Mortgage Lenders, Rates, Calculator, Home Mortgage

Decision Time - Home Equity Loan Or Home Equity Line of Credit?

2009-10-18T23:37:00.000-07:00

Home equity loans and home equity lines of credit continue to grow in popularity. According to the Consumer Bankers Association, during 2003 combined home equity line and loan portfolios grew 29%, following a torrid 31% growth rate in 2002. With so many people deciding to cash in on their home's equity value, it seems sensible to review the factors that should be weighed in choosing between out a home equity loan (HEL) or a home equity line of credit (HELOC). In this article we outline three principal factors to weigh to make the decision as objective and rational as possible. But first, definitions:
A home equity loan (HEL) is very similar to a regular residential mortgage except that it typically has a shorter term and is in a second (or junior) position behind the first mortgage on the property - if there is a first mortgage. With a HEL, you receive a lump sum of money at closing and agree to repay it according to a fixed amortization schedule (usually 5, 10 or 15 years). Much like a regular mortgage, the typical HEL has a fixed interest rate that is set at closing for the life of the loan.
In contrast, a home equity line of credit (HELOC) in many ways is similar to a credit card. At closing you are assigned a specified credit limit that you can borrow up to - not a check. HELOC funds are borrowed "on demand" and you pay back only what you use plus interest. Depending on how much you use the HELOC, you will have a minimum monthly payment requirement (often "interest only"); beyond the minimum, it is up to you how much to pay and when to pay. One more important difference: the interest rate on a HELOC is adjustable meaning that it can - and almost certainly will - change over time.
So, once you've decided that tapping your home's equity is a smart move, how do you decide which route to go? If you take time to honestly assess your situation using the following three criteria, you will be able to make a sound and reasoned decision.
1. Certainty or Flexibility: Which do you value the most! For many borrowers, this is the most important factor to consider. Your home is collateral for either type of home equity borrowing and, in a worst case scenario, it could be seized and sold to satisfy an outstanding unpaid loan balance. People do remember the double-digit interest rates of the early 1980's and, for many, the mere prospect of interest costs on a variable-rate home equity line of credit rising rapidly beyond their means is reason enough for them to opt for the certainty of a fixed rate HEL.
From the borrower's perspective, "certainty" is the main virtue of a fixed-rate home equity loan. You borrow a specific amount of money for a specific period of time at a specific rate of interest. You repay the loan in precise monthly installments for a precise number of months. For many, knowing exactly what their future obligations will be is the only way they can borrow against the equity in their home and still sleep at night.
A home equity line of credit, in contrast, is short on certainty but long on the virtue of flexibility. With a HELOC you borrow funds on an irregular schedule that meets your needs at adjustable interest rates that can change quickly. Loan repayment is also flexible: you typically are required to make only relatively small "interest-only" monthly payments on a HELOC. However, you have flexibility to make any size payment above the interest-only minimum or payoff the loan at your will.
2. Do you need money for a one-time, lump-sum payment or will your cash needs be intermittent over several months or years? Home equity loans are best suited for one-time payment needs (a good example is consolidating debt by paying off several high-rate credit cards at one time). This is because at the time you close on a HEL, you will be provided with a lump-sum check in the amount you've borrowed (less closing costs). While it may be empowering to have that much money handed over to you, be humbled by the fact that you will immediately begin incurring interest costs on the entire balance.
When you close on a HELOC, on the other hand, you will be given a checkbook (or debit card) that you use only as needed. So, for instance, if you're embarking on a multiyear home improvement project for which you'll be writing checks at varying times, a HELOC might be best. Similarly, a credit line is probably best for paying sporadic college expenses. Interest on a HELOC is only charged from the time that your HELOC checks clear the bank and only on amounts actually disbursed...not the value of the entire credit line.
3. Do you possess sufficient financial self-discipline for a HELOC? Financially-disciplined borrowers can have the best of both worlds...almost. By taking out a HELOC but paying it back according to a self-imposed fixed amortization schedule they can enjoy both the flexibility of borrowing cash only as needed and the certainty of a fixed repayment schedule. HELOCs are typically more efficient in terms of lower closing costs and a lower initial interest rate. Also, a HELOC may be somewhat easier for borrowers to qualify for since the low, flexible monthly payments mean debt to income ratios that loan officers look at are more favorable for the borrower.
The one big factor not within the HELOC borrower's control is the interest rate (see #1 above). Interest rates will almost certainly change over the life of a HELOC. This means that a self-imposed "fixed" amortization schedule may need to be periodically refigured. Numerous internet sites provide free, powerful mortgage calculators that can assist you in preparing updated amortization schedules whenever needed. Some lenders are also meeting borrowers' demand for greater certainty by providing HELOC products that can be converted (for a fee) into a fixed rate loan when the borrower elects.
As mentioned earlier, HELOCs are much like credit cards and the similarity extends to spending temptation. If you are a person who has trouble keeping credit card debt under control and you haven't taken steps to change habits, then a HELOC probably isn't a smart choice.
You might be wondering which home equity product most people actually choose. According to the Consumer Bankers Association 2002 Home Equity Study, home equity lines of credit account for 28% of consumer credit accounts followed by personal loans (23%) and regular home equity loans (16%). In terms of dollar value, home equity credit accounts (HELs and HELOCs together) represent a full 75% of consumer credit portfolios with HELOCs having a 45% share of the market and HELs a 30% share. Of course, the popularity of HELOCs may subside if interest rates continue to rise.
Whichever home equity product you decide on be certain to shop for the best deal possible. The market is extremely competitive and there are many non-traditional options, including on-line lenders and credit unions, which should be considered in addition to your local bank.

Here's a Quick Way to Understand FHA Streamline Refinancing and VA Mortgage Loans

2009-04-02T01:53:00.000-07:00

As the number of homes for sale continues to grow across America, home buyers are constantly looking for more home loan choices before making their purchase offers.
With home loan interest rates at multi-decade lows, it can be a stimulant for qualified home buyers to hunker down and make the buying decision they have been delaying. But everything is not Mom's apple pie. The underwriting guidelines from lenders has become substantially tighter and prospective buyers will encounter a bit of research and denials before embarking on the right mortgage loan.
As an example, the only zero down home loan financing choices remaining are for military veterans who qualify for V.A. benefits and Rural Development Housing loans from the U.S. Department of Agriculture. Each of these home loan choices have particular borrower conditions so consult with a competent exeprienced mortgage company so you fully understand all limitations.
One of the most popular types of mortgage home loan currently is by the FHA (Federal Housing Administration) currently requires the borrower to have at least a 3 1/2 percent down payment along with funds for closing costs. However, the closing costs can be a gift from a qualifying relative. Again your mortgage company will consult with you all of these conditions with you.
Fortunately, for borrowers who already have an FHA mortgage on their primary residence, FHA Streamline Refinances exist them and can save them a bundle. By refinancing under this government loan, you can take advantage of this refinancing choice to reduce your mortgage interest rate while saving a lot on your closing costs. Many times borrowers pay nothing out of pocket and do not increase their current motgage balance. In essence, a true rate reduction mortgage. So, it is still advantageous even if you reduce your current rate by 1%.
If your current home loan is a V.A. mortgage, you too can have a streamline refinance choice. It is typically known as the Interest Rate Reduction Refinance Loan and it is a optimal way for eligible veterans to experience substantial monthly savings on their mortgage payments. This refinancing choice also features low closing costs linked with it. As is customary, certain conditions must be met in order to be eligible for a V.A. mortgage refinance. The main concern is there are no late mortgage payments and the home's value.
So, you see that government loans offer some attractive choices for homebuyers and current homeowners. And with the current low interest rate environment, borrowers who do not qualify for government mortgage programs cans still get a great deal as well due to some prediction so perhaps fixed interest rate around the 3.5 percent range which is unheard of. . Yes, we live in some interesting and perhaps one of the best investment eras in quite a while. Will you take advantage or be caught in the headlights

