Hard Money Lenders can Provide Mortgages to Homeowners in Foreclosure

One of the first methods that homeowners typically pursue to avoid losing their homes to foreclosure is a new refinance. Unfortunately, many banks no longer provide loans to homeowners with very little equity, low income, and bad credit. Some, though, will not provide a loan no matter what, as long as the home is in foreclosure. For homeowners who do own a significant amount of the home and have paid down their original mortgage, hard money lenders may be able to provide a source of funding to help them save their homes. There are various hard money loan programs offered by numerous lenders and investment groups, and, although there are additional qualifications and costs that must be met, this type of loan can be closed in a very short amount of time and can be used when homeowners are running short on time.

The most usual provider of hard money loans is an institutional lender or group of private investors who have come together and created a company that pools money and invests in real estate by providing mortgages. The value of the real estate and the interest charged on the loans make up the largest portion of the profits these companies make. They are mainly used by borrowers who do not have a lot of time to close on the mortgage, when the borrower does not wish to keep the property for longer than a few months, if the borrower can not give out their credit history or other financial information, or for larger loan amounts that traditional lenders would not be able to provide funds for. These loans can be used for creative financing purposes, as well as giving foreclosure victims one more solution to save a home.

There are two main considerations in qualifying for a loan through a hard money lender: equity and loan amount, and income. Many of these lenders will not loan more than 65-70% of a home's value, and foreclosure loans may have even stricter lending guidelines, depending on the company. Unless homeowners can work out a short payoff to refinance, this will disqualify the vast majority of foreclosed homes from getting a loan. The related requirement of the loan amount means that homeowners must borrow a certain amount of money to get the loan in the first place. Most hard money lenders have requirements of $75,000-$100,000 as a minimum, due to the nonexistent profits of managing properties with lower values.

Thus, homeowners must meet two related qualifications of having a property that with a high enough value, and having significant equity in that property. It can often be difficult to calculate if lower-valued homes will even qualify for these kinds of loans. For example, if the necessary requirements are 65% loan-to-value (LTV) and a $100,000 minimum loan, the homeowners will need a property worth at least $154,0000. If the requirements are 70% and $75,000, the house will need to be valued at $108,000. Hard money lenders' qualifications can vary dramatically from one company to the next, so foreclosure victims can shop around for the best deals, especially if they are turned down the first time.

The second major requirement to meet for this type of loan is that the homeowners must have enough income to make the mortgage payment. A credit check is usually necessary for the lender to take a look at the foreclosure victims' other monthly obligations to determine how much of their incomes will need to be paid on the mortgage. If the homeowners do not have enough income to pay the mortgage, all their other debts, and keep the lights on and provide for their families, the hard money lender can not make the loan and expect it to be paid on time. This is why most of these lenders will require a credit check: not to determine the homeowners' score, which is typically low or else they would qualify for a traditional loan to stop foreclosure, but to help determine if they can afford the payment at all.

But, for the lucky few homeowners who are able to qualify for a foreclosure bailout from a hard money lender, the fun does not end. The loans typically have higher costs because of their unique nature and specialized uses. It is not uncommon for homeowners to be charged 4-5 points on the loan, which is simply the lender's up front fee for making the loan at all. Interest rates can also be sky high, in the range of 12% to over 20%. This often results in a higher mortgage payment for the homeowners than they originally had, making is absolutely essential for them to have recovered financially from their hardship and have established some sort of emergency fund to protect against future drops in income.

Despite the strict requirements of this type of foreclosure loan, homeowners who meet the qualifications often find they are able to stop foreclosure very quickly and get a new loan, making this a viable solution. Although they are more expensive than traditional mortgages, they are designed to offer homeowners a short-term solution to foreclosure and allow them the chance to save their homes and begin to establish an on time mortgage payment history. The hard money lender, in turn, makes a high rate of interest on a reasonably safe investment, and provides foreclosure victims with an additional option to avoid losing their homes, making a significant positive contribution to local communities and individual families.

The ForeclosureFish.com website provides homeowners with foreclosure information and advice designed to help them save their homes. Homeowners can read through basic descriptions of various ways to avoid foreclosure, including short sales, hard money loans, and bankruptcy, among others. With hundreds of pages of reference materials, blog entries, and articles, foreclosure victims can put together a comprehensive plan. Visit the site today and begin learning how the foreclosure process works and how it can be stopped: http://www.foreclosurefish.com/

Helpful Information On Mortgages

The first thing you'll want to do before you start looking at the various mortgages and mortgage lenders available is understand what a mortgage is, how the process works and who takes part.

Mortgages are simply methods of using your personal property or real estate to secure your payment of a debt. The term mortgage comes from the French word for death vow. It refers to the legal means that is used to secure the property, although it most commonly refers to the debt that is secured by that mortgage. In other words, the terms mortgage and mortgage loan are commonly used interchangeably.

In just about every jurisdiction mortgages are associated with loans that are given on real estate rather than on any other property such as water craft. There are cases where raw land is mortgaged as well. The securing of a mortgage simply means that individuals or businesses use the accepted method of purchasing either commercial or residential property without having to pay the full price on their own immediately. So there are residential mortgages and commercial mortgages commonly provided throughout the world on a regular basis.

It is far more common for either individual or commercial enterprise to seek out mortgages and mortgage lenders to buy real estate than for them to pay the full price for the property on their own. Nowadays mortgages are the way of the world. The most active markets for mortgages - where the demand for real estate is high - are the United States, the United Kingdom and Spain.

While there are some variations due to language constraints and colloquialisms, the two standard participants in mortgages are the creditor and the debtor. The creditor is, quite simply, the person or financial institution lending the money to buy the real estate or other property. The creditor has legal rights to that debt that is secured by a mortgage. The debtor usually lends to the debtor the money needed to purchase the property. Mortgage creditors are typically banks, insurance firms or other financial institutions such as credit unions. The two other common names for these creditors which are mortgagees or lenders.

A debtor is the one who secures the mortgage loan in order to buy the property - the new property owner. The debtor has to meet the mortgage lender's financial requirements and conditions during the life of the loan to prevent the mortgages being cancelled and the property reclaimed by the lender. These debtors are also called mortgagors, obligors or borrowers.

Attorneys will often enter the mortgage fray as well, as representatives usually of the debtor. Depending on the locale they may be referred instead as the conveyance or solicitor.

A mortgage broker may be part of the mortgage process. This professional, rather than licensed and employed by one mortgage or banking firm, has familiarity with many and is responsible for doing the search and comparison of many mortgage firms and options, and finding the would-be debtor the best mortgage deal. The mortgage broker may be a certified financial advisor, or the debtor may secure the help of one for the best financial mortgage options, and help acquiring the most competitively priced loan.

James Copper is a writer for http://www.any-loans.co.uk/mortgages.php where you can get information on mortgages

Mortgages to Help Fund Business Ventures

Some people dream of taking the movie world by storm. Others dream of making a mark in journalism. Still others dream of starting their own ventures. Starting a business is what some people aspire to do. It may not be the easiest thing in the world. The way to business success may be paved with many thorns. But the young entrepreneur knows what he wants and is keen to get it. Henry David Thoreau famously said, "If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them." Now there is a quotation that every budding entrepreneur could take note of.

