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How Home Loans Work: Summary Of The Markets

October 16th, 2008    Subscribe To Our Feed

To better understand the process of getting a mortgage loan, you need some tips to know how the mortgage market actually works. The mortgage market has two main parts: the primary market and the secondary market.

The Primary Market

The primary mortgage market is made up of lending institutions and banks that extend loans directly to consumers and prospective home buyers like you. Basically, if a financial institution keeps the loan that it makes to you, then it’s a portfolio lender or a primary lender.

Examples of portfolio or primary lenders include credit unions, savings and loan companies, and banks. Portfolio lenders can be a little more flexible in their loan offerings and often more creative than lenders who sell their loans to the secondary market.

The Secondary Market

The secondary mortgage market is made up of institutions like Fannie Mae, Freddie Mac and others that purchase loans from primary lenders or mortgage bankers. In turn, they package these loans into mortgage-backed securities (which are like bonds) and then sell them on the world capital markets.

Before a loan can be sold, it has to be a “conforming loan.” That means both the collateral and the borrower have to meet a certain quality and credit standard. Any loans that fail to meet these standards are considered “non-conforming” and are kept in the issuer’s portfolio until there’s enough buyer equity built up to sell the loan or it can be classified as “seasoned.” This happens when the borrower has made on-time monthly payments for a set period of time.

Because over 60 percent of all loans are sold on the secondary market, some lenders have very particular lending standards that the borrower has to meet to make the loan conform.

How the Mortgage Loan Process Works

Mortgages are complicated and often time-consuming. Predatory lenders can take advantage of misinformed borrowers, so it’s important to equip yourself with a mortgage education. Become familiar with the mortgage process, learn what’s available in your market and always try to find a credible mortgage adviser to help you through the process.

The first step to get a good mortgage is having a healthy down payment. This money can be savings, a gift from a relative or sometimes a secondary mortgage. Next, the lender will want to review your credit. If your down payment and credit scores are healthy and it’s determined you pose a small risk of foreclosure, you should qualify for a mortgage with a low interest rate and favorable repayment terms.

Mortgage Protection - Is It Worth Considering?

October 10th, 2008    Subscribe To Our Feed

Redundancy Insurance is one of the most under bought and misunderstood insurances available in the UK. Many people, having been caught out by the hugely expensive payment protection insurance charged alongside personal loans, have shied away from finding out about Redundancy Insurance. Even those who have not been caught out themselves, know someone who has, or have been aware of the campaigns of Which? and other bodies.

Mortgage Protection

Quite simply, Redundancy Insurance, or Accident Sickness and Unemployment cover as it is sometimes called, is designed to pay your mortgage if you can’t. The policy is designed to cover your mortgage payments, normally for up to a year, if you lose your job, or otherwise are unable to work as a result of accident or illness. With the UK entering a recession, having cover in place may be the difference between losing your home or keeping it.

In fact, like any insurance, the price is determined by the level of risk the insurer feels they are being exposed to, and therefore, in times of rising unemployment it seems only logical that the price of such insurance will also increase. Indeed, Norwich Union have recently taken the decision not to underwrite cheaper unemployment only policies, and will only underwrite a combined policy whish includes accident and sickness cover as well.

Accident Sickness Unemployment Insurance

Policies can be bought direct from your mortgage lender, but many still charge premiums in excess of £5 or £6 per £100 of monthly cover. Whilst this is still far cheaper than typical loan payment protection, it is still expensive when compared to what can be achieved by shopping around.

A good example of this is the Accident, Sickness & Unemployment Insurance that was awarded a “What Mortgage” best buy award in both 2007 and 2008, and frequently tops the Moneyfacts and Defacto best buy tables. The policy charges just £3.95 per £100 of cover, and for applicants who buy online the first three months is FREE.

Like most insurances, there are some who do not benefit, and the self employed in particular should read the small print of policies carefully. Those who have started a job very recently will not be covered for the first few months, but for everyone else the message really has to be “buy now whilst stocks last”.

Mortgage Payment Protection

If you need help in finding Redundancy Insurance? Simply click on one of the mortgage payment protection links above.

Tim Lee – The Mortgage Warehouse

Is Buoyancy Beginning To Come Back In House Sales Uk Amongst Companies That Buy Houses

October 9th, 2008    Subscribe To Our Feed

We closely monitor House Sales UK, and it’s highly interesting to note that most of the Companies that buy houses are not showing any signs of being too anxious about whether or not they can speedily sell all the houses they can get hold of. But, they do seem to be very anxious to make sure that anyone wanting to sell a property knows how to find them as easily as possible, and more significantly, sees their “We buy Homes” message as often as possible.

