Zero Down Loans Are a Thing of the Past By Lee Keadle

By Lee Keadle

Not too long ago, buyers were able to purchase homes without making a down payment. There were several options for these zero down loans, such as Fannie Mae's My Community or Du Flex loans. An around the way (but quite popular) option for doing this with FHA was getting the seller to contribute the down payment money to a non profit organization like Nehemiah or AmeriDreams, which then granted the money back to the buyer for a fee.

Despite the popularity of such loans, lenders are now realizing that these kinds of loans did more harm than good. In short, there is no such thing as a $0 down mortgage anymore. Fannie Mae has raised guidelines for their loan products and is not allowing zero money down now.

However, borrowers who were considering these loans several months ago do have other options. So, don't assume that you can't get a low down payment loan right now - it just won't be no money down. Be sure to talk to your lender about your options. It's a little harder to meet the new Fannie Mae guidelines, but buyers still use these loans everyday. So, don't think it's impossible.

Now that buyers can no longer get a zero down mortgage with FHA, some are questioning whether it's still worth using the FHA loans. Although a buyer will have to put money down now, he or she will generally have a lower payment with an FHA loan compared to a traditional loan. The reason that the payment is less with FHA is because the mortgage insurance premium for these loans is less. And, that insurance can make a big difference. Another advantage of using FHA loans is that the borrower can have a lower down payment. FHA only requires 3 percent down, where most conventional loans want 5 percent or more. It's easy to see why FHA is still such a popular loan for borrowers - even without the zero down that it used to offer.

State housing is about the closest thing there is right now to the zero down loans. State housing does not always require the full 3 percent down. These kinds of loans can be a pain in the neck to jump through all the hoops to get them. But, they provide a lot of buyers with a way to buy a home when they otherwise would not be able to. And these loans really depend on income. For a borrower with low income and a low sales price for the home, it's possible for this person to obtain very close to a 0% loan. But, this borrower would need good credit.

Lee Keadle is a Realtor in James Island South Carolina. He also specializes in Summerville homes for sale.

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Getting Qualified in Today's Mortgage Market By Lee Keadle

By Lee Keadle

Home mortgages have gotten a lot of attention in the news during the past few weeks. As home buyers keep hearing about how lenders are tightening the loans they give out, many people are wondering if they'll now be able to get the home they could have easily bought months ago. I've included in this article one of the most common questions we've gotten from home buyers in the past few weeks: is it harder to qualify now than it was 3 months ago before the mortgage crunch?

The short answer to this question is that it's gotten more difficult for lenders to qualify borrowers who have limited down payments. A borrower now needs a clean credit and a few months' of reserves in the bank in order to get qualified. Borrowers also now have to make a minimum of a 3% down payment unless they are VA eligible.

In terms of qualifying, lenders are having to go back to old school methods of qualifying. All lenders (regardless of the company) will require a 2 year history of income, which is a larger time frame than what we were seeing even six months ago. And, lenders are having to be conservative in how they calculate a borrower's income.

For example, some borrowers who work overtime count that overpay as their regular income. Even if a borrower can show that he has a history of regular overtime pay (say 6 months or so), the lender may not be able to technically count that overtime income anymore in the regular income. So across the board, you'll find stricter guidelines for borrowers.

However, it's important to note that even with these stricter guidelines, the changes should not affect most buyers. These guidelines are really only affecting borrowers with a damaged credit history. It's gotten a lot harder for them to qualify in the past few months.

But, if you've a done good job of maintaining credit and have saved up some money, you should not have any more trouble qualifying now compared to several months ago. So, it completely depends on your current financial situation.

If you're considering buying a home in the next few months, it's a good idea to talk with a home loan consultant. Don't think that several months out is too early to meet with a consultant. One of the biggest problems we see with buyers is that look at homes (either in person or on the internet) and don't really know how much they can afford. There's no point in getting your hopes up for a home or a price range of homes that you love but can't afford. So, before you start visiting homes, it's a good idea to talk with a lender about down payments and monthly mortgage payments so you can have a definite price range in mind.