No business can be formed solely on the strength of one's dreams. A lot of work goes in to making that dream a reality. Every successful venture is built up on the foundations of hard work. A lot of research also has to be done before any business venture can be floated. Much time is spent in studying how similar businesses have begun. Purchasing equipment, finding employees, and building networks are essential aspects that have to be taken care of. Farming out functions to other people may also be an option that the entrepreneur could be looking at.

However, before the business can start functioning, the entrepreneur has to find a suitable base of operations. Finding the ideal office may be backbreaking work. But this will be good practice for the future. To begin with, you will have to look at places which will be suitable for your venture. Do you require the services of other people and organizations? If so, it would be a good idea to look for an office which would be in proximity to those service providers. Are you looking at attracting new customers? If that is your aim, you would have to look for a prime location in a desirable place. You would also have to make sure that the area attracts the target audience that you will be servicing.

The next question that the entrepreneur has to ask is "Can I afford such a place?" For the budding entrepreneur, money might be tight. Without another large source of income, the young business person with a dream may face himself clutching at straws. But there are ways in which one can afford that ideal office. The business mortgage is a great blessing for all young entrepreneurs.

The business mortgage is perfect for those who are looking to buy an office. The terms can be anywhere between five and thirty years. The repayment schedule would be an important factor to consider. You could pay equal installments over a period of time or you could just pay the interest every month and a final bulk amount. Many combinations of the above two modes are also possible; Some mortgages require the borrower to invest in an endowment fund which would end up paying off the principal. The serious entrepreneur would make it a point to look at a variety of options before deciding on the mortgage option that would suit him best.

Buyer Beware! Make sure to Compare mortgages before you get business mortgages or other Mortgages.

Low Rate Mortgages

The global economy has been extremely unstable since the later half of 2006 and that has directly led to problems for borrowers all over the world. In most of the leading developed countries in the world, interest rates have risen immensely, and that also included the interest rates set by the Bank of England. UK interest rates actually rose five times in the twelve months between August 2006 and August 2007, with the final rate standing at 5.75%. Whilst savers are rubbing their hands together, borrowers all over the world are looking for the lowest rates possible, and low rate mortgages are the most desirable of those on the market right now.

Low rate mortgages are popular because they can save homeowners a lot of money, and there is also a degree of flexibility with many low rate mortgages deals out there at the moment. Many providers offer fixed rate products that can save individuals the hassle of strained finances should the UK interest rates fluctuate in future.

There are fixed low rate mortgages available out there for two, three, five and even twenty-five years. However, there are also low rate mortgages with variable rates out there too if you prefer to take your chances or do not want to commit to a deal that has major restrictions, as many of the fixed low rate mortgages products do.

Low rate mortgages do tend to have more restrictions than those products that have higher rates because the lender prefers to secure your custom in return for offering you a low rate the first place. This is one of the major down sides to low rate mortgages, but may not apply to all of the products out there.

The best way to find out whether the low rate mortgages product you are looking at has such restrictions is to read the small print. All exclusions and terms will be contained within the small print, so you should know exactly what you are committing to after reading it! If you do not read it then the likelihood is that you will end up paying far more than you plan to somewhere down the line.

http://news.bbc.co.uk/1/hi/business/6272776.stm

Jason Hulott is Business Development Director at UK Mortgages service, PolarMortgages. Visit Polar Mortgages now for more information about UK mortgages and remortgages.

Adjustable Rate Mortgages

Adjustable-rate mortgages (ARMs) differ from fixed-rate mortgages in that the interest rate and monthly payment can change over the life of the loan. ARMs also generally have lower introductory interest rates vs. fixed-rate mortgages. Before deciding on an ARM, key factors to consider include how long you plan to own the property, and how frequently your monthly payment may change.

Why choose an adjustable-rate mortgage?

The low initial interest rates offered by ARMs make them attractive during periods when interest rates are high, or when homeowners only plan to stay in their home for a relatively short period. Similarly, homebuyers may find it easier to qualify for an ARM than a traditional loan. However, ARMs are not for everyone. If you plan to stay in your home long-term or are hesitant about having loan payments that shift from year-to-year, then you may prefer the stability of a fixed-rate mortagage.

Components of adjustable-rate mortgages

Adjustable-rate mortgages have three primary components: an index, margin, and calculated interest rate.

Index

The interest rate for an ARM is based on an index that measures the lender's ability to borrow money. While the specific index used may vary depending on the lender, some common indexes include U.S. Treasury Bills and the Federal Housing Finance Board's Contract Mortgage Rate. One thing all indexes have in common, however, is that they cannot be controlled by the lender.

Margin

The margin (also called the "spread") is a percentage added to the index in order to cover the lender's administrative costs and profit. Though the index may rise and fall over time, the margin usually remains constant over the life of the loan.

Calculated interest rate

By adding the index and margin together, you arrive at the calculated interest rate, which is the rate the homeowner pays. It is also the rate to which any future rate adjustments will apply (rather than the "teaser rate," explained below).

Adjustment periods and teaser rates

Because the interest rate for an ARM may change due to economic conditions, a key feature to ask your lender about is the adjustment period--or how often your interest rate may change. Many ARMS have one-year adjustment periods, which means the interest rate and monthly payment is recalculated (based on the index) every year. Depending on the lender, longer adjustment periods are also available.

An ARM can also have an initial adjustment period based on a "teaser rate," which is an artificially low introductory interest rate offered by a lender to attract homebuyers. Usually, teaser rates are good for 6 months or a year, at which point the loan reverts back to the calculated interest rate. Remember, too, that most lender will not use the teaser rate to qualify you for the loan, but instead use a 7.5% interest rate (or calculated interest rate if it is lower).

Rate caps

To protect homebuyers from dramatic rises in the interest rate, most ARMs have "caps" that govern how much the interest rate may rise between adjustment periods, as well as how much the rate may rise (or fall) over the life of the loan. For example, an ARM may be said to have a 2% periodic cap, and a 6% lifetime cap. This means that the rate can rise no more than 2% during an adjustment period, and no more than 6% over the life of the loan. The lifetime cap almost always applies to the calculated interest rate and not the introductory teaser rate.

Payment caps and negative amortization

Some ARMs also have payment caps. These differ from rate caps by placing a ceiling on how much your payment may rise during an adjustment period. While this may sound like a good thing, it can sometimes lead to real trouble.

For example, if the interest rate rises during an adjustment period, the additional interest due on the loan payment may exceed the amount allowed by the payment cap--leading to negative amortization. This means the balance due on the loan is actually growing, even though the homeowner is still making the minimum monthly payment. Many lenders limit the amount of negative amortization that may occur before the loan must be restructured, but it's always wise to speak with your lender about payment caps and how negative amortization will be handled.

