Senin, 23 Februari 2009

About Mortgage Life Insurance

Owning a home is a dream for most of us, although it is an expensive
one. The monthly payments usually take up a big slice of our monthly
income, and the sudden loss in the event of you or your spouse's early
death may leave your survivors unable to make payments. To make your
family is protected from financial hardship, consider Pick-a-Term
Mortgage Protection insurance.

Pick-a-Term Mortgage Protection has a descreasing death benefit to
match your mortgage balance at the beginning of each year. And because
the death benefit decreases along with your mortgage balance, the cost
of Pick-a-Term is less expensive when compared to non decreasing term
life insurance.

Life Insurance: Decreasing Or Not?

If you go to your local bank, along with the mortgage they will try
and sell you what they call "mortgage insurance". This is not
"mortgage insurance" but "life insurance" where they protect
themselves by having you buy their policy. You need to be clear how
this operates; you are paying for an expensive policy which they own
and in which they are the beneficary. Further, the amount of the
policy decreases though the premium remains the same. If they
decreased the premium along the coverage, it may not be too bad, but
they don't. The way it is now the policy decreases, you pay for it,
they own it, control it and will benefit from it.

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Sabtu, 21 Februari 2009

Reverse mortgages or Home equity loans ?

While both reverse mortgages and home equity loans enable senior homeowners to turn the equity in their home into spendable dollars, there are important differences between these two types of mortgages.

First, home equity loans require regular monthly payments in order to repay the loan. These payments begin as soon as the loan is settled. In contrast, a reverse mortgage does not have to be repaid as long as the home remains the senior’s primary residence. In other words, the loan becomes due only when the senior no longer occupies the property.

Second, home equity loans are based on the borrower’s income and credit history. A home equity loan borrower may be required to requalify for the home equity loan each year. If the borrower does not qualify, than the lender may require that the loan be paid in full immediately. However, income and credit are not obstacles for seniors who want a reverse mortgage because there are absolutely no income or credit requirements to qualify. It should also be noted that there are no requalification requirements.

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Kamis, 19 Februari 2009


Variable rate mortgages have an interest rate that may fluctuate throughout the term of the loan. Interest rates attached to variable rate mortgages usually move in line with either the Bank of England Base Rate (BoEBR) or the lender’s Standard Variable Rate (SVR) and is quoted as a fixed percentage above one of them. An example of this is a variable rate home loan with an interest rate equalling BoEBR plus 0.25%.

Fixed rate mortgages, on the other hand, have a static rate of interest that is locked in for an agreed period of time. Changes in the base rate or the lenders SVR will not affect the interest rate attached to this type of home loan making this type of product less risky to the borrower as their monthly mortgage payments will not increase.

There are several different types of variable rate mortgage products including tracker rates, discount rates, and capped rates. Tracker rate mortgages and discount rate products have no upper or lower limit and therefore offer the borrower no protection against excessive interest rate rises. They also, however, offer the borrower the potential for substantial decreases in the interest rate attached to the variable rate home loan helping them to save money.

Capped rate mortgages have an inbuilt upper limit above which the interest rate on the product cannot rise even if the base rate rises above this limit. Capped rate mortgages therefore offer the borrower protection against excessive base rate rises while still offering the advantage of saving money through potential decreases in the base rate.

Unlike fixed rate mortgages, variable rate mortgages offer borrowers no protection against interest rate rises and are therefore risky. The amount of monthly repayments due can both rise and fall throughout the term of the mortgage therefore making variable rate mortgages unsuitable for householders who have a tight budget.

Despite this risk, variable rate mortgages do have some advantages. During periods of traditionally high interest rates many borrowers opt for variable rate mortgages if they are expecting the cost of borrowing to fall. This is because any fall in the underlying interest rate will be passed onto them by their lender, resulting in a decrease in their monthly mortgage payments.

Additionally, variable rate mortgages have less stringent terms and conditions than their fixed rate counterparts, and are usually offered with low fees and no tie-in periods. It is essential to assess the fees and charges attached to home loans before applying instead of opting for the product that appears to have the most favourable interest rate structure. This is because the cost of the fees may outweigh the benefits of the interest rates – whether they are fixed or variable.

