. To make it easier for you, experts have come up with a mathematical figure. Your total monthly debts, (including mortgage) shouldn’t exceed 36 percent of your income.(excluding taxes)

Forgetting to Inspect

Buying a foreclosure? It is highly recommended that you inspect the property along with a construction expert. The discounted price of the property will tempt you to sign the deal as soon as possible, but a little more consideration after a physical inspection of the property might reveal the true reason behind the discounts; property’s dilapidated condition.

If you are able to keep yourself from committing these five mistakes, home buying could actually turn out as a good experience for you.

Saurabh Tyagi has a penchant for writing, which he discovered early on in life. He likes to put pen to paper every now and then for topics such as property in zirakpur, serviced apartments for sale and commercial real estate property. . Currently he writes on behalf of a leading real estate site.

Friday, August 23, 2013

3 Significant Ingredients for Getting A Satisfying Mortgage

With property prices on the rise, potential home buyers are out looking for the best real estate deal that is possible. Mortgage rates have suddenly started to increase which is making consumers even more aware of the changing housing atmosphere. For those home buyers looking to finance a home purchase, it is vital to know the 3 significant ingredients for getting a satisfying mortgage.


1. Become Familiar With Your Credit

Becoming familiar with your credit, credit history and possibly credit score is always a smart move, especially when planning on applying for a mortgage. If you are aware of your credit score, you can work to make improvements to it prior to submitting a mortgage application. Completing a thorough check of your credit history and having errors corrected is just the beginning. It is also vital to make on-time debt payments which can help improve credit scores. Lenders are looking for significantly higher credit scores today from borrowers. Scores above 700, or even 740, will get a borrower a low mortgage rate offer. Acceptable credit scores will differ from lender to lender and anything below these thresholds will mean that the borrower will pay a higher rate for the entire term of the loan. Very often, a borrower will not be approved for a mortgage with scores below what a lender deems acceptable.

2. Decrease Your Debt to Income

Debt to income ratios play a very important part of the mortgage process and approval. Together with credit scores, debt to income will also be a factor that determines the mortgage rate that a lender offers. Borrowers should work diligently at reducing their debt prior to making a mortgage application since lenders have a maximum debt to income that is acceptable for approving a loan. Having a good credit history, credit score and low debt ratio is the perfect combination for receiving a mortgage approval with a low mortgage rate.

3. Reduce the Loan to Value With a Higher Down Payment

The down payment that a borrower has will also influence the mortgage rate that is offered, as well as, the overall costs of the loan. When the down payment is below 20%, the borrower must pay private mortgage insurance which is an added expense that is included in the monthly mortgage payment. If the down payment is 20% or more of the purchase price of the property, mortgage insurance is not required (lenders may have their own guidelines). Lenders look for higher down payments because it shows that the borrower has been able to diligently save money. It also shows that the borrower considers this a financial responsibility which, in the end, reduces the lender’s risk when approving the mortgage.

The mortgage rate that a lender offers has price adjustments that are based on credit scores, debt to income ratios and loan to value ratio. All of these factors help the lender determine if they are dealing with a high risk or low risk loan. A loan with a lower risk will be a better mortgage for both the borrower and the lender. Keeping scores high and ratios low will also produce a low mortgage rate. A low interest rate for the mortgage will ultimately produce a low monthly mortgage payment. In the end, this will be a very satisfying mortgage for the borrower.

Rosemary Rugnetta has been writing since 2010 for, a company that matches consumers with banks and lenders offering low mortgage rates. Previous to her writing career, Rosemary spent 13 years working hands-on in the mortgage industry as a mortgage loan analyst, certified mortgage underwriter, loan processor and property manager.

Monday, July 1, 2013

How to Finance A Remodel Along with Your Home Purchase

It can be difficult if not impossible to find a home on the market that is ideal for you and your lifestyle. While you are on your house hunt, you may find yourself saying things like, “if only this kitchen were newer” or “I wish the master bedroom were bigger”. This is a common response, especially when you are making the biggest investment in your life, but the likelihood that you will find the perfect home is slim. This is where remodeling comes in as an excellent option and there are couple different ways you can go about financing the additional work.

Home Purchase

Finance it into Your Mortgage

An FHA 203(k) home loan is a great option for buyers looking to purchase a fixer-upper. This loan allows you to purchase a home that requires minor updates or remodels and roll the expense directly into your loan. The loan amount is based on the home value after the improvements are made and will cover materials and labor plus an additional 10-20% for unexpected expenses.

