Good Mortgage Broker vs. Bad Mortgage Broker

On 08.28.10, In UK Mortgage Comparison, By Admin

According to the NAMB (National Association of Mortgage Brokers), two out of three Americans work with a mortgage broker to purchase a home because of the brokers expertise and wide selection of loan products and lenders. However, with so many so called experts out there, how does one separate the wheat from the chaff? How do you know if a broker is honest? And how do you know they’re an expert or not?

The NAMB says that over 70 percent of brokers are legitimate, that is they have safeguards and policies in place to make sure that they stay on the straight and narrow. So what about the other 30 percent? Well, the whole 30 percent isnt bad, but just as in any classroom, youre going to have those at the top, some in the middle, a few at the bottom, and others who simply dont show for class. Obviously, those at the bottom and the no shows would not be your first choice if you were going into surgery and they were holding the scapel, nor should they be handling your loan when you purchase a home or refinance.

Because of the surge in numbers of mortgage brokers in the past few years, there are plenty of incompetent and dishonest brokers out there. In order to avoid the 30 percentile, I offer the following tips to help you find a mortgage broker that is not only an expert but honest and reputable as well:

1.Dont believe everything you hear. Asking friends or family to recommend a mortgage professional is usually the first place people start. However, how do they know the broker is reputable and trustworthy? Check with your state regulatory offices and licensing bureau once you have some referrals. Better to be safe than sorry.

2.Use an NAMB certified mortgage broker. Brokers certified by the NAMB practice the highest ethical and professional standards in the industry. There is a Find a Broker link on the NAMBs website at www.namb.org.

3.Use an Upfront Mortgage Broker (UMB). These brokers disclose their fees to customers in writing in advance at the customers request. They also disclose the wholesale prices they receive from lenders. For a list of UMBs visit www.mtgprofessor.com.

4.Honesty is the best policy. If a mortgage broker suggests that you lie on your loan application in any way, heshe is most likely in the 30 percentile. Walk away.

5.They need to show you the money. If a mortgage broker doesnt disclose your closing costs in three business days, its probably best to take your business elsewhere.

6.If youre not bleeding, they shouldnt be applying pressure. A mortgage broker who pressures you into anything you are not comfortable with probably failed ethics. No reputable broker will pressure you into anything you dont feel comfortable with.

7.There are no stupid questions. Does the mortgage broker answer all your questions to your satisfaction? Are hisher answers straightforward, honest, and respectful?

8.Do you have a reservation? If you feel comfortable with whom youre working with and feel like they have answered all your questions and put all your reservations to ease, youve probably found a good mortgage broker.

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Getting Pre-Approved for a Mortgage Makes Buying Easy

On 08.21.10, In UK Mortgage Comparison, By Admin

Whether buying or selling a home, the real estate transaction process can be seriously stressful. Hey, no pain, no gain. Getting pre-approved for a mortgage can seriously reduce stress levels.

Lender Approval

Many people make the mistake of going house hunting without knowing exactly how a large a mortgage they can get. This leads to incredible frustration when a dream home is found, but you cant get a loan. For some shoppers, the frustration and stress leads them to throw their arms in the air and give up on the process. While an understandable reaction, the stress and frustration can be greatly reduced by getting pre-approved for a mortgage loan.

Getting pre-approved by a lender involves going through the full mortgage application process. You are going to fill out all the forms, provide tax returns or salary verification, have your credit run and so on. The bank will do a full analysis regarding whether you are mortgage worthy. It will also lay out the specific requirements it expects you to meet including the down payment amount and the specifications your potential home must meet. To this end, the pre-approval process is always contingent on the appraised price of the prospective home and any defects found in the home inspection.

Once a lender approves you for a loan, a magical thing happens. The lender will issue a pre-approval letter. The lender letter indicates the bank has approved you for a loan, the specific amount of the loan and often how long the pre-approval will last.

The pre-approval letter is the golden egg in the home purchasing process. It gives you a significant advantage over other people bidding on the same home. Imagine you are a seller who receives to bids within a few thousand pounds of each other. One bid has a pre-approval letter from the lender and the other does not. Which are you going to choose?

Getting pre-approved also has additional benefits. As you go through the process, the bank may alert you to problems. You can then go ahead and take the necessary steps to fix the loans. Compare this to trying to get a loan while in escrow. You are under a lot of pressure to get the loan in a thirty or sixty day period. If you fail to get the loan, you lose your good faith deposit, which is often thousands of pounds. Obviously, that is a disaster.

Whenever possible, get pre-approved for a mortgage before shopping for a home. It will save untold amounts of stress and make the buying process much easier.

