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Wells Fargo Helps Mortgage Customers Facing Payment Challenges

2011-04-09T12:29:00.000-07:00

Wells Fargo & Company WFC announced it is hosting a Home Preservation Workshop for Wells Fargo Home Mortgage, Wells Fargo Financial, Wachovia Mortgage and Wells Fargo Home Equity customers in the Detroit metro area facing financial hardships. The two-day workshop — to which Wells Fargo has invited southeast Michigan homeowners — will take place April 19 and 20, from 9 a.m. to 7 p.m., at the Hyatt Regency Dearborn-Detroit, Great Lakes Center, located at 600 Town Center Drive, Dearborn, Mich.

“Wells Fargo wants our customers to succeed financially and helping them stay in their homes is one of our top priorities,” said Russ Cross, regional servicing director with Wells Fargo Home Mortgage. “This workshop will offer homeowners who are facing payment challenges the opportunity to meet face to face with a representative to find options available for them.”

About 100 homeretention team members will be available to work one-on-one with mortgage customers facing payment challenges. Bilingual representatives will be available to assist borrowers during the event. In many cases, borrowers may receive a decision on a workout, loan modification, or other option, on site or shortly following the workshop. Options include the federal government’s Home Affordable ModificationProgram (HAMP) and Wells Fargo’s own loan modification program.

How to register

Walk-ins are welcome, but registration is strongly recommended in order to guarantee your ability to meet with a representative. Sign up by Sunday, April 17, at www.wfhmevents.com/leadingthewayhome. For more information call 1-800-405-8067.

This is the 24^th Home Preservation Workshop Wells Fargo has conducted. The Detroit workshop is one of more than 20 Wells Fargo will hold across the country in 2011.

About Wells Fargo’s loan modification efforts

Wells Fargo is making every effort to keep people in their homes through the federal Home Affordable Modification Program (HAMP) and the company’s own modification programs focused on mortgage payment relief. As of Feb. 28, 2011, Wells Fargo modified 649,075 mortgage loans since the beginning of 2009 – of which 86 percent (or 556,294 mortgages) were done outside of HAMP.

In the fourth quarter of 2010, about 92 percent of Wells Fargo’s mortgage customers remained current on their loan payments and the company’s delinquency and foreclosure rates were three-fourths that of the industry. As a result, fewer than 2 percent of the loans secured by owner-occupied homes and serviced by Wells Fargo proceeded to a foreclosure sale in the last 12 months.

About Wells Fargo

Wells Fargo & Company WFC is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With approximately 280,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 19 on Fortune’s 2009 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.

Wells Fargo & Company
Chris Hammond,415-222-4106
415-310-9152
hammcl@wellsfargo.com

Mortgage refinance- all your financial problems solved

2010-12-03T09:20:00.000-08:00

Mortgage is a term used to denote the pledging of a persons property (typically) as a security when a person borrows money from the lenders. In most countries and their jurisdictions, loans secured on real estate are called mortgages. But, there are a few exceptions and few restrictions as well. There might be some jurisdictions in which only a piece of land can be mortgaged. But on the whole, mortgage generally refers to putting up your real estate as security. Thus, it is a secured loan with minimal risks to the lender.

Suppose, you have an old loan and you want to repay it. Well, then you can take a new loan to repay the outstanding debt. This, in essence, is what mortgage refinance is all about. When a person goes for a refinance loan, he/she is actually going for a secured loan. Through this process people replace an existing loan that was secured by the same assets. The most common reason why consumers go for refinancing is home mortgage. Some of the other salient reasons why people tend to go for mortgage refinance are given below:

· Refinancing goes a long way in reducing the cost of interests. Refinancing is generally done at a lower rate as compared to the other loans.

· If a person wants to pay off other debts, the refinance is the mortgage to go for.

· At times, people take a long-term loan and reduce their obligations in terms of periodic payments.

· Mortgage refinance also aids in risk reduction. Sometimes people move from a variable-rate to a fixed rate loan when they choose the refinance option.

· Many a times, people want to liquidate their entire equity, which has assimilated in real property since the time they gained ownership of their house.

Believe it or not, in some types of refinanced mortgages, you have a penalty if you repay the loan early. This can be with respect to a part repayment or the repayment of the entire loan. You are also cautioned, as far the lower interest rates are concerned. Some refinanced mortgages expose the borrower to greater risk than done so by the existing loan.

While picking a mortgage refinance you must calculate the ongoing, up-front, and the potentially variable costs that are all a part of refinancing mortgage. All these points must be considered before making a decision to go for a refinanced mortgage. Refinancing quotes also vary from region to region and depend on your credit history and other aspects like employment, duration of employment, savings history, and number of years at the existing place of residence.

Like all mortgages, mortgage refinance gives a lot of importance to credit reports. But, don't fret if you have a poor credit history. There are numerous options available in the market today that allow you to pledge your property in order to borrow cash.

About the Author

Keith Gill is an Experienced Real Estate investor and Mortgage Banking Consultant and Loan Officer. Keith Prides himself on Bring accurate and valuable information to the Real Estate and Mortgage market place. Keith Can be driectly contacted by going to his personal website at http://www.YourLenderForLife.com

Washington Mortgage Lenders: know The Facts

2010-12-03T08:40:00.000-08:00

Most people search the internet for authentic mortgage options. Most first time businessman or a person in a financial crisis looks out for easy mortgage options. Mortgages play an important role in raising the requisite money in the market. It is the source of easy money and credit in the market. Often big business plans or growth is stopped because of financial crisis.

One of the ways to ride over this problem is mortgage. Mortgages work wonderfully when you have a fixed asset. It is vital to possess affixed and valuable asset like estate, properties or houses. In this issue Washington Mortgage lenders can help you. Some people also mortgage their lands deeds and even their company to borrow money. Liquid cash is vital for the running of the market. When there is lack of this liquid money people go for mortgages.

Washington mortgage is actually a type of loan forwarded by an individual or an organization to you. This loan is given for a fixed term. This term given by Washington Mortgage lenders is normally big because it takes many years to repay the loan. There is also a fixed or variable interest charged on the amount given to you. So after the loan expires you will pay back the principal with the interest. The interest is actually the profit of the lender. The principal can be returned after a fixed duration or in installments over a period of time. Most borrowers try to repay the loan as quickly as possible to avoid piling of interest rates. But before the loan amount is written to you the lender normally takes something from you as a guarantee that you will pay back the amount. This is normally a fixed asset like gold or property. Some also take loan on their personal credit (which can be dangerous) and the industry itself.

If you stay in the state of Washington then the process of mortgage is even simpler for you. There are plenty of profitable Washington Mortgage lenders here. You can search the internet for the best Washington mortgage companies in this state. But remember along with the good ones there are also the tricky ones whose main interest is in taking away your asset through heavy rates and hidden costs. There are also some great Washington mortgage lenders who get you the perfect mortgage quickly to you. What you need to do is, first fill out their detailed form provided online. They will then understand your requirements and match it with the long list of Washington based mortgage money lenders. You are introduced with this lender and you can have a free consultation with him. If you are not satisfied with the terms of lending them you can quit or search again for other lending options.

But first try to understand the type of loans that you need. You can go in for 'First Mortgage' where the value of the asset is given to you as a loan amount. 'Refinance' is actually taking the first loan again on the same asset. Then there are equity loans and credit loans where the business or personal credit is considered as collateral. Before you go in for mortgage loans it is important to know your credit ratings in the market.

About the Author

Andrew Stone is author of this article on Washington mortgage.
Find more information about Washington mortgage lenders here.

What To Know When Getting Your Pennsylvania Home Mortgage

2010-12-03T08:34:00.000-08:00

Mortgage Source is an organization established by Theresa Cummins. Mortgage Source is the answer for all your problems and questions when you decide to purchase a new house or refinance your mortgage. Mortgage Source will help you find the best loan program which meets the terms of Pennsylvania home mortgage guidelines.

There's a lot of excitement involved with buying a new house. And it also gives you a sense of achievement when you finally have the keys in your hand. You would obviously not choose a house that is perfect for someone else, you will choose the one that looks like your dream home and is best for you. Professionals at Mortgage Source will help you find a loan program that will match with your needs. You will not be required to do elaborate paper work and they will provide you with all the personal attention that you need.

With Mortgage Source, refinancing your mortgage will be pretty easy. You may have thought that refinancing a mortgage will require you to do a lot of paper work. But this is not true. Mortgage Source will make it absolutely simple for you and they will also lower your rate of interest and monthly payment. They will allow you to pay down your mortgage as quickly as possible while keeping the same monthly payment. Mortgage Source has experienced professionals who will guide you in your journey to pay off loans.

It is advised to consult a professional at Mortgage Source before you start looking at houses. You may think, why is this important, when you haven't even negotiated a price. Well, this is important because a professional at Mortgage Source will guide you and determine the amount of monthly mortgage payments you can afford and how much of a loan can they offer you. They will determine this on the basis of your debts and income, your employment and situation of residence, funds available for down payment, and the reserves that will be required.

By knowing in advance how much you can get, you can tell your real estate agent to help you get an appropriate offer. You know the price you can offer and you won't be confused as to whether you can buy the house or not.

There are many different loan options, including USDA loans, VA loans (Veteran Administration), conventional loans and others. In order to apply for a certain type of loan program, you will need to qualify for certain criteria. Mortgage Source offers you the lowest rates on conventional (FNMA, FHLMC) loans.

There are some closing costs involved with every loan program that you opt for. You should inquire about these closing costs and ask the professional for the best that they can offer. In the beginning, you may be asked to pay a loan origination fee. This will include all the expenses incurred in processing the loan, and is generally a percentage of the mortgage amount.

Sometimes, you may also be given the opportunity to pay points. These will help you lower the rates of interest at which you will repay the loan. One point is equal to 1 percent of the mortgage amount. You may choose to use this or not.

About the Author

If you want to get the absolute lowest rates on your Pennsylvania home mortgage, visit http://www.mortgagesourcepa.com/ or call 800-858-8279.

