Mortgage...

Realize The Power Of Equity With Reverse Mortgage Loan

2007-09-28T07:17:00.000-07:00

Below, you'll find extensive information on leading mortgage loan articles and products to help you on your way to success.

By Antonio Redford
For decades mortgage loan was in practice. People used to take loan against their equity on their fixed assets but it was never considered as a good way to get money as chances of loosing asset were high. With revolutionary enhancements in banking sector mortgage system has entirely changed and now it is becoming preferred choice of more and more people. With evolution of reverse mortgage loan, seniors have also got a firm support to live their old age happily as it is especially launched to benefit seniors. Seniors can also need money for many reasons such as treatment,

house renovation or just for livelihood, but they can not fulfill these necessities as they possess very limited source of income i.e. pension or money given by their children. Reverse mortgage loan provides them loan for their immediate requirements as well as a regular source of income in the form of increased value of equity on their mortgaged asset.

Reverse mortgage loan provider does not force the mortgagor to left the house and gives him freedom to live in his own house till he want. It is an obvious human nature that he gets attached to the place where he lived every moment of grief and glee. Selling that home just to fulfill the requirement of money may affect a senior somewhere deep inside. In that phase of life when a senior need extra care and relaxed environment to live in shifting may affect his mental as well as physical health. Reverse mortgage loan providers are very close to senior’s heart and they understand what a senior exactly need that is why they provide them hassle free loan along with a regular source of income. Reverse mortgage loan facility is made especially keeping the old age

requirements in mind and is dedicated to comfort them in their bad times of financial crisis.

Going for a loan facility is not a bad idea but in case you are not able to repay that loan in proposed time then it is better to use your equity on your house ownership. If you are a person more than 65 years and possess any kind of house ownership including partial ownership then you are the suitable one to apply for reverse mortgage loan. The amount of loan will be decided only after valuation of your house property and your age. As high the value of your house will be the higher amount you will get as loan. You will also get a monthly payment in terms of equity on increased value of your house that will be again calculated on the value of your house. The biggest benefit of reverse mortgage loan is that you can live in your house as long as you want and can also keep ownership of your house.

Obviously it is always an excellent idea to borrow loan from reverse mortgage loan providers only as you get a bunch of benefits along with loan. Therefore choose reverse mortgage loan to come out of the phase of financial crisis and enjoy your financial freedom.

Antonio Redford is a legal expert. He gives advice to clients who are looking for expert counsel on reverse mortgage. For more queries about reverse mortgages loan, American reverse mortgage, reverse mortgage loan and reverse mortgage loan visit www.reverse-mortgage-seniors.com
We strive to provide only quality articles, so if there is a specific topic related to mortgage that you would like us to cover, please contact us at any time.
And again, thank you to those contributing daily to our mortgage loan website.

Mortgage Lenders And Building Problems

2007-09-28T07:13:00.000-07:00

Below, you'll find extensive information on leading best mortgage articles and products to help you on your way to success.

By Calvin A Leonard
Refinance mortgage lenders cater to different parts of the borrowing market.
A significant change during the last several years has been the increasing use of the secondary mortgage market which purchases loans originated by lenders. However, applicants with bad credit standing are advised to be wary of predatory bad credit mortgage lenders.

Most states have lending laws that say a lender can only charge an interest rate a certain percentage above the retail or normal market interest rate for borrowers with bad credit.
The development of the secondary market allowed lenders to convert a group of like loans to single security instrument which then could be sold just like stocks and bonds.
Bank and mortgage company loan officers will give you face-to-face customer services, at least before the closing.
To purchase a mortgage, homeowners can even get in touch with, a local mortgage broker or call the toll free number, of any of the mortgage companies.
A mortgage broker is basically a retail seller of a loan.
Home mortgage lending is an integral part of the lending business.
Refinanced mortgage lending is a great option for borrowers who had a bad credit record at the time of taking
the mortgage and due to which they got high rates.
Borrowers who find it difficult to meet their repayment obligations due to financial constraints can opt for refinanced mortgage lending.
Bankruptcies on the increase, extended mortgage terms of up to five times salary, and a housing market which will just not slow down - these are all simmering in the background, ready to explode at some point, unless the wreck less nature of the consumer is some how dampened over the coming months.
It is possible to find many mortgage companies who offer mortgage plans online.
Fixed mortgage rates are mainly preferred because they offer long-term stability.
At this point, a mortgage lender will closely examine each of your open accounts to establish an overall credit pattern.
Mortgage lending companies offer borrowers a rate after assessing their applications based on many parameters.

For the best information about mortgage leads visit our website for more information on purchase mortgage lead
We strive to provide only quality articles, so if there is a specific topic related to mortgage that you would like us to cover, please contact us at any time.
http://www.mortgageleads-free.com/
And again, thank you to those contributing daily to our best mortgage website.

Mortgage Leads, Where They Come From

2007-09-28T07:12:00.000-07:00

Below, you'll find extensive information on leading home mortgage articles and products to help you on your way to success.

By jay
If you are a loan officer or mortgage broker, and you are thinking about buying mortgage leads, one thing that will be important to know, is where these mortgage lead companies obtain their mortgage leads from.

Many times, mortgage lead companies will sell their mortgage leads multiple times to many different loan officers and mortgage lead companies. They have a data base of thousands of mortgage leads that they sell many times over and over.

Or, they buy their mortgage leads in bulk from third party vendors and sell them at a profit.

This is known as recycling mortgage leads, or selling junk. And who knows how many times that third party vendor sold their mortgage leads to other mortgage lead companies.

By the time that mortgage lead lands on the desk of a loan officer, it has gone through the hands of literally dozens of other loan officers and mortgage brokers.

Your best bet is to deal only with mortgage lead companies that own and operate their own mortgage lead generation sites. This way at least you know that

there is a very good chance that the quality of the mortgage lead will be good.

How can you find this out?

Call someone in the customer service or sales department of the mortgage lead company you are considering. Don’t be shy, come right out and ask where and how they obtain their mortgage leads.

If you are not happy with their answers you receive, than move onto the next mortgage lead company.

Remember, if you are not happy with their customer service, than it is more than likely you will not be happy with their mortgage leads either.

Jay Conners has more than seventeen years of experience in the banking and Mortgage Industry. He is the owner of www.jconners.com, a mortgage marketing and resource site for loan officers. He is also the owner of www.callprospect.com, a mortgage lead company, specializing in real time mortgage leads.

We strive to provide only quality articles, so if there is a specific topic related to mortgage that you would like us to cover, please contact us at any time.
And again, thank you to those contributing daily to our home mortgage website.

Financing Homeowners Mortgage Loans

2007-09-28T07:10:00.000-07:00

Below, you'll find extensive information on leading 2nd mortgage articles and products to help you on your way to success.

By Calvin A Leonard
To help you recover from your poor credit status, consider refinancing your home mortgage loan to improve your financial situation for the long term.
A Home Equity Instalment Loan (HEL) is a fixed mortgage rate loan, which means the annual percentage rate (APR) and monthly payment will stay the same for the life of your loan.

