Alabama | Home Loan | Mortgage | Refinance

Archive for May, 2010

Do 1.25% interest rates really exist? Neg am mortgages calculate several mortgagerates. One is called the payment rate the other is the actual interest rate. Fortunately, the payment rate is capped at 7.5% of the previous payment. The true interest rate is calculated as simply the index plus the margin without periodic caps. When the interest rate resets to a higher rate with a negative amortization Adjustable Rate Mortgage (ARM), the mortgage payment doesn’t change. Instead, the additional interest expense is added to the loan balance.

Homeowners are given a choice of which rate to pay, which is why negative amortization loans are also referred to as “payment option” loans and option ARMs. Cost of Funds Index (COFI), Cost of Savings Index (COSI), and Monthly Treasury Average (MTA or MAT) are all examples of Alt-A negative amortization loans. The Mortgage Bankers Association of America (MBA) says alt-A loans’ share rose from 8% to 11%. Why? Because of the flexibility these loans offer, not to mention affordability for a home purchase loan or if you want to cash out on your home equity with a mortgage refinance.

Another affordable loan option is the interest only loan. With an interest-only loan, you pay only the interest on the mortgage in monthly payments for a fixed term. After the end of that term, usually five to seven years, you must refinance, pay the balance in a lump sum, or start paying off the principal, which increases your monthly payments substantially. Like neg am loans, interest-only loans are option ARMs because borrowers have the option of paying only the interest or paying principal and interest.

Negative amortization and interest-only loans can be useful if you are primarily concerned with cash flow instead of building equity. If you only pay the payment rate, the overall monthly mortgage payment might be lower than a typical 30-year, amortization loan. If you’re a short-term borrower who plans to refinance or sell the home within a period of a few years or if you have unsteady sources of income or too little documented income to qualify for a traditional loan, you may want to consider a neg am loan or an interest only home loan.

Maria is a respected published writer from San Diego California. She has written hundreds of mortgage finance articles online for BD Nationwide. You can read more of her loan articles at BD Nationwide Home Equity Loans and get more information about debt consolidation & Negative Amortization Loans. If you are curious about the pros and cons of the 1.25% interest rate loans from visit the loan department for Neg Am Option Mortgage Loans.

Article Directory: Article Dashboard http://www.articledashboard.com

DEAR DOUG: Basically, there are two types of mortgage accelerator plans. First, there’s the old biweekly mortgage where you make half of a payment every two weeks. This will drop the length of time you’ll pay on a 30-year mortgage down to about 22 …
Go to Source

Mortgage rates have fallen to the lowest level of the year as investors poured money into the safe haven of U.S. government securities. The average rate on a 30-year fixed rate mortgage dipped to 4.78 percent this week from 4.84 percent a week …
Go to Source

One controversial way to help close the budget gap is to get rid of the mortgage interest deduction that $40 million taxpayers take advantage of annually, with Mark Calabria, Cato and Lawrence Yun, National Association of Realtors.
Go to Source

Is now an ideal time to buy a home, given that mortgage rates are at record lows, with Michael Moskowitz, Equity Now president, and Fred Glick, US Loans Mortgage LLC.
Go to Source

Unemployment numbers are rising higher than usual in the USA. So many families need to refinance their mortgages because they have lost their jobs and are getting less money from unemployment than they did when they were working. Some people are finding it difficult to get a bad credit refinance due to having bad credit and having less income.

The main two things any lender looks at when applying for a mortgage or refinance are income and credit scores. If you tell the lending company that you are receiving unemployment, they may question how long you will have an income, as unemployment benefits can only last for a certain period of time. They are thinking, “What if this person loses their income? How will they survive? How will they pay us?” Maybe you would live on credit cards until they are maxed out. The bottom line is that they will not risk not getting paid.

Luckily there are companies that specialize in Bad Credit Mortgage Loans. They understand what is going on and do not judge you. You can feel at ease talking to them about any missed payments you might have had. Remember they do not get paid unless they close a deal for you and they will work hard to make sure you are approved.