Keep your home with mortgage protection

2010-12-03T08:31:00.000-08:00

Having that home repossessed because you can’t afford to keep up with your mortgage payments is something you won’t be proud of. Yet this can happen, and often when you least expect it. Far too many people don’t think that mortgage protection is something that they need to consider, especially if they are in a good job, have good health and earn a reasonable amount of money. However in life things can change in the blink of an eye and your once idyllic lifestyle can be taken away from you in a flash.

This may seem quite dramatic, but it isn’t. Everyday when you read the newspapers or see the news there are tragic stories about people who are either involved in road accidents or simply drop down dead with no warning – and these are the type of situations that cause people to fall behind with mortgage payments. With mortgage protection families of the deceased can be helped with the cost of their repayments.

Mortgage protection doesn’t just provide cover for the unexpected death of a mortgage holder, it can also help in other circumstances such as critical illness, redundancy and long term sickness. If you have a fully protected mortgage you will have peace of mind knowing that your mortgage will be covered if life does throw something at you that you are not prepared for. Take illness for example, no one can plan when and for how long they will be ill for, or the severity of the illness. Some people are lucky enough to be employed by a company that provides a sickness scheme that will allow them to be ill for up to six months and still receive their full salary each month – and for many people this will be enough for them to make a full recovery. Some people on the other hand will only receive statutory sickness pay which is usually not enough to provide enough income to pay a mortgage and the other bills associated with owning a home. This can be further worsened if you are the only wage earner in the house.

If you are in a job that will not pay you well if you become ill or have to leave work for some time then mortgage protection really is something that is worth seriously thinking about. As with any type of insurance there are different types of mortgage protection and different premiums that you should expect to pay. Here are a few of those types of mortgage protection that are available on the market right now:

Fully protected mortgage – this is a type of plan that will cover you in the event of your death, critical illness, redundancy, long term sickness and it will usually cover your buildings insurance too. Mortgage providers do not consider mortgage protection to be compulsory, however it is compulsory to have buildings insurance for your property to protect it.

Level critical illness insurance – this type of mortgage protection covers you if you contract a critical illness during the term of the plan. You will then be assisted in your mortgage repayments.

Long term sickness – this is similar to the critical illness insurance, however you can claim on this is you are absent from work due to an illness that is not classed as critical.

This is just a brief look at how mortgage protection can help you. If you would like to know more contact Go Direct who will be more than happy to help you with mortgage protection insurance needs.

About the Author

Mark Walpole is a protection and mortgage advisor at godirect.co.uk, one of the UK's most trusted information site about personal finance.

Home Mortgage Refinance Loans - Is It Realistic?

2010-12-03T08:26:00.000-08:00

Home equity mortgages are loans that use the equity on the home as collateral. Home equity is the difference between the current value of the home and the amount owed because of the mortgage/mortgages. A home equity mortgage can also be said to be a second mortgage since the extra cash generated can be used for home improvements, thus increasing the value of the house further. Best Home Loans

Like regular home mortgages, home equity mortgages also use the property/ home as the security. In case of default, the lender has the right to take over the home. There are many advantages of taking a home equity loan: it would reduce the current loan burden if taken at a lower rate; the funds generated can be used to pay off high interest debts like credit cards; sometimes, home equity mortgages enable some tax savings; they can be used to exchange the present mortgage for a shorter term mortgage. Other advantages include: lower closing costs, and faster closing. Mortgage Refinance

Home equity mortgages are ideal for people who are planning to use their home equity to finance something else. They are also good when the borrowers are planning to sell their house soon, since short-term equity loans have lower rates. Equity mortgages are preferable when the loan amount is smaller. Generally, equity mortgage rates are higher than first mortgage rates. They are also riskier because of their second-lien position. The rates of home equity mortgages depend on the frequently changing Wall Street Journal prime rate. Long-term home equity loans tend to have higher rates than even fixed rate mortgages. Bank Mortgage Loans

With increasing real estate prices, many people are considering home equity mortgages. Lenders are also giving many attractive offers on equity mortgages. A good past credit rating is an important prerequisite for obtaining a home equity mortgage. The best source for knowing about home equity mortgage rates is the Internet. Most mortgage loan companies provide information through their websites also. These rates are updated daily. Their sites also have easy-to-use home equity mortgage calculators that give all information, including payments to be made each month and the tax advantages, with the single click of a button. Most of them also have financial advisory who would provide advice online, or over the phone. Mortgage Rates

About the Author

Donald Newton is out to provide knowledge based information in respect of finances after having himself gone through the ordeal including loan borrowing and understanding of the need for good quality loan advice because knowledge in respect to loan borrowing is power and exudes financial benefits. Visit http://www.homeequityloanssolutions.blogspot.com for more resources

What Type of Mortgage Loan Should You Choose

2010-12-03T06:59:00.001-08:00

There are two types of mortgages, fixed rate mortgages and floating rate mortgages. As is clear from their names, the fixed rate mortgages are ones where the monthly home loan payment amount is the same for the entire life of the mortgage i.e. Until the end of mortgage term ; while floating rate mortgages float/ change throughout the life of the home loan loan.

The bad credit home loans rate of interest on the fixed mortgage mortgage loan is fixed at the start of Connecticut home mortgage term. While, the mortgage rate on a floating rate mortgage is dependent on a pre-decided financial index. This predecided finance index factor is on commercial, money, political and lots of other factors ).

So, which type of mortgage is better?

Well, the opinion seems divided and is especially based totally on the preferences of the individual who is getting the home loan loan. However the general recommendation is that you should go for a floating rate mortgage loan if you intend to live in the home for a shorter duration. For long durations, you will need to decide on how low this fixed mortgage rate is and whether its low enough to be of benefit for locking-in for a long period.

Owning a home is a matter of great pride ; and in todays world, owning a home has been made truly straightforward through mortgages. {However when you buy an home through the home mortgage route, you dont essentially get the total ( 100 percent ) ownership of the home until you have paid your mortgage utterly.

As you make your monthly home loan payments, your ownership level increases and when you pay back your complete mortgage ( which might occur 20-30 years after you start your mortgage ), you then become 100% the owner. So, bad credit loans are long term investments where the house is the asset that you create over a lengthy period of time. But that does not mean that you are blocking all of your money in the making of an asset that matures over long term. If you want money during the duration of your home loan loan e.g. For home enhancements, you can use your investment ( your ownership in the house ) to get the money you need. This happens in the shape of a home loan.

Getting a good mortgage deal is one thing and bettering that mortgage deal is another thing. In straightforward words, mortgage consolidation means ending your present mortgage to get into another mortgage for the same property.

Of course, you would go for mortgage consolidation only if the present mortgage IRs are lower than the mortgage IRs that you are paying on your mortgage which you took some years back. However that doesnt mean that you go for mortgage consolidation every time you find that the mortgage interest rates have gone down a bit. There are costs involved with mortgage consolidation and these costs make mortgage consolidation unfeasible unless the mortgage rates have gone down seriously.

Varied mortgage industry researchers suggest different figures for the opening ( between current mortgage rates and the rates on your current mortgage ) that would make mortgage consolidation a practical option.
About the Author

Alfred, loans for bad credit and personal loans for people with bad credit specialist.

What Type of Mortgage Loan Should You Choose

2010-12-03T06:59:00.000-08:00

Mortgage Terminology

2010-12-03T06:39:00.000-08:00

Adjustment Date: Date agreed to by both parties to a real property transaction for the adjustment of property taxes, rent, interest, and other items.

Amortization: The number of years needed to fully repay a loan. Most mortgages are amortized over 25 years. This means that by making set monthly payments - each a blend of interest costs and repayment of the original principal - you'll have paid back the original amount and all the interest in 25 years. You can however choose different amortization periods. A shorter amortization, 15 or 20 years for example, will mean higher monthly payments, but a significantly lower interest cost. Do not confuse amortization with term.

Appraisal: The estimation of the value of a legal interest in land.

Arms Length Transaction: Transaction in which the parties involved are not inclined towards making voluntary concession to each other.

Assessment: Appraisal, usually for real property taxation purposes.

Asset: Items of value owned by a business. Contrast to Liability.

Assumable Mortgage: A Mortgage that allows a purchaser to assume or take over the responsibility and liabilities under the mortgage from a vender.

Balance Sheet: A financial statement listing Assets, Liabilities, and Owner's Equity at a specific point in time. Also known as a Statement of Financial Position or Statement of Assets and Liabilities.

Borrowing: Incurring an obligation to repay a debt in order to invest or consume more than one currently owns.

Brokerage Fee: Fee charged by a mortgage broker for arranging a loan. Builders Lien: A claim registered against the title to land by a contractor, Supplier of materials or workman f with respect to work done or materials supplied to improve that land.

Caveat: A notice registered against the title to land warning those looking at the title that a claim has been made.

CCA: Abbreviation of Capital Cost Allowance.

Chattel Mortgage: A document evidencing a debt owed by the borrower (mortgagor) to the lender (mortgagee). The mortgage is secured by the lender against personal property owned by the borrower as collateral to ensure the repayment of the debt. These mortgages are governed by the Personal Property Security Act.

Closed Mortgages: A mortgage which cannot be fully paid out before expiry of its term.

Completion Date: Date on which the purchase's solicitor undertakes to the vender that he will pay the balance owing to the vender upon the transfer of title being accepted for registration.

Compound Interest: Interest which, during the life of the loan is charged or calculated at regular intervals and if not immediately paid will, in subsequent period, earn interest itself.

Condition: A fundamental term of a contract, a breach of which allows the injured party to terminate the contract and/or sue for damages or Specific Performance.

Condition Precedent: Legal term for a "subject to" clause. In contract law, a condition precedent calls for the happening of some event or the performance of some act the contract shall be binding upon the parties.

Conditional Sale: A contract for the sale of goods by which the seller reserves ownership (but not possession) of the goods until the price has been paid(usually by installments) Such contracts are regulated by the Personal Property Security Act.

Contract: An agreement between two or more persons which create an obligation to do or not to do a particular thing.

Conventional Mortgage: A traditional mortgage for up to 75 per cent of the appraised value of a property.