Rob Alley
Roy Wheeler Realty Co. - The Avery Group
http://www.robsellscharlottesville.com
roballey@roywheeler.com

Cons and Pros of Interest-Only Mortgages

The concept of interest-only mortgages has emerged not so long a go, but it is becoming increasingly popular as a method of financing homes.

When you take out a mortgage, your payment includes two parts: interest and principal, the former being the actual cost of your house and the latter being the extra amount you pay on top of that cost in order to take out a loan and is based on the interest rate your lender imposes. Thus, the interest may be considered as the price of taking out a loan.

A mortgage is called "interest-only" if the scheduled monthly mortgage payment - the payment the borrower is required to make - consists of interest only. The concept is that you will pay the interest and the principal on the basis of a special repayment schedule, in which at the beginning of the repayment period most of your payment will be interest and towards the end of it most of your payment will be principal. The option to pay only interest is usually provided at the beginning of the repayment period and lasts for a specified period, which is usually 5 to 10 years. However, even during this period a borrower, if he wants to, has a right to pay more than interest. Once the interest-only period is over, the mortgage will be re-amortized to include the principal.

The point in such scheme is that for the first several years your monthly mortgage payment will be much less then it would be with a usual mortgage. For example, if a 30-year loan of $100,000 at 6.25% is interest-only, the monthly payment will be $520.83, while a borrower with the same mortgage but without an interest-only option would have to pay $615.72. But once your interest-only period is over, your monthly mortgage payment will be higher for the remainder of your repayment period.

This option may be good for people with fluctuating incomes, as when their finances are tight, they can make interest-only payments, and when they are flush, they can make a substantial principal payment. This is also a good option for people who are short on money at the moment, but expect to get more money in the near future via a raise or investments.

And now for the drawbacks. An interest-only mortgage can be a game of chance. As for the people with fluctuating incomes, they should ask themselves, whether they are disciplined enough to make principal payments when they are not obliged to do so. As for those short on money at the moment, they should consider the risk that the expected income raise won't materialize. In both cases you may end up being unable to pay high monthly mortgage payments after the interest-only period is over. The decision on taking an interest-only mortgage basically comes down to whether you need to save some money at the beginning of your repayment period and whether you are ready to deal with the possible consequences described above. So think twice!

Arthur York is a home loan expert working for http://www.NorthAmericanLoans.net To get aid in buying a home of your dreams and finding the right loan to save you thousands of dollars each year, please visit us at http://www.northamericanloans.net

A Brief Introduction To Fixed Rate Mortgages

Fixed-Rate Mortgages

Fixed-rate mortgages are among the most popular on the market. They can be useful for first-time buyers, or anyone whose mortgage obligation represents a significant percentage of their earnings. The benefit of knowing the level of mortgage repayment is more important than any benefit gained from decreasing interest rates.

Loan to value

Loan to Value (LTV), usually expressed as a percentage, is the ratio between the total borrowing amount and the total value of the purchase property. As a simple example, borrowing £90,000 against a property valued at £100,000, assuming you are able to supply a deposit of £9,000; LTV is calculated as 90,000/100,000 x 100 = 90%.

Early Redemption Penalties

Early redemption or repayment charges, often equivalent to several months' interest may apply for at least the duration of the fixed term. Sometimes redemption penalties will extend beyond the fixed term, depending on the lender. This is important in the case of long-term mortgages, where the prediction of a change in circumstances, leading to early repayment, is difficult. Generally, the better the rate, the longer or higher the redemption penalties.

Pros and Cons of Different Types of Fixed Rate Products

There are two main types of long-term fixed rate mortgages: 25-year fixed rate. 10-year fixed rate. These are suited to borrowers who intend to live in their home for an extended period, and prefer the safety of invariable monthly repayments. Many mortgage lenders offer enticements for first-time buyers, such as no arrangement fees, reimbursement of valuation fees or "cash back", upon completion.

25-Year Fixed Rate Mortgage Traditionally, this has been the most popular mortgage when interest rates are low allowing a low interest rate to be secured for the full term.

Advantages : Lower monthly payments than a 10-year fixed rate mortgage Payments are constant for 25 years.

Disadvantages : Pay a higher interest rate than a 10-year fixed rate mortgage. Payments stay the same if base rate goes down.

10-Year Fixed Rate Mortgage This has been popular among people who are refinancing their 25-year loan.

Advantages : Lower interest rate than a 25-year fixed rate mortgage. Build up equity faster than with a 25-year loan. Payments are constant for 10 years.

Disadvantages : Higher monthly payment than a 25- year fixed rate mortgage. Payments stay the same if base rate goes down.

Key Considerations

Background

If you are considering a fixed rate mortgage, be aware that a booking or arrangement fee is payable. In many cases, this fee can be added to the total sum borrowed, but interest charges will also be applied to this additional amount. Beware of high mortgage fees obscured by an apparently attractive APR.

Interest Rates

Interest repayment is the mortgage element that has the biggest impact on the borrower's monthly outgoings. The UK base rate is set by the Bank of England, subject to external factors, and unpredictability. When homebuyers borrow money, an obvious concern is the risk of unforeseen interest rate rises. It's a very real possibility, no matter how stable the economy.

Fixed Rate versus Variable Rate

Base rates are influenced by a variety of factors, and fall as well as rise. The possibility of a fall in the base rate often tempts consumers to favour a variable rate mortgage. If interest rates fall significantly during a fixed rate period, a fixed rate mortgage may prove to be more expensive than a variable rate mortgage. If interest rates rise during the fixed-rate period, you will experience substantial increases in repayments, when the interest reverts to the standard variable rate, at the end of that period.

Conclusion

Financial trends and recent economic history can give a clue to possible base rate fluctuations, but the result is only an educated guess. Predicting variations in the base rate is very difficult. However, fixed-rate mortgages aim to take interest rate movement into consideration, by setting a fixed interest rate for a predetermined period. They are very useful in some circumstances, as long as the underlying principle and ramifications of a variable base rate are properly understood.

Josh Taylor writes regularly on consumer, financial and business matters.

You can find impartial advice and further information on a fixed rate mortgage at http://www.1000mortgages.co.uk - where whole of market mortgage brokers do the searching for you.

All Providers Claim They Have Cheap Mortgages

Need a cheap mortgage? Who doesn’t? The trouble is that with the recent upheaval in financial credit markets around the world money is no longer cheap, and therefore there’s not much chance of a cheap mortgage any more.

Of course, most providers claim they offer cheap mortgages. They are not likely to advertise expensive mortgages, after all. It is therefore, important to look behind the headlines which battle for your attention and look at the figures and fees in detail, as in the example above. No matter what label the lender puts on a product, to find the cheap mortgage that suits you, you will need to do your own homework, or at least, with the help of a mortgage broker or mortgage adviser.

To find the best cheap mortgage deal you need to look for a competitive interest rate for the type of mortgage you want over the period you want. There are so many mortgage products on the market (over 8,000) and with many of them claiming to be cheap mortgages you may miss out on the best if you simply walk into a high street bank. Small differences at the start of a mortgage can make big differences in the total amount you repay. It is always sensible, therefore, to take professional mortgage advice. Mortgage advisers can save you a lot of time and money because they have access to all the mortgage packages on the market, and they know where to find the best cheap mortgages.