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Your Step by Step Guide With This Loan Modification FAQ

2009-03-27T06:33:00.000-07:00

People who work in the lending industry know all about home loan modifications, but homeowners - the very people who stand to benefit the most from this process - typically know nothing about it at all. The following FAQ lays out the basic facts behind this option and can help mortgage holders make an informed decision about whether or not a modification is a good option for them.
1.) What does it mean when you modify a loan?
When you enter a loan modification agreement, you and your lender agree on changes to the terms of how you will repay it, typically by agreeing to lengthen the period of time you have to pay back the money you borrowed. For example, a 15-year loan might be turned into a 20-year loan. You still have to repay the same amount of money - plus interest - but you have more time to pay, meaning that each of your monthly payments will be smaller. Loan modifications are one way that financial institutions can make it easier for mortgage holders beset by financial difficulties to stay in their homes.
2) How does a homeowner benefit from loan modification?
Modification can reduce the size of your monthly mortgage payment. Obviously, that adjustment can be crucial to your ability to keep your home if you lose your job or experience other financial distress. A typical restructuring gives you an additional five years to pay off your mortgage. It may also be possible to re-negotiate your borrowed advance to reduce your interest rate.
3) Is loan modification the same thing as refinancing?
No. When you refinance a loan, you are in essence retiring - paying off - your original loan with money you get by taking out a second loan. But when you modify it, you keep the original loan but change some of the repayment terms. Refinancing can help you save tens of thousands of dollars on the lifetime cost of your home, but you need a good credit record and reliable income to qualify for the second borrowed amount. Loan modification, by contrast, is an option for homeowners who are under financial duress and who would have difficulty qualifying for refinancing.
4) My credit score isn't the best. What are my chances of getting a loan modification?
You can have a less-than-perfect credit history and still qualify for a loans modification, although you may have to work harder to get your lender to agree to it. The companies that broker the modification agreements will be looking at different things to decide whether you're a good bet for a modification or not. These companies will certainly look at whether you've been paying your mortgage on time in the past. But they also understand that people may going through hard times for reasons that are beyond their control, such as losing a job or seeing their hours or compensation cut. You won't necessarily get the same sympathy if you apply to refinance.
5) I 'm falling behind on my mortgage payments and am terrified of losing my home. Can a loan modification prevent that?
Here, modifying might keep you from having to default on your mortgage by making your monthly payments smaller and easier to handle on a reduced income. It's important to understand, though, that modifying a loan does not mean taking it off the books. You will still have to repay your lender the amount of money you borrowed, plus interest. You should make sure that you understand what your financial obligations would be under the terms of a loan modification before you agree to one.
6) Where can I find out more about getting a loan modification?
There are public agencies that help homeowners figure out whether a loan modification is the right option for them and advise them on how to secure modifications. There are also private companies that specialize in negotiating these type deals.

Sample Hardship Letter Template - Easy to Use Guide and Example

2009-03-24T08:34:00.000-07:00

The first step in the loan modification process is writing a hardship letter, or financial hardship letter, and contacting your lender. This article includes examples of financial hardship and a sample hardship letter template you can use to successfully start the loan modification process.
Here is a sample of hardships that lenders consider during the loan modification process:• Adjustable Rate Mortgage Reset- Payment Shock • Loss of Job • Death of Spouse or Co-Borrower • Incarceration • Divorce • Military Duty • Reduced Income • Damage to Property • Job Relocation • Death • Marital Separation • Medical Bills • Failed Business • Reduced Income
If you have experienced any of the above hardships you should now take the time to educate yourself on the loan modification process and take the first step which is writing the hardship letter. Below is a sample hardship letter template designed to help you successfully start the loan modification process. Make sure you customize the letter to fit your specific need.Remember that this sample hardship letter is only the first step in the loan modification process, use a good quality loan modification kit to complete the remaining documents and learn about the foreclosure process.
Sample Hardship Letter Template:
Name:
Address:
Lender Name:
Loan #:
To Whom It May Concern:
I am writing to inform you of my unfortunate situation that has caused me to fall behind on my mortgage and become delinquent. I have tried for weeks everything in my power to make the payment we rightfully owe, however due to circumstances out of my control I have not been able to make the payment. My goal is to come to a mutually beneficial resolution that allows me to stay in my home and make affordable payments.
The unfortunate financial hardship, that was out of my control, that has now caused us to be late on our payments is (put your specific reason in here be concise and specific with 2-3 sentences) It is my full intention to pay (Lenders Name) what I owe but at this time I can not make the required payments.
To alleviate the financial hardship we have taken these step: - List costs you have cut - Any increased income - Resolution of financial hardship
My situation is getting better as is evident in our financial statements we can provide and I am certain with a little modification I will be able to stay current for the remainder of the mortgage. I would greatly appreciate if we could work together to find a speedy mutually agreeable resolution to the current delinquent mortgage.
Sincerely and Respectfully,
(your signature)
Date

Why You May Get a Higher Mortgage Interest Rate Than the Advertisement Says When You Buy Your Home

2009-03-16T22:54:00.000-07:00

Over the years there have been many times where home buyers have come to my office upset because they were promised a 4.99% interest rate from another mortgage professional who could not give them that rate. When I dug a little deeper I discovered that the interest rate they "thought" they were getting was actually an advertisement in the newspaper and did not accurately reflect their true income, credit and overall risk level from a lenders perspective.
So here are some of the occasions in which you might find yourself getting a dramatically different interest rate than what you heard on the radio, saw on T.V. or read in the newspaper:
You chose a different mortgage type. Many times lenders will put the most attractive rates that will result in a lower monthly payment. However, they neglect to mention less than one percent of the population qualifies for these programs.
On paper you look risky. There is no substitute for having good credit and consistent income. If you do not have either then you may have a good story to tell, but on paper you look risky.
You are borrowing almost what the house is worth (High LTV). Since the days of one hundred percent financing are long gone, this now means you are putting the minimum amount the lender will allow you to put down and have a high LTV. The only exception to this rule is if you are using a FHA mortgage which I will discuss in-depth a little later.
Your loan cannot be resold on the secondary market. Banks view mortgages as investments so they will package ten or twenty mortgages together and sell them as an investment package to other banks. So if they have a group of ten thirty year fixed mortgages with six percent interest rates they will expect a six percent return each year for thirty years. However, if you are viewed as risky then they might not be able to sell your mortgage to other investors and so you represent more risk to them.
Your loan may or may not have points. The mortgage rate you saw may have included paying one or two points, however if you stated you did not want to pay points to your mortgage professional then you may get a higher interest rate and points are included in the interest rate in order to provide compensation to the mortgage professional. This is otherwise called yield spread premium.