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Get a Mortgage With Bad Credit

On 08.14.10, In UK Mortgage Comparison, By Admin

In the old days if your credit history was less than perfect, the only mortgage you would be offered would be one with extortionate interest rates from a shady broker.

Nowadays, there are more sympathetic lenders who will offer you a bad credit mortgage without charging you sky-high interest charges. And because there are more lenders out there now offering these non-standard mortgages, it has driven the interest rates on them down which is good news!

The term Bad credit can be anything from County Court Judgements (CCJs) on your credit file to something like having missed a mobile phone payment or made a few mortgage payments late.

More and more people now have a bad credit file. Rising inflation and credit companies making it easier for people to borrow means that just because you have a bad credit file, you are not rubbish with money!

So, what can you do to get a mortgage, without being ripped off by greedy lenders?

First of all, if you are considering using a mortgage for debt consolidation, do bear in mind that it will probably cost you more in interest in the long run. And also the debt will be secured against your home, so you must really ensure that it is affordable to you.

And when it comes to choosing a mortgage, do not apply for the first mortgage that you see. TV adverts saying that they can help people with bad credit are all very well but many of them charge as much as a 3% fee to arrange a sub-prime mortgage. So, on a 150,000 mortgage, they get 4,500!

Get independent advice from an independent mortgage specialist as well as doing your own research. Bad credit no longer has the financial stigma it used to, so hold out for the right deal for you.

How the web can help you if you are looking for a bad credit mortgage

If you have a poor credit history, finding a mortgage specifically for people with bad credit can be difficult. And even if you do find a mortgage, how do you know that it is the right one for you?

Using the internet can help. There is tons of information on there relating to bad credit mortgages such as free guides, as well as access to providers of bad credit mortgages.

Going online also allows you to compare multiple providers so that you can look at all the product features and benefits to decide whether it is right for you.

There are also websites that accept online mortgage applications and there are hundreds that offer free and immediate online quotes. This means that you can see how much you can really afford to pay out for a mortgage.

Steps to improve your credit rating

If you have recently applied for credit and have been turned down or you have been offered credit but at higher interest rate than advertised, then this is probably because of your credit rating.

Even if you never miss payments or do not have any debts such as a loan or credit card, you could still have a low credit rating.

This is because you can be penalised if your credit record is empty. Prospective creditors like to see positive entries on your credit fie and if you have no financial history, they are unable to judge how well you manage your credit.

The solution is to develop your credit file by adding positive entries on your record. Running bank and savings accounts as well as paying your mobile phone bills on time are a good start as are well managed credit card and store card accounts.

If you do not have any credit accounts, then gradually apply for them. Dont apply for lots of credit all one go as this will look like you are in financial distress. Instead, get one card at a time with a low credit limit and pay the balance off in full every month. Open up a bank and savings account. And pay your bills on time even the small ones!

Start building a financial history gradually and over time you will find it easier to get credit, and at a better interest rate too.

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Free Mortgage Quotes

On 08.07.10, In UK Mortgage Comparison, By Admin

Attaining a mortgage quote is obviously helpful for the people who want to refinance their existing house and purchase a new house in the near future. While in the past this involved sitting through a sometimes arduous and always unnerving interview with a banker, the whole process has become simplified, thanks to the efforts of some companies who provide free mortgage quotes online. There are several companies who provide free mortgage quotes online. All you have to do it to fill a simple online form and send. The rest will be done by the companies who will process your information and quickly return the free quote to you as soon as possible. These quotes will enable you to plan your future in a better and efficient manner. You can get extensive information on fixed rate mortgages, variable rate mortgages and other capped mortgages. You will get an in-depth analysis of different options available to you. The free quotes will unravel the mystery that surrounded the different type of mortgages.

Advantage of Free Mortgage Rates

The advantages of free mortgage rates are many. The biggest advantage, of course, is that you can get the mortgage quote free of cost, giving you a good general feel of what the market is bearing. There are no charges, no hard efforts, and no interviews. By simply filling out a form on the website, you can get a number of free quotes from a wide range of lenders. In doing this, you will be better able to look at the bottom line across many loans and in so doing decide which option offers the best solution for you. The world of lending is riddled with hidden contract clauses and indecipherable language. So without proper and careful planning, you can become lost rather quickly.

The fast service provided by the free mortgage quote providers is another advantage. All the mortgage quotes on the web sites are customized. When you answer the questions on the online form and submit it, your answers will be immediately matched with lenders and brokers who meet your exact financing needs. Typically, you will receive the quotes from multiple lenders very quickly and there will be no long waiting.