Of the cheap mortgages on the market at the moment one of the best is a 4.99% fixed rate until 30 November 2009. Let us assume you need a £125,000 mortgage on a property estimated to be worth £200,000 and you want a term of 25 years. That 4.99% reverts to the lender’s standard variable rate for 35 months – the rate currently being 7.74% – and then it changes again, to a long standing borrowers rate of 7.34% for the rest of the period of the mortgage (around 20 years). Other incentives that come with this cheap mortgage are free Accident Insurance for six months, free Sickness Insurance for six months, free Unemployment Insurance for six Months. Importantly, as well, there is no higher lending charge (HLC).

With this cheap mortgage your estimated monthly payments would be £730 for the first period of fixed 4.99%. For the next period of 35 months the estimated monthly payments would be £929, and for the rest of the mortgage term, your estimated monthly payments would be £901. All that means that you would pay £142,117 in interest, and would need to pay back the original loan of £125,000. With fees, the total amount repayable is £269,626. The fees are an arrangement fee of £1,999, a valuation fee of £175, a valuation admin fee of £125 and a redemption fee of £210. Other costs you might incur are survey costs at £315, fund transfer fee of £25 and legal fees of around £400. Stamp duty payable on a property worth £200,000 is at 1% - or £2,000.

Even with cheap mortgages, the costs mount up.

Nick Rivera is an author on a variety of property related subjects, which include mortgage rate reviews and detailed analysis of the role mortgage brokers provide in the current climate.

Article Source: http://EzineArticles.com/?expert=Nick_Riviera

UK Mortgages Facing Tough Times Ahead

The property market is set for troubled times over the next year or two after the number of UK mortgage approvals fell by 14% in August. Figures from the British Bankers' Association showed that the number of approvals given the go-ahead for home purchases in the month was 61,051, down from 71,178 in August last year.

The number of UK mortgages fell for the third month in a row, as buyers left the market, uncertain about the financial future. For all UK mortgages, including re-mortgages, the number of approvals was 168,291 - down 8.8% from the same month in 2006. The total value of loans was £19.1bn. For house purchases the figure was £9.38bn, down £1.1bn from July, and down by £10bn compared to August last year.

Britannia Building Society's chief executive Neville Richardson said bringing interest rates down by a quarter of a percent would not be sufficient to solve the crisis in the UK mortgage market. He said: "The mortgage market will be challenging. Just lowering the interest rates will not work. Getting some liquidity back into the market would help." Mr Richardson thought that the chances of a property crash were low, thanks to good economic fundamentals.

Unlike Northern Rock, Britannia uses the global wholesale money markets) for only 25% of its borrowing (Northern Rock's level was 75%), with 60% coming from its customers, so it should not suffer like Northern Rock did.

Nationwide's house price figures showed a fall in the annual rate of inflation from 9.6% in the previous month to 9% to mid-September 2007, and the downward trend is expected to continue.

Further, the UK's biggest housebuilder, Barratt Developments reported that sales of new houses were down by 10% following the Northern Rock crisis.

Worse news for UK mortgage holders is that mortgage lenders are beginning to ask for larger deposits from first-time buyers as the credit crunch continues to bite. Deals that enabled borrowers to take out a mortgage with only a small deposit have been withdrawn by many lenders. Some deals even asked for no deposit at all. Industry watchers see this as the start of a process of providers tightening their lending conditions - and other building societies and banks are expected to follow suit.

Uk Mortgage products that lent 95% or 100% of the property values have been scrapped by the Norwich & Peterborough Building Society (N&P). Their maximum loan-to-value is now 90%. For a £200,000 property, the borrower will now have to find £20,000 for the deposit - in addition to other fees and costs, such as stamp duty (which on a £200,000 property would be £6,000). Accord Mortgages, part of Yorkshire Building Society, has also scrapped its 100% lending on UK mortgages. Alliance & Leicester has stripped back its 95% lending to only a few products, and Leeds Building Society requires a 100% loan to have a guarantor.

In particular, these changes to policy will affect first-time buyers, as the less a deposit is, the easier it will be for them to get on the property ladder.

The credit crunch and accusations of less than responsible lending has caused providers to take a look at own their lending criteria. As well as a cut back in UK mortgage products, those that offer 90% lending usually have high fees attached. Alliance & Leicester, Halifax and RBS/NatWest all have a higher lending charge for borrowing at 90% or more, claiming that it covers the increased risk associated with higher lending. The charges often amount to more than £3,000 on a typical UK mortgage.

By contrast, Barclays, Bradford & Bingley, Lloyds TSB, HSBC and Nationwide do not charge more in these circumstances.

It is best to get as large a deposit as possible when taking out a UK mortgage, to get a lower fee, and a better interest rate.

Nick Riviera is an author on a variety of property related subjects, which include mortgage rate reviews and detailed analysis of the role mortgage brokers provide in the current climate.

Article Source: http://EzineArticles.com/?expert=Nick_Riviera

Reverse Mortgages Could Supply Liquid Cash in Time of Need

We all would ideally like to keep aside a substantial fund to see us through bad days. However life cannot be predicted and a sudden circumstance may arise where the fund proves to be insufficient to meet our needs. Till the time we are employed and earning our own money, we need not worry about the cash inflow. Life after retirement is the time when we need to be well prepared to meet sudden liquidity requirements which may arise. The sudden stop to the constant inflow of cash already causes a strain on even our regular household budget. In such a scenario an emergency could turn our world upside down. Reverse mortgages are an ideal way for retired citizens to deal with such a circumstance.

Reverse mortgages are a convenient process of getting a loan in lieu of property owned by the borrower. The main difference and convenience of getting reverse mortgages is that the property owner gets loan against his house but he can continue to retain the ownership of the house and even reside in it till the time of his death. In case the borrower decides to sell off the property, he is entitled to do so but needs to repay theloan in full and final settlement. The loan amount is also remains the responsibility only of the borrower and does not get transferred to his or her heirs. The arrangement for receiving the loan can also be decided by the borrower, as he can decide if he wants to take the entire lump sum at one go or in monthly installments.

Taking reverse mortgages on one’s property ensures a regular cash flow into the household even after the regular source of income has stopped. Any person above the age of sixty two, who owns a property can easily apply for it and enjoy a financial support for lending agencies. This enables the loan taker to lead an independent life without having to ask for financial help from any relative or friend, and for a retired person this is a big boon indeed. Also a property that has been put up for reverse mortgage can be mortgaged even further provided it was the first kind of loan taken on that property. The continued ownership of the property and facility to continue using the property for residential purposes is a major attraction of applying for reverse mortgages.

