Are You Aware Of These Mortgage Rip Offs?

By admin on July 7, 2011

Although the majority of mortgage lenders have very high standards, some practices bear watching. Consumers that fail to thoroughly inspect the contracts they’re signing may find that they’ve incurred unwanted and unnecessary expense.

The most common ripoff is an ‘interest lock’. After you’ve shopped around for a lender and decided which one to use, they may offer to lock in the interest so that you will pay that specific rate even if the interest rates rise before you sign the mortgage. Get it in writing!

A verbal promise of a ‘lock in’ is worthless unless it is committed to paper. Even then your closing may be delayed until the time limit on your lock runs out and you end up paying a higher rate. This is called ‘running’ the lock. Unless you’ve obtained a signed promise with the interest rate you’ve locked in and a firm closing date, you may be stuck with a much high rate than you had anticipated.

Be sure to check out the lender you’re dealing with, call the Better Business Bureau and state regulators to ascertain the reputation of the firm you’re dealing with. Start with lenders that your friends and acquaintances have been satisfied with, get your paperwork completed without delay and if you do suspect that your loan is delayed start complaining.

You should always keep an eye on the interest rates. If you’re quoted and interest rate of 6%, for instance, and by the time you’re ready to lock in the rate dropped to 5.75%, the broker may not tell you of the drop and lock you in at the higher rate.

There’s nothing illegal about this practice as long as it’s disclosed in your contract but there is usually no notice until you’re ready to close. You have to wade through a lot of legalese to find this information so the best way to protect yourself and your wallet is to pay attention to how the interest rates are changing.

You should make sure that your mortgage doesn not include a prepayment penalty, even if you have no intention of paying off your loan early. You may want to refinance to take advantage of a better interest rate or for some home repairs or remodeling. Since refinancing involves paying off your lender with money borrowed from another lender, you have effectively paid off your mortgage early.

If you have a prepayment penalty in your mortgage contract, you will be charge approximately six months of interest on eighty percent of the remaining amount of your loan. If you’re not sure after reading the contract whether a prepayment penalty is included, ask to shown where it states there is no prepayment penalty. It’s always advantageous to have a real estate attorney review your contract. The money you spend on an attorney’s fee may save you thousands of dollars while giving you assurance that you have the very best contract possible.

A very popular and surprisingly lucrative rip-off involves paying a bank or a company to set up your mortgage payments on a bi-weekly basis. The concept behind bi-weekly payments is sound and legal, allowing you to make one extra payment per year and reducing the length of your mortgage.

You’ll save thousands in interest this way but again, be sure there isn’t a prepayment penalty in your contract. You definitely do not have to pay to set up bi-weekly payments! Your mortgage company will be more than happy to set up such an arrangement and won’t charge you a cent to do so.

The very best way to protect yourself from common mortgage rip-offs is to pay attention, read your contract and have an attorney check it out before you close on your property. You’ll be glad you put in the extra effort, and so will your wallet!

Joe Kenny writes for Glitec.org, offering loans in the UK, visit them today for cheap personal loans or visit Rebuild.org for great mortgages.

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Getting A Mortgage in Spain

By admin on July 5, 2011

For all of its structural weaknesses Spain is considered one of Europes leading economies. Located on and north of the Gibraltar Straight, Spain is constituted through a center right government and runs a mixed economy. In fact, Spain is one of the only countries within the European Union that was able to avoid zero percent growth in recent years. Although there is a variety of industry within Spain it is its tourism industry that is most impressive. Over the last 40 years the country has grown tourism into the second largest in the world while generating almost 40,000 million Euros in the process.

Unfortunately, the successes found within tourism cannot be translated into the mortgage market where pricing pressures have left younger buyers scraping by to meet payments or rents. Current loans that are available include:

For purchase (including land)

Re-mortgage

Interest only

Self build

Variable

Fixed

Non-status loans are available

Up to 30 year interest only available

Commercial loans

Even with a low interest rate of 3.5 percent as an introductory offer and then 4.25 percent there after it is the loan to value conditions that help to make decisions. Although vary strictly monitored and designed to keep people in Spain ,or move there, loan to value conditions include:

Based on land valuation

E180,000 loan to value based on 95 percent loan to value and the intent to become a Spanish citizen.

