John Winters

Discussing the need for life insurance is never a pleasant topic, and certainly combined with talk of mortgage payments, it can be downright distasteful. But it is your responsibility as the principle breadwinner in your home to consider what might happen if you or your spouse were to perish. Would your spouse be able to meet the most basic needs of food and shelter? While the money necessary to pay for basic amenities like food and transportation are attainable through a single income source, most families simply cannot afford to meet their most basic requirement, the mortgage payment, without the income from both spouses.

How it Works
If you are in this situation, it is important to take the necessary precautions in case you or your spouse dies unexpectedly. While saving enough to cover your mortgage is certainly an ideal solution, it is largely unfeasible for most contemporary families. As a result, individuals often opt for mortgage protection life insurance policies. These policies are designed specifically to meet the needs of your home mortgage payment in the event that you or your spouse dies.

The idea behind mortgage protection life insurance is simple: you pay a monthly premium in exchange for which the insurance company agrees to pay off the rest of your mortgage should you die.

Pricing
Pricing for mortgage protection life insurance policies parallels that of traditional life insurance price criteria. For example, if you smoke your rates will be higher, just as if you are an older individual. But certainly the most determinative factor in your price will be the amount of coverage you need. The more you owe on your home, the more insurance you will need to pay it off, which of course means the more expensive the insurance premium will be.

Alternatives to Consider
While mortgage protection life insurance will cover your mortgage payment, as all home owners know, this is only part of the cost of owning a home. In addition there are taxes and repairs to prepare for. For a family that has lost a breadwinner, making these types of allocations can be difficult. As a result, many individuals opt for coverage which goes beyond just mortgage protection and instead provides payments sufficient to cover all the expenses associated with owning a home. This type of insurance often comes in the form of a term life policy which is for an amount which exceeds the price of your home. Of course, this extra coverage comes with a price. But with this coverage also comes quite a bit more flexibility. Under a term life policy your family is not bound to pay off the house with the money they receive, but can instead use it in whatever manner they feel most compelled to. This can be especially helpful if there are other medical costs to consider or if you have children approaching college age.

Life insurance is not a pleasant concept to consider because it requires that we think about the potential for our own demise and the resulting consequences of our death. It is vital, however, that as individuals who are responsible for the financial support of others, we consider these difficult questions and decide whether a life insurance policy is the best solution for us.

John Winters writes about a variety of financial topics. He recommends http://www.protected.co.uk/ to get a life insurance quote.

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Corey Senn

Best Mortgage Loan Rate

If you are looking for the best mortgage rates but don?t have much time to spare, use a mortgage broker to assist you in finding bad credit financing. Sometimes a broker can help you secure lower rates than the market rate and the most beneficial loan terms and conditions. When the time comes to apply for the loan, if you decide not to use the broker, it is still a very good place to start your search.

Mortgage Broker

The broker himself does not offer the actual finances, but they synchronize lenders with borrowers based on individual circumstances. The broker is paid when the loan is closed as a portion of the closing costs. Using online brokerage sites, you can often obtain several quotes within a matter of minutes. Then after making comparisons among offers, you can apply for the loan online.

Use Multiple Sources When Searching for a Loan

Remember the importance of shopping around. It is not wise to accept the terms and conditions of the first broker you encounter. Compare multiple quotes until you find the best offer for your financial situation. This is especially important for borrowers with poor credit, because if you rely on a single quote, it is very easy to get tangled up in a loan with high rates and fees. Use the information granted by the brokers so that you can make a smart decision.

Bad Credit Mortgage Sources

If your credit score is below 620, you will need a get a subprime or hard money loan (sub 520 credit score). These bad credit loans will carry less desirable rates and terms — however, they are a welcome alternative to foreclosure or defaulting on your current loan. As with any type of loan, you should compare quotes and terms to insure that you are getting the most competitive deal available.

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Linda Chandler

Are you looking for a new career? You may want to think about becoming a mortgage broker or loan officer, or sell useful training material for brokers and loan officers.

If you type Mortgage Broker or Loan Officer in your search engine, you will find links to thousands and thousands of websites. This is because Mortgage Brokers and Loan Officers provide a much needed service to the public. They take applications for mortgage loans from potential homebuyers, and help the buyers find the right loan. If you ever applied for a mortgage loan for the purchase of a home, you worked with a broker or loan officer.