Convertible Mortgage: A mortgage that gives the borrower the flexibility to change from a short-term to a longer-term mortgage if it seems advantageous to do so. For example, when interest rates appear to have hit bottom.

Conveyance: The process of transferring interest on land from one person to another way of a transfer document. Conveyancing usually refers to the transfer of title to land but also includes dealings such as assignments, leases, and mortgages

Co-Ownership Syndicate: A real estate syndicate organization in which two or more investors are owner of an undivided interest in real property.

Corporation: A business entity which is owned by shareholders who decide on the general policies of the company through their elected board of directors. A corporation is a separated legal entity and therefore has the right and liabilities of an individual. Shareholders do not share directly in the income of a corporation, but they may receive Dividends.

Credit Analysis: An investigation of a loan applicant's ability to repay.

Creditor: A person to whom a debt is owed. Contrast to Debtor.

Current Assets: Those assets which will be converted into cash, sold, or consumed within one year or the f normal operating cycle of a business, whichever is longer, Current Assets may include Cash, Marketable Securities, Accounts Receivable, Investments, and prepaid expenses.

Depreciation: The amount by which the value of improvement has decreased over time as a result of wear and tear or change in taste. Depreciation can be classified as physical or functional and curable or incurable.

Disclosure Statement: A schedule showing the face value of the loan, all costs associated with issuing the loan to the borrower, and the effective annual rate as required by the B.C. Mortgage Brokers Act.

Easement: A limited right of use of another's land by a landowner for the benefit of his land. The land receiving the benefit is called the dominant tenement and the land granting the benefit is called the servient tenement.

Economic Life: The time span over which a property is employed in its Highest and Best Use

Effective Annual: An annual interest rate that is compounded once a year. This is the rate used for disclosure purposes under the B.C. Mortgage Brokers Act.

Fee Simple: The legal term for the maximum interest in land available to a person, or the maximum of legal ownership. Equivalent in many ways, for practical purposes to absolute ownership.

Fiduciary: A person who holds a position of trust with respect to someone else and is obliged, by virtue of the relationship of trust, to act solely in the other persons benefit.

Fixed-rate Mortgages: With this type of mortgage, the interest rate is set at a specific level for a certain term, ranging from six months to five years or more.

Foreclosure: A legal action taken by a mortgagee to obtain possession of a property, by reason of the mortgagor's default in payment of the principal and or interest of the mortgage debt.

Fully Amortized Mortgage: Loan which is repaid completely by a series of payments over the full duration of the amortization period.

Gross Debt: The percentage of gross income which is the maximum a mortgagor is allowed to pay annually in principal, interest, and property taxes. For example a borrower may pay $270 out of $1000.00 gross income as P.I.T. payments. This ratio is usually expressed as a percentage ie P.I.T. payment can be 27% of gross income. Compare to Loan to Value Ratio.

Gross Income: The amount earned through employment or investment before taking taxes or other deductions into consideration. This amount may or may not be the same as gross income for purpose of mortgage lending.

Income Tax: That part of taxable income which a person or corporation is required to forward to Revenue Canada Periodically.

Interest Adjustment: The process of calculating compound interest payable on the amount borrowed between the day the monies are advanced and the day amortization period starts.

Interest Only Loan: A loan which is serviced by interest-only payments. At the end of the term the full principal plus interest for the last payment period of the loan is still owing.

Interest Rate: The percentage rate that represents the cost of borrowing or the benefit of lending money.

Joint Tenancy: Where two or more persons acquire an equal undivided interest on a property. When one person dies, that person's share automatically goes to the survivor or survivors.

Judgment: An award granted to a successful party to litigation by the court. The award may included a specific amount of money to be paid to the successful party by the unsuccessful party to the litigation.

Lender Value: The estimated value of a property for lending purposes. It is a long-term conservative estimate of the value of the security as determined by the lender and therefore, does not necessarily equal Market Value or Sale Price.

Liability: Monies owed by business. Contrast to Asset .

License: With respect to real property, a privilege to enter onto premises for a certain purpose. However, this privilege does not confer upon the licensee any title interest or estate in such property (e.g., exclusive right to possession of the property). Example of a license include a hotel suite where monthly rates may be available but the innkeeper has the right to enter the suite at his pleasure.

Lien: A claim or charge on real personal property for payment of some debt, lien obligation or duty.

Maturity: The date on which the balance owing on a mortgage becomes due; the final day of the term of a mortgage.

Mortgage: A document evidencing a debt owed by the borrower (mortgagor) to the lender (mortgagee). Registration of the mortgage in the Land Title Office transfers the mortgagor's interest in land to the mortgagee as security for the repayment of the debt.

Mortgagee: The lender.

Mortgagor: The Borrower.

Negligent Misrepresentation: A legal principle which provides that if in the ordinary course of business, a person seeks information or advice from a another who possesses special skills in circumstances in which a reasonable man would know that his special skills were being relied upon, and the person asked chooses to give the advice without clearly qualifying his answer so as to show that he does not accepts responsibility is it is incorrect then he accepts a legal duty to exercise such care as the circumstances require. If he is incorrect he may be liable for his negligent misrepresentation.

Net Income: The amount which revenues exceed expenses in any given time period. Contrast to Net Loss.

Net Proceeds: The face value of a loan less all brokerage fees, appraisal costs and other charges.

Nominal Rate: An interest rate quoted as a rate per annum; it is equal to the interest Of Interest rate per compounding period multiplied by the number of compounding periods.(For example, j2 = 10%; j4=12%; j12=11.5%). Offer: A proposal to so or refrain from doing some specified thing usually followed by an expected acceptance, counter-offer, return promise or act. The person who makes the offer is called the offeror. The recipient of the offer is called the offeree.

Operating Expenses: Those costs which have to be incurred to keep any business going including the business of renting real property.

Possession Date: Date on which the purchaser is entitled to possession of the property.

Power of Attorney: A document conferring authority to one person to act as another's agent on his behalf.

Prepayment: The act of fully or partially paying off the outstanding balance of a loan at any point during the term of the loan at a time earlier than set out in the contract.

Principal: That portion of the original amount borrowed which still has to be paid back to the lender.

Purchaser's Statement: A closing statement in a real property transaction which indicates the balance of cash required from the purchaser to complete the transaction.

Restrictive Covenant: A covenant restriction the use of the land of the covenantor (the Servient Tenement) for the benefit of land belonging to the covenantee (the Dominant tenement). An example would be a restriction on the height of a building on one piece of land so that adjacent or adjoining lands are not put in shadow.

Statement of Adjustment: A closing statement in a real property transaction whose format is structured by debits and credits.

Sub-Mortgage Broker: A defined term in the Mortgage Broker Act. Basically, An individual employed by the mortgage broker who satisfies any one of the following requirements: 1. Carries on a business of lending money secured in whole or in part of mortgages, whether the money is his own or that of another person. 2. Holds himself out as, or by an advertisement, notice or sign indicates that he is, a mortgage broker 3. Carries on a business of buying and selling mortgages or agreements of sale. 4. In any one year, receives an amount of $1000.00 or more in fees or other consideration, excluding legal fees for arranging mortgages fro other persons. 5. During any one year, lends money on the security of 10 or more mortgages.

Tax Rate: The number of dollars pre $1000.00 worth of actual value which is payable in property taxes Tenants Agreement: Contract between the landlord and the tenant, pertaining to the letting of residential premises.

Tenants in Common: Where two or more persons acquire interests in a single property. Each may sell or bequeath their interest and in the event of death, their interest becomes a part of their estate.

Term: With respect to mortgages, a time period at the end of which the outstanding balance of a mortgage is due and payable.

Total Debt Service Ratio: The percentage of gross income which is the maximum amount that a mortgagor is allowed to pay annually in principal, interest and property taxes all other debts.

Transaction Record Sheet: A form, prescribed by the Superintendent of Real Estate, which contains certain required information on each transaction, including every transaction where a Deposit is received and paid into the real estate agent's trust account.

Variable Rate Mortgage: A loan being repaid by payments change as the market interest rate changes.

Vendor's Statement Of Adjustment: Closing Statement which shows the net amount of proceeds to be paid to Vendor upon completion of the transaction.

Vendor Take-Back Mortgage: A mortgage taken back by the vendor from the purchaser to facilitate a sale whereby the vendor becomes the mortgagee and the purchaser becomes mortgagor.

Yield: The income and/or value appreciation of an investment expressed in terms of the purchase price of that investment. For example, if a property that has sold for $100,000 is worth $2000.00 more one year later and has generated an income of $5000.00 during the year, the yield to the investor is ($2000 + f $5000.00) $100,000 = .07 or 7%

About the Author

Jackson Cunningham vancouver mortgage broker

Choosing Mortgage Comparison Sites for the best deal

2010-12-03T05:25:00.000-08:00

There are a number of mortgage comparison sites on the Internet today and the trend seems to be growing. It's big business for this kind of website as they try to consolidate all the mortgage deals from banks and building societies into one easy to use website, for a fee of course.

These websites then spend a lot of money marketing with TV advertising and search engine marketing to get many thousands of hits a week to their websites. The banks and building societies are very comfortable with this as it puts their latest mortgage offer in front of a very large audience that they could possibly have missed out on before.

Mortgage comparison sites not only benefit the banks and building societies but also the general public, people like you and me looking for the best mortgage deals on the market today. Everyone wins too, the banks, the building societies, the public and of course the mortgage comparison sites.

There are numerous mortgage comparison websites but we have just listed a few we found that are UK based;

moneysupermarket.com/mortgages/
moneyfacts.co.uk/compare/mortgages/best-sellers-mortgages/
fairinvestment.co.uk
uSwitch.com/Mortgages
totallymoney.com/mortgages/mortgage-comparison-sites.aspx
totallymoney.com/mortgages/mortgage-comparison-sites.aspx
moneynet.co.uk/mortgages
fool.co.uk/mortgages/
beatthatquote.com/

A good mortgage calculator can be found here: godirect.co.uk/mortgage-repayment-calculator.php

None of these mortgage comparison websites have anything to do with us, they are just samples of what mortgage comparison sites are.

