Reverse Mortgages are a very good tool for many senior borrowers to enable them to access the equity in their home while never having to make another payment as long as they live in those homes. However, a Reverse Mortgage has always been a fairly expensive proposition, usually carrying a price tag of a 2% origination fee as well as a 2% government mortgage insurance fee, plus third party costs such as appraisal, title, escrow or closing, etc. In all, in some of the higher HUD areas, the total of all fees could total as much as $17,000. Even though these fees are not paid out of pocket and are rolled into the loan, the fees can still scare some borrowers away from obtaining a loan which could otherwise improve the quality of their lives until now!

The numbers don’t work with all reverse mortgages, but for those borrowers who planned to take a minimum of $200,000 or more on their reverse mortgage at the very beginning (not hard to do if you have to pay off an existing mortgage or if you already have plans for the funds and need them right away), borrowers can now obtain a reverse mortgage called the Independence Plan which will contain no origination fee! The lender has priced the loan so that the originator does not have to charge any fee to the homeowner for the loan. What more, if the initial drawn amount is over $275,000, then there aren’t any third party fees either because the lender will give a credit to off-set these fees as well.

Sound too good to be true? You start thinking that the interest rate has to be at or above 10% to offer this good of a deal, right? Well, it’s not too good to be true and the rate is excellent in fact much lower than many of the other programs available in the marketplace. So is there a catch? Well, the amount of money you get may not be quite as high as with some other programs, but considering that you only pay back what you receive plus interest and ultimately the amount you or your heirs pay back depends largely upon the interest rate at which the interest accrues, this plan might well be one of the best plans available in the market today. You don’t pay any costs or interest on any costs to start the loan, we’ve seen borrowers qualify for payments to them up to $3,5000,000 and the interest rate for a proprietary or jumbo product is among the lowest in the marketplace.

So if you have always thought that a reverse mortgage might be a good thing for you but always shied away from the high initial costs and your initial draw or loan amount would be $200,000 or $275,000 or more, now might be a good time to look into a reverse mortgage with no closing costs.

Michael G. Branson (CEO All Reverse Mortgage Company)is a Mortgage Broker who has over 31 years of mortgage banking experience. Toll Free (888) 801-2762

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Many senior homeowners have lived in their homes for a very long time, have no desire to move and have gotten reverse mortgages so that they can continue to live in their homes payment free for life while accessing their equity to help supply them with income or cash to meet their living needs. Still others have wished that they could relocate, choosing either to be nearer to loved ones or pick a property that was more conducive to their current life style or needs (such as a single story when their home of many years was a multi-level property, one that was a more appropriate size for their current needs, closer to their family or friends, or located in a senior community).

For these active seniors who were not ready to move into assisted living and yet did not want to stay in their current properties, it used to be that they could only use a reverse mortgage to purchase the new home they desired if they used one of the few higher interest rate, proprietary-type programs which allowed for home purchases. It looks like this is about to change!

The current bills in congress are going to change the way the FHA does business with many of its loan programs, but one of the changes that appears to be approved by both the House and the Senate concerns the addition of allowing the government Home Equity Conversion Mortgage (HECM or Heck-um) to now allow for purchases as well as refinances of existing homes. There are many other changes being proposed as well that will probably go into effect very soon that we won’t discuss here but this one change alone is exciting because as soon as the changes are signed into law and become effective with the FHA, senior borrowers will be able to purchase the home that suits their needs by using a reverse mortgage, and not have to rely on conventional financing.

This is important for a number of reasons. Firstly, there is no income or credit qualification requirement for the reverse mortgage. Borrowers with limited and fixed incomes typically don’t qualify for conventional financing. Borrowers who needed to move or had a strong desire due to any of the reasons listed above, often had no alternatives unless they could purchase their new home for cash due to conventional financing qualification.

These borrowers most often made due in their present situations even though they really desired to make a move that would either make their lives so much easier or fulfilling. After the government reverse mortgages are made available for purchases, senior homeowners will have a real, viable option to be able to make choices about where they will live that weren’t previously readily available to them.