A mortgage broker works on his/her own bringing a borrower and lender together for the purpose of a mortgage loan. Brokers are quite often real estate agents in addition to working as a mortgage broker. According to the Mortgage Bankers Association of America, there are approximately 40,000 mortgage brokers in the U.S.

The mortgage loan officer is an employee of a mortgage company, bank, or other mortgage lending institution. The U.S. Department of Labor reports that mortgage loan officers earned between $30,000 and $100,000 in 2005. However, highly motivated loan officers earn much more.

There should be no shortage of business for mortgage brokers and loan officers as numerous real estate properties are bought and sold every day in the U.S. The mortgage broker, loan officer field is a lucrative, well respected field that thousands of people are in now or want to start. There are also brokers and loan officers who are interested in enhancing their present business and knowledge.

You can sell well respected items that really do sell and get paid up to 50% in commissions. Mortgage Broker Training provides banners and text links to make it easy for you. Click below to take a look at some of the products.

Linda worked in the mortgage industry for several years and now manages her websites at: http://www.mortgageproducts.org and http://www.my-home-services.com/broker.html

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John Visser

Rising Mortgage Rates Are Hurting Your Investment

The 6 month LIBOR ( a popular 5/1 ARM index) has gone up 274% in the last two years. The inverted yield curve causes long term rates to be better than short term rates. The net effect is that your real estate investing career is impacted dramatically and directly. Two years ago you could buy a $140,000 house with 100% financing on a 5/1 ARM, rent it out for $1,100 a month and have positive cash flow.

Those times are over for right now. Interest rates have gone up, but rents have not. This means that if you buy that same $140,000 house now, getting the same $1,100 a month rent, that you are going to pay some money out of your pocket to make up the difference between the mortgage and the rent. This is called an ?alligator?, because you have to feed it.

Second mortgage rates on high Loan to Value loans (above 90%) on real estate investment properties can go as high as 19%, even if you have a 700+ score. First mortgage rates run in the 8?s at the moment. You are not going to cash flow if you are paying full market value and getting 100% financing.

Rate Cheating Thinking

A good credit score is not enough to help you cash flow, structuring the deal right is now more important than ever. Understanding your financing options can make the difference between having a positive cash flow and having an alligator. Here they are:

Strategy #1 ? Beat the rate down

When you get your financing to purchase a property, put at least 10% down. At 90% loan to value, and documenting your income, you have a standard Fannie Mae/Freddie Mac loan with rates in the low 7?s (and in some cases still in the 6?s). You need to have a 620 credit score or better, be on your job (or self employed) for two years or more, and have 6 months of reserves in assets. (Reserves are calculated as the new mortgage payments multiplied by the number of months). Reserves can be in the form of 401K?s, IRA?s, stocks and bonds or cash.

Strategy #2 ? Buy right and then refinance immediately after

Your goal is to have the loan not exceed 90% of the value of the property. On purchases the purchase price is used to calculate the loan to value (regardless of the appraised value), and on refinances the loan to value is based on the appraised value of the property. If you buy the property at a discount, say 65 cents on the dollar with hard money, cash or conventional financing, you can refinance immediately after.

The refinanced loan can be based on the appraised value which will lower your loan to value and allow you to qualify for the best rates. The key here is to buy the property at enough of a discount so that the new loan plus closing costs will give you a far better rate than if you purchased with 100% money. The side benefit of this transaction is that you can get your entire original investment back, you can even get cash out, and still have a payment low enough to cash flow positively.

Strategy #3 ? Base the mortgage product on your exit strategy

If you are a buy and hold real estate investor, then get the longest term product available. Right now 30 year fixed loans are cheaper rate wise than 5/1 or 3/1 ARMs. Sometimes you can opt to choose a pre payment penalty which will reduce your rate further, or choose to pay extra points. Only use these options for a long term buy and hold strategy. If you don?t know when you are going to sell, use the 30 year fixed option.