A piggyback mortgage is also known as an 80-10-10 loan because it involves a first mortgage for 80% of the purchase generally offered at a lower rate, a second trust loan (second mortgage) for 10% at a slightly higher rate and the remaining 10% as a down payment.
Whether you use a second mortgage or an unsecured loan to pay off credit card debt, often depends on several important factors including whether you actually own a home, what your credit rating is, and what the total dollar amount of the credit card debt is that you owe to various financial institutions.
For instance, you may decide that you want to consolidate all of your borrowing so that you can pay off smaller loans, especially any credit card accounts, as these generally charge a higher rate of interest.
Your interest is also tax deductible with a mortgage or home equity loan, where your credit card interest isn’t.
By understanding where you stand, you can either choose to go forward and find

a mortgage loan that is within your limits, or repair your credit before making a move.
The FHA loan program, similar to conventional loan programs, allows for mortgage refinancing of owner occupied properties as fixed mortgage rate loans and adjustable rate mortgages (ARMs).
Legislation in the United States, “The Truth in Lending Act,” requires mortgage lenders to post the Annual Percentage Rates for all of their loan offers.
The major benefit for a debt consolidation loan is that most states allow you to write off the interest paid up to 100% of the value of your home.
Another advantage to this type of financing is that you generally will not be required to pay for private mortgage insurance; private mortgage insurance can add hundreds of dollars to your mortgage payment and does nothing to protect the homeowner, only the lender.
Mortgage Software provides detailed information about mortgage software, mortgage banking software, mortgage broker software and more.

For the best information about leads mortgage visit our website for more information on cheap mortgage lead
We strive to provide only quality articles, so if there is a specific topic related to mortgage that you would like us to cover, please contact us at any time.
http://www.freemortgage-leads.com/
And again, thank you to those contributing daily to our 2nd mortgage website.

Bad Credit? Qualify Yourself For A Zero Down Mortgage Loan

2007-09-19T07:28:00.000-07:00

Bad Credit? Qualify Yourself For A Zero Down Mortgage Loan - Mortgage-Refinance
I decided to write this article today after closing a home purchase loan for a couple that had some major credit issues. They got into the house with ZERO down payment, and only had to bring $600 for the closing costs. Their situation was pretty bad, I'm talking about a bankruptcy 2 years ago, thousands of dollars in outstanding collections, charge-offs and debt to income ratio of 49%. By the way, we left all of their outstanding charge-offs and collections open which means they didn't
have to pay any of them off! So many think they won't be able to qualify for a mortgage loan. Many will keep thinking they can't qualify until they read this article.

My name is Nick Graziano and I have been employed as a Loan Officer for 5 years. I have experience originating conventional mortgage loans as well as sub-prime (non-conventional) residential mortgage loans. Many of the clients that I deal with have great credit (and know it) and have no problem getting a loan but then there are those with credit problems (and they know it too). The ones with great credit are the ones that are easy to close, get the best rates and all with minimal time
involved on the part of myself.

But, this article is for those with credit problems, low income and those who cannot afford a down payment. I am going to show you how to qualify for a loan with ZERO down payment, and the only out of pocket expense will be less than $1,000 ( if any at all) to cover some of the closing costs. This is just an example of one particular loan program that I use but there are numerous others out there. I picked this loan program because it allows 100% financing down to a 575 credit score

I see it on a daily basis.

Everyone wants to own a home and those with credit problems are calling every mortgage company in the phone book and applying on every mortgage website out there. (And there are many out there). Only to find out later that every time a mortgage company pulls their credit, their credit score dropped a few points, or that the particular lender doesn't originate the type of loan that you need. That is frustrating.

Step by Step

Here is where I show you how to qualify yourself for a zero down loan.

1.The first thing you need is your tri-merge credit score. I would be more that happy to suggest a few places on the internet that you could go to get your credit score but I don't want this article to seem like an advertisement. So, the best thing to do is to do a search on yahoo.com for terms like "free credit reports", or "tri-merge credit report". Just make sure that you end up pulling a "tri-merge" credit report on yourself. A tri-merged credit report pulls your credit profiles
from the 3 major credit reporting companies and merges it into 1 report. The nice thing about pulling your credit yourself is that it will NOT affect your credit score. Bookmark this page while you go get a copy of your credit report and then come back to see the additional steps.

2.What is your credit score? Most mortgage lenders will use the middle of the three scores. Example: Your credit scores are 576, 525, 599. In this case you would use the 576 credit score since it is not the lowest score and it is not the highest.

3.Is your middle credit score at least 575? If so, congratulations and move on to the next step. If your middle score is less than 575 you have some homework to do. You can either sign up with a credit repair company ("search yahoo.com for credit repair") to try and remove some derogatory items on your credit which will raise your credit score OR you can try to acquire some credit to help re-establish your credit worthiness. The easiest way to re-establish your credit is by either
getting a car loan or credit card designed to help re-establish your credit. Again search yahoo.com for "credit cards to re-establish credit"

4.Do you have a bankruptcy or foreclosure in your past? Has it been 2 years since it was discharged? If yes, move on to the next step! If not, unfortunately in most cases your bankruptcy or foreclosure will need to be discharged at least 2 years or you will need to have at least 5% down payment.

5.You will need to document 24 months of recent mortgage or rental history. If you rent from a property management company we will need a Verification Of Rent completed. The form will be supplied by your mortgage lender or broker. If you rent from a private landlord, you will need 24 months cancelled checks/ or money order receipts with no payments over 30 days late. Sorry, you cannot prove your rental history if you pay your landlord cash every month, unless they are a property
management company. If you are unable to document your rental history there is a way around it. Get your credit report and look for the following: Do you have an active credit line on your credit report that has been open for at least 24 months? Has this credit line had any activity in the last 6 months? If so, move to the next step.

6.Look at your credit report. Do you have a credit line that has a 12 month history reporting? If so and as long as you have no more that 2x30 day late payments then move on to the next step.

7.Look at your credit report again. Do any of your credit lines have a high limit of at least $3,000. If so, move to the next step.

8.Now take one more look at your credit report. You will need 1 more additional open credit line reporting on your credit report. (It does not matter how long it has been open or how much the credit line is for).

Well, congrats! You made it this far which means that your credit might qualify for a Zero Down Payment Loan. The loan program you qualified for is subject to change and is subject to additional conditions. This article should not be construed as an advertisement to lend. These are the steps that I go through when trying to pre-qualify a client that has credit problems. There are many more factors to determine so please discuss this with a qualified mortgage professional.

You are probably asking yourself what you are supposed to do with the information that was given to you in this article. The first thing is to contact a few mortgage companies. Ask them if they have any zero down loan programs that will go down to a 575 credit score, or whatever your credit score is. Remember, you will need at least a 575 credit score to qualify for this particular loan program. Also, in order to minimize your out of pocket expense, ask your mortgage professional if the
property seller is allowed to pay 6% of the purchase price towards closing costs. If so, you will need to remember to negotiate that into your purchase contract when you make an offer on a house.

About The Author

Nick Graziano
http://www.aaamortgagerate.com

The Power of a Home Equity Loan to Pay Down Debt

2007-09-19T07:15:00.000-07:00

The Power of a Home Equity Loan to Pay Down Debt - Mortgage-Refinance
Households across the country are finding themselves in a similar situation. They lack the financial funds to make the necessary changes to their home and need to find a way to fund upgrades and eliminate debt. A popular way of financing these changes without killing themselves is by taking a home equity loan to pay down their debt.

