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Posts Tagged ‘Mortgage’

A Different Kind Of Mortgage Broker

Wednesday, November 3rd, 2010
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There’s a different kind of mortgage broker on the block and they’re giving conventional mortgage brokers a run for their money.

With today’s current economy, consumers have to be as budget conscious as ever, and it’s showing in every consumer decision they make – including shopping for a mortgage.

Gone are the days where the consumer waits with baited breath as to whether or not the corner mortgage broker can find financing for the home they want to buy.

Say hello to today’s new mortgage seeker; the one who has lenders competing for their business, makes educated lending choices and is making upfront mortgage brokers more popular than ever.

So what is an upfront mortgage broker? The main difference between an upfront mortgage broker and a conventional mortgage broker is that an upfront mortgage broker discloses their fees to the borrower up front and in writing.

The borrower will pay the broker a fee in addition to paying the wholesale loan price. With conventional mortgage brokers, borrowers don’t know the true cost of the loan until after the application has been submitted.

The conventional lenders add a markup to the wholesale rate of the mortgage to make their profit. While on the surface it may seem like the prices quoted by upfront mortgage brokers compared to the quotes received by conventional lenders would not be the wise choice, don’t be fooled.

The quotes you get from an upfront mortgage broker will be an accurate reflection of what you’re really going to pay. Just because a conventional mortgage broker promises you the moon, does not mean that he can actually deliver it.

There are other reasons that have conscious consumers choosing upfront mortgage brokers over the traditional conventional brokers.

While conventional mortgage brokers don’t always have the best interests of their customers in mind, upfront mortgage brokers gain nothing by providing their borrowers with anything other than the mortgage that best suits their needs.

There are also times when mortgage brokers are given rebates by third parties. While a conventional broker may keep this rebate as a part of their profit, an upfront mortgage broker will always pass this rebate on to the borrower.

With consumers appreciating honesty and no-nonsense approaches when dealing with their lending needs, upfront broker methods may just change the face of mortgage lending forever.

Written by Craig Romero

Discover how to quickly build a minimum of $40,000 worth of home equity and pay your mortgage off in 10 years or less without making biweekly mortgage payments. Visit: www.wisemortgageinfo.com

Craig Romero is an author and mortgage analyst dedicated to helping homeowners maximize the investment in their homes.

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Commercial Mortgage Leads Can Improve Your Business

Sunday, September 19th, 2010
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If you are a commercial mortgage broker and want to increase your sales to grow you business, consider purchasing some commercial mortgage leads to get you where you need to be. Have a verified lead can help you get the advance that you need.

When you go online you will see web banners and web pages that are advertising free online mortgage loan quotes. The people that respond to these free banners and sites then become a mortgage loan lead. All they need to do is fill out a small online form and submit it and the lenders will be contacting them.

The information that a potential customer has to fill out is very basic and will only provide contact information for the most part. The rest of the information will be provided directly to the person that calls them back to provide a sales pitch for a mortgage loan. Because the person that is interested in getting the loan is the one that is asking for a free estimate, this is considered a verified business lead.

After the information that is provided online is compiled, it is then sold to one or more mortgage companies as a business Lead. The fees for these leads can be large or small depending on how exclusive it is.

If you want to purchase commercial mortgage leads that will only be sold to you and no one else, an exclusive lead, you will be paying a larger fee for it. The smaller fees to get a mortgage lead only guarantees that you get the information, not that it will only be sold to you. As a matter of fact, if you do not pay for an exclusive lead, the same lead that you pay a small fee for will probably be sold to at least eight other mortgage companies and then it becomes a race.

With nonexclusive commercial mortgage leads comes the pressure of competition. You will sure to be racing against other companies to get in touch with the person that filled out the request first and to get your proposal to them before the others. If you would prefer not to have to rush to work on the lead, you should consider paying the extra money for the exclusive lead.

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Online Mortgage Applications, What Happens After You Hit Submit?

Saturday, August 28th, 2010
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In concept, getting a mortgage quote from 4 or 5 different mortgage companies is a wise decision to finding the lowest mortgage rate you qualify for. Mortgage companies and brokers alike can claim that they have hundreds of lenders and thousands of programs, and I am sure they do, but I have yet to see the one mortgage broker who has that magical lender that can get you a better mortgage then every other mortgage broker out there. The bottom line is, they all have access to the same lenders and same programs, it is just that some mortgage brokers know their programs better then others.

The problem today with submitting your information to an online mortgage lead company is that the demand for your information is at an all time high, and the supply is very low. In order for these companies to stay in business they need to be price competitive with other online mortgage lead companies. The way that they do this is by selling your information to numerous mortgage companies. Just recently I spoke to an individual who received over 40 phone calls from the one application he filled out online.

Sometimes it is not the online mortgage lead companies fault that your information gets oversold. There are other online mortgage lead companies that buy your information from the original lead company where you filled out the application and then they turn around and sell them to their clientele base. After all, your information is not cheap and some mortgage companies will pay in excess of $35 for it.

