Avoiding PMI - Private Mortgage Insurance

by Max Hunter

PMI - a recurring, monthly, unwelcome guest. It sounds similar to and is about as welcomed as a similar acronym. PMI is private mortgage insurance. This insurance policy is paid for by the homebuyer when the amount of their primary mortgage is greater than 80% of the value of the property.

You will note that the term 'primary mortgage' was used. This is for a specific reason. It is not the total of all mortgages and home loans on the property that is evaluated, but rather the amount of the primary or largest mortgage on the property that can trigger PMI.

PMI is calculated by taking 0.5% of your primary loan balance and dividing it by 12 (12 monthly payments). For example, if your primary mortgage is $200,000 and you are required to pay PMI, your mortgage payments would be an additional $83.34 per month. For most homebuyers, this additional premium is a considerable financial burden to undertake.

There are ways around PMI for those homebuyers unable to put down 20% or more on their new home. Mortgage lenders have created loan packages which include two or more home loans that when combined exceed the 80% threshold, while no one of the loans exceed that threshold. Typically there is a primary mortgage and either one or two home equity loans taken out simultaneously which are 81% - 100% (or sometimes more) of the home value. This affords the homebuyer to put less than 20% down, or perhaps put nothing down at all while at the same time eliminating the need to pay PMI.

If you know you are going to be putting less than 20% down on the purchase of your home you should immediately speak to your home lender about avoiding PMI. A good home lender will inform you about these types of packages. Though the rules on these packages may differ from state to state, the vast majority of states allow for these types of loan packages.

When you review this type of package you will note that there will invariably be a different interest rate on the mortgage than there is on the home equity loan(s). The mortgage rate may have a slightly lower interest rate or perhaps even a considerably lower interest rate. You should be able to calculate what the monthly payments would be for the combined loans and then determine if it comes out less than a single mortgage with PMI. Obviously, a good lender is only going to present you the package if the payments are cheaper than a single loan with PMI.

You are able to refinance the loans at any point and combine them into one payment. You would only do this when the value of the home is more than 20% above of the amount you will mortgage. As the value of your home increases through home improvements or time, you can receive an appraisal and speak to your home loan professional to determine if refinancing the loans into one loan makes sense.

These types of loans are often referred to as 80-10-10 loans or 80-15 loans, among other names. An 80-10-10 loan is a mortgage at 80% of the amount to be financed and than two home equity loans at 10% each. You will likely find that all three loans will have a different interest rate with this type of package. 80-15 loans are similar but would be the main loan at 80% and a secondary loan at 15% with the buyer putting down the additional 5%.

It is important to note that when financing 90% - 100% of a home, or more, the appraisal will play a key role in the loan approval process. If the appraisal does not come out at a pre-determined amount, the lender may feel that the transaction is not a sound one. You may need to go back and renegotiate the purchase price of the home or run the risk of being denied the mortgage. Most real estate contracts, however, do have a clause in them that allows the buyer out of the contract if they are denied a mortgage. You will want to speak to the lawyers and real estate agent in advance if you are planning for applying for this type of loan. Some contingency clauses in contracts specify a maximum percentage of a loan you need to qualify for and if you are denied for a loan at a higher percentage you are not protected by this clause.

It is important for you to have all of this information in place before you start your home search. By knowing how your financing is going to be handled you will be able to make sure you are protected in the transaction and you will also be able to negotiate a better deal since your financing has been completed or is close to being completed. The key is knowing in advance what percentage of the value of the home you are able to and willing to put down on your new home.

Max Hunter is the author of many credit related articles. If you are looking for help with Home Loans or any type of credit issue please visit us at http://www.homeloanave.com

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Getting Money From A Reverse Mortgage

by Tom Atkins

A reverse mortgage allows homeowners over the age of 62 to cash in on the equity of their home. The homeowner can use these funds in anyway they want.Some have used the money for extended term care or home improvements. Homeowners usually run into very little difficulty in securing these funds.The funds are practically free because with the exception of the fees, more than likely, the mortgages will not be paid back over the course of the homeowner’s life.

There are several payment options to choose when receiving funds from a reverse mortgage. In most cases you can choose one or more of them based on your needs.

* Getting your money in a lump sum: Most often the money from a reverse mortgage is paid in a lump sum. You will receive one payment which equals the value of your home.