Mortgage Calculators - How They Can Help You Make a Better Deal

2009-03-13T07:42:00.000-07:00

If you have decided to settle for a mortgage, there are several aspects that need to be considered. The most important factor is how you should plan it out? Your affordability, how much you are eligible to borrow, what interest rate should you opt for, what will be the down payment etc. It is very natural that you will have many queries because you cannot build or own a house every now and then. It is an investment of a lifetime and needs to be handled with utmost care. Any mistakes committed in planning out finances can have a damaging effect not just on your finances but it can leave you with a ruined credit rating. And you may not qualify for credit again with favorable terms and conditions. For similar reasons, it is essential that you make optimum use of mortgage calculators as they are important financial tools that can help you to be stable and consistent with your mortgage payments.
There are many different types of mortgage calculators. Some of the widely used calculators are as follows-
1. Required income mortgage calculator Rate of interest, payments for your existing debts, income etc help you to decide how much you are eligible to borrow. Calculate to find out what should be your income that will help you qualify for mortgage.
2. How much you can afford calculator When you are in the process of buying a home, how much you can borrow is a vital question that needs to be answered. Find out your affordability with the help of a mortgage calculator.
3. Interest-only calculator Interest-only calculator helps you in the initial years of your loan term. You can opt for paying only the interest initially and also make some payment for the loan balance. However, if you are opting for this payment mode, you have to pay off the principal amount in a shorter time period. It may increase your final payments to a considerable extent.
4. Calculate to decide whether fixed or adjustable interest rate is suitable In case of fixed rate mortgage, your monthly payments can be predicted and you know how much you are required to pay for the entire loan term. In case of adjustable-rate mortgage, your interest rates may be low initially but they are not predictable and can be very high in future. Use the ARM or FRM mortgage calculator to settle for the type of interest rate that suits your needs best.
5. Loan term mortgage calculator If you are opting for 15 year loan term plan, you will be paying less in interest rates but the payments you make every month will be higher. On the other hand if you are opting for 30 year loan term plan, the amount you are shelling out every month is low but the rate of interest will be very high. So, by the time you pay off the entire loan amount, there is a great probability that you will have paid several times more than what you actually availed. In this context, the loan term mortgage calculator can help you to decide.
6. APR calculator It is important to know the cost of the loan you are availing. To determine the total cost of the loan, the APR or the Annual Percentage Rate mortgage calculator can be of immense help.

Finding the Lowest Mortgage Rates With Different Types of Mortgages

2009-03-12T02:31:00.000-07:00

One of the things that you might not be aware of when you are looking for mortgage rates is that there are different types of mortgages, and if you are able to discuss these different types with your lenders, you will find better deals. The different types of mortgages are meant to be used for people of different ages and experiences, and with different job histories, credit histories, and financial obligations. The many different types of mortgages translate to chances for just about everyone to find a good deal on a home loan, so if you are interested in a mortgage it is important to focus on the different types of mortgages so you know you can find the one with the lowest rate. There are several different types of mortgages that you should be aware of, so that you can explore them and figure out which ones will have the lowest rates for you.
Basic Home Mortgages
First of all, there are basic home mortgages. These are two different types of mortgages that are the most popular. First is the traditional fixed rate mortgage, and second is the adjustable rate mortgage. Both of the mortgages have a basic monthly payment, and then an interest rate that is added onto them. However, they are different.
With a fixed rate mortgage, your interest rate is locked in when you begin to pay back the loan. This means that you have a fixed rate for your repayment, for the length of your mortgage. The rate will stay the same for the life of the loan, no matter what the current market does. Therefore, when you are paying back this type of loan, you will have a stable amount to pay back each month.
The adjustable rate mortgage is another option, and it has actually become quite popular lately. This is a basic home mortgage that allows the interest rate to fluctuate with the changes in the market. It means that whatever home market values are doing, it is reflected in the interest rate that you are paying. This means that if market values go up, your payment will go up, but if market values go down, your payment will go down. Some of these loans have a cap to the amount of change that can occur during an adjustment period, and some have a lifelong cap, meaning that there is an amount of change that can be met, after which the loan will not go any further up or any further down.
Government Guaranteed Mortgage Loans
There are also government guaranteed mortgage loans. This is a FHA loan, which is a fixed rate mortgage, designed for a first time home buyer, who has moderate or low income. This is a loan that is guaranteed by the Federal Housing Administration, as a way to make sure that first time home buyers are getting into home ownership and are ready to become home owners. It can be easier to qualify for these loans, because they usually have a lower credit rating approval, and a lower income that is needed to qualify to pay back the mortgage.
VA Loans
VA loans are another type of mortgage loans. These are loans that are meant for people who have been in military service. Either someone who has been on active duty with the military ,or a spouse of someone who died as an active service member are eligible to get VA loans. These loans can be easier to get because they often require little or no down payment. In order to get VA loans, the person must be able to make the monthly payments.
USDA Rural Development Guaranteed Housing Loan
Another government guaranteed loan, the USDA rural development loan, is given to people who have low to moderate income, and who are purchasing a home in a place that has been designated as a Rural Development Area. With this type of loan, there is no down payment that is required, and often there is no mortgage insurance required. It can be much easier to get this type of loan than any other type of mortgage, as long as you are buying a home in a rural development area.

Powermax Generator - 4 Steps to Pick the Right Powermax Generator

2009-03-11T00:43:00.000-07:00

The first step to choosing the right Powermax Generator is you need to determine what your intent is? Are your going to use it strictly as a back up power source to use only when there's no power or do you want to take it camping? Maybe you require portable power for a job site. Once you have decided on the main purpose of your generator we can now determine the size you need.
The second step is choosing the right wattage output of your Powermax Generator. Most homes require at least 3500 watts minimum to run a few small appliances and several lights, I would recommend at least 5000 watts then you're safe. You have the option of connecting a cable from your generator directly into your main power panel by means of a transfer switch. If you choose to this be certain you have a qualified electrician do the hookup.
The third step is choosing a reliable one that will easily start after a few months a sitting idle. Be sure to use a good fuel conditioner additive to keep the gas fresh. It's also a good idea to run your Powermax every 2 months or so to keep it in top condition.
Fourthly is the loud sound of a generator going to be a problem, or can you locate it away from your living area to reduce the noise level. Some machines have low noise reduction technology, be prepared to pay more for this option. It shouldn't be a big issue unless you're running it more often. I would rather have a little noise then a freezer full of ruined meat.

