PANTA FAMILY


Tuesday, October 30, 2007

Relying On A Mortgage Calculator Can Be Risky

While the simple mortgage calculator was not much use for my friend’s purposes we did find a mortgage calculator that compared the interest rates of her existing lender with another lender she was considering refinancing with. Again though, this mortgage calculator was strictly considering the impact of interest rates over varying terms. My friend was comparing her existing mortgage manager loan with that of one of the big four banks. The bank had quoted her a monthly instalment which was lower than that being sought under her existing facility and this was confirmed when she compared the interest rates through the mortgage calculator. The interest rate was marginally lower than the mortgage manager’s rate. However when she looked at the fine print in the product details on the bank’s website she found that on top of the interest rate the bank was also going to seek a monthly fee of $8. She would also be paying for transaction fees on her account. When she added up the fees and the monthly instalment figure, the total monthly repayment was greater with the bank’s loan. So, while the mortgage calculator had indicated that she would be better off refinancing, the reality was that this was not going to be the case at all. She also realised that the bank’s monthly mortgage payment had been calculated over a 30-year term while her existing loan was arranged on a 25-year period. Obviously you will be paying a greater amount per month on a $250,000 loan if you choose to repay it over a shorter term. The mortgage calculator was able to quickly show the difference in the monthly figures over the different loan terms. Had my friend decided to proceed with the refinance and pay an application fee she would have been worse off financially once the refinance has been finalised.



Furthermore, the mortgage calculator did not factor in some important benefits she was enjoying, particularly a 100% offset loan feature which enabled her to reduce her monthly instalment significantly. By all means use a mortgage calculator as a guide but before committing to any fees or paying a deposit on a new purchase, check with a mortgage manager or other lender to make sure you and your mortgage calculator are on the right track. Before refinancing it is always a good idea to speak with your existing lender. Unless there is some event that has annoyed you and you have made the decision to leave because of the poor relationship you have with your existing lender, then discuss any concerns you might have with your existing lender - they will be willing to run through any mortgage calculator figures you want clarified and will be generally keen to retain your business.



While my friend was looking for a mortgage calculator to help her with a refinance decision others want to use a mortgage calculator when they are trying to work out the maximum purchase price they can go to on a property they are keen to buy. Just as in a refinance scenario, a mortgage calculator can be handy but make sure you check with a mortgage manager or lender before you exchange contracts. Most lenders will provide you with an approval in principle that will give you added comfort at auction or when negotiating with a real estate agent or vendor.



In Australia, a mortgage calculator can be useful but do not rely on it solely when making finance decisions that will have a significant impact on your cash flow over 25 to 30 years.

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Relying On A Mortgage Calculator Can Be Risky

While the simple mortgage calculator was not much use for my friend’s purposes we did find a mortgage calculator that compared the interest rates of her existing lender with another lender she was considering refinancing with. Again though, this mortgage calculator was strictly considering the impact of interest rates over varying terms. My friend was comparing her existing mortgage manager loan with that of one of the big four banks. The bank had quoted her a monthly instalment which was lower than that being sought under her existing facility and this was confirmed when she compared the interest rates through the mortgage calculator. The interest rate was marginally lower than the mortgage manager’s rate. However when she looked at the fine print in the product details on the bank’s website she found that on top of the interest rate the bank was also going to seek a monthly fee of $8. She would also be paying for transaction fees on her account. When she added up the fees and the monthly instalment figure, the total monthly repayment was greater with the bank’s loan. So, while the mortgage calculator had indicated that she would be better off refinancing, the reality was that this was not going to be the case at all. She also realised that the bank’s monthly mortgage payment had been calculated over a 30-year term while her existing loan was arranged on a 25-year period. Obviously you will be paying a greater amount per month on a $250,000 loan if you choose to repay it over a shorter term. The mortgage calculator was able to quickly show the difference in the monthly figures over the different loan terms. Had my friend decided to proceed with the refinance and pay an application fee she would have been worse off financially once the refinance has been finalised.

Furthermore, the mortgage calculator did not factor in some important benefits she was enjoying, particularly a 100% offset loan feature which enabled her to reduce her monthly instalment significantly. By all means use a mortgage calculator as a guide but before committing to any fees or paying a deposit on a new purchase, check with a mortgage manager or other lender to make sure you and your mortgage calculator are on the right track. Before refinancing it is always a good idea to speak with your existing lender. Unless there is some event that has annoyed you and you have made the decision to leave because of the poor relationship you have with your existing lender, then discuss any concerns you might have with your existing lender - they will be willing to run through any mortgage calculator figures you want clarified and will be generally keen to retain your business.

