Category Archives: Loans and Mortgage

Different Types Of Mortgages

Types of mortgageYou have a plenty of choices when it comes to mortgage and this can be really complicated and confusing. As you have to work out on which of the option suits you the best. You must have to analyze which one is the cheapest along with the interest rates and fees.  Here are some of the types of remarkable mortgage options for you to compare and pick the best one out.

  • Fixed rate mortgage

In case of fixed rate mortgage the rate of interest remains the same for the whole period of deal which may be from one to five years, even though it is possible to get the fixed rate for the ten years. By fixing this rate you get to have the exact idea as to how much your mortgage is going to cost you over the period of years and you can adjust your finance accordingly.

Advantages

The payment of the mortgage will remain the same despite of the change in the interest rates. This factor is great for the purpose of budgeting.

Disadvantages

You have got a fixed rate so when the interest rate goes down you cannot take any of the advantage from it.  Say for an example if you have a deal of six years mortgage then you are locked up for six years in the same interest rate even when you want to get out of it, you cannot or else you have to pay big amount of penalty. So think twice before opting for the long time so that you don’t have to regret later by paying a hefty penalty.

  • Tracker mortgage

In case of tracker mortgage the interest rate is connected with that to the interest rate of the England based rate.  As the rate of England changes, the rate of mortgage based on tracker also changes. Trackers are available with fixed rate mortgages it usually for a period between two years to five years. Any change before the term can cost you with penalty.

Advantages

The rate of tracker mortgage is comparatively lower than the fixed rate mortgage. You can have a track on amount even it is variable as it relates to the base rate.

Disadvantages

The level of security of tracker is not the same with fixed as the rate is variable. This means that your monthly payments can go up anytime and you should be prepared for this.

  • Discount mortgage

Another type of variable mortgage is discount mortgage. It’s like tracker mortgage but it is not linked up with the England rate. It is related with the standard variable rate. This standard variable rate is of the lenders.

Advantages

The rate of interest is lower than that of fixed mortgage rate. As a matter of fact the discount is variable the rate can either go up or go down.

Disadvantages

The level of transparency in case of discount mortgage is very low. That means the lender can change the rate at anytime he wants. Thus it can happen that the rate bounces up at a time when you are not expecting it to go up.

 

 

How to manage your direct school loan

school loan, loanDirect school loans are loans that are granted to those students who need financial aid so that they can finance their studies. These loans cover an entire academic and two disbursements are made by the school foe the students in a year. The disbursements are made in the semester beginnings. Generally, the school gets the money credited in the school account of the student so that payments can be made for all the charges that are authorized along with the tuition fees.

If the amount of the loan exceeds the charges of the school, you will be paid the remaining by the school in due time. You will be notified by the school whenever a disbursement is made and you will be given information regarding cancelling the disbursement if you do not need it. You will have to start the repayment of the loan after graduation and one month of professional work.

Advantages of FHA mortgage calculator

 FHA mortgage calculator, mortgageMany people think that owing a house is of great pride and social stature. The Federal Housing Administration or the FHA has got many offers of loans for the people so that everyone can fulfill their dream of owning a house. If you are anxious about the payment of the loan, then FHA calculator can really help you a lot to have in hand the easy calculation about loans. The FHA mortgage calculator is of immense helpful in such situations due to various factors.

The mortgage calculator help a person in knowing how much loan he can get depending on the data given by him. It also tells the right amount of mortgage that he has to give. You just need to enter the amount of loan of loan you are looking at and the calculator will give the mortgage amount. Depending on that you can decide if you will be able to take the loan or not.

What is chattel mortgage?

chattel mortgage, mortgageChattel mortgage is meant for companies, which look for loans regarding motor vehicles. The main criteria for getting a chattel loan are that the vehicle should be used by the company for at least 50 % of their work. Exit and termination fees are also applicable just like any other car loan. Chattel basically means a term, which is used for fixed property or item(s). The loan is taken out in the name of the vehicle in question based upon its lifespan.

 

You can check out various car loan prices online through chattel loan calculators, which are put up by companies online. The repayment is usually done on a monthly basis. Mostly loans are given to a company if it has more than one vehicle used for business purposes. The advantage of getting a chattel loan instead of normal car loans is that even after taking out the mortgage, the vehicle will be legally under the company’s name.

 

How to qualify for a mortgage

In this world, we are striving just in order to survive so money is a big issue. We really cannot afford to go spending barrels of money over houses and other elements. At the same time, our basic necessities require a lot of money. Building a house is everyone’s dream but it is in fact a costly dream.

It is not that we cannot afford to buy a house. Anyone with a stable source of income can afford to buy a house but it is just that we cannot arrange for that sum of amount in a single installment. After all we are not Bill Gates or Mark Zuckerburg. So, in order to help you build the house of your dream, there are many companies which offer your house loan mortgage. In order to get these loans, you need to have a stable source of income as well as a bank account.

Should you or should you not use a mortgage broker

If you are intending to mortgage then you will be faced by the obvious question, whether or not you should take the help of a mortgage broker. You need to answer this question yourself and for this you will need to take a look at the advantages and disadvantages of a mortgage broker.

