What to Do With Late Mortgage Payments

Settling in to your dream home is one fulfilling experience. Finally, you and your family can feel comfortable, safe and secure in the years to come. Along the way however, unexpected events can take place that will threaten your ability to pay your loan mortgage on time.

The need for relocation, marital concerns, retrenchment and severe sickness by a family member are just some of these unfavorable circumstances. In the process, you may incur some late fees and start to worry about how you are going to get through.

Fortunately, there are various work out plans that you can count on. What is important is that you are able to monitor the date of your late mortgage payments and that you can also honestly communicate the problem with your lender.

The earlier this is done, the better chances for you at getting a feasible loan modification deal. With numerous foreclosures happening here and there, lenders nowadays are more than willing to draft that workout plan with you in order to save your home.

If your mortgage payment is late for more than 15 days, then you are likely to be charged a late fee by the mortgage company. Even if the late fees may differ with each lender, it is still going to add up to your burden. Immediately contact your lender, explain your situation, and ask for a possible extension.

However, if you can give them a call before the 15 days lapses, then they could offer to have late charges waived. What you need to do is to set up a future date to settle the account so that the lender feels assured of the payment.

Some words of caution though, do not complicate matters by promising payments you cannot fulfill. Set a date which you know you will have enough funds to cover them by then.

Likewise, if your mortgage payments are past due for a month or so, express your concerns with the mortgage company. Before you give them a ring, be ready with a date by which you are sure to make payments.

When you foresee that you will be unable to raise the exact sum of payment in the coming months then talk to your lender about the possibility of a loan modification that includes a reduction in the amount for the next few months. These payment modification schemes will allow you to manage your finances until you are capable of paying the full amounts again.

Lastly, try your best not to go beyond 90 days for late mortgage payments as this will mean foreclosure proceedings. When this happens, your credit report can get tainted and adversely affect your credit standing.

Stay where you are - right in the comfort of your home. Plan your mortgage payments ahead of time and prevent adversities from coming your way.

For more of these important tips visit http://www.askcindy.tv

Disadvantages of Reverse Mortgages

Getting a reverse mortgage can mean the difference between living comfortably and living day to day. But, before you commit to, you must also understand the disadvantages. So, let's first take a quick review, then take a look a the disadvantages.

What is a reverse mortgage?

A reverse mortgage is a home loan that lets you take some of the equity in your home and convert it into cash. So, as opposed to a regular mortgage where you pay every month, a reverse mortgage pays you! Sounds great, it's almost like winning the lottery.

OK, now that we know the good news, here are some of the disadvantages to consider:

It can be expensive

Like most often in life, nothing is free. With each loan there are fees involved. Sometimes these fees can be high because they are based on the home's value. And, the amount of money you owe grows larger over time based on the fees and interest rates. So, you must consider if the amount of fees is to high. But, if you're considering selling your house to survive, a reverse mortgage is still a wonderful solution, after all, you are getting money back. So, a lot of times, the money in hand is worth it.

They can affect the inheritance you leave behind

When your home is sold, the cash received from the loan, interest and fees must be repaid. But, the remaining equity in your home will go to your heirs. Important: your heirs, will not be required to pay more than the home is worth on the maturity of the loan when it is sold. However, if your heirs do wish to keep the home for sentimental reasons, etc., they will be responsible for the full amount owed which can be more.

I don't want to stay in my home forever

Because of the costs linked to a reverse mortgage, there may be more inexpensive options. So, consider other options if you do plan on moving in the near future.

It may affect eligibility for some benefits.

A reverse mortgage will not affect your social security or medicare benefits. But, the money received could impact your Medicaid benefits. So, if you are on Medicaid you should make it a requirement to contact a Medicaid expert in your area. If you don't you may risk losing Medicaid benefits! Also, check on the affects on any other benefits such as Supplemental Social Security Income (SSI) and Medi-Cal.

As always review all of these options with your adviser and your family.

Reverse mortgages offer a tremendous amount of help to homeowners who qualify. To learn more about the advantages and disadvantages, click here.

Mortgage Rates Ticking Up?

Over the last two weeks we have seen mortgage rates tick upward almost .1%. While this may not seem like a big deal; it is if you have a loan with the value of $300,000 or more. Many home owners are trying to time the exact bottom before refinancing but this is not the best idea. If you feel you are talented enough to time the bottom of any financial market, it is likely you would be extremely rich from these abilities. While most of us cannot do this, it is smart to refinance when rates are low and you have the ability to get a rate that is pleasing to you.

Overall, you may save some money if you pick the exact bottom on overall rates, but your risk is enormous if you miss with your prediction. If the government feels that the housing market is on solid footing and we have seen a bottom, it is likely that rates could shoot all the way back up to 6% within a matter of months. While this is not likely to happen anytime soon, no one knows for sure with this market. As soon as the government stops buying up all the mortgage backed securities, it is likely we will see a steady increase in mortgage rates.

With this knowledge, it is advisable to start planning for that refinance now. It very likely that you will have an interesting time with the appraisal step so you might as well do it now and get it over with before the housing market takes any more crazy moves.

Subprime Blogger offers information on mortgage rate trends and how they affect the economy and ultimately your life. Keep up with daily mortgage rates could save you thousands of dollars in the long run.

Advantages and Disadvantages Of A Reverse Mortgage

Betty and John, are in their mid-seventies and are currently weighing the advantages and disadvantages of a reverse mortgage as a way of freeing up some cash. The couple purchased their home 45 years ago for about $14,000 since then home values have skyrocketed and recent single family homes in their neighborhood have been selling for a minimum of $160,000.

Like Betty and John, if you’re considering a reverse mortgage it’s important to do some research prior to making a decision. You not only need to understand the basic principles of this kind of mortgage but you also need to look at all the advantages and disadvantages of a reverse mortgage.

