Is Mortgage Your Only Option?

At present, thanks to the ever-increasing use of the internet to seek out houses for sale, and the increased contribution of homeowners in the buying and selling procedure, there is better interaction between the buyer and seller. Not only is this good for public relations, it is also a superb opportunity to discover other funding options, for the buyer and for the seller.

It is not uncommon on the part of the buyer to assume their only option when buying a home is to acquire a mortgage, but the traditional lending procedure. This is not always the case, and these days more than ever, buyers and sellers are coming together with creative and accommodating ways to affect the purchase, or sale, of the home depending upon your position as buyer or seller.

Quite often, folks interested in purchasing a home lack the 20% down payment often required from the lender. Provided the seller has established equity of the home, there are other options for the buy and sale agreement. Seller financed mortgages are the most frequent alternative mortgage option exercised; seller financed mortgages however, are not the only option that can be considered. In this article, we’re going to take a look at some of the option mortgage options that are rarely exercised, but that do provide tremendous advantage to the buyer and seller.

As a seller, the conditions must be present that allow you to offer the buyer alternative options. Your mortgage balance must be considerably less than the fair market sale price or your hands are basically tied. Imagine a scenario: you're ready to sell your home, the buyer is ready to purchase your home, and they simply do not have a 20% down payment. What they do have is a 5% down payment, and the aspiration to work with the seller and the mortgage lender. You're asking price for the home is $80,000 and the appraised value of the home is $85,000; your existing mortgage is $50,000 and the lender requires the proposed buyer to provide a $16,000 down payment. How can a solution be reached? If you, as the seller are eager to take a second lien on the property, there is a feasible solution. The fact that the house appraises for more than the asking price, automatically provides the buyers with a $5,000 level of equity, so they only need $11,000 more to reach a 20% down payment. They have $4000; in order to accommodate the buyers, you could accept $74,000 in upfront mortgage money from the lender, and take a second lien on the $6000 difference. This method works only if you’re willing to take the second lien, and the buyers are credible and reputable folks.

Taking second liens or second mortgages are growing in popularity as a means to sale increasing value real estate in today's rapidly growing market. There are other spins offs from the basic formula described, however the scenario above is the most common and provides the buyer and seller with the basis for growing with creative add- ons. Of course, the seller financed mortgage is still the meat and potatoes of the alternative financing business.

How does the seller financed mortgage work? Generally, it works in this manner: if the seller owns the house outright he or she may decide to finance a mortgage for the buyer, and set up an amortized loan. Thanks to the readily available personal computer, loans can be constructed that would have only be accessible via an accountant or lending institution, 20 years ago.

Of course, how you make a decision as a buyer or seller to ultimately close a deal, will depend on many factors, this may be just one of the more important aspects. How well you know each other, credit ratings, and the dollar value of the mortgage will also influence your decision.

In spite of of the final decision, the opportunity exists to explore other avenue other than the traditional mortgage lending institutions, or mortgage companies. And, from time to time, you never know, the deal from the seller financed mortgage may open more options than just a mortgage for homeownership!

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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
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** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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5 Important Questions When Applying Mortgage

Some people are still being burned even after they shop around when they want to take a mortgage. If this happens to you, don´t be afraid anymore. This is mostly because you don´t have enough information about the mortgage world. If you want to apply for a mortgage there are 5 (five) important questions you should ask before you sign any mortgage.

Even though it seems simple and just another common sense, the answer for these questions can help you get better mortgage. Without wasting any time, here are the questions.

1. What is the condition of the pre-payment penalty?
If there is no pre-payment penalty, it´s great. However, more often than not, there is a pre-payment penalty in the clause. Pre-payment penalty is the money you have to pay because you pay the mortgage completely before the mortgage term is finished. Mostly, you will be able to get lower interest rate later on.

You will then want to refinance to get the benefit of the new and lower interest rate. You apply for a new mortgage and use the money to pay the old mortgage. Thus, if you are in the pre-payment agreement time, you will have to pay the penalty. Try to negotiate the pre-payment penalty time to be as short as possible. Try to aim one year or less for the pre-payment penalty.

2. What is exactly the interest rate?
This is just a common sense. However, what most people forget to do is to get the exact number of the interest rate. Normally you will get an estimated interest rate or just merely a range of it. Then, as the closing time is near, you will be charge with a high interest rate. Don´t accept this kind of answer. Try to get the exact number of your interest rate at early stage, not at the closing time.