A Closer Look at Luxury Modular Homes

2009-03-06T23:30:00.000-08:00

Who doesn't dream of owning and living in a luxury home? A nice roomy castle with all of the custom features that make a luxury home just that, a luxury home. However; as anyone who has gone through the experience of actually having a luxury home built knows, it can be a very unpleasant experience.
The Home Building Experience
For one thing it can take up to a year to complete and one is completely at the mercy of the contractor who is doing the work. Each extra added on item that makes a home nicer, brings an extra charge to drive the overall price up.
It's Pick and Choose With Custom Options and Features
This is why more people today are choosing the much simpler and far more economical option of living in a luxury modular home. They simply choose what they want in their home just as a person would that is buying an automobile.
Deluxe Kitchens and Bathrooms
Custom fireplaces with any number of mantle styles. All manner of tile and hardwood floors and even vaulted and cathedral ceilings are all selected out as the buyer wishes. The same thing goes for kitchens and bathrooms that offer any number of choices in hardwood cabinets the latest in fixtures and polished stone counter tops.
A Three Dimensional Computer Home Tour
Of course choices in custom light fixtures and switches have to also be made as well as wall colors and paneling. Another new development in luxury modular homes is new three dimensional computer software that allows a person to actually tour the home they have designed and decorated prior to it being built.
Built to the Buyers Exact Specifications
This way they can be sure that all is just as they want and once this is done then the luxury modular home is built to their exact specifications. So it's easy to see why so many people are now choosing to have their custom home built this way.

Practical Considerations When Building a House

2009-03-06T01:29:00.000-08:00

Of course, a lot of people dream about building their own home. And while you may not design the actual layout yourself, you can certainly give the architect ideas about what you want the finished design to look like.
But more than often people do not think practically when they are in the process of designing and building a new house. Indeed, it is quite natural to think about how the finished result will look, rather than what it might cost you in ongoing bills; but if you don't look beneath the surface in this way, you might end up paying dearly for it in the future.
For example, you will need to spend some time thinking about what type of energy you are going to use in your home. Do you want to use gas right through the property? Would you prefer electricity? Or perhaps a combination of the two might suit you best? And if you have always moved into an existing property in the past, this might seem like a strange consideration; after all, you normally just move in and get used to whatever is already there.
However, this is your house - that means you get to decide what services you do and don't want, right from the start; which of course, can prove extremely beneficial. And while personal preference does come into it, you should also think about how much each service is likely to cost you. Of course, the price of electricity can vary greatly over time, as can the price of gas; what you start paying when you move into your property will very likely change before too long.
It will also pay you to build a home that is as carbon neutral as possible, since it can result in bills being even lower. Therefore, if you can consider this in the planning stages you might just be rewarded with lower bills.
You can also save money by getting both utilities - if you are going to have both - from the same provider, and there are usually reasonable discounts given for this. You will also save more by paying via direct debit and when you add these together, you can normally save quite a bit over the course of the year.

Insulated Earthbag Houses

2009-03-04T22:34:00.000-08:00

Energy performance on most buildings can be improved with insulation, including those made of earth such as adobe and earthbag structures. Although most earth structures are located in hot, dry climates, there is increasing demand for low-cost, eco-friendly earth building techniques in cold climates. This article explores three innovative methods for insulating earthbag buildings, which extends their building range to cold regions.
Most earthbag buildings use polypropylene grain bags filled with soil. The bags are filled, stacked in level courses and then tamped solid. One or two strands of barbed wire between courses bond the bags to each other and add tensile strength. The building process using earthbags filled with insulation as described here would be nearly the same, although the bags would weigh significantly less and speed construction considerably.
Unlike other earth building methods, earthbag building has the unique advantage of providing either thermal mass or insulation, and therefore can be adapted for cold climates with an insulated fill material. Scoria, pumice, perlite, vermiculite or rice hulls are all suitable insulating materials. These materials are natural, lightweight, easy to work with and non-toxic. They will not burn or rot and do not attract insects or vermin. In addition, scoria, pumice, perlite, vermiculite are not adversely affected by moisture and can be used as part of earth-bermed structures.
The table below compares the approximate R-values of three sustainable insulating materials that could be used in earthbags. (The first column in the table is the insulative value per inch; the second column shows the R-value for a typical 15" thick earthbag wall.)
Material -- R-value/inch -- R-value/15" Rice hulls -- R-3 -- R-45 Perlite -- R-2.7 -- R-40 Vermiculite -- R-2.13 -- R-32 to 36
1) The first method for insulating earthbag buildings uses bags filled entirely with insulation. The main advantage of this method over the other methods described below is ease of construction. Walls are one bag wide and filled entirely with insulation. Thick earth or lime plaster on the interior provides thermal mass to help stabilize indoor temperatures.
A demonstration home using this method was built in Crestone, Colorado with scoria-filled earthbags. Scoria also is known as volcanic rock or lava rock. Due to its volcanic origin, scoria is filled with tiny air spaces, making it a good insulator. Although the R-value of scoria is debatable, the owner claims these earthbag walls are comparable to straw bale walls of around R-26 to R-30. This estimate includes 5" of papercrete at approximately R-2/inch.
2) Another method for insulating earthbag buildings uses tube sandbags, also called traction tube sand bags, typically used to improve automobile traction on snowy/icy roads. (The bags are sold to add weight for vehicle traction.) This method involves stacking tube sandbags filled with insulation on the exterior of earthbag walls, thereby creating a double wall.
Filled tube sandbags provide about 10" of insulation, which is perfect for many climates - not too much, not too little. Again, scoria, pumice, perlite, vermiculite or rice hulls could all be used for insulation. Perlite would be my first choice due to its high R-value (R-2.7x10"=R-27) and resistance to moisture damage, although the final decision needs to be weighed against other locally available and inexpensive natural materials.
3) A third possibility is to add a seam lengthwise down earthbags to divide them into two compartments. The outer part could be filled with insulation; the inner part with soil. Like the other systems described here, this would create an insulated wall with thermal mass on the interior. For many situations, especially structures in moderately cold regions, this is an ideal wall system.
The placement of the seam could vary, depending on the climate. In a mild climate like New Mexico, about 4"-5" of insulation on the outside would suffice. This would provide about R-10 insulation. In a slightly colder climate the seam could go down the middle (50% insulation / 50% soil). In extremely cold or extremely hot climates I would fill the bags with 100% insulation (or all earth in a hot climate if insulation is not available).

Easing Your Way Into Homeownership: A Guide To Low Down Payment Mortgage Programs

2009-03-03T01:33:00.000-08:00

There’s no question about it: Buying a first home is a big financial commitment. In most cases, a home is the largest single purchase an individual or family will make in a lifetime. However, because of the tax advantages afforded to homeowners, buying a home also can be one of the best financial decisions you’ll ever make.

Problem is, many would-be homeowners remain renters simply because they mistakenly believe mortgage lenders require that buyers come up with 20 percent of the purchase price as a down payment. While it’s true lenders feel it’s less risky to work with buyers who are able to bring a substantial down payment to the table, the standard 20 percent requirement is fast becoming a relic of the past. In recent years, lenders have become more flexible in working with first-time homebuyers by creating a variety of special programs that require only a small down payment. These programs, combined with the most favorable interest rates in two decades, have encouraged growing numbers of renters to consider the tremendous benefits of home ownership.

