Relish Economic Advantages With Refinancing

Refinancing mortgage loan is a comparatively new concept that is fast catching on these days. There is no doubt that refinancing, if done properly, can prove to be beneficial for people who are struggling with financial difficulties. The advantages of refinancing and the things that one should consider while refinancing the mortgage loan are discussed below:

• All those who have taken mortgage loan for buying Columbus Ohio homes or made investments in Ohio real estate market can use the option of refinancing to decrease the monthly payments. However, this is possible only when the current mortgage rates are lower as compared to the time when Columbus Ohio homes were originally financed. Refinancing is also a good option when the owners of Columbus Ohio homes decide to switch to ARM (adjustable rate mortgage) which has a lower rate as compared to the current one. Of course, the person has to ensure that the loan term is not reduced or there has been no enormous increase in the balance.

• Refinancing allows owners of Columbus Ohio homes to build equity at a faster rate. This is particularly true when the person can afford an increased monthly payment and is thinking to opt for thirty-year mortgage loan rather than a 15-year loan. This means that the homeowner can build the equity quickly and cut down the financing fees.

• Many people who have invested in Ohio real estate market recently or bought Columbus Ohio homes and have good credit scores can choose to refinance. There are many who prefer utilizing the money provided by cash-out refinancing for paying off other financial debts such as credit card bills. Often people unknowingly fall into the trap of huge amounts of credit card debts and cash out refinance offers the easiest way out. In addition, some may prefer using the option of refinancing for renovating Columbus Ohio homes or paying off Ohio real estate creditors.

• Probably very few people are aware of the fact that refinancing can help them to grab their dream jobs! Many employers these days check in details the financial history of the potential candidates. Chances are high that they may reject someone whose financial situation report is brimming with liens, foreclosed Columbus Ohio homes and late payments. Refinancing will allow you to clear off the pending financial debts and improve the credit scores, thus creating a positive impression.

• Owners of Columbus Ohio homes must ensure that they will be living in them long enough to make-up the costs that have been incurred on refinancing transactions. For example, let us assume that the closing costs of refinancing mortgage loan have been $3,000 and the monthly payments are lowered by $70. Calculations reveal that the borrower is required to live in Columbus Ohio homes for approximately 25 years to enjoy the benefit of refinancing. This means that living for lesser number of years will not bring any benefits.

• People who have sold off any of their financial assets recently or inherited a considerable amount of money can also opt for refinancing. It will allow them to pay off the loan that they have taken for buying Columbus Ohio homes and the amount of interest that have been saved over the term of the loan can be put to some good use such as investing in Ohio real estate market.

All those who are currently planning to refinance their homes should carefully review their current financial status. Remember that refinancing is a weak option when the homeowners can solve their financial problems by cutting down the daily expenses. Opting for refinancing for wrong reasons can be damaging to one's overall financial plans.

A Look at Refinancing Mortgage Loans

The current financial climate has been more of a storm for many and those folks are seeking some fiduciary assistance in the form of mortgage refinancing. So, demand is up and so are those willing to meet that demand. Jobs have been lost, prices have gone up, and people are struggling to hold onto a way of life to which they had become accustomed. Looking across the market, there are many mortgage refinancing productions and they are varied in product and approach. Due to the selection, it is wise to shop around, compare interest rates, look hard at repayment terms, and, though the hope is you will never need them, check out late fees and other charges and penalties. If you are careful, you can find a plan that will specifically benefit you.

Mortgage Refinancing Goals

Smart mortgage refinance shoppers will pull their own credit report. Having copies of your credit report will give you and your potential lender enough to go on as you shop. This prevents each prospective lender from passing a hard query to the credit reporting agencies each time you make an application. Too many direct requests can harm your credit rating. Also, if you know exactly what your report indicates, you can prevent unscrupulous lenders from convincing you that you are not a very good loan candidate due to your credit history and then try to charge you higher interest rates.

Your next most important consideration, of course, is interest and other terms, conditions, and charges. This will vary from lender to lender and the state of your credit history. This will also be determined by the amount of equity you have built into your home over the years of ownership. And you will want to weigh the interest charges against other aspects of the loan such as repayment terms, charges, and fees. Maybe a lender is offering a loan at half a point higher but has more favorable terms and conditions than another lender who may offer at a lower rate but not so friendly terms.