The Home Equity Loan has become a fast-track way of paying down large credit card debt, financing college education and even taking a vacation. Since the stock market has lost quite a bit of appreciation, people have been purchasing homes as a means of investment, thus sending housing prices through the roof. With higher prices comes a great deal of appreciation in the home. People who have found themselves in 20 - 30 thousand dollars in debt can pay it down by taking a home equity loan.
Home Equity Loans have been a source of relief and flexibility to get the homeowner out of debt and moving forward in life.

The home equity tax shelter

The greatest benefit from taking a Home Equity Loan is being able to crush debt, but also reduce the amount you owe the government every year. Most loans by design do not provide any tax relief, whereas a Home Equity Loan provides a direct line item to reduce your debt. To figure out your home equity value you can hire a professional appraiser to come out and tell you how much it is worth to a bank or financial institution. Once you have that figure you can easily find out how much equity
you have in your home. For example, should your home appraise for $150,000 and you owe $ 60,000 you have $90,000 in equity. This equity will not become a taxable event should you buy a bigger home and spend more money. Should you step down in your home, you can be penalized for the difference, provided that you have not already taken the one-time exemption allowed by the government.

Debt relief

Once you have found out how much your home is now worth, it is time to apply for the loan. During the loan process you can bring your credit card statements as well as any other debts you may owe to the table. Explain to the loan officer your situation and ask that these debts also be included in the Home Equity Loan. If your home has at least 40% equity in your property you should have no problem getting them dissolved into the loan. There are many reputable lenders who will help you find
the right loan for you. The Home Equity Loan will restart the 15 or 30-year clock from day one. Your payment may increase or decrease depending on how much debt you add or cash you take out of the property.

About The Author
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Internet & Mortgage Calculations

2007-09-19T07:14:00.000-07:00

Internet & Mortgage Calculations - Mortgage-Refinance
"You've been approved!" The words you have always wanted to hear when you filled out the home loan application. It swirls through your mind the opportunities and memories you will cherish in your new home. Before you even start shopping for a home it is best to understand in real terms what you can afford. Your income level may make it tight for you every month to make the mortgage payment if you purchase too much home.

You may wish to know how much the home may cost you before you sign your contract. So you will need to be a financial calculator to figure out the monthly paper in real-terms. There is an easier way. The Internet has become the best place for mathematical equations and there are some great websites that will do the figures for you should you know the absolute basics of the transaction. Here are some of the factors that can help you determine what your monthly interest rate will be:

* Amount of home

* Percentage of interest

* Duration of loan (5, 15 or 30 years)

* Down payment

* Insurance (percentage of loan)

* Start date of the loan

Sites like bankrate.com and countrywide.com provide free online calculators. Save yourself time and frustration trying to determine the monthly payment when these programs offered free work well. Some of the calculators can also factor in extra payments to your schedule and will show the end result savings. An amortization schedule is also provided to show you how your payments over the thirty years reduce your liability and increase your equity in the property.

Most mortgage lenders will give you a maximum you can afford and should be within a few dollars of the actual dollar amount should you ask them for the monthly payment calculated. Your being comfortable with the mortgage payment will help you recognize your monthly commitment to the property. There is a lot more involved than just making the payment to the mortgage, utilities, upgrades and other expenses come into play when factoring in all your overall commitment.

About The Author

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Home Loan Applications Made Easy

2007-09-19T07:13:00.000-07:00

Home Loan Applications Made Easy - Mortgage-Refinance
You have finally found the home of your dreams. You have searched all over and are ready to purchase it. Before you even make your offer you should seek out the financing first. In some cases, it is easier to have a pre-approval in hand before making any financial commitment through a contract. Why get your hopes up after you purchase the home when you can buy with assurance and wait by the settlement table. Before you can buy anything, you will need to get accepted by a reputable lender.
There is much you will need to know, as this will be the largest purchase you will ever make. You will need to fill out a mortgage application first.

As with any mortgage application, you will need to provide the necessary information to the lender so they can weigh the option to grant you the loan. This information is based upon your financial picture. It consists of your social security number, date of birth, and where you have worked for the past 3 years. This information will give the lender a good picture about your spending habits through a credit score. Depending on the score itself, the lender will make a financial decision to
grant or deny your request. You may also have to explain certain circumstances in your life such as a job loss or credit rating should they not be up to par.

Upon completing the mortgage application review, you will be given an amount in which you can afford. Usually the sales price of the home is based upon 3½ times your annual income. It is also equivalent to the percentage of debt to income ration determined by FHA (Federal Housing Authority). Should you meet these guidelines you will be given a green light to go and look for a house in this range. You may be able to afford more should you have a sizeable deposit. There are also programs
that you can use to get into a house with only 3% down. Some lenders ask that you fill out the home loan application in person rather than online so that they can answer any questions during the process.

About The Author

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Refinancing Your Home - How and Why?

2007-09-19T07:12:00.001-07:00

Refinancing Your Home - How and Why? - Mortgage-Refinance
Chances are you may need a little extra money to get some work done around the home or perhaps your current interest rate is 7.5% and the prime interest rate is 6.0% there is a benefit to restart the clock on an existing mortgage and save thousands of dollars over the life of the loan. The first thing you must realize is that refinancing your home can also be tax deductible, meaning that you will receive an extra tax advantage for the closing costs associated with a refinancing no matter
what the condition, even in bankruptcy!

The first step of refinancing your home is finding a reputable lender that will get the job done right the first time. Think of refinancing similar to purchasing your home, as the same information is necessary in order to get started. You will need to produce the same documentation that verifies who you are, how much you make and what you currently owe. A reputable finance company will shop your loan around to several lenders and get you an acceptance in a matter of days and in some
conditions in a matter of hours.

Once you set the ball in motion, you will have to get your current mortgage holder to provide a statement of payoff that shows how much you owe at this point in time. Your home will need to be appraised in value and an interest rate will be locked in for a period of 60 days. You will be asked to sign several pieces of paper to release this information from the mortgage company. You may also have to turn in the cover page of your homeowner's insurance policy to show the break down of your
coverage.

Should all the paperwork be in order, you will be given a tentative closing date by a registered title company. It is the title company's job to make sure that all documentation and title pass from the current bank to the new one at the settlement table. At the close, you will resign your paperwork and title documentation over to a new lender. In some cases, it may be the same lender as the mortgage company that you currently have. Should you have asked for some cash back a check will be
presented at this time.

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Student Home Purchase Plan

2007-09-19T07:10:00.000-07:00

Student Home Purchase Plan - Mortgage-Refinance
Tuition costs are climbing, housing costs are climbing, it seems like all the costs for students are climbing these days. Students can afford cost increases less than any other demographic in Canada. Because of this, parents and students alike are looking for new ways to offset the costs of education.

Student loans can be used to defer these costs to some extent, but they need to be repaid after graduation. It's difficult to climb the corporate ladder or get ahead in life when you have $30,000 worth of debt before your first job is even found!

Bursaries, grants, and scholarships are another great source of funding for a student. However, the amount of money available is thinning, and the competition is growing stiffer for this money each year.

The average student, over a 4 year degree, pays over $16,000 in tuition and books. Housing costs approximately $38,000 for a 4 year degree. This is based on rent of $800 per month for 48 months.

This means the total cost of education for a student is over $54,000 before paying for any clothes, food, or recreational expenses. Given that the average student doesn't qualify for more than about $9000/year in student loans, this means an average student needs to find over $18,000 during their 4 year education career to be able to go to school. Not to mention the cost of food and clothes.

So how does a student get ahead in life, avoid massive student loans, and still get an education?