While the list of programs offered by individual lenders is too extensive to mention in detail, here are some common programs you are likely to come across as you work with your real estate agent to purchase your first home:

Federal Housing Administration (FHA): FHS mortgages allow homebuyers to purchase a home with as little as a 5 percent down payment, and to finance all non-recurring closing costs. The current maximum loan amount in most urban markets is $151,725. In addition, borrowers are allowed to use up to 41 percent of their gross income toward paying mortgage debt – well above the ratio allowed under most private programs.

Department of Veterans Affairs (VA): VA mortgages allow veteran or active service personnel purchase home with no down payment, up to the current maximum price of $184.000. However, there is no purchase price limitation for buyers able to make a down payment. Like the FHA program, VA borrowers can put up to 41 percent of gross income toward their mortgage debt.

Mortgage Revenue Bonds and Mortgage Credit Certificates: Mortgages funded with these instruments typically require a minimum of 5 percent down and have interest rates that are 1.5 to 2 percentage points below conventional 30-year fixed rates. These types of loans, offered by state and local housing agencies, are available only to first-time homebuyers. There generally are income and purchase price caps that vary, depending on where you plan to buy.

Private Mortgage Insurance: Most major lenders offer privately insured mortgages, which generally require a 10 percent down payment (although some lenders offer loans with a 5 percent down payment to buyers with exceptional credit). These loans typically are not limited by maximum loan amount or purchase price limitation.

Community Homebuyer Program: Through their networks of mortgage lenders, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) offer Community Homebuyer Program loans. These programs require a 5 percent down payment, 3 percent of which may be a gift. To further help buyers qualify, applicants may use 38 percent of their gross income. Currently, the maximum loan amount available through these programs is $203,150.

Clearly, there are a lot of options for first-time homebuyers. While lenders will be more than happy to share information about their own programs, you can save yourself a good deal of time by first selecting a professional real estate agent who is experienced in working with first-time buyers in the areas where you plan to buy.

An agent who focuses on first-time buyers will know from experience which lenders in your area offer a low down payment program that will meet your unique needs.

Today, taking the first step toward owning your own home is easier than before. Your real estate agent is your best resource for finding innovative ways to help you come up with a down payment and qualify for financing. There’s certainly no need to wait until you’ve saved a 20 percent down payment!

Bad Credit Loan Mortgage: Best Bargain

2008-05-14T04:51:00.000-07:00

Having bad credit and getting a home loan are typically quite a bothersome combination and usually referred to by homeowners and lenders alike as a difficult, daunting and dynamic duo to bring together in financial harmony. And it's not as if there aren't options to make getting a home loan with bad credit actually possible.

For instance, bad credit home loans now exist and are currently readily available through many lenders, both through in house and online options. Yet, wouldn't it be more ideal to have a clean credit score and get a home loan with no hassle? I'd say so. One way to avoid going through the trouble of dealing with bad credit to attain a home loan is to, simply enough, bring your credit to an improved and non-spotty status.

Just A Few Initial Steps

To polish and make your already smudged credit rating glisten, you'll need to take a few steps first. To initiate and finalize the improvement process of your credit you must analyze your credit report, become familiar with what, how and just exactly why your credit is so poor as well as use some alternative form of credit.

A Careful Credit Report Analysis

More or less, a credit report is a financial Polaroid reflecting your payment history and the calculated amount of debt you're currently lugging around. Glancing it over, you'll notice if you have a number of late payments a lower overall score will be reflected. This makes sense, but sometimes, there are a few questionable scenarios that can randomly pop up on your credit score. Keep an eye out for mistakes made by credit bureaus. Inaccurate late payments are quite common and must be taken care of if spotted. Getting such a mistaken report fixed immediately is essential as such errors are substantially detrimental to your whole score and record.

Become Familiar With Makes Bad Credit, Well, Bad

After examining your credit report step back and become familiar with what actually made your score fall and shatter into a million tiny scattered bits. Going with the general rule of thumb and assuming your weak rating is due to not making payments on time and dealing with excessive amounts of debt, consider doing the following. Put down your credit report and ask yourself "What are my paying procedures...do I even have any?" If your answer is something along the lines of "what?" or "huh?" then you have found your first problem - you need a plan. Putting a billing system in place is dire, simply to keep up with payments and outlining when to pay them in a timely fashion as to heal your bleeding credit condition.

To whittle down the bulk of your debt, first pay off hefty credit card balances. Be sure to also maintain your balances, keeping them noticeably lower than your set credit limit. This is important because if credit bureaus notice you're maxing out a card they will be forced to give you a lower overall score.

Seek Using Alternatives, Different Accounts

Being that credit cards put you where you are currently - seeking to attain a home loan with bad credit - you'll have a tough time getting a new card with a low rate. But, you don't need another credit card as it is - you'll be better off without a new one. This said, seek alternative credit avenues to build your credit score back up.

Consider opening a checking or savings account, or even acquiring a secured credit card for outlining responsible credit card usage and displaying your ability to manage money well. Doing either of the aforementioned two will show credit bureaus you've improved financial shrewdness and obligation; thus, a higher score could soon very well be yours.

Effective Mortage Tips

2008-05-14T04:49:00.000-07:00

Are you having trouble attaining and qualifying for a home loan simply because you have bad credit? If so, you're not alone. The struggle is universal and is unwillingly attached to many a person with poor or bad credit.

But, the solution is comprehensive, so not to worry. There are actually special loans designed and implemented for people with bad credit looking for a home loan. Even better and as of late, it seems that home loans for bad credit toting individuals are much easier to attain thanks to wider avenues through online banking.

Having Bad Credit Is All Too Common

And let's face it, bad credit is something most of us can't avoid and it blatantly shows as poor credit is quite prevalent. This is so simply because not all of us can be fully conscious or perfectly adept with managing our finances and corresponding financial responsibilities. But, literally, any type of financial slip -anything from failing to make payments, to having bankruptcy history, to defaulting on past loans- can result in gaining a bad credit stance and being labeled as a person with poor credit. Missed payments are monitored and almost flagged immediately, thus leaving a bit of a smudge mark on your credit score. And of course, such a flagging and noting of a financial slip creates added difficulty when trying to seek out home loan opportunities.

Home Loans For People With Bad Credit

Individuals with bad credit can seek two types of home loans, secured or unsecured. Secured loans are typically ones with some form of security held against specific pieces of property such as the value or equity of your home, your car, business and etcetera. Specifically, these types of loans are advantageous, especially if you're seeking to borrow a substantial amount of money with bad credit under your hat and cannot seem to attain a loan from a standard bank or traditional lender. Interest rates here with these types of loans are much lower than most unsecured loan interest rates, which is another plus.

Unsecured loans, on the other hand, are not secured by any form of property and overall are, as it has been for years, quite hard to come by, especially with lower interest rates. But now, unsecured loans are being offered through many finance companies - both online and in house - with lessened interest rates as well.

The Current Offering For Bad Credit Individuals

A great number of online mortgage companies are now taking advantage of what many standard lenders and banks have been ignoring for quite some time now - bad credit persons seeking home loans. The online mortgage companies can offer bad credit individuals home loans simply because of an existing low overhead; expenses are lower and other standard business attachments are non-existent, thus, these companies can offer such home loans other banks cannot financially give out.