* Getting a specific amount paid over the course of a number of years: With this option the homeowner will receive payments over a specific course of time, 10 years for example. This could be a great help in managing funds over a period of time.

* Getting a specific amount paid to the homeowner every month until they die or permanently move out of their home: Receiving monthly payments gives the homeowner a sense of security in knowing that their money will not run out before they die.

* Getting a line of credit. Funds can be provided as a line of credit and be paid back to the lender. A specific amount could be taken out to make repairs or to pay a bill as the funds are needed.

Getting the right type of terms for your needs is totally up to you. Give thought to what your needs are, how much funding is required and how soon you will need the funds. Some homeowners have gotten a lump sum and transferred it into a savings account until needed. The funds are yours and you can do whatever you want to with it with no restrictions.

Tom Atkins is a staff writer at http://www.finance-journal.com and is an occasional contributor to several other websites, including http://www.debt-journal.com.

For more News, Articles, Guides, Tips, Tricks and various Mortgage And Loan Products information... visit our site at http://www.mortgage-and-loan-info.com.

What Is A Commercial Mortgage?

by Benedict Rohan

A commercial mortgage is similar in principle to a residential mortgage except it is used to purchase a property or to raise capital for commercial purposes rather than domestic purposes. As with residential mortgages, the lender retains rights to the property until the loan is repaid in full.

What would you use a commercial mortgage for?

The types of property that people might purchase using a commercial mortgage could be anything from hotels, restaurants, shops and takeaways to office buildings, factories, warehouses and farms.

Sometimes people might buy the business and property at the same time if the two are intrinsically linked, such as a hotel or restaurant.

When properties are purchased to be used as business premises, the mortgage is known as a commercial owner-occupier mortgage.

Alternatively, a commercial mortgage could be used for refinancing.

People might want to unlock capital from their existing business property to expand or improve their premises or facilities, or to raise cash for any other business purpose.

There are many other uses for a commercial mortgage, such as buy-to-let mortgages, where people purchase a property (perhaps residential) as an investment and let it out, or commercial development mortgages, where people purchase a property to develop it and sell it on for a profit.

Why purchase premises rather than rent?

Taking on a commercial mortgage is a major leap for your business and must be carefully considered before entering into the commitment.

However, it can be an excellent investment and owning the business premises that you occupy can bring many advantages to your business:

In most circumstances the proceeds of the loan are not considered to be taxable income and the interest payments are tax deductible.

You’ll have a clear repayment plan, with terms and rates tailored to suit your needs. (See below for more details on this.) This means that you can manage your cash flow more easily.

Mortgage repayments can be cheaper than rent.

Any property purchase is an investment. Your asset could appreciate a great deal in value, thereby increasing your capital.

You have the potential to make money by subletting. For example, you might have space in your property that you don’t currently need, and could make money on it by letting it out to another business until you need it to expand your own business.

Why use a commercial mortgage to raise capital?

If you already own business property and need cash for your business for any reason, unlocking the capital in your property by refinancing or remortgaging is an effective solution. Think of it as a loan that could be used for any business purpose – not just expanding or improving your premises. There are many benefits in doing this:

Commercial mortgages can be easier to obtain than business loans, especially for small businesses, as the property provides security to the lender.

Unlike many business loans, which tend to have a short repayment term, commercial mortgages cover a long period – anything from 15 to 25 years, depending on the lender and the financial circumstances of your business.

In most circumstances the proceeds of the loan are not considered to be taxable income and the interest payments are tax deductible.

There are two ways in which you might use a commercial mortgage to raise capital for your business:

1. Refinance your current commercial mortgage to include the loan amount that you wish to borrow.

2. Release the equity that has accumulated in your current property, i.e. the current value of the property minus any outstanding mortgages or debts tied to it.

What are the costs and repayment options for commercial mortgages?

Repayment plans tend to be similar to residential mortgages. The main options are either fixed rate or variable rate repayment mortgages or interest only/endowment mortgages.

Unlike residential mortgages, however, the interest rates for commercial mortgages tend to be higher as business lending is perceived as more of a risk. The rates will vary depending on the circumstances of your business, but generally speaking, the higher the risk, the higher the interest rate. For the same reason repayment terms also tend to be shorter than residential mortgages – typically 15-20 years.

