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Now that the days of loose lending are gone, creative seller financing is poised to make a comeback. Home sellers are exploring ways to attract more buyers, rather than let their property languish on the market. Seller financing may provide a lift to home sales, as well as a good opportunity for home buyers.

Financing can be a First Mortgage or a Second Mortgage:

A first mortgage lien can be offered by the seller if the property is owned free and clear, or the seller has a small existing mortgage that will be paid off at the close of the transaction.

A second mortgage can be offered to help a buyer get a first mortgage at 80% loan to value, or less, which makes it easier to qualify, and eliminates the need for mortgage insurance.

For home sales with a higher price, seller financing could reduce the loan amount of the first mortgage to the conforming loan limit, which provides the buyer with a lower interest rate, and easier qualifying guidelines than a jumbo loan.

A second mortgage can also be used as a wrap around loan, where the seller maintains their existing first mortgage, and creates a new second mortgage, offering one payment to the buyer.

Regarding a wrap around loan, which is also known as an all inclusive trust deed, the buyer and seller should be aware that many loan documents have a due on sale clause that says the lender has the right to call the loan due if the property is transferred. Considering market conditions, lenders may not choose to exercise that option if the mortgage remains in good standing.

Both the Home Buyer and Home Seller can Benefit:

Seller financing allows the parties to negotiate the interest rate and the repayment schedule. As compensation for helping the buyer with financing, the seller could receive a higher priced sales offer, and a higher rate of interest than they would from other investments. Also, the mortgage note carried by the seller would have a cash value, which could be sold to another investor.

Strict lending guidelines can prevent some good borrowers from buying a home. Seller financing could provide an opportunity for more buyers and sellers to negotiate a mutually beneficial transaction. Buyers could get into a home when they otherwise may not qualify, and home sellers could receive a quick home sale, at a fair price, with a good rate of return on investment.

Article Source: http://www.articlesbase.com/mortgage-articles/
seller-financing-may-lift-home-sales-805426.html

Author: Rick Smith

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Written by Rick Smith: Current rates and information on mortgage loans, additional information on home loans to buy a home

The question many of us are asking these days is whether to refinance our mortgage, or wait for better terms or a better rate. While no one can accurately forecast where rates are headed, there are some steps you can take that will help you decide whether to refinance your mortgage now:

First: How much lower are the rates than what you are paying on your existing mortgage? Keeping in mind, especially if you are writing off some mortgage interest on your taxes, that a slight drop in rates may not make it worthwhile to refinance.

Second: If the rate is significantly lower, you may want to check what your monthly savings will be. When doing this, make sure you calculate the new mortgage payment after your refinance without factoring in any years you are adding on to the end. For example, if you owe 27 more years on your current mortgage, calculate your new payment using the new rate and the amount you are refinancing only over 27 years. Otherwise you might think you are lowering your payment more than you actually are, when you are really just adding years onto the end.

Third: So now you know how much you’d save each month on a refinance, but how much are the closing costs going to be for your refinance? You need to be sure that paying any closing costs (including points) are worthwhile. Here’s some simple math: If you are paying $2500 in closing costs, and the reduced rate saves you $500 each year, you’ll need to stay where you are for five years to reap the benefits. For many, closing costs are worthwhile, but for others who know they will need to upgrade, or have a job situation that can mean having to move, closing costs may eliminate any benefit of the refinanced mortgage.

Fourth: If you’ve arrived here, you have probably figured that you are saving enough over time to make your new rate and the closing costs worth moving forward. One last consideration: Do you think you will refinance again? This one may be close to impossible to answer easily, because who knows where rates are going. But, if you think they might go down, make sure you know what your lender’s terms are as far as refinancing. Some lenders will not refinance a mortgage for 90 days after the close of the one you are doing now. Make sure you are getting enough savings to not worry about that.

Fifth, and finally: One last word of caution: Once you lock you may have to pay fees (e.g. for an appraisal) that might not be recoverable if the loan does not go through. One of the biggest issues you could run into is that your appraisal is not high enough to qualify you for the mortgage. You may want to carefully look at comparable sales in your neighborhood, or, even better, talk to someone who is aware of the real estate market in your area, to be sure that your home will be appraised at a high enough value to meet the criteria of your loan.