Essentially a reverse mortgage is a loan that permits homeowners 62 years of age and older to borrow against the equity in their homes without having to sell it. Further, you don’t have to give up the title or take on a new monthly mortgage payment.

A reverse mortgage loan is tax-free and needs only to be repaid when the borrower (or in the case of Betty and John, when the surviving spouse) dies or sells the home. At which time, the reverse mortgage loan must be repaid in full, including all interest and other charges.

When examining the advantages and disadvantages of a reverse mortgage it’s also important to consider both the process and the related costs of obtaining a reverse mortgage. Unlike a conventional mortgage, with a reverse mortgage, the homeowner (the potential borrower) must meet with a reverse mortgage counselor. References for counselors can be obtained from banks offering reverse mortgages or the U.S. Department of Housing and Urban Development (HUD).

The purpose of these meetings which may take place in person or on the telephone is for the homeowner to learn about reverse mortgages and discuss alternative options. It also helps you decide which kind of reverse mortgage may be best. As well as exploring the advantages and disadvantages of a reverse mortgage, it’s wise that the potential borrower, also compare costs between various lenders and request a Total Annual Loan Cost estimate for each.

Further to discussing the advantages and disadvantages of a reverse mortgage with a counselor, you also need to understand that there are certain costs involved in the reverse mortgage process. Costs may include application fees, closing costs, insurance, appraisal fees, credit report fees, and quite possibly a monthly service fee. Remember too that since a reverse mortgage allows you to continue living in your home, you’re still responsible for property taxes, insurance and repairs. If these payments are not maintained, the loan could become due in full.

A reverse mortgage may also affect eligibility for federal or state assistance as well as Medicaid. That said, any reverse mortgage money that is received is tax-free and does not affect Social Security or Medicare benefits.

The condition of your home is also a large part of the approval process. It must be structurally sound and in good repair. If it’s determined that home repairs need to be done, the costs can also be financed through the reverse mortgage loan.

The total amount a homeowner can borrow all depends on the kind of reverse mortgage selected, how much equity is in the home, the loan's interest rate and most importantly, the age of the borrower. Typically the older a person is, the more they can expect to receive.

A borrower can receive reverse mortgage payments in one of the following ways: in a lump-sum payment; fixed monthly payments; a line of credit or a combination of any of the above. Most homeowners go for the line of credit option which allows them to draw on the loan whenever money is required.

Paul Jesse is a retired government employee, small business owner and the author of many articles on finance and internet marketing. Visit his website at: http://www.sheamarketing.com/financial.

Reverse Mortgages: All You Need To Know

A lender’s promise of fast cash and no monthly payments make reverse mortgages an attractive alternative for cash-strapped seniors who are house-rich but cash-poor. Offered to homeowners over the age of 62 (in Canada), reverse mortgages allow seniors to convert the equity of their home to finance living expenses, home improvements or other needs. It seems like a good idea, but it could cost a fortune.

While they offer distinctive advantages - such as allowing people to stay in their home, receive a monthly income and maintaining an enjoyable standard of living - reverse mortgages aren’t for everyone and they involve a number of risks that should be taken into consideration. A reverse mortgage is the opposite of a conventional mortgage. Instead of borrowing money from a lender to buy a home, the lender pays you based on your home equity. The home must be your principal place of residence. If the mortgagor (homeowner) dies, sells the home or otherwise changes principal residence the initial loan must be paid back together with accrued interest, usually through the sale of the property. Because the proceeds of a reverse mortgage are classified as a loan rather than income, they are non-taxable.

The mortgage principal amount is anywhere between ten to forty percent of the home appraised value and is in direct function of the borrower’s age, current interest rates and property value.

With eighty percent of the average Canadian seniors’ assets tied up in their home and little or no income, this can be a viable financing tool for some people. The downside of a reverse mortgage, however, is that it can quickly eat up the accumulated equity of the house. Let’s say you take a $50,000 reverse mortgage today at the rate of five percent. You will owe $50,000 seven years from now, double in fourteen years. For seniors who want to leave one-hundred percent of their estate with heirs or who hope to have a certain amount of equity leftover after re-paying the mortgage, this type of financing may not be ideal.

When considering whether or not to take out a reverse mortgage, it is important to understand the risks involved, the types of reverse mortgages available and the different terms offered by lenders. And it never hurts to seek the advice of a third party such as a lawyer prior to entering into an agreement.

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton-Centre Realty in Burnaby, BC.

Reverse Mortgages - Are There Disadvantages?

If you are looking for a way that you can make your retirement a bit better, you may want to consider checking into the reverse mortgage options that you have. You will find that there are a variety of companies today that will offer you the opportunities to get a senior reverse mortgage, which can really make a difference in your life. However, you'll find that although there are a variety of advantages to doing so, there are also a few disadvantages as well. Although many times you hear all about the advantages, you may not be aware of all the disadvantages to going with a reverse mortgage. So, let's take a look at some of the disadvantages as well as some of the considerations you'll need to keep in mind if you are considering this options for your needs as a senior.

Disadvantages to Be Aware Of:

First of all, there are some disadvantages that you need to be aware of. Here are just a few of those disadvantages that you will need to keep in mind.

- Disadvantage #1 - Building Up Debt - One of the main disadvantages that you'll encounter is that you'll be building up debt over time while you live in your home. Usually with a regular mortgage you work on paying off the debt on your home over 30 years, but when you go with a reverse mortgage, as long as you are living in your home, you are going to find that you are building up debt instead of paying it off.

- Disadvantage #2 - Large Costs Up Front - Not only will you find that building up debt is a disadvantage, but you'll also find that another disadvantage is that there can be some rather large costs you have to pay up front when you go with this option. These costs really go up when you are only wanting to take out part of the money or you only want to live in your home for a couple more years. So, this can be a big disadvantage to be aware of before you make up your mind.