It’s likely that you’ll also need to raise a deposit, as most lenders won’t provide 100% loan-to-value mortgages – i.e. they won’t provide a mortgage for the full purchase amount and will expect a down payment from you as a form of security (typically 20-30% of the purchase price, although some lenders accept as little as 5%, but with a higher interest rate for repayment).

Other expenses to consider are the setup costs involved in arranging a commercial mortgage, such as legal charges, surveys and broker fees.

In terms of responsibility for repaying the mortgage, this depends on the type of business. If you’re a sole trader the responsibility will lie with you and you may also be personally liable should you default on the repayments – meaning that you could lose personal assets as well as the commercial property that is mortgaged. If you’re in a partnership, the responsibility and liability apply to all partners. If it’s a limited company, the responsibility and liability belong to the business, although personal security may be required to approve the mortgage depending on the profitability of the business.

How do you obtain a commercial mortgage?

When applying for a commercial mortgage, you’ll need to do your homework and build a strong business case to demonstrate your company’s ability to repay the mortgage. Be prepared to undergo a thorough examination of your finances, including:

business history of your company: financial statements, profit and loss accounts, balance sheets, past and current cash flow, all certified by an accountant future projections for your company: long-term business plan, intended use of the property, earnings potential, projected cash flow personal finances: the financial histories of yourself and all other key stakeholders in the business, such as credit worthiness and past earnings All of these factors will determine the lender’s perceived degree of risk in lending you the money, which will in turn determine the term and interest rate of the loan that they are willing to give you.

The obvious first step to many people applying for a commercial mortgage is to approach their bank or business lender, with whom they already have an established relationship. However, for this very reason it’s unlikely that you’ll receive a competitive deal.

The best way to get a commercial mortgage is to use the services of a specialist independent mortgage broker, who can help you get a good package to suit your needs whatever your circumstances. Even if your credit isn’t great, it doesn’t mean that you won’t qualify for a commercial mortgage. Having a broker to represent you will really strengthen your case. They have access to a wide range of lenders and understand their criteria for lending, as well as your specific needs.

They can therefore undertake a targeted search, increasing your chances of finding a suitable loan. In fact, the broker may even be able to obtain several different options from various interested lenders, which provides the scope to negotiate a fantastic deal for you.

Money isn’t all that you’ll save. Imagine if you tried to apply to several lenders yourself – think of the time taken to complete all the applications, and the time wasted in applying to unsuitable lenders.

The independent advice and specialist knowledge that a broker provides are invaluable.

Benedict Rohan works as a freelance finance writer. Commercial Mortgage, Homeowner Loans, Remortgages

Website: http://www.mortgagenation.co.uk

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Mortgage refinance information helps you get undoubtedly great deal for bad credit mortgage!

by Kirthy Shetty

Adverse credit simply implies poor or bad credit that can affect your financial status and you may be considered as a borrower with high risk by a lender. So you are at the receiving end of loan refusals. You may find it tedious to find a loan due to your bad credits.

Refinance Mortgage Information provides you a silver line in the midst of a debt cloud. The bad credit remortgage lets you refinance a mortgage loan if you have faced difficulties with bad credit history. When the mortgage lender reports late payments, bankruptcy, default payments to your mortgage bad credit history, it in turn affects your credit score. Based on these credit scores the mortgage lenders either approve or reject loan financing.

By choosing to remortgage, you get a new mortgage that replaces your existing high interest mortgage loan. Adverse Credit Remortgage is an option to consider when the loan market interest rates drop significantly. You no more have to stay put with just one mortgage loan deal through out your life. Take advantage of the gamut of refinance options.
Why opt for adverse credit remortgage uk?

• Lower the bad credit mortgage payment: Firstly, borrower wants to reduce his monthly mortgage payments. With the change in the mortgage rates, he can find a lower interest rate opting for remortgage.
• Raise additional money for your personal needs such as your home improvement, vacation, dream cars etc. One can release the equity which has increased ever since he first applied for a mortgage.
• Pay off debts: One can pay off existing debts which is more commonly known as debt consolidation remortgage. Club all different unpaid debts together into one adverse credit remortgage as against your collateral. Keep up to the monthly payments so that you don’t risk your collateral.
• Repair your mortgage bad credit: Your mortgage bad credit rating can be improved in the long run if you are consistent with your payments. With bad credit remortgage, your loans are rated at a low interest rate and there’s no chance of missing out on your loan payments. Gradually, your mortgage bad credit scores will improve.