Another thing that you may want to consider, is rolling outstanding credit card debt, or even an outstanding auto loan, into the refinancing package. Some lenders will work with you on that. Consolidating other debts may ease your monthly payments and simplify your bill paying. Yet another thing to consider before you begin your shopping, is to talk to friends and colleagues who have gone through refinancing themselves. Talk to them about their experiences and they may even be able to point you to an efficient and friendly lender.

Mortgage Refinancing Does Not Make Obligations Disappear

One of the reasons you may be seeking to refinance your mortgage is that you are having problems meeting your bills every month. You must consider all your income and outgo so you know what exactly to ask for regarding repayment. Refinancing your mortgage and then not being able to meet the new cost, and start slipping on other bills as well, will be financially devastating. You must look for ways to trim your budget of luxuries and over-generosity to yourself. Frugality should become you financial key word.

As you look for ways to ease your monthly financial burden, keep the things mentioned above clearly in mind. If you plan, make good decisions, and pay attention to your spending, you will probably be a much happier homeowner as your future unrolls.

Main Hurdles In Mortgages For Contractors

Most lenders are only interested in providing mortgages to people who have a fixed annual or monthly salary and their important criteria for assessment is based upon the amount that is earned. The presumption is that only these people are capable of meeting their repayment options without default. This presumption in the mortgage industry is creating problems for contractors or freelance workers to obtain credit easily.

The credit lenders are reluctant to provide finance for contractors, mainly because they are afraid that there is no continuity of work. Without this continuity there is a risk that the client will default on the repayment and therefore their money will be at risk. There are some lenders who are willing to provide mortgages for contractors, but they can charge comparatively high rates of interest. These high standards and rates of interest prescribed for credit loan facilities put a big burden on contractors when it comes to finding finance. Even though the fact is that many self employed workers earn more money than some employed workers.

The main hurdles faced by the self employed when applying for credit is proving how much they earn. They also find it difficult to provide guarantees to prove that they will continue to receive this money in the future, which would obviously reduce the repayment risk. In order to avail mortgages for contractors, you first need to prove your employability, that is, the present work you are performing. They will also assess you on the basis of your past performance.

The lender will assess your market reputation and the profile features of your clients, also your earning potential and your credit worthiness. These are all related to the future and have a certain level of uncertainty. Some lenders do tend to exploit these problems and will offer mortgages but with much higher fees and processing charges, therefore compelling the borrower to pay very high rates of interest. The lending institutions justify this injustice on the basis of the risk involved in the repayment by the service providers. Hence special and difficult criteria are provided for mortgages for contractors.

But now the situation has changed and many lending institutions are coming forward to offer finance for contractors on a reasonable and standard rate of interest without spending much on processing fees. They have made the procedure much simpler so that there is no need to produce company accounts, or to take out overpriced loans in order to pay your mortgage.

Time To Move Your Loan?

After the Australian Reserve Bank's interest rate rise earlier this month most lenders have finalised what they are doing with their interest rates now.

While most lenders have increased their rates by more than the 0.25 per cent from what the Reserve Bank went up, some are now offering new incentives to lure new customers away from their current lenders or they have brought in deals to keep customers from moving.

A few lenders have introduced lower fixed rates options and the reduction or even waiving of early repayment fees. While there are a lot of changes going on in the market, you have to decide if your existing loan is right for you. Moving to a new bank or lender might not always be the best option for a number of reasons.

Even if other lenders variable rate seems better now, the rates are continually changing and the lender with the lower rate now may not have the lower rate after the next interest rate rise.

It is necessary to look at all options and fees you're going to have to pay before changing lenders. This latest interest rate rise has brought the variable rates between the various lenders on a more parallel playing field, closing the gap that was there before the rate change. The reality in this is that the differences between your current lender and the others are not as significant as the media might make it out to be. Another very important factor to consider when refinancing is the value of your property.

Bank valuations on a refinance loan often come in more conservative than a valuation for a normal purchase. If the valuation on your property were to come in lot less than expected this can stop the refinance process completely or may have you incurring much higher and expensive mortgage insurance premiums. This is one important issue that is generally overlooked or not made clear when you look at refinancing.

By speaking to a mortgage broker or someone who has access to the different lenders and knowing what specials and incentives are out there, you should be getting the best and correct advice.

Can Real Estate Markets Revive If Banks Are Reluctant to Lend?