Many parents have been turning to Real Estate as a solution for a solution. Let me explain what they're doing?

When their first child enrolls in university, the parents purchase a small home with easy access to the University. The more bedrooms the better! This opens many possibilities for the parents, as well as the students.

First, the property will likely appreciate in value, presenting the parents with equity that can later be used to repay student loans or their own personal use.

Second, the rent the student would have paid to a landlord or dormitory is being used to repay the mortgage, creating more equity in the property.

Third, being a rental property, the tax benefits of the property are fabulous. Any interest paid on the mortgage is a write-off. Maintenance and improvements, as well as taxes and often utilities, are expenses that can be written off.

Fourth, there is the potential for additional tenants. Suppose you were to purchase a 3 bedroom bungalow for approximately $150,000. The cost of the mortgage would be approximately $900; based on a 5.5% 25 year mortgage with 5% down payment. That's just $100 dollars more than rent on a typical 1 bedroom apartment close to the University of Alberta right now.

Your child finds 2 roommates to share expenses with. They each pay you $600 per month; the tenants are then saving $200 per month over the cost of renting an apartment. A good deal for them!

Your total revenue on the home is $1200 per month. Your child lives for free, and clears $300 per month, which can be put towards living expenses and spending money. Now your child can go to school, not work, and focus on studying.

What if you were to finish the basement with an additional 2 bedrooms? That would essentially double your income, or allow you to "clear" $1500 per month. Your child gets $500 per month for expenses and living, and there's an additional $12000/year ($100/month) to be put towards tuition, books, and other university expenses.

Let's look at this again, using 2 family as examples. The Smith's and the Jones'.

The Smiths send their son, Steve, to university for 4 years. He rents an apartment in residence for $800 per month while going to school. His tuition, including books, is about $4000. Spending money, clothing, and food costs are approximately $500 per month. So Steve's annual costs are approximately $20,000 annually.

Student loans and scholarships (assuming Scott qualifies) cover approximately half of this, leaving him and his parents to cover the rest. Scott has to get a part time job to pay for some of it, and work full time in the summers to help.

The Smiths struggle through, using their savings and hard work to get through a tough 4 years. When Scott graduates, he has to start repaying is $30,000-$35,000 in student loans. He'll be making that payment for the next 10 years?

Now let's look at the Jones'.

The Jones' purchase a home close to the school for their daughter Sally. They make a 5% down payment ($7500) on a home worth $150,000. It has 3+2 bedrooms. Their daughter lives in 1 room, and manages the rest of the tenants in exchange for free rent and a monthly allowance of $500 to cover her living expenses. Each of the additional 4 rooms are rented for $600 per month including utilities and laundry. A great deal for ANY student.

Each month Sally collects the rent from her 4 roommates, totaling $2400. She keeps her $500, and deposits the rest into a bank account dedicated to the property. The mortgage and taxes get paid each month from that same account. Together, these cost $1100 ($900 for the mortgage and $200 for the taxes). That leaves an end-of-the month profit of $800 for the property. That money just sits in the account in case of emergencies, repairs, or other unforeseen expenses.

Remember, the taxes and interest on the mortgage are tax write-offs at the end of the year for Mr. & Mrs. Jones.

At the end of the first year, September to December, there is $3200 worth of cash in the bank account, or roughly 50% of the initial down payment. Sally is happy because they can use that money to pay for Sally's 2nd semester tuition without any student loans, not to mention that she hasn't needed to work a job while going to school.

Mr. And Mrs. Jones are happy because of the great tax write-offs they get from the property, plus Sally has no excuses for not getting good grades.

Over the summer, the house pays for Sally to take some extra curricular courses, or perhaps do some traveling. Maybe she even just lounges around the yard and does nothing. She has options because she doesn't have to work.

By the start of September of the next year (beginning of Sally's 2nd year at university), the Jones' have collected $6400 in revenue from the property. Sally's tuition for the next semester is paid, so are her books and she's living for free. The cycle continues for the rest of her time at university.

At the end of the 4 years, they have profited over $20,000 in cash after all expenses. They have also been paying down the mortgage and the property has likely increased in value.

Sally hasn't worked a single day while at school, she has absolutely no student loans, and is fresh and ready for the work force. She's carrying no debt, so she quickly gets ahead in life.

Sally graduates with honors because she could focus on her studies and not worry about making money for school. Total investment from the Jones': $7500 in the initial deposit plus Sally's first semester tuition of approx. $2000.

Total profits; $35,000 in cash and equity. Is it any wonder why we're all trying to keep up with the Jones'!

But it doesn't stop there?

The Jones' now have to figure out what to do with the property. Sell it? Sure. They would net a tidy profit from the home. Remember, the mortgage has been paid down for the last 4 years, as well as the value increases of the home over those 4 years.

But let's say they keep the home and rent out the entire property to students. Their total revenue could be as high as $3000 per month, or $1900 after mortgages and taxes. And that's assuming that the rental rate hasn't gone up over the 4 years?

If you were the Jones', you could go to www.mercedesbenz.ca, pick out his and hers Mercedes convertibles, and not pay a dime for them. The leases would be covered every month by the $1900 in revenue.

For being such great parents, and paying for your child's entire education, you deserve a couple of convertibles don't you?!?

All figures are approximate, and provided as examples only. Some properties may not perform as well, while some may perform better. To select a good investment property, contact a real estate professional like John Carle and Sharon Gregresh. We do not guarantee good grades for your children at school.

About The Author

John Carle & Sharon Gregresh are Realtors with Royal LePage - ArTeam in St. Albert, AB. They pride themselves on providing more than just real estate sales and listings. Their clients benefit from a much larger spectrum or real estate services. Contact them any time at information@workingtogether.ca or through their website at www.workingtogether.ca. They can be reached by phone at (780) 458-5595

Mortgage Prepayment Penalties - Just Say No

2007-09-19T07:09:00.001-07:00

Mortgage Prepayment Penalties - Just Say No - Mortgage-Refinance
One of the most common terms found in a new home loan is a prepayment penalty. This type of penalty says that if the borrower pays off the loan early, commonly during the first five years of the loan, then the borrower will be responsible for paying an additional amount of money, typically about six months interest on 80% of the mortgage balance. Sub-prime market loans will typically carry prepayment penalties more than standard mortgage loans.

You may plan on keeping the house for the entire duration of the prepayment penalty, and be tempted not to worry about it much. But sometimes life circumstances change, so it's wise to avoid any type of prepayment penalty if you can. A typical prepayment penalty might equal five months worth of monthly loan payments, so it's worth checking on. Of course, you should always ask (before you sign) if a new loan has a prepayment penalty. In fact, ask the lending officer to point out to you
in the document where a prepayment penalty is discussed.

Most items in a loan are subject to negotiation. If you haven't signed loan papers yet, and you find that your loan has a prepayment penalty, you might offer to pay an additional closing point or so to see if it can be removed. The key at this stage is that if you agree to the prepayment penalty, you should try to find ways to reduce either the amount, the term, or both as much as possible.

If you already have a loan, you are bound by the terms of the document, unless you can negotiate them. There are perfectly legitimate reasons why you may want to pay off a note early - most often, due either to refinancing or selling the house. You may be able to contact your lender to see if they will waive the prepayment penalty if they are able to provide refinancing. If interest rates have dropped a lot, and you can't get out of the prepayment penalty, it may be worth rolling that
amount into a new loan. And of course, try to get the new loan without a prepayment penalty.

