Are You Thinking Of Taking Out A Second Property Mortgage?

Word Count:
434

Summary:
Buying a second property with the idea of letting it can benefit you in two major ways. The first of course is that if you have done your homework correctly then it can bring in a substantial income. The second is that there is a long term accumulation of capital growth associated with them.

However when it comes to taking out a second property mortgage there are many pitfalls that you can come across and you need to have some knowledge on the subject if you are to avoid s…

Keywords:
Holiday Property Mortgages, Holiday Let Mortgages

Article Body:
Buying a second property with the idea of letting it can benefit you in two major ways. The first of course is that if you have done your homework correctly then it can bring in a substantial income. The second is that there is a long term accumulation of capital growth associated with them.

However when it comes to taking out a second property mortgage there are many pitfalls that you can come across and you need to have some knowledge on the subject if you are to avoid stumbling into one of them.

Second property mortgages generally aren’t as simple to arrange as the normal first mortgage and many factors have to be given some serious consideration if you are to get off on the right footing. While you can search for and deal with your second property mortgage yourself, this isn’t the advisable way to go or the best. The best way to go is by choosing a specialist broker, this ensures that you will get the best deal that is currently available as the broker does all the hard work of searching for you.

However you should also bear in mind that buying a second property with the intention of turning it into an income is not easy. When you consider this option it is often far more risky than other investments, it can be very time consuming and is complicated even with the help of a mortgage broker. But on saying this it can be a very rewarding experience financially over the long term, providing you are willing to wait to start reaping the benefits.

When taking out a second property mortgage one of the biggest considerations that you will have to take into account is your primary objective for the property. When it comes to letting the property you will have to know if the main objective is for capital growth or income. In plain English this means are you seeking to get an income on a month to month basis or looking to gain from increased equity over a period of time?

You should have course taken into consideration the fact that besides the monthly mortgage repayments you will also have other out goings to pay, additional costs include the upkeep of the property, legal insurance and insurance such as contents and building and replacing furnishings and appliances.

As you can see owning a second property to gain an income is complex and this is more than enough reason why you should choose a specialist broker to take care of the mortgage part of the venture.

Slash Your Credit Card Debts, Not Your Wrists With Refinance Mortgage

Word Count:
568

Summary:
When your credit card debts are piling up and taking away your zest for life, don’t despair. A refinance mortgage will bring back that spring in your step plus you won’t be creeping in the shadows lest you meet an angry creditor.

Having sleepless nights?

Creditors knocking on your door and a phone ringing off the hook are not virtual nightmares. They’re for real. The only way out is to have your mortgage refinanced to regain your sanity.

This must come with a promise…

Keywords:
refinance mortgage

Article Body:
When your credit card debts are piling up and taking away your zest for life, don’t despair. A refinance mortgage will bring back that spring in your step plus you won’t be creeping in the shadows lest you meet an angry creditor.

Having sleepless nights?

Creditors knocking on your door and a phone ringing off the hook are not virtual nightmares. They’re for real. The only way out is to have your mortgage refinanced to regain your sanity.

This must come with a promise that you’ll change your spending habits because a refinance mortgage is serious business. You’ll have to put your beloved home, rodents and all, on the line. So call your creditors and beg them to give you time. They’ll listen. Credit card companies want their money back too, that’s how they survive. They can’t get your house and that’s a comforting thought, so call them.

With a reprieve, start shopping for a reliable lender for your refinance. You’ll be sleeping better knowing there’s hope.

Don’t jump into the fire

People make the mistake of hurrying up their loans and getting 3rd degree burns. Stay cool and shop for the best deal in the planet. But while you’re at it, stop using your credit cards and live on a miserly budget.

Be realistic, with a loan hanging over your head, times ahead will be hard. With this caveat, get a refinance mortgage with eyes open. Don’t be lulled by promises that you’ll be able to breeze through your loans. You will, with determined belt tightening. No more dinners out nor fancy shopping, unless you use those smart coupons.

what to do?