So what about getting a mortgage?

The problem with trying to get a mortgage these days is the amount of deposit you need, such as 25% or 30% being the norm. 1st time buyers have been hit really hard with this as its just not possible for a 1st time buyer to have such a deposit.

You used to be able to get a 95 percent mortgage easily but then you do have to remember that years ago almost everybody's job was pretty much safe but the last few years has proved that this type of security is no longer there.

the building societies and banks have had to get really strict about who they lend money to after what has gone on recently, how much LTV (loan to value), and weigh up the individuals risk to protect themselves, especially now.

You can find plenty of mortgages on offer if you look around and they have some very low rates but the problem is, the people who really need to get one of these low cost mortgages is the first time buyer, but unless your middle aged with some equity already earned you are stuck.

About the Author

Read more about Mortgage Comparison Sites at our website

Information on Mortgage Refinance-Refinance Mortgage & Mortgage Refinance loan

2010-12-03T05:17:00.000-08:00

Information on Mortgage Refinance-Refinance Mortgage & Mortgage Refinance loan by james

A mortgage can be defined as an agreement to give up an interest in something and if you fail to perform some duty then in many cases it means that you will give up your home if you couldn't repay for your home loan as you agreed. Mostly Mortgage and "home loan" are often used interchangeably. But the mortgage is the agreement that makes your home loan work and the bank wouldn't lend you hundreds of thousands of dollars until they knew they could claim your home in the event of your default.

Refinancing your mortgage can be an easy task but it is not as simple. Nowadays refinance options are available and you should know about it. If you are not aware about this then you can be in trouble. There are many reasons for you to refinance as to get a low rate of interest, also to reduce the term period, for home improvement and many others. While you are looking for refinance you should look your necessity first and have patience till you find the suitability according to the requirement.

Now a day you can get the quotes for the mortgage refinance loan below your current rates and can get many options like:
You can get free quotes with no credit check it means you have no need to pull your credit score.
If you require then you can lock your rates.
If you have anything like bad credit or low credit then also you can get the refinance.
By doing so you can get consolidate debts into this new account within 3 days.
You need to do just to fill up the questionnaire and the representatives that will search in their database for refinance loans that are suitable for you.

Refinance lenders usually ask you to produce many documents like prior loan's details, credit history record, income details, credit score and other related legal papers. There is also A "point" of one percent of the total loan amount that is usually paid to refinance lender as fee and only in cash. The interest rate and points have the inverse relationship. If you check more points then you will be offered lower interest rates and vice-versa. It would be a good offer only if you have the cash and if you have planned to stay in the home for few more years.
Your finances are important and you should have the proper Residential Mortgage that is important. If you are just wanting some Mortgage Refinance Information we can help you. Mortgage refinance quotes don't have to be a painful experience. We can help you to provide information to find the right mortgage refinancing quotes at no cost.

Free Mortgage Calculators

2010-12-02T00:48:00.000-08:00

There are a variety of free mortgage calculators available on the Internet. These can be useful for determining how much home you can afford, whether to buy a home or continue renting, and what your monthly payment will be. Here are descriptions of a few different calculators.

How Much Loan Can You Get

Before you go house searching you may want to know how expensive of a home you can afford. An affordability calculator will take a look at your income, all your debts (auto loans, credit card debt, etc), taxes and insurance for the new property, and information about the loan itself to determine the maximum loan amount you might be able to obtain.

Monthly Payment

When determining whether or not you can afford a loan you should look at both the total amount you'll pay over the life of a loan AND what you'll pay each month. This monthly payment includes not only principal and interest but also taxes and insurance. A payment calculator takes all four factors into account to give you a true monthly payment.

Keep Renting or Buy a Home?

Another great tool allows you to see how much money you'll lose or save by renting, and how large a benefit buying a home might be. You'll be able to change the number of years used in the calculation. So for example, if you were planning to buy a home and then sell it in five years, and you wanted to know if that was better than renting for the next five years, you'd put a "5" into the appropriate field in the form. In this case you might see that you'd save $80,000 in monthly payments if you rent, but that you'd make that up and earn an additional $5,000 when you sold your house. So if you were able to pay the larger mortgage payments now, you'd end up better off after your house sold.

Refinancing Your Mortgage

Refinancing can save some homeowners money, but it can also cause them to lose money. Using a refinancing calculator can thus help you to make a wise choice. For example, if you were to refinance and then sell your home five years later, you might save $1,500. If you waited a total of 10 years, the savings would be $4,000. If you waited 25 years, you might in fact lose $7,500.

Loan Comparison

Mortgage lenders offer a variety of loan products that you can choose from, but how do you know which one is best? A loan comparison calculator allows you to enter in key values such as the interest rates, points, and closing costs. The calculator will then show multiple elements of comparison. Key among these are the monthly payments and the total savings over the life of the loan. Such a calculator can help you know which loan to choose. Be careful though, because different loans can have different amounts of mortgage insurance associated with them, and the calculator might not take that into account.

Bi-Weekly Payments

Will making a mortgage payment every two weeks save you more money than paying once a month? A calculator can tell you this. You'll be able to see how much interest you'll save and how much sooner you'll pay off the loan. A good calculator will take into account the fact that you'll lose some tax savings by paying off the mortgage sooner, and will give you a "net savings".

Knowing whether to buy or refinance a home can be easier when you use the right mortgage calculator.

About the Author

You can use free mortgage calculators or get a Utah mortgage at the Direct Mortgage website.

The Best Mortgage For You

2010-12-02T00:35:00.000-08:00

The search for a universal "best mortgage for you " is an impossible quest, because what is great for one buyer may not work well for another. Choosing the very best financing option for your home purchase or re-finance loan is about knowing both your current and potential future needs, and finding the right mortgage to meet them. Having someone to work with who not only understands how to choose the best mortgage to meet certain needs, but also has access to a wide variety of lender information is a big asset. A Mortgage Broker is an excellent choice for anyone searching for a mortgage. A great mortgage broker recognizes that no two situations are the same. With knowledgeable staff trained in evaluating the needs of those seeking a mortgage, coupled with the extensive list of lenders they partner with, a mortgage brokerage is on the leading edge of mortgage lending service. Most will also pride themselves in customer satisfaction, and are always interested in helping their clients find solutions to their needs.

Knowing which mortgage is best for your needs is the key to building a financially sound future for you and your family. The task of setting appointments with a variety of different financial institutions, and then sorting through the different terms and incentives to choose the right one for you can be very time consuming, and extremely stressful.

By opting to work with a mortgage broker, you eliminate the need to visit the financial institutions yourself one at a time, saving time, money and frustration. Using a mortgage broker gives you the opportunity to have a "one stop" mortgage shopping experience, with the added benefit of experienced staff to help with your decision making. You'll be able to rest assured that not only are you receiving the best options to choose from, but also that your broker is skilled at helping you choose the one that meets your needs now, and in the future. This will save you a great deal of frustration down the road!

When you're ready to start looking for a new home loan or refinancing option for your existing loan, Be sure to use a mortgage broker that offers a comprehensive list of services designed to meet the unique situational needs of their clients, and their changing financial needs as well. They are always happy to answer any questions you may have about what a mortgage brokerage does, and how they are different from other home loan companies.

About the Author

Mortgage Broker for The Mortgage Centre, offering seamless solutions to all your mortgage needs. For the best mortgage rates in Mississauga, new jersey mortgage rates, best mortgage rates in Toronto and the surrounding areas in Ontario visit his site today. http://www.gtamortgagematters.com/

U.S. seizes mortgage giants

2010-12-01T17:39:00.000-08:00

Two veteran bankers, one from Merrill Lynch and another from U.S. Bancorp, will be the new CEOs of mortgage titans Fannie Mae and Freddie Mac, under a U.S. government takeover plan announced yesterday.

By The Gazette (Montreal)

Two veteran bankers, one from Merrill Lynch and another from U.S. Bancorp, will be the new CEOs of mortgage titans Fannie Mae and Freddie Mac, under a U.S. government takeover plan announced yesterday.

Herb Allison, 65, a former president of Merrill who most recently led the TIAA-CREF pension fund, will take the corner office at Fannie Mae, the nation's largest housing finance group, as it and Freddie Mac are placed under federal conservatorship.

David Moffett, 56, a former U.S. Bancorp executive who last year joined the politically powerful Carlyle Group private equity firm, will be CEO of Freddie, the smaller of the two deeply troubled, government-sponsored enterprises.

Both men are "highly capable ... the circumstances are enormously challenging even for talented people," said Eugene Ludwig, founder of consultancy Promontory Financial.

"They've got enormous issues to deal with. They have capital problems to address. They have funding issues that are serious. They have personnel issues," said Ludwig, who was U.S. comptroller of the currency in the Clinton administration.

In what may be the largest federal bailout ever, the U.S. government yesterday took control of Fannie Mae and Freddie Mac, with the housing market in its deepest swoon since the Great Depression and global financial markets in turmoil.

Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron were both ousted to make way for Allison and Moffett, who were both generally praised by financial industry groups.

"Their ethics are above reproach. When you think of Allison and Moffett, the first thing that comes to mind is ethics," said Steve Bartlett, president of the Financial Services Roundtable, a financial industry lobbying group.

Both men have ties to the Republican Party. In 1999 and 2000, Allison was national finance chairman for the presidential primary campaign of Arizona Senator John McCain, who is now running for U.S. president as the Republican candidate.

Moffett contributed to the unsuccessful 2004 Senate campaign of Republican beer baron Peter Coors, who is on U.S. Bancorp's board of directors, according to the Centre for Responsive Politics, a campaign finance watchdog group.

Mortgage lending stalls in August

2010-12-01T17:23:00.000-08:00

(Reuters) - Approvals for new home loans in Britain fell to a series low in August while net mortgage lending slowed to a standstill, figures from the Bank of England showed on Monday.

The BoE said approvals fell to 32,000 last month from 33,000 in July. While marginally higher than analyst forecasts, it was the lowest since the series began and means approvals are running at less than a third of their total this time last year.