If you plan to hold the property for two years or less, and/or your selling method is a lease purchase strategy, then you can cash flow much more every month if you use an Option ARM. It can cause negative equity if you choose the minimum payment option every month, but if you have equity in the property and sell in a relatively short amount of time, this loan can be very valuable to your cash flow since the minimum payment can be as low as 1.5%. You also have the option to amortize over 40 years which lowers your payment even further. It is a terrible long term loan however, so make sure you can get out of it in a short amount of time.

John Visser is a real estate entrepeneur and mortgage lender. Years of experience in both fields have taught lessons that were expensive, but valuable.

His goal, through education, is to help others avoid the money traps they can step into as real estate investors.

http://www.financingforinvestors.com

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Dan Maurer

No financial planner would ever recommend a mortgage refinance (one form of debt consolidation) to get out of credit card debt. It is substituting secured debt for unsecured debt and you could lose your home over a bunch of unsecured credit card debt if you get injured or can’t afford your new higher monthly payments.

Also, and these are verifiable published reports, 77% of all people who refinance their way out of credit card debt are right back at the same level of credit card debt 2.5 years later on average only now with less equity in their home. So it obviously isn’t fixing the problem.

why?

Because no behavior modification was needed. You made it too easy on them to just refinance out of cc debt. No financial planner will ever recommend that route.

In settlement though they have to go without using credit cards for 2 to 3 years and do go through behavior modication as does an alcoholic in rehab. Secondly, credit counseling entries on your credit report are as bad as bankruptcy entries
they will crash your FICO for 10 years and take you from a 700 FICO down to low 500’s literally overnight.

Debt settlement on the other hand is only a late pay on your credit report. Late pays bring down a 700+ FICO about 40-50 points, they bring down 600+ FICO’s about 30 points, and bring down 500+ FICOs about 10-20 points. But more importantly, the FICO goes back up more than the drop from late pays as we eliminate the debt so their debt to income ratio goes down to zero and their FICO is back up higher than it was before they joined a settlement program even with the late pays on there,
but we demand a withdrawal of the late pay entry as part of the negotiated settlement and get that 99% of the time.

Superior Debt Relief is the only debt settlement company that pays for three levels of credit restoration afterwards to bring the FICO up even higher.

Settlement is one of the methods used by mortgage consolidation people to get someone qualified into a home that was denied financing due to too high of a debt to income ratio.

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Amanda Thompson

Mortgage- the word baffles people when they think about borrowing money. However, it is a very simple procedure, but it is apparently complicated as this term relates to our home.

Normally, mortgage is a legal agreement between borrowers and lenders. With mortgage, a borrower can borrow money from any loan lending organization and give them the right to repossess his property. This property acts as guarantee incase he fails to pay-off the loan amount.

There are various forms of mortgage. One can choose any of these forms according to his/her needs and demands. Different mortgages are-

? Fixed rate mortgage
? Variable rate mortgage

? Balloon rate mortgage

A fixed rate mortgage is availed at a fixed rate during the mortgage period. With this kind of mortgage, you have to pay a fixed monthly payment in a fixed period of time. So, in future, whether interest rate rises or falls, your monthly payment will be fixed. And for this reason, the mortgage is more popular. The repayment period of fixed rate mortgage varies from 3 years to 25 years.

Whereas, a variable rate of mortgage has fixed rate of interest for a fixed period of time that is bound to change in future. A variable interest rate mortgage is also known as adjustable rate mortgage or ARM. As variable interest rate mortgages are available with lower interest rate than fixed rate mortgage, so they are appropriate for short term period where you will get the benefit of lower monthly payments.

As the name refers, balloon rate mortgage is a singular form of mortgage. This mortgage is given with a fixed rate of interest and a fixed monthly payment for a predestined time period. The balance amount of the loan needs to be paid off totally at the specific time. Many features of fixed rate of mortgage and variable rate of mortgage are also present in balloon rate mortgage. The interest rate on this mortgage remains fixed for a specific period of time that will range from five to seven years. One can pay-off the amount until 30 years. But, if someone fails to repay the amount by the end of the period, then lenders will decide that how he can pay-off the amount.

Many mortgage brokers provide expert advice and service. These will help you to grab the best deal in a minimum time. Besides, you can also try for traditional mortgage lenders, like bank, financial institution etc.