The good news is, you can avoid these headaches by doing some research on your end. Over the years mortgage brokers have realized that the internet is a powerful tool that can generate mortgage applications. It is now easier to locate your local mortgage companies and fill out an application directly with them. It is very unlikely that your local mortgage company is going to sell your information to their competitors, as they are in the business of closing loans.

This is where the research on your end comes in. Using your favorite search engine, type in your city, state or even zip code followed by the word mortgage. This will generate a number of pages full of local mortgage companies that would be more then happy to compete for your business. When visiting these websites, look for quality content and educational information. There are plenty of dull sites out there that only talk about themselves and the hundreds of lenders and thousand of loan programs with the lowest mortgage rates anywhere in the galaxy.

My name is Jeremy Redlinger and I have been in the mortgage industry since the age of 22. My philosophy is to cater to the needs of homeowners by education. If you enjoyed this article, you can find many more like it on just about any topic when it comes to financing a home on my website entitled Your Mortgage Matters.

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Top 10 UK Mortgage Features to Consider

Friday, August 20th, 2010
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Quick Move Now are not financial advisers and do not dispense mortgage advice. However, we are up to speed on some of the elements of the subject, and this top 10 is a general guide to the most important UK mortgage features to consider.

1. Repayment mortgage

This is the old fashioned, traditional type of mortgage and remains the only way the property is actually guaranteed to be yours at the end of the mortgage term – provided you have repaid the loan. Your mortgage debt is divided into capital repayments (ie repayment of the money you borrowed) and interest payments (ie repayment of the interest you’re being charged for the loan). As you pay off your mortgage every month you’re paying off a bit of capital and a bit of interest until the full debt is repaid.

2. Interest only mortgage

As the name suggests, with an interest-only mortgage, the monthly payment includes only this element of the debt. The upside of this is that the monthly cost is considerably lower than for a comparable repayment mortgage. The downside is that at the end of the mortgage term you still owe the original amount you borrowed. And if you can’t repay it, your mortgage lender is perfectly entitled to repossess your home.

3. Fixed rate mortgage

This type of mortgage is where you and the mortgage lender agree to fix the interest rate owed on your loan for a set period of time. The period of time is usually between 1 and 5 years but could be longer. (That simply depends on the exact mortgage deal you choose). After the agreed period, the interest rate owed on your loan usually reverts to the lender’s Variable Rate.

4. Tracker mortgage

Tracker mortgages are those that track the Bank of England’s Base rate, whatever rate it is may be. They can last a few years, where the rate reverts back to the lenders standard rate after a period, or can be for the entire length of a mortgage, when it’s called a lifetime tracker.

5. Capped mortgage

A variation on interest only mortgages, capped mortgages have a limit, or cap, on the amount of interest you will pay over a particular period of time while allowing it to fall if the variable rate drops.

6. Muslim mortgage

A large Muslim population in many cities in the UK now means many lenders are offering Muslim mortgages. These are ones that comply to Sharia Law.

7. Portability

This refers to the practice of transferring your mortgage between properties when you move house, but staying with the same lender. Mortgage portability can be advantageous, if for example you have secured a good fixed rate, a capped, cash back or discounted product originally and the market has since changed, leaving no comparable deals.

8. Buy-to-let mortgage

Designed for those who want to buy a house with the intention of letting it out to tenants. Buy-to-let-ers can be private investors looking to make some money in property, or professional companies similar to Quick Move Now. Buy-to-let mortgages normally require a 15% deposit and home ownership.

9. Early repayment charge

A charge levied by lenders to borrowers who repay their mortgage early, or transfer it to another lender. Early repayment charges can be a percentage of the mortgage left to pay, a percentage of the initial loan amount, a certain number of months interest or a percentage of the total sum already repaid.

10. Valuations

Before approving your mortgage application, the lender will want to check the property’s value. To do this, the lender will usually arrange for a qualified valuer to inspect it. You normally have to pay for the valuation, even if you do not go on to buy the property. However, some lenders do not charge for valuations, so check.

This article was written by Quick Move Now who are one of the leading house buying companies in the UK. They specialise in providing a quick house sale and will buy my house quickly. They will buy your house for 90% of its value and can turn around in 7 days.

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Fixed Mortgage Loans – What You Need To Know

Tuesday, April 6th, 2010
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Getting a home loan can be a tricky business – there are so many choices out there, and it’s not always easy to know which one is right for you. Once you cut through all the bells and whistles, though, there are really only 3 main types of home loan to choose from. Of the three, the most common type of home loan is the fixed mortgage loan.

This mortgage has a fixed time period, say 30 years, for you to repay the loan. The good thing about this is that over time your loan will decrease, but every time you get a pay rise or some extra bonus money, you can pay a little extra off and often pay out the loan a lot quicker.

You can also choose the time period you want the loan for. If you’re a little strapped for cash and want to get the lowest monthly repayments you can, then look at a 30 year loan. This is an extremely common time period, and will probably give you the most options to choose from out in the market place. The good thing is that with lower repayments, you have more money in your pocket each month to spend on other things like food and bills. Unfortunately, though, the length of the loan means that you pay a very large amount of interest to the financier. Still, it’s a good way to get started cheaply.