I believed that those Companies that buy houses who happen to be highly geared will, on the one hand be seeking to cut their borrowings, and so wouldn’t be seeking to buy much in the present economic environment. On the other hand, if they are fortunate enough to bank and borrow from one of the triple A Banks (the ones who source most of their funds for lending from their own depositors), then it seems rational that those banks would be quite anxious only to lend out their funds to their own dependable account holders with whom they have a good relationship and financial understanding. After all, the Banks are thoroughly disinclined or unable of lending to each other during the present economic environment.

Companies that buy homes who are not so highly geared will most likely have the opposite problem. If they don’t buy houses at least as fast as, or preferably faster than they sell them, they may soon end up with seriously large bank balances. They would then end up having to face the problem of risking their cash in Bank Deposits where only the first fifty thousand pounds would be secured by a government guarantee.

All of the above is a likely explanation for the sustained eagerness of Companies that buy houses continuing to do just that. But could it also be because these firms consider that we are near enough to the bottom of the trough in House Sales UK Prices?

After all, Companies that buy houses typically pay about 80% of the market price of a property, so if they consider that we’re within 10% to 20% of the base of the trough, and they especially do not want to run the risk of keeping large cash deposits in the bank, wouldn’t it make more sense for them to keep shouting “We buy Homes” and buying up all the houses that come their way?

Then they just need to wait until the market is back on the rise before making as concerted an effort in sales as in purchasing. After all they may, in the meantime, accept any sales which come along. I know that in their situation, if I was certain that my interpretation of the market was spot on, I wouldn’t be in any panic to turn property into cash unless I was getting the absolute full value I’d attached to it. Especially if I’d bought at 20% under current valuation, and the trough looked like bottoming out at just about that very point.

A Concise Overview Of How The “buy House” – “sell My House” Procedure Functions In The United Kingdom

October 8th, 2008    Subscribe To Our Feed

House Sales UK is not a single discipline. A separate legal code operates in England and Wales on the one hand and Scotland on the other.

The first thing you absolutely must have before you even start the “Buy house” or “Sell my house” process in either England and Wales or Scotland, is a good solicitor with a good reputation for conveyancing. Personal recommendation is the best way to get one or you could simply call the Law Society.

Next, unless you’re lucky enough to have the funds ready to buy a property, you will definitely need to have a mortgage agreed. All the High Street Banks and the few remaining Building Societies will issue mortgage in principle agreements showing that, subject to valuation and status, you are a guaranteed a loan up to a certain sum.
A mortgage in principle and your solicitor’s details will persuade the vendor that you are serious, and so should speed up things.

If you’re selling your property; make sure that the potential purchasers have already sorted out these 2 very basic steps. If they haven’t you’ll almost certainly be wasting your time.

Once you’ve chosen a property you want to have, and agreed the price, you instruct your solicitor to draw up a Buy my home contract, and the vendor’s solicitors in co-operation draws up a property sales contract. When everything is agreed the contracts are “exchanged” between the solicitors, and the buyer’s solicitor transfers a deposit of usually ten percent of the total agreed property price to the Vendor’s solicitor.

Once the contracts have been exchanged, the Vendor is legally committed to “Sell my house” at the agreed price, and subject to the terms & conditions of the contract. At the same time, the buyer is committed to “Buy house” on the same terms. If the buyer backs out or cannot complete the deal, he loses the deposit. If the Vendor fails to complete the deal he can be sued for damages.

From this moment on, the deal is fixed, and the buyer can’t be “gazumped” (that is where another buyer suddenly appears and offers more money), nor can the Vendor be “gazundered” (where the buyer suddenly decides to pay a lower price that that agreed in the exchanged contracts.

The final step is to arrange completion. This is where the remaining cash passes from the buyer’s to the Vendor’s solicitor, and the change of ownership becomes effective. This step can be on the same day as exchange, but most solicitors prefer to have a few days gap between the two steps.

Several Mortgage Advice For The First Time House Borrower

October 6th, 2008    Subscribe To Our Feed

Buying your first home? Is the whole lending process confusing? Not sure what the difference is between a variable rate and a fixed rate mortgage? Do you understand the true cost of borrowing? Keep reading for 7 invaluable mortgage tips that are critical for any first time home buyer.

