Stepping Onto The Mortgage Ladder For The First Time

Securing a mortgage loan for the first time can be a worrying experience. You want to go it alone but your naturally concerned that a mortgage lender will take advantage of your lack of knowledge.

In spite of numerous laws and regulations it is still better to have a very least a basic understanding of the ideas and systems of the mortgage industry.

There are many different deals, incentives and programs for the first time mortgage buyer. Its important to look at each of these in detail to find out if they are worthwhile, and if so, if they are ideal for you and your circumstances when it comes time to mortgaging your first home. The old saying if it seems too good to be true it probably is should be kept in mind at all times.

There are whole range of starter mortgage plans dependent on your situation now and what you anticipate will happen in the future. This is not like buying a new computer game once you have made a decision you will usually find it will be difficult to change your mind. Probably one of the most popular starter mortgages is a fixed rate mortgage. These are available for periods of 30,20,15 or 10 years, depending on the lender and situation.

With this type of deal the mortgage rate and the payment rate will remain the same and will not change throughout the mortgage term. Most commonly the rate will be at a slightly higher rate than the current market rates as the mortgage company will try to predict interest rate fluctuations of the years.

These fixed rates are perfect for first time buyers if you plan to live in the home or property for more than 10 years and if you like certainty rather than change in your monthly payments and budget.

Its sort of like knowing what your rent will be for several years, many new buyers find this reassuring especially when first putting a toe in the water of the property market. But If you plan on staying in the home for a lesser amount of time, a short term first time buyer mortgage might be the best alternative for you.

If you don't want your mortgage to be the same for the next 30 years or feel that the current fixed rate available is expensive and does not really effect the estimate of interest rates in the future, you can maybe opt for a adjustable or variable first mortgage. The interest rate and the cost of most first time buyer mortgages will still remain the same for a specific number of years, then after the initial period the payment and interest rate has the likely hood of fluctuating annually, dependent on the market rate.

Homeowners who have owned homes a number of years can remember when we had much higher interest payments than we experience today. But don't forget a mortgage is a long-term commitment so think carefully before taking up any deal

But don't forget a mortgage is a long-term deal so don't forget to consider your options carefully before taking up any deal. Variable rate mortgages are perfect if you need initial certainty, but anticipate more income to cope with changes in the future. It can also give you more control if intend to upgrade or move once circumstances change.

There are different programs both state or federal offered by different mortgage lenders that provide other options to first time buyers. This type of mortgage could offer reduced interest or maybe points if it is your first home or if you have had a home for a few years (usually three) There are also incentive options for that can help you obtain the credit you need to get into a first home.

You will find Federal schemes, such as the FHA (Federal Housing Administration) schemes as well as more localized programs both State and those funded by mortgage companies.

If you are retired military (veteran) and intend to buy a first home you're well catered for with special veteran loan schemes. The Division of Veterans Affairs has set up a scheme for you that will guarantee some of the most popular first time buyer mortgages (such as the 15 or 30 year fixed rate loans).

There are a many mortgage companies that want to help you find a mortgage. But never forget, this is a considerable investment on your part and change your future plans.

It will be in your best interest to have some understanding of everything presented to you when looking for the first time deal and you must check out all the possibilities before choosing a deal.

Talk to family members and friends, get their views about a specific loan or use their contacts and experience or ask them to refer you to a trusted mortgage brokerage. Just because you're new to this, it doesn't mean you have to be completely clueless does it?

Show you grasp the basics and tell mortgage lenders and mortgage brokers that you have some idea what you're really looking for; they will treat you with more respect and this will help you get a better deal and so you can take that plunge into homeownership with no fears.

Do Not Lock Yourself Into A Long Term CD

Interest rates in America are rising, and they may very well continue to rise throughout the year. Because of this current trend in the financial market, investors should reduce their exposure to long term CDs to ensure that they receive best CD rates available. 

The national average rate for a five-year certificate of deposit has been hovering around 1.50% (at the time this article was written). If an investor purchases a five-year CD and rates begin to increase, he or she will be locked into a lower interest rate while new investors receive the higher rate of return. Withdrawing from a long-term certificate of deposit may require the investor to forfeit interest earned or pay a penalty. If an investor believes that interest rates are poised to rise, then that investor may be wise to wait before locking in to a long term certificates of deposit in order to receive the best CD rates later. 

One way for an investor to combat the potential of rising interest rates is to invest in shorter term certificates of deposit. For example, the national average rate for a three-year certificate of deposit is 0.99% (at the time this article was written), and the national average rate of return on a six month CD is 0.30%. While these are not high rates of return, they allow the investor to be able to move to a higher earning CD if one becomes available. Another method for investors to combat rising interest rates is to ladder their certificates of deposit. With this popular investment strategy, investors purchase short term certificates of deposit and then reinvest the proceeds into longer term CDs after the original ones mature. Every year, the investor would purchase a five year CD, for example, with a portion of the capital that matured. As new CDs mature each year, the investor continues purchasing new five-year CDs eventually having CDs staggered at one year intervals creating a ladder effect. This allows the investor to be flexible and prevents too much of his portfolio from being invested in low earning CDs when interest rates are poised to rise. 