Net mortgage lending collapsed to just 143 million pounds in August, its lowest since the series began in April 1993 and a fraction of the 2.998 billion pounds lent in July.

The figures highlight the extent to which the credit crunch has taken the lifeblood out of Britain's housing market, with banks reining in lending and house prices tumbling.

The nationalisation of Bradford & Bingley, Britain's biggest provider of buy-to-let and self-certification mortgages, is likely to reduce the supply of mortgages still further.

The Bank of England has held interest rates steady at 5 percent since April but a deluge of bad news on the economy and further stress in money markets has raised expectations of a cut soon, despite inflation running at more than double the central bank's target.

Feds hope to unfreeze SBA, consumer lending

2010-12-01T17:17:00.000-08:00

The Federal Reserve Board announced plans Tuesday to create a $200 billion lending facility aimed at unfreezing secondary markets for Small Business Administration loans and consumer loans.

Under the program, loans will be made to holders of asset-backed securities collateralized by SBA-guaranteed loans, student loans, auto loans and credit card loans. This will provide liquidity to issuers of these securities, Treasury Secretary Henry Paulson said, enabling “a broad range of institutions to step up their lending” and “enabling borrowers to have access to lower-cost consumer finance and small business loans.”

To support the program, the Treasury Department will provide the Federal Reserve with $20 billion in credit protection from its remaining Troubled Asset Relief Program funds.

Secondary markets for both SBA loans and consumer loans have frozen in recent months.

“As a result, millions of Americans cannot find affordable financing for their basic credit needs,” Paulson said.

The inability of SBA lenders to sell their loans on the secondary market is one reason why the volume of 7(a) loans made so far this fiscal year, which began Oct. 1, is 55 percent below the same period a year earlier. Other reasons, according to the SBA, are reduced demand for credit and tighter lending standards.

In normal times, lenders sell 40 percent or more of the loans made through the SBA’s 7(a) business loan program as pooled securities. Today, however, that secondary market is not available to SBA lenders. The inability to sell their existing SBA loans has left many lenders without sufficient capital to make new SBA loans.

The health of the SBA’s 7(a) loan program is important because it’s a major source of long-term financing for small businesses. The government guarantee on SBA loans — which can range up to 85 percent of the loan amount — enables lenders to provide financing to small businesses that wouldn’t qualify for conventional loans.

Without a secondary market, however, many lenders have downsized their SBA departments, temporarily stopped making SBA loans “or have just flat out quit” the program, said Tony Wilkinson, president of the National Association of Government Guaranteed Lenders.

During his Tuesday press conference, Paulson said the new asset-backed securities lending facility may be expanded in the future to include commercial mortgage-backed securities.

Paulson said the federal government now has the tools it needs to get credit flowing again, but “it will take a while to do that.”

President-elect Barack Obama’s choice to head the Treasury Department, Timothy Geithner, worked on the asset-backed securities plan in his current capacity as president of the Federal Reserve Bank of New York.

“He was working right with us all weekend,” Paulson said.

Paulson said he will work “seamlessly with the next administration” to ensure a smooth transition, but he has no plans to ease back on his job over the next two months.

“I am going to run right to the end,” Paulson said.

Bank of America to buy troubled mortgage lender Countrywide

2010-12-01T16:58:00.001-08:00

By Ieva M. Augstums

ASSOCIATED PRESS

CHARLOTTE, N.C. – Bank of America said Friday it will buy Countrywide Financial for $4.1 billion in stock, a deal that rescues the country's biggest mortgage lender and expands the financial services empire of the nation's largest consumer bank.

The acquisition will make Charlotte-based Bank of America Corp. the nation's biggest mortgage lender and loan servicer.

Bank of America said it initially plans to operate Countrywide separately under the Countrywide brand, with integration occurring no sooner than 2009.

The transaction represents a 7.5 percent discount to where Countrywide shares ended Thursday after they soared on news that a rescue plan was in the works. It also effectively leaves Bank of America with a big loss on its $2 billion August investment in Countrywide Financial Corp. during the height of the summer's global credit crisis.

An aggressive dealmaker who has already snapped up behemoths FleetBoston Financial and MBNA, Bank of America chief executive Ken Lewis this time isn't buying a financial winner. Delinquencies and loans in pending foreclosure are rising in Countrywide's loan portfolio, and Lewis said Friday “there are near-term challenges” in the nation's housing market.

But Countrywide's troubles have allowed Lewis to sweep in and add a major business line to his supermarket of financial products on the cheap.

“Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation's premier lender to consumers,” Lewis said in a statement.

It also places Lewis in the position of a market savior. By buying Countrywide, he's keeping the industry and regulators from the messy task of figuring out who would take on the responsibility of collecting payments for the 9 million U.S. home loans serviced by the Calabasas, Calif.-based lender.

“There's still plenty of risk involved,” said Bart Narter, senior analyst at Celent, a Boston-based financial research and consulting firm. “He's brave to do it. But I think that it's very likely down the road to be profitable, maybe not immediately, but long-term.”

Lewis said he wants Countrywide chairman and chief executive Angelo R. Mozilo to stay with the combined companies until the deal is done.

“Angelo has told me that he will do anything that we want him to do,” Lewis said. “I would guess that he'll want to go have some fun. I will talk with him next week about his personal desires. Many of the senior people will have big operating roles in this company.”

Shareholders of Countrywide will receive 0.1822 of a share of Bank of America stock in exchange for each share of Countrywide. The deal is expected to close in the third quarter and to be neutral to Bank of America earnings per share in 2008 and lift earnings per share in 2009, excluding buyout and restructuring costs.

Bank of America expects $670 million in after-tax cost savings in the transaction, or 11 percent of the expense base of the two companies' mortgage operations.

The agreement has been approved by both companies' boards and is subject to regulatory and Countrywide's shareholders approval.

Shares in Countrywide hit record lows in recent days on persistent rumors that a bankruptcy was imminent, a condition brought on by the widespread spike in mortgage defaults and foreclosures, especially in subprime loans – those made to borrowers with weak credit.

Countrywide shares nearly 12 percent, or 90 cents, to $6.85 in premarket trading after soaring $2.63, or 51.4 percent, to close at $7.75 Thursday on reports of a possible deal. Bank of America shares rose 45 cents to $39.75.

Countrywide shares have fallen 57 percent since Bank of America made its $2 billion deal in August at $18 per share. That purchase of preferred stock was convertible into a common shares of Countrywide at $18 per share, for roughly a 16 percent stake in the company.

Along with the $2 billion investment from Bank of America, Countrywide was forced to draw on an $11.5 billion line of credit to steady itself in August. It also tightened its credit guidelines and stopped selling some types of adjustable rate loans. But analysts said it wasn't enough, with one noting this week that Countrywide needed an infusion of $4 billion in capital within the next two weeks to save itself.

Lewis' bank holds $1.5 trillion in assets and is the nation's largest bank by market capitalization

“Their balance sheet can take a shock much better than Countrywide,” said CreditSights senior analyst David Hendler. “When you take the shocks at Countrywide, they have a big, busting consequence that's negative.”

While Lewis downplayed the prospect of a major deal last month, it fits with an established pattern of building Bank of America through acquisition. In the past few years, Lewis has expanded the bank's retail operation with multibillion purchases of FleetBoston Financial Corp., bolted on a credit card business by adding MBNA Corp., and grabbed a wealth-management business in U.S. Trust Co.

The result of all the dealmaking is a widely diversified financial services company that does business with nearly one out of every two American households.

In the past year, Bank of America has boosted its market share of prime mortgages, or those offered to borrowers with a solid credit history, and was the top retail mortgage originator in the U.S. during the first nine months of 2007.

“We are aware of the issues within the housing and mortgage industries,” Lewis said. “The transaction reflects those challenges. Mortgages will continue to be an important relationship product, and we now will have an opportunity to better serve our customers and to enhance future profitability.”

In Countrywide, Lewis gets the “best, total mortgage-banking company in the U.S. by far,” Hendler said. Countrywide's sophisticated back office is a valuable asset that makes Bank of America a much bigger competitor with Wells Fargo & Co., Washington Mutual Inc. and others, he said. In 2007, Countrywide had $408 billion in mortgage originations and has a servicing portfolio of about $1.5 trillion with 9 million loans.

“The technology platform, the people who run it, the hedging, the facilities, the mortgage servicing rights, the origination platform, you know, they are all state of the art,” Hendler said.

While there are some regulator hurdles to close the deal, they are hardly insurmountable. The buyout would require approval from the Federal Reserve, and possibly other agencies, but analysts believe regulators are more concerned about a Countrywide collapse than industry consolidation.

A Countrywide failure would be a huge blow to government-sponsored mortgage finance companies Fannie Mae and Freddie Mac, which are major buyers of Countrywide's loans.

Federal law also bars banks from acquisitions that would increase market share above 10 percent of U.S. deposits, a limit that Bank of America is nearing. Bank of America chief financial officer Joe Price said because Countrywide Bank us a federally regulated thrift, it's deposit holding “doesn't play into the deposit cap.”

In addition, banking industry experts say Bank of America could easily lower the total amount of money held in deposits by decreasing interest rates and shedding deposits.

AP Business Writers Alex Veiga in Los Angeles and Alan Zibel in Washington contributed to this report.

Mortgage Rescue Scheme: A Ray of Hope to Save a Home

2010-09-23T18:50:00.000-07:00

24.09.2010 | Author: rosafmzl | Posted in Business

Introduction To Mortgage Rescue Scheme In UK

Mortgage rescue scheme works for individuals, who after having bought that dream house face financial difficulties. They ultimately miss out on a few mortgage repayments and reach to an extent that creditors start threatening seizure of property through repossession orders etc.

Mortgage rescue has made life simpler of peopl
Introduction To Mortgage Rescue Scheme In UK

Mortgage rescue scheme works for individuals, who after having bought that dream house face financial difficulties. They ultimately miss out on a few mortgage repayments and reach to an extent that creditors start threatening seizure of property through repossession orders etc.