Everyone is entitled to a life of dignity and a retired person feels the need for such respect even more than others. Owning a house truly becomes an asset for such a person as in times of need he can actually use this asset in the most beneficial manner. He can ensure that he maintains his regular lifestyle that was there during his employed days, thanks to reverse mortgage facility. This form of providing senior citizens of America has truly helped to establish a society of senior citizens that encourages independence and self sufficiency among its members.

Antonio Redford is a legal expert. He gives advice to clients who are looking for expert counsel on reverse mortgage. For more queries about Reverse mortgages, American reverse mortgage, www.reverse-mortgage-seniors.com and visit Reverse mortgages

Islamic Mortgages

According to the Islamic law, Sharia, the Muslims are forbidden to pay or receive interest. Most of the mortgage products on the market thus were unsuitable for Muslim borrowers as these mortgages are mainly based on interest.

As a result of the increasing demand by the Muslim borrowers, lenders have in the recent years expanded their product ranges with Sharia compliant mortgages. Under Sharia law, two mortgage types are available to potential homeowners: Ijara (Lease To Own) and Murabaha (Deferred Sale Finance) loans.

The Ijara Loan

By this method, the mortgage lender would buy the property from the vendor; becoming the owner. The lender then leases the property to the over 20 to 25 years with a monthly lease payment. The lease payments would take all of the lender's costs into account.

Now the Muslim borrower's payment would now be treated as rent instead of "interest". And the payments would fluctuate with the interest rate changes.

The lease agreement would also specify that the occupier can buy the property off the lender for a very small sum, usually £1, at the end of the lease period.

The Murabaha Loan

By the Murabaha method, the mortgage lender purchases the property and immediately resells it to the Muslim borrower at a higher price.

The profit that the lender essentially makes out of this transaction is the equivalent of all the interest on a fixed interest loan as well as any costs incurred. The borrower then buys the property from the lender at that gross figure, which is then repaid to the lender in equal installments for a period, typically of 15 to 20 years.

Adil Akkus is the managing director of the Appleton Estate Agents in Reading and Appleton .

Mortgages After Divorce

When a marriage breaks down one of the biggest problem areas is finance. Each member of the couple has a feeling of insecurity immediately. Where, they wonder, will they live after separation and divorce? They will need to consider divorce mortgages – where the lender understands the situation from which the couple have come and does everything to help people make a new start.

A home, perfectly naturally, has a feeling of security, but as soon as that security is under threat, emotions are raised. A home is where you will have been with your spouse, and possibly raised a family too. So when things go wrong, it is no wonder that people put up their defences. However difficult it will be the subject of finances will have to be discussed between husband and wife, and divorce mortgages will have to be raised.

It is important to ensure that current payments on the house are maintained: existing mortgage payments, house and contents insurance, endowment policies. Arrangements to cover these costs should be made immediately, as non-payment will lead to anger, resentment, and worse – a possible blot on credit ratings.

Emotions will be running high, but it is important to discuss financial affairs sensibly with a view to the future for both parties. Independent legal advice is the best way forward as each seeks to secure a mortgage after divorce. If circumstances ended up meaning a court had to decide the division of finances then it may mean one party gets more money than the other, but both parties should realise that there is only so much to go round. Financial stress can be such that during separation and even after divorce, couples still consider living under the same roof to avoid the need for another mortgage after divorce.

If there is enough money in the pot to buy two houses, then mortgages after divorce would not present a problem, and a court would primarily be concerned about the welfare of any children. However, if there is not enough money to fund two post-divorce mortgages, the court will of course consider selling the original home and dividing the proceeds as it sees fit. Again, the primary consideration will be for the needs of the children. A home has to be provided for any children, whatever the hopes and needs of the other parent. It is unlikely that either party will ‘lose everything’ as the court has wide powers in aportioning assets. However, it could also rule that the deeds of the house are transferred in full to one party.

One or both parties can easily be left searching for a mortgage after divorce. It is very difficult thing to have to do at a time of great stress. Some building societies specifically provide divorce mortgages. Sometimes one party appears to take charge of financial affairs, and this can leave the other party feeling vulnerable and unsure. Mortgage brokers can help in this situation. Divorce mortgages cater for the fact that you may need to minimise your monthly mortgage payments until finances are under control. Divorce mortgages can provide additional features and benefits which will not be available when you choose a mortgage from a standard range.

Nick Riviera is an author on a variety of property related subjects, which include mortgage rate reviews and detailed analysis of the role mortgage brokers provide in the current climate.

Mortgages, True Costs Revealed - Insurance

When buying a home there are a number of types of insurance you may have to take out.

Mortgage Payment Protection Insurance (MPPI) is one of them. Its purpose is to ensure that mortgage repayments will be met in the events of unemployment, sickness or accidents.

Although this may afford the buyer peace of mind, whether to take out this type of insurance is a personal decision.

For example, if you have good accident or sickness protection through your employer, or if the company you work for has a good redundancy policy, MPPI may not be necessary.

If you have access to savings, for example up to three times your monthly salary, you can use those instead until you find another job.

Another type of insurance lenders often recommended is life cover, which pays off the mortgage in the event of a borrower’s death. Until recently, most lenders made life insurance obligatory. Nowadays, many don’t.

But for most families, especially with young children, it still makes sense to consider this type of cover, as it means the loan will be paid off if one of the main breadwinners dies.

One type of cover that lenders will insist on is buildings insurance, in case of disasters such as fire, floods and so on.

From the insurer’s point of view, this is essentially to protect their investment, as until the loan is fully paid off the home is still technically theirs.

But it also ensures that if anything happens to your home, it can be repaired or rebuilt and you can continue to live in it.

Either way, the number one rule with regards to mortgages is to not automatically take out lenders’ own insurance cover.

‘Tied in’ insurance – whether MPPI, household or even life cover – is often more expensive when taken out through a lender and can generally be found more cheaply from an independent supplier.

Liam G is a UK based financial author, currently focusing on mortgages, in particular the hidden costs associated with taking out a mortgage.

Mortgages, True Costs Revealed - Early Redemption Charges

An Early Redemption Charge is a fee you must pay for paying off a mortgage before the agreed end of a deal with a lender.

Why are such penalties applied?

In order to attract borrowers, lenders are often forced to compete by offering mouth-wateringly cheap deals in the first two or three years, sometimes for longer periods.

The hope is that borrowers will then stick with them not just through the course of the deal itself but for several years afterwards.

Clearly, if borrowers were to jump from one mortgage to a cheaper one whenever they wanted to, lenders could lose a lot of money. So they protect themselves by applying charges on those who do.

Either way, lot of borrowers don't become aware of these charges right up until when they wish to remortgage or pay off their mortgage early.

However, with most early redemption fees being in the thousands, it is vital you know beforehand if you will be liable to pay up and how much the cost might be.

Redemption fees can be calculated in the following ways:

• Percentage of the original mortgage loan value
• Percentage of the balance still owing on the mortgage
• Percentage of the amount repaid
• Number of months' interest

For short-term fixed or discounted mortgages of, say, two years, the interest penalty will generally be a set amount of months' interest.

In the case of longer-term mortgage deals, the fee may be set on a sliding rate. For example, say you have taken out a five-year fixed mortgage.