- Disadvantage #3 - Leaving Your Heirs a Smaller Inheritance - Going with Minnesota reverse mortgages also has the disadvantage of leaving your heirs a smaller inheritance as well. Although they are probably not really interested in the money you lave behind, you may be. You'll have less equity in your home if you go with the reverse mortgage, meaning that the home will be worth less, which can affect the heirs that you leave behind.

Considerations You Need to Think About:

Now that you understand that there are a variety of disadvantages to keep in mind, there are other considerations that you'll need to think about before you decide whether or not this is going to be the best senior housing option for you and your needs. Here are a few important considerations that you need to keep in mind.

- Your Current Needs Financially - First of all, you need to consider your current needs financially. Take a close look at your budget and figure out which options are going to best help you to deal with the financial needs that you have. Take a look at the bills you have. Do you have too many expenses and are you barely getting by? Perhaps you need to adjust your budget or you need to find a way to get extra money, such as through a reverse mortgage.

- Can You Adjust Your Budget? - Ask yourself whether or not you can cut down on some of your expenditures to adjust your budget. Of course there are some things that you may need to sacrifice; however, some things you cannot live without. Before you decide to go with a reverse mortgage, it's important to figure out how long the equity that you have will be able to help you support yourself on the budget that you have.

- Will You Move to Avoid a Reverse Mortgage? - Is moving an option for you if it helps you to avoid going with a reverse mortgage? If you want to move and it will keep you from going through this option, it may be the right choice. However, it's not always the best choice. You may want to stay in your home and often you'll find that a reverse mortgage can help you to do so.

- Benefits of a Reverse Home Mortgage - Last of all, you'll want to consider all the benefits that a reverse home mortgage can provide you with. You will have the advantage of having more cash to deal with and you'll be able to pay off some debt and live a better life. However, it's important that you balance out the benefits with the cons of the option as well. Take the time to figure out if the benefits outweigh the problems, and if they do, then this may be the right choice for you.

Where can you get this type of loan? Think about using a mortgage broker. A mortgage broker that is FHA approved will be able to offer you the FHA HECM product as well as conventional products. You will want to evaluate both before you make your choice.

Looking for a reverse mortgage in Minnesota?-check out http://www.MinnesotaReverseMortgage.net John Mazzara is involved with financial services in the Twin Cities, MN. Officing out of Edina, Minnesota-John is centrally located within the 7 county MN metropolitan area. John owns three separate businesses-a licensed real estate broker associate selling Minnesota real estate since 1986-affiliated with RE/MAX Associates Plus http://www.MinneapolisStPaulHomes.com , an independent CFP-certified financial planner since 1989 with an independent Minnesota financial planning firm-Financial Planning Associates and the owner of a Minnesota mortgage broker firm-Venture Development Inc-specializing in residential, commercial and investment mortgages for purchases of single family homes, investment properties and commercial property. Venture brokers FHA, VA, Conventional loans and lines of credit. If you are looking for someone to help you in the areas of real estate sales/purchase, mortgages, or and/or financial planning and insurance you should call John for a free 1 hour consultation to see if he can meet your needs. 952-929-2577. RE/MAX Associates Plus and Venture Development are located at 7300 France Ave S, Suite 410, Edina, MN 55435

Help Deciding If a Home Mortgage Refinance is Right For You

If you happen to be thinking of refinancing your home mortgage there are a few things you will want to take into consideration. Regardless if you follow the "2% rule" or not, there are a lot of good reasons to refinance your home loan. Here are some tips to assist you in deciding if a home mortgage refinance is right for you.

There are plenty of good reasons why a homeowner would choose to refinance their home mortgage. Most choose a refinance in hopes of getting a new, lower interest rate, lower monthly payment, to get a new mortgage lender or bank, or to cash out some of the equity in their home. These are all legitimate reasons which go against the "2% rule" of mortgage refinancing or modification.

The 2% rule of Home Mortgage Refinancing

The 2% rule of home refinance states that you should never refinance your home loan unless you will be able to get a 2% or more lower interest rate than you already have. This "rule" though is nonsense and only applies in certain situations. For example, a homeowner who wishes to get out of their ARM (Adjustable rate mortgage) and into a more stable fixed rate home loan. Generally a fixed rate mortgage comes with slightly higher interest rates than a ARM would, so in this case it would be smart to throw that 2% rule out the window.

It would make the most sense for you, as a homeowner, to evaluate your financial position and refinancing options that may be available, and which is most beneficial, for you. Refinancing a home loan costs money. There are closing costs and other associated fees whenever a new loan, regardless of the type, is taken out. Figure out the "break in" time which is when after the cost of a refinance, you will start seeing true savings from your new home loan.

Practice plenty of patience and do some basic research in order to ensure you are getting the best refinancing deal you can possibly get. The savings that can be had are incredible and can start with your next home loan payment.

Home refinancing can save you thousands or if it is done the wrong way cost you thousands. Greedy mortgage lenders will try to suck you dry if you let them. Learn how to properly refinance a home mortgage and walk away happy and with more money.

California Home Mortgage Loan Rates

Mortgage has become one of the most important elements in modern day living. It is a key concept that might help one to fetch the amount of money one needs to fulfill his or her dream. Most of the time people look forward to mortgages for securing a home or some other real estate. Therefore, it is important to get the most out of the Internet by viewing the best rates on mortgages.

A mortgage for the purpose of building, buying or making a home is the most common phenomenon. Home, as we all know, is one of the most important aspects of life, of establishing the self as a citizen. Making a home is something that is greater than touching the sky, a feeling that cannot be explained, that cannot be explicated. Keeping this in mind, most of the financial companies and banks provide lucrative and low rate mortgage loans for the special purpose of building a home.

Most of the companies and banks in California provide easy loans at low interest rates for the special purposes of homes. These home loans are available from a whole lot of other sources in California, although the State of California has firm control over the whole matter. In California home loans are available from different types of lenders, apart from financial companies and banks. These lenders include thrift institutions, commercial banks, mortgage companies, and credit unions, among others.