Mortgage rescue has made life simpler of people. There are many companies which help such individuals in need to pay off their existing mortgage. They offer various solutions which allow individuals to stay in the same house as tenants and not owners. This is possible because mortgage rescue schemes are designed to protect the individual’ from being evicted and becoming homeless. There are schemes run by the council and housing associations which offer UK mortgage help and provide solutions to those in distress.

Start Early And Worry Less

It is always suggested to review the current financial position and cut back on unnecessary expenses to be able to easily pay the mortgage fees. Any temporary set backs should be dealt with as early as possible and repayment of mortgage payment should always be a top priority.

Consider the services of a debt specialist if need be to review and reduce debt payments where possible and funnel the savings into the mortgage repayment. That way you can take care of your financial liabilities effectively.

Looking at ways to generate more income also helps control financial obligations while considering a UK mortgage rescue.

Mortgage Rescue Solutions For UK

There will be various combinations, products and services offered when considering a UK mortgage rescue or UK mortgage help. One must understand the complexity and carefully take decisions related to any changes in mortgage as mortgage companies will generally charge a fee for any changes to be made.

Mortgage rescue schemes can help individuals sell their existing property and repay the debt but they will eventually lose ownership and become tenants in the same house. However, this equation will help get rid of the mortgage.

Some companies are also ready to buy the property upfront however the individual will then have to vacate the premises completely along with any family members. It is advisable to take legal consultation or from the council some information prior to selling a mortgaged property. Negotiating with the lender for more time to carry out the sale, negotiating for better prices and deals will also add to the benefit.

The government also helps those on income support and in need of mortgage rescue schemes to pay their mortgage however it is a lengthy process and may take several months till the actual benefit reaches him/her.

If at all a situation arises where there is no way an individual can pay the mortgage and is almost homeless, he/she can approach the local council or advice services. They can negotiate on his/her behalf with the mortgage lender and see if they can get into an arrangement which will solve the purpose of having a mortgage rescue scheme in place.
e. There are many companies which help such individuals in need to pay off their existing mortgage. They offer various solutions which allow individuals to stay in the same house as tenants and not owners. This is possible because mortgage rescue schemes are designed to protect the individual’ from being evicted and becoming homeless. There are schemes run by the council and housing associations which offer UK mortgage help and provide solutions to those in distress.

Start Early And Worry Less

It is always suggested to review the current financial position and cut back on unnecessary expenses to be able to easily pay the mortgage fees. Any temporary set backs should be dealt with as early as possible and repayment of mortgage payment should always be a top priority.

Consider the services of a debt specialist if need be to review and reduce debt payments where possible and funnel the savings into the mortgage repayment. That way you can take care of your financial liabilities effectively.

Looking at ways to generate more income also helps control financial obligations while considering a UK mortgage rescue.

Mortgage Rescue Solutions For UK

There will be various combinations, products and services offered when considering a UK mortgage rescue or UK mortgage help. One must understand the complexity and carefully take decisions related to any changes in mortgage as mortgage companies will generally charge a fee for any changes to be made.

Mortgage rescue schemes can help individuals sell their existing property and repay the debt but they will eventually lose ownership and become tenants in the same house. However, this equation will help get rid of the mortgage.

Some companies are also ready to buy the property upfront however the individual will then have to vacate the premises completely along with any family members. It is advisable to take legal consultation or from the council some information prior to selling a mortgaged property. Negotiating with the lender for more time to carry out the sale, negotiating for better prices and deals will also add to the benefit.

The government also helps those on income support and in need of mortgage rescue schemes to pay their mortgage however it is a lengthy process and may take several months till the actual benefit reaches him/her.

If at all a situation arises where there is no way an individual can pay the mortgage and is almost homeless, he/she can approach the local council or advice services. They can negotiate on his/her behalf with the mortgage lender and see if they can get into an arrangement which will solve the purpose of having a mortgage rescue scheme in place.If you live in England, are struggling to make your mortgage payments, and are at risk of losing your home, you might qualify for mortgage aid with the Mortgage Rescue Scheme.

Prime time to refinance your mortgage

2009-09-06T10:34:00.000-07:00

You can borrow too much or prepare too little. You can misjudge terms or overestimate your credit. With so much at stake, it’s no wonder so much can go wrong.

By Liz Pulliam Weston

Applying for a mortgage can be a daunting experience.

It's not enough that you're agreeing to take on the biggest debt of your life, one that represents two to three times your annual income. You're also confronted with piles of paperwork, flurries of fees and a tidal wave of terms, from amortization to title insurance, whose meaning is fuzzy at best.

"Whether it's a professor at Stanford or a ditch digger," said San Francisco mortgage broker Leon Huntting, "most people don't understand the loan process."

In this confusing and pressure-filled atmosphere, it's easy to make some mistakes. Here are some common ones that lenders and mortgage brokers see, and what you can do to prevent them.

Not fixing your credit

Mortgage brokers say they're confounded at the number of buyers who apply for a mortgage with their fingers crossed, hoping their credit will allow them to qualify for a loan.

Before you even think about applying for a mortgage, obtain copies of your credit report and your FICO credit score. Your FICO score is the three-digit number that's used in 75% of mortgage-lending decisions. You can order your FICO score on the Web for a fee of $14.95, which includes a copy of your credit report.

Doing this at least six months in advance should give you plenty of time to challenge any errors on your report and ensure that they're removed by the time you're ready to apply for a loan. You can also see the legitimate factors that are hurting your score and do something about them, such as paying off an overdue bill or paying down credit card debt.

Not looking for first-time home buyers' programs

These programs, typically sponsored by state, county or city governments, often offer better interest rates and terms than you'll find among private lenders, said mortgage consultant Diane St. James. Some are tailored for people with damaged credit, while most can help people with little saved for a down payment.

Some of these resources are listed on St. James' educational Web site, ABC Mortgage Consulting. You can also call the housing agencies for your state, county and city to see what they offer.

Not getting pre-approved for a loan

Many first-time borrowers confuse being "pre-qualified" with being "pre-approved." Pre-qualification is a pretty casual process, where a lender tells you how much money you probably can borrow based on how much money you make, how much debt you already have and how much cash you have for the down payment.

Getting pre-approval, by contrast, is a much more rigorous process and involves actually applying for a loan. You typically submit tax returns, pay stubs and other information. The lender verifies the information and checks your credit. If all goes well, the lender agrees in writing to make the loan.

In a hot or even warm real estate market, the house hunter who is only pre-qualified is a cooked goose. Home sellers and their agents give much more weight to offers being made by buyers who already have a loan lined up.

Borrowing too much money

Many people take out the biggest loan they possibly can, figuring that their incomes will eventually increase enough to make the payments comfortable. But few first-time buyers have any clear idea of how expensive homeownership can be. Not only will you shell out more for mortgage payments than you probably did for rent, but you'll also need to cover property taxes and homeowners insurance, as well as higher bills for utilities, maintenance and repairs than you faced as a renter.

Lenders are perfectly willing to let you overextend, knowing that you'll probably forgo vacations, retirement savings and new clothes for the kids rather than default on your mortgage.

"Mortgage money … is way too easy to get," said Ted Grose, president of the California Association of Mortgage Brokers. "People tend to overbuy … and that can really stress family life. It's also a formula for foreclosure."

nstead of going to the edge of affordability, consider limiting your housing costs -- mortgage payments, property taxes and homeowners insurance -- to 25% or so of your gross income. That's a much more sustainable level for most people, financial planners say, than the 33% lenders are typically willing to give you.

Not shopping around for rates and terms

Mortgage broker Allen Jackson of Bristol Home Loans in Bellflower, Calif., sees too many borrowers with decent credit getting stuck with loans meant for people with poor credit. So-called "subprime" loans are often more profitable, so less ethical mortgage brokers may push them.

If the borrower doesn't know what the prevailing interest rates are for someone with their credit standing, Jackson said, they can easily pay thousands of dollars more than they need to. You can see a listing of loan rates by credit score at MyFico.com, and a comprehensive listing of prevailing rates and fees can be found in MSN Money's mortgage loan center.

Even people with a few dings on their credit can often qualify for better loans than they're typically offered, said Grose of 1st Mortgage Advisors in Los Angeles. He believes most of the people being shunted into government loan programs, such as Federal Housing Administration (FHA) loans, would pay less if they used mortgages now being offered by private-sector lenders.

Paying junk fees

Lenders can boost their profits by adding on a variety of fees. Some may be legitimate, some may be inflated and others may be pure fluff. Lenders may charge for "document preparation," for example, when all that involves typically is having a computer spit out a form. Or they may charge $150 for a credit check that cost them $15.

Once you've selected a lender, you'll be given a good-faith estimate of closing costs, which should include any fees being charged. Ask about each fee, and try to negotiate down the ones that seem excessive.

If the lender won't negotiate, "take that estimate to someone else," St. James said. "I'll bet they can beat it."

Unfortunately, this doesn't absolutely guarantee you won't face junk fees when it comes time to sign the loan. Many borrowers complain that they still face higher costs than were originally estimated, and so far the federal government has done little to prevent the practice. You can try challenging junk fees at this point, but most likely you'll have to bite the bullet and pay the fees to get your loan.

Not planning for closing costs

The day you're scheduled to get your loan, known as closing, you'll also be expected to write a check for a number of expenses, which typically include attorney's fees, taxes, title insurance, prepaid homeowners insurance, points and other lenders' fees. Together, these are known as closing costs, and the total can be eye-popping: somewhere between 2% to 7% of the selling price of the house.

"Usually, when people see the closing costs, they're like a deer in the headlights," said mortgage broker Huntting, who works for Pacific Guarantee Mortgage. "It's much more than they ever think it's going to be."

Plan for closing costs by getting a good-faith estimate from your lender as early in the loan process as possible. Make sure you have the cash on hand (or rather, in your checking account) and that it doesn't "disappear" before closing because of sloppy bookkeeping or a last-minute emergency.

Not having enough cash on hand after closing

After borrowing too much, and scraping together every last dime for closing costs, many home buyers have nothing left in the bank to pay for anything unforeseen happening --and something unforeseen always happens.