The redemption fee might be:

• Six months' interest for the first year of the mortgage
• Five months' interest for the second year
• Two months' interest for the fifth year.

There are two main types of redemption fee. The most common is one that applies throughout the lifetime of the deal itself. So, a two-year fixed rate mortgage may have penalties that apply during the deal period, but not after it has ended and you are back on the lender's variable rate.

The five year-deal, above, is one example of this.

In some cases, especially where a very cheap deal is on offer, the lender may apply an "overhang", committing you to staying with the mortgage even after the deal is over. So, you might have to stay on that lender's variable rate for several years after the deal ends.

In most cases, unless the deal on offer is exceptionally good, it makes sense NOT to opt for a home loan with a long overhang.

The simple way to avoid any such costs is to look for a mortgage that doesn't impose early redemption fees.

But it may be hard to resist a good deal, especially when variable rates are high. In that case, it is better to opt for a shorter fixed rate deal.

Although you may pay a higher APR in the short term, it may be better to do as you then have the flexibility to shop around for a cheaper mortgage at a time of your choosing.

Liam G is a UK based financial author, currently focusing on mortgages, in particular the hidden costs associated with taking out a mortgage.

Reverse Mortgages - What To Look For In A Reverse Mortgage Lender

If you have decided to get a reverse mortgage on your home the next big decision you will have to make is how to choose the right reverse mortgage lender. There are many out there to choose from, but how do you know which ones are the best. Keep reading this article to uncover some great tips on how to choose the right reverse mortgage lender that will meet your needs.

The most common type of reverse mortgage is the HECM which stands for the Home Equity Conversion Mortgage. This is the only reverse mortgage that is insured by the federal government. They are insured by the FHA which tells the HECM reverse mortgage lenders how much they can lend you. This decision is based on your age and your home value.

Another type of reverse mortgage lender can be a state funded lender. The cash received from these reverse mortgage lenders will usually have stipulations on how you can spend the money. The money will be given to you in one lump sum but it must be spent for home improvement, to pay taxes or some other pre-approved expense.

Proprietary reverse mortgages are offered by banks or lending institutions. The money received from these types of lenders is able to be used in any way that you want. But proprietary reverse mortgages are usually the most expensive. If you live in a higher value home, you may be able to get more money from a proprietary lender. However, it's important that you always compare the advantages of a proprietary reverse mortgage and a more traditional of a HECM.

When you begin your search for a reverse mortgage lender, do so with caution. There are many good mortgage lenders out there but there are some dishonest ones also. Always check out a reverse mortgage lender thoroughly before you agree to anything.

Another option would be to enlist the aid of a reverse mortgage lender association. Do a search on the Internet and you can find a few associations that will aid you in finding a reputable reverse mortgage lender in your area of the country.

Read through the AARP website for a lot of great advice on reverse mortgages. AARP has several pages devoted to reverse mortgages. This site also has a free downloadable eBook that explains the whole reverse mortgage process in easy to understand language.

If you are worried about how you are going to be able to stay in your home, consider getting a reverse mortgage. You will make no payments on the mortgage during your lifetime or while you still live in your home. You will be able to get the cash to create a cushion to fall back on in case of medical bills or home repairs. Do some research and find a great reverse mortgage lender today.

By the way, you can find out more Reverse Mortgage Lender as well as much more information on everything to do with reverse mortgages at http://www.ReverseMortgagesA-Z.com

Mortgages Worth More Than Your Home/Supersize Mortgages

A number of factors have resulted in home buyers having no choice but to borrow over and above what their house price is worth.

Soaring house prices and recent increases in interest rates have meant potential home buyers are being left with minimum cash to invest into a new home and in turn nothing to spend on furnishings and renovation. As more first time home buyers are desperate to get onto the property ladder, they feel they are left with no other option but to go down the route of borrowing 100% mortgage or even 125% mortgages.

Due to these reasons many financial institutions are now offering mortgages of equal value to your home, and often mortgages worth more than the purchase price of your property.

Before committing to what will probably be the largest debt in your life, first time buyers especially are strongly advised to think care fully before agreeing to these supersized mortgages. Though they may seem like a good idea at the time, some thought needs to go in to some of factors that may be of concern after committing to such a mortgage.

By putting a deposit on a mortgage, even if it’s a small one of 5% for example can make all the difference on monthly payments. In most cases, banks and building societies will charge higher interest rates if you do not have any deposit to put down, making your monthly mortgage payments much higher. So if at all possible, try to get some deposit together, even if it means borrowing short term from family or friends.

Some thing to consider is the rate in which house prices are increasing (or perhaps not). This may be of concern to recent homebuyers looking to take out 100% or 125% mortgages. With the housing market not growing as rapidly as it has done in previous years, home owners could be in position where even in a few years time, they may still have a mortgage debt that is higher than what the house is worth. This means that there will be no positive equity in the house, so when the current mortgage deal finishes, you may yet again have to pay higher premiums to remortgage.

Those who borrow more than the property is worth will have negative equity from day one. If house prices don’t rise as much as they have in recent years, then as a homeowner in the eventuality of selling your house, you will be responsible for funding the difference in the borrowings.

With the uncertainty of the current housing market, it is very worthwhile thinking considerably prior to committing to a mortgage that is worth more than your home.

Please visit Mortgages UK for more information.

Mortgages That Attract Homebuyers

Do great rates and great service fail to impress you? Well you are not alone. We are in a time where you need to find out who can create value with their services and ideas. And what I mean by value is, attracting customers.

Here are a few loans of value over the last few years:
• 100% purchase, non-owner, stated income, interest only
• 1% pay option ARM
• 100% cash out refinance
• 100% Jumbo Loans

There is great debate on whether these are good loans, but few can argue these loan did attract customers for Realtors, Builders, and Mortgage Companies.

What are the next generation of loans to attract customers? The loans of 2008!
• 3-2-1 buy-down
• PITI Abatement
• FHA/VA
• My Community
• Credit Repair

One might say that 2008 is the year of government backed mortgages. All the loans high lighted above are directly tied to the government through Fannie Mae, Freddie Mac or FHA/VA. Unfortunately the line is drawn right at $417,000. I hope they raise this number soon!

To give you an idea of what these 2008 loans are I would like to give some details on PITI Abatement.

What is PITI Abatement?

An incentive to the buyer to have the first 6 months of the mortgage paid by the seller. PITI Abatement program is a product designed specifically for home-buyers. You can give a 6% Seller Contribution that can be used for Principle, Interest , Taxes and Insurance payments.

What are the General Guidelines?
• Loan amounts up to $417,000
• Up to 100% of the purchase price
• Minimum score of 575
• Fixed Rates and ARMs
• Interest Only is available
• Income limitations may apply
• Closing costs can be paid by seller too
• No prepay penalty
• What is the Realtor marketing element?

6 MONTHS PAID!
BUY THIS HOME AND I WILL PAY YOUR FIRST 6 PAYMENTS
6 MONTH PAID MORTGAGE INCENTIVE
BUY MY HOME AND I PAY CLOSING COST AND 6 PAYMENTS

Hopefully you can see how this type of loan can help you move more homes.

