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You must have been advised in the past, when applying for a mortgage as to all the dos and don’ts. But now it’s time for you to be in the driver’s seat and take charge of this round of Q and A and make sure you extract as much pertinent information as you can from your mortgage officer before buying a house. While customers are expected to jump through the highest hoops in order to impress their mortgage officer, their mortgage officers are not as forthcoming with information as their clients are expected to be. Here is a list of questions that we feel you should get  out of the way prior to settling on a particular lender.

Questions To Ask Your Lending Officer

Some of the important questions you need to ask your lending officer about your home loan may involve:

• The Terms Of The Loan: It is best to start the application of with this question. It is always beneficial to understand the terms of the mortgage upfront rather than wait and be surprised with something that you should have cleared up at the very outset. Ask questions like, what are the terms of the mortgage, what is the interest only period, what are the undisclosed charges that could apply to this loan structure etc.

• Can I Pay Off The Mortgage Early?: Often consumers feel that there are no penalties, which apply to paying off their mortgage early. This could be a mistake. Quite often you will find that your mortgage provider will charge you penalty interest for paying off your mortgage early.

• What Interest Rates Are You Looking At: If you are looking at getting yourself a fixed interest mortgage loan, then it is easy to figure out what your payments are going to be now or a future date. If however, you decide to brave the market and get yourself a variable loan, you might want to quiz your mortgage officer on the kind of range you might be looking at with regards to interest rates and payments.

• Principal And Interest Break Ups:  Another thing that you might want to figure out is what is the principal and interest break up. You may want to ask your mortgage officer as to how much of your repayments go towards the principal component and how much goes towards the interest component. The reason this should be of interest to you is owing to the fact that you should want the majority of your payments to go towards the principal component thereby reducing your overall interest payments.

• Other Factors: In addition to the aforementioned questions you would should also ask your mortgage officer questions like, if there re any closing costs.  These are hidden costs and are sometimes added over the above the general costs associated with getting a mortgage. It is always beneficial to have these factors cleared up front as you find yourself short on the day of settlement. Further you should also enquire whether it is possible for you to get a fixed mortgage. If you can qualify for one, ask your mortgage officer to explain the terms and conditions of a fixed mortgage.

These are some of the questions you might want to ask your mortgage officer prior to settling down on a particular lender. As with any investment it is very essential that you do your research adequately.

References:

1. Ten Questions to Ask Your Mortgage Officer – Fine Tuned Finances
2. 10 questions for lenders – BankRate
3. Ask the Lender the Right Questions – Yahoo Finance

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In the not so distant past it was possible to get a no down payment mortgage loan or a 100 percent lend as the market place calls it. However with the recent economic meltdown and tightened lending policies, no deposit loans are fast becoming the “Dodos” of the banking world. In other words they are extinct. This leaves clients with the obligation of coming up with sufficient funds to be able to secure a mortgage nowadays.

Come to think of it, one of the chief advantages of putting down a down payment for mortgage is that it creates instant owners equity in the market. In addition to this, the larger the down payment, the smaller your monthly interest payments on your mortgage.  In addition to this several industry experts have found that several first homebuyers who are not accustomed to owing a property find it hard to cope with owning an maintaining their homes. Hence as a precaution it is advisable that individuals should not allocate all their money towards their down payments and should store a bit in reserve. As a result of this a lot of mortgage programs nowadays have cash reserve requirements for individuals.

Getting A Down Payment For House

Some quick fixes to getting a house down payment are as follows:

• Ask your parents for the deposit amount as a non-repayable gift. This will ensure that the banks do not treat the mortgage down payment amount from your parents as another debt.
• You can also create your house down payment by selling assets such as cars, boats, bikes collectibles etc.
• In addition to this you could also liquidate your investments such as stocks and managed funds.
• Another alternative for a down payment mortgage could easily be recycling your tax refund and using that as a deposit.
• You could borrow the mortgage down payment from your IRA account.
• If you have received a bonus at work and are planning to buy a property, set this amount aside to use it as your down payment.
• In addition to the above-mentioned methods you could also look into private mortgage down payment assistance programs or if you are an employee of the government you could look into home buyer programs for public servants.