Let Lee Keadle be your Charleston real estate guide! He specializes in Mount Pleasant SC real estate but works in all 18 Charleston areas!

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Equity Release Schemes - Important Considerations

By Jerry Figueroa Lee

The issues surrounding pensions in the UK means many people face a considerable drop in income when they retire, with the real prospect of having to downsize to release equity from their homes to help supplement their pensions. However, many retired people who manage on a small pension and limited savings are also living in properties which, even with the recent house prices fall in some parts of the country, have soared in value. This has opened up the market to an alternative known either as Lifetime mortgages or equity release, which many are now finding an effective way of generating readily accessible capital from their home, enabling them to afford the life they want in retirement and do the things they want to do without the need to move.

An equity release scheme could mean the difference between a comfortable retirement and a constant worry about paying the bills. However it is not suitable for everyone, and serious consideration of the following would be recommended before reaching a final decision.

How Lifetime Mortgage Plans Work

All Lifetime mortgages work on the principle that they provide part of your home's value in return for a share of the proceeds when you die, with the proceeds available to use for any purpose such as purchasing a new car, to pay for home improvements or a holiday, or simply to make daily life a little more comfortable.

The equity release in your home can be made available either as a lump sum, or as a monthly release, or a combination of both. Flexible features now make it possible to mix and match product features that satisfy the specific need.

How much you can borrow depends on the value of your home and your age - the older you are, the higher the percentage of your property's value you can borrow. Generally, you will not be advanced more than 50% of the value of the property.

Equity release schemes can be complicated products and are now fully regulated in the UK by the Financial Services Authority, who themselves recommend getting independent financial advice before proceeding with a Lifetime mortgage.

Equity Release Plans - Pros & Cons

Pros

• They can provide a lump sum, a regular income or both.
• Money released is free of tax unless subsequently invested.
• You don't have to move house or sell your home to unlock equity.
• It can be a way of cutting inheritance tax bills as the value of many properties means that IHT is no longer something only the rich have to pay.
• They can be used to pay for care bills without having to sell up at what can be a traumatic time.
• No interest payable while you are alive, so you will get a higher income for the same sized loan than with an interest-only mortgage or home income plan.
• Most loans are fixed-interest, so reducing risk.
• Plans are available to people as young as 55.
• The provider of a lifetime mortgage will be authorised and regulated by the Financial Services Authority.

Cons

• It is impossible to say how much will have to be repaid at the end - and how much will be left for your family.
• Interest payments roll up and compound reducing what your family will inherit. Your family could end up with nothing from the sale proceeds even though the lump sum you were lent only seemed a fairly small proportion of the home's value.
• You may not be able to get a top-up loan later.

Further points to consider when taking out a Lifetime Mortgage are -

• An independent adviser will look at the overall picture, taking into account any effects equity release will have on any means tested benefits and tax allowance as in some cases you could risk losing some or all of it, or having to pay extra tax
• Consider whether funds could be raised affordably from other sources.
• Equity release plans can be a good way of cutting potential inheritance tax bills, but they will also reduce what your family will inherit. Children or other relatives may be prepared to help you out financially instead of you taking out an equity release plan. They could then inherit the whole property.
• Consider whether moving to a less expensive property might be a better way of releasing money tied up in your home.
• Look for plans carrying the SHIP logo. SHIP is an industry body set up to promote safe equity release schemes. Members provide a number of guarantees which includes; The right to live in your property for life, The freedom to move to an alternative property without penalties and a no negative equity guarantee so that you can never owe more than the value of your home.
• You may want to sell your house at a later date and move somewhere smaller, or you may want to sell up completely to move into sheltered housing or into a care home. Check whether the equity release plan being considered allows you to transfer it to a new property or whether there is a redemption penalty if you end the scheme before death.
• Check the costs as schemes are becoming more competitive. A free valuation and a contribution towards the legal fee is not uncommon.
• Check the impact on your tax allowance
• What will happen if the value of your house falls or inflation rises?
• Who will be responsible for maintaining the home?
• The fees and charges for arranging the equity release.
• What will happen if your circumstances change such as remarriage?
• Can others take up residence in the property once an equity release scheme is in place?