Sometimes, the simple interest rates in cases of home loans are very low, as the home itself becomes the ultimate security, the ultimate mortgage. This erases any kind of risk involve on behalf of the lender(s).

California Home Mortgage Loans provides detailed information on California Home Mortgage Loans, California Home Mortgage Loan Rates, California Home Mortgage Loan Applications, California Home Mortgage Loan Brokers and more. California Home Mortgage Loans is affiliated with Best Home Mortgage Loan Refinances.

First Time Home Owner Mortgage Loans

First time home owners are sometimes surprised at the complexity of the mortgage lending process. If you are searching for a mortgage and you have never owned a home, there a few things you can do to make the mortgage process less confusing. First time home owners should educate themselves on the home-buying experience before contacting mortgage lenders. There are many choices in obtaining a first time home owner mortgage loan. Friendly mortgage professionals are available to assist you in making the right decisions.

Before applying for a first time home owner mortgage loan, shop around and find the lowest interest rates, down payment requirements that fit your budget, and terms that suit your lifestyle. You can choose from 15 up to 30 years and you can choose a fixed or variable interest rate. With so many loan products available, it is hard to know which one is right for you. You must consider your long-term goals, the length of time you plan to own the home, and your current financial situation. Professional, knowledgeable mortgage lenders will be able to advise you as to which choices may be appropriate for you.

Applying for a first time home owner mortgage loan does not have to be a stressful, scary experience. Many first time home owners have found valuable help and advice from mortgage lenders who are eager to approve a first time home owner mortgage loan. Applying for a mortgage does not have to be difficult. Let expert mortgage lenders help you in making the best decisions for your individual situation. You can even apply for a first time home owner mortgage online. The application is fast and simple and you will be well on your way to being approved for your first mortgage.

Owning a home is the dream of millions of people. Your first time home owners mortgage loan can be approved quickly and you can fulfill your dream of home ownership with the help and advice of expert mortgage lenders who are competing for your business. Becoming a first time home owner does not need to be frustrating and stressful. Allow a professional mortgage lender to guide you through the mortgage process painlessly. A first time home owner mortgage loan can be yours in less time than you thought possible.

Refinance Home Mortgage Loan Tips

If you are frustrated with your high mortgage monthly payments, Why not apply for refinance home mortgage loans? Refinancing home mortgage loans refer to the application for a second loan to compensate your existing home mortgage loan.

What really happens when getting a refinance mortgage loan is that the present loan that you have already got will be replaced with a different deal, with different conditions and of course at a much lower interest rate. A refinance mortgage loan comes with a whole lot of benefits. The main advantage of a refinance mortgage loan is the decrease of the total payment on the mortgage value. Another benefit is that a refinance mortgage loan assists in getting some of the equity built in a lump sum payment or in instalments.

People all over the world have come to accept the many benefits of refinance home mortgage loans. One of the primary advantages of refinance home mortgage loans is that it will bring down your monthly mortgage payments. The financial environment, especially the existing interest rates in the market may have controlled the interest rates that you are expected to pay on your mortgage. However, these market interest rates do not remain the same and, increase and decrease due to other financial factors.

Therefore, naturally the best time of the year to apply for refinance mortgage loans are when the rates drop down rapidly. Exchanging your higher mortgage interest rate for the lower mortgage interest rate will reduce your monthly mortgage payments. Another advantage of refinance home mortgage loans is that in can cut down on the term of your mortgage which can save you thousands of dollars of interest, although your monthly payment may remain the same. This means that more of your payment will be added towards the principal which enables you to build faster equity in your home.

Refinance mortgages come in extra handy if you have settled for adjustable interest rates on your first mortgage. Though adjustable rate mortgages sound great when the interest rates are down, it can be equally horrifying when the interest rates on mortgages increase. In order to maintain the stability of your expenses, the best option for you may be to exchange that adjustable rate with a fixed rate refinance home mortgage loan be your best.

If you hold the near crime of bad credit records, refinance mortgage loans may seem as a distance reality for lenders will still offer you high interest rates.. Refinancing is also a bad idea when your property has significantly devalued since your original mortgage rate is bound to be higher than the new one. The third instance of bad timing for refinance mortgage loans are when you have only few year worth of mortgage to be paid off from your original mortgage.

Therefore, in order to choose the refinance home mortgage loan that works best for you, consult a mortgage broker to get help comparing refinance home mortgage loan options, lenders and their products.

Commercial Mortgage Loans

Commercial mortgage loans are executed using real estate to collateralize the loan. Commercial mortgages are similar to residential mortgages, except that the collateral used to secure the loan is a commercial (business) building rather than a personal residential home. If the borrower defaults on the loan, the lender can seize the collateral (building) to recover the loan proceeds.

Commercial mortgage loans are not available to persons, but rather to businesses, which include partnerships, incorporated businesses, limited companies, etc. The business must be sound financially and the process to verify the business income can be more complicated than verifying the credit worthiness of a specific individual. That is why traditional commercial mortgages can take six to nine months to underwrite.

Commercial loans are procured for a variety of reasons: to buy the premises of an existing business, to make improvements or enlarge existing premises, to make commercial and residential investments or to develop the existing property in other ways. An example would be to buy already constructed business premises, like offices, shops, restaurants, or pubs. Additionally, they can also be used to buy business assets such as plant equipment and specialized machinery.

The Interest rates for commercial mortgages are generally higher than those for residential mortgages but lower than interest rates on unsecured business loans. A fixed-rate loan is the most common commercial mortgage. It is similar to the fixed rate home mortgage loan in that the interest rate remains constant throughout the term. However, the term for most commercial mortgage loans is between 3 and 10 years but they can be extended for as long as 25 years.