This is a great option for first-time homebuyers looking for an affordable home in their price range, requiring just 3.5% as a down payment. This loan will cover repairs, minor kitchen and bath remodels, flooring, energy improvements, decks, patios and even new appliances. However, if you are looking to do a major overhaul that will take in excess of six months to complete, this is not the loan for you.

The expense of the renovations may not exceed $25,000, but the qualifications for a FHA 203(k) are identical to what is required to be approved for a standard FHA home loan. The difference comes in with the paperwork, as you will be required to submit a detailed list of repairs and cost estimates with your application.

Take out a Construction Loan

If you are planning to make major changes to the home or if you are planning to build a home on property you purchased, you will need a construction loan to make that happen. These loans are typically interim or short-term loans set aside in a special account for the borrower. Unlike conventional loans, the interest payments will vary month-to-month depending on how much funds are dispersed each month to cover the construction costs.

Typically with loans like this, once construction is complete, the borrower has twelve months to pay back the loan and you will need to obtain more permanent financing. If you have made smart upgrades to your home, it should be worth more now than it was when you originally purchased and you will be able to refinance your mortgage at the new appraised value to get the loan rolled into your current mortgage.

The bottom line is that you do not have to feel stuck with options on the market. You have a variety of loan options at your disposal that can make remodeling your new home into your dream home a reality! 

Content provided by Gwynne Ohm at First Option Mortgage

First Option Mortgage was founded in 2004 in Atlanta Georgia and has since grown to over 200 employees with branch locations across the United States. Their Oregon branch, located in Lake Oswego, offers mortgage and refinancing solutions for Oregionians across the state. With over 97% customer satisfaction and a strong commitment to the communities that First Option Mortgage serves in, we take pride in providing a better life through financial savings and stability.

Wednesday, June 5, 2013

Why To Refinance Mortgage?

Due to relatively low interest rates and increased property values, many people are considering to use their mortgage to repay certain debts including high interest rates (credit cards, consumer loans, etc. ...) to renovate the house or to invest in RRSPs or other investments.

Refinance Mortgage

The principle of refinance mortgage is simple:

You use the equity in your property to obtain the necessary liquidity performance of other projects. In other words, this means that you can borrow up to 80% of the market value of your property less the balance remaining to be paid on your mortgage. In addition to making regular payments to pay off your mortgage, property values ​​tend to increase, which allows owners to accumulate equity. You can access this equity by refinancing.

Consider the following example:

Sylvie's house is now worth $ 230,000 on the market. Currently, he still has to pay $ 130,000 on his mortgage.
To calculate the limit it can borrow, the financial institution conducts the following calculation:
Outstanding balance of the mortgage - Estimated maximum property value * allowed for the loan (80%) value.
$ 230,000 * 80% 130 $ 000 = 184 $ 000 130 $ 000 = $ 54 000

Sylvie can therefore borrow a maximum additional amount of $ 54,000 when refinancing his mortgage. The main reasons for a refinance mortgage:
  1. To renovate your home.
  2. Investing in a second home or other property.
  3. Buying a vehicle
  4. Fund your children's education.
  5. Make profitable investments.
  6. Invest in your RRSP.
  7. Lower your monthly payments by consolidating your debts.
  8. Pay off your credit cards and get a better rate, etc...
The methods of refinance mortgage There are several options available to you for refinance mortgage which include the following:

1. The breakdown of your mortgage contract.

If you do not intend to honor your mortgage, act quickly, so as to get a lower interest rate or even access your home equity, stop your mortgage and get a new one with another institution.

2. Add a line of credit on home equity.

A line of credit gives you access to the equity in the house whose amount is at your discretion. You are then responsible for the payment of monthly interest according to your current balance. You can access the line of credit with your lender and a small group of other bankers.

3. Mix and apply the mortgage.

Your institution can offer a "blended rate", basically a "mix" of your current mortgage rate with additional liquidity that will lend at market rates. The weighted rates are often higher than the most competitive rates; make sure to compare with the "breach of contract" option to not miss the chance to save.

How to proceed?

Being a new mortgage, you must renegotiate all conditions. Contact your mortgage broker for Multi-Loans who will make representations to financial institutions to find you the best rate with the best conditions.

The broker may also help you plan your financial needs and highlight the amounts required for your projects. It will calculate the costs related to the transaction, such as legal fees.

Benefits of refinance mortgage

  • It is generally a more economical loan. Interest on a loan secured by real estate values are generally lower than rates on personal loans.
  • Refinancing can be your leverage, enabling you to improve your financial situation in the long term. The money generated from the equity in your property can be exploited in efficient investment if the interest earned on these investments is higher than the interest payments on your mortgage.