Jerry Figueroa-Lee is the co-founder of The Mortgage Warehouse, one of the UK's leading online Mortgage Advisory Services, providing independent advice on the Best Mortgage Rates and Equity Release Schemes from the whole UK mortgage marketplace.

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Refinance Rates to Save Money on Mortgage Loans

By Tom Wil

While purchasing a home, most homeowners consider the price of the home but forget to look into the mortgage rates when they get their financed. Taking mortgage rates into account is essential as it determines what amount you finally pay for your home. So, people who realize the importance of mortgage rates later need not wait until their next mortgage loan to correct their mistake. Refinancing mortgage loan is a great option available at their disposal.

Amendments in the payment scheme and change in the terms of loan are the primary reasons that cause people to refinance their existing mortgage with the new one. Conditions of the existing mortgage is changed by opting for a refinance mortgage scheme that has a different interest rate, payment duration and may also have an altogether different lender.

However, there are many upfront costs related to refinancing - these costs are almost equal to the expenses that you incurred to acquire your previous mortgage loan. Nevertheless, refinancing helps you save money in the long run.

Furthermore, there are two main conditions to opt for refinancing that has a tremendous impact on the refinance rates that are being offered:

1. Acquired your mortgage loan when the interest rates were sky rocketing? - In this case, refinancing your home now will help you strike a good deal that have lower interest rates. This way you will save a lot of money, not only on the overall amount that you will pay for your home but also the monthly payments that you will need to pay will also be lower. Hence, you can have more to pay for your other necessities and debts.

2. Your mortgage loan has an adjustable interest rate - It may be possible that you have chosen to go for adjustable interest rates when your home was financed. Therefore, whenever the interest rate rises, so is your monthly payment for the repayment of the loan. It would thereby be a better option to switch over to refinance the home and opt for a fixed lower interest refinance rate. This would assure you a lower interest payment for every month.

Stagnant finance rate

Nonetheless, there are many other reasons when people consider refinancing their home but the refinance rate usually remains the same or rises in some cases. For instance, some people refinance their home merely to increase the duration of repayment of the mortgage loan. In that case, though the monthly payment of the borrower may decrease but the refinance rates remains stable or increases.

Same lenders who finance their home can be approached for refinancing as well that includes banks, mortgage companies, brokers and others. Thorough research of the available refinance options will help you find the best deal.

Refinancing is a great option to make amendments in your existing mortgage loan. For more information on refinance rate or refinance mortgage loan, please visit http://www.refinanceguide.com

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4 Essential Points to Strike the Right Mortgage Loan Deal

By Sam Loyal

Usually a home is the primary asset in the financial portfolio of an individual. It provides immense financial security and strength in the long run. Being a loan seeker, your main concern is generally to find the best mortgage loan package with the best possible interest rate. However, credibility of the lender you are dealing with is also important as the market is flooded with lenders who practice unethical lending strategies.

Knowledge is power

When armed with sufficient knowledge, borrowers are at a superior position to be wary of such predatory lenders. They make informed decisions while applying for mortgage loans and strike the deal that meets their individual needs in the best possible way.

Any mistake at this point can land you in stressful debt conditions. So, it is essential for you to keep in mind the following points in order to take the right mortgage loan decision:

1. Broker or lender - Banks and credit unions are big lenders who have good reputations in the market for professionalism and ethics. They offer only their own specific loan packages. On the other hand, a mortgage broker or a mortgage wholesaler provides you access to several lenders so as to help you get the best loan package considering your specific credit rating and other associated intangible factors. Hence, you have a wider choice in case of a mortgage broker.

2. Good Faith Estimate - Most people who look forward to mortgage loans are only concerned about the interest rates. But this is not the only factor that can make a difference to your mortgage loan. Apart from a low interest rate, the lender must also provide borrower with a Good Faith estimate for all the charges that are involved in the loan. Ask for explanations and question the quoted charges if you think they are not feasible. See if you can make them reduce fees, interest rates and charges.

