Why you Need a Reliable Independent Mortgage Advisor

Why you Need a Reliable Independent Mortgage Advisor

In light of the latest housing predicament and unstable and faltering economy, mortgages and mortgage loans have become very complicated today more than ever before. If you are looking to buy a home therefore, you are highly likely to get frustrated not only at the complexity of getting a home loan but also at the complex ins and outs of the mortgage contracts. In case you find the process of acquiring a mortgage loan daunting, you may wish to look at hiring an independent mortgage loan advisor, but what are the important considerations to make when looking for the most reliable one?

The same way you will approach any business transaction, you might want to shop around and research on different mortgage advisors. There is a widespread misconception that hiring a mortgage advisor is very expensive. Note that independent mortgage advisors are paid directly by the lender and not a company hence there are many professionals out there who are available and do not ask for any obligation or fee from clients. Researching several different options is now easier than ever before since you will not feel tied down to a single advisor. Additionally, the advisors get access to all manner of lending options from various lenders hence you will get to reap the best benefits.

It is important to remember that a mortgage advisor has done many mortgage transactions than you can imagine thus, they are well versed with the process and all the nitty gritty. Perhaps you are familiar with the basic mortgage loan concepts such as early redemption penalties and stuff, but your independent mortgage advisor is in a position to explain to you in detail the practices of all individual lenders hence you wouldn’t have to make any phone calls for further clarifications. Mortgage advisors further know about the loopholes and details to be cautious of, and can advise accordingly.

Of equal importance to keep in mind is that you lack half the amount of experience with lenders that independent mortgage advisors have. Note that you are a complete stranger to lending institutions while your financial advisor has hopefully worked with nearly all the lending institutions you can think of. Chances are quite high he has formed a personal relationship with these institutions and thus has all the insider information and knows what to expect from each advisor. Part of the information that a mortgage advisor maintains include current promotions and deals that are likely to slip past the attention of a novice in the industry. By maintaining close business ties with mortgage lenders and banks, an independent mortgage advisor is in a great position to guide you through different lenders’ practices.

Getting a mortgage can prove a confusing and very tricky affair. There are many legal jargons that are sure to try your patient. Just take a moment to consider the amount of work and efforts you are willing to put into coupled with your level of experience in the mortgage field and decide whether you need to hire an independent mortgage advisor.

Top Five Major Features of a Reverse Mortgage

Top Five Major Features of a Reverse Mortgage

Reverse mortgage loans are a category of mortgage loans available today tailored for American seniors who are aged 62 and above, and who have equity for their homes. Senior citizens typically need to have more disposable cash so that they can enjoy their sunset years and home equity is one of the most lucrative sources. The popularity of reverse mortgages has significantly increased something that is very useful because it is one of the surest ways that seniors can get insightful information. Here are some of the most vital features of a reverse mortgage loan that all seniors looking to tap this lucrative opportunity should be aware of.

1.      Maturity of reverse mortgage loan – a reverse mortgage loan matures when the last borrower sells the property in question, moves away, or dies. Moving away could be interpreted by the lenders as when the borrower moves from the property for over 12 consecutive months. In such a case, the house is foreclosed and sold to cover the interest and loan capital and all fees incurred.

2.      Interest – another important aspect is the compound interest in that because nothing is paid to the lender until the loan closes, the interest is bound to pile up to a huge amount. Interest is mostly calculated on a monthly basis based on all expenses and other factors such as the capital, service fees, and other small upfront items and stuff. You might want to request your lender to calculate the figure upfront to avoid bad surprises in future.

3.      Shareholding – this is a very critical principle. The collateral of the reverse mortgage loan comes from the real value of the property from the main mortgage insurance. It is for this reason that lenders care less about your income information or your credit score because either way they will recover their money

4.      Reverse mortgages and taxes – reverse mortgage loans basically use money which you once paid for its taxes hence when you start receiving the monthly passive income, you will not be expected to pay any taxes. Be advised though that if the whole amount is not used up within the month received, your liquid assets may rise so high to a point you will lose your eligibility to public social security. Thus, it is advisable that you confirm this pertinent issue before you sign any deal. Still on taxes issue, annuity advances may be subject to taxation.

5.      ,Affordability – be advised that reverse mortgages are very expensive owing to the upfront costs which tend to be higher than the costs of a normal mortgage. When thinking of taking a reverse mortgage loan, you should compare the costs of what you stand to gain and what you will pay and all other financial options at your disposal before making a decision.