Sometimes the mortgage broker might refer your bad credit refinance to the FHA. FHA loans are much easier to qualify for. They are also good for those that do not have a lot of money to put down on a house. You can qualify for an FHA with just 3.5% down. It is easier to refinance your mortgage with bad credit with the FHA since they are more lenient and will even consider applications that have prior bankruptcies.

Bad Credit Mortgage Brokers understand that life happens. Plain and simple. Not everyone can always pay their bills on time. Sometimes you might find yourself unemployed or maybe you had to take a pay cut at work, they work with you to supply explanations to accompany your bad credit report to their underwriters. Many of these bad credit mortgage brokers have good relationships with their underwriters and have the ability to explain situations that banks would not accept.

Before you go and find a lender or try to get a loan, you may want to get a copy of your credit report. There are a couple of ways to get a copy. One is by going to the credit reporting websites and asking for a free credit report, which you can do once a year. The second way to get a credit report and work on fixing your credit is by contacting someone like CCCS. The three credit reporting agencies will offer you ways to fix your credit (like paying more than the minimum payment due for credit card payments each month) and so will CCCS. Ultimately, you can get your own report, see what is on there, and try to fix some yourself, too. If there are any errors on your report, make sure that you dispute these with the credit reporting agencies. They will fix any errors on there.

Now, you are ready to look for a bad credit mortgage broker. You want to make sure to get a good faith estimate form the broker. Try to get a good faith estimate from at least three bad credit mortgage brokers. This way, you can compare the three and choose the one that will give you more and cost you less. When you are applying for a bad credit refinance, always ask for a good faith estimate.

Always make sure that you know who the company is. Find out everything that you can about the refinance company where you will get your bad credit refinance loan. Maybe some friends or someone in your family has used or heard of a legitimate company. You want the best company to help you refinance your mortgage with you having bad credit.

Beci gives Bad Credit Mortgage Refinance Facts and Bad Credit Home Loans Information

Article Directory: Article Dashboard http://www.articledashboard.com

The main advantage of applying for online mortgages is their convenience. It is relatively easier to apply for an online mortgage that it is for an offline mortgage. The Internet is a wonderful tool and one which you can take full advantage of when looking for the best deals in online mortgages. Many online mortgage lenders offer competitive packages for home buyers and most of these offer free online mortgage quotes for your perusal. As a perk, some of these sites also offer free online mortgage calculators to help you calculate the costs and gains of the loan programs they have to offer.

The Benefits of Online Mortgages

Borrowers can stay involved with their mortgage dealings by applying for a mortgage online. With traditional mortgages, lenders may not give out enough information, leaving the borrower practically in the dark throughout the whole process. Online mortgages dispel of this practice as sending information over the Internet can be done much faster and easier. So now, borrowers can stay in the know with the information that is readily available on the Internet.

Online Mortgage Applications…the Best Way to apply for a Mortgage

Based on the benefits listed above, online mortgages may be the best type of mortgage for you. Generally, mortgage brokers who conduct their business online charge lower fees compared to traditional brokers. What’s more, online rates are updated everyday, thus keeping you aware of the changes in interest rates.

Online mortgage applications are quick. An online application form takes about four minutes of your time filling it up. Approval can then be given within 24 hours. This is a far cry from the several business days it usually takes for traditional mortgage applications to be approved. In this regard, online mortgages are less time-consuming and even initially paper-free.

The Disadvantages

There are always two sides to every coin. As with all things, online mortgages, for all their many benefits, do have a certain disadvantage. And this certain disadvantage is enough to cause some people from engaging in such. Because part of the transaction is done online, people are hesitant to pursue online mortgages. The very faceless nature of online mortgages makes them difficult to trust. There is, after all, much sensitive information that you would have to give out when you apply for a mortgage. Such information may include your social security number, your full name, your address, your monthly income, et cetera. Thus, it is therefore advisable that you only conduct these types of online transactions with an established institution.