3. What´s the hurry?
If there is a party, whether the mortgage broker or the company, is being in the hurry, you will need to be careful. Mortgage loan is not and should not be decided in a hurry. Be careful of any hidden ploy. To be safe, just change your mortgage broker or mortgage company if you sense that they are too pushy.

4. Am I able to pay even if I can´t refinance?
Although refinancing is a common thing to do, don´t expect that you are definitely able to do that. Don´t guess! If you are able to refinance the mortgage, it´s good. If not, you should also be able to pay it.

5. What is the exact closing cost?
Some mortgage broker or mortgage company charges high closing close. So, even though you get good interest rate, you will have to pay a high closing cost. Ask for an exact number of the closing cost when you shop around. Also, don´t forget to ask any other cost like underwriting cost or any other cost you may have to pay. Just ask them the exact number. If it´s too much for you, negotiate!

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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
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** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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Council Right To Buy Mortgage

Are you living in UK? Do you want to have a house? Are you tired of the title tenant and want to become a homeowner? If so, then Council Right To Buy mortgage would be your solution.

In The 1981 Housing Act, council tenants have the right to buy the property they live in from local authority with discounted price. Council Right To Buy mortgage is one of the biggest mortgage market, and has gain more popularity in recent years.

What is a council tenant, you may ask. You are considered as a council tenant if you live in London borough council, district council, non charitable housing institution, county council, or similar council.

There is a time period when you are eligible to claim the property. If your tenancy began before January 18, 2005 you will need to be able to prove that you live in the property for at least 2 years before you can buy the property. If your tenancy began on or after January 18, 2005 you will need to be able to prove that you live in the property for at least 5 years before you are qualified to buy the property. After the time consideration, you will also need to pass several considerations such as the property you live in should be your main home, you must live in that property yourself, the property should not be included in your job profile, and other similar considerations.

Similar to any other mortgages, Council Right To Buy mortgage has fees, interest rate, and any other aspect of a mortgage. Although you will be getting discounted price, you must do your own analysis before deciding taking Council Right To Buy mortgage. Don´t forget to shop around when you want to apply for Council Right To Buy mortgage.

One last thing you have to pay attention to when you want to apply for Council Right To Buy mortgage is, you have to provide the necessary information and data in one go, if you can. Approval for the Council Right To Buy mortgage might take more than 3 months. That is why, providing the necessary documents such as RTB1, RTB2, and section 125 notice is advisable.

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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
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** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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Reverse Mortgage for You Retirement Fund

Many people work hard every single day in their life. Mostly, without any proper vacation. When it´s time to retire, don´t you want to be able to take a vacation? Don´t you want to have a world round trip? Don´t you want a houseboat? Don´t you want to go skiing on the mountain?

One of the ways to achieve it is through a reverse mortgage. Although reverse mortgage is not created to be used to support your retirement, this unique usage of reverse mortgage has been quite popular in recent years.

So, how this reverse mortgage works? What is reverse mortgage anyway?

Reverse mortgage allows the home owner to borrow money out of their home equity. This money later on will be paid when the house being sold as the owner dies or just being sold for some reasons.

At first, reverse mortgage is created to provide a last resort for the home owner to avoid foreclosure, pay medical or other emergency expenses, or keep the home from disrepair. However in recent years, home owners have tried to find creative ways to make their retirement time more fun and enjoyable.

The simplest way of using a reverse mortgage is something like this. Retirees borrow money out of their home equity. Then, the money is used to pay for their world round trip, houseboats, or other "dreams" they want to achieve. The borrowed money will be paid later on when the house is sold by them or when the house is being foreclosed because the owner dies.

Of course, reverse mortgage should be used only after careful consideration. Borrowing out from the house equity might end up in no emergency funds. Sometimes by taking a reverse mortgage, someone is cutting his own safety net. What will happen if lengthy hospital stay is unavoidable? What will happen if a spouse is incapacitated and needs housing in nursing home? These are only several things you have to consider when you want to take a reverse mortgage.

Because of the effect of double edge sword of reverse mortgage, you should always consult your situation with a reputable lawyer and financial advisor.

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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
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** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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40 Year Mortgage

If you want to buy a new house nowadays, you will be quite surprise of the increase of the house pricing compared to the price one year ago. The increase in price could easily go to 20% till 30% higher than the price last year. Obviously having a mortgage might be the only way out for first time buyers.

Sometimes taking a mortgage doesn’t solve this problem as the monthly payment might be still quite high. One of the ways to lower the monthly payment is to choose longer term mortgage. So later than taking a 10 year mortgage, you could take 20 year mortgage to lower the monthly payment. Although the total money you have to pay when the mortgage period ends is higher if you choose the longer term mortgage, for some people, this is the only way to get their dream house without burning their pockets each and every month.