Important Information about Mortgage Loans

Important Information about Mortgage Loans

Imagine you want to get your family a place they will call home, but lack enough cash in form of savings in the bank to pay for the house in full. In such a situation, it makes total sense to use the small amount of cash that you have as down payment and then apply for a loan against the property as collateral, which you will then start repaying in form of monthly installments until the loan is due… and that is what is known as a mortgage loan.

What exactly is a mortgage loan?

A mortgage loan is one type of loan a home buyer (mortgagee) procures to be able to pay the property seller in full, after which the mortgagee is expected to repay the lender (mortgager) the total mortgage amount plus fees and interest accrued as agreed. Until the whole amount is paid off satisfactorily, the title deed or ownership of the property in question remains with the mortgager.

There are several types of mortgage loans customized to meets the tastes and preferences of different mortgagees. There are fixed rate mortgages, variable rate mortgages, long-term or short term mortgages etc. A mortgagee should procure a specific type of mortgage depending on their financial needs and their long-term plans. For example, a mortgagee who plans to live within the property for a long period of time may opt for a long-term fixed rate type of mortgage compared to the one who seeks short-term deals for investment purposes. Thus, both the mortgager and mortgagee must spend enough time and efforts on finding the most suitable mortgage loan customized to an individual’s mortgage needs.

How does Mortgage Default occur?

In case you fail to honor your end of the mortgage loan deal i.e. make the monthly payments towards the loan as agreed, it will result in the mortgage loan being termed as an ‘in default’. In such a case, the mortgager has the right to foreclose on the property meaning you the mortgagee will lose the property. Mortgage default should be avoided as much as possible because even if the mortgager doesn’t foreclose on the property, chances of tarnishing your credit score are quite high. This will put you in a very compromising situation because you will affect your odds of securing a loan of whatever kind in the future with a bad credit score.

Thus, to avoid a situation that will lead to mortgage default, you should ensure that your payments towards your debts do not exceed 28% of your total revenue or monthly income. You should factor in other loans such as credit card debts, car loan, etc that are pre-existing when applying for the mortgage in order to calculate and manage your finances effectively.

How to Avoid Mortgage Foreclosure

How to Avoid Mortgage Foreclosure

Mortgage foreclosure can take two forms. One, it can be a court process whereby the lender sues the borrower and proves to the court that the borrower has defaulted to make payments towards the mortgage. In ruling, the court may compel the borrower to pay the remaining mortgage fee failure to which a statement could be issued to foreclose the mortgaged property. The other form that foreclosure could take is non-judicial, where things are settled amicably among involved parties.

Either way, in case you are finding it hard to pay your mortgages on time, running away is not the solution. Your best bet would be to arrange a meeting with your mortgage lender and explain to them your financial status that makes it hard for you to make payments on time. The lender, seeing as it is they wouldn’t want to lose everything, and because the process of foreclosure is one that involves a lot of risks and takes a lot of time, may review the situation and act accordingly. Your lender could request you to pay part of your normal monthly payments and then gradually make up for the late payments in the course of the following months. Alternatively, your lender could modify the loan terms and conditions to suit both parties.

In case you agree with the new terms, both parties will sign a new contract and all foreclosure proceedings will come to a stop. Modifying the terms of a mortgage is one of the greatest ways to get assistance with late mortgage payments so that they can be more affordable. In case your lender doesn’t want to make any beneficial arrangements with you, you can always consult foreclosure services, which you can get online, in your locality, or even in churches. Foreclosure services will offer you expert advice, negotiate with your lender on your behalf and even help you in making the late mortgage payments.

In case you are left with no options, you might consider selling your property because when you sell your property in cash, you can take the money and pay your lender, and then channel the little remaining savings you have on finding another affordable home. When all else fails, your best option would be to declare bankruptcy. This however should be your last resort when all else fail. Ensure you consult a professional bankruptcy attorney to see any available options that you might have. When you file for bankruptcy under chapter 13, you can be able to retain your home but under specified qualifications. Chapter 7 on the other hand will obliterate the debt that you have but will have you vacate the property.

In case you are facing foreclosure, you shouldn’t avoid foreclosure and such like notices you get from your lender. Rather, face the problem head on. While this could not guarantee that your property will not be foreclosed, at least you will be ready for what awaits you ahead.