No maximum loan amount for up to 70-80 percent of loan to value amount

Equity release of up to 60 percent of loan to value

Self certification of up to 60 percent of loan to value

In most respects even the term of the mortgage is generous at 40 years. The age limit is fair as well at 75 years old. There also is no limit on the 30 year interest only product if higher interest rates are in place. Documentation is fairly straight forward and includes, at the minimum:

Six months of bank statements

P60 or equivalent

Letter from accountant indicating taxes paid

Three years of audited accounts if self employed

Certified true copies of passports

Two forms of address identification

Completed application form

Despite Spains remarkably strong economy, which is thought to be able to overtake Germanys per capita income levels in the very near future, its debt level within the younger and poorer populations may derail mortgages, growth and investment. Recently Spain has been partaking in the global housing boom with 16 percent of GDP being comprised of construction. Unfortunately, investment in education, research and development have been underperformers in recent years causing a loss of manufacturing jobs to lower cost countries. But if this were not enough, Spain has been ranked the worst educational system in the European Union. Perhaps the bubble is about to burst and it will fall to tourism to save the day but, at the moment, Spain is on the move and awaiting anybody that would like a mortgage.

Leo Fogarty is Marketing Director of the mortgage specialists Euromortgage. He is also a regular author for financial magazines, most notably Property Gallery Magazine in Ireland and is an expert on mortgages, remortgages, equity releases and overseas mortgages.

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Getting A Mortgage in Turkey

By admin on July 3, 2011

Turkeys economic development over the years has been slow and measured with structural changes being instituted in a hit or miss fashion. In the 1980s macroeconomic reforms to modernize the countrys economy began in earnest, albeit at a slow and methodical pace. Lack to follow initial changes with meaningful reform led to rampant inflation and only moderate GDP growth. As might be expected rampant corruption became the norm and growth in key industrial sectors floundered.

As the country worked to open up the economy, to a market based approach, several industrial sectors were enabled to move away from the strict control that the countrys leaders had over them. Unfortunately, the finance and banking sectors were not among them resulting in only a small flow of foreign investment into the country. In the first few years of the 21st century this has slowly changed with bank liberalization and lending laws becoming more open to foreign investment. Although information is scarce mortgages are to be had in Turkey with fairly straight forward requirements based largely on European Union standards. Currently, the following loans and purposes of the loans that are available include:

Purchase

Refinancing

Improvements

Repayment

The term of the loan varies on how much is taken with a 15 year term for under E150000 and 20 years for over E150000. The loan to value rate is slightly higher than the norm but reasonable at 75 to 80 percent depending upon the location of the property. Interest rates also follow the European Union norm and are currently at a fixed rate of 6.1 percent for one year and then adjusted and fixed for 3 and five years.

Although Turkey is following many of the European Unions practices it is not yet a member of the EU. Certain political concerns have hampered the country from attaining full member status although it almost certain that, over time, it will adjust certain considerations for formal status.

These political issues have not hampered the strength of the economy and the structural changes being made. Although formal status with the European Union would be preferred it has not affected the realization that Turkey is a good economic vehicle regardless of status. This is not easily said about other petitioning countries or existing members. As with any economy there are issues but in Turkeys case they are becoming more mundane by the year.

The banking sector is unfortunately one of the last industries to be freed up by this rather strictly controlled economy. The reluctance, by the government, to give up authority has taken almost 100 years and they are not going quietly into the night.Fortunately, once a change like this gets started, however slowly, it is almost impossible to stop. It has been an agonizing journey but Turkey has become a world financial power and is here to stay.

Leo Fogarty is Marketing Director of the mortgage specialists Euromortgage. He is also a regular author for financial magazines, most notably Property Gallery Magazine in Ireland and is an expert on mortgages, remortgages, equity releases and overseas mortgages.

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Which Mortgage Is Best For You?

By admin on July 1, 2011

A popular trend for Americans is to seek low rate home loans especially those who are first time homebuyers. Sellers are also getting the message and responding by reducing the asking price. There is also recent drop in mortgage interest rates that is encouraging the first time homebuyers to start applying for mortgage loans. Following are the various mortgage loan options available:

Fixed rate mortgage :

30 Year Fixed Rate – the interest rate is fixed for 30 years and the mortgage is fully amortized in 30 years if the amount payment schedule is followed.

20 Year Fixed Rate – the interest rate is fixed for 20 years and the mortgage is fully amortized in 20 years if the amount payment schedule is followed.

15 Year Fixed Rate – the interest rate is fixed for 15 years and the mortgage is fully amortized in 15 years if the amount payment schedule is followed.

10 Year Fixed Rate – the interest rate is fixed for 10 years and the mortgage is fully amortized in 10 years if the amount payment schedule is followed.

Fixed Rate Balloon Mortgage

7/23 Conforming Mortgage rate is fixed for 7 years and then converts to a new fixed rate for the remaining 23 years. The new rate is based on the Fennie Mae net yield index and is added to a predetermined margin. Converting to the new rate is only permitted if the prescribed conditions are met and if not met, then the loan is due and payable to the lender as a balloon loan. The loan is amortized for 30 years if the normal payment schedule is followed.