Disadvantages of Free Mortgage Quotes

Like all other things, free mortgage quotes have both the positive and negative aspects. Sometimes, it becomes difficult to know whether the prices are competitive or not. We have to believe the information we get from the lenders and could do little if these rates are not reasonable. But because lenders receive thousands of leads a day, whereas your local bank may receive only a dozen or so, the online lender may offer unfavorable terms in an effort to sell to only the suckers. That is not to say that all do, however, but merely that you should verify any quotes by attaining at least one quote from a brick and mortar lender.

The quality of the lenders may be another reason to worry. To expand their business, new online lenders may promise terms they can never meet. While users can investigate the history and third party lending appraisals of the company, for the newest lenders it is difficulty to know the quality of their services only after dealing with them.

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Flexible Payment Mortgages

On 07.31.10, In UK Mortgage Comparison, By Admin

With most mortgages, your payment is the same every month. But what if your paycheck isnt so regular? Would you like to be able to vary your mortgage payment depending on your cash flow? An option ARM — also called a flex-ARM or pick-a-payment loan — allows you to do just that.

How does it work?
An option ARM is an adjustable-rate mortgage with a twist. You dont pay a set amount each month. Instead, the lender sends a monthly statement with up to four payment options. You simply choose the amount you want to pay that month and then submit your payment.

The options vary, but heres the most common menu:

Minimum payment: This is calculated using an initial interest rate that can start as low as 1.25 percent. Because this payment is so low, its useful for months when you dont have much cash on hand, perhaps because you are waiting for a commission or bonus check. But any unpaid interest gets deferred, or added to the principal of the loan, so your principal grows.

Interest only: You pay all the interest due, but none of the principal. This doesnt reduce your mortgage balance, but it allows you to avoid deferring interest.

30-year amortized: This matches the monthly payment of a mortgage amortized over 30 years at your current interest rate. It includes both principal and interest.

15-year amortized: The same as above, but amortized over 15 years. This is the highest monthly payment. Choosing it allows you to reduce your principal faster than any other option.

The fine print
The biggest caveat with option ARMs is that those enticing initial rates are short-lived. The low minimum payments that make these mortgages so attractive can increase dramatically. In addition, every five years, the loan is recast — that is, a new amortization schedule is drawn up to ensure that the remaining balance will be paid off by the end of the loans term. When that happens, the minimum payment can be pushed even higher.

Whats more, if you defer too much interest, you can reach whats called negative amortization. If your balance grows to 10 percent to 25 percent (depending on state law) greater than the original principal, your loan is automatically recast and you have to start paying the fully amortized rate, which will increase your monthly payments.

Another potential downside of option ARMs is that theyre more complicated than most other mortgages. Home buyers may be seduced without fully understanding how much the minimum payments will increase over the long-term. When the monthly amounts go up, these people can experience payment shock.

To learn more about flexible payment mortgages, visit http:www.lendingtree.comcecyourhomeyourmortgageopen-arms.asp

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Fixed Rate Mortgage vs. Adjustable Rate Mortgage

On 07.24.10, In UK Mortgage Comparison, By Admin

The most basic distinction between types of mortgages that are available when you’re looking to finance the purchase of a new home is how the interest rate is determined. Essentially, there are two types of mortgages – fixed rate mortgage and an adjustable rate mortgage. If you choose a fixed rate mortgage, the rate of interest that you are paying on your mortgage remains the same throughout the life of the loan no matter what general interest rates are doing. In an adjustable rate mortgage, the interest rate is periodically adjusted according to an index that rises and falls with the economic times. There are advantages and disadvantages to either, and no easy answer to ‘which is better, a fixed rate mortgage or an adjustable rate mortgage?The main advantage to a fixed rate mortgage is stability. Since the interest rate remains the same over the entire course of the loan, your monthly payment is predictable. You can count on your monthly mortgage payment to be the same amount each month. On the minus side, because the lending institution gives up the chance to raise interest rates if the general interest rates rise, the interest on a fixed rate mortgage is likely to be higher than that of an adjustable rate mortgage.A fixed rate mortgage loan makes the most sense for those that are going to settle into their home for many years. While the initial payments may be larger than with an adjustable rate mortgage, stretching the payments over a longer period of time can minimize the effect on your budget.An adjustable rate is one that is adjusted periodically to take into account the rise or fall of standard interest rates. Generally, the adjustable term is annual – in other words, once a year the lending company has the right to adjust the interest rate on your mortgage in accordance with a chosen index. While adjustable rate mortgages make the most sense in a situation where interest rates are dropping, though it’s dangerous to count on a continued drop in interest rates.Lenders often offer adjustable rate mortgages with a very low first year ‘teaser’ interest rate. After the first year, though, the interest rate on your mortgage can increase by leaps and bounds. Even so, there are limits to how much an adjustable rate can actually adjust. This is dependent on the index chosen and the terms of the loan to which you agree. You may accept a loan with a 2.3% one year adjustable rate, for instance, that becomes a 4.1% adjustable rate mortgage on the first adjustment period.Finally, there’s a new kind of loan in town. A hybrid between adjustable rate mortgages and fixed rate mortgages, they’re known as ‘delayed adjustable’ mortgages. Essentially, you lock in a fixed rate of interest for a number of years – say 3 or 7 or 10. At the end of that period, the loan becomes a 1 year adjustable rate mortgage according to terms set out in the agreement you sign with the mortgage or financial institution.