While my friend was looking for a mortgage calculator to help her with a refinance decision others want to use a mortgage calculator when they are trying to work out the maximum purchase price they can go to on a property they are keen to buy. Just as in a refinance scenario, a mortgage calculator can be handy but make sure you check with a mortgage manager or lender before you exchange contracts. Most lenders will provide you with an approval in principle that will give you added comfort at auction or when negotiating with a real estate agent or vendor.

In Australia, a mortgage calculator can be useful but do not rely on it solely when making finance decisions that will have a significant impact on your cash flow over 25 to 30 years.

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Sunday, October 28, 2007

Mortgage Rates Stress

This is on top of any movements by the Reserve Bank of Australia, which again will have a flow on effect and raise mortgage rates - already at an 11-year high - as early as November.

In some states property prices have also fallen and as a result low-income homeowners with high-risk loans could be left owing the bank more than their property is worth, forcing them into bankruptcy.

The credit crisis emerged last month in the US sub-prime mortgage market, which lends to people with poor credit ratings who cannot get loans from the big institutions, and has since spread globally, Increases in mortgage rates will affect customers of many banks, because they source about a third of their funding from the global money markets.

After three years of low mortgage rates, those who had taken out low-doc loans and mortgages for more than the price of the property would be hit hardest. As house prices soared during the boom, those who could not save a deposit, had a poor credit history or did not have documentation of their income used these types of loans to get into the market.

Low-doc borrowers are finding it tough to meet their mortgage commitments due to the increase in mortgage rates, with the number of households in arrears by 60 days about double that of those with loans that have normal mortgage rates.

Further mortgage rate increases as a consequence of RBA increases could force tens of thousands of people into banas a result of rising mortgage rates often occurs in discrete areas with the result that if numerous owners are forced to sell, the increase in supply drives prices down in that suburb, leaving people with negative equity.

These scenarios are not often considered buy borrowers and particulalry first home buyers when they are entering the property market. The carrot of a 100% + mortgage loan and the rose-tinted view that property prices will only ever increase creates a false sense of security for first home buyers. If they are purchasing in a new sub-division with a house and land package then they not only need to consider mortgage rates but also the geographical location of the property being purchased and other planned subdivisions coming on near or adjoining their selected subdivision. Mortgage rates obviously impact on cash flow but this problem can be compounded by the fact that the property value has decreased since the inception of the mortgage.

In Australia mortgages are in effect guarantedd by the borrower. In the event that a borrow defaults, say because of high mortgage rates, then unless that default is rectified, the lender can commecne action to sell the property and recover the debt form the sale proceeds. If the situation outlined above, the borrower has take a 95% or more loan and the value of the security porperty has subsequently fallen then it is unlikely that the lender will recover the money owing to it. The shortfall or outstanding amount can be recovered by the lender and this is why we are seeing an increase in the number of bankruptcy actions before the court. Obviously, a borrower who cannot make loan repayments because of high mortgage rates is not fgoing to be in a position to repay any outstanding amount that remains after the sale of the property.

By all means consider current mortgage rates and anticpate your position in the event that mortgage rates do increase but also think carefully about how much you are borrowing against the value of the property, where is it located and the impact on your property value of any new subdivisions planned for the area.

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Friday, October 26, 2007

Looking For A Free Lease Agreement?

A lease is a legal contract that sets forth the terms of the agreement between you and your tenant. Basically, you’re relying on this document to establish the guidelines that will define your entire relationship with your tenant.

The free lease agreements that are a dime a dozen online don’t cover much more than the contact information for the landlord and tenants. If you’re lucky, you might find one that has a space for the rent amount and due date. In short, these “free” leases typically leave a lot to be desired.

Over the last several decades, the courts have become increasingly friendly to the cause of tenants’ rights. Many of the landlords who are hauled in front of a judge by a disgruntled tenant -- or who file a claim to collect back rent from a deadbeat renter -- are winding up out of luck. When in doubt, more and more courts are automatically siding with the tenant.

When you rely on a lease that is vague, brief, or incomplete, you are putting your property, your investment, and your entire business at risk. In legal terms, a contract that’s skimpy or insufficient isn’t worth the paper that it’s written on.

The kind of generic free lease agreements that you can find online are typically chock-full of grey areas, omissions, contradictions, and even outright errors. In other words, they’re not exactly the kind of thing that’s going to sway the judge in your favor if you wind up in court. If it’s not specifically spelled out in the lease, chances are good that the judge will end up siding with your tenant.

Let’s face it -- to stay profitable, landlords and property managers have to constantly be on the lookout for ways to save money. That means holding out for sales at home improvement stores, opting for the mid-grade paint and fixtures, and keeping an eye out for reputable contractors that won’t charge an arm and a leg.

What it shouldn’t mean, however, is skimping on your lease agreement. There are a lot of smart ways for you to save money, but this isn’t one of them. Think of it as an investment -- the money you spend now on a comprehensive, legally binding lease agreement could save you thousands of dollars down the road.