If you’ve made it this far, you may be inclined to go forward and refinance. Best of luck! Information in this article should not take the place of a conversation with a finance and possible tax professional who is aware of your unique situation.

Article Source: http://www.articlesbase.com/mortgage-articles/
when-should-you-refinance-your-home-mortgage-805388.html

Author: Alan Jacobson

About the Author:

For more comprehensive information about mortgage refinancing, including types of mortgages, exploration of each aspect of the refinance process, and advice that might help each step of the way, please see my blog at RefiLoans.org

With so many variations of mortgages on the market it can be daunting for first time buyers and could mean they choose a mortgage which isn’t suited for them.

A tracker mortgage is worthwhile inquiring about with the current market conditions. A tracker mortgage is a variable rate mortgage; the interest on the mortgage follows the Bank of England base rate. More often than not interest rates are set higher than the base rate. With interest rates set at 1% at the moment, you would then pay a percentage above this rate.

While interest rates are very low at the moment you can find mortgages with low monthly payments or overpay helping you to clear your mortgage sooner. Tracker mortgages are very popular at the moment and while there are good deals to find they do however attract high arrangement fees. The other disadvantage is mortgage lenders often have a ‘collar’ in the contract which states if the base rate falls below a certain percentage they reserve the right to stop tracking the base rate.

If you can find a good rate as well as afford the deposit, which has become the biggest hurdle for borrowers, do calculate how competitive the rate is when you compare the arrangement fee to other deals over the term. Finally think about how the market is likely to be when the term ends. You could finish your mortgage deal and be looking for a deal when rates have returned to 2007 levels of 6-7%.

Before going with the mortgage go through your options. It may be of more benefit to go with a lenders standard variable rate which and then going with a fixed rate deal when interest rates start to rise again.

While the purpose of this article was to give you more information about tracker mortgages to help you with your mortgage choice it is best if you seek professional advice. Mortgage brokers can provide you with expert advice and often for free as part of their service. They can explain the different mortgage products on offer as well as advise you on a type to suit your circumstances.

Article Source: http://www.articlesbase.com/mortgage-articles/
tracker-mortgage-basics-805034.html

Author: Direct Traffic

About the Author:

Direct Traffic has 2 years experience in the financial service industry and working with mortgage advisers. They enjoy writing on various financial topics.

Mortgage brokers and loan officers rely on loan processors to process and fund their loans. Since the mortgage industry has taken a big fall in the recent years, it is no longer beneficial for most mortgage brokers who are closing one or two loans a month to have a loan processor working from their office. Therefore, their alternate solution is hiring Contract loan processors. Contract loan processors work out of their own office, which means the mortgage broker would no longer have to spend money on extra office space. Most contract loan processors charge a flat rate per file. The average contract processor charges between $400.00 to $700.00 per closed file. That means the broker saves more money by not paying the processor a salary or hourly wage. They also save even more money by not paying for health benefits, sick leave, office supplies etc. The money that the brokers save by hiring a contract loan processor can be used on advertising to generate more leads. You can see why hiring a contract loan processor would be a wiser choice for any mortgage broker.
Contract loan processors are responsible for submitting the file to the lender, ordering and filling out necessary paperwork, locking the rate, verifying and reviewing paperwork to make sure nothing is missing from the file, working on the conditions, monitoring the file with the lenders to ensure a smooth and accurate closing, updating the loan status with the mortgage broker on a daily basis and funding the loan. In other words, contract loan processors make life easier for the mortgage brokers and loan officers because they do pretty much most of the work.
Finding the right contract loan processor however, can be a difficult task because no two processors work the same way. Some processors are just way more experienced, aggressive and work driven than others. Choosing the right contract loan processing company can make a big difference in the amount of files you will close on a monthly basis. Contract loan processors can be found online by doing a simple google search. If you would like to find out more information about contract loan processing, please visit www.Uniquemortgageprocessing.com

Article Source: http://www.articlesbase.com/mortgage-articles/
why-more-mortgage-brokers-are-switching-to-contract-loan-processing-805017.html

Author: Jeremy Wagner

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Jeremy Wagner

A new Bank Bailout Plan unveiled last week may give new hope to distressed homeowners and communities. Treasury Secretary Tim Geithner recently announced the government’s plan to commit over $1 trillion in reforms aimed at rescuing the country’s financial system. The program would amend weaknesses in the bailout plan proposed by the Bush administration, and override other previous reforms.