Alternative Methods To Getting a Down Payment

• Government Backed Programs: Apart from the above-mentioned methods there are other alternatives to securing a house down payment for your mortgage loan as well. For instance, The FHA backed mortgage Insurance program allows borrower to secure a loan with as little as a 3% deposit, the entire of  which could be a gift. However, you must be a approved applicant first. In addition the loan programs run by the Department of Veteran Affairs allows retired servicemen to get a home loan without any deposit at all.
• Private Assistance Programs: Private Assistance programs such as Nehimiah and AmeriDream are extremely popular and controversial at the same time. While these programs convert sellers equity into the buyers house down payment, they are not without flaw. One may ask him or herself the question that if an individual did not have the discipline to save up for a deposit,  will they have the discipline to make their repayments.

Hence, as stated there are several ways an individual can come up with a mortgage down payment for their home, but it is always advisable to ensure that you have saved up for it and have made adequate contributions.

Reference:

1. How to come up with a down payment – House Hunt
2. How to come up with a down payment – MSN Money

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The US economy, since the fall in the first week of July 2009, has yet again seen a fall in he number of mortgage applications in September 2009, according to a report released by the Mortgage Bankers Association. However this is no reason to panic. Although the fall in mortgage applications marked the end of a 2 week climb in the numbers there is still a lot of positive market information out there and consumers should be able to take heart from it.

The number of US mortgages declined by 3.1 percent in comparison to the week ended 28th August. In addition to this the refinance index also took a dip or around 3.1 percent. However, the figures for mortgage  applications are still about 23 percent higher than they were a year ago. In addition to this the Mortgage Bankers Association saw a decline of about 8.6 percent in applications to either buy or refinance an existing home. In addition to this the rising numbers in foreclosures and the falling prices of homes make a complete housing sector recovery a little hard. Industry analyst further estimate that the US home prices may fall by another 10.5 percent and eventually hit bottom by the second quarter of 2010.

US Mortgage Applications – Good News

In spite of all this information, there is still good news out there in the market place which should be driving the sales of homes and hence mortgage applications up again. Some good news for consumers is as follows:

• Low Interest Rates : This has probably been the given driver of home sales in recent times. The 30-year home loan interest rate fell from 5.07 percent to a low of 5.04 percent. In addition to this the 15-year interest rate saw a decline from it’s 4.5% figure to 4.47%. In accordance with the statement made by a spokesperson of Freddie Mac these rates have been the lowest since the week ended 28th of May. Further to this the Federal Reserve has been assuring the industry that these rates will allowed to be low for a while. This in turn will greatly aid the first home buyers entering the market. The government at this stage does not look like they want to withdraw the stimulus package too early.

• First Home Owners Tax Credit: The government has given first home buyer entering the market a tax concession of 10% of the purchase price, which is capped at $8,000. Unlike previous tax concessions, this one is not repayable over a 15 year time frame. This is entirely a one off payment to first home buyers which is not to be paid back. This is expected to further boost the sales for homes and the number of mortgage applications as more and more first home buyers try and enter market prior to the end of the year and before the tax credit is withdrawn.

• End Of Recession Announcement: Earlier this month, the Federal Reserve Chairman, Ben Bernanke announced that the US recession might finally be over. The end of recession can only mean economic growth from here on in. In due course this will lead to rise in employment rates etc, there by bolstering the home purchases and the number of US mortgages again.

Even though we have seen a fall in the US mortgage applications, the industry on the whole remains optimistic. We should see a surge in the number of mortgage and refinance applications as consumers try and take advantage of the low interest rates and the first home owners tax concession.