1. The bigger the down payment, the better.

The lower your down payment, the more you’re going to pay. With a 5 percent down payment, for example, you’ll be expected to pay for mortgage insurance and will most likely be subject to higher interest rates. Most lenders like to see a down payment of at least 10-20 percent.

2. Good credit will save you money.

Lending institutions base your interest rate and your subsequent cost of borrowing heavily on your credit rating. If your credit is poor, you may be advised to wait a few years while you build your credit back up. The amount you save with a lower interest rate after rebuilding your credit could be tens of thousands of dollars over the life of the loan.

3. Remember the closing costs.

Every mortgage has hidden costs associated with it, from legal fees to home inspections to bank’s closing costs. Before you commit to any mortgage, remember to ask about all the closing costs. You don’t want a $5000 surprise - much less 10 times that amount! - on closing day.

4. Get pre-approved.

While pre-approval can sometimes be more difficult, you can also save yourself a lot of unnecessary headaches. Essentially, you apply to the bank for a potential mortgage up to a certain amount. From there, you have a clear idea of your budget as you search for houses, and you can consequently make an offer that won’t be dependent on potential financing.

5. Investigate FHA loans.

The Federal Housing Administration (FHA) offers free loan insurance to qualified buyers with a minimum 3 percent down payment. This insurance means you can get a better rate from lenders without having to pay for outside mortgage insurance. Typically, the FHA sets maximum limits that depend on your county and region, but are based on the median house price for that area.

6. Budget for home insurance and property taxes.

No lender will mortgage a home that has tax liens on it or isn’t properly insured. When laying out your home ownership budget, always remember to calculate a monthly cost for county property taxes and home insurance.

7. Choose a reputable lender.

Don’t just accept the first mortgage offer you receive. Instead, look for a lender that’s stable, reputable and able to offer you quality customer service. A lending institution is one you will likely be dealing with for 30 years, so finding one with a stable history and good reputation should be a high priority.

How To Sell Property Quickly Even During The Current Down Turn

October 5th, 2008    Subscribe To Our Feed

Yes it’s true! Even in the present recession; you can still find Cash House Buyers whose chief function is to permit you to Sell property quick. These Companies that buy homes have grown up over the last 2 or 3 years in answer to the increasing demand from house owners who are stuck in a chain, who have set their hearts on several properties, only to see them sold from under their noses because they couldn’t sell their own house in time.

Within some house buying chains there are several such people, and they all have one desire in common. They just want to Sell property quick. Many of them are now realising that it’s better to accept the lower offer from Cash House Buyers, because that in turn makes them Cash House Buyers, and so, as Cash House Buyers they are then in a very strong bargaining position when it comes to buying their next house .

Even when they are competing against several other buyers who’ve agreed to pay the full asking price, Cash House Buyers can often get the house at a very hefty discount, because vendors are beginning to realise that many of these would be purchasers may never be ready to complete the purchase, because, by locking themselves into a full price deal, they’ve left themselves no flexibility for negotiation on the house they’re selling. So the sale could take a very long time or indeed, may never happen at all.

The lure to Sell property quick becomes particularly strong in particular as the seller comes under pressure to complete the purchase of his next house , or worse still, if he actually misses the house he’d set his heart on.

This is just when Companies that buy houses or even private Cash House Buyers can come to the fore and help to break the classic house buying chain.

Of course, for this to come about requires a good deal of imagination and negotiating skill on behalf of the first person to break the house buying chain. He must be the one who can see beyond the big discount he must give to the Cash House Buyers in order to Sell property quick.

Typically Companies that buy homes offer 80% of a house’s market value. Now that seems at first like a stunning loss on what is, for most people, their largest asset. But, remember to offset against that loss all the savings to be made by selling to Cash House Buyers. There’ll be no advertising or Estate Agents fees, and if you go down this route in the beginning, there’ll be no HIPS to pay for. Additionally, you’ll be in a formidable negotiating position for your next purchase, because you’ll have now become Cash House Buyers yourself.

You’ll certainly be able to find and buy a house that you really want at a discount of at the very minimum 10%, and maybe more. When you add that together with the other savings you’ve made, you should see that the net result of giving away 20% to Sell property quick in order to break out of the vicious house sales chain, is that you should be able to claw back most, or if you’re lucky, all of it.

Just remember, the easy bit is giving away the discount on your own house . Don’t do that unless you’re confident that you can follow that up with hard bargaining as a buyer later. Don’t begin this process if you only have your heart set on buying one particular house . You need to have several potential properties in mind to buy, so that you can negotiate from a detached standpoint.