Get all your credit cards and check out the outstanding balance of each card. List the priority credit. It pays to start with the smaller balances and pay these in full when you get your refinance mortgage money. Those small balances will balloon if you don’t watch out.

While paying those balances, also debit your other balances. As you go along you’ll find you’ll be dealing with less credit cards. Go ahead, hang that paid credit card like a prized trophy once it’s fully paid. It will be a good reminder of your triumphant struggles.

Don’t get a $200K refinance mortgage for a $30K credit card loan, unless you have emergency purchases or payments like a hospital bill or college education for your kids.

The lure of hard cash is irresistible, but think about the times ahead. After the credit card debts and refinance mortgage loan is paid up in let’s say, ten years, go get another loan for a meaningful big purchase.

Play Smart

Don’t eye those teaser rates. Instead, look for a fixed interest rate that’s lower than your current mortgage. You’ll be able to play around your budget without dealing with surprise attacks of high interest rates. You’ll sleep easy like Rip Van Winkle, but for only 10 years.

Choose a short payment term, and avoid borrowing more than the value of your home. Pay closing costs upfront instead of having it on the loan fees. You’re getting a loan to pay your credit card debts, not make your life more miserable. So slash your credit card debts instead of your wrists with a refinance mortgage loan.

What Is A Reverse Mortgage And Should You Get One?

Word Count:
420

Summary:
Reverse mortgages are for senior citizens who own homes and want monthly income.

Keywords:
home, reverse, equity, mortgage, loan, interest, reverse mortgage, equity home, repay, monthly, money, payment, mortgages, heirs, bankruptcy

Article Body:
Who qualifies for a reverse mortgage?

You must be at least 62 years old and have equity in your home.

You have equity in your home if your home is worth more than you owe on it.

Here’s how it works

When you bought your home, the bank loaned you the money to buy it and you paid them back with monthly mortgage payments.

A reverse mortgage is the opposite. With a reverse mortgage, the bank pays you a monthly payment from the equity in your home.

You repay the money when you sell your home, refinance, permanently move out, or pass away. At that time, you or your heirs must repay the loan plus interest in one payment.

How do I get a reverse mortgage?

Reverse mortgages are available through most major banks and lenders.

Here’s what happens when you contact the lender:

An appraiser will determine the value of your home.

The lender will tell you how much you qualify for based on your age, the equity in your home, and the cost of the loan.

You decide how you want to receive the money.

You can receive the money:

As a lump sum

In monthly payments

As a credit line that lets you decide how much of the loan to use, and when to use it
You sign a contract. The contract will outline the payments you will receive and the amount you have to repay including interest.

Maintaining your reverse mortgage

To keep your reverse mortgage in good standing you must:

Pay your property taxes on time

Maintain and repair your home

Have homeowner’s insurance

Your lender can end the reverse mortgage and require immediate repayment if you:

File for bankruptcy

Rent out part of your home

Add a new owner to title

Take a new loan against your property

Things to consider

Reverse mortgages are more costly than typical home loans or home equity credit lines.

They also have higher interest rates and fees. Interest is charged on the outstanding balance and is added to the amount you owe each month. This means that your total debt increases each month.

Keep in mind that you are borrowing equity from your home. This means fewer assets for you and your heirs.

Shopping for a reverse mortgage

Shop around and get offers from several lenders. You should compare the terms, and look for a loan with the lowest interest rate, points and fees.

Seven Alternatives To Consider Before Getting A Reverse Mortgage

Word Count:
1245

Summary:
Reverse mortgages are hot. Baby boom demographics, inadequate retirement funding, and problems in the traditional mortgage market (pushing brokers into alternate products) have combined to make marketing of reverse mortgage products to senior citizen homeowners one of the hottest niches in the mortgage business.

And the effort is paying off for marketers. Federally-insured Home Equity Conversion Mortgages (HECMs) are the predominant type of reverse mortgage in the U.S. Rec…

Keywords:
reverse mortgage,hecm,retirement,mortgage,personal finance

Article Body:
Reverse mortgages are hot. Baby boom demographics, inadequate retirement funding, and problems in the traditional mortgage market (pushing brokers into alternate products) have combined to make marketing of reverse mortgage products to senior citizen homeowners one of the hottest niches in the mortgage business.