Long term certificates of deposit have a place in every investment portfolio, but investors must be careful when locking in long-term capital at low rates of return. In order to receive the best CD rates, investors should stagger their purchases of long-term certificates of deposit over the course of several years. As interest rates rise, investors will be ready to capitalize on increasing rates by not having too much of their investment portfolio locked up for long periods of time.

Post Chapter 7 Bankruptcy Car Loan To Rebuild Credit

Reduced credit score and future borrowing get seriously handicapped post you have filed bankruptcy. But that doesn't mean you can't get a loan. So if you are considering financing for car loan after bankruptcy, there is hope. And you could look forward to getting a car loan after bankruptcy even after you have filed or even immediately after bankruptcy. You need to explore the market and find out subprime lenders or secondary lenders. The subprime or the secondary lenders especially work with people with all sorts of credit. 

However; you must ensure that you work with a lender affiliated to the Better Business Bureau online. These lenders work with non-traditional borrowers and offer variety of financing options. You should evaluate all options and lenders meticulously before finalizing the type of the loan and the service provider as well. The post bankruptcy car loans are also a smart way to rebuild credit and obtain car as well. The internet and online options can be explored to make the search easy and effortless. One need not hesitate in approaching lenders for finance post bankruptcy there is hope and help. This article highlights how one can go about the search and get a loan. 

Post Bankruptcy Car Finance 

Once you complete chapter 7 bankruptcy discharge the debt burden and all the worries are lightened. It's a feeling of relief but it may happen that you need to replace the car or need to buy a car. One may find it difficult to approach lenders or dealers for finance for fear of rejection. But the fortunate news is car loans after bankruptcy is not only plausible it is a smart move as well. Auto financing is a specialized service and professional companies which specialize in this also offer bankruptcy car financing. Hence looking at regular car lots and dealerships may not always be a sound decision. Leading companies provide auto financing for new as well as used cars and hence they would definitely provide better options for bankruptcy car loans.

The processes are easy and have quick online approval. Loan approvals are based on an individual's credit score, which post bankruptcy, is all time low, so applying for bankruptcy car financing with specialized companies still ensures competitive rates and terms. One can do some loan shopping and online research to know the market and get the best solution. Generally dealers would not finance cars for individuals with poor credit or bankruptcy. There are only a few specialist companies like the carmoneyfast.com from getting online quotes is quick and easy. 

Bankruptcy discharged within one year may pose a question from dealers and lenders and they may not be very welcoming of such individuals. As the Chapter 7 bankruptcy remains on credit history for 7 years hence they may perceive this to be risky. However few lenders would overlook and offer an opportunity to get car loan after bankruptcy and a way to rebuild credit can be obtained as well. Once the car loan repayment is made regularly the credit score starts climbing up gradually. There are reputed lenders who would offer competitive terms and rates for such loans and one can search the net and get several quotes for comparison. 

The bankruptcy car loan interest rate offered may not be very low but they would be reasonable enough. After evaluating and making a budget one can choose the best bankruptcy car loan offer and the lowest quote with the best terms. The borrowing capacity may have taken a beating post bankruptcy. But that in no way means that one can't get an auto loan after bankruptcy. If filing bankruptcy was appropriate for your financial difficulties then its time you stop fretting over the past and look ahead. 

Visit reputed websites and read their client testimonials to know how bankruptcy car loans can help. One should not let bankruptcy bog them down but it is time to start again and working towards getting back on the track. It is not correct to fear and avoid going to dealership or lenders for loan approval for the fear of rejection. One can get a loan approved and then walk into a showroom with a pre-approved loan and confidently shop for car. The ability of bankruptcy car loan to rebuild credit is known and it is an accepted method so lenders would be able to give a fair deal and quote reasonable terms. The processes are fast and easy and approvals can be as good as instant.

Securitization of Subprime Home Mortgages in United States

Securitization, also known as structured finance is a financing technique which allows capital markets to support direct income pooling resources and then resell them to investors. In countries where the legislation would encourage structured finance, almost all income-producing asset can be securitized. 

In USA, securitization of funding can be done for nearly everything including medical and hospital records, oil exploration, lawsuit settlement proceedings in projects across the enterprise, royalties to music, or even a baseball stadium. But often the most securitized assets, both globally and in the US are consumer loans, especially home mortgages. The business structure of the US mortgage securitization has developed into a complex web of relationships between the various business units that offer wide range of loans and investment services. In the United States, there are two basic home mortgage securities market: a public (or at least quasi-public) and the other private. In general, most mortgage securities market home runs by one of the two ‘Government Sponsored Enterprises’ (GSE) created by the Congress. 

These companies Fannie Mae and Freddie Mac buy mortgages that meet relatively strict underwriting guidelines for private mortgage lenders. The status of Fannie Mae and Freddie Mac is a little vague, because Congress has not enacted a law which explicitly guarantees the payment of bonds or securities issued by GSEs. Still the capital markets usually regard both of these companies as ‘too big to fail’ and treating their debt as virtually guaranteed by the U.S. government, believing that the Congress will not allow these companies to collapse. 