If you have a bit more money to spend, it’s worth looking at a loan with a shorter term, say 15 years. This way you can pay your home of much quicker, and have more funds available when the time comes to start looking at retiring. You also pay a lot less interest over the term of the home loan. Some people avoid these loans because they’re worried that if they lose their job, they’ll have trouble making the payments. The good thing, though, is that in situations of extreme hardship, you may well be able to extend the term of the home loan, and drop your payments substantially.

A fixed mortgage loan generally also allows some repayment flexibility. So this means that instead of paying monthly, you can pay fortnightly. This can be a huge benefit, because if you pay fortnightly, over the course of a year you actually make the equivalent of 13 monthly payments. This helps to drop your home loan balance more quickly, and often means you’ll pay the loan off in 23-25 years. Definitely worth doing if you can!

You also need to make a decision about whether you want an adjustable (variable) interest rate, or a fixed rate. This is always a tough choice to make when setting up a home loan – after all, the top economists often struggle to predict what the economy and interest rates are likely to do over the medium term, so you can hardly be expected to work it out! However it’s usually cheaper to go with adjustable rates, so if you have a little bit of room in your home loan budget in case rates rise, that’s probably your best choice.

Fixed interest rates work best for people who need certainty about their home loan repayment. It usually means you end up paying more to begin with, but at least if interest rates rise you won’t be caught short.

Remember, too, that many home loans allow you to change your options as you go along. So if rates start rising to the point where you’re getting worried about making the repayments if they rise again, you can most likely change to a fixed rate home loan. Some loans even let you have part of the loan as a fixed rate, and part as adjustable, to give you the best of both worlds.

In the end, every person applying for a home loan has a different set of circumstances, and it’s vital to understand what these are, and find the home loan best suited to them. It can take a bit of research, but by knowing exactly what type of home loan features you’re looking for, you will be able to find it much more easily.

For heaps more tips on choosing the right home loan, check out http://www.homeloanzonecentral.com.

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The Straight Dope On Mortgage Refinance Loans

Saturday, February 20th, 2010
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Times are tough, there is no doubt about that. Interest rates are inching up and much of the hub-bub of the refinance boom is over. It’s the difficult loans that remain, amongst them mostly purchases.

It’s time to face facts. The A-paper good credit refinance loans are over. There is little chance that you’ll be able to convince anyone to refinance, unless they are in extreme dire financial straights and have a tremendous amount of debt to pay off (and in that case, they are probably sub-prime borrowers anyway). Because consumers are interest rate sensitive, even though they are combining total debt into a lower payment, you will be hard-pressed to get them to trade their 5.25% mortgage rate for a 7.5% rate. It simply won’t happen.

In order to sell these types of refinance loans (combining and rolling debt into the mortgage), you will have to hit the customer’s hot buttons. Are they concerned about lowering the monthly out-go? Have they recently had a major financial change in their life? Lost their job? Unexpected bills? Whatever the reason, the customer’s immediate concern is the monthly cash flow. They aren’t thinking long term, and what this will do to their financial future. All they care about is getting back on their feet. And this is where YOU can help. But do it if it only makes sense. Don’t sell a loan if you yourself wouldn’t do the same thing.

Know that long term, when you roll debt into a mortgage, you pay much more on that debt than you ever would by paying it off yourself. You end-up carrying the debt over a much longer term, 30 years on a 30 year note, and the accumulated total interest charged is much, much higher. Even tens of thousands of dollars higher!

Yes, there are tax benefits to this and you can deduct the interest from your mortgage off of your taxes. But, what happens cash-flow-wise is that the customer is stuck with an elevated monthly mortgage payment over the LONG TERM. Short term, the combined total monthly cash flow is lower by combining debt, but long term their monthly mortgage payment will be higher than what they originally started with.

In order words if the customer simply got a debt consolidation loan or a HELOC from their bank, at least when the debt is finally paid off, they would still have the same low monthly mortgage they have now. By paying debt though refinancing, long term the customer shoots themselves in the foot by paying a higher interest rate and having a higher monthly mortgage payment (which will never go back down unless they refinance again or pay off the note).

These types of refinance loans made sense when rates were low and customers were cutting both their monthly mortgage rate and monthly payment. It was logical and the financial benefits could be seen in black and white. Nowadays, these debt-consolidation mortgage loans are almost un-sellable. It’s simple economics and no matter how you try to push it, it’s a very hard sell indeed. You would not only be doing the customer a disservice but yourself.

Give up on these types of refinance loans for now. Focus on purchase loans and sub-prime. That’s where the money is and that’s how you’re going to succeed in this market.

Rob Lawrence is ranked one of top national trainers in the mortgage industry. He is the currently the CEO of Battlecall.com, coaching, tools and resources to turn mortgage professionals into mortgage warriors. Visit http://www.battlecall.com for his free “Sink Or Swim” weekly newsletter, mortgage training, marketing advice and more! Jumpstart your career in the mortgage business, starting today.

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Mortgage training for loan officers who want to become mortgage warriors.

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