5/25 Conforming Mortgage rate is fixed for 5 years and then converts to a new fixed rate for the remaining 25 years. The new rate is based on the Fennie Mae net yield index and is added to a predetermined margin. Converting to the new rate is only permitted if the prescribed conditions are met and if not met, then the loan is due and payable to the lender as a balloon loan. The loan is amortized for 30 years if the normal payment schedule is followed.

30/15 (30 due in 16)- the rate is fixed for 15 years and the payment is amortized over 30 years to facilitate lower monthly payments. This loan is due and payable as a balloon loan at the end of 15 years.

Intermediate A R M’s:

10/1 ARM’s – the rate is fixed for 10 years after which in the 11th. year the loan becomes an adjustable rate. The adjustable is tied to the treasury index of 1 year and is added to a predetermined margin to arrive at new monthly rate. The margin, life cap and periodic caps of ARM will be in the 11th.year. The loan is fully amortized in 30 years if the normal payment schedule is followed.

7/1 ARM’s – the rate is fixed for 7 years after which in the 8th. year the loan becomes an adjustable rate. The adjustable is tied to the treasury index of 1 year and is added to a predetermined margin to arrive at new monthly rate. The margin, life cap and periodic caps of ARM will be in the 8th.year. The loan is fully amortized in 30 years if the normal payment schedule is followed.

5/1 ARM’s the rate is fixed for 5 years after which in the 6th. year the loan becomes an adjustable rate. The adjustable is tied to the treasury index of 1 year and is added to a predetermined margin to arrive at new monthly rate. The margin, life cap and periodic caps of ARM will be in the 6th.year. The loan is fully amortized in 30 years if the normal payment schedule is followed.

3/1 ARM’s the rate is fixed for 3 years after which in the 4th. year the loan becomes an adjustable rate. The adjustable is tied to the treasury index of 1 year and is added to a predetermined margin to arrive at new monthly rate. The margin, life cap and periodic caps of ARM will be in the 4th.year. The loan is fully amortized in 30 years if the normal payment schedule is followed.

Joe Kenny writes for Rebuild.org, offering home equity loan deals, they also have some great offers on mortgages..

Visit today: Loans at Rebuild.org

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Is Bridging Finance For You?

By admin on June 29, 2011

By definition, Bridging Finance or Bridging Loan is a short-term loan used to purchase commercial property. This is something that can come in very handy, depending on your particular situation. There are two main points that you need to consider before you opt for a Bridging Finance package, your needs and the state of the property market.

One of the major benefits of Bridging Finance is that it will allow you to close on a property and purchase a new property before you sell your existing one. You will need to evaluate your current situation to determine if your needs justify taking on this type of finance. Will you lose the new property if you can’t offer a deposit? Would you be eligible for a discount on the purchase price if you can come up with the cash fast?

What are the existing market conditions in regard to the sale of your existing property? Is it going to be possible to sell your existing property in the time frame set out in your finance package? Most Bridging Finance typically runs for one year and will need to be paid in full at the end of the term unless it is possible to convert it into a Commercial Loan. You will also need to be aware that the interest rates will be higher on a Bridging Finance package.

If the market is slow and you do not have an urgent need for the new property, it may not be in the best interest of your business to take on this type of loan. On the other hand if the property market conditions are good, you can be out from under a Bridging Loan fast. However, it is still something that will need to make sense for your business.

If you feel taking on this type of loan is the right thing to do, you will be far better off going through a specialist Commercial Lender.

They will shorten the entire process as a specialist will know the market and they can quickly make a judgment on the best loan for you, based on your particular circumstances. Be sure to check that the loan can be converted into a conventional Commercial Finance package. You will also want to check on the type of interest rate and the costs you will entail if you do have to convert.

Most Commercial Lenders will be willing to extend the terms of your Bridging Finance package. Let’s say, for example, you have a buyer and you are waiting for the sale to close. Bridging Finance in general is much more flexible and accommodating than you might expect in this respect.

Paying back your Bridging Loan at the end of the loan term more often than not depends on your ability to sell your existing property. If it does not sell in the required time, you will be paying the existing loan on your current property, your new property and the newly converted Bridge Finance as well.

If you believe this may be a possibility be sure to take a package that can be converted to a Commercial Loan if the need arises. Otherwise you may have to come up with the full Loan sum at the end of the finance term.

Need Bridging Finance in the UK? Commercial Lifeline are Bridging Finance and Commercial Mortgage specialists.

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How Easy Is It To Get A UK Commercial Mortgage?

By admin on June 27, 2011

No matter what kind of mortgage you apply for, whether it’s a commercial mortgage or a residential type of mortgage, you will find that great credit and good collateral will make it easier and more cost effective when it comes to the application process. But if your credit is not ideal, or even if you are planning on buying property in a bad part of town, you still may be able to get the financing that you require. lenders are much more flexible and willing to work with you these days.