Your Insightful Recommendations About Retirement Tactics

October 4th, 2008    Subscribe To Our Feed

Retirement can be the most dynamic part of your lifetime. When you properly design your retirement strategy, you will discover that retirement affordsyou the freedom to explore everything that life can provide. To prepare for an outstanding retirement, you need to set goals to make certain you remain course. However, not all retirement goals involve money.

One significant aspect of planning for your retirement is your health. You can begin today preparing to have a healthier body. You could enroll in a Yoga course, or begin taking a daily walk around your neighborhood. If you want to drop a few pounds, you can develop a program for that also. You need to be as healthy as possible once you retire, so you won’t be restricted in what you are able to do once have the time to begin enjoying your life. So one of your early goals could be to preserve or improve your general health and fitness. You see that retirement is not just about 401 retirement plan.

Retirement planning services companies provide long-range planning and guidance for retirement plans, building a clear path to financial security. They conduct seminars on retirement planning to Federal, State and local government employees and businesses in the private sector. Plenty of research and analysis on retirement planning is conducted by these agencies.

Don’t think of retirement as a destination. Some of the happiest people in the world never retire. Consider your retirement plan to be a guide to the wonderful years ahead.

Think of those colorful maps you get when you visit Disney World or any of the big theme parks. A big mass of space with lots of paths to all the wonderful rides and shows - that is your retirement plan. There is no single destination. You want to see and experience every good and happy event possible during this great time in your life. Without a retirement plan, you may show up at the gate after hours, with no money to get in or be too feeble to walk the paths or maybe miss the park altogether.

So, where do you start? Your mindset; use the seven points above as affirmations. Say them out loud or write them down on paper every day. Don’t tape them to your bathroom mirror and ignore them. You are a Baby Boomer. You have life experiences and you’re smart enough to be reading this article. But if you feel like you are in a rut or traveling down the wrong path, start making changes today. Grab control of your life and make the next thirty years the very best humanly possible.

Also make sure that you know how to save your paper money from the results of all these bailouts and even bigger bubbles - read about junk silver coins and junk silver bags.

Home Buying – Could It Offer A Safe Path Through The Downturn?

October 4th, 2008    Subscribe To Our Feed

If you’ve been hard working and lucky enough to amass a sensible amount of capital in your business life, you need to ensure the current uncertainty doesn’t make you a victim by destroying all that you’ve sensibly built up.

In ordinary situations, Bank Shares, Bank Deposits and Real Estate are considered to be just about bullet proof homes for your hard earned funds, but in the current crisis, if you have in excess of a few tens of thousands of pounds, you’ll need to split it across dozens of banks in order to be sure that your deposit is guaranteed in the event of a bank going bust.

It’s very ironic that the current instability started by banks over enthusiastic participation in the Home Buying market, and that this has brought about the fall in property and Bank Share prices, and the doubt about which Banks will suffer share price collapses which push them under the required capitalisation level for the loans and Deposits in their accounts. If that comes about, the bank can’t continue to operate and must either fail or be taken over by another bank or in the ultimate resort be nationalised. If any of these things come about, the unlucky shareholders are unlikely to get very much if any of their investment back, and depositors will have some guarantees, but only on the first few tens of thousands of poundsworth of deposits.

None of the above is much consolation to those of us who are at that juncture in life where we can’t or simply just don’t want to have to start again from nothing, so what can we do? We’re told that the Home Buying market is still on the downward slope, so prices will go down before they recover again, large bank deposits are no longer fortified by cast iron guarantees, and Bank Shares are only OK if you know for certain that the bank in question takes in the majority of its cash for lending from its own depositors rather than the money markets.

Here’s my suggestion for consideration: First of all ensure you have more than enough ready money to get you through anything the next 2 years can throw at you; then, why not use some of the rest in becoming or investing in Home Buying either as Cash House Buyers or by investing in a Home Buying company that has in place a watertight survival plan to carry it through the Downturn. If you take this latter course; all the usual caveats apply: do the due diligence, and make certain that the business you are investing in will have more than enough resources to cover it’s operations and financing commitments right up to when the market bottoms out and begins to improve again. Also be sure that your investment gives you enough control to ensure that the business is run conservatively and that survival is assured.

If this looks like foolishness, consider this; in the UK, simply to keep the Market stable over the next ten years; 3 million new homes will be required. At the current rate of construction, we’re unlikely to see more than a third of those put up. This shows that the medium and long term prospects are excellent for investing in property, because it’s much more probable that demand will outstrip supply than the reverse happening.