The commercial mortgage loan amount and interest rate that you can receive is a direct correlation of the credit worthiness assessed by the lender with respect to your ability to repay the loan. If you have an excellent business record with a verifiable profit and loss business statement then you will have little trouble getting a commercial mortgage at an attractive interest rate.

Commercial loans are not provided without extensive scrutiny regarding your business stability and profitability. The Lender usually wants to see your last three years of audited financial statements including a Profit and Loss statement, balance sheet and a cash flow forecast. Favorable business information is critical to the lender and to you because, as stated earlier, if you default on the loan the lender can repossess your property and sell it to repay the outstanding mortgage balance.

The best place to find commercial mortgage loans is on the Internet. There are enormous numbers of commercial lenders vying for your business and they all advertise on the Internet. It is possible to compare many loan quotes side by side and determine which is best for your financial situation.

Mortgage loans can be a confusing and complicated subject for many people. For some straight talk visit Home Mortgage Loans and learn more about the different Types of Mortgage Loans.

What is Private Mortgage Insurance?

If you're planning to take out a home loan you may have heard the phrase "private mortgage insurance' bandied about. So what is it and who needs it?

In general, a lender will require you to obtain private mortgage insurance when your home loan is worth more than 80 percent of the purchase price of the home.

Basically, most lenders consider the ideal borrower as someone who can fund 20 percent of the home price. This shows that the borrower has significant 'skin in the game' - by investing a significant amount of money in the home they demonstrate a high level of commitment to the home and to meeting their loan repayments.

Moreover, it means that should the borrower default on the loan they will have equity in the home which they can be sold and used to pay off a good chunk of the outstanding mortgage. Accordingly, by lending to such a borrower the bank is taking less of a risk than if they lend the same amount of money to a borrower without such equity.

However, the bank won't necessarily refuse to lend to you if you have less than a 20 percent down payment. What they will do to reduce their risk is to require you to purchase private mortgage insurance!

Private mortgage insurance or 'PMI' provides security for the bank in assuming the risk associated with lending to someone with less than a 20 percent down payment. This is because if the homeowner purchases PMI and they default on the loan, the insurance company will pay off the remaining balance of the loan. In turn, this means that the bank will not lose money if the borrower cannot pay their mortgage payments and end up in foreclosure.

The Federal Government has established regulations governing the imposition of PMI since it presents a significant an additional expense for consumers. In particular, the Homeowner's Protection Act specifies particular rules that lenders must follow in relation to private mortgage insurance. These rules are designed to protect the borrowers and save them money. For instance, when a lender requires you to obtain PMI they must inform you of the amounts you must pay, when you must pay these amounts, the date you can stop paying them, when the PMI will automatically be canceled, your rights to terminate the PMI, and a phone number you can call to cancel the insurance.

Although many home buyers who borrow more than 80 percent of the purchase price of a home must buy PMI, there are also other circumstances where you will also have to pay for such insurance. The most common instance is where you have a poor credit score. A poor credit score means that you are a higher 'credit risk' to the bank, such that they will desire you to have PMI.

So how much does private mortgage insurance cost and when do you need to pay it? Well, you will typically be required to pay around .5 percent of the total loan value for PMI. What's more, a lender will usually want the entire first year's premium up front at the close of the home purchase. So if you have a loan of $200,000, your PMI will cost around $1,000. In most cases, you will need to continue paying for the private mortgage insurance until you have paid at least 20 percent of the loan value down. Once you have built this level of equity in the home you will no longer be required to pay for the insurance.

Despite the additional expense presented by PMI and the obvious attraction of having at least a 20 percent down payment PMI is not all bad news. In fact, it may be a small price to pay to get into home ownership earlier rather than later. However, it's best to discuss the best strategy whether it's saving a larger down payment or using a smaller down payment and buying PMI with your mortgage planner.

Get more articles and information at http://www.VirtualREIMentor.com

Reverse Mortgage - How it Can Help

As age catches up with seniors and their retirement gross nearer, seniors should start thinking about planning for the future. There is no doubt, some post retirement benefits will help seniors, but the amount of money can be inadequate for some seniors to meet their financial expenses for each month. Unless the senior is receiving a sizable amount of money for their retirement benefits, it is unlikely they have the funds for a comfortable retirement that would enable them to travel and enjoy their silver years. All these financial requirements can easily be taken care of my means of a reverse mortgage.

Many people think of ways in which they can add substantial amounts of money to their retirement so they can live the life they have always dreamed about. Most seniors have seen ads of elderly couples traveling to exotic foreign destinations beamed across the TV screen and they too want to join in the fun and enjoy life. There is a way to take those trips and have extra money without many hassles; the parties involved just need to be at least 62 years of age to apply for a reverse mortgage that can provide the senior with financial liberty by using their home equity.

If you are a senior citizen and are above 62 years of age and have a large amount of equity in your home, a reverse mortgage can assists you in your post retirement dreams. After you receive the loan from the lender, you will not have to pay back the loan as long as you live in your home. However, if you sell your home, you will have to repay the loan. The money you receive from the loan is tax free and you retain ownership of your home. In case of your death, the person who inherits the house will need the loan if they decide to keep the house. A reverse mortgage is not dependent on your health, income or even credit history.

Many seniors may decide to use a reverse mortgage for something other than a dream vacation. Seniors may decide to use the funds towards paying off their current mortgage, some may decide to use the money for health care, or even daily living expenses. The fact that a reverse mortgage allows seniors to have their own financial security and independence makes it a very popular option. Most people veiw a reverse mortgage as a need, meaning they will only do a reverse mortgage because they need the money not because they want the money for trips.

A reverse mortgage can be quite expensive because the cost of the loan includes credit reporting charges as well as appraisal and initiation charges, inspection charges etc. add them all together they can add up to a substantial amount which is deducted from the amount you will receive. If you do not properly manage your cash, you should seek professional to help manage the money you receive from the reverse mortgage in combination with the rest of your funds.