If this interests you, you might be interested to find out that there is 40 year mortgage out there. Although not all mortgage companies offer 40 year mortgage, you may find some that do. The reason behind this is quite simple. Those financial institutions are quite reluctant to lend their money out for such a long period. By accepting longer period, they have bigger risk, and bigger risk is something that everybody avoids. The good news is Fannie Mae recently announced their intention to purchase more 40 year mortgage on the market. That may result in more financial companies offering 40 year mortgage to average home buyers.

So, do you really want to have a 40 year mortgage? Only you who know the answer to the question.

However, one thing you have to keep in mind is that the longer the period of the mortgage, the bigger the total amount of money you have to pay in the end. Some companies also charge bigger interest for longer mortgage period, even though the monthly payment might still be affordable to you.

Another thing you have to consider is the usage period of the house you are going to buy. Most of the people don’t live in a house for 40 years. Do you really need to pay for 40 years for a house that you may not live in for that long?

If your financial condition forces you to take longer term mortgage, than go for it. But, if you are able to purchase shorter term mortgage, just remember two points above.

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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
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** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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Mortgage Terms (Part 2 of 2)

Mortgage
This is a loan to buy a property.

Mortgage Deed
This is a legal document that stated that the lender has a legal charge over your property.

Mortgage Payment Protection Insurance
This is the insurance that insure your mortgage payment on time in case you are unable to pay your mortgage.

Mortgagee
Institution that lends the money in a mortgage agreement

Mortgagor
A person who borrow money in a mortgage agreement

Quotation
Document that states your mortgage cost.

Repossession
This is stating that if the mortgagee fails to pay the mortgage under specific terms, the mortgagor has the legal right to take the ownership of a property.

Repayment Mortgage
This is the payment you make each month until all fees, interest, and capital are paid off.

Sealing Fee
This is a fee made when the lender release the legal charge over your property.

Searches
Inquiries made to make sure there is no problem with the title of a property.

Stamp Duty
This is the government tax when you purchase the property.

Standard Variable Rate
This is the interest rate that may go up or down any time depending lender´s consideration.

Subject To Contract
This is an agreement between seller and buyer before the actual contract is made.

Title Deed
This is a legal document that transfers the title of a property or land from seller to buyer.

Valuation
This is the value of a property in lender´s consideration.

Valuation Fee
This is the fee for lender´s inspection about the value of a property.

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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
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** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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Mortgage Terms (Part 1 of 2)

There are several jargons in mortgage world that may confuse some people. Below are some of the terms that are used frequently in a mortgage agreement.

Advance
This is the money you have borrowed plus all the additional fees.

Annual Percentage Rate (APR)
This includes all fees, interest rate, and any additional costs related to the mortgage.

Base Rate
In UK, this is the base interest rate set by the Bank of England.

Bridging Loan
This is a temporary loan that enables you to purchase your new property before you are able to sell your old property.

Completion
This is the time when money is transferred to the seller and the ownership is transferred to you.

Conveyance
This is the legal document that transfers ownership of unregistered land to you.

Disbursements
This is the all fees of your solicitors, such as stamp duty, land registry, search fees, etc.

Discounted Variable Rate
This is the rate of your interest rate that is discounted against the normal interest rate.

Early Redemption Charge / Pre-Payment Penalty / Redemption Penalty
This is the amount of money you have to pay if you pay your mortgage in full before the time finished.

Equity
This is the amount of your property in the market minus all loans that it has.

Fixed Rate
This is the interest rate that will not change for a specific period of time.

Freehold
This means the ownership of a property and the land.

Interest Only Mortgage
With this kind of mortgage, you only have to pay the interest every single month while the money you borrowed should be paid at the end of the mortgage.

Land Registration
This is a legal document that records the ownership of a property and land.

Legal Charge
This is a legal document that records the data of the rightful owner of a property or land.

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Disclaimer:
The general information provided by http://MortgagePalace.blogspot.com is intended as an educational purpose only, and should not be interpreted as legal advice. The law varies drastically by location and legal specialty, and http://MortgagePalace.blogspot.com makes no promises about the accuracy or completeness of the information provided. You should not rely on our information when making legal decisions. We recommend that you consult with a lawyer to get professional legal advice on how best to deal with your situation.
-=-=-==-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-
** Attn Ezine editors / Site owners **
Feel free to reprint this article in its entirety in your ezine, blog, autoresponder, or on your site so long as you put a link back to this original post, leave all links in place, and do not modify the content in anyway.
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