Troy Schuricht & Phillip Lechter
Home Mortgage and Construction Specialists
Community First Financial, LLC
http://www.communityfirstfinancial.com
yourlendertroy.blogspot.com
tschuricht@communityfirstfinancial.com
480 305-8905

No Cost Mortgages Come at a High Cost

You’ve seen the ads on TV. Lenders offering “home-equity loans" or a refinance of your existing mortgage as a quick source of cash, or way to get out of other types of debt quickly. There are still lenders who are advertising their “no fee” mortgages. These loans are being offered as having “no points, no closing costs, and no fees of any kind.” What they DON’T tell you in the commercial is what the terms of these “no fee” loans are.

Lenders are in the business of making money, so you need to be aware of how these “no fee” loans work. You can bet that these fees are figured into the cost somewhere, so it is important that you make yourself familiar with what a loan entails. Too many consumers are going into this type of transaction without really understanding the risks involved. As a result, more consumers than ever are finding themselves facing foreclosure and losing their homes, which have a very negative affect on the housing market.

For these “no fee” loans, borrowers will generally face much higher interest rates on the loan, a host of additional “miscellaneous” fees, and sometimes find themselves having to finance the loan for a longer period than they want. The borrower may also be asked to pay mandatory personal mortgage insurance (known as PMI which costs an additional amount equal to between 0.15% and 2.5% of the total amount borrowed) or optional credit insurance, such as credit life, disability, or unemployment insurance, all of which helps the lender protect their assets.

When you hear about ‘no closing cost’ loans, think about who pays those costs. They never just disappear, but are always built into the loan somewhere. When you apply for a mortgage, don’t be swayed by the lenders’ promises if they sound too good to be true. Decide for yourself if it is more important for you to pay the least amount of closing costs right now, or if it is more important for you to get the best loan possible at the best interest rate and best terms possible. You will always get a less appealing loan when you forego the closing costs. If you can afford to pay the costs that are usually charged at closing, you will have saved yourself thousands of dollars over the life of the mortgage rather than if you had included those costs in the loan.

Consumers must know the terms of their loans and make decisions based on facts rather than base their decisions on teasers like ‘no costs whatsoever’. Be sure to ask your mortgage broker to give you a “Good Faith Estimate” (required by federal law) showing the true costs of the loan and ask to see a few different scenarios so that you can make a well-informed decision, before you fall into what could be a situation that costs you thousands of dollars extra and could put your home in jeopardy.

ABOUT THE AUTHOR: Patricia Adkins is a specialist on the subject of mortgages and real estate. Her web site, http://www.FreeConsumerService.com, provides a wealth of informative articles and resources on everything you'll ever need to know about getting the best deal when you buy a home or refinance your existing mortgage.

Reverse Mortgages Help Phoenix Homeowners

A few days ago, Mrs. K was talking on the phone to Grandma, who was lamenting the fact that Grandpa never "believed" in life insurance so he had never taken out a life policy. Later, as we discussed it, I pointed out that while there had been no insurance windfall after his demise, he had provided for his spouse by ensuring that their home was paid off in full. In fact, Grandma has not had a mortgage payment in twenty years.

It is unusual for a realtor to cover this subject as it is somewhat out of our area of expertise. Which is Realtor-speak for "I don't make any money from this." It's like when your mechanic says of the mystery squeak "They all do that" is mechanic speak for "I don't know how to fix it".

I digress; eventually the conversation led to reverse mortgages and people's perception of them. Most folks think it is a scam. And they could not be more wrong. I do not intend to cover all the intricacies of a reverse mortgage in this article, but I will provide links at the end so that you, dear reader, may undertake further research.

Very simply put, if you are over the age of 62 and, either, own your home outright or have sufficient equity to pay off the loan and still have equity remaining, you are in business. You must also live in the home.

You may never be kicked out of your home or owe more than its value. You can receive the equity in any of the following ways: As a single lump sum, as a credit line account from which to withdraw funds or to be left to grow as an interest-bearing fund. You may elect to collect a fixed monthly stipend for as long as you live in your home. Or, you may concoct a combination of all of the above to best suit your needs.

From a practical standpoint, the only other requirements are that you keep both taxes and insurance on the home current.

Remember that this is a H.U.D. program under the auspices of the F.H.A. If a member of your family is sceptical, and they have a right to be cautious, reassure them that this could be a way to ease their financial burden.

In fact, our Grandma decided to downsize from her 2 acre property to a more manageable condo. The surplus cash will be invested wisely to provide a monthly income, thereby preserving all capital whilst still retaining the flexibility to obtain a reverse mortgage in the future if needs require it.

Anyway, that nice Jim Rockford advertises them on T.V. so how bad can they be?

Gary Kiernan is a broker, in both Arizona and California. He specializes in the Greater Phoenix area concentrating on Cave Creek, Carefree, Scottsdale, Phoenix and including Desert Hills, Anthem, Paradise Valley, Gilbert, Mesa, Peoria and Chandler. To learn more about Gary and Cave Creek, Arizona and the surrounding communities please visit his website at http://www.garizonaproperties.com or you may email him at skiernanc21@yahoo.com

Understanding Buy to Let Mortgages

Buy to Let over time has been the preferred type of investment, however for new potential investors it can be difficult to get vital questions answered about how to get started, how to purchase your first property and what the restrictions involve.

A buy to let property investment can be purchased with little regard via your personal income, not like a standard mortgage, which normally involves your home. If you are buying a property to rent for the first time, consider the level of rental income, which you might be able to obtain through the process. Lenders have expected rental per month to be 130% more than the mortgage cost or greater in order to let enough income cover rental management charges.

Here is a simple example, you have a property with a rent of £400 per month you would be approved a mortgage cost per month of no more than 400 / 0.65 or £315 per month. Nowadays lenders have develop into being flexible and permit as little as 100% interest cover so your rent could be the same as your mortgage cost. Regrettably, after void months and any management expenditures, you will stream a loss on these types of loans so if you are eager on simply covering the mortgage, then the furtive is to track down property which has the highest rental income compared with the price of the property.

Buy to let requires a deposit, banks need a minimum deposit of 15% to be put down, however if the interest cover requirements are not set, then this will lead you to put in a greater deposit to condense the size of the mortgage and meet the interest cover. These days developers are very eager for more sales and it is possible to negotiate, to get a 5% deposit paid by the developer and yet gain a rent guarantee for a little period when offering them excess sales.

Today there are many mortgage products available, however some have large application fees, which offset the evidently cheap interest rates, and others have long tie-ins so be cautious when choosing a mortgage deal. Due to property prices being so high in price, you will find that most property, mainly new build, will only just cover the interest on the mortgage after other costs. For this being a major problem for many, people purchase using the cheapest interest only mortgages rather than repayment. When dealing with a buy to let investment there are many fees involved.