Profit opportunities are present and online companies are capitalizing on them. It's not just one-sided though, as the bad credit person gains loan benefits too. Helping those otherwise ignored by standard banks, individuals are now able to acquire home loans with poor credit and additionally, to their complete credit betterment, improve and repair credit ratings through said online home loan options.

Home Loans: Making Smaller Installments

2008-05-14T04:48:00.000-07:00

Some times the abundant choice also becomes a bit of a problem for the consumer. If you are exposed to a market environment where so many options are available then it may become difficult to choose a specific loan deal.

Generally, your choice of a loan should be based on the types of convenience that you want. If you want a quick loan then those loans that do not require any security should be selected. However, if your requirement is a loan that spans over a long period of time and allows smaller installments then security based loans should be preferred.

Smaller installments make it easy to repay loans without imposing a big burden on your repayment capabilities. Select a lender who is ailing to offer you such loans at competitive rates and on relaxed terms and conditions. No doubt, there are many lenders in the money market but a matching requirement has to be traced. This may require you to do a comparative analysis of their products and services so that nothing but the best is assigned to you.

Homeowner loans generally have favorable disposition of the lenders as a large value security in the form of home is pledged to the lender. These loans are not difficult to get sanctioned and offer relaxed conditions like repayment holidays and low rates of interest. It is not necessary that all homeowners must pledge their homes to borrow money. They can also seek loans that do not require any security though it will fall under unsecured category.

Unsecured loans for homeowner is a non-security based loan that can get you upto 25,000 pounds for a period that may extend upto 8-10 years. If you are not financially secured, you may prefer to have small installments and long repayment period, but this is not always possible in case of unsecured loans for homeowners. These loans are available online and some lenders may offer these loans despite the bad credit score. So, there should not arise any problem in availing loans unless you have an extreme case of bad credit history.

How to Avoid Mortgage Loan Fraud?

2008-05-14T04:46:00.001-07:00

Buying a home is an important financial decision in a person's life. Most often, it is a stressful experience for the first-time buyer. You need to be really careful while approaching a mortgage lender or real estate broker when buying a real estate property using a mortgage loan.
You should know how to avoid mortgage loan frauds. Listed below are some tips that can prevent you from becoming a victim of predatory lending or loan fraud.

1. Whenever anybody goes to hire a real estate professional, it is very important to go for a properly qualified and licensed professional. However, you should always seek references or testimonials from previous customers.

2. It is always better to select homes in a safe neighborhood. While selecting a home, it is always better to enquire about the home prices in the neighborhood. This can help in determining the right price of the home, and you can apply for the mortgage loan accordingly.

3. Before making any commitments to buy a property, it is good to get the property inspected by a qualified and certified home inspector. If the home needs any repairs, you should decide whether the property is worth it as some repairs can be very expensive.

4. While going for a mortgage loan, it is important to shop around for lenders and compare costs.

5. You should always be apprehensive of real estate brokers who insist on you taking loan just from one specific lender.

6. You should never entertain any mortgage lender who tries to convince you to manipulate the information on the loan application or persuades you to make a false statement. Whenever you apply for a mortgage loan, it is important that every piece of information submitted is accurate and true.

7. You should never sign a blank document. It is important to read and understand each and every term drafted in the loan document before signing it. You can even seek help from a reputed attorney in this regard.

How to Avoid Mortgage Loan Fraud

2008-05-14T04:46:00.000-07:00

Best Methods to pay off your mortgage faster

2008-05-14T04:44:00.000-07:00

There are only 6 ways to pay off your mortgage early and if you don't know them, you'd better be ok with leaving tens of thousands, sometimes even hundreds of thousands, of dollars on the table.

Now, some of these are great, some are not so great. It just depends on your financial situation and how badly you want to pay off your mortgage.

Regardless of your situation, however, there is always a way to pay off your mortgage that will work for you.

The 6 Methods To Pay Off Your Mortgage:

1 - Use the "Mortgage Loophole Report" that has recently been publicized

2 - Get a biweekly payment plan (it may not sound like much but it actually will pay off your mortgage quite well)

3 - Make an additional payment to principle each month (the most common way to pay off a mortgage)

4 - Refinance to a 20 or even 15 year loan (the mortgage payment will increase but it'll get the job done)

5 - Make a lump sum mortgage payment to the principle (maybe with a Christmas bonus you get)

6 - Last on the list is to refinance at a lower rate. Your payment will be lower and you'll have more money to pay off your mortgage with. You probably get a million calls a day about refinancing, but I wouldn't recommend it unless you can see both mortgage pay off amortization schedules and total interest paid on both. You'll learn why in the Mortgage Loop Hole Report.

Before ever choosing which method that you'll use to pay off your mortgage you need to have a firm understanding of not only what the current sacrifice is but also of how much it's actually going to help you pay off your mortgage and cut interest.

Usually, the decision comes down to your family's future and your family's lifestyle. Ask yourself the following questions:

Do you have a retirement set up?
Do you have money for your kid's college?
Do you want/need a new car?
Do you or your spouse want to vacation?

And most importantly, how much money do you want top save and when do you want to pay off your mortgage?

If you're truly serious about saving money and want to pay off your mortgage fast, you'll find the perfect option.

Although this is just a basic overview of methods to pay off your mortgage, I've written several reports that go into further detail on these.

Mortgage Loan Approval

2008-05-14T04:43:00.000-07:00

With widespread concerns over the stability of the housing market escalating in recent months, new statistics have shown that approval rates for mortgage loans fell by 50 per cent during March 2008.

According to the British Bankers Association, figures for all major high street banks showed a downturn in the availability of mortgage loans, with personal loans also being reported as weakening. Total figures for mortgage lending among all major banks stood at 5.1 billion pounds, down from 5.5 billion pounds in February. This amounts to just 35,417 new mortgages being approved during the course of the month, an 18 per cent decrease from the previous month. Consumer credit approvals also fell by 200 million pounds to stand at 500 million pounds.

The decline in mortgage loan availability was experienced across all forms of applications, with approvals for house purchases standing at its lowest level since 1997. Furthermore, close to 50 per cent of successful applications came from homeowners looking to secure remortgaging deals, although fewer of these types of loans were successful than in previous months.

Over the period of the month, 2.7 billion pounds' worth of new personal loans were approved, a stable figure against February's result and up 100 million pounds from the previous six-month average. The BBA reports that consumer spending has shown signs of recovery in early 2008, with deposits now in line with long-term averages. During the final quarter of 2007, total UK deposits fell to below one billion pounds, with this month's figures showing a climb towards three billion pounds, slightly above the trend trajectory.

BBA statistics director David Dooks said of the latest data: "The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals. Pressures on personal finances are also constraining demand, not only for mortgages, but also for personal loans and borrowing on cards."

Elsewhere, Simon Rubinsohn, spokesperson for the Royal Institution of Chartered Surveyors, told the BBC: "The tightening in the credit crunch is continuing to take its toll on the residential property market ... The Bank of England's latest 'swap' arrangement with the banking sector should help provide a little more liquidity for lenders but is not going to turn around the current challenging environment overnight."