And the effort is paying off for marketers. Federally-insured Home Equity Conversion Mortgages (HECMs) are the predominant type of reverse mortgage in the U.S. Recently, the number of HECMs originated has averaged about 9,000 per month, more than double the average in 2005. Moreover, about two-thirds of the total HECM reverse mortgages ever issued have been originated in the last two years.

Reverse mortgages are only available to homeowners age 62 and older who have paid off their mortgage or have only a small mortgage balance remaining. The sales pitch for these loans is enticing: tax-free retirement income for as long as you own the home – even for life; no monthly loan payments; no repayments until the home is sold, and payment options flexible enough to meet any need! In many cases a reverse mortgage is the ideal tool for senior homeowners.

But there is one big drawback with reverse mortgages: high up front closing costs that can sometimes reach $20,000 or more. Combined with the regular interest that accrues on the loan balance, the up front costs can make this an extremely expensive way to borrow. To spread these costs out and make the cost of borrowing reasonable, it is imperative that the borrower be confident in their ability to remain in the home for at least 5-7 years and, preferably, longer. Unfortunately, government data shows that most HECMs are paid off in seven years or less.

So, while a reverse mortgage may be a good fit for seniors in many situations, it is always important to carefully explore alternatives to see if a more cost-effective means to achieve your retirement financing goals is available.

We discuss below seven alternatives for you to consider:

1. Intra-Family Loan – Do you have a relative or friend with deep pockets and a good heart? An intra-family reverse mortgage loan can be an excellent way to gain the advantages of a reverse mortgage, but avoid most of the costs. The concept is straightforward: instead of a bank lending you retirement funds in exchange for a lien on the house, structure an arrangement with a relative or friend to lend you the money instead – collateralized with your home, of course. You can avoid most of the up front costs this way and have more flexibility to set interest rates and loan terms. There is even a company called Circle Lending (http://www.circlelending.com/familyadvantage/reverse-mortgage.asp) that specializes in drafting these loans as “official” arms length transactions and then provides monthly loan servicing just as a traditional lender would do.

2. Price Appreciation Agreement – There are also firms that will give you money today in exchange for an “equity-share” in the future appreciation of your home’s value. These programs are usually aimed at higher value homes (over $500,000) and may only be available in areas of the country with a track record of strong property value growth. The benefit of these programs is that you may be able to tap into your equity without the high up front costs of a reverse mortgage. The drawback is that it could cost you substantially more in the long run in the form of foregone home appreciation.

If you think this type of arrangement may be a good fit for you, here are two programs to look into to: Equity Key (http://www.equitykey.com/) and, Rex Agreement (http://www.rexagreement.com/)

3. Home Equity Line of Credit (HELOC) – As noted, reverse mortgages make most sense if the homeowner is able to remain the home for seven years or more. The reality, however, is that more than one-half of all HECM reverse mortgages terminate in less than seven years. To finance short and intermediate cash needs, a HELOC loan may provide a more cost-effective way to tap into your home equity. With a HELOC, closing costs are generally minor (sometimes zero). The downsides are two-fold: 1) there are monthly loan payments required and, 2) you will likely need to show the lender that you have adequate income to make the required loan payments.

An “interest-only” HELOC loan typically requires monthly payments equal only to the accumulated interest on the amount borrowed to date. With care it is possible to borrow an amount each month that provides cash for living expenses and is adequate to make the monthly interest-only payment. In this way the HELOC mimics a reverse mortgage with interest building up in the loan balance until the loan is repaid when the home is sold.

4. Delay Receipt of Social Security Benefits – The majority of Americans start their (reduced) social security benefit at the earliest possible age (62). While people may feel it is smart to “get the money while you can”, the truth is that Americans are living longer than ever before and the decision to take early social security can cost you several hundred dollars per month for the rest of your life. People in their seventies and eighties often feel a reverse mortgage is needed to close a budget gap – a gap that might not exist if they were receiving full social security benefits.