The Stimulus Bill is expected to be signed into law by the President next week. Once the new provisions to the reverse mortgages are put into place by HUD, seniors will be able to utilize reverse mortgages for home purchases. Those seniors who have been thinking about how nice it would be to move into a home but always thought that there was no way they could qualify for (let alone make the payments on) a conventional loan, watch for the new provisions for government-insured reverse mortgages which should be available for purchases soon.

Michael G. Branson (CEO All Reverse Mortgage Company)is a Mortgage Broker who has over 31 years of mortgage banking experience. Toll Free (888) 801-2762

Click Here to visit our Homepage

Click Here to watch the Reverse Mortgage Benefit Video

Turn on the television or open up your internet explorer and chances are you’ll see ad after ad for reverse mortgages, all of which are targeted toward senior citizens. With so many scams these days that revolve around mortgages, and those geared toward senior citizens, you do well to want to explore all the details of mortgages before ever signing on for such a deal. So, what are they and how do they work? And why are these ads only geared toward seniors?

First of all, it’s important to understand that reverse mortgages are advertised to seniors not because they are some type of scam but because they are only available to those 62 and over in the United States. Sorry, but you must be a senior to be eligible.

It’s also good to understand how a typical mortgage works. For a regular mortgage, the homeowner borrows a certain amount of money at a certain interest rate and pays monthly payments to the bank. Because of the way the loan is amortized, much of those payments go toward interest, but as the principal of the loan is paid down, the homeowner builds equity in the home. This equity is an important factor in mortgages. Equity in a home simply refers to the fact that the home is now worth more than what the homeowner owes on it; if he or she were to sell the house, that excess amount they would receive over and above the loan amount is equity.

In many cases, a person may buy a home when they are younger and as they pay over the life of the loan, by the time they are a senior citizen the mortgage may be entirely paid off. When they are in their 60’s, it’s assumed by many that they don’t have a mortgage or have very little of the mortgage balance left. The home by this time should have quite a bit of equity in it. This type of mortgages tap into that equity of the home by giving it to the homeowner by way of a monthly “allowance” or one lump sum. Rather than needing to be paid back to the bank every month, however, the mortgage do not become due until the homeowner dies, sells the home, or leaves the home permanently (such as to move to a nursing home or other full-time facility). If there is no payment arrangement at that time, the bank would then seize the home the way they would with a typical mortgage foreclosure.

The Pros and Cons of Reverse Mortgages

You might immediately be thinking of some drawbacks of reverse mortgages. For example, if the homeowner is getting this loan as monthly payments and then he or she dies, chances are there will be no cash reserves with which to pay back the loan. This means the bank is likely to seize the home. For those who had been looking to leave their home to their children or grandchildren as part of an inheritance, this can be a complicated problem. When the home is sold, monies owed for the mortgage get paid first; any and all equity above and beyond that go back to the estate, but this often takes time and of course there are always added fees and costs tacked on when the bank needs to seize a home.

However, reverse mortgages might work for seniors that need cash for their health care or other reasons. If they only take a small amount and leave other cash reserves, such as their 401(k), then there may be a cash reserve from which to repay any mortgage when they become due. Or, seniors who do not have children or do not plan on leaving the home to the children can tap into this money while they are still alive and may need it.

Examining all these details of reverse mortgages is the only way to really be sure if such an arrangement is appropriate for you.

David Cowley has created numerous articles on real estate investing. He has also created a Web Site dedicated to real estate investing. Visit Real Estate Investing

UK homeowners are, despite higher interest rates, choosing to unlock money tied up in their property. In 2006 homeowners released £49.7bn of equity from their properties, mainly due to the continued rise of house values. Most commonly the mortgage equity is used to fund home improvements and to pay off personal debts.

However, if house prices were to fall homeowners could regret their decision to borrow against the value of their homes. The US is seeing their economy slow down prompting fears that it is only a matter of time until ‘the chill’ crosses the Atlantic. Lenders in the US are closing the lines of credit open to people, thus there is less demand for homes and subsequently the value of property is falling. Not only that but in the past few years US banks have been lending money to people with poor credit rating who are now struggling to pay that money back and are also struggling to sell their property quickly.