Basic Outline of Reverse Mortgages

Basic Outline of Reverse Mortgages

A reverse mortgage is a financial tool tailored for senior citizens who own property, those above the age of 62 years whereby they can utilize the tool to access and subsequently convert part of their home equity into a tax-free retirement income. Rest assured that reverse mortgages are federally insured meaning you will not only get flow of cash but also financial security that comes with it, all of which you get without having to give up your title deed, make any monthly mortgage payments, or sell the property.

But why on earth is it known as a reverse mortgage? It is simple; it is the opposite of the forward mortgage whereby instead of you paying the mortgage payments, you are the one who is paid on a monthly, or at a lump sum, whatever you wish for as long as you will be living within the property you wouldn’t be expected to make any mortgage payments. And when the time comes, you will not have anything more than the total cost of appraised value of your property to owe to your lender. Furthermore, the bank will not claim any equity that is remaining on the property as it is meant for the home owner to enjoy.

What is the level of security in reverse mortgages?

As mentioned, reversed mortgages are federally protected… actually, the government has put some measures in place to safeguard the interests of its senior citizens and protect them from unscrupulous lenders. As such, before a reverse mortgage gets approved, there ought to be a third-party counseling session and further, there is a policy in place that no reverse mortgage should be processed unless the senior citizen takes the forms in person… this way, the senior citizens are protected against telephone and email scams.

Benefits

-          You have no limits to your expenses as you will be assured of supplement cash flow in addition to your retirement perk

-          In order to qualify for a reverse mortgage, you don’t have to have any form of income, as long as the home is registered under your name

-          You will have the peace of mind that comes with the knowledge of being fully insured and protected.

-          Note that the cash you get through reverse mortgage is not perceived as part of your income meaning it is free of taxation.

-          Reverse mortgages allow you to take advantage of the financial security that comes with them, and the security of knowing your future is secured within the property.

Needless to mention, with the additional cash that you get through reverse mortgages, you get extra cash to spend on such things as home improvements, paying for college education, touring the world, paying for an emergency expense etc.

The Ins and Outs of Mortgage Loans

The Ins and Outs of Mortgage Loans

Mortgage loans can vary significantly from each other as much as the properties and the mortgage requirements do. That’s the reason why you are advised to consult a qualified mortgage advisor and deal only with a licensed mortgage lender before you make the final decision on the type of loan that you will take out, in order to increase the odds of getting a mortgage loan that best suits your needs.

Among the many factors that you might want to take special consideration when applying for a new mortgage loan is your credit score; sadly, this is one of the most overlooked factors. You can get a copy of your credit report for free from any of the leading credit bureaus and check to ascertain whether the details contained in there are up-to-date and accurate, and to ensure that your home-hunting undertakings have not fortuitously tarnished your credit rating.

While it is highly advisable that you shop around in order to compare different quotes from different lenders before finally settling on the final mortgage lender that you feel is perfect for you, it might interest you to know that some mortgage lenders mistakenly perceive inquiries made to several mortgage providers as a sign that you have been turned down. This however shouldn’t deter you from looking for the best possible mortgage provider because by the end of the day, you will be the one stuck with a bad deal, and besides, the difference could be very significant veering in thousands.

This becomes all the more important if you are a first timer in the mortgage loan industry, and you are working on a tight shoe-string budget, and some providers are giving better mortgage loan deals than others. Remember that a mortgage loan is mostly depended on your monthly income, meaning you will have to carry a thorough research in advance before you find most affordable mortgage that ranges within your budget.

Even if you cannot seem to locate a good mortgage lender who will give you a deal within your means, rest assured there are other avenues you can look at such as applying for a guarantor type of mortgage loan if you have someone who is willing to be responsible for the mortgage repayments in case you fail to honor your end of the deal. Note however that such a mortgage loan needs a high degree of commitment on the part of your guarantor.

Another important thing you must be aware of is that the cost of the new home that you are getting a mortgage loan for will not end with the monthly mortgage repayments you will be making. It is almost mandatory today that you get a house insurance policy to cover the new property, which to many, it is an extra expense, although it is one that may be invaluable in the event the new property is damaged through fire, theft or unforeseen natural disasters. Note however that the market has comparative rates when it comes to property insurance which as be as diverse as the mortgages, hence you should also work hard to get the best possible deal.