Your credit score, how your business is doing, your reason for getting a loan, the specifics of your property location and the appraisal amounts will be taken into consideration when you are trying to get a commercial mortgage. If all of these things do not meet the requirements of the lender, you could go through the whole application process numerous times only to be rejected for financing each time.

Every lender will have a different set of conditions that you will need to meet to get approved. But finding the right lenders and applying to a number of them each with different application forms can be very time consuming and confusing. Instead consider using an independent commercial Mortagage broker. This is by far the easiest and most cost effective way of securing a commercial mortgage. Your broker will be your representative and act as an ambassador between you and the mortgage lenders.

A commercial mortgage broker provides you with the flexibility to approach multiple lenders easily. This will make it much more likely that you will find the right mortgage at a competitive rate. Your broker, since he knows the lenders, may even be able to leverage a special deal for you, something you would never be able to achieve by yourself. You may even receive multiple offers and be in the ideal position of being able to pick and choose.

The broker will, in most cases (90% of the time), charge you nothing for his services, always check this before you proceed with a broker. Only being rewarded himself by the lender after you complete. In turn they will work hard to find, apply for and process the right loan for you fast. When you consider they know the market, and they can approach multiple suitable lenders easily, using an independent broker really is the best option.

You could approach various lenders yourself, but you would have to complete applications over and over again for each lender as their application forms are not standard. If you deal with a broker they will only require that you complete one application and they will then complete multiple applications for the various lenders on your behalf, which will save you a great deal of time, inconvenience and probably money. Your broker will already be familiar with the qualifications of different lenders and your application will only be sent to the lenders who may actually accept you.

There are many ways to complete just about every task in life, including applying for commercial mortgages. If you want the easiest, fastest and most cost effective way to get the loan that you need, then it is recommended that you find an independent commercial mortgage broker to do the work for you. This is the absolute best way to avoid the commercial mortgage application headache and find the best loan for you fast!

As UK Independent Commercial Mortgage Brokers Commercial Lifeline are ideally placed to help if you are looking for a Commercial Mortgage in the UK.

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Securing Commercial Finance

By admin on June 25, 2011

When you first decide to take up Commercial Finance from a Commercial Lender, you need to consider what you have to offer as security for the loan. Items that you can use to secure a Commercial Finance package are generally property, revenue and equipment.

In the UK, most Commercial Lenders will require up 75% of the value of the loan. You will need to come up with as much as possible to secure the loan. The items you put up to secure the loan will be confiscated by the Commercial Lender should your fail to honor the terms of the loan. Let’s look at each of the things that can be used and how they work.

Property
This can be in the form of residential property owned by the principles involved in the business. It can also be existing commercial property that is owned by the business. Finally, it may also include the property you are purchasing, if the Commercial Finance package is being used to purchase property.

When you put up property to secure the loan, the lender will be looking at the equity value of the property first and the total value of the property second. They will also look at the payment history of any property that has not been paid for outright. When the lender has finished looking at the property you have, they will look at your account receivables.

Revenue
The amount of revenue generated on a regular basis. This can be weekly, monthly, quarterly and even annually to see if the income is there to support the payments on the Commercial Finance package. The lender will also look at what your potential for grow is for your receivables. Your previous growth history will help them figure that out. They will look at how much is left when you subtract all your account payables, except the loan repayment and it should be greater than 1.35:1.

Equipment
The degree to which this is helpful will depend on the type of commercial financing you are looking for and the type of equipment you are planning to use to secure the loan. If the equipment has a long shelf life, it will be more desirable than things that have a short shelf life. If your business is a trucking company, the vehicles and the equipment used to fix them could be used to secure commercial financing.

The parts that you would use to keep them running could not be used to secure commercial financing. This is because, once the part is used, it no longer exists to secure the loan. The use of a truck to secure the loan is better because it will presumably be around for a much longer period of time.

If your business is a factory, you could use the equipment you use to make the product you sell to secure commercial financing or a Commercial Mortgage. The supplies used to make the finished product would not be good because they are not going to be around once the product has been made.

This does not mean that short life-span materials cannot be used, but they are counted as general inventory in much the same way as office supplies would be. You need to keep in mind that anything you use to secure the financing from your lender will be lost if you fail to honor the terms of the finance package. The longevity of the equipment is something that will be looked at carefully by the lender.

This is because some equipment, in some industries, out date very quickly and loose value very quickly as well. If you work primarily with computers, your equipment and software will be outdated and worthless long before a loan would be paid off. Factory equipment, on the other hand, will still retain its value many years after the Commercial Finance start date and should satisfy your Commercial Lender.

Need UK Commercial Finance? Commercial Lifeline can help as Commercial Finance and Bridging Finance specialists.

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