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Finding the Right Commercial Mortgage Broker

On 07.17.10, In UK Mortgage Comparison, By Admin

Make no mistake, there’s a lot involved in getting a mortgage loan. For a potential borrower, finding the right broker is paramount, so they can take care of the loan details, and you can concentrate on moving forward with your new investment. To help you prepare in your search for the right broker, here is an overview of the commercial loan mortgage process.

First, determine how much you can borrow. This includes a few different things, such as the amount of monthly payment that you can afford. Also, depending on your unique credit and employment history, income and debt, and goals, you can estimate how much a lender will loan you.

Second, you should try to pre-qualify for your loan. Your lender should spend time finding the right loan that fits you and your investment.

Be prepared to provide information about your loan request and investment. For example, if you are looking for an apartment loan, you will need to provide information or descriptions about borrower (you) and financial information, the financing request, location information, property information and issues, and tenant information.

When you apply for the loan, make sure your lender will assess and approve your loan quickly, so you are not left in the dark about your investment future. Your lender should specialize in commercial loans, instead of residential, so they are aware of your specific needs.

Visit Security National Capital to learn more about commercial mortgage brokers.

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Figuring Out Whether To Go With A Fixed or Adjustable

On 07.10.10, In UK Mortgage Comparison, By Admin

Figuring Out Whether To Go With A Fixed or Adjustable Mortgage

Traditionally, the 30 year fixed mortgage was the staple of the home loan industry. Now you have tons of choices with the fixed or adjustable mortgage being the biggest.

Figuring Out Whether To Go With A Fixed or Adjustable Mortgage

Almost every person, at one point or another, will be looking into the possibility of pulling out a mortgage on a home purchase or refinance. When doing so, they are faced with two general propositions: a fixed rate mortgage and a variable rate mortgage. These two forms of mortgages are very different and can benefit different people in different ways all depending on the situation, especially the current interest rate levels. Both have advantages and disadvantages that must be weighed carefully.

Fixed rate mortgages (FRM) are mortgages that, as the name implies, will have one steady interest rate over the entire mortgage term. This interest rate will never change and never vary. You, as the homeowner getting the mortgage, will not have to worry about sudden market changes affecting how much you will be paying a month and how much interest is charged. This is all set beforehand. Fixed rate mortgages are determined by the prime rate of interest at the time and by measuring your own credit scores and other variables into the mix. This is a solid option for people who do not like any risk.

Adjustable rate mortgages (ARM) are more of a risk. They start out at a lower rate than FRM and can prove to be very cost effective or they can lead to much higher interest rates in the long run. You see, while adjustable rate mortgages start out lower, they are also affected by changes in the interest rate levels at any given time. If interest goes up, your rate will follow suit. Basically, when considering an ARM, you must consider what the current market is like for interest rates. If the current market is high, it might be better to go with adjustable, have a lower initial interest rate, and then have lower interest rates in the long run as interest rates fall. However, if you get an adjustable rate mortgage and a time when interest rates are low you will end up seeing significant increases in your interest rate in the long run. In fact, this has been the situation over the last five years or so. Now rates are rising and there is some fear that many homeowners with ARM loans are going to default.

As can be seen, each form of mortgages has their own uses and sets of plusses and minuses. When considering a mortgage against your house it is extremely important to evaluate your own situation carefully and also the current market situation. Look into what the long run interest payments are going to be for each method and choose what is right for you and what will save you money in the long run.