Because of the various advantages and disadvantages of variable rate home loans, professional and impartial advice should be sought from an independent mortgage broker before applying for a this type of mortgage. An independent broker will be able to offer impartial expert mortgage advice on all types of home loans from the entire range of UK lenders.

By = Michael Sterios, a writer for

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Discount Mortgages What About It ?

Discount mortgages are a type of mortgage product that have a variable interest rate which moves roughly in line with the lender’s Standard Variable Rate (SVR). The discounted interest rates attached to this type of home loan product are genuine and will normally apply for a set period of between one to five years. The discounted interest rate is designed to attract new customers.

Once the discount period expires the interest rate will convert to the lender’s SVR which can result in a sharp increase in the monthly mortgage payments due. This means that borrowers should take careful note of when the discount is due to expire and prepare to remortgage to a more suitable home loan product if required.

Also, because the discounted interest rate is a variable rate, any change in the lender’s SVR will affect the discount mortgage’s interest rate and the amount of monthly repayments due. The lender’s SVR will normally reflect changes to the Bank of England Base Rate (BoEBR), although this is not a requirement. Therefore borrowers should also take note of any major changes in the base rate as it could affect their own mortgage payments.

Discount mortgages are popular with first-time-buyers who cannot afford high mortgage repayments during the early years of homeownership. Borrowers of discount mortgages will experience a reduction in their monthly mortgage payments during the discounted period when compared to borrowers who do not have a discounted rate attached to their mortgage products. This is one of the more obvious advantages of this type of home loan product.

Despite this advantage, there are several disadvantages to consider before applying for discount mortgages. The most prominent disadvantage to consider is that discount mortgages often come with stringent terms and conditions including long tie-in periods and costly early repayment charges. Therefore, if a borrower wishes to redeem their mortgage during the discount period, they may be forced to pay hefty penalties to the lender that may negate the effect of the discount received.

This can effectively lock the borrower in to remaining in their property for a set period of time if they cannot afford to pay the early repayment charges if they need to sell their home and redeem their mortgage. Lenders will not normally waive the fee for any reason so borrowers should therefore look beyond the discounted interest rate when assessing whether to apply for a discount mortgage.

As with all non-standard mortgage products, professional advice should be sought from an independent mortgage advisor before applying for a discount mortgage in order to receive impartial advice as to whether this type of home loan product is suitable for your particular needs. A discount mortgage may not be the most suitable product for your needs just because it has a low interest period for the first few years of the entire term of the product.

There are many other factors to consider when applying for a home loan and an independent mortgage advisor should be able to guide you towards selecting the right product for your needs.

This Article is write by Michael Sterios, a writer for

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Rabu, 18 Februari 2009

The Benefit of Fixed Rate Mortgage

If you are offered a deal that appears to be too good to be true than it probably is. Interest rates remain the same throughout the life of the loan for 15 year fixed rate mortgages. There are no hidden costs involved with this type of plan which is great for many people that want a regular monthly payment. My wife and I had already decided to research long term fixed mortgage rates when we started looking at homes for sale.

The monthly payments for 30 year or 15 year fixed mortgages are the main considerations for many people who are looking to buy a home. Buying a home later in life means that many people want to have the mortgage paid off early. Take some time to think about everything carefully before any agreement is signed. Ensuring the repayment remains the same throughout the mortgage term is very important.

Even though it was important for us to pay off our loan at the earliest possible opportunity, we did not want high, unrealistic monthly payments which we would have trouble maintaining. So in consideration of this point we also looked at longer, 30 year fixed rate mortgages as well. The problem was that we were not very happy about having a mortgage close to when we both retired so it was our hope a 15 year fixed mortgage rate would still be available to us. We felt that there was a great deal of emphasis on paying the mortgage off early.

Eventually we decided on a 30 year loan after looking at all the other possibilities. There were many things that lead us into making this choice.Discovering my wife was having a baby was the most important reason. Her regular monthly income would become unreliable because she wanted to be at home raising our child. The problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. For us it just was not feasible as we would just be in over our heads. The monthly payments on a 30 year loan were quite a bit lower.