The value of the property decides the amount that a borrower can avail as mortgage. The borrower has to bear the costs of the survey and valuation. If he thinks that the valuation is incorrect then he can request for re-evaluation as well. And last but not the least, it can be said that, a well-informed decision can help a borrower to stay away from the negative effects of mortgage.

Amanda Thompson holds a Bachelor?s degree in Commerce from CPIT and has completed her master?s in Business Administration from IGNOU.She is working as financial consultant for Chance for Loans.To find a Personal loans,bad credit loans,Debt consolidation loans at cheap rates that best suits your needs visit http://www.chanceforloans.co.uk

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Anonymous

Joining such names as the Wall Street Journal, BankRate.com and others, Mortgage Loan Search, located at http://www.mortgageloansearch.cc, launches its own mobile news presence in the form of PocketNews Today. A market watch financial news reporting website with a primary focus on providing daily rates, personal financial tips, tools and guides for mobile device users.

Users of Palms, Handspring and Pocket PC type mobile computers can logon to PocketNews Today directly via a modem or sync thru Mazingo.com’s network of mobile news, magazine’s and community channels.

Read MSNBC Business news headlines, iwon news, Forbes, and Sunspot.com headlines while checking the Dow and the Nasdaq market status instantly from the PocketNews Today site.

Mortgage Loan Search’s affiliate partnership with Loanweb.com now makes financial transactions such as loan rate quotes, credit card and loan application possible on handheld devices connected to the internet or desktop sync cradle.

“This new approach to providing tips, tools and guides to consumers further enhances the combined convenience and effectiveness of bargain loan shopping online.” Says Mortgage Loan Search Network President Mark Askew.

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Jeanette Joy Fisher

In an earlier article, we presented various options for ensuring that you have positive cash flow when holding rental houses, by minimizing loan payments. One problem which we now can address is to how to eliminate the need for paying mortgage insurance.

Any loan with less than 20% down payment will include or require mortgage insurance. It may be included in the rate (which is called “Lender Paid Mortgage Insurance” or LPMI) or more commonly it is a separate itemized item, but in either case you must pay it.

If you want to pay less than 20% down, the best way to get around mortgage insurance is to finance your purchases with two loans, a first and a second mortgage. For example, the first mortgage is commonly 70%, 75% or 80% of the purchase price and the second mortgage makes up the difference to 90% or 95% of the purchase price. You can get both mortgages from the same lender, but usually you can find better rates on the second mortgage from a lender that specializes in second mortgages. An independent loan broker can put this together for you nicely.

Both mortgages typically close escrow at the same time and both lenders are fully aware of each other. For simplicity, put both loans in the same escrow and sign them both at the same time. If you want to be tricky and try to use two mortgages to get to 100% financing (i.e. no down payment), there are ways to do this, but we do not recommend it and it is not within the scope of this article.

The second mortgage is typically at a higher interest rate than the first, but not always. For example, there are some very competitive home equity lines of credit (HELOCs) with rates only a fraction above the prime interest rate. You have to have good credit scores to qualify, but if you do, they are very attractive. The problem with a HELOC based on the prime rate is that it assumes the prime rate does not get too high before you pay it off. As you may recall from the early 1980s, the prime occasionally does go sky high and it could happen again.

There is a particularly wide variation in the interest rates for second mortgages from various lenders. Moreover, if your credit, income, and assets are not ideal, you may not be qualified for certain second mortgage programs, so it may be more difficult to find a second mortgage at a good rate that you do qualify for. It is very important therefore to ask your independent loan broker to check out various options and to shop the rates. He/she should be comparing at least half a dozen different second mortgage programs.

When you use two loans as described above, it is usually advisable to have an interest-only or minimum payment loan for the first mortgage. This allows you to focus on paying down the principle on second mortgage over a period of say 5 years, if you can afford it. If you cannot do that, than obtain a second mortgage that also has a 5-year fixed period and an interest only option. You are then covered with predictable and low payments for at least 5 years.

This article has reviewed a strategy for improving your cash flow when purchasing investment rental homes — namely, using two loans to eliminate mortgage insurance. There is much more to say on this topic. So keep an eye out for additional articles by the same authors on this and related topics.