"It costs so much just to move in," Grose said. "Then the water heater breaks."

Some people are so tapped out by the process, Jackson said, that they're not able to make their first mortgage payment on time. That's why "more and more lenders are requiring [borrowers have] three months' reserves after closing," Jackson said.

That's a smart idea for borrowers, anyway. Having three months' reserves, which means a fund equal to three months' worth of expenses, will help you handle the added costs of homeownership with much less stress.Liz Pulliam Weston's latest book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

These 18 tips can help cut the stress of taking out a mortgage -- and get you into a house you can afford.

2009-09-06T10:15:00.000-07:00

What's the best way to pay for the biggest purchase you'll likely ever make?

You can be sure of two things: It's harder to get a mortgage now than it was a year ago, and the fine print can have life-changing consequences.

First, visit MSN Money's Home Affordability Calculator, which considers your income and debts, even your credit, before figuring out the maximum amount you should borrow. It may not be as much as some banks will lend you, but it should be within your means to repay. You can get an idea of what's available here.

Once you've got an idea of how much you can afford to borrow:

Gather your paperwork before you meet with a lender.
Get preapproved for a mortgage. Unlike "prequalifying," preapproval means you have a loan lined up, which makes your offer more attractive to sellers. You don't have to accept a loan from a company that preapproves it.
If you suspect interest rates are going to rise before you close, pay to lock your rate in place.
Consider buying discount points to reduce your interest rate only if you plan to be in the house long enough to recoup that money and then some.
If you're a first-time homebuyer or are low-income, look for financing through your local or state board of housing. The federal Department of Veterans Affairs offers help for military personnel and veterans.
In today's tighter credit market, you'll need a down payment.

Dozens of mortgage products are available. You have to decide which one best fits your spending plans. (See "Which mortgage is best for you?") Consider these and compare them:

30-year fixed rate. Compared with an adjustable-rate mortgage, or ARM, you'll pay a slightly higher interest rate but have the comfort of knowing it won't change over the life of the loan. Consider a 15-year mortgage to save thousands in interest if you can afford a higher monthly payment.
ARM. Sometimes known as "hybrid" loans, ARMs offer a low fixed rate of interest at the beginning of the loan, followed by rate adjustments that are tied to an index. For instance, a 5/1 loan has a fixed rate in the first five years and a rate that's adjusted every year after that. These mortgages may work well for people who plan to move or refinance their homes with a fixed-rate mortgage before the interest begins to ratchet up. (See "How to deal with a rising home payment.")
Option ARM. You can pay the full interest and principal due each month or just the interest, or make a partial interest payment. The third option is particularly hazardous because the unpaid interest will be added to the principal you owe. (See "Ouch! Your house payment just doubled.")
Interest only. You pay only interest for the first five years or so and both interest and principal in the remaining 25 years. Another version is the interest-only fixed-rate mortgage. Like ARMs, you'll end up with substantially higher monthly payments unless you sell or refinance your home. If your income can support only the interest payment, rather than principal and interest, you should not be buying a home. Further, with home values falling across the country, you could quickly find yourself "upside down" -- owing more than the house is worth.

With so many types of mortgages to choose from, it's essential to understand the terms of the loan before you sign:

Will the interest on your ARM be adjusted every year, every six months or every month?
Is there a cap on the interest? Does the cap apply to the first adjustment or only to subsequent adjustments? Is there a cap on your payments, which could cause your obligation to soar?
Does the mortgage include prepayment penalties or balloon payments?

Private mortgage insurance, known as PMI, can cost hundreds of dollars a month.

You can avoid having to buy private mortgage insurance (which protects the lender, not you) by putting down at least 20% on your home.
You could also take out what's known as a piggyback loan. Your primary loan would cover the first 80% of the value of your house. A piggyback loan is a second mortgage that would cover the remainder, usually at a much higher interest rate.
If you have to buy private mortgage insurance, ask to have it canceled when you've reduced your loan balance to 80% of your home's appraised value. Once you've reduced your loan balance to 78%, the lender must cancel your PMI unless you're considered a credit risk.

If you already have a mortgage, you may be tempted to refinance when interest rates drop. (See an estimate of your growing home equity here.) Don't make a decision based simply on the availability of lower rates. Would you actually pay less when you figure in the closing costs?

If you've got a hint we haven't included or find a factual error, let us know by sending an e-mail to Five.minute@hotmail.com.

Which mortgage is best for you?

2009-09-06T10:11:00.000-07:00

By Ban

k rate.com

Mortgage lenders offer many features and restrictions that can be added to a variety of mortgage programs, but the following eight mortgage loans are the basic types you will encoun

ter. No single loan is best for all circumstances; some loan types work better than others, depending on individual circumstances and lifestyles.

Buying for the long haul

Loan: 30-year fixed rate.

Why: Financial peace of mind can be worth the higher interest rate that comes with an interest rate that

won't change for three decades.

Job

with good but inconsistent income

Loan: Option adjustable rate mortgage (ARM).

Why: These loans, considered among the riskiest offered in recent years, originally were designed for people with incomes that vary a lot from month to month. Each month you have a choice of payments: the full amount needed to pay off principal and interest as scheduled, an amount that covers only the interest owed that month, or an even smaller amount that doesn't even co

ver interest owed.

In a month in which your earnings are lean, you might choose to make one of the lower payments, even though that actually adds to the amount of debt you must eventually pay back. In a month of strong earnings, you could choose to make the full payment. Over time, however, your required payments could rise significantly if you have frequently chosen to make only the smaller payments.

Refin

ancing (15-20 years before retiring)

Loan: 15- or 20-year fixed or ARM.

Why: You can retire the loan before you retire from your job. A fixed rate generally has a higher interest rate than an adjustable but will give you more certainty in budgeting. However, if ARMs are significantly cheaper and your income can handle possible payment increases, you could save with the adjustable rate.

MSN and Bankrate.com

Recent graduate with strong earnings potential

Loan: One-year ARM.

Why: Stretch your dollars with low interest rates during the years when your income is at its leanest. Your rate can go up (or down) each year, but interest-rate caps will limit that change to a predictable amount, and your rising income should be able to handle it. Watch out for loans that don't cap the interest rate but instead cap your payment. They could cause your indebtedness to grow even as you make monthly payments. ARMs also come in varieties that adjust -- up or down -- every six months or even more frequently.

Self-employed

Loan: No- or low-documentation loan.

Why: Though you'll pay a higher interest rate, not having to produce paycheck stubs or employer references, which you would be expected to supply when applying for a traditional loan, can be a huge help to those with variable incomes.

Planning to live in home 4 or 5 years

Loan: A 5/25 hybrid loan.

Why: If you won't keep the loan longer than five years, why pay extra to lock in an interest rate for a longer period? If you do end up staying longer, you can either refinance or live with an interest rate that adjusts every year.

Job relocation for a short run

Loan: Interest-only mortgage.

Why: While these loans can be risky for novice borrowers or those stretching to afford a home, they can be a smart tool for financially sophisticated borrowers who already have assets built up. Monthly payments are low because you're not repaying principal, so you can afford a larger loan. If you eventually sell the home for less than you paid, however, you could have to take money out of savings to pay back the full amount owed on your mortgage.

Active duty military or veteran

Loan: VA loan.

Why: The Department of Veterans Affairs offers loan guarantees that allow qualified military personnel and veterans to take out mortgages for as much as $417,000 with zero down payment. In Alaska, Hawaii, Guam and the U.S. Virgin Islands, that loan amount goes up to $625,000.

This article was reported and written by Elizabeth Razzi for Bankrate.com.

Mortgage prepayment plan: Own your home in half the time

2009-05-27T08:16:00.000-07:00

Filed under: retirement, Get Rich Slowly, mortgage, home buying, emergency fund

This post comes from J.D. Roth at partner blog Get Rich Slowly.

Because I recently eliminated all of my nonmortgage debt, I have a significant positive cash flow. The $1,000 per month I was putting toward debt can now be used for investing. I'm making maximum contributions to my Roth IRA, of course, but that still leaves several hundred dollars each month available for other purposes. This has forced me to re-evaluate my financial goals.

For the past year, my wife and I have discussed making accelerated payments on our mortgage. I've written about this choice several times at Get Rich Slowly, and it seems clear that mathematically it makes more sense to invest the money. However, it's also clear that eliminating a mortgage offers a tremendous psychological boost. I've never heard anyone say they regret owning their home outright.

I've researched a variety of mortgage-acceleration schemes:

Refinancing from a 30-year to a 15-year mortgage is appealing, but the interest rate drop (from 6.25%) isn't enough to make this worthwhile.
I could sign up for my bank's biweekly payment program, but I don't like the enrollment fee, and I don't like the increase in paperwork.
We could make an extra payment every year, or pay an extra $100 per month. But I feel that we could do more.

Ultimately, we decided to use the method described by Charles Givens in his 1988 best-seller, "Wealth Without Risk":

"You can pay off your 30-year mortgage in half the time without refinancing by making extra principal payments. On the first of the month when you write your regular mortgage check, write a second check for the 'principal only' portion of the next month's payment."

Wealth without risk

For most homeowners, the principal portion of a mortgage payment is quite small. For example, our February mortgage bill was $1,681.79. Of that, $1,119.16 was designated for interest, $295.19 for escrow (taxes and insurance), but only $267.44 for principal.

Using Givens' plan, if I include an extra $267.44 with my payment, I'll also knock off the next month's payment from my mortgage. That $267.44 accomplishes the same thing $1,681.79 usually does, but at 16% of the normal monthly cost. That's a bargain.

The advantages of this method are:

It has a sliding degree of difficulty. At first, the extra principal payments are lower. But as we pay down the mortgage, these extra payments will increase. We have time to "grow into" these increased payments.
It's easy for us to back out. If we decide our money is better used elsewhere, we can simply stop making extra principal payments.
Every time we make a payment, we're essentially making two payments, cutting the term of our mortgage in half.

After discussing the pros and cons, my wife and I have agreed to follow a modified version of Givens' plan. To make things simple, we're using round numbers. During 2008, for example, we're going to pay $2,000 toward our mortgage each month, which gives us an additional $318.21 against the principal.