Thursday, May 9, 2013

Property Development – How To Raise The Finances To Get Started

Property development is one of the most exciting ways of becoming your own boss. Property development is all about buying at the right price, adding value and selling for a profit but all that is easier said than done. However you first need money to make money. Financing your first crack at property development is the hardest as it’s unlikely you have ready access to a large amount of money. In this post I’ll look at how to secure the initial finance to begin developing property.


Calculate the Cost

Apart from the sale price of an existing property or the land to build on you’ll also need money for professional and legal fees associated with the purchase and securing finance, the building work, the mortgage repayments, utilities, labour costs and insurance. Depending how you get the money for the development you may need up to 40% of the total cost at your disposal already. Check out all your options below:

Mortgage Companies

A mortgage is one of the most common ways to finance a first foray into property development. A mortgage differs from other loans by using property, either an existing property or the one you plan to build, as security aka collateral for the money lent. If you fail to repay the loan then the property passes to the lender.
  • A standard mortgage generally requires a large percentage of the total cost upfront i.e. you’ll still have to find around 40% of the money yourself. A good rule of thumb when calculating how much you’ll be able to borrow is to multiple your annual salary by 3.5. Ask yourself if this is enough to cover all your costs? The more secure your own situation i.e. your salary, job security and value of current property, the more likely you are to get a good rate on a mortgage. Lenders like to see evidence that lending to you will be profitable to them which includes your ability to pay back loans. Money Saving Expert has a good guide to understanding credit rating and how you can improve yours.
  • Another type of mortgage, which is less demanding, is a buy-to-let mortgage. When you apply for a buy-to-let loan you must show that your property will generate 125% of your mortgage repayments through rent once the development is complete.
  • The last mortgage type useful for raising cash is a re-mortgage. You can re-mortgage your home in order to free up the ‘equity’ held in your current property. Equity is the difference between the value of your home and the amount it’s already mortgaged for. You can then use this money to finance your development.
When seeking a mortgage it’s imperative to use a mortgage broker. There are two kinds of broker; an independent broker who isn’t affiliated with any mortgage firms and a ‘commission-tied’ broker who will only sell you a package that they will benefit from. Charted accountants can act as independent brokers, providing property investment accounting to help you secure finance at the best rates.

Alternative Finance

  • Friends and family can help you either by providing the start up cash or by acting as a guarantor on a loan. You need to be sure that this person is aware of the risks associated with property development. If something goes wrong they will be worse off than you will be if they’re financially tied to the development.
  • Funding for special interest builds may be available either from your local authority or from a private investor. What deems your build to be of special interest? It should involve innovative materials or methods that may benefit the wider community by making a case for cheaper or more environmentally friendly building practices. Eco homes including strictly standardised ‘passive houses’ are very popular with home owners and investors who view them as the future of housing.
  • High street banks often have fantastic deals on loans or mortgages. As I’ve discussed mortgages already I’ll look here at bank loans that don’t involve mortgaging property. You may get preferential rates if you bank with them already. A loan specifically given for property development is usually quite short term with repayment expected in just a year or two. They can be more difficult to secure for first developers because a good track record of successful previous developments may be necessary.
  • Embarking on a joint venture will mean you share the costs and the responsibility for the project. The ratio of investment and hands on involvement should be agreed by both parties before any arrangement is entered into. Joint ventures always run the risk of your partner letting you down in some way e.g. not pulling their weight or procrastinating on joint decisions.

Risks of Property Development

As I said earlier, while property development is exciting it’s also risky (perhaps one of its appeals for many people). The property market is a volatile sector, made even more so by the rocky economic climate in general. When securing finance from a bank or mortgage company the state of the market and future predictions for the rise or fall in house prices will affect the rate of lending you receive. Your lender will conduct their own research into the current risks and provide better rates when less risk and greater profits are likely.

Property builds or renovations inevitably incur delays for one reason or another which can be filled with risk if your budget lacks elasticity. A tight budget is important but you must have some flexibility for cash sucks like delays. If you don’t have any stretch in the budget you may end up having to give up the project altogether, accepting a loss in profits to avoid total bankruptcy. That said the risk can often pay off. Take time to consider the current property market, find the right development and consider how you can add value. If the conditions are right take the leap!