About The Author

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

The Zero Down 80/20 Mortgage

2007-09-19T07:07:00.000-07:00

The Zero Down 80/20 Mortgage - Mortgage-Refinance

This is an excellent loan for those that are lacking the down payment required for other types of mortgages.

The 80 20 mortgage is simply two loans for 100% of the purchase price. It is a first mortgage at 80% of the purchase price with a 20% second mortgage.

If you are a conforming borrower, doing your loan in this manner will save you from having to pay mortgage insurance. Mortgage insurance is almost always required when you have less than 20% down. But with the 80 20 loan you avoid this necessary evil.

If you are a sub-prime borrower, doing you loan in this manner will typically keep your interest rates ½% to 2.5% lower than doing a 100% one loan. A 100% one loan is simply one loan for the entire purchase price.

Many times you will have two choices when it comes to the second mortgage portion of the 80 20 mortgage. The second mortgage can either be a fixed second mortgage or it can be a line of credit.

If it is a fixed second mortgage. The interest rate is fixed for the entire length of the mortgage. Most fixed second mortgages are a 30 due in 15. Meaning that the second mortgage is amortized over 30 years, but is due in 15 years. Basically it is a balloon payment. Don't let this scare you. Statistically people refinance or sell their home every 7 to 9 years any ways.

If it is a line of credit as the second mortgage. The interest rate will fluctuate as the Federal Reserve adjusts the prime interest rate up or down. The benefit of going with the line of credit as the second mortgage is that the interest rate is normally much lower than the fixed second mortgages rate. It can be 2% to 5% lower.

If you are considering doing the 80 20 loan have your loan officer compare the two different options if you have both available to you.

You may also want to consider an 80 20 interest only loan. The interest only loan could save you hundreds of dollars in mortgage payments every month. This can help you purchase a more expensive home or keep the payments down on the home you want to buy.

About The Author Matthew Allen is a mortgage consutlant with Action Brokerage Services, Inc. in Medford Oregon. He is also the author of "How To Buy A Home With Zero Down, Even If You Have Damaged Or No Credit" You can visit his website at http://www.realmortgageadvice.com.

Reasons To Get A Home Equity Loan

2007-09-19T07:06:00.000-07:00

Reasons To Get A Home Equity Loan - Mortgage-Refinance
Using a home equity loan really depends on what your needs, wants and desires are that prompt you to take the home equity loan in the first place.

The most common reason people obtain the loan is for debt consolidation however other uses include home improvements, educational expenses, unexpected family emergencies, medical expenses and in some cases for big ticket purchases.

As expected debt consolidation is the primary reason many people obtain a home equity loan. The thinking is sound especially if they're stuck paying anywhere from 17% to 21% in credit card debt. Department store cards are another money eater that using a home equity loan to pay off could be considered smart.

Paying for an education with the loan could prove beneficial in the long run but I'm hesitant to advocate taking out a loan for that reason. The only other reason I could recommend getting a home equity loan would be to pay for a home improvement project that could increase your home's value and could also make you feel better about your house.

For absolutely no reason would I ever advise anyone to take a home equity loan out to make a big ticket purchase. It simply doesn't make financial sense in the long run. As far as for medical reasons or family emergencies I would take that case by case to determine if it would be a smart decision.

Timothy Gorman is a successful webmaster and publisher of Military-Loans-Online.com. He provides more free financial information and home equity loan uses that you can research in your pajamas on his website.
Other websites operated by Tim
Cellular-Phone-Solutions.com - Free information and resources regarding cell phones and cell phone plans.
Best-Free-Insurance-Quotes.com - Offers discount auto, life and home insurance.

Types of Home Equity Loans

2007-09-19T07:05:00.000-07:00

Types of Home Equity Loans - Mortgage-Refinance
There are at least two types of home equity loans.

The first is a term or closed end loan and the second is basically a line of credit. Most people prefer to refer to them as a second mortgage because they are secured against your home much like your first home loan or mortgage. Typically these types of home equity loans usually have a payback life of between 5 and 15 years.

The term loan is a one-time lump sum payment that is paid off over a set amount of time. There is a fixed interest rate which allows for the same loan repayment each month. After you get your money you cannot borrow further from the loan.

A home equity loan line of credit works more like a credit card. You are allowed to borrow up to a certain amount for the life of the loan. The time limit is usually set by the lender of the loan. During that time you can withdraw money as you require it to purchase items or pay for things that interest you. As you pay off the principal your credit revolves and you can use it again. This credit line gives you more flexibility than a term home equity loan.

Which ever of the two types of home equity loans that you should use depends on your unique situation. You can base your decision on some common questions such as how much money will you need, how long will you need the money for, how long will you need to pay the loan off and how much of a monthly payment can you afford.

Timothy Gorman is a successful webmaster and publisher of Military-Loans-Online.com. He provides more free financial information and types of home equity loans that you can research in your pajamas on his website.

Other websites operated by Tim

Cellular-Phone-Solutions.com - Free information and resources regarding cell phones and cell phone plans.

Best-Free-Insurance-Quotes.com - Offers discount auto, life and home insurance.

Free Home Equity Loan Information

2007-09-19T07:04:00.001-07:00

Free Home Equity Loan Information - Mortgage-Refinance
Home equity loan information can sometimes be confusing and misleading. I have written this article to properly explain home equity loans. Basically equity is the difference between your home's appraised -- or fair market value and the outstanding mortgage balance you owe on your home. Borrowing against the equity built up in a home has become extremely popular.

If you're wondering why this has become popular it's due to the tax deductions and the low interest rates that are current in today's housing loan market. It's also because of the growth of equity in most people's homes.

For instance if you buy a house for $100,000 with a down payment of $20,000 and have made payments of $10,000 towards the principal then you would have $30,000 in equity. But wait suppose your house has increased in worth to $120,000 in that case then you would have $50,000 in equity that you could use for a home equity loan.

This equity is very valuable because you can use it without selling your home. Banks consider this equity to be secure since it is based on your house so they are more inclined to give you lower rates when loaning money against the equity.

However, don't be mislead. The cost for these loans is higher then your actual mortgage rate but since many people use their home equity loan to pay off credit cards or make house improvements they end up paying less then if they had gotten a traditional loan. Best of all the interest on this type of loan is also tax deductible. When you add it all up you can actually save money in finance charges.

Anyone using this type of loan must be careful though because if a person defaults or fails to make payments on this loan then the bank can forclose on your house which could prove to be a financial nightmare for the careless borrower. For this reason I recommend using caution when using a home equity loan.

Timothy Gorman is a successful webmaster and publisher of Military-Loans-Online.com. He provides more free financial and home equity loan information that you can research in your pajamas on his website.

Other websites operated by Tim
Cellular-Phone-Solutions.com - Free information and resources regarding cell phones and cell phone plans.
Best-Free-Insurance-Quotes.com - Offers discount auto, life and home insurance.

Understanding UK Bridging Finance

2007-09-19T07:03:00.001-07:00

Understanding UK Bridging Finance - Mortgage-Refinance
Bridging finance, also referred to as "bridge loans" and "bridging loans", have nothing at all to do with re-constructing the London Bridge. Bridging finance is typically a short-term loan that a business uses to supply cash for a real estate transaction until permanent financing can be arranged. The word "bridge" conveys the fact that the loan is designed to get you over a temporary obstacle.