Making a few additional lump sum payments during the year helps bring down the amount owed. Those few extra payments also help reduce the number of years you have to pay the loan over. It may be easier said than done, but this approach does pay off eventually. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. Things worked out well anyway, even though we were unsure about it to start with.

There is always a debate when home buyers have to decide on the merits of 15 or 30 year fixed mortgage rates. No-one wants a mortgage hanging around their neck forever but with homebuyers entering the market later, an early repayment of this loan is important. Take some time to think about everything carefully before any agreement is signed. It is important to make sure that the interest rate does not change over the course of the loan.

It is always wise to avoid agreements that do not appear to have any negative aspects because they invariably have but are hidden. A 15 year fixed rate mortgage means the interest rate remains stable for the life of the loan. This is of great benefit for anyone that does not like surprises. When we were looking to buy a home, my wife and I decided to go for a loan with a 15 year fixed mortgage rate.

Even though it was important for us to pay off our loan at the earliest possible opportunity, we did not want high, unrealistic monthly payments which we would have trouble maintaining. So in consideration of this point we also looked at longer, 30 year fixed rate mortgages as well. The 15 year fixed mortgage rate was the plan we really wanted because neither of us wanted to be still paying a mortgage when we close to retiring. We felt that there was a great deal of emphasis on paying the mortgage off early.

We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. Many factors were taken into account when reaching this decision.Finding out my wife was having a baby made making the choice so much easier! My wife was going to raise our child from home so her addition to the monthly income would be restricted. The downside to the 15 year fixed mortgage rate was the higher monthly repayment. For us it just was not feasible as we would just be in over our heads. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

We found that if we could make a few extra payments throughout each year then it would gradually reduce the principle sum owed. To our surprise we also discovered that we could knock years off our loan by doing this. This takes some discipline but it is well worth the effort it in the long term. Taking our needs and abilities into account was more important than our desire for a shorter term mortgage plan. All things considered, it all worked out for the best in the end.

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Tips to Find The Lowest Home Mortgage Refinance Rates

The decision to refinance your primary residence is not often made without conscientious examination and planning. One of the greatest decisions decides if you will employ a loan of stockholders' equity at the house, will refinance your current mortgage or will obtain a mortgage. After having decided type of loan you need the borrowers of next article which the hearth makes a success of the low mortgage deed with the dwelling refinance the rate available to them. When it comes to the refinancing there are many factors which determine your interest rate. The days of the setting on your best costume and speaking to the branch manager went. Today you are puffed up with the low mortgage refinance rate to the radio, the Internet and the TV. Many of these companies are the national lenders and cannot be based in your city or even the same state.

When this is the case, you can also resort to home loan refinance for you to find another source of funds that will pay the previous unpaid loan. With refinancing, you can try to find lower rates and save more money. You can find an offer that suits you and you can even find lower home refinance rates. Different companies may have different offers and this also includes a different rate. With proper computations and comparisons of different offers, you can have the one that is best for your needs. Home refinance means that a person who has an unpaid mortgage will apply for another loan to pay for the previous home loan. When shopping for your home mortgage refinances rate keep in mind that bigger is not always better and that a local mortgage broker or banker can usually match or beat the deals offered by the large lenders that advertise on TV and radio.

When you are looking for a mortgage loan you will definitely have to have an idea about the monthly payment for your mortgage loan, this may be determined easily by using a Mortgage calculator. If you are looking to refinance then you may use a refinance calculator and if you are looking for particular category loan like home refinance loan then you may use home refinance calculator. To get a clear picture on the monthly amount you will need to pay with each different package of mortgage loans you will find mortgage loan calculators depending on the type of mortgage loan you require.

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Jumat, 13 Februari 2009

About The Federal Home Loan Mortgage Corporation

The Federal Home Loan Mortgage Corporation (TFHLMC) is a Government Sponsored Enterprise (GSE), with special designated authority from Congress to provide a secondary market for residential mortgages. In that unique role, TFHLMC, like other mortgage related GSE entities such as Fannie Mae, underwrites a vast mortgage portfolio made up of real estate loans from all across the U.S. Fannie and TFHLMC handle the majority of residential mortgages made in this country. This is meant to offer extra security and confidence to investors so that they'll purchase the loans from banks and other mortgage lenders. When investors are eager to buy GSE-backed loans, it ensures a smoother mortgage market, and translates into more affordable home loans for the average American.