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Fannie Mae And Freddie Mac Mortgage Loans – Conforming Loans

On 07.03.10, In UK Mortgage Comparison, By Admin

Fannie Mae And Freddie Mac Mortgage Loans – Conforming Loans Provide Low Interest Rates

Conforming loans provide low interest rates since they are almost guaranteed to be purchased by Fannie Mae or Freddie Mac, which allows more funds to be available for borrowers. However, these corporations have terms, such as maximum loan, that limit how much you can borrow. If you dont meet their terms, you will need to apply for a non-conventional loan with slightly higher interest rates.

Loan Purchasers

Fannie Mae and Freddie Mac are stockholder owned companies that purchase mortgages, package them into securities, and then resells them to investors. This allows banks and other financing companies to lend to more customers since their capital is not tied up in long-term loans.

Fannie Mae and Freddie Mac have strict requirements for purchasing loans. Basically, they want to reduce their risk level so they put a cap on loan amounts, credit score, income level, and down payment.

Conforming Loan Amounts

Each year Fannie Mae and Freddie Mac create new guidelines for loan amounts. In 2005, a mortgage limit for a single-family dwelling is 359,650. Limits for multiple family dwelling are significantly higher, roughly an additional 100,000 per family. Maximum loan amounts are also 50% higher in Alaska, Guam, Hawaii, and the Virgin Islands since property prices are higher.

Second mortgages also have their limit. In 2005 the limit was 179,825, but the total mortgaged amount of both loans could not exceed 359,650. As with first mortgages, second mortgages can also be 50% higher in designated areas.

Non-Conforming Loans

There are other loan options if you dont qualify for a conforming loan. If you need to borrow more than the maximum conforming loan amount, then you will want to apply for a jumbo loan. Because these types of loans are handled on a smaller scale, their rates are slightly higher than a conforming loan.

If you have poor credit or little down payment, you can use a subprime lender who specialized in lending to BC type loans. You can expect to pay higher rates with these lenders, but many offer favorable terms. To find the best deal and to avoid scams, you must research your lender. Compare rates and terms until you find a favorable financing package.

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Drastic Move of Some Mortgage Rates

On 06.26.10, In UK Mortgage Comparison, By Admin

In the previous week’s Freddie Mac Primary Mortgage Market Survey, the short term mortgage rates that had been rising very sharply during the time of last few weeks suddenly fell slightly last week. Whereas the long term rates almost remained unchanged.

The 30-year fixed rate mortgage (FRM) moved up one basis point with 0.5 point from 6.45 percent to 6.46 percent with same 0.5 point. During the year of 2006, at this same time the average rate of 30 year fixed rate mortgage was 6.47 percent.

The 15 year fixed rate mortgage with 0.5 point averaged 6.15 percent. Hardly shifting from 6.12 percent with 0.5 point during the week ending in August 30. Previous year during this time the 15 year fixed rate mortgage was at 6.16 percent.

The 5-year Treasury indexed hybrid adjustable rate mortgage (ARM) had an average contract interest rate of 6.32 percent with 0.6 point, yet again just a very little change from the previous week when it running at a rate of 6.35 percent with 0.6 point. The current rate is 19 basis points higher compared to what it was at this same time of 2006.

The most dramatic change has been shown by the 1-year treasury indexed adjustable rate mortgage. After jumping 24 basis points to 5.84 percent with 0.8 point during the last week, the adjustable rate mortgage settled down and returned back 10 of those basis points, averaging 5.74 percent with 0.6 point.

Frank Nothaft, vice-president and chief economist of Freddie Mac said, “Over the past week, long term mortgage rates were largely unchanged as the most recent economic news showed smaller increases than had been expected.” He explained it with the example of rise in the core personal consumption expenditure price index at an annualized rate of only 1.3 percent in the second quarter where as the July’s consumer spending data has shown a 1.9 percent gain in the core price index for the 12 months ending in July.

In the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ended September 7 demonstrated a remarkable drop in the 30-year fixed rate mortgage, from 6.42 percent with 1.09 point to 6.25 percent with 1 point.

The average contract interest rate for the 15-year fixed rate mortgage also had a strong decrease to 5.9 percent with 1.03 points from 6.10 percent with 1.16 points. The short term 1-year ARM decreased to 6.34 percent from 6.52 percent with points remaining unchanged at 0.93.

The mortgage application volume increased 5.5 percent from the previous week on a seasonally adjusted basis, but was down 16.7 percent from that previous week and was up with a slight 0.1 percent from what it was in the earlier year during the same time.

As a share of total mortgage activity, refinancing is up by 0.7 percent. It is now 42.1 percent from 41.4 percent during the last week. However, the market share of adjustable rate mortgages is dropping down continuously from 13.2 percent the previous week to 12.6 percent this week.

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