Need Of A Mortgage Calculator

You can use a mortgage calculator to decide just how much funds you can afford to borrow. These days, a number of mortgage calculators are accessible on the Internet that facilitates you to decide your financial insinuation of mortgages.

So, basically, following should be looked in a mortgage calculator:

1. The balance that is available on the main loan.

2. The interest rate in periods.

3. The number of payment installments and the total money involved in each.

4. The sum of installments you require to make to resolve the mortgage

If you are searching a mortgage on your residence, certainly hunt for a mortgage calculator, particularly one that talks about the amounts mentioned above. You require filling out an online feedback form where you need to give such information as your income, your operating cost.

The calculator will inform you how much you are capable of having a loan of. The best element of using a mortgage calculator is that you can find that you have initiated saving considerably, may be in some thousands of bucks as the mortgage calculator will teach you about unusual mortgage loans.

You will also be able to evaluate and compute the true cost of all alternatives and carry on with the one that is the most reasonably priced one for you.

When you make use of a mortgage calculator, you not only put away on your mortgage but also on agent bill. Calculating the mortgage after bearing in mind your income and spending is a tough task.

Use A Home Mortgage Calculator

If you are considering a mortgage, then you must familiarize yourself with the functions of a home mortgage calculator. You can determine payment terms with a home mortgage calculator. Monthly payment amounts are easy to figure out. A home mortgage calculator is an invaluable tool in determining an optimal loan situation. It gives you an overview of your financial position with regards to the mortgage.

A Great Idea

Using a home mortgage calculator is an excellent approach to figuring out where you are in your loan. It will factor in interest rate and loan period to determine your monthly payments. In the end, this tool will help you figure out how much the total loan will cost you. This can help you eliminate years off your payment period and thousands off your interest payments.

A home mortgage calculator helps you determine your monthly obligations. Input your taxes, insurance, etc. The output will be tailored to your specific need and situation. It also helps in calculating closing costs. A good calculator is the edge you need in a mortgage loan situation.

Some Examples

Home insurance is definitely not a luxury. All homeowners should have it. But most homeowners do not understand it. There is a big problem in the U.S. right now. The real estate market is rapidly declining. If you intend to go into it, use a home mortgage calculator for the U.S. market. It presents numbers, not speculation. This is a great way to obtain a realistic overview of what you are getting into.

A mortgage APR calculator can determine your annual percentage rate. With the click of a mouse, you can yield this figure right away. You can also use this type of calculator to compare different terms. You need to do this when shopping around for a loan. The APR can reflect the total cost by taking the interest rate into account. This type of calculator can also determine whether the mortgage is beneficial to you.

How about mortgage points? Should you buy them? Mortgage points will reduce your interest rate when you close a mortgage. This reduces your monthly payment as well. But points cost you money. A mortgage point calculator can calculate whether purchasing mortgage points is a good idea or not. You can either pay for points or increase the amount of your initial payment. If you do purchase points, the calculator can figure out the amount of time it will take to recover those points as well.

It is very important to use a home mortgage calculator any time you are involved in a mortgage transaction. It helps you figure out all the numbers and condense them into useful information. It is unthinkable to go into any sort of financial transaction blind. So do not go into a mortgage transaction without the aid of a calculator. Figure out the appropriate one for your situation and use it judiciously. Your finances will fare better because you took the time to crunch all the numbers.

What is a home mortgage calculator? It comes handy when you're thinking about a refinance home mortgage like a Florida refinance. Visit WhatAboutLoans.com today.

Loan Modification Qualifications

If you are a homeowner facing foreclosure, you may want to consider getting your loan modified. Many, who dismiss the option, end up with more chaos than actually trying it out. Never the less people are not considering it because they figure that it's too late, gotten too far behind on their payments or believe their bank will gain by foreclosing on them. The fact of the matter is you will eventually want to apply for the loan modification and hire a representative. You can even do it yourself. Let's reveal the types of information the lender is likely to examine when reviewing your application.

First you will need a statement showing your willingness to keep your house. A hardship letter will also be necessary in describing the event that has forced you to get behind on your mortgage payments. The Hardship should include loss of job, reduction in pay, medical illness, costly medical bills, a sudden and significant interest rate increase on an adjustable rate mortgage (ARM), etc.

You will need to show the ability to afford a reasonable lower monthly payment. If the lender is unable or unwilling to reduce the monthly payment to an amount you can afford, you won't have a successful loan modification. You will also need to include W-2's, current credit report, pay stubs, federal income tax returns, bank statements, etc. In order to determine whether you qualify for a loan modification, lenders take a close look at your debt to income ratio (Debt Ratio = Total Monthly Payments / Gross Monthly Income).

You need to keep in mind that qualifying for a loan modification means that you are left with a truly affordable monthly mortgage payment. It makes no sense for you to qualify for the modification only to find out that you are not going to be able to make that payment as well.

If you are interested in more information on the industry, find out how to talk to the bank yourself, you will need to visit my blog and get all the necessary tools in order to get the most out of your situation.

Loan Modification Websites

There are many reasons why mortgage companies are shifting towards servicing modifications. However, number one reason is the huge financial crises that we are facing as a country right now. In addition to this, people are unable to refinance their mortgage. Therefore the only option is to get a loan modification. Most people in foreclosure are really not sure how to start the process of finding the right service for their situation. The number one source many Americans are turning to is the internet. There, people are finding answers with their loan modification questions.

This is why it is imperative for professionals to set up loan modification websites that can provide homeowners with information, sell guides, and generate leads from people seeking information on loan modifications online. A website allows you to do all of things. Since many people are unsure of who to speak to, they tend to get intimidated when seeking a professional online. Therefore, you will need to make sure that your website looks professional and is easy to understand and navigate.

when looking for the right design, you will want to make sure that the company website ensure that you are well positioned with search engines to receive a great deal of loan modification leads pointing towards your website.