Cash House Buyers and Home Buying Companies normally buy houses at 80% of market value, because the sellers are more than happy simply to find someone to “Sell my House”. This means that they have a good margin to cover all their own costs, and to allow enough spread to use discounts as incentives to turn over properties quickly, so cutting the risks of falling values reducing or wiping out profits. Also, in the fairly unlikely event of prices falling to a point where you can’t sell at a profit, you’ll be in a position to wait for the market to climb out of the trough.

What You Should Know About Online Debt Consolidation

October 3rd, 2008    Subscribe To Our Feed

Too embarrassed to admit that they’ve managed their finances poorly, some people find it difficult to approach a lender and apply for a online debt consolidation loan. For them, it would be better to make a loan through a system that obscures their identity, rather than go through channels that require face to face communication.

If you are like this, you should seriously consider getting an online debt consolidation loans. Today, there are a lot of websites that offer this type of loan, saving you the need for personal meetings and discussions with potential lenders.

Despite being noted for fraudulent sites, the internet offers one great advantage: anonymity. Aside from this, the world wide web is home to thousands of websites, making your reach virtually limitless. You can tap lenders from all over the country as opposed to getting in touch with the tens of lending institutions that have offices in your hometown.

Additionally, there may be online debt consolidation loan companies that are willing to take on high risk debt, but due to the risk of some individuals, the interest rates on the loans may be considerably higher than with traditional lenders. Not all online debt consolidation loan companies deal strictly with high risk borrowers and many will offer interest rates that are competitive with the hometown market.

Be careful with internet transactions though, especially in cases where a company asks for upfront fee. Several individuals have been victimized by fly-by-night companies promising that they’ll consolidate all your bills into one lower monthly bill, but end up reneging on the agreement. When you follow-up with this online debt consolidation companies, they’d already have packed up and closed their site.

Such situations clearly demonstrate the need for thorough checking and investigation before you sign up for a deal. Talk to the business bureau in the area where this online company is reportedly based and find out how long the latter has been operating. If it’s possible, ask your creditors if they know this internet site you’re planning to do business with.

You can expect to pay for the services of an online debt consolidation company, and all fees and charges should be clearly stated in any agreement. Just as when conducting business offline, if there are blanks in any documents, do not sign them or you could end up agreeing to more than you can afford.

Rights Foreclosure

October 3rd, 2008    Subscribe To Our Feed

foreclosure help

Some people consider whether or not they should file bankruptcy or just let their mortgage lender foreclose on them? If you go into the decision thinking that you must choose one or the other, then the decision is going to be even more difficult than it already would be - and it isn’t a decision that can be made easily. Monthly mortgage payments must be paid on time every month,or the mortgage lender will file an action of foreclosure. preventing the action can only be done by paying the lender. Understandably, most people do not want to have their car repossessed, so they make their car payments on time every month. If a person does not make their mortgage payments, they face the loss of their home through stop foreclosure loans .

rights foreclosure

Bankruptcy is an action which is declared by a person incapable of paying their debts. This will put an end to the civil actions being filed against the debtor during the time they are in bankruptcy. As a result, the mortgage lender is incapable of immediately continuing their rights foreclosure, or any other legal action. However, the mortgage lender does have an out, as they can file for a relief from the automatic stay and will proceed with their actions after the relief is approved. When it comes down to it, filing for bankruptcy will not stop foreclosure loan, nor will you be able to keep the home if you do not pay the mortgage lender. Bankruptcy only slows down the process and does not eliminate the situation.

Occasionally, however, foreclosure is prevented through bankruptcy, as the latter gives person additional time in which to pay the lender and usually makes the paying easier. As bankruptcy makes a mortgage lender temporarily cease a stop foreclosure loans action, a debtor has additional time to raise money to pay the lender. In addition, since bankruptcy can discharge many other debts completely, a person in debt might have more funds available to pay their mortgage. Through a chapter 13 bankruptcy filing, the debtor is able to - through a court order - pay their mortgage catch up over a period of time rather than all at once.

stop foreclosure loan

In order to file for bankruptcy, you must first qualify - which not everyone does - and even if you do, you will be faced with large legal fees. Legal costs and fees might actually end up being more than the amount needed to catch up on the past due mortgage payments. In terms of both a rights foreclosure and a bankruptcy, you will want to discuss your options with a lawyer first. Due to the complicated legal procedures involved in bankruptcy, it is definitely a procedure that you should not control by yourself. The material offered in this article should serve only as a general guide, and for more specific information, you should contact a licensed lawyer in your state.

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