(c) Copyright 2004, Jeanette J. Fisher and Robert S. Kramarz. All rights reserved.

Jeanette Fisher, Design Psychology Professor, is the author of “Doghouse to Dollhouse for Dollars: Using Design Psychology to Increase Real Estate Profits,” the only book to reveal interior design secrets on how to make top dollar investing in real estate. For real estate and interior design psychology books, articles, tips, and newsletters: http://www.doghousetodollhousefordollars.com.

Robert S. Kramarz is a loan officer for a major loan brokerage. He has over 20 years experience in finance and business management and comes from a family a long background in real estate investing and banking. He specializes in providing financing for purchase of investment real estate. He can be reached by email at MrFunding@22cv.com. Further information is available at the website http://www.sweetloan.info.

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Maya Pavlovski

Low Doc Loans

In recent years, one of the fastest growing segments of the Australian mortgage market has been the ?low doc’ home loans. These are loans for which borrowers are able to ?self-certify? their income during the application process. Full financial documentation such as payslips or tax returns do not need to be provided by the borrower. Low doc home loans were introduced primarily for the self-employed or those with irregular income whose finances may not be up-to-date at the time of the loan application
The value of low-doc loan approvals in Australia has grown over the past year, even though these loans are estimated to only represent around 5% of the loan market.

Initially, low-doc loans were marketed only by specialist non-bank lenders, but in recent years mainstream lenders and even some of the major banks have also entered the market.

While some of the non-bank lenders are prepared to offer low-doc loans to borrowers with impaired credit histories or other ?non-conforming? characteristics, mainstream lenders still expect the client to have a clean credit history and a sizable deposit. The good news is that the deposit required with a Low Doc loan can now be as low as 5% and the interest rate which was previously loaded for the extra risk is these days not much different to the standard variable rate.

Lenders have also increased the maximum size of low-doc loans that they are willing to provide. When low-doc home loans were first introduced, the maximum allowable loan size was generally around $500 000 but these limits have since been increased, contributing to an increase in average actual loan sizes. Recent estimates based on securitised loans suggest that new low-doc loans are on average around 30 per cent larger than conventional loans.

Analysts estimate the low-doc loan market in Australia is growing at more than 15 per cent a year compared to 12 per cent for traditional home loans.
In recent times, the Tax Office has expressed concerns at the growing numbers of persons applying for loans which allow them to declare an income beyond that declared in their tax returns. The Tax Office is threatening to target users of the low doc loan products in their future tax audits. To facilitate this the Tax Office is considering forcing lenders to provide confidential customer information enabling it to match tax returns against mortgage insurance records.

Macquarie Research estimates the low-doc lending market is worth up to $50 billion, or 8 to 12 per cent of the mortgage market.

According to reports by Australia?a leading home insurers, defaults on low-doc loans are escalating but at this stage do not present a serious concern. A contributing factor has undoubtedly been the recent upward trend for interest rates.

No-doc Loans

No Doc Home loans are similar to Low Doc Home loans with the only difference being that no information needs to be provided by the borrower on his income or asset levels. The lender is effectively providing the borrower with a mortgage which is solely secured by the property being purchased. These loans are generally provided at a lower LVR than the Low Doc loans and an even higher interest rate ? they are seen to present a greater risk to the lender than the low-doc loans.

Applicants who own businesses, make commissions, live off investments, get their income in cash ? may not want to give up their privacy and are often prepared to pay for this privilege. No Documentation mortgages were designed for such applicants.

Borrowers pay for the flexibility and privacy of these types of mortgages. A clean credit is a must. Lenders also want the No Doc borrowers to make a larger deposit (generally 30% to 40%).

Some of the key reasons why an applicant would consider a low-doc/no-doc mortgage include:
? Self Employed applicants whose financials are not up-to-date;
? Financially independent people with complex asset and income structures;
? Retirees who live off investments;
? People whose lives are in a flux because of divorce, recent death of a spouse, or career change.

Both the Low Doc and the No Doc markets are fairly new to Australia. These loan products have made it possible for people who can afford a loan but do not qualify with a traditional lender to borrow. They have also made it possible for people who are asset rich but cash poor to get access to the equity in their property without needing to sell any assets. The No Doc Loans in particular, serve as an excellent wealth generation tool as borrowers are able to use the equity in their existing assets as a deposit in the acquisition of future assets and thus over time grow a property portfolio.