A typical use for a bridge loan is to cover situations such as when a company needs to close on a new office building before having sold their old one. They would use the proceeds of the bridge loan to continue making payments on the old building until it is sold.

Bridging finance almost always requires that you pledge some sort of collateralas security against the loan. You could offer up commercial or private real estate that you own,or are in the process of buying, machinery and office equipment or even existing inventory. If you have outstanding business and personal credit, as well as an outstanding relationship with your lender, you might be able to secure your bridge loans on just a signature.

Because the need for bridging finance sometimes arises suddenly and without warning, it is a good idea to establish a relationship with a lender before the actual need arises. When you do this you can arrange to be pre-approved for a specified loan limit. Later, when the need suddenly arises, you won't have to wade through all of the red tape. The typical term for a bridge loan runs from a fortnight to as long as two years. Of course, any terms can be negotiated and a motivated lender
will work hard to match your needs.

Since bridging finance usually lasts for a relatively short period you may find that the interest rate you are being asked to pay is slightly higher than a more conventional type of loan. Lenders make their profit by charging interest across the life of the loan. The shorter the loan period the less interest they earn. As a result many lenders will often boost the rate by a 1/2 point or more. In general, the length of the loan, the amount of risk that is present for the lender, the quality
of your credit history and the liquidity and value of your collateral all are used to help determine the interest rate.

Your best bet for securing a bridge loan at the most favourable rates and terms is to work with a qualified UK Commercial Mortgage Broker who understands the ins and outs of bridge loans. That way you can get your application in front of as many lenders as possible and end up with several who are willing to compete for your business.

Understanding a UK Commercial Mortgage

2007-09-19T07:02:00.001-07:00

Understanding a UK Commercial Mortgage - Mortgage-Refinance
In many ways a commercial mortgage is just like a residential mortgage in that you pledge real property as collateral against a loan to either buy or refinance that property. You can also receive a commercial re-mortgage and use it as a line of credit for any business purpose.

When you use a commercial mortgage to buy property, or to raise funds for any other business purpose, the lender retains an interest in that property until the loan has been paid in full. Unlike other types of business loans, which usually have a relatively short repayment period, you can take out a loan for as long as 30 years if you like.

The lender receives repayment of the commercial mortgage principal and interest over the lifetime of the loan. If you default on the loan and go into arrears then the lender can foreclose and take possession of the property that was used as collateral.

Generally speaking, the interest on a commercial mortgage is tax deductible and the net proceeds of the loan are not considered to be taxable income. However, you should always check with your accountant to be sure because the tax consequences can be severe should it be determined that your usage of the funds was not for a qualified business purpose.

Should you be seeking a commercial mortgage for the purposes of operating your business, rather than actually buying property, then the lender will either want to re-finance your current mortgage, and include enough money to provide the amount that you are seeking, or they may arrange an equity line where they lend you the difference between the current value of your commercial property and the amount that you owe on the current mortgage.

There are generally two types of interest schemes available when you are applying for a commercial mortgage.

The fixed rate commercial mortgage establishes an interest rate that is in place either for the life of the loan or for a fixed period of time. If it is for a fixed period of time then it will normally convert over to the second type of rate, which is called a variable interest rate, after the fixed time period expires.

In some cases your lender may add a Early Redemption Charge (ERC) clause to your commercial mortgage contract which states that if you pay off the note prior to the end of the fixed rate period then the lender is entitled to a one-time lump fee to offset their loss of expected income. In some cases this ERC may extend to longer periods possibly up to the entire term of the loan. Be very sure to read your loan contract carefully to make sure that you understand the implications of the ERC
if it is present.

With competition from lenders heating up you'll find that many of them are dropping ERC clauses all together. If there is one present in your loan contract you may be able to negotiate it away with little effort. It's worth trying in any case and you can always apply somewhere else if your lender is not willing to negotiate.

In the case of a variable interest rate commercial mortgage the rate is based upon those issued by Bank of England. The lender will usually state that the rate consists of the published rate, which will likely vary up and down over the life of the loan, plus some pre-determined premium that remains the same for the life of the loan. Be sure that you understand how frequently your rate will change and that you are comfortable with the amount that the lender is charging as a premium. As with
any terms of your loan you can negotiate both of these factors.

A fixed rate commercial mortgage is a good choice when you feel that interest rates are headed up sharply and you want to lock in the current rates. On the other hand, if interest rates are in flux, and economic indicators point to a downtrend, then a variable rate may be your best choice.

Keep this strategy in mind during the lifetime of your commercial mortgage. If you are locked into a fixed rate, and interest rates have dropped significantly below what you are paying, you should consider applying for a re-mortgage and selecting a variable interest rate to take advantage of the lower rates. On the other hand, if you are in a variable, and all indicators are that interest rates will be skyrocketing soon, then look to move into a fixed rate so you can protect yourself
against future increases.

Housing Bill - Changes in the Right To Buy Scheme

2007-09-19T07:00:00.000-07:00

Housing Bill - Changes in the Right To Buy Scheme - Mortgage-Refinance
Presently council tenants are able to purchase their rented property after 2 years of tenancy. However, this is about to change. As of the 18th January 2005, the new Housing Bill becomes law and the current 2 years will change to a period of 5 years. This means, that once the proposals come into force, any new council tenant will have to wait 5 years before having the option of buying their property.

There is also a proposal to extend the period during which landlords can require owners to repay some or all, of the discount given on a property in the case of an early resale.

Currently, purchasers of a property that has been bought on the right to buy scheme, can sell after 3 years with no requirement to make any repayments of the discount. The proposal suggests this should be extended to 5 years. Therefore, anyone who sells a property bought under the right to buy scheme within 5 years of the purchase, will be requested to repay a percentage of the given discount. Repayment figures are as follows: -

Currently Sale within the 1st year - 100%
Sale within the 2nd year - 66%
Sale within the 3rd year - 33%

Proposal amounts Sale within the 1st year - 100%
Sale within the 2nd year - 80%
Sale within the 3rd year - 60%
Sale within the 4th year - 40%
Sale within the 5th year - 20%

With the predicted drop in house prices in 2005 (meaning lower property valuations) combined with the new proposals further restrictions on council tenants wishing to purchase, now may be a good time to consider a right to buy.

The proposed changes in the right to buy scheme include measures to reduce the attraction of purchasing a discounted property with the prospect of selling it to make a profit.

The initial idea of the right to buy scheme was to give ordinary families the opportunity to own their own homes, something they may not have been able to afford otherwise. However there are concerns about the effects this has had on local housing stock and a number of people profiteering from potential windfalls in expensive property areas.

Exploitation in the Right to Buy Scheme

There have been several schemes where third party companies encourage tenants to purchase their homes under the right to buy scheme, by offering them cash incentives. The tenant purchases the property at a discounted price under the right to buy scheme and simultaneously exchanges contracts to sell the property to the company after 3 years at which point no discount penalty will be repayable. The tenant will lease the property to the company and move out of the home with a cash sum. This
leaves the company free to rent out the property at the current market rental rates.

After three years the tenant sells the property to the company. The company will either continue to rent the property at market rates or the property will be sold on at a substantial profit.

The incentive for the tenant is the lump sum offered, which can be anywhere from £5000 to £26000 but is usually a percentage of the equity of the purchased property. This could be attractive to tenants who do not wish to purchase their current home or hope to purchase a property in another area as it will give them a ready made deposit to buy another home.