Fannie Mae and Freddie Mac keep some mortgages in their own portfolios, the securities, but many others, they share investment instruments and are sold to investors. A huge amount of loans securitized by Fannie and Freddie give businesses economies of scale and risk diversification benefits that most private companies cannot match. In addition. Because of the implicit federal guarantees of Fannie and Freddie, GSEs can locate investors for their securities, without raising any transaction costs from credit rating agencies or credit enhancements. 

Moreover, GSEs hesitate to offer high loans-to-value (LTV) loans and are reluctant to buy loans to borrowers with questionable credit histories. Loans sold to these sources of public capital are usually fifteen or thirty year mortgages, often at fixed interest rates and no prepayment penalties. Fannie Mae and Freddie Mac refuse to buy loans from private mortgage raisers, unless they use standardized contracts which contain terms considered generally fair to both parties. The two GSEs have strict automated underwriting standards and generally accepted financial models, require standardized documentation, and pay the same price for all loans they purchase. 

Therefore, in general, Fannie and Freddie acts as a stabilization force in the ’prime’ mortgage lending market, guards against and eliminates the conditions of predatory lending or underwriting risk. Some commentators also argue that mortgage pools of the GSEs' merge lower and some moderate-risk borrowers with same loan pricing, which also provides modest support for some moderate-risk borrowers. Packaged mortgages by Fannie Mae and Freddie Mac are in a rather good position through the recent problems in the mortgage market in the United States.

Reverse Mortgages: Understanding the Pros and Cons

Older citizens may want to consider a reverse mortgage, which borrows against the equity in a home to give you cash in hand month after month. For a vast majority of older Americans who own their homes and get a reverse mortgage, this would mean a steady source of income for the remainder of their lives. The proceeds from sale of the real estate after the passing of the mortgage holder is used then to pay the lender, the remainder still owed on the mortgage. 

A reverse mortgage may be a good solution that will provide you with reliable income and eliminate the stress of paying a mortgage on a fixed income. Reverse mortgages are not a good solution for everyone wanting to overhaul their mortgages to make them more cost-friendly. Take a closer look at the pros and cons of reverse mortgages to help you understand the benefits and risks. 

The Pros of Reverse Mortgages 

• You have the flexibility of choosing whether to take payment from the equity in your home in a singe lump payment, or as month payments and even a line of credit you access as needed. You can also combine any of these options which may be especially helpful to you when unexpected household repairs, or illness and injuries occur and you need a large amount of money quickly in the short term. 

• The money is exempt from taxes and a guaranteed income that continues until your death. 

• You can remain in your home which is very important to many of us, as we get older. 

• You can never owe more than your home’s value, regardless of the balance still owed on a mortgage at the time of your passing. 

• Home owners are not required to own their homes outright in order to qualify for a reverse mortgage, which helps if you are still paying on a mortgage. 

• At the time of your passing if your home’s value is more than the remaining balance still owed on the reverse mortgage that difference will be paid to the heirs of your estate. 

• If you decide to repay the money you have received with a reverse mortgage, you can do this without having to sell your home. 

• Medicare and Social Security incomes are not affected by income from reverse mortgages. You will not lose your benefits by obtaining a reverse mortgage. 

• The title of your home remains in your name. 

• There are no monthly payments for you to make such as you would need to by taking out a home equity line of credit loan. 

• In a reverse of the typical considerations for determining a loan like your credit score, income, and savings: your health, age, and your home’s net value and the equity it has built up are how reverse mortgages amounts are determined. 

• You have a three day ‘buyer’s remorse’ clause of protection in case you decide against a reverse mortgage within three days of its closing. 

The Cons of Reverse Mortgages 

• Fees, interest rates, insurance, and closing costs can culminate together into quite an expensive mortgage that you may not want to carry at this stage in your life. 

• You must be at least 62 years of age in order to qualify for a reverse mortgage. 

• The heirs to your estate may receive less because there was a greater balance owed on the mortgage than the proceeds from the sale of your real estate netted. 

• Failing to keep up with your property taxes, home insurance, and repair costs could lead to you having to pay back your reverse mortgage early. 

• If you are the holder of a mortgage at the time of acquiring a reverse mortgage, the amount you still owe on your mortgage is added into the amount of your reverse mortgage. 

• If you sell your home or move to another residence, you will have to pay your reverse mortgage back. A reverse mortgage loan is paid prior to heirs receiving money from your estate upon your passing as well. 

• There are caps in place that limit how much you money you can borrow with a reverse mortgage. 

• Reverse mortgages are typically more expensive than other types of mortgages. 

• You must meet with a mortgage counselor prior to getting approval on a reverse mortgage loan. 

• Refinancing a reverse mortgage after the three day ‘buyer’s remorse’ period has expired can be expensive and difficult to accomplish. 

Now that you know the advantages and disadvantages associated with reverse mortgages, you may now more easily be able to decide if a reverse mortgage is the best solution for you.