Wednesday, May 8, 2013

Getting A Mortgage For A Commercial Property

If you are enthusiastic about expanding your business, you should consider buying a commercial building. You have to make your move when the market prices are attractive. If you plan on taking up a commercial mortgage then you have to be familiar with the process. Here are important steps to follow when getting a mortgage for a commercial property.


Consult your Banker

First you should make an appointment with your banker to discuss this matter in depth. Since real estate matters vary from area to area, it is wise to speak with a mortgage specialist who understands the trend in your area. Moreover, you should find out the purchase price, mortgage interest rates and the down payment.

Locate the Commercial Property to Buy

Finding the best piece of property for purchase is the next vital step. You already have some prospective figures as given by your banker to guide. You can also ask a reputable commercial realtor to help you since he or she understands the market value of most commercial property. A realtor will let you know how flexible the seller is in terms of prices.

Look for a Mortgage Lender

Carry out an extensive research to find the most attractive offer. Don't depend entirely on your banker's opinion. However, you should not overlook your banker's advice since local banks are worth considering and quite competitive. Compare rates offered by several lenders dealing with commercial mortgages. Evaluate the amount of loan you will receive depending on the commercial property you have chosen. On the other hand, consider the structure and terms of the mortgage they are offering.

Make an offer on the Commercial Property

The reason why you need to choose you lender first before making an offer is that your offer becomes highly attractive. This allows you to negotiate further. Negotiations are important for both the seller and buyer to ensure you both benefit from the sale. Matters decided upon during negotiations should be made official through signing a contract.

Make a Follow Up

After signing the contract, you have to keep on checking with your mortgage lender on a weekly basis for a start. Obviously, some days will pass by without any updates but you will be able to know about delays or extra materials needed in advance.

Close of your Commercial Mortgage

You ought to celebrate the closing of the deal. It is now official that you are a commercial property investor. This may be the beginning of successful commercial mortgages in your name. Most people cannot different between commercial property mortgages and residential ones, here are some notable differences.

Commercial mortgages have a high down payment as compared to home mortgages. This is because the risk involved in commercial mortgages is higher, the lender normally wants the borrower to make some payment as a form of equity.

Mortgages for commercial property usually have a high interest rate and is shorter termed than mortgages for residential homes. Banks are ready to offer reasonable interest rates on home loans because their capital investment can easily be recovered through the sale of mortgage loans in secondary market.

Commercial mortgages are focused on actual property and the flow of cash as compared to residential loans. When shopping for commercial property mortgages be ready to give details about utility payments, the type of maintenance required and cash flow related questions.

Managing a Mortgage on a Property Being Used For Student Accommodation

A lot of people have started investing in properties for rental income. Investing in a property for rental purpose is a very good way to make additional income. While you can always rent your property to families and business people, the trend for student letting is also on the rise. Letting your accommodation to students can prove to be a steady source of income, especially if you hold a property nearby institutes and learning centres.


But if you have bought a property on mortgage, then managing it can be a difficult task. You need students who can stay and pay rents on time without much hassle. Failure to obtain rents on time can create financial problems as the burden of loan instalments will start affecting your budget. Therefore, it is vital to choose renters who are capable of paying rents on time. Let's take a look at some tips that you can use to maintain your mortgage property you bought to let out.

Get in Contact With the Letting Agent: Not many people realize, but a student lettings agent can ensure that you get consistent flow of income from your rental property. Hiring a letting agent will ensure that your property is never vacant. Since it's a mortgage property, it is important that the property is occupied by some or the other tenant always. This will allow you to strike a balance between your loan and budget. A letting agent will help you get the best potential return on your investment. Make sure you hire a specialist letting agent who is well aware of the target market and majorly deals in student letting. Your agent will do anything to get the right people to rent your property.

Dealing with the everyday issues: With a property let out to students, you'll have to undergo a lot of challenges. Although the profit in letting your property to students is high as compared to families, maintenance can be a bit of an issue. This is due to their careless attitude towards cleanliness and maintenance. You must make sure that you get a contract signed by the tenants mentioning everything clearly. The date of the rent, the cost of maintenance and repair, electricity bills etc. All the terms and conditions should be clearly stated before signing the agreement. You should be aware of the activities taking place on your property to avoid any kind of future complications.

Make sure you do a bit of market research while finding a letting agent. You can ask around for recommendations or use internet to gather testimonials of people who have used the services of the student lettings company you are considering. This is the best way to find a professional and efficient letting agent who can take care of your property and make sources for constant income from your buy-to-let property. It is a good idea to put your investment in the hands of professionals to get the maximum returns. This will even help you get rid of your mortgage in a short period of time.