As a result of my real estate activities, I am frequently questioned about the general trend of the markets. Over the past few years, my answer has been, "It's very difficult to tell. All bets are off."
In fact, we have been through an extremely vexing time in which banks simply do not seem inclined to lend. The lack of available capital has created a situation in which real estate markets as we know them seem no longer to exist.
Lately, however, some positive signs indicate a change is in the air. We appear to be embarking on a Darwinian process that, in time, could be quite beneficial. First, however, we need to face the facts.
Notwithstanding the outrageously low interest rates that are touted for residential loans, I know of very few people who have actually been able to obtain a mortgage and take advantage of these historically low rates. On the contrary, banks that have been burned in the recent collapse of real estate values do not appear willing to lend for real estate purchases or refinancing.
In recent years the majority of purchases have been for residential properties financed through FHA or VA loans, properties purchased with existing cash or credit lines that do not require traditional bank underwriting, or large bulk purchases made by highly sophisticated entities with ready access to investment capital. The new real estate market is a cash market in which buyers demand significant price reductions - or they buy somewhere else.
Cash is king, and the clear reality at the present time is that the lack of readily available capital and the relatively few cash buyers continue to hold down values.
But something is stirring. Real estate owners have begun to respond to the scarcity of capital by offering seller financing and other inducements to entice new buyers into the market. As this trend takes hold, prices will stabilize and values will begin to climb.
In addition, I am seeing advertisements for young technology-driven lending companies who embrace new technologies and appear intent on conducting their lending businesses in a lean and mean fashion through reliance on the internet.
The combination of seller financing and new lending businesses entering the market seem likely to alter the landscape of lending, providing access to capital and furnishing a much needed boost to the markets.
When real estate prices begin to climb, the banks will most likely realize they are missing out and resume their traditional role of lending based upon reasonable underwriting requirements. The increased competition will be good for the markets, widening access to capital and fueling growth, and that will be good for everybody.

This article was written for Family Office Specialist.com by Malcolm David Logan. Malcolm David Logan is a freelance writer offering research and ghostwriting services at Fill My Empty Blog Space.com.

Investing With FHA Loan Secures Your Future Financial Stability

The FHA loan program was originally designed specifically to help first time home buyers. But that was a long time ago. The program today is really for anyone; those who want to become home-owners, those who need to refinance, or those who want to invest in properties. Everyone knows that conventional housing loans right now have very tight credit requirements. This is not the case with FHA. These loans do not require the borrower have perfect credit to qualify.

Once you obtain this loan, you will now become a full pledged property owner. And the best part is that an FHA financed home can be enrolled in a reverse mortgage fund so you can have a steady source of income during your retirement years.

The federal government insures all the loans in the FHA program. Because of this, many lenders are ready to offer different deals for borrowers. Some people think that FHA loan can be used to buy any type of house. You need to understand that this type of loan has some inclusions too. It can be used to finance single family home, a condo unit, one to four family homes, and many others.

If you buy a home today when you are still young, then you will have a very valuable asset when you go into retirement. You probably know already that the regular senior pension is usually not enough to sustain a retiree's needs. A second source of income is usually needed by retirees. FHA backed homes can qualify for the reverse mortgage program which guarantees a solid income for retirees.

FHA loans can also provide unique benefits for first time homebuyers. FHA financing has much lower down payment requirement. Borrowers are only required to put up three percent of the total sale value as down payment. This specific feature drives many borrowers to obtain FHA loans. And when you apply for a reverse mortgage when you get old, the lenders will simply evaluate the current value of your property so you can cash-out your equity.

It is very easy to qualify for FHA loans. People who do not have stellar credit ratings could still qualify for the loan. Obviously, FHA loans are less stringent compared to traditional commercial housing loans. Of course, you are required to submit the usual documentations. However, many FHA loan borrowers experienced few hassles during the application process. And if you get approved for reverse mortgage using your FHA backed home, you stand to earn tax free income on top of your regular monthly pension.

Many first time homebuyers already benefited from FHA loans. Since this loan was introduced, it already helped numerous Americans to acquire their own homes. Most important of all, your home investment today can be used effectively as a source of good income when you retire.

FHA loans pave the way for you to own a new home. Buying a property is a good investment and you can rely on it for your future needs. You can use your FHA backed home to cash out your equity through the reverse mortgage program.