The site will need to have lead forms that collect as much information as you could get from your online loan modification leads. You will also need to allow visitors to upload their documentation online through your site. The site needs to have examples of loan modification designs for you to look at.

If you want the best possible sites for your business, then you can visit my blog to find out which sites are the best sites for a loan modification business.

How Much Mortgage Can You Afford

If you want to purchase a new home, chances are you will need a mortgage. But, before you begin shopping, you need to determine exactly how much house you can afford. Nothing is worse than being turned down for a loan after you have found what you consider to be the perfect home.

Debt-to-Income Ratio

To determine the maximum mortgage amount that you can afford, most lenders use debt-to-income ratio guidelines. The term debt-to-income ratio is used to describe the percentage of your monthly income (before taxes) that is used to pay your monthly debts. In general, the common guideline for this ratio states that monthly mortgage costs should not account for more than 33% of your monthly income. And, when your other debts (credit cards, installment loans, etc) are added to the monthly mortgage payment, it should not consume more than 38% of your income altogether. For example, if your monthly income is $3,000, your maximum mortgage costs should be $990. When your consumer debt is added in, your monthly mortgage payment and your other credit expenditures should not exceed $1140 per month.

Making Your Own Calculations

Before consulting with a lender, you can make your own calculations. Begin by determining your monthly income. Only count income that can be documented by paperwork. The easiest way to do this is to locate your W-2s forms from the last two years. Add the amounts on the two forms together and divide by 24. This is your monthly income. Once you have that number, multiply it by 0.38. This is the maximum amount you can spend on mortgage payments and consumer debt combined.

Mortgage Calculators

To help you determine how much mortgage you can afford, you may also want to use a mortgage calculator. These calculators are readily available online and can help you evaluate different mortgage options. Here is a list of recommended Home Mortgage Lenders online. It's important to use a reputable lender online to make sure your personal information is secure.

Refinance Advice - Don't Believe Everything You Hear

Although the mortgage industry is highly regulated, there are still plenty of ways in which your search for a home refinance loan can end in disaster. And the problems may not even be the result of someone's trying to cheat you; it can be a matter of incompetence on your lender's part, because of a poor grasp of the complicated mortgage system. So you must take responsibility for choosing a legitimate and qualified mortgage lender.

You can find all kinds of people to offer refinance advice, but the merits of that advice may be questionable. Knocking one back with an old high school buddy who knows someone who took a college course in economics and gave him refinance advice before may not be the best way to find your home refinanced. You should look at any refinance advice from similar sources with skepticism, and do your own homework before you look for a home refinancing loan.

The first thing you should do is educate yourself in the various kinds of refinancing available, and compare what you have learned to your won particular situation so that you won't end up drowning in refinance advice totally useless in your situation.

Refinance Advice Myths

You can find information on refinancing in textbooks, economic journals, on the Internet, and in financial magazines. But taking this refinance advice as gospel can be a real mistake, and here are just a few suggestions which you should ignore if they come your way:

* You will have to pay a high interest rate on your refinance loan if your credit record is shaky.

* You will be better off if you choose a fixed interest, thirty year refinance loan.

* Interest rates will never be lower than they are right now. It's all uphill form here, so you'd better refinance while you can.

* Don't take out a mortgage if you don't expect to live in your home for at least five years.

* Stay away from an adjustable rate loan as if it were poison.

* You can always trust your refinance lender to protect your financial interests.

* A bankruptcy will spell the end of your financial future. Your credit history will never recover.

All of the above are akin to the old wives' tales of refinance advice, and should be given about as much credence. The idea of not purchasing a home with a mortgage unless they intend to hang on to it for five years would have kept thousands of people from making a killing by flipping their homes in the recent US real estate boom. And the refinance advice that says you will have to pay an excessive interest rate if your credit is not the best is simply inaccurate. There are many factors which will determine your refinance interest rate; your credit rating is just one of them. For more info see http://www.mortgagerefinanceloanhelp.com/When_Refinancing_Your_Second_Mortgage on Refinancing Your Second Mortgage.

Anyone who tells you to trust whatever refinance advice you get from your lender is probably in your lender's employ. Your lender is refinancing your home for one reason only: to make a profit. And if your interests stand in the way of your lender's profit, you can expect your lender's profit to be the underlying reason for the refinance advice you get!

Benefits Of A Cash-out Refinance

If you need extra funds for large purchases, or simply want to obtain a better interest rate on your home loan, refinancing may be a good option. Today, many homeowners are taking advantage of a cash-out refinance.

There are several advantages to refinancing a home. Moreover, refinancing also involves certain pitfalls. Before choosing to refinance your mortgage loan, carefully consider the benefits and risks.

What is a Cash-Out Refinance?

A refinancing is an approach that involves creating a new mortgage loan. You have the option of refinancing with your current lender or choosing a new mortgage lender. When refinancing, the old loan is replaced, and you begin making mortgage payments to the new lender.

Homeowners refinance for many reasons. Because of low mortgage rates, refinancing for a low rate is perfect for lowering monthly payments. Additionally, those with an adjustable rate mortgage usually refinance to acquire a low fixed rate.

Refinancing is also beneficial for obtaining extra funds. The option of cash-out refinancing involves creating a new mortgage, while borrowing some of your home's equity. Hence, the new mortgage amount will exceed the previous amount. For example, if the old mortgage was $100,000, and a homeowner refinances and borrows $10,000 from the equity, the new mortgage principle totals $110,000.

Benefits of a Cash-Out Refinance

A cash-out refinance is ideal for homeowners needing extra funds for large expenses. For example, if your home is older and requires several upgrades, a cash-out refinance is great for financing the project. Moreover, the funds received may be used to start a business, plan for retirement, payoff personal debts, college expenses, etc.