3. Negotiation of interest rates - This point is usually for borrowers who are dealing through a broker. As the lending party is the third party in this case and the broker is involved in the dealing, he thereby charges a commission for his services. There are two ways in which the broker earns - yield spread and the original fees.

In a yield spread, the broker generally tries to strike the deal at a higher interest rate than what is possible. Nonetheless, you are open to negotiate here as well and so you must take advantage of the opportunity. You can enquire the broker about his original fees and the yield spread, if he charges any. A fair amount of both should not be more than 1% of your loan. Ask for a concession if it exceeds 1%.

4. What's your credit rating - This is a universal mantra for loans. The better your credit rating, the better will be your deals on mortgage loans with lesser monthly payments.

Last but not least, reading the documents of mortgage loans carefully is very important so as to avert any conflict later. It is foolish to assume that what you have agreed for verbally will be what is contained in the final documents.

Negotiation and knowledge is essential to strike the right mortgage loan deal. For more information on mortgage loans, please visit http://www.bestratesource.com/mortgage-rates

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2nd Mortgage Refinance Loans

By Kevin L B

If you're looking for a way to free up some cash for things like home improvements, second homes, investments, and even vacations, you may be able to borrow against the equity in your home through a 2nd mortgage refinance loan. The equity in your home is defined as the difference between the appraised value of your home and the amount you still owe on your mortgage.

2nd mortgage refinance loans are fixed interest loans that use your home as collateral. In exchange for access to the equity in your home, you promise to pay back a given amount every month for a specific period of time.

Calculating Available Funds from 2nd Mortgage Refinance Loans

Lenders calculate the amount of 2nd mortgage refinance loans using a specific formula. They typically take a percentage of the market value for your home, and then subtract the balance on your current mortgage. For example, if the value of your home were $100,000 and the lender set the percentage rate at 80 percent, and the amount you still owe is 40,000, then the maximum loan amount would be $40,000 (100,000 X .80 - 40,000.)

Many people have turned to online loan calculators to help determine the equity in their homes. In addition, they have had tremendous success in finding lenders who offer exceptional interest rates and reasonable terms by using the handy form at one of the many quality online referral sites. These sites offer people just like you the chance to save thousands of dollars on 2nd mortgage refinance loans, and it only takes a few minutes to fill out the sites form online.

Kevin Benner is the owner of 4mortgageratequotes.com an online financial information site helping consumers with 2nd mortgage refinance loans as well as other mortgage refinance and debt consolidation issues.

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2nd Mortgage Rates

By Kevin L B

2nd mortgage or home equity loans can be a great way to access the equity in your home. If you're looking to add value and comfort to your home through a home improvement project, or you're looking for a lower interest rate alternative to a traditional loan or line of credit, second mortgage or home equity loans may be right for you.

2nd mortgage loans or home equity loans are typically fixed rate loans. You are given a lump sum of money, which you are required to pay back over a set period of time. Many lenders offer their clients home equity lines of credit. These home equity lines of credit may be risky, however, because they feature variable interest rates.

Tracking Down the Best Rates for 2nd Mortgage Home Equity Loans

One of the best things you can do to protect your credit and your home is to compare interest rates for 2nd mortgage or home equity loans. The interest rate depends a great deal on your credit score. Some lenders will offer to waive the application and home appraisal fees. Some financial advisors recommend maintaining a small cushion of 20 percent equity in your home in case of emergencies.

One of the fastest and most efficient ways to compare home equity and 2nd mortgage loans is to fill out the easy online form at one of the many mortgage referral sites available on the web. They offer you quotes and contact information for up to four different lenders. These sites will narrow down the options, matching you with lenders that meet your criteria, and offer the lowest interest rates and the best terms.

Kevin Benner is the owner of 4mortgageratequotes.com an online financial information site helping consumers with 2nd mortgage Rates as well as other mortgage refinance and debt consolidation issues.

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