The lack of new houses in the UK is certainly helping to keep house prices high. If interest rates were to go up beyond the 5.25% to 7% many could find themselves struggling to pay their mortgage. But some believe that house prices could continue to rise for another decade simply because demand is out-stripping supply. Crucially though because inflation and wage growth are low, mortgage debt is being reduced far more slowly than it previously had been, put simply mortgage repayments are swallowing a major amount of people’s incomes leaving them burdened with debt for many years.

Whilst experts are focusing on what is happening now and in the immediate future, most don’t look to what might be happening in five years time. Those who are see house prices falling and the number of repossessions eclipse that of the early 1990’s.

But in the short term, high house prices mean that it has never been a better time to release equity on your home, or even re- mortgage
your home.

James Quinton is a writer based in the UK. He has had articles published worldwide. Compare over 8,500 mortgages online.

When you are applying for a mortgage, usually the lender will focus on your financial history over the past 2 years. For employees, that means 2 years of personal income tax returns, as well as W-2s and paycheck stubs. If you are self-employed, that changes the usual process a little. For one thing, you probably won’t be able to provide W-2s or paycheck stubs.

Many lenders specialize in working with borrowers who are self-employed. It’s worth your time to shop around for a lender you’re comfortable with, who has done this type of loan before. Be aware that it may take a little longer and involve a bit more paperwork, but mortgages for self-employed people are approved every day.

By the way, you may be surprised to find that you fall into this category. If you are employed by a business that you own 25% or more of, you’re considered self-employed. If you own a construction company equally with your 4 siblings, you own 20% so you’re not considered self-employed. If you own the same company equally with 2 siblings, you own 33% so you’re considered self-employed.

The lender will be concerned with your financial stability, and the financial health of your business. After all, in this situation, if your business fails, you are likely to default on your mortgage, as well. So, the lender will be checking two sets of documents - your personal financial records, as well as your business records.

You’ll need to supply your personal income tax returns for the past two years. If your company is incorporated, you’ll also need to supply two years of income tax returns for the business. The lender will often also request a current balance sheet for the business, as well as a current profit and loss statement.

If your credit is good and you don’t have any other major loans, the lender may simply work with the first two pages of your personal tax returns for the past 2 years. In this case, your financial history is strong enough that they aren’t concerned about the business. However, this is the exception.

Normally, the lender will check the credit rating of your business, as well as your personal credit rating. Both will be considered in approving the loan.

The documentation you’ll need to furnish, and the way it’s viewed by the lender, depends on the structure of your business:

–Sole Proprietor
–Corporation
–Partnership

Sole Proprietor

As a sole proprietor of a business, you own the whole thing. Your business income and expenses will appear on Schedule C of your personal income taxes. Your taxable income (or net income) is considered your total revenue (or total income) minus expenses.

Corporation

If your business is set up as a corporation, it’s separate from your personal income. The lender will need to see your corporate tax returns for the past two years, as well as your personal tax returns.

Partnership

If your company is a partnership, the lender may ask for two years of tax returns from the business. On the other hand, if your credit score is high and your current loans low, again, they may simply work with your personal tax returns.

Additionally, for those with strong credit scores and profiles, there are loan programs that can greatly reduce the amount of documentation necessary to obtain a mortgage. No Doc, Low Doc, Stated, and No Ratio loans are all loan types that are available to self employed borrowers who wish to streamline the mortgage process.

MyRefi.com’s professionals understand the unique needs of self employed borrowers. Contact MyRefi.com for a free mortgage quote today.

Even if you are in the process of working with another lender, the experts at MyRefi.com will go over your current loan offer and make sure that you are getting the best mortgage for your unique situation.

Looking for a California Mortgage or Commerical Financing? MyRefi.com and its lending partners can help!

Today is the day of the internet. You can meet anyone in the world, perform various transactions and yes, even apply for a home mortgage all via the internet. The banking and real estate industries are no exception, when it comes to a majority of their customers depending less and less on face to face business relationships.