The most important advantage of having a mortgage broker is that he will have knowledge about the entire mortgage market and will have easy access to the same. This means that mortgage brokers will be able to give you valuable advices. If you have bad credit history then a mortgage broker can come to your rescue. The mortgage brokers are usually adept in sourcing mortgages. The broker will also take care of the paper works and dealing with the lender.

However mortgage brokers come with a few disadvantages too. If the broker is not well trained and experienced then you will lose out on the best deals. Moreover there are some unscrupulous brokers who favor the lenders. And some brokers charge hefty fees as well.

Short Sales Education

Short sales is the phrase used to define the process of getting a discounted loan balance from a bank to pay off mortgage that is more than the home’s current value. Short sales are used by property owners who are behind on their mortgage payment. This is a way of creating equity for an investor who wants to buy the house. In other words, the investor buys a house at a discount that has to be negotiated by a bank.

There is an Agreement of Sale document that you have to sign for the bank. After you have transferred ownership of the property, you will not be charged any fee, and neither will you gain anything from the sale. If you want to sell your property using short sale, you should know everything about what is required during the transaction. This is because a short sale is quite a complex process that can go wrong because of a small mistake.

The reverse mortgage path

Reverse mortgageSup-prime meltdown has revealed darker truths and the buildings of trust have tumbled down one after another. How can a system live so long on an oversubscribed economy and boast of resources it did not have. How could it sign erratic loan decrees without finding out if a person was ever eligible to receive that loan? Well! Truth is that such things have been done and this is why sub-prime crisis is there in the first place.

Private lenders, financial institutions and banks, sure of the paying power of borrowers gave home loans at reduced rates, reasonable mortgage structure and lesser down payment. Today, they find themselves at the receiving end of these home loans and unfortunately, in the absence of collaterals, and most of the time, not being backed by FHA or other such organizations, they find that the defaulter’s line is a hell-hole out there.

The only possible option with the banks to compensate for lost funds is Foreclosure or Short Sale but because the Obama administration promised moratorium, stop foreclosure, loan rewrites and loan modifications, the banks cannot even come up with these plans.

But, the home owners deserve it just as well. Think about them, they are short of disposable income. Global recession has taken the wind from beneath their sails and they are suffering great budgetary constraints. In such a time, they can hardly afford the mortgage structure. This is where loan modification actually helps.

In the event when a homeowner cannot keep up with the monthly mortgage, Foreclosure begins to loom large. Short Sale is another painful process. (Short Sale is more favorable than foreclosure as it ends the obligation of the borrower and gives the proceeds of the discounted sale to the mortgagee). In all such cases, the Stop Foreclosure team comes to the fore and looks into the situation.

If it’s extremely distressful then the team can do no wonders but if in case, the situation is redeemable then the Stop Foreclosure unit suggests the unique Loan Modification plan. Such plan is useful in altering the mortgage structure and also reduces interest rates. Sometimes, if the bank or the private lender is lenient, the borrower or homeowner also gets payment deferring facility or Moratorium.

Such modification saves the home for the borrowers and also gives the lender some kind of a breathing space in terms of compensating finances. The lender always looks for the FHA or some such organization to secure the loans. It acts as semi-collateral mentally as the organizations take part of the pressure when the borrower defaults. This is why, the lenders are ready to provide the FHA approved loan at lesser interest rate and more lenient down payment structure.

Another superb idea that’s doing the round today is Reverse Mortgage. Reverse Mortgage is fundamentally the exact reverse of a normal loan. In a normal loan, you take a lump sum from a bank and keep paying it as equated monthly installments. While in a Reverse Mortgage, you pledge a property that you own and ask the bank to keep paying you series of monthly revenue for a particular period of time. Senior citizens can avail the loans and they are eligible to get the annuity for 15 years (in most of the cases) after which there is no further cash flow but they can choose to be in the house. Another relief option is the VA loan clause. VA loans for veterans and service personnel have also been given a fillip by the government and its limit is being raised to $ 7, 29,000.

Yes, there is a global liquidity crunch but then there are initiatives just as well. These are not dark times, come to think of it.

The mortgage refinance option

Many of the homeowners with existing loans would be interested in repaying their current loans with a mortgage refinance planner. It’s a good financial tool to pay off an existing loan and secure a lower interest rate. For home owners who seek to improve upon their financial situation and have a little more cash flow available in their budgets, home refinance is a good option to look into.

The option of mortgage refinancing is available when a person already has a mortgage running with a financial institution and would like to swap the current loan with a new one. The key to the success is to ensure that the net cash flows are positive for you. Also ensure if the fees associated with the refinancing is less than the savings on the interest you would make by setting off the old loan.

Interest rates do not remain same over a period of years. The cycle of fluctuation holds true for the interest rate regime also. So in case, you secured your home loans at the peak of the cycle, it’s a good time to have a home refinance, specially since the interest rate cycle is now at the lower end of the spectrum. Use a mortgage calculator available on the Internet to see the many benefits of swapping your current loan with a new one.

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