Posted: Mon Apr 12, 2004 12:01 am Post subject: Basics of Mortgage
You may have the desire of getting a home of your own, but lack of finance may prevent you from fulfilling your dream. This is where a mortgage can help you. It provides a financing option that can make your dream come true.
Mortgage is a legal process through which a borrower takes a loan for the purchase of residential or commercial property. The same property is kept as the security for the debt.
In general, a mortgage transaction involves two parties - the lender or the mortgagee and the borrower or the mortgagor.
Mortgage lenders are concerned about your financial strength in paying for the loan costs and making the monthly payments to clear the debt. So, they will consider your credit score, your monthly gross income, and the amount of cash you can pay as the down payment. The higher your score, the lesser is the risk in offering you the loan.
The loan amount depends on the value of your home and the down payment. The interest rate charged on your loan depends upon your credit score, discount points and down payment. The better your score and the higher your down payment and points, the lower is the rate offered. Getting a lower rate is also possible if you can pay a part of the loan amount as prepaid interest or points. You may get a loan at fixed rates, variable or adjustable rates or a combination of both the rates.
The loan application that you have submitted goes through a process of review before the lender gives his approval. After the lender approves the mortgage, he decides upon the date of closing. The closing involves the signing of legal documents including a mortgage note which obligates you to repay the loan in time.
At closing, the lender requires you to pay for the costs of originating and processing the loan. You will also have to deposit property taxes and insurance premiums into an escrow account which ensures that these payments will be paid in time. The rest of the taxes and insurances are paid along with the monthly mortgage payments in order to protect the lender from tax liens and uninsured losses.
The monthly mortgage payments include the following:
The loan principal is the amount that you borrow in order to purchase a property.
The interest that you pay for taking the loan. The interest payment depends on the mortgage rate which fluctuates with changes in the economy.
Escrow payments including property taxes and insurances to prevent losses against fire, theft, and disasters.
PMI (Private mortgage insurance) premiums which you require to pay along with monthly installments if you have made a down payment of less than 20% of the sale price or home value, whichever is less.
The mortgage loan is paid off within a specified time period known as the loan term that varies from 10 to 50 years. The monthly payments vary depending upon fluctuation in rates as in case of adjustable-rate mortgages, or ARMs. The payments also change on the basis of fluctuation in taxes, and insurance premiums for both ARM and fixed-rate mortgages.
While you are repaying the mortgage, the title of ownership of the property still remains with you. But if you fail to pay off the outstanding balance, the lien created in the mortgage allows the lender to take away your home. He gets the right to sell off the property in order to get back the loan balance.
You may apply for a mortgage with a bank, a credit union or a broker depending upon your requirements. But in each of these cases, you need to shop around for the best loan package, that is, which offers a reasonable rate and does not require extra charges in the form of hidden fees.
Posted: Wed Feb 01, 2006 12:50 pm Post subject: Land Purchase in Hawaii
I am Canadian. Do you offer land loans for the State of Hawaii. And if so, what is the minimum down payment requirment and maximum loan amount you allow?
We will try to help your requirements with our strong network. It will enable us to serve you in a better way if you give us some required details.
Have you got citizenship in U.S.? There is some other information which you are required to provide so that the down payment and maximum loan amount can be determined.
We would like to know about your income, assets, credit history and your credit score.
Also you need to give some more details on the property that you intend to buy. If you face any problem in disclosing these you may leave your e-mail address or your phone no. so that you con be contacted for discussion.
We will feel happy if we can help you and your queries.
Posted: Fri Feb 10, 2006 4:08 pm Post subject: Mortgage options for divorce
My husband will be getting payment for half the equity in the house. I'd like to pay it by using equity in the house. His name will be removed from the deed. Then, I would like to refinance the principal balance to a 30 year term which would include the equity I borrowed. Does this require a whole new mortgage, is it a refinance, is it a home equity loan, or some combination of those (or is it not even possible to do this?) What other options are available? Thanks!
You may combine an existing first mortgage with a home equity loan. If the combined, refinanced loan is more than 80% of the home's value, then you need to pay PMI.
I think refinancing will do in this case. Through refinance you can consolidate your debt by combining a home equity loan with you original mortgage and have one manageble payment.
I can understand your situation. Sometimes borrowers do suffer due to the unprofessional attitude of some lenders.
Normally it takes two to four weeks in refinancing but it depends on a few things like -
Time taken for the appraisal to be completed.
How much time you took to provide all the required paperwork.
Usually it is the appraisal process which takes the longest time to complete. If you have provided all the necessary paperwork, then there is no reason why they are late on the matter.
Did you ask them if there is any specific reason behind this or are they reluctant on the issue?
If you are perfect from side and the problem is solely from their side, then you can check with other lenders/brokers in your area. Before do a little follow up with the present one and see if that works.
Otherwise there are plenty of them in this competitive market to help you.
Posted: Wed May 10, 2006 1:34 pm Post subject: mortgage business runnings
I recently have begun employment with a mortgage company. I need to find out all I can about the workings of the mortgage office so I can move to a better position like processor, loan officer, underwriter, closer. Where can I access this information online? I am a receptionist and need to learn the "lingo" for the mortgage business.
Posted: Wed Aug 20, 2008 2:55 pm Post subject: What consider a mortgage in Arkansas?
I took out a loan to purchase a lot in 2006. The lot price was $42,000. I put down $35,000. I borrow $7,000 to purchase it. It pay off now and I'm building my dream home. The problem I having now the bank report the the $7,000 loan as a mortgage. Is a lot loan the same as a mortgage?
Sam