Charges from the letting agent 10-15% of the rent per month, insurance, rental voids, safety checks (£100 plus a year) and additionally to make sure your property gets rented, furnishing. Be aware of service charges.After searching the market you will find out that to find a property which generates cash profit each month, can sometimes be impossible. However through time and seen as this type of investment being a better long-term investment you would be sure to get a good return.

For more information on Buy to Let Mortgage or for a Mortgage Quote please visit: Mortgages UK

Flexible Mortgages Are Made for Today's Modern Lifestyle

Flexible mortgages are among some of the new mortgage packages that have been created to cater for the modern mortgage market. The modern mortgage market has become more liberal and creative, and therefore this has led to an increase in the choice and diversity of mortgage packages being offered to borrowers. Most major lenders include some kind of flexible mortgage in their product range. The majority of flexible mortgages are sold through the traditional routes and they are increasing their hold in the mortgage market, due to consumer demand.

Essentially a flexible mortgage is a secured loan that can be paid back in varying amounts, and the interest is calculated on the fluctuations of the outstanding balance. Flexible mortgages are particularly suited to today’s lifestyle, for example: ‘jobs for life’ are virtually unknown, you might want a career break to raise a family or you might expect some major life changes in the near future.

A flexible mortgage can offer:

Overpayments

You can pay off your mortgage quicker by making regular overpayments or by paying in a lump sum on an ad hoc basis, without incurring any redemption penalties. A flexible mortgage recalculates your outstanding mortgage balance on either a daily or monthly basis, and your interest payments are quickly adjusted for the overpayments that have been made.

Underpayments

You can reduce your regular mortgage payments or even have a complete payment holiday without being in default. There will be conditions attached to this option, for example: you might have to build up a reserve of overpayments before being allowed to underpay. However, a consequence of underpayment means an increase in your outstanding mortgage balance.

Further loans

You can withdraw lump sums from your mortgage account to be used for any purpose, without the formality of applying for a new loan. There are usually conditions attached to this feature, for example: you might have to build up a reserve of overpayments against which you can borrow, and there will probably be a ceiling on the overall amount you can borrow through your original mortgage.

Not all flexible mortgages offer those features, so you will have to shop around.

The ability to pay off your mortgage early is a necessary feature of all flexible mortgages, and the main point of distinction for a flexible mortgage is the extent to which you are allowed to withdraw funds from your mortgage account. The least flexible mortgage combines overpayment facilities with only the option to take occasional payment holidays.

In a recent survey of flexible mortgages carried out for the Council of Mortgage Lenders, nearly half of the surveyed borrowers had not made use of the flexible options that their mortgage gave them. The borrowers that had made use of the flexible options mainly used the overpayment option to allow them clear their mortgage early by either regular overpayments and/or an occasional lump sum payment.

A more structured approach to the flexible mortgage is offered by the current account mortgage (CAM) and the offset mortgage. With a CAM, there is just one account as it combines your mortgage account and current account. The offset mortgage uses separate accounts for the mortgage, current, and savings account. The interest earnt by the current and savings accounts is offset against the outstanding mortgage capital and the interest is reduced accordingly. It is important to make sure the mortgage rate is competitive because some lenders charge a higher rate than average and thus the benefit is lost.

Flexible mortgages have been around since the 1990’s and they have grown in popularity since then. The future looks good for flexible mortgages, with even more options for borrowers to choose from as time progresses.

The Author, Jenny Hoskins wrote the article on ‘Flexible Mortgages Are Made for Today’s Modern Lifestyle’ and recommends you visit www.offsetmortgagecentre.co.uk/flexible-mortgages.html for more details.

Interest Only Mortgages Are Hot!

Interest only mortgages are one of the best selling products today. With an interest only mortgage you may either pay just the monthly interest that is due on your loan or you may pay both the principal and interest. This type of mortgage is good for someone that may own their own business or be in sales because you are not committed to make the full principal and interest payment. If you have a bad month just pay only the interest due. With the interest only mortgage if you make a payment towards your principal your monthly payment will be reamortized to reflect the new interest payment that is now due. This is an excellent mortgage for someone that wants to pay off their mortgage quickly too because of the reamortization feature. With any other type of mortgage if you pay anything towards the principal your monthly payment does not change.

Fannie Mae has recently made it harder for borrowers to qualify for this mortgage. They now make the borrower qualify at the fully amortized monthly payment not the interest only payment. This change has made it much harder for borrowers to qualify.

On Fannie Mae interest rates (which are the best there is) there is a hit to the pricing on interest only mortgages of about .25% to .375%. This means your interest rate will be about .25% higher than if you chose a straight 30 yr fixed.

The interest rate on the Fannie Mae interest only mortgage is fixed for the full 30 yrs so the interest rate will never change. The loan is interest only for 10 to 15 yrs. After this initial period you will have to pay both the principal and the interest. The loan will also at this time be reamortized to 20 yrs if it was a 10 yr interest only and 15 yrs if it was a 15 yr interest only. If you haven't been paying anything towards your principal during that initial period your payment will go up dramatically. At that point it will be like you have a 20 yr or 15 yr mortgage depending upon which interest only term you originally chose.

The interest only mortgage is also good for anyone that thinks that they will be selling their home in the next 10 to 15 yrs.

Sandra Sheely is President of First Financial Mortgage, Inc. in Sunrise, FL. She has been in the Real Estate Industry for 12 years with experience in the mortgage industry and title industry. She has a couple of Mortgage websites. http://www.ffinancialmortgage.com and http://www.lowestraterefi.com She writes a mortgage blog on both of her mortgage websites.

First Time Buyer Mortgages

There has been a lot of talk recently about the difficulty that those seeking to buy a property for the first time are having doing so. This reflects continued growth in house prices which has outstripped growth in incomes.

Lenders have been doing their bit to help – there are now (1 October 2007) 160 mortgages available where the lender will lend 100% of the property value compared to 92 in April of this year. However, care should be taken in choosing a 100% mortgage. Some lenders allow you to add any initial fees to the mortgage amount. Whilst this may appeal at the time because you do not have to find a few hundred or a few thousand pounds, obviously you are increasing the amount of your mortgage to more than its current valuation. At a time when many people are predicting that in the foreseeable future house prices will not rise at the rates that they have in recent years having a mortgage amount greater than your property value may be a risk you should think seriously about.

Today there is a tracker mortgage available for a major high-street lender where the fees on a £150,000 mortgage are £4,954. Adding these fees to the loan would result in a mortgage equal to 103% of the property value. That means that you start off with a minimum of 3% that you have to make up. And consider what would happen if house values fell. Consider also what would happen if interest rates rose by 0.25% or 0.5% - would you still be able to meet your mortgage payments?

The best way to check this out is to use a mortgage comparison site that compares the whole of the market; one that is independent of all lenders; one that looks at the true cost of the mortgage over the term of the deal that you want.

Duncan works as the Marketing Director at Mform.co.uk. It allows you to compare mortgages and remortgages from every lender in the UK. Mform is independent, free to use and enables you to apply for a mortgage from the whole UK market.