If you would like to read more about the Low Doc and No Doc Home Loan products available in Australia, please visit :

www.webdeal.com.au
or www.honeyloans.com.au.

Maya Pavlovski holds a Bachelor of Commerce degree from the University of Melbourne and is a qualified CPA.

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Dale Rogers

First Frank and Janet thought it was a simple error. Their mortgage had been recently sold to a new company with a new servicing company. As with the prior lender, they had sent in their mortgage payment by way of a personal check between the first and the fifteenth of the month and the payment had been posted with little event as being received as agreed.

Around the 20th of month, a rather cryptic call was received on the answering machine stating the payment had not been received and a late charge would be applied and charged and that they needed to make a payment immediately. Ok Frank and Janet reasoned that the payment might have been lost in the mail. Things happen, although it was the first time in two years that a payment was late. Frank and Janet has some credit challenges three years ago and found it necessary to entertain a sub prime loan to buy the house that they currently resided. Thus they were dealing with a sub prime lender and all that goes with it. Quickly, Frank and Janet called customer service and were able to make a check debit on line for the payment plus a late fee right out of their checking account. The late fee of 5% amounted to $62.50. Frank told the mortgage-servicing representative that they would put a stop payment on the check and instructed them to flag the account and not deposit that particular check (with #10224 check number dated on the 2nd of that month) as he was going to put a ?Stop Payment? on it. After the call they called their bank and put a ?stop payment? on that check. This cost them $25. Five days later another call came in from the mortgage servicing company stated that they had deposited the mailed check and it came back resulting in a $50 charge for the transaction since it hadn?t gone through. The conversation went nowhere as there wasn?t a record anywhere.

Frank and Janet looked at each other and collectively rolled their eyes while verbally reviewing what had transpired. Frank asked Janet rhetorically, ?Can you believe this??
Next month rolls around and this time Frank and Janet make a special effort to send the mortgage payment in close to the first of the month. Around the 20th of the month, Frank and Janet received another call from the mortgage servicing company indicating again, that the payment had not been received and that there would be another late charge. The discussion became extremely heated with Frank leading the charge. Frank demanded to speak with a supervisor regarding the second time around of the mishandling of the monthly mortgage payment. The supervisor was not of much help claiming the check had not been received. Frank and Janet were determined that they would not put another ?Stop Payment? on this check at a cost of $25. Not getting any satisfaction, Frank told the customer service supervisor that he would call back in seven days to see if the check had been received and posted. Seven days later, Frank called and the check had been received and posted but there would be a late charge that would apply. Another $62.50 late charge would apply. Frank and Janet were frosted beyond belief but at the same time relieved that the check had arrived. What could be going on they wondered.

The next month Frank and Janet decided to send in the mortgage payment a week before the 1st giving the mortgage servicing company plenty of time to receive and post the payment well within the time frame. On the 20th of that month a call was received from the mortgage servicing company stating once again the payment had not been received. Frank and Janet were beside themselves. This time Janet demanded to speak with a supervisor. The supervisor explained that the check had not been received. Janet pressed the supervisor further, ?Has this been a recurring problem with other borrowers?? There was a long pause of silence from the supervisor followed by, ?Uh?no?I don?t think so.? Janet wasn?t satisfied with any of the answers and what was going on with this new mortgage servicing company and was determined to get the bottom of these ?phantom late charges?. Adding insult to injury, the following month a thirty-day late was reported to the credit bureau. Frank and Janet engaged in their own spirited credit repair campaign.

Immediately, after getting off the phone with the supervisor Janet and Frank went on line and started researching the company for any information that might shed some light on what was happening. It was found a series of stories and articles about complaints regarding this servicing company. A ton of new service business had been added without the staff to handle it. Check and payments were stacked up and untouched. Problems and complaints mounted. State and Federal agencies were suing with massive fines to be levied. Frank and Janet decided to send bank checks by certified mail return receipt. This was cheaper than $62.50 a crack and could now prove ready receipts of their payments.

Dale Rogers

www.brokencredit.com

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