During 2008, both Fannie Mae and TFHLMC fell on hard times. Instead of rescuing the housing market, the twin GSE agencies needed to be saved by taxpayers. The government stepped in to buy up many of the loans in the TFHLMC mortgage portfolio. Freddie received almost $14 billion of taxpayer money after a record third-quarter loss, and a government-appointed regulator put 10 new directors in charge of the agency, including seven new executives. Nervous investors seem to be appeased, because now TFHLMC is doing a brisk business.

Back in November 2008, only two months after TFHLMC was placed under government control, its mortgage portfolio grew by more than 65 percent within a single month. That marked the second straight month of serious growth, countering the bad news of the previous two months, when Freddie's mortgage portfolio plummeted in value. Now, its assets are worth more than $800 billion, and its year-to-year gains set a new company record.

In a further attempt to bring down loan interest rates more and help borrowers, the Fed says it plans to buy as much as $100 billion of the corporate debt now encumbering Fannie Mae and TFHLMC. The FHA is also shouldering more responsibility by guaranteeing a greater number of loans and offering more affordable terms to homeowners.

The news isn't all comforting, however, because the delinquency rate on single-family loans guaranteed by TFHLMC didn't fall in November, but instead, rose to more than 1 1/2 percent. The previous year, that rate was almost a full point lower, but the housing markets continue to suffer as the real estate economy weathers more foreclosures and price declines. As people lose jobs and income, and their mortgage balances far outstrip the value of their homes, many experts expect to see more defaults and foreclosures.

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Senin, 02 Februari 2009

To have a better saving should we refinance our mortgage ?

Mortgage refinancing may offer an individual various benefits such as paying the high interest loan in exchange of a lower one. But the question that must be answered is that if should you refinance your mortgage when you want to save? The answer would depend on situation of the previous loan and the interest of the two loans as well as other factors that goes with the loan. If there are other good offers like a lower interest rate, lower monthly payment and other benefits, then refinancing would be a big help.

If a person does not have enough money to support the payment of his previous loan, he may be able to find another rate that would offer him a lower monthly principal and interest payment although this would be paid in a longer time frame. Also, another option would be to consider refinancing when you earn enough money to increase the monthly payment. When you refinance, you may be able to increase the monthly payment and the person may also be able to save since the term would be paid faster and there will be less interest paid.If one is paying an adjustable interest rate loan, there is a possibility of over paying since the interest rate may change within a month and you may find a hard time paying for an unpredictable total payment. Thus, a fixed rate can be better than getting an adjustable interest rate and this lessens the risk in paying the loan.

With all the reasons stated, the benefits and the risks involved, the question of should you refinance your mortgage may be clearer. A good decision can be done when all other options are checked and considered. It would be easier to pick one loan more than the other when you understand its terms and you know that you are capable of paying the loan plus the interest. The needs and the situation of the individual would be the deciding factor if one will have to continue paying for the old loan or it would be better to get another one.The interest and the length of the payment should be considered and analyzed. There may be many reasons why you should refinance but there are risks involved so first make yourself clear and more knowledgeable about the terms of the loan that you have and another loan that you are considering.

Mortgage refinancing may be a good way for one individual who has a hard time paying a mortgage. If a person has a mortgage that takes up much of his monthly income, then it must be necessary that he should find another way of getting additional income or find a better way to pay for the loan. Refinancing is done when there is an outstanding loan balance and the medium in which you will use to pay for it is through getting another loan. There are different situations that would be beneficial to refinance a mortgage but there are also some events that refinancing would not be a very good action.

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The Problems of Mortgage Payment Cover

Mortgage protection is one of a family of protection policies that can be taken out to safeguard against you becoming out of work. If you are incapacitated to the point where you cannot attend work after suffering from an accident or an illness, or if you should become unemployed such as through redundancy, a policy could help.

But the question must be answer is that Mortgage Payment Cover still facing many problems and faith badly needs restoring ? Taking out a protection policy could provide a much needed income that would allow you to continue meeting the commitments of your mortgage. The majority of polices begin to provide benefit after you have been unable to work for between 30 to 90 days. Once the policy holder has started receiving a tax-free income, they then continue to do so for between 12 to 24 months if needed. Mortgage insurance can give security and allow the individual to recover with the knowledge that the roof over their head is safe. This can help to speed up recovery or give peace of mind while looking for a new job.