The Bank of England has recently announced a relaxation in the types of securities it will accept as collateral in an effort to encourage borrowing among mortgage providers. The BBC reports that even if such measures are successful, it is unlikely that consumers will be able to obtain mortgage loans of 100 per cent of property value or more, as was the case last year. It predicts that a ten per cent deposit on all mortgage loan applications is likely to become the norm for homeowners. For people struggling to save money towards their deposit, a personal loan may be of assistance in helping to produce the funds necessary for an application.

The BBA figures follow an announcement by the Bank of England monetary policy committee earlier this month of its decision to cut the base rate of interest a quarter of a percentage point to stand at an even five per cent. It was the second rate cut of the year so far.

Best way to get Pre-Approval

2008-05-14T04:41:00.000-07:00

Not only does getting preapproval for a home loan help you narrow your home search, it speeds up the purchase process and can give you some real negotiation room when dealing with a seller. In this article, we'll talk about why getting preapproved for a mortgage is important and how you can do so.

Why Get Preapproval for a Home Loan?

Getting a preapproved loan tells you exactly what kind of home you can afford and your expected monthly costs. You can start house hunting without worrying about calculating finances. You'll know your maximum loan, maximum monthly payment, minimum down payment and that you have a virtual guarantee for a loan.

That preapproval letter can be real heavy artillery to motivate sellers, putting you in a better position to negotiate or win a bidding war.

How Do I Get Preapproved for my Home Loan?

When you apply for a preapproved mortgage, the process is the same as applying for a mortgage. You'll go through the application process with the lender, fill out your application, pay your credit report fee and submit your documentation.
When applying for preapproval, you'll need the following documents:

1. Check or cash to cover the application fee and credit report. If applicable, you may need to cover an origination fee or additional points up front.

2. Social Security numbers for all applicants.

3. List of all income sources.

4. List of all debts, credit cards, bank account numbers, loans, monthly payments and balances.

5. List with two years of employment history, including employer's name, address and contact information.

6. List of addresses for the last two years.

7. If you're self-employed, you'll need to bring in the last two year's income tax returns. Or, if you're newly employed (a recent graduate), you'll need to bring in copies of your W-2 forms.

8. The account numbers and balances for all your checking and savings accounts along with the branch addresses.

9. A clear explanation of any credit problems, and copies of bankruptcy papers, if any.

10. If applying for a VA loan, bring your Certificate of Eligibility.

11. List of all your stocks, bonds and investments, including current market values.

12. List of other assets and real estate.
13. Copy of any divorce or separation papers, along with child support and alimony documents - whether you're paying child support or receiving it.

When you look for a preapproved mortgage, the lender won't be able to actually inspect or appraise the property, so the preapproval will be contingent on both those processes.

Breaking Point for Homeowners

2008-05-14T04:40:00.000-07:00

Mortgages and rents are rising. Landlords are being forced to pass on their increased mortgage costs to renters and with a shortage of rental properties, rents are increasing to enormous levels. People looking for a rental property; have to vigorously compete with a many others - often finding themselves in a "bidding war". Economic analysts have forecast a 20% to 50% rise in house prices and rents based on supply and demand fundamentals.

Added to this, wage increases have not been able to keep up with other costs such as petrol and food and debt servicing. The question here is how much can working Australian's take before something breaks?

Mortgage borrowers have adjusted their attitudes in comparison to years gone by. In the past for instance, people would borrow funds taking into account their cost of living and their servicing capacity.

In contrast, the latest economic data shows borrowers adjust their "normal" consumption to retain home ownership in times of hardship. This said when the cost of living increases (i.e. increased consumables, food prices, petrol and interest rates) people heavily geared with debt can go to the wall.

In such circumstances people will be forced to alter spending and lifestyle patterns. More people will share accommodation, move into smaller houses (slum landlords rejoice), move back in with parents or move out of the cities and into the country.

Given the high levels of household debt and tightening of credit policies in the wake of the sub prime credit crisis, any short term relief looks doubtful.

In this environment, people need to re-examine their budgets and focus their efforts on reducing household debt. They should look at ways to increase their earnings and reconsider their investment strategies, opting for a lower risk conservative approach in order to weather the storm. In this way, and relying on the cyclic nature of economies, people will stand a better chance of emerging from the present conditions with mitigated effects.

Which Type of Mortgage is best for Me?

2008-05-14T04:38:00.000-07:00

Are you ready to buy a home? If you think that you're ready to buy a home the first thing that you need to do is decide what type of mortgage is for you. When you're looking into the different kinds of mortgages that are available you need to know how much of a down payment you will be able to make on a home because the amount of the down payment that you can make will affect the type of mortgage that you are eligible for.

The ideal down payment amount is 20% of the cost of the home but most people can't come up with 20% and usually people put down about 3% of the cost of the home as a down payment.
The two most common types of mortgages are an adjustable rate mortgage and a fixed rate mortgage.

An adjustable rate mortgage, also known as an ARM, usually has a low down payment and initially has a low monthly payment however the monthly payment will increase as interest rates go up. An ARM may have a low monthly cost that is fixed for six months or even a year but after that the monthly payment you need to make could double or even triple depending on the interest rate. Many people will initially choose an adjustable rate mortgage and then try to refinance and get a fixed rate mortgage just before the ARM monthly payment is set to increase.

A fixed rate mortgage, on the other hand, has the same monthly cost throughout the entire cost of the mortgage. You will always know what your monthly mortgage will be if you have a fixed rate mortgage.

However, the monthly mortgage payment if you have a fixed rate mortgage will be higher than the initial cost of an ARM mortgage and will be higher in total than an ARM. So over the course of the mortgage you will pay more to have a fixed rate mortgage but for many people that extra cost is worth the security of knowing that the monthly mortgage fee is fixed and won't change.

Even though you will pay more over the course of the mortgage if you choose a fixed rate mortgage if you choose an adjustable rate mortgage there's a chance that you will end up paying a lot more over the course of the ARM depending on how high the interest rate climbs. Since you will most likely have the mortgage for more than ten years going with a fixed rate mortgage is still usually a better option than an adjustable rate mortgage.

If you can't get a fixed rate mortgage when you first buy a home then you should refinance and switch your adjustable rate mortgage to a fixed rate mortgage as soon as you can after buying the home. If you can refinance before your adjustable rate mortgage introductory period is up then you can smoothly switch from one mortgage to the other without paying the ultra high interest rate of an ARM.

Need to Re-Mortgage Don't Panic

2008-05-14T04:36:00.000-07:00

If you are remortgaging and have equity in your property that it is. There is plenty of mortgage and remortgage deals available if you consult a whole of market mortgage advisor who knows where to look.

Mortgage lenders are never out of the news currently as they withdraw products and push their rates up, despite the best efforts of the Bank of England.

The main types of mortgage that have been withdrawn by lenders are the ones for 100% loan to value (LTV) and over, such as the now infamous Northern Rock 125% mortgage. There has also been a marked decrease in the number of 95% LTV mortgages available, be it for a first time purchase or a remortgage, as mortgage lenders are concerned that if the market drops by 5% or more then the outstanding mortgage will be greater that the value of the property.