Risks of Applying Online

Like all new advancements and technology, there are some downsides. For example, there is the threat of being a victim of identity theft. This is when an individual somehow finds your personal information online and takes on your identity. He or she usually steals your social security number or bank information and starts to withdraw funds or open and use credit card accounts in your name. You usually become aware of this theft after the crook has raked up a substantial debt in your name.

Secure Websites

Due to the threat of having your important information sent all over cyberspace and landing up in the wrong hands, people are wondering whether or not applying for a home mortgage online is safe and secure. The short answer is yes. Although there is always a small percentage that something may go wrong, all the major mortgage lenders online has secure websites. Secure meaning that they are encrypted so that your personal information can not be downloading by others or sold to others. Also, most major mortgage lenders do not ask for highly sensitive information in their online applications.

Benefits of Applying Online

There are some benefits to apply for a mortgage online. First, when you apply to a mortgage lender online, you are not under any obligation to commit to any loan offer you receive. Also, you will save a substantial amount of time when you apply online. Applying online allows you to gather information from multiple lenders within a short period of time.

Overall there are many benefits to applying for a home mortgage online; the greatest advantage is the time and money you will save.

Reputable Online Home Mortgage Lenders - We maintain a list of recommended mortgage companies online and update the list regularly.

List of Creative Techniques for Financing a Mortgage- Read this article to find out some creative ways to finance your mortgage.

If you are beginning the process of searching for a lender to refinance your home with and you have less than perfect credit, it is important to know what options are available to you. Although the lender’s approval or disapproval is contingent upon many factors, if an applicant has damaged credit then this will play a significant part in not only obtaining the loan but in the terms and rates of the loan.

Get a Copy of Your Credit Report

When you do go to refinance your home, it is important that you have an accurate copy of your credit report prior. This will allow you to read your credit report and to discern whether or not any inaccuracies have been reported. Most lenders consider the credit history of an applicant on a case by case basis. In other words, if someone has a credit report that shows only recent negative marks, then that may be looked upon differently and probably less harshly than someone who has consistent negative marks. It is important for you to explain to the lender and better yet have some proof, the reasons for your current or past delinquencies. This will give you a higher chance of approval verses that of an applicant who can’t justify his or her continuous delinquencies.

Make Your Payments On Time

The other factor that a lender will analyze is how consistently are current payments being paid. If you are behind in only some payments, then that is looked upon differently than someone who is behind in all payments. It also makes a difference as to what types of loans that an individual is behind in. For example, if you are behind in some credit card payments, then that will be reviewed differently then if you are behind in your mortgage or auto loan payments. Likewise the age of the delinquent accounts, and the amount of their outstanding balances, will also play a role when you go to refinance your mortgage as to the risk factor that the lender asses.

Evaluate Different Options and Loan Terms

After speaking with a lender, and after you have carefully analyzed the numbers and decided that refinancing is the correct route, then evaluate the different refinance options in order to choose the best loan. If you have damaged credit, then you will pay a higher interest rate than someone with perfect credit. It is important to consider the actual cost of the entire loan. Lenders fees can vary widely. Insist upon receiving a Good Faith Estimate that lists the specific charges, not a range of charges for each item. This will help you to compare the different lender costs and ultimately help you to determine which loan is best for you.

Reputable Home Mortgage Refinance Lenders for Borrowers With A Low Credit Score - We maintain a list of recommended mortgage companies online and update the list regularly.

Low Credit Score? Here Are 50 Tips to Improve Your Credit- Read this article to find out 50 things you can do to raise your credit score.

There are numerous types of home equity loan options available to borrowers today. Figuring out which option is best for you can be a rather daunting task. The process does not have to be bewildering if you follow some general rules of thumb. The first step is to decide what specifically you need the money for. Do you need money in one lump sum or smaller incremental withdrawals? Lump sum loans are ideal for home improvement projects or other short-term needs; whereas small, incremental withdrawals are ideal for college tuition. Regardless, the first step is to figure out what you need the loan for and decide how you want the loan distributed.