Risks Involving a Cash-Out Refinancing

The money from a refinance is received at closing. The funds are dispersed as a lump sum of money. In most cases, homeowners may borrow up to the home's equity. While tempting, it is important to avoid borrowing too much money. Because a cash-out refinancing increases your previous mortgage principle, your monthly payments may also increase.

Prior to applying for a cash-out refinancing, make sure you can afford the additional expense. For example, you must pay closing fees. You have the option of including the closing fees in the mortgage. However, this will also increase the total mortgage principle. To avoid the risk of foreclosure, the new mortgage amount and payment should fit comfortably into your budget.

Bad Credit Home Mortgage Refinance – Should You Refinance

A bad credit home mortgage refinance is possible for people with previous credit problems. The interest rates will not be as low as those for consumers with good credit but you can still end up saving in the end.

There are several questions you should ask yourself when considering a home mortgage refinance. First of all you need to access your credit situation. If credit has been a problem for you in the past, you will want to take control of your finances before applying for a mortgage refinance loan. Refinancing can either help or hinder your current situation.

You will need to calculate all of the costs involved in refinancing before making a decision. A lower rate of interest and a shorter loan payoff time are two desirable perks of refinancing. Some people are only interested in lowering their monthly payment amount. However, you will need to remain in your home long enough to reap the benefits of refinancing. It makes no sense at all to refinance your home if you plan on moving within a few years. It is a good idea to figure how long it will take to recover the costs of refinancing. Some loans may offer a lower rate of interest but have excessive closing costs and fees. You will want to be aware of all costs involved including any additional income taxes you may be charged.

The Two Percent Rule

The two percent rule refers to your existing mortgage rate compared to current rates of interest. Many lenders recommend that you refinance if you can obtain an interest rate two percent less than your current rate. This is just a general rule and should not be the only deciding factor. Often the time you intend to remain in the home is just as important as the lower rate of interest.

On average the costs of refinancing will be at least three percent of your mortgage loan. This is a lot of money to spend and you will want to make sure you will be able to recover these costs when refinancing. If you are making payments on your first home and plan on buying a larger home in the future, a drop in the current interest rates may be the perfect time to purchase a new home. If you can obtain more home space for about the same price, this may be a desirable option.

1st And 2nd Mortgage Refinance Loan - Why Refinance Both Mortgages?

The hassle of making two monthly mortgage payments has prompted many homeowners to consider refinancing their 1st and 2nd mortgages into one loan. While combining both loans into one mortgage is convenient, and may save you money, homeowners should carefully weigh the risks and advantages before choosing to refinance their mortgages.

Benefits Associated with Combining 1st and 2nd Mortgages

Aside from consolidating your mortgages and making one monthly payment, a mortgage consolidation may lower your monthly payments to mortgage lenders. If you acquired your 1st or 2nd mortgage before home loan rates began to decline, you are likely paying an interest rate that is at least two points above current market rates. If so, a refinancing will greatly benefit you. By refinancing both mortgages with a low interest rate, you may save hundreds on your monthly mortgage payment.

Furthermore, if you accepted a 1st and 2nd mortgage with an adjustable mortgage rate, refinancing both loans at a fixed rate may benefit you in the long run. Even if your current rates are low, these rates are not guaranteed to remain low. As market trends fluctuated, your adjustable rate mortgages are free to rise. Higher mortgage rates will cause your mortgage payment to climb considerably. Refinancing both mortgages with a fixed rate will ensure that your mortgage remains predictable.

Disadvantages to Refinancing 1st and 2nd Mortgage

Before choosing to refinance your mortgages, it is imperative to consider the drawbacks of combining both mortgages. To begin, refinancing a mortgage involves the same procedures as applying for the initial mortgage. Thus, you are required to pay closing costs and fees. In this case, refinancing is best for those who plan to live in their homes for a long time.

If your credit score has dropped considerably within recent years, lenders may not approve you for a low rate refinancing. By refinancing and consolidating both mortgages, be prepared to pay a higher interest rate. Before accepting an offer, carefully compare the savings.

Moreover, refinancing your two mortgages may result in you paying private mortgage insurance (PMI). PMI is required for home loans with less than 20% equity. To avoid paying private mortgage insurance, homeowners may consider refinancing both mortgages separately, as opposed to consolidating both mortgage loans.

Mortgage Brokers For Home Loan Refinance

Online brokers negotiate financing deals with several lenders. This may mean that you can find a better deal through their site than by working with the lender. Not all mortgage brokers guarantee the lowest refinancing rates, so you should also compare brokers.

Understanding Mortgage Brokers

Mortgage brokers specialize in finding financing. They work with many lenders to offer you several financing choices. They partner with traditional banks as well as thrift institutions, credit unions, and mortgage companies. They can even connect you with subprime lenders if you have poor credit.

Not all brokers call themselves “mortgage brokers.” But any site that offers bids from more than one lending company is a broker. Make sure you know if you are dealing with a broker, since this will affect your closing costs.

Brokers collect a fee for each loan they refer to a lender. Sometimes you will pay this fee as part of the closing costs, other times it will come out of the mortgage company’s fees. Even with the additional expense of a fee, brokers can usually find you better deals than if you shop alone.

Working With Broker Sites

Online broker sites enable you to make quick comparisons from basic financial information that you provide. Usually, you will need a general idea of your credit score, loan amount, and down payment. The quote you receive gives you a rough idea of rates and closing costs.

Take the time to check with a couple of broker sites to find the best deal. Each broker works with different lenders and negotiates unique deals. Spending a few extra minutes analyzing quotes can save you thousands in interest costs.

Taking The Next Step

Once you have narrowed your choices down for refinancing, request a detailed quote from the lender. This will require the financing company to look at your credit score. You don’t want to request too many detailed quotes, since your credit score is temporarily lowered every time a lender makes a credit inquiry.

The detailed quotes will list rate along with terms, such as required points. Even with this accurate quote, it can change hourly based on market indexes and bank rates. If you find a good deal, it is best to act on it quickly to lock in rates.