5. Sell and Downsize or Rent – Using home equity to help pay for retirement is not a new concept. For generations, it was common for elderly homeowners to sell their homes and use the proceeds to buy or rent a smaller, more affordable dwelling. This remains a viable strategy and one of the best methods available to ensure you get full use of your hard earned home equity.

It is sometimes possible to sell your home to an “investor” and who will then rent it back to you. This provides you with needed cash while allowing you to remain in the home. Investors like this type of transaction since they get a “good” tenant who likely will take good care of the property.

6. Deferred Payment Loans – Many states, local governments and nonprofit organizations sponsor loan programs for the benefit of “house rich, cash poor” senior homeowners. Much like reverse mortgages, these programs lend money today that is paid back when the senior homeowner sells the home or dies.

The drawbacks are: 1) the use of loan proceeds is usually restricted to a specific purpose (e.g. home repair, payment of property taxes or special assessments, etc.) and, 2) eligibility may be restricted to seniors qualifying as lower income.

Deferred loan programs often have very low (even zero) closing costs and interest rates. This which makes them an alternative worth looking into before deciding on a reverse mortgage. To find out what deferred loan payment programs are available in your area, contact the Area Agency on Aging (AAA) for your region (http://www.eldercare.gov/Eldercare/Public/Home.asp).

7. Other Assets – Home equity should be viewed as a financial asset on par with CDs, stocks, bonds, cash-value insurance policies or other investments you may own. Before deciding to “cash out” home equity with a reverse mortgage, compare this strategy to other possibilities like selling other financial assets you may own. Stocks and bonds can be turned into cash much more efficiently than home equity can.

Deciding whether to take out a reverse mortgage is an important financial step for both you and you heirs. Be sure to consider the alternatives before making a final decision.

100 Per Cent Remortgage

Word Count:
435

Summary:
People interested in a 100 percent refinance are looking to cash out the total value of their homes. This type of loan does not require any down payment and one can use the money for anything that they like. Fixing up one’s home, paying off bills, or going on vacation are all legitimate options.

Keywords:
Mortgage, Remortgage

Article Body:
When an individual refinances the full value of your home, they are essentially taking out all of the value of the property. It will cost. One will typically be required to pay up to three percent of the home’s total value to cover closing costs. Also because one is using up all of the equity in your home, they will, in most cases, have to purchase private mortgage insurance. However, if one works with a sub-prime lender, they may be able to get the insurance waived. Refinancing will provide some tax benefits. Individuals will be able to deduct interest and closing costs.

A 100 percent refinance will be more expensive then a typical refinance. This is because one is borrowing against the full value of their home. To find the very best rates, one will need to do some research. There are plenty of online mortgage websites that will pit lenders against each other to refinance your home. One will be able to compare the rates and terms of different mortgage companies. To speed this process up, an individual should be sure that they have some idea about the value of their home, their credit score, how much debt they have and their income and other assets. This will enable them to receive a realistic quote and give them some idea regarding their options.

When looking to refinance the full value of ones’ home, one may have to be creative with financing. Besides a straight 100 percent refinance, one might consider refinancing two different mortgage loans. This allows individuals to forgo private, mortgage insurance (PMI), which will cost hundreds of dollars a year. Two, separate refinance loans also allows one to structure terms differently for each loan. One loan can be borrowed at a fixed rate, while the other one at an adjustable rate. There are many different options. One is only limited by their imagination, credit score and the condition of the property.

For individuals who need a large sum of money fast, refinancing and cashing out the full value of one’s home, is one way to get it. There are many reasons that an individual may consider doing this. Paying for a child’s college tuition, investing, purchasing more property, paying off debt, or making home repairs are a few reasons. Because one can lose their home if they are unable to pay back the loan, a 100 percent refinance should be carefully considered beforehand. There are likely to be higher monthly payments and private mortgage insurance, so one must be fully confident that will be able to successfully absorb these costs before proceeding.