Cash-Out Refinance

If you are looking for a lump sum of money, then a cash-out refinancing lump sum may be your best option. This option is when you refinance your first mortgage and cash out a lump sum of equity. Although closing costs on this type of loan may be higher, if the rates are lower than on your first mortgage you will have a lower monthly payment and long-term interest savings.

Home Equity Line of Credit

The home equity line of credit, or HELOC, can be distributed through incremental withdrawals. A HELOC has a higher interest rate than the first mortgage. With a home equity line of credit, you have a pre-set credit limit, which you can draw upon whenever, you need it. HELOCs only charge you interest on the amount that you withdraw, and the rate is usually tied into the prime lending rate. This is a popular choice if you are looking to tap into your equity over time.

Home Equity Loan

The home equity loan is another option that has a fixed rate and term. The home equity loan is also considered a second mortgage, and is subject to a slightly higher interest rate. If your mortgage is at a low rate, then the home equity loan would be a good option if you need a lump sum payment.

Once you decide on what you need the equity for and the manner of delivery, lump sum or incremental payments, it is easier to discern which loan is right for you.

Recommended Online Home Equity Lenders - We maintain a list of recommended mortgage companies online and update the list regularly.

25 Things To Be Aware of Before Getting a Home Equity Loan- Read this article to learn 25 things you should know before getting a home equity loan.

How do you know which lender to choose? With all the ads coming at you from every direction, saying they have the best rates, it’s hard to know which lender to choose when you’re looking for a mortgage. This article will focus on using the Internet to narrow your search down to finding the right mortgage lender at the right price.

Many Internet lenders such as Lendingtree have an easy application form you can fill out and have competing loan offers come to you. This is a big change from the way we had to find mortgages in the past. Now, more and more people are successfully using the Internet to find the best deals on mortgages, home equity loans, and refinancing than ever before.

Searching for a lender on the Internet is nothing more than filling out a pre-qualification form which lets a network of lenders make their best loan offer to you. After filling out an online form, you can expect to have 3 to 4 mortgage lenders contact you with their initial offers. This is when you get a chance to discuss your options with the individual lenders.

By discussing the terms of a mortgage loan such as interest rate, points, closing fees, and other associated costs, you can get an idea of which lender is the right one for you. A good lender will not only have competitive rates, but will also be happy to answer all of your questions pertaining to the loan you’re interested in.

After speaking to the various lenders, it’s entirely up to you whether you want to proceed or not. You can get each lenders rates and then go back to the ones you like and negotiate for the best deal. Today’s mortgage market is very competitive compared to what it was just 10 years ago. With a little research and bargaining on your part, it’s possible to find a lender that fits your style, and your price!

If you liked this article and would like to read more mortgage articles then stop in and take a look at what we have to offer. We have articles for refinance, mortgage, home equity, and credit scoring. And of course, you can always get a free rate quote while you’re there. Thank you, Frank Ellis, U.S. Mortgage Quest

Check out all the interest rates so that when you have finally decided to apply for the loan you will know where to get the best deal.

Many home owners take this loan to renovate their homes. There are so many ways to improve on your greatest asset. Repainting and general redecorating can cost a lot of money. By considering a loan you can plan to improve your home. You may have always planned to build a swimming pool, or have the garden landscaped. These are all improvements that will enhance the value of your home. The carpets might need replacing, floor coverings might start looking shabby, or tiles in the bathrooms might need to be replaced. There is always something that needs to be addressed.

You might wonder if it is worth the expense of paying off a loan with interest for a couple of years to upgrade your home. You alone can decide if this is for you. Consider though the cost should you not upgrade your home. Your home is an asset that has and is still in some cases, costing you a lot of money. It is unwise to let the value of your property decline because you do not want to spend money on it.

Home mortgage loans are the big loans that finance most home owners’ first home. Property is always a good investment and it is worthwhile paying off a loan to have your own home.

Once you have decided that it is time to buy your own home you should start shopping around banks and loaning institution to acquaint yourself with the interest rates and loan charges involved with such a loan. You will realise that this is a big step to take as you will be committed to this debt for a very long time so you will want to get the lowest rates possible.

Lee Van writes informative articles on various subjects
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