References:

1. Mortgage Rates in U.S. Decline – Bloomberg
2. Mortgage Applications, Loan Rates Fall – Fox Business

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For consumers struggling with their existing mortgage a mortgage refinance might be an alternative to bankruptcy. Most credit consumers have experienced changed circumstances over the years and the mortgage which suited you then might no longer be the option. Under changing and extremely difficult financial conditions mortgage refinancing might just be the best alterative to save you from bankruptcy.

Refinance Your Mortgage For Better Credit Report

Consumers are sometimes misled and often believe that bankruptcy is a whole new start. While this is true, one should remember that declaring yourself bankrupt, comes with a lot of repercussions and bankruptcy affects credit reports as stated below:

• For starters, your FICO score gets affected negatively by anywhere between 240-280 points owing to the fact that bankruptcy is a matter of public record.
• Secondly clients who have been declared bankrupt find it very difficult to obtain credit and even if they do it is at a much higher interest rate.

Hence in light of these facts a mortgage refinance might just be the saving grace and one of the best alternatives to bankruptcy.

Alternatives To Filing Bankruptcy

Bankruptcy is not the only solution to manage mounting debt and there are some alternatives to filing bankruptcy that will not affect your credit report as badly. Listed below are a few alternatives to bankruptcy:

1. Refinance A Mortgage To A Lower Rate: If you are still in a product or with a lender offering a higher interest rate than the market place, it might be time to shop around and look for a lower interest rate for a mortgage refinance. A lower interest rate means lower repayments.
2. Mortgage Loan Refinance And Debt Consolidation: If you have more than one property and are struggling to keep up with your repayments, a mortgage loan refinance and debt consolidation might be a good idea. Consolidate your two separate mortgages into one facility and make one repayment on them. This usually also enables customers to make lower repayments owing to the single facility being larger and is an excellent bankruptcy alternative.
3. Line of Credit: This is a very powerful mortgage tool. This is much the same as using a checking account. The client is granted an overall account limit and can draw down from the mortgage loan as and when required. You only pay interest on the drawn down amount or the used amount.
4. Obtaining Cash Out: This type of a mortgage refinance will allow you to use the lazy equity in your mortgage loan. The diagram explains what lazy equity is.In this example the consumer can get a loan of up to 80% of the property value, i.e. 480,000 without having to pay Mortgage Insurance. Hence the client can use the additional 30,000 as per the client’s discretion. People often use the cash out component to pay off bills, credit cards and to create buffers in their mortgage account.

Using a mortgage refinance is a great alternative to bankruptcy as a well managed mortgage loan improves your credit report rather than the damage bankruptcy causes. However, there is one more alternative to bankrtupcy as well:

• Filing For A Chapter 7 or Chapter 13: Clients can sometimes file for a chapter 7 which is commonly known as liquidation as alternative to bankruptcy. This does not disqualify a client from obtaining a mortgage refinance as long as 2 years have passed since the client was discharged of the bankruptcy. On the other hand if the client files for a chapter 13, he/she can still obtain a mortgage refinance as long as the payments in relation to the mortgage and the bankruptcy have been made on time.

In a changing credit environment, consumers can no loner rely on the “one size fits all” principle. It is essential that clients reassess their situations and are full aware of all bankruptcy laws before making a decision. As as an alternative to bankrtupcy, one can refinance mortgages out of their present financial institutions and on to cheaper rates and solutions. This could be the ideal alternative to bankruptcy and helping you maintain a blemish free credit report.

Reference:

1. Could Mortgage Refinance Help You Get Out Of Debt? – Legal Helpers

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Did you ever ponder what’s there in your credit report that strikes the employer to decide whether you should be hired or not? What do employers reckon as positive or negative in your credit? Well, don’t consider yourself alone if you are looking for answers of these questions before signing permission form of credit report for your employer. It’s true that apparently your credit report is not a right tool to agree on your employability, but still there are some reasons which compel employers to closely look into your credit report.

There is only limited data available on some employment report that potential and current employers use to make promoting and hiring decisions. It has the same information about your credit cards and loans that is listed in your credit report, but it doesn’t contain information like date of birth, marital status and account numbers.

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