Every January, we'll adjust how much extra we're paying. If our budget gets too tight, we can cut back at any time.

The drawbacks

To be fair, Givens doesn't recommend this method for low-interest mortgages like ours. He clearly states, "Never pay off low interest mortgages -- those under 9%. Instead, use the extra money in a better investment." He wouldn't advocate using this method on a 6.25% mortgage.

The March 2008 issue of Consumer Reports has a brief exploration of this topic. Their conclusion?

"Many people find peace of mind in paying off their mortgages and owning their homes outright, especially as they approach retirement. That can make an investment in your mortgage a worthy choice, psychologically if not financially.
"Still, the bottom line, according to our Money Lab, is this: Although there are exceptions, chances are you'll be better off putting extra money into a good mutual fund, not into prepaying your mortgage."

"Did you see this article?" my wife asked me after she finished reading it.

"Yes," I said. "What do you think?"

"I don't care" she said. "I want to do both. I want to invest and prepay the mortgage."

"So do I," I said.

Financial freedom

If we have a substantial emergency fund, if we're fully funding our retirement plans, and if we're saving for other goals, I believe that paying down the mortgage makes sense for us. We understand that we're sacrificing some theoretical (and probable) future investment returns, but we're also working to create a financial situation that's easier for us to maintain in the long run.

If we have no mortgage, that's $1,400 less each month that we have to pay in expenses (we'll still need to pay taxes and insurance). Since my wife and I split the payment, that's $700 less per month that I have to pay. Without a mortgage, my fixed expenses would be about $600 a month. My total expenses would be about $950 a month. This would provide tremendous freedom, granting me an opportunity to try things that I might not otherwise be able to do.

Another form of diversification

Every investment book I've read says that a smart investor diversifies his portfolio, putting some of his money into each of several different types of investments. I view prepaying the mortgage as diversification. Sure, the stock market will probably beat the 6.25% I'll earn by doing this, but it's guaranteed money. To me, it's better to put my money into my mortgage than into bonds or a high-yield savings account -- especially if we're heading for a recession.

Other articles of interest at Get Rich Slowly:

"Renting vs. buying: The realities of homeownership"

"Is it better to invest or to prepay a mortgage?"

"Accelerated mortgage payments (and the Get Rich Slowly amortization calculator)"

8 big mortgage mistakes and how to avoid them

2009-05-27T08:01:00.000-07:00

You can borrow too much or prepare too little. You can misjudge terms or overestimate your credit. With so much at stake, it’s no wonder so much can go wrong.

By Liz Pulliam Weston

Applying for a mortgage can be a daunting experience.

"Whether it's a professor at Stanford or a ditch digger," said San Francisco mortgage broker Leon Huntting, "most people don't understand the loan process."

In this confusing and pressure-filled atmosphere, it's easy to make some mistakes. Here are some common ones that lenders and mortgage brokers see, and what you can do to prevent them.

Not fixing your credit

Mortgage brokers say they're confounded at the number of buyers who apply for a mortgage with their fingers crossed, hoping their credit will allow them to qualify for a loan.

Not looking for first-time home buyers' programs

Some of these resources are listed on St. James' educational Web site, ABC Mortgage Consulting. You can also call the housing agencies for your state, county and city to see what they offer.

Not getting pre-approved for a loan

Borrowing too much money

Lenders are perfectly willing to let you overextend, knowing that you'll probably forgo vacations, retirement savings and new clothes for the kids rather than default on your mortgage.

Continued: Stay within your means

Instead of going to the edge of affordability, consider limiting your housing costs -- mortgage payments, property taxes and homeowners insurance -- to 25% or so of your gross income. That's a much more sustainable level for most people, financial planners say, than the 33% lenders are typically willing to give you.

Not shopping around for rates and terms

Paying junk fees

The time to challenge junk fees is not when you're about to sign the loan papers. Use a mortgage broker or call a number of lenders to compare their loans. Ask about the interest rate, the "points" charged to get that rate (each point is 1% of the total loan amount) and any other fees the lender charges. Then you can compare terms.Once you've selected a lender, you'll be given a good-faith estimate of closing costs, which should include any fees being charged. Ask about each fee, and try to negotiate down the ones that seem excessive.

If the lender won't negotiate, "take that estimate to someone else," St. James said. "I'll bet they can beat it."

Not planning for closing costs

Video on MSN Money

Not having enough cash on hand after closing

"It costs so much just to move in," Grose said. "Then the water heater breaks."

Liz Pulliam Weston's latest book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Prime time to refinance your mortgage

2009-05-27T07:55:00.000-07:00

Homeowners facing resets on their adjustable-rate mortgages or hoping to refinance into less-burdensome loans may be the biggest beneficiaries of the Federal Reserve's surprise rate cut this week as mortgages continue to get cheaper.

As many as 2 million homeowners face ARM resets this year and declining interest rates hold out the promise of at least limiting the sticker shock of higher payments on loans linked to Treasury indexes used to calculate many adjustments.

Lower rates also will make it easier for homeowners to qualify for refinanced loans, mortgage professionals say.

Ready to refinance? See current rates

"For anyone on the margin, this will provide some relief," said Richard Musci, vice president of Charles Schwab Bank. But he warned that for those already struggling or already behind on credit payments "the die has been cast."

The Federal Reserve's emergency interest-rate reduction of three-quarters of a percentage point brought the central bank's key lending rate down to 3.5% from 4.25%. It was the most aggressive one-time cut in more than two decades, and its bombshell nature underscored the Fed's worries that credit conditions for consumers and businesses are at a breaking point.

"Whenever you lower rates, it can't hurt the consumer," said Bernard Baumohl, managing director of the Economic Outlook Group. "The Fed never promised it could change things dramatically overnight. There's a certain timeline with a cut in rates of nine months to 18 months when the economy feels the benefits."

'Consumers should be able to afford more'

While mortgage rates are not specifically tied to the rates the Fed controls, they have dropped significantly in the last three weeks and may be drop further.

"Mortgage rates already have fallen and they still are falling," said Dave Loyst, vice president of retail lending at Stearns Financial in San Diego. "Every deal is a struggle, but we're still doing loans. I think this rate cut absolutely is going to help the real-estate market."

"This definitely will help the mortgage situation," Loyst said. "With rates falling, more people are able to qualify for refinancing and more people who were left out from buying homes before will be able to do so now."

Consider what's happened since September's rate cut for creditworthy Schwab borrowers. On Oct. 7, a 5-1 adjustable-rate mortgage of $350,000 carried a 6.52% interest rate, assuming a 20% down payment. (A 5-1 ARM gives borrowers a fixed interest rate for the first five years and then converts to a loan that adjusts annually after that.)

The rate this week for that same loan was 5.04%. That translates into an annual mortgage payment that's $5,100 cheaper, Musci said.

"This is the affordability piece," he said. "Consumers should be able to afford more (of their living and discretionary expenses) at these lower interest rates."

By Loyst's thinking, that kind of reduction will push consumers to tiptoe into the home-buying market. "People will come out looking to buy houses . . . and it will help slow down the depreciation of real estate (values) in certain areas."

Now here's the gamble: Should consumers wait for what might be another cut in interest rates next week when the Fed holds its next regularly scheduled meeting -- and maybe even another cut at its March meeting -- or take the plunge now?

Get the paperwork started

Richard DeKaser, chief economist at National City Bank, encourages consumers to go for it now. "This doesn't apply to all cases, but for those who have an adjustable-rate mortgage and good credit this is probably a very good time to lock in some fixed rates for the long term."

But he warns that credit-lending standards are much tighter than they were two or three years ago when many borrowers took out their current loans, with full documentation of income required on nearly all loans.

"Don't go out and borrow money for the sake of borrowing money. But if consumers can consolidate and lower some credit-card debt, it probably makes sense to do so," he added.

Musci said those who want to refinance should get the paperwork started and look for lenders that offer a "float down" option that gives the borrower a one-time chance to lock in a lower rate should mortgage rates continue to fall in the wake of any additional Fed cuts.

MSN Real Estate: How to fight foreclosure

"Even though it costs money to refinance, rates have gone down so much that you're probably locking in rates at the bottom or close to the bottom," Musci said.

Even though mortgage rates may be low, some homeowners may have trouble refinancing if the value of their house has fallen, as has been the case in many parts of the country. But home-price patterns vary by locale.

In Boston, for example, home prices are starting to inch up again after falling sharply, but in Bakersfield, Calif., more fallout is expected. So borrowers will need to monitor their property appraisals.

This article was reported and written by Jennifer Waters for MarketWatch.

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U.S. seizes mortgage giants

Two veteran bankers, one from Merrill Lynch and another from U.S. Bancorp, will be the new CEOs of mortgage titans Fannie Mae and Freddie Mac, under a U.S. government takeover plan announced yesterday.

Mortgage lending stalls in August

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Mortgage Rescue Scheme: A Ray of Hope to Save a Home

Prime time to refinance your mortgage

Not fixing your credit

Not looking for first-time home buyers' programs

Not getting pre-approved for a loan

Borrowing too much money

Not shopping around for rates and terms

Paying junk fees

Not planning for closing costs

Not having enough cash on hand after closing

These 18 tips can help cut the stress of taking out a mortgage -- and get you into a house you can afford.

Which mortgage is best for you?

Buying for the long haul

Job

with good but inconsistent income

Refin

ancing (15-20 years before retiring)

More from

MSN and Bankrate.com

Recent graduate with strong earnings potential

Self-employed

Planning to live in home 4 or 5 years

Job relocation for a short run

Active duty military or veteran

Mortgage prepayment plan: Own your home in half the time

8 big mortgage mistakes and how to avoid them

Not fixing your credit

Not looking for first-time home buyers' programs

Not getting pre-approved for a loan

Borrowing too much money

Not shopping around for rates and terms

Paying junk fees

Not planning for closing costs

Video on MSN Money

Not having enough cash on hand after closing

Prime time to refinance your mortgage

'Consumers should be able to afford more'

Get the paperwork started