Mortgage Advice and Mortgage News

Different Kinds of Mortgages

2009-09-08T10:35:00.000-07:00

There are many different kinds of mortgages, to cater for specific conditions, and/or financial goals. These include fixed rate mortgages and adjustable rate mortgages, but there are many more, that vary in the ways they are drafted. With a fixed rate mortgage you can be sure, that your repayments will remain the same for the time of the loan, but the adjustable rate mortgage alters with market trends. Adjustable rate mortgages are more of a gamble, but they are preferred by some loan applicants.

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Quite a lot of house buyers, have secured mortgages to purchase residential premises, that they don't mean to occupy. They participate in what is labelled the 'Buy to Let' sector, indicting that they purchase real estate to let out to those requiring such arrangements. Their intended profit on investment is built into, the rents they collect, from their tenants. They may also expect to maximize returns from an increase in property prices, but that doesn't always materialize, and some unlucky landlords have lost substantial sums.

Buying your own house is an understandable aspiration. Nevertheless, you must give equal attention to negotiating the right mortgage as to your perfect house. There is no doubt that it is vital for intending house hunters, and particularly new applicants, to find all the information about mortgages they can obtain. Happily, most of those who are contemplating entering into a mortgage commitment, for the first time, have friends who have knowledge of the subject. They may be in a position to recommend a competent broker, or other trusted professional, from whom to seek information.

Advice concerning the different kinds of mortgages, is obtainable from many sources, which include the Internet. Nevertheless, there is no real alternative to trusted private opinions. Bear in mind that mortgage companies operate in a highly competitive market place. It's essential to find the mortgage best suited your own circumstances, but unless you are a mortgage specialist of your own making, it is vital that you obtain qualified guidance before completing the deal.

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different kinds of mortgages
different kinds of mortgages

Choosing A Mortgage Broker

2009-09-04T04:03:00.000-07:00

Proficient mortgage brokers are generally indispensable to potential real estate investors, since even a solitary house buyer is a real estate investor of a kind, as their hope is that in the foreseeable future property prices will increase.

While there is no scarcity of mortgage brokers it is prudent to pick intelligently. Not only do you require a broker in whom you have complete trust, but also somebody with whom you can easily talk.

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You must be sure that your mortgage broker is fully trained and experienced. There is a broad variety of mortgage types that he must be totally familiar with. Therefore, it is essential, when choosing your mortgage broker, to get the advice of a family member or companion, who has previous dealings with the service. Good character is not achieved without effort, but fortuitously mortgage negotiations are extremely commonplace, that almost everybody knows someone who will have had a successful experience.

Keep in mind, that insofar as mortgage dealings are involved, your mortgage broker is your guide. You must be sure that everything is related to you in a way that you fully understand. Then you will have the knowledge to be happy with a reasonably stress free loan procedure.

The trick is to find which mortgage broker is properly suited to your personal objectives? Every part of the mortgage deal will need to be covered. From the beginning you will want to be sure that your negotiations are handled in a relaxed and helpful style.

You need to be able to make contact with your mortgage broker as frequently and whenever it is essential. He will have other clients as well as you, but you must be aware that you can be in touch with him at any sensible point in time. Furthermore, make sure that if he has agreed to call you at a particular instant, he will respect the arrangement; or else you could be very concerned!

Your mortgage broker, must be able enough to respond to any matter you bring up, in a unruffled and capable manner. Should your broker become fretful or irritable, that might rub off on you, and the mortgage broker client connection would be jeopardized. Never be frightened of being persistent in searching solutions to problems you are apprehensive about.

A mortgage is one of the major financial undertakings you might ever be called upon to make. Know that it is important that you enter into the formalities fully aware of your obligations. You can see why a trustworthy, certified and well trained mortgage broker should be very useful, and support you in negotiating the best mortgage loan possible.

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mortgage broker
mortgage brokers

Stairway to the Stars or Housing Ladder?

2009-06-02T15:31:00.000-07:00

Frequent mention is given to the so called housing ladder. Of course the implication behind a housing ladder is property prices moving forever upwards. Recent events have proved that is not always the case, because housing markets overheated and the bubble burst. However, the term 'housing ladder' understates the case for many British Members of Parliament. They have devised a scheme for themselves, whereby the taxpayer picks up the bill for their mortgage interest. Ordinary mortals may think that is more like a stairway to the stars than a housing ladder.

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Even David Cameron, the leader of the opposition, otherwise known as the Conservative Party has got in on the act. It is reported that he has gotten involved in a piece of financial juggling, that may have cost taxpayers around £22,000