However, you do have to be aware that cover is not suitable for the circumstances of all individuals. Exclusions that are usually included in a policy include being retired, self-employed, suffering a pre-existing medical condition or working only part time. You do have to check these exclusions carefully, and be aware that they vary between providers. An ethical provider will always make the consumer aware that these exclusions exist and give all the information needed for them to be able to make an informed decision. It is a lack of information that has led to a lack of faith in payment protection products. An investigation started in 2005 after a super complaint was made to the Office of Fair Trading.

Following this, the Financial Services Authority also began their own investigation, which resulted in them handing out several fines to some well-known high street names. The most recent fine was for a mortgage firm, and the chief executive had to dig into his own pocket to pay a personal fine too. Early in 2007, the sector was referred to the Competition Commission, which is currently conducting an in-depth review. While there have been some changes, it is evident that many more need to be made in the future. A recent report revealed that some providers are still continuing to mis-sell cover despite recommendations set out for improvements. It is hoped that with the introduction of comparison tables, which are to be revealed in March this year, buying cover will be easier. Mortgage payment cover is just one form of payment protection.

Loan and income protection could also benefit the individual but sometimes choosing which product is most suitable can be hard. The tables will lead the consumer through a series of questions, which will help them decide which policy would best meet their circumstances. They will also be aware of how much a policy would cost and be told of the exclusions that exist. But at the moment, the safest way to buy cover is with a standalone specialist provider.

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Info : How To Get The Right Mortgage Protection Insurance Cover for us

The only way you can be absolutely sure that the policy suits your situation is if you take care to read the terms and conditions because Mortgage protection insurance cover can work in the way it is supposed to, but only if it is suitable for your circumstances.

Some individuals cannot read the terms and conditions simply because they are not offered them and so do not know they exist. This is due to poor selling techniques being used at the time of selling, either because high street lenders want to push the cover alongside the loan or those selling cover have no training in selling. One sure way of getting access to all the information needed to make an informed decision is to get quotes from independent providers.

Ethical providers will ensure that the information needed is available to those wishing to purchase cover. The exclusions in a policy vary depending on the provider, but there are some that are often seen in policies. Being of retirement age, suffering a pre-existing medical condition, being self-employed or working only on a part-time basis could mean mortgage cover is not suitable. While exclusions do exist, even these depend on certain circumstances. For instance, as long as you have not suffered from the illness within the last two years you would be able to claim. The same goes for those individuals who are self-employed and through involuntary unemployment find they have to stop trading. These are just two reasons why going over the terms and conditions with a fine toothcomb is essential. Those individuals who could benefit from a policy would have peace of mind and the security of an income each month.

Being unfit for work due to an accident or illness or becoming unemployed through being made redundant are all covered by mortgage payment cover. Providers offer a policy that will protect your monthly mortgage repayments and allow you to continue meeting them for a premium each month. The premiums will be based on your age when applying and the amount of your monthly mortgage repayments. The tax-free income gained from the premium would begin between 30 to 90 days of being unable to work and would continue for 12 to 24 months, depending on the terms of the policy. In the past mortgage insurance, along with the family of payment protection policies, has been seen as being poor value for money.

The premiums charged for the luxury of having protection can be extremely high. Shopping around will reveal the difference between quotes: it can be as much as 40% when you compare the high street lenders with the best specialist providers. This difference also exists when it comes to getting the information needed to compare protection. Some give very little information, while specialists will give you all the details needed. Faith has been lost in mortgage protection insurance cover along with loan and income protection. News that the latest firm to receive a fine from the Financial Services Authority was a mortgage firm has done little to restore faith. Anyone considering taking the protection that a policy can offer should realise that it is those who have mis-sold cover who are at fault and not the actual policies themselves.