Much of the funding would go into financing loan purchases and reviving the economy through increased lending activity. The key points of the program include:

Support for bank lending

The Treasury aims to advance the capital position of major banks to boost lending activity. This would entail a three-part process:

Stress test: Banks and financial institutions will be checked to ensure they have enough capital to keep lending, and whether they can survive future economic downturns. The government will tighten its rules on public disclosure of a bank’s holdings, and those with assets over $100 billion will be assessed individually.

Capital Assistance Program: The CAP will build on previous efforts by theTroubled Asset Relief Program (TARP), which has put $250 billion in capital purchases. The Treasury will continue to help banks rebuild their capital following the stress test, and take preferred shares in banks taking part in the CAP program. According to Geithner, this will serve as a buffer for banks that can benefit from increased lending.

Financial Stability Trust: The FST is a separate trust to hold the investments made by the Treasury under the program, and will be maintained by a group of fund managers.

Buying up troubled assets

This section is designed to help relieve banks of toxic or hard-to-sell assets and put more of their efforts into private lending. The goal is to buy up these assets using a combination of public funds and private capital, with the private sector taking charge of the price assessments. The costs of this goal are still uncertain, but the Treasury expects to generate up to $1 trillion from the investments.

Consumer and business lending

The Treasury also plans to restore the flow of credit by increasing lending in the consumer and business levels. This goal builds on the proposed Term Asset-Backed Securities Loan Facility (TALF), but will increase funding from $200 billion to $1 trillion in federal lending. Under the plan, the government will purchase securities backed by consumer and business loans, such as auto loans, small business loans and credit cards. The plan will put a premium on higher-quality securities to minimize losses for taxpayers.

Improved transparency and accountability

Banks and financial institutions who benefit from taxpayers’ money will be closely watched to ensure they don’t misuse public funds. Any companies receiving bailout funds will have to meet new requirements and operate under tighter restrictions. For instance, they will need to submit a plan for spending the government aid to increase lending, and upload monthly reports on the website www.financialstability.gov. Details of all transactions will also be posted on the website 5-10 days after each one is completed.

Companies receiving federal loans will also have to limit dividends to 1% per quarter until the debt is paid. Until then, they cannot re-buy private shares or buy up other banks without consent from the Treasury. A cap will also be imposed on executive pay for CEOs, and lobbyists will be banned to keep them from influencing the Treasury’s decisions.

Housing and foreclosure assistance

The new plan will lower interest rates to provide more affordable housing and reduce the risk of foreclosure. This program will cost $50 billion in the first weeks following implementation, during which loan modification guidelines will be established and existing programs will be adjusted. Under this plan, all companies receiving financial assistance will need to participate in the foreclosure mitigation plan (currently, only Citigroup and the Bank of America are taking part).

For homeowners, the government plans to spend $600 billion to buy up existing mortgage-backed securities from Fannie Mae and Freddie Mac. This will allow them to lower mortgage rates and make housing more affordable for families in distressed communities.

Small business lending

Small businesses and community lenders will also benefit from the bailout plan through lower borrowing costs and increased lending activity. Key elements will include buying up loans from the Small Business Administration (SBA), reducing fees, and increasing loan guarantees up to 90%.

Loan modification options

The new bailout plan may offer new options to homeowners seeking Loan Modification and other forms of mortgage assistance. Luckily, most loan modification companies have adjusted their programs to better comply with public policies. To know more about your options under this bailout plan, visit : http://www.cdloanmod.com/loss-mitigation-news

Article Source: http://www.articlesbase.com/mortgage-articles/
the-2009-bank-bailout-plan-how-will-it-help-you-avaoid-foreclosure--804296.html

Author: Loan Modification Attorney

About the Author:

The Loan ModificationDepartment is composed of a team of Loan Modification Attorneys, Mortgage Professionals, and Hardship Analysts. Lead by Expert Loan Modification Attorney, Marc R. Tow, Loan Modification Department has helped thousands of American Home Owners by Loss Mitigation through Loan Modification, Mortgage Modification, For more information Just Call 800-738-1170 or Visit our website http://www.cdloanmod.com/