Find the best and most cost-effective remortgage deal!

Take advantage of a flexible remortgage plan. With the booming markets, you can opt for better remortgage deal with a lower Annual Percentage Rate and also reduce your repayment term, in order to get rid of your mortgage debts soon.

However, it is wise to do some research online, to find out the best loan quote online and settle down with the right adverse remortgage deal.

Log onto http://www.adverse-remortgages.co.uk for a safe and secure online adverse credit remortgage.

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Secure Loan vs Remortgage

by Dimitri Konchin

In getting a new loan it is important to understand the difference between a remortgage and a secure loan. A remortgage is when you take out a new loan to replace the current loan you have on your house. A secure loan is using the equity in your house to take out a loan. Example, if you have a house with property value of 180,000 and you have 70,000 left on your mortgage. You need to raise 40,000 through a secure loan or a remortgage. In a remortgage you would take out a loan of 110,000 and pay down the 70,000 you have left on your mortgage. This will leave you with the 40,000 you require. In a secure loan you can just borrow the 40,000 and use your house as collateral.

What is the difference between the two you may ask? First the interest rate you are going to pay on you loan will be different. You will receive a lower rate with a remortgage then you will with a secure loan. This is because the lending company is making profits on the whole 110,000 and not just the 40,000. Which means the lender can give you a lower rate loan, while maintaining higher a profit margin.

The downside to this particular aspect is that your original lender can have a penalty if you pay of your loan right away. So if there is a 10% charge on paying off your original mortgage early, it may be in your best interest to get a secure loan instead of a remortgage.

If your credit has been dramatically affected, it will also make it expensive to remortgage your house because your new loan might have a much higher rate then your original mortgage. An important reason for a person to go get a remortgage is if they are unsatisfied with their current lenders business ethics.

If you don’t agree with the customer service that is provided by your lender, you can find a more customer friendly loan provider if you remortgage your house. Whether you get a remortgage or a secure loan, you have to make sure you understand the benefits and the downsides of both methods. Do analyses, see which one you believe is better before you go and get the loan.

Remortgage, UK Cheap Secured Loans and Remortgages. Apply now, No Obligation Quote.

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Find How You Can Reduce The Amount You're Paying Each Month In 1 Simple Way

by Ben Hamilton

Remember that when you remortgage, you're not purchasing a new home. Instead, it’s just about switching your credit to a different mortgage owner, in order to lower the amount your monthly outgoings.

If you have a bank loan, then there’s a good chance you’ll also have an eye on opportunities to reduce the amount you’re giving each month – and if that’s the case, a remortgage may well be a sensible decision.

In short a remortgage is about saving riches, and is of special importance if the rate of your home has came up to.

For instance, your existing lender will want to try to make sure you stay with them or - if you part - that they squeeze a bit more assets out of you. Typical consequences are charging a percentage of what's still owed on your debt if you go to a new financier with a better relevance rate. This will be looked into for you and taken into account when all your alternatives are considered and offered.

Because organising a remortgage can be tricky to inquiry, it’s wise to turn to a team of masters – the best of which will have left no stone unturned in their bid to take the anxiety for you.

Others may make up for their ‘loss leader’ rate by trying to tie you. Tactics to accomplish this can take in making you pay a economic fine if you successively go to an alternative creditor.

As well as making sure you learn about the very best remortgage duties, they will look at your existing loan and make sure the opportunities presented to you take into account any present challenges which may relate to changing investor.

And there are those who may try to make it compulsory that you buy other bundled products from them at the same time as you take out your remortgage. Typically, they’ll try to make such bundling a state of your taking their cut-amount significance rate.

Also, some remortgage lenders will try to attract you with great cut-worth importance rates – you may read or hear of this being mentioned to as the ‘important benefit rate’.

Among the most commonly bundled goods are insurance policies.

Do you need help getting the best refinancing deal possible? Visit out site today.
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Can I Get A Mortgage After Filing Bankruptcy

by Nikola Govorko

Usual opinion is that with an item like bankruptcy on your credit report you do not stand a chance of getting a mortgage. While it might have been true until as little as 4 - 5 years ago it is certainly not true today.

It is natural that bankruptcy does not help your credit score but it is not something that can prevent you from buying your own home in near future, in say next 2 to 5 years.