The new proposals are designed to make this type of sale less attractive and prevent profiteering as well as securing local housing for the less well off.

A New Choice for Home Financing: Correspondent Lenders

2007-09-19T06:58:00.000-07:00

A New Choice for Home Financing: Correspondent Lenders - Mortgage-Refinance
When you begin your search for a new home loan, one of the first things to consider is where you'll get the money. Your basic choices will be mortgage brokers and banks.

Your first instinct may be to go with your local bank, who you know from doing business with them for other things, such as your checking and saving accounts. But you've probably also heard that mortgage brokers can get you a better interest rate, since they deal with hundreds of lending sources. It can be confusing, but there's a third source of funding that combines the best of both--the correspondent lender.

In order to understand the differences, let's look at how the lending process works in each case. Mortgage bankers are given rate sheets by their institutions, telling them what interest rates they can quote to their clients on any given day. There's only so much a bank can do, with regard to interest rates, because it needs to remain profitable in order to stay in business.

Mortgage brokers have an advantage in that regard. They're not loaning their own money, and are free to "shop your loan around," looking for the best terms from various lending sources. They make their money by getting loans at discount prices and then marking them up, making money on the difference. Since they have many sources to choose from, they can often find loans at lower rates than most banks.

The third alternative, correspondent lenders, combines the best features from both groups. Correspondent lenders are similar to mortgage bankers in that they make the lending decision and fund the loan with their own money or credit line. However, as soon as a loan has closed, it's sold to another lender at a previously negotiated price. It's the best of both worlds for you as a borrower. You'll be dealing with the banker who is funding your loan, yet that banker is able to shop your
mortgage around, which can obtain you a lower interest rate.

Correspondent lenders can sometimes be difficult to find, since they're generally smaller institutions, operating on a regional basis, and it can be hard to tell whether a lender is a broker or a banker, based solely on the company's name. One way to find out is by visiting the lender's website, if they have one. You'll normally find a button you can click that will bring up a page containing a detailed description of the company. If the lender doesn't have a website, you may find
their phone number in the Yellow Pages.

Although they may not always be easy to locate, with a little digging, you may find that a correspondent lender offers an attractive alternative to a banker or mortgage broker when it comes to shopping for your next home loan.

Jeanette Fisher is the author of "Credit Help! Get the Credit You Need to Buy Real Estate," and other books. Real estate financing questions? Visit the new Real Estate Credit Help Center for articles, Credit Tips ezine, and blog: http://www.recredithelp.com

Are Biweekly Mortgages Really Worthwhile?

2007-09-19T06:57:00.000-07:00

Are Biweekly Mortgages Really Worthwhile? - Mortgage-Refinance You may have heard people, especially mortgage lenders, extolling the virtues of biweekly payments, saying that you can save thousands of dollars and take 5-7 years off your mortgage--and then offering to set up a biweekly plan for you for as little as $400. But you don't have to spend $400 to begin saving money and time on your mortgage. In fact, you don't have to spend anything at all! You can set up a money-saving
mortgage payment plan yourself--easily and at no extra cost.

The key is to look carefully at the fine print in many biweekly plans. You find that even though you'd be making biweekly payments, the lender may only post them to your account on a monthly basis, which means that you wouldn't be saving anything on interest, because mortgage interest is paid in arrears (as opposed to rent payments, which are paid in advance). Your only real savings would be in the fact that you'd be making the equivalent of one extra payment a year. That's a good
thing, of course, but you don't need to pay someone $400-500, possible monthly maintenance fees, to be able to accomplish the same results.

Here's how biweekly payments save time and money: By making biweekly payments, you actually end up making an extra monthly payment each year. Over the course of a year, you'd make 26 payments (one every other week for 52 weeks), which is the same as making 13 monthly payments. Making one extra payment per year will shorten the life of your loan and save you thousands of dollars.

But you don't have to make biweekly payments to obtain those savings. Here are a couple examples of how you can save big money, using the same basic idea:

If you get paid every two weeks, divide your monthly principal and interest payment in half and then send your lender a check for that amount during those months in which you receive three paychecks. Just sending in those two extra checks will be the equivalent of one extra payment a year.

If you don't want to send lump checks, you can get the same results by dividing your monthly principal and interest payment by twelve and then adding that extra amount to your payment every month. Normally, that figure won't put too much extra strain on your budget, and it will add an extra mortgage payment to your loan every year.

You really can save significant amounts of money and shorten the life of your loan by making extra payments, but you definitely don't have to pay a lender $400-500 to do it. Making those extra payments is easy to do yourself, and at no extra charge--which is always a good thing.

Professor Jeanette Fisher is the author of "Doghouse to Dollhouse for Dollars," "Credit Help! Get the Credit You Need to Buy Real Estate," and other books. Real estate financing questions? Visit the new Real Estate Credit Help Center for articles, Credit Tips ezine, and blog: http://www.recredithelp.com

Total Cost Of Credit vs Monthly Payments

2007-09-19T06:56:00.000-07:00

Total Cost Of Credit vs Monthly Payments - Mortgage-Refinance
I read a press release the other day which points to the fact we need to be very careful with our finances. The subject of the release was home mortgages. A company was announcing the availability of 40 year mortgages for its customers. The stated purpose was to lower the monthly payments to make buying a home more affordable.

Whenever I hear the phrase "more affordable", I put my hand on my wallet because the attempt to empty it will begin any moment. Almostnever is that phrase used in relation to the total cost of financing. It isalways used in reference to the size of the monthly payment, as in this example.

Let's see what it really means. I did the math. A mortgage for a $100,000 home at 6% for 30 years would have a monthly payment of about $600 for principal and interest. You would pay about $216,000 over the life of the loan of which $116,000 would be interest..

A mortgage on that same home for 40 years would be at 6.25%, with a monthly payment of $565. The payments over the life of the loan would total about $271,200 and $171,200 of the total would be interest.

The forty year mortgage has a higher interest rate (usually between.25 and .50 percent) because the lender has his money at risk for a longer time (Lenders are well aware that time is money. You should be as aware).

This higher rate coupled with the extra ten years of the loan, has the borrower paying 47% more interest, or $55,000 more over the life of the loan. Even with a lower payment that supposedly makes it more affordable to purchase that home. Sounds like a pretty good deal for the lender.

Another problem the borrower faces is building equity much more slowly in the beginning of the loan. The extra interest expense paid for the extended length of the loan prevents equity from building up quickly. All of this for a monthly payment that is only $35 less.

You need to think in terms of overall cost and not just monthly payments. The total cost is what you will give back to your creditors. The focus on the monthly payment takes attention away from the total amount to be repaid. You need to look at this with any indebtedness, car payments, personal loans, credit cards: figure the total cost, not just what you pay each month.

You'll begin to hear more about these loans I'm sure. Think long and hard before you lengthen your indebtedness. The goal is to become debt free and to do it as fast as possible. Advise your families and friends to do the same.

David Wilding works with indiviuals and groups to help them get rid of debt. For the past ten years he has attempted to change attitudes toward and acceptance of personal debt. Visit his website http://www.debtattack.com for more ideas, tools, and strategies to become debt free.

How Good a Deal Is Your Banks Mortgage Insurance Plan?