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Tips To Research Mortgage Rates Online

One of the first things that you should do when researching mortgage rates online is to spend a few minutes finding out what the national average rate is for a mortgage loan. Everybody knows that internet can be very useful for those individuals who are in the market for a mortgage loan, allowing them not only to borrow money from lenders who operate online but also to find more information about potential loans before they actually commit to a specific lender. While not all borrowers take the time to research mortgage rates online, those who do can often find competitive if not superior rates. These rates can be superior when compared to those that would be found after simply visiting a few different mortgage lenders in their local area. If you have been looking to learn how use the internet to help you research mortgage rates before committing to a loan, then this information should assist you in being able to make an informed decision when you borrow.

Mortgage rates fall under federal regulation, but they may still vary from one location to another; by discovering the national average you can get a better idea as to whether the rates in your area are above or below the average. This in turn helps you to decide whether you can be better served by using a local mortgage lender or if you would be better off to expand your search to lenders in some other areas (or to focus more on lenders who operate primarily or exclusively online.) Once you have determined what the national average is for interest rates, take a little bit of time to shop around online for properties in your area.

While you may already have a specific property in mind when you start looking for a mortgage loan, this may give you a better idea of how much homes and other property in your area is selling for and may assist you in negotiating a better purchase amount for the property that you buy. Once you know both the average national mortgage rate as well as the average rate of properties in your area, you should be in a much better position to shop around for a good deal on both the property that you buy and the mortgage loan that you use to buy it.When using the internet to research mortgage rates, do not forget that most if not all of the mortgage lenders that you might be considering should have websites that you can visit. Not only can this help you to find out more about the lenders themselves, but in some cases you may be able to learn things about their lending policies that you might not have known previously. Many of these mortgage lenders may also give you access to valuable tools on their websites, such as mortgage calculators that can help you to develop an estimate of both your likely interest rate and how much you should have to pay each month for your mortgage at that rate.Some mortgage lenders choose to operate primarily or exclusively online, so when researching mortgage rates online you may find yourself with access to lenders that you would not be able to use otherwise. By requesting loan rate quotes from these online lenders, you should have a chance to expand your search for a good mortgage rate while gaining a better idea of whether the quotes that you have received from local lenders are the best that are available to you.

You may find that you have gotten a truly exceptional rate quote from one or more of the lenders that you have already considered, or you might discover that you can find lower rates by shopping elsewhere.One other important advantage of using the internet to research mortgage rates online is the fact that you can often find out the information that you want quickly. Many online mortgage lenders offer instant quotes that are calculated and sent to you via email, and their rate information is updated daily to stay up-to-date with the latest federal mortgage rates. There may be some discrepancies between what is displayed on the website and what rate is available. This is why is it best to request a quote because mortgage rates can change often. Online lenders and other mortgage information websites are generally able to get you the information that you want quickly and without having to deal with lending officials for every question that you might have. You can even spend your down time at night finding out more information about your mortgage rate options, freeing up your time during the day and not making you have to adjust your schedule just to find out the information from local lenders when they are open.

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The Asset Based Mortgage

One alternative form of mortgage that you may qualify for is the asset-based mortgage; in these loans, the mortgage is not guaranteed by the property, which is being purchased but is instead secured by other assets, which the borrower provides. Might be most potential homeowners are most familiar with traditional mortgages where the property being purchased serves as collateral for the loan, this is not the only type of mortgage that is available.

There are some advantages to choosing an asset based mortgage loan over a traditional mortgage, though this loan type comes with some restrictions as well. Here is a look at the basics of an asset based mortgage, so as to help you determine whether or not one of these loans is right for you.

Asset based mortgages can be very useful for individuals that have little or no credit as well as those who have bad credit. While in most cases these individuals may not be able to qualify for a traditional mortgage loan, the value of the assets that they offer for collateral should be enough to qualify them for an asset-based mortgage regardless of what their credit rating might be. This can be very useful for those who are trying to purchase their first house while still trying to start out financially.

It is also useful for those who have run into financial problems in the past and anybody that is trying to reestablish their credit now that they have gotten back on their feet. Though credit is taken into account, for most asset based mortgage lenders it is not nearly as important as it would be for most other types of loans.Another difference between asset based mortgages and other mortgage loans is that in many cases there is no down payment required when securing the loan. Though the borrower still has to pay a portion of the total cost of the property, the loan itself will not contain many of the same costs that taking out a traditional mortgage would entail. Though the availability of this specific feature of asset-based mortgages may vary from one lender to another, a number of lenders offer the no down payment feature as one of the attractions of this type of loan over mortgages that are more traditional. The fact that the collateral for the loan is worth more than the amount that is being borrowed and does not require the lender to find a buyer for the house or other property in order to make their money back greatly reduces the need for a down payment or other forms of payment when the loan is issued.