And in case that you already have a mortgage on your record, you will be happy to know that you can refinance your mortgage and get a much better deal which can enable you to pay off your creditors much easier and faster. You will have to work long, hard and smart to repair your credit rating.

Here are steps you will have to take in order to get a mortgage after filing for bankruptcy:

1. Make a budget that you can stick to and the one your family can live with. It is very important to make a realistic list of your monthly income.

In this list include any income that you can count on100%, leave all the other possible money sources out. You can do it easy with a pen and paper or you can use your PC/Mac.

Place any other possible sources of income on a separate list, so if it happens OK, if it does not no harm done to your budget planning.

2. List your expenses include all your monthly bills in this like car or a home loan, rent, insurance payment, utilities and food. Keep ALL the bills, and at the end of the month you should have much clearer picture where does your money go to.

Many people do not do this, and that is a HUGE mistake. Small $10-20 bills soon ad up without you noticing it. It is not big expenses that push people in debt, in most cases it is lots of small charges you do not take notice off until you have to pay them.
You have gathered similar information before, probably when filling for bankruptcy. At the end of the month or at the beginning of one, when you do the math you will be able to find out if you are living above your means.

If that is the case you are just going to have to give up some of the unnecessary costs. What that is I can not tell you, each of us is different but usually things like cigarettes, bar bills, DVD rents and other entertainment oriented expenses are not necessary for living normal lives.

You would be surprised to know how much you can save on things like this.

3. Pay ALL your bills ON TIME importance of this can not be stressed enough. If you follow above two steps you should have less trouble with this probably the most important step in your credit repair.

Make sure to have your mortgage, car loan, or a secure credit card bill (that you have naturally been paying on time) listed with credit bureaus.

It will provide the proof your creditors need that you have been working hard on your credit repair and that you have learned how to live within your means.

4. Fourth step is optional; you can apply for a mortgage after bankruptcy even with bankruptcy discharged yesterday and just about any time you want.

But even if you are approved you will have much higher interest rates to payback and those rates can be just thing that will push you even more towards financial bottom.

If not absolutely necessary wait for at least a year (during which you will naturally working harder then ever to improve your credit score) and then apply. Also make sure to check all your options, apply online with reputable lenders and get as many offers as you can right to your e-mail.

This is much, much easier, faster and over all better way to apply for any kind of a loan then the traditional methods.

So can you and should you apply for mortgage after filing bankruptcy? The answer to both questions is YES. But you will have to undertake above steps to get a better deal.

At www.Debt-Free-Family.com we are dedicated to help regular people get out of debt, avoid bankruptcy and enjoy a debt free life. Get easy 4 step tutorial how to get Mortgage After Bankruptcy

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Mortgage Refinancing

by Jennifer Hershey

If you are interested in Mortgage Refinancing, it is normally for one of two reasons. Either to get a lower interest rate to save money in interest payments over the life of the loan. Or, you are interested in refinancing with cash out.

Mortgage refinancing can be done in a number of ways. The two most common are going to your local bank or using the internet.

The internet is becoming a more and more popular method of mortgage refinancing by the day.

Some of the reasons are obvious, mortgage refinancing over the internet is very simple, and the information you can find on the mortgage industry is limitless.

The mortgage industry is a very competitive one, so using the internet to shop around for mortgage refinancing is very smart. As opposed to using your local bank that normally has one product for you to choose from.

Finding someone to do your mortgage refinancing by way of the internet may be easier than you think. These loan officers are hungry for your business, and by putting only limited information on a secure mortgage web site, you will have at least four mortgage loan officers calling to compete for your business within twenty-four hours.

There is also no need to hide the fact that you are shopping around, this only forces loan officers to come back at you with the best rate they can possibly find in order to keep you from doing business with someone else.

The best part is, you are not committed to anything by shopping around, and this is a great way to educate yourself about the programs that are available, and to get a feel for how mortgage refinancing works.

In the end, the choice is yours. But remember, take your time and gather as much information on the mortgage industry as possible. It will help you make much wiser choices, which will pay off in the end.

Jennifer Hershey has more than twenty years of experience in the Mortgage Industry as a loan officer. She is the owner of http://www.explainingmortgages.com/, a mortgage resource site devoted to making mortgage terms and products easy to understand.

For more News, Articles, Guides, Tips, Tricks and various Mortgage And Loan Products information... visit our site at http://www.mortgage-and-loan-info.com.