To secure the best deals in the current marketplace you really need to be able to put down a deposit of at least 10%, or have owned a property long enough to have built up enough equity to ensure that you are remortgaging below the 90% LTV level.

If you are looking to remortgage in the coming months it is best to consult whole of market mortgage brokers who can take you through all of the options available to you. When you find the mortgage deal which suits your needs it is best to move fast to secure the rate.

Mortgage deals are being withdrawn daily with little or no notice. Lenders are also taking longer to process applications, especially for the most popular deals, as they are taking a more cautious approach and scrutinising applications thoroughly.

Prior to the credit crunch mortgage lenders were chasing the borrowers to offer them the best deals available. Now it is the applicant who needs to use all the resources available to them to seek out the best deal. A whole of market mortgage advisor will be able to use sourcing software that will show the best mortgage rates available for your given set of circumstances and will often have access to exclusive deals.

Mortgage advisors will also be able to use their experience in dealing with lenders and be able to advise on the best way to present your application if you have had any past difficulties, such as missed payments, arrears or county court judgements.

If you have had credit difficulties is may be worth while checking your credit report prior to applying for a new mortgage to ensure that you do not leave a credit search 'footprint' by applying to get mortgages that you are not likely to be accepted for. Also, if there are any errors on your credit file you can apply to have them corrected prior to application as lenders can cherrypick applications with spotless credit records.

Last week there were over 5,000 different mortgages available. Although this sounds like a lot, it is down from a high of over 16,000 deals available in mid-2007. So there are still plenty of mortgages out there and plenty of lenders wanting to lend to you, but it is best to consult a whole of market mortgage advisor to ensure that you are getting the best possible deal.

LIBOR Is On The Way Up!

2008-05-14T04:33:00.000-07:00

The LIBOR has been rising in recent weeks begging the question: How does LIBOR affect the American homeowner?

LIBOR stands for the London Interbank Offered Rate and it is the interest rate at which British banks borrower funds from one another in the London wholesale money market. Many adjustable rate mortgages are based on LIBOR.

An adjustable rate mortgage (ARM) is a mortgage in which the interest rate is adjusted periodically based on a pre-selected index. Probably the most common index is the 6 month or 12 month LIBOR.

A popular ARM mortgage product is the 5/1 ARM. What this means is that the loan is fixed for a period of 5 years. After that time, the rate begins to adjust based on the current LIBOR index. When LIBOR is rising and your loan is in the adjustment period, your rate will go up regardless of whether or not mortgage interest rates are down.

So, why is LIBOR rising?

In recent months the Federal Reserve has embarked on an aggressive interest rate cutting campaign. This has caused the gap between LIBOR and the interest rates set by central banks to increase. Many believe this is a sign that banks are in poor financial health and are reluctant to lend money. This seems logical considering much of this mortgage crisis is due to a lack of liquidity in the secondary mortgage market.

What does this mean to homeowners?

If you currently have a fixed rate mortgage, it means nothing. However, if you have an adjustable rate mortgage that is scheduled to begin adjusting in the next 18 months, now may be a great time to take action. This might be an excellent time to consider a refinance. Of course, remember to explore all options before making a decision to refinance. Ask yourself questions like:

How long will you be in this home? How long until you plan to retire? Do you have catching up to do on your retirement savings? Are you preparing to send children to college? Do you currently have equity in your home? Is there a pre-payment penalty on your existing mortgage?

With interest rates near historical lows, this could be a great time to refinance. Just make sure to ask questions and determine if it's right for you.

100 % Mortgage

2008-05-14T04:31:00.000-07:00

Most lenders who offer a mortgage always require some kind of a deposit in order to forward the loan. The deposit acts as a means of security for the lenders and also highlights the fact that the borrower is serious about the mortgage and that he or she will be independently able to raise some money to raise the loan.

Even though mortgages were a boon to borrowers the fact that they needed to raise money as a deposit was an issue that many borrowers found difficult. Especially those borrowers who had to borrow money for building their first home found it extremely difficult to raise money that increased with the increase in size of the mortgage. In such cases companies who were ready to provide a mortgage for the whole amount of the proposed loan is a very convenient arrangement.

In such a mortgage, the lender will provide the borrower the exact amount that is needed to buy the property. This means that there is no down payment or deposit in the transaction. Usually, first time home buyers are the ones who opt for such a mortgage. Since a deposit is not taken for such a mortgage, the interest that is charged by the lender for such mortgages will be usually high.

Since a hundred percent loan involves a lot of money that is provided without availing a deposit companies have various schemes that provides the money and yet maintains some amount of security for them.

Such loans may be very difficult to come by and needs extensive approval from the lender. Therefore, while providing details about oneself, one needs to be accurate about one's income and liabilities, including bad credit situations. If the lender finds anything amiss, the loan will not be provided. It is seen that interest rates in such loans are also very high.

Commercial Mortgage Explained

2008-04-30T14:03:00.000-07:00

Although most people would relate a mortgage to buying a home, they can also be used to buy a property that will be used by a company as a workplace. This can be for either business or commercial use, so it doesn't matter if it's for a shop, salon or office. These types of mortgage are known as commercial mortgages, and they have a few differences that set them apart from a regular homebuyer mortgage.

Other times when a commercial mortgage is more beneficial is when a business and property come combined - for example, a residential pub where the landlord resides over the pub itself would be better suited by a commercial mortgage.

Commercial mortgages do share some common ground with the more traditional home mortgages. The main one is that the loan still needs to be paid off within an agreed time (25 years being common, just like a homebuyer mortgage). Credit checks may have to be carried out as well. However, this is where the majority of the similarities stop, and the differences in a commercial mortgage become more apparent.

For instance, one immediate difference is that an arrangement fee will be charged. This is normally about 2% of the overall mortgage cost. On top of the arrangement fee, you'll also have to provide a guarantee on a commercial mortgage. This is to ensure that such a large loan can be covered, since commercial mortgages are often for far more expensive properties than standard house mortgages.

Guarantees will normally be either another business asset, such as another pub or office block, or even the new property itself. This is another way that it shares similarities with a traditional mortgage, in that you could lose the property if the mortgage payments aren't met.

One of the plus points of taking out a commercial mortgage is that you will generally benefit from a lower interest rate. The reason for this is that lenders believe that a successful business will be almost guaranteed to be able to afford the monthly payments; therefore, there's less of a risk factor involved. Some of the other features available on a commercial mortgage include:

Advance of up to 85% Loan to Value option

Self certified earnings

Bad credit is often accepted, even if you have numerous CCJ's, previous mortgage arrears and defaults against your name

No maximum age limit on the borrower

30 year mortgage available

When you compare these features to the ones found on a standard homebuyer's mortgage, you can see why it's a far better idea to take out a commercial mortgage if you have a business, rather than a more traditional type. If you're still unsure on how to go about applying for a commercial mortgage, or any of the features of one, there are a host of places both online and offline where you can get all the information you need. Once you have all that to hand, you'll have a good idea as to whether you need to apply for a standard or commercial mortgage.