Unlike most mortgage loans, those which are based off of external assets may not have the same income requirements that are required by more traditional loans. Some individuals who take out an asset based mortgage will only apply a portion of the borrowed money toward the purchase of a house or other property itself, keeping anywhere from five to fifteen percent of the amount set aside to assist in repaying the loan itself. This can be especially useful when trying to guarantee that you will be able to afford the mortgage payments if you are worried about the possibility of layoff or may be moving to a new area where you might not be able to locate a job immediately.

Though setting aside some of the borrowed money can mean that you may have to borrow more than you actually need, the buffer amount can help you to avoid a default and it should make the overall loan amount much easier to pay back.Asset based mortgage loans do have their disadvantages, of course. In most cases these loans cannot be taken out for the full amount that you will need to purchase the property. Most asset-based mortgages can only be taken out for fifty percent of the property’s total value or less, though some lenders allow the loan to be for up to sixty-five percent or higher. This is because of the high value of homes and similar property, as well as the fact that those with little credit or who have had bad credit in the past are more likely to default on their loan payments than individuals who have established good credit. Many asset-based mortgages are used in the purchase of homes and property that are going to be resold after restoration or that are being purchased at a discounted rate; the borrower in these cases is hoping to finalize the sale of the property before the loan is due in full. Though this can be risky since not all homes sell quickly, when it works it allows them to repay the loan easily while still making a sizeable profit off of the property in question.

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The Importantce of Mortgage Payment Protection Insurance (MPPI)

Someday in the future if you should become unemployed, such as by redundancy, or were to have an accident or get ill and be unable to attend your job, you could be left struggling. You can use Mortgage payment protection insurance (MPPI).

MPPI can give a lifeline to those who have monthly mortgage repayments to make and fear they could lose their income. Not being able to find the money each month to continue making your mortgage repayments could mean you lose your home.

Homeowners who rely on the state stepping in and providing an income could be in for a shock. In order to be able to get help you have to fit certain criteria, and this usually means you have to be claiming income support. Even if you do receive help, the state support provided only goes towards the interest part of your mortgage. In the majority of cases you could also be waiting a long period before seeing any money.

If you want peace of mind and security, and providing a policy is suitable, then taking out a protection policy to cover your mortgage payments could be a better choice. Cover can be expensive depending on where you choose to take out a policy. Mortgage protection is offered when taking out the loan at the time of borrowing but this is not the only option you have. You can make the choice to buy a policy independently, from a standalone provider.

Buying cover for your mortgage this way can save you around 40% in comparison to the quote offered by the high street lender. It is also important to realise that the borrowing is not dependent on you taking the cover a high street lender offers. While some lenders might ask that you protect the money you are borrowing, you do have the option of choosing who to take that protection with.

A policy that is bought from an independent specialist provider would kick in after the policy holder had been unable to work for between 30 to 90 days. It would then continue to provide you with a tax-free income for between 12 to 24 months.

However, a policy is not suitable for all. There are circumstances that could mean the protection would not be suitable. For example, if you only work in a part-time position as opposed to full time you would not be eligible.

In addition, if you are retired, suffer from an ongoing illness or work for yourself then a policy might not be suitable. These are just some of the exclusions that can frequently be found in mortgage insurance cover and providers can add in others. This means that checking the terms and conditions of a policy is essential before taking out the policy. An ethical specialist will make you fully aware that certain conditions exist. They will show you in plain English what you will get out of their mortgage payment protection insurance policy, while also making you aware of how much the cover would cost in total.

The premium quoted will be based on your age and the amount of your monthly mortgage repayments. High street lenders sometimes work out how much the insurance would cost and then add it onto the cost of the loan, and then add interest onto the whole amount. An independent provider will not only help you to make savings, but will also give you the vital information needed to make an informed decision regarding suitability.

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