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Wednesday, October 24, 2007

Obtaining A Home Mortgage Equity Loan Rate That Is Affordable

You can generally find a good home mortgage equity loan rate even if you have bad credit. This is because you are putting up your home as a collateral in the loan. The bank knows that in a worst case scenario, you can offer your home as payment. For the bank or other lending institution, home equity lending is very low risk.

There are several steps that you can take to get the best home mortgage equity loan rate. Even though you don't have to have perfect credit, you do need to take steps to improve your credit. If you have a lot of outstanding debt, the bank will see you as a potential default. You're more likely to miss a payment or go into bankruptcy in their eyes. Reduce your credit card debt and close the cards that you aren't using in order to raise your credit score.

You can also find a better rate by shopping around. Don't feel like you have to stick to your current bank. A different bank or lending institution may work harder to get your business, and that can translate to better rates. You should also consider finding a mortgage broker who can shop around for you. A mortgage broker will obtain quotes from many different institutions and find you the best rate.

No matter what route you go, whether you get your loan through your current bank or find a new one, make sure to shop around sufficiently so you can get the best home mortgage equity loan rate.

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Monday, October 22, 2007

Mortgage Refinance Loan Advice

• Loan Options: Determine whether a fixed rate mortgage or adjustable rate mortgage is in your best interest. Fixed rate mortgage monthly payments tend to remain steady despite market conditions. E-LOAN allows you to compare both loan options and to outweigh the pros vs. cons before you make your decision.

• Cash-out refinances: These allow you to refinance with a loan amount larger than your current mortgage…while you keep the cash difference. The catch? Your home equity must qualify before you can go through with it.

• No Closing Cost Refinances: If you wish to save on up-front fees, this is probably your best choice. Depending on whether or not the prevailing market rate is lower than your existing rate by at least 1.5%, you are sure to reap the benefits.

6StarReviews.com reports that sites such as E-LOAN provide mortgage refinance loans, as well as useful information on home equity, home and auto purchasing, and personal loans. Utilizing features such as ‘The Loan Advisor’ allow you to enter information such as credit ratings, how much you intend on borrowing, estimated property values, and current mortgage balances. They, in turn, will recommend which loan route to take. Remember, saving money is key in your refinance loan search.

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Monday, October 15, 2007

Do Lenders Really Mistreat Foreclosure Victims?

The homeowners' perception may also be correct because the lender is often unresponsive or not supportive because it is one of tens of thousands the lender has to deal with at any given time. The lender's loan mitigation officer may have hundreds of files working at one time and is often unreceptive to calls from homeowners. A very few lenders have developed departments with field personnel to visit the homeowners and show them solutions. The lender gets an appraisal or BPO (Broker's Price Opinion) as soon as the loan is delinquent by a few weeks. This estimated fair market value of their home is used to determine whether the lender can get the remaining loan balance back from the sale of the property. This estimated resale value has to affect how the borrower will be treated, either with an aggressive attitude to get the property back and get the home's equity by offering a "Deed in Lieu of Foreclosure", or with a different legal approach to have the homeowner keep the problem property.

Lenders use strictly a financial determination to resolve the problem of the foreclosure because it is in their best interests. This cut-and-dry decision often results in the homeowner getting minimal help from the lender. Homeowners can simultaneously be correct in their perceptions because the lender may want their property for its equity and homeowners only see that the loss mitigation representative is unresponsive to their phone calls. The best solution is for the homeowner to steer the foreclosure process and understand his rights without possible biased help from the lender.

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Saturday, October 13, 2007

Self Certification Remortgage

A self certification re mortgage is a perfect choice for those who have started a new business or cannot otherwise verify their income. A self certification remortgage requires the borrower to have a certain amount of equity in their property, usually at least twenty percent. Equity is the amount your property is worth less the amount that you owe.

Many people are finding that this is an ideal time to remortgage their property. Interest rates across the United Kingdom are at an all time low. People are saving money by switching to a new low rate and, in some cases, paying hundreds of pounds less a month in mortgage payments. About half of all the mortgages made in the United Kingdom today are remortgages.

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Wednesday, October 10, 2007

Mortgage Refinance Loans Tips

If you are already in the process of refinancing your home mortgage loan, choosing the right type of mortgage for your situation could save you thousands of dollars. There are two types of mortgage loans to choose from when refinancing depending on your financial needs and tolerance for risk. Here are several tips to help you select the right type for mortgage when refinancing your home loan.

The two types of mortgage refinance loans are loans with fixed interest rates and those with adjustable interest rates. As for fixed rate mortgages, they come with ten to fifty years of term lengths and have payments based upon an interest rate that does not change for the duration of the loan.