Beware Of Reverse Mortgage Pitfalls

Wow, the time seems to be flying by this year, it's almost 2011 and another calendar heading for the trash.

So what's going to be the next big thing for the new year? Well with the phenomenal amount of Baby Boomers retiring, an educated guess would be Reverse Mortgages.

This market is hot at the moment, and with the recession biting many retirees are releasing the equity they have built up in their homes over a lifetime, so that they can comfortably enjoy their latter years.

Officially the Baby Boom started at the end of the Second World War and continued until 1964, so the retiring droves are showing no sign of a let up for the next decade or more, depending of course on the retirement age in their country of residence.

There were just short of 80 Million of us born in just 20 years, it's quite phenomenal really. The Mortgage Industry has focussed it's attention quite rightly on the needs and wants of this segment of the market, as for the last couple of decades inflation has rocketed the value of their homes out of all previous proportion.

Traditionally the Mortgage Lender gets the Homeowner to borrow a large sum to purchase a home, paying it back with smaller payments and interest over many years.

A Reverse Mortgage Lender gives the homeowner money, either as a Lump Sum payment, as a Regular Monthly Payment or as some combination of the two. This money is lent against the equity of the home, but no payments are required whilst the borrower is still living in the home. If the borrower is forced to leave the home, for residential care, or passes away, the home is sold to repay the debt, and their heirs and successors receive the balance left over.

The concept of the Reverse mortgage has been around since the late 1980's, but it is more recently that it has become popular, probably due to the recession and the effect it is having on the elderly's standard of living.

These Reverse Mortgage products have become ever more sophisticated, and are now considered a lot safer than the earlier ones. Each Lender seems to have put their own quirks into their products, but choosing the right product for your circumstances and needs can still be fraught with dangers and pitfalls for the uneducated.

The majority of IFA's recommend using a Lender whose product is insured by the FHA, these products are called Home Equity Conversion Mortgages (HCEM). Choosing a Reverse mortgage that is not HCEM could expose the unwary to additional problems and extra costs if due diligence is not undertaken.

There are always pros and cons with any financial product, so being aware of them will prevent you from being surprised by anything nasty lurking in the small print at a later date.

Most Lenders will not expect any repayments whilst you are living. Check that this is included and that there are no grey areas.

Usually after the borrower passes away the family or heirs can have the opportunity to re-mortgage the property and repay the debt. Is this included? Do you want it to be?

Your family should receive all money left over after what is owed to the Lender once your estate is settled.

If the home is not valuable enough to repay the whole debt, your family should not be left with paying the shortfall. The FHA Insurance should cover this, however they will forfeit the right to re-mortgage the home.

Be very aware of what the "plus interest and other fees" and other such statements actually include, and factor them into your figures when deciding to go ahead with a Reverse mortgage or not.

Once you no longer reside in the home, it can be sold or the debt needs to be settled. Just keep this in mind.

Make a decision early in the application process if you wish to fix the costs and interest rates, or you are going to leave them variable The industry standard is to leave them variable, but there are always options open to you if your needs require them to be fixed.

You should keep in mind that no one ever knows what interest rates are going to do, it is a gamble, pure and simple. If we could predict them we would be very very rich.

One of the bigger obstacles that put many people off a Reverse Mortgage is the high up front costs.

The costs of a Reverse Mortgage are quite a bit higher that those of a traditional mortgage. These can be reduced substantially by doing a bit of research, shopping around and finding the "Best Fit" for your circumstances.

FHA insured reverse mortgages have closing cost limits that lenders need to adhere to.

It will also pay you not to just accept the first quote you are given. Get the Lenders to work for their money and get a couple of competitive quotes from different Lenders.

You will be under obligation to maintain the property so that its value and condition does not deteriorate, with older properties the costs of this could be significant and should be budgeted for.

As Reverse Mortgages are for Seniors this upkeep is going to most likely come from contractors, and they are not cheap! Ensure you check with the Lender exactly what is expected on the maintenance front. You don't want to be obligated to renewing the roof 6 months after receiving your first payment. It would probably make sense to have a fund set aside for eventualities such as this.

As long as the Borrower is knowledgeable about the pitfalls of Reverse Mortgages he should be able to make an informed decision on whether it is suitable for his needs. There is a lot of free information online that can ensure you are more informed when you first apply for a Reverse Mortgage. Be sure to use it. Knowledge is Power, as they say.