2007-09-19T06:54:00.000-07:00

How Good a Deal Is Your Banks Mortgage Insurance Plan? - Mortgage-Refinance

When you go to the bank to get a mortgage, you'll inevitably be asked to take out mortgage insurance. The idea behind mortgage insurance is simply that if something happens to you or your spouse then your loan will be paid off which is good news for your family and the bank. Most financial institutions act like they are doing you a favor by offering you mortgage insurance through their own group plan, but are they?

The truth is that you could probably get a much better deal and at least an equal amount of protection by shopping around for your own insurance policy.

Essentially, mortgage insurance is no different than term-life insurance. With both, your policy only lasts for a specified period of time and pays its benefits if something happens to you or your spouse. The real difference comes down to how much control you'll have over your policy and how much you'll pay for it.

If you choose to use the mortgage insurance offered by the bank, you will not be able to customize a policy to fit your needs and you'll be lumped together with other borrowers under a group plan. Because of this, you will only have limited control over your policy. For example, through a third party provider, you would be able to choose your own beneficiary, decide how to spend the proceeds if necessary, and cancel the policy at any time. You would not have these options with a lending
institution.

Additionally, the bank maintains the right to not renew your policy and to cancel the policy when you sell the house. If you find your own insurance provider, you can make those decisions yourself.

The other big difference is cost. A third party insurance policy's premiums will not go up, so you would pay the same premium today that you'd pay ten years from now. You won't get that same guarantee from a bank which can and probably will increase your premiums during the life of the policy. In most cases, you'll probably pay more through a bank anyway. In fact, you could pay as much as 40% more than you would if you shopped around and found your own insurance provider. Not to
mention that the policy you take out through your bank will gradually decrease in value while a plan you select from an outside source will be worth the same amount during the entire policy period.

Of course, many people don't mind paying more for their mortgage insurance because it's more convenient than dealing with insurance agents. The truth is that you can easily find a policy that fits your needs and provides affordable premiums via the Internet. An organization, such as the Hughes Trustco Group, can even generate quotes for you from multiple insurance providers so you'll know that you're receiving the best deal possible on the policy you want.

The bottom line is that mortgage insurance is important and should be part of your home buying or refinancing preparations, but that does not mean you need to pay more or let the bank make important decisions for you. Instead, you should find your own personal plan from a third party provider which will let you stay in control of your policy and will save you money in the long run.

Ivon T. Hughes, The Hughes Trustco Group Ltd. Canadian Insurance Broker - Get a FREE Quote TODAY! Tel: (514)842-9001 Email: info@trustco.ca Web: http://www.trustco.ca

Bankers Dont Want You to Know That You Pay for Your No Cost Home Loan Forever

2007-09-19T06:53:00.000-07:00

Bankers Dont Want You to Know That You Pay for Your No Cost Home Loan Forever - Mortgage-Refinance

With mortgage rates continuing on a downward trend, the competition in the business is fierce. A day never passes that I don't hear some crazy advertisement about a new loan program that XYZ mortgage company has and no one else offers. One of the oldest programs remains steadfast in both its high profile and its duplicity. This program is the No Cost Home Loan -- the one bankers say is free, but you actually pay for as long as you have the loan.

The no closing cost home loan is virtually everywhere. It is advertised in the mail, on radio and on TV all the time. "Hey, refinance your loan today, and there will be no closing costs," the ads scream. Wow, a free loan. Imagine the money you'll save. So, if you are in the market for a refinance loan or home equity line, which you probably should be, with rates at all-time lows, you might consider running to XYZ mortgage company, who is now offering free mortgage loans.

Just be careful you don't go bankrupt, along the way. Remember, the old cliche, Nothing in life is free, because it makes a lot of sense. You actually can get a mortgage with little or no closing costs. What bankers don't tell you (one of their great secrets) is that you pay a higher interest rate than you really qualify for, when you get your loan for "free." So, you might save $2,000 or $3,000 in closing costs, but your monthly payment could be $100 to $300 higher than it would have
been if you had actually paid the costs.

Imagine taking this loan and saving $2,000 in total closing costs. Perhaps you borrow $200,000. Now, if you simply pay all the costs and tell the banker you want the best rate available, let's say it is 6% for this example, you would have a monthly payment of $1,199. Now, let's assume the wiley banker convinces you to pay no closing costs and take an in terest rate of 7%. He might say, "Now, your interest rate will be a bit higher, but you'll save $2,000 in closing costs." Sounds
great, you might think.

What he doesn't do, though, is spell out the difference in the 6% rate you could qualify for, versus the 7% rate you choose to take for your "free" loan. If you borrow $200,000 at 7% interest, your monthly payment is $1,330. This is $131.00 more each month than you will pay on the same loan at 6% interest.

If you choose to pay the closing costs and save $131.00 monthly, it will take you 15 months to get your $2,000 in closing costs back. Now, if you keep this loan for five years beyond that first 15 months, you will save an additional $7,860 at the 6% interest rate. If you listen to the crafty banker, selling the No Cost Loan, you'll allow nearly eight thousand dollars to drift right up your home's chimney.

Unless the difference in the interest rate on your no closing cost loan and the loan with costs is a tiny amount, say .125%, you are almost always better off paying the costs. Be sure to ask what the difference in the rates is. Then learn exactly what the total closing costs will be. Calculate the difference in the two monthly payments (one with closing costs and one without). If that amount will pay back your closing costs in two years or less, and you intend to remain in your loan for at
least five years, pay the costs and take the better rate.

Use this method, and you'll never go wrong.

Mark Barnes is author of the wealth-building system, Winning the Mortgage Game and other investment real estate books. He is also a suspense novelist, and his new novel, The League, will thrill both suspense and sports fans. Learn about Mark's wealth-building system and get his free home loan course at http://www.winningthemortgagegame.com. Learn more about The League and read an excerpt at http://www.sportsnovels.com

Selling Your Business Note

2007-07-24T09:00:00.001-07:00

Before I go further, let me ask a question- if you won the lottery
tomorrow, would you take the payout in a lump sum or in monthly payments?

Most people would take a lump sum because even though it might be less
than the total prize, they would have control over a large sum of money
now and could let the time value of money go to work and increase their
winnings.So why then would you opt to get paid on your business sale over
several years rather than take a lump sum payout?

The answer is probably because you didn't know that you could get cash
for your business note. Peacock Capital can help you to sell your
business note at a discount and cash out now, rather than later.

Advantages to sell your business note include:

? Walk away from a business you didn't want without having a financial
anchor still attached to you for the next several years

? Use the balance owed to you to fund a new business, pay off debts or
finance education for yourself or your loved ones- now!

? Avoid the risk that the buyer will default on the loan

? Avoid the risk of the buyer going bankrupt

? No need to wait for monthly payments

If you are going to sell your business, the following criteria should be
structured into your note so that it will be more attractive to investors
for purchase:

? Down payment of 30% or more

? Personal guarantee from the buyer

? Short term financing - the shorter the term the better

? Minimal seasoning of the note is needed - usually two months at least,
depending on the type of business.

A note for a business that has substantial tangible assets will be easier
to sell compared to one that does not - example: machine shop versus a
coffee stand.

***Afra AmirSanjari is the Principal for Peacock Capital. Peacock Capital
specializes in solving the cash flow challenges of Small/Medium
Businesses, Government Vendors and Individuals with innovative financial
solutions by providing a network for securing operating capital.

http://www.peacockcapital.com
info@peacockcapital.com