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Tuesday, October 9, 2007

Two Common Misconceptions Regarding Foreclosure

"I have to pay off my mortgage to keep my home" is what most homeowners believe initially because the default notice says it! When the lender "accelerates" the mortgage or deed of trust because the homeowner stopped making payments they call for the entire balance "due and payable". This does not mean that the default can't be cured by other means such as reinstatement but the language of the default notice doesn't stipulate other solutions. In certain types of foreclosures this time period to cure the default can be as much as 90 days and in other types, as little as a week. The "grace period" to cure a default is clearly outlined in the actual clauses in the loan agreement.

So banks may or may not want your home depending on the equity in your home and the financial decision of whether they can make a profit. The banks have a legal obligation to their shareholders to foreclose on delinquent loans and the bank's officers can be prosecuted if action isn't taken timely. The acceleration or default notice could include language in a separate document about the actual requirements to reinstate or cure the delinquent loan. But that is not the case currently. As a homeowner in default, your best course of initial action is to read your loan agreement and call you lender's representative for options to fix your situation.

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Saturday, October 6, 2007

The Most Common Problems In Resolving A Foreclosure

The lender's representative can have as many as 500 foreclosure cases at one time. They are instructed to first do what is best for the lender and not to give legal advice to the homeowner. This means that the friendly person from the lender is working to get your home if it has equity in it, or get you to reinstate your loan so it comes off the lender's list of delinquent loans.

Realtors® only make money if they sell your home, but if they can't sell it quickly or in a timely manner, you will lose your home unless you have another solution. Promises that they have a buyer do not justify your signing an exclusive seller's agreement. Sign only a buyer's agent commission agreement for a specific person(s) when and if they bring you a buyer.

Mortgage brokers are quick to tell you they can get you refinanced, but if they are wrong, you could lose your home. Do not allow them to screen your calls if your sell your home yourself because you are paying for their advertising and they may convert your perspective buyers to mortgage clients for the purchase of another home.

Bankruptcy attorneys only make money if your file for bankruptcy. The issue with filing a Chapter 13 bankruptcy is that while it will stop your foreclosure, it is only temporary and your home will be released from the proceeding and the lender will continue the foreclosure. However, you will have the bankruptcy on your credit report for 10 years versus seven years for a foreclosure.

So as you can see, each of these professionals has a motive that may or may not be the best solution for the homeowner's specific problem. Who do you listen to? Unfortunately, it is often the best salesman that wins the attention of the homeowner. The solution is for the homeowner to quickly become informed about foreclosure to sort through the myriad of incoming information and to ask for legal advice from attorneys who handle foreclosure cases.

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Thursday, October 4, 2007

Foreclosure And Deficiency Judgments

For accounting or legal considerations, the lender may choose to report the loan deficiency for the guarantor on Form 1099 to the IRS. This gives the former homeowner or loan guarantor a "phantom income" equal to the amount of the loan deficiency and will require he pay income taxes on this amount. In this case the cost of the guarantor's foreclosure will be the amount of income taxes he pays the IRS instead of the entire amount of the deficiency judgment plus additional interest and expenses. This can be a substantial savings to the guarantor and the lender benefits because of a better impact to their financial statement. Usually the lender will issue a 1099 unless they feel there was fraud involved with the original loan.

If a lender accepts a deed in lieu of foreclosure and they make a profit from its sale, they will retain the profit. However, if they lose money, they may be able to issue a 1099 depending on the terms of the original loan agreement and the Acceptance Agreement. It is always wise to have an attorney review any agreement before you sign it to preserve your financial interests. Have the terms of your loan agreement reviewed and any agreements a lender offers you.Carefully weigh your rights and options when you make a decision to allow your home to be lost as there are solutions besides foreclosure and deed transfer to the lender.

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Monday, October 1, 2007

Searching For A Idaho Mortgage Broker

The entire mortgage business in the American state of Idaho is to be seen as a growing process; all the mortgage brokers are likely to do profitable and steady businesses thus leading to the continuous growth of the Mortgage Interest Rate. These brokers are likely to offer a various amount of services; various loan programs and even mortgage rates are likely to be offered by all these business men and they are also likely to be quite cheap and even competitive when it comes to their inner structure. The Idaho Mortgage Broker is likely to render different services that are related to the so-called refinancing.

All the mortgage rates that are to be found in this American state can be quite variable and they are likely to depend on different types of mortgage loan programs and lender ones. But all the regulations and rules that are to be found in this area are likely to be quite stringent when it comes to their nature. In order for a person to be able to run different mortgage and brokerage businesses in this American state, he has to obtain a special license that is to be taken from the Idaho Department of different finances. One should also pay attention to the fact that the eligibility criterion is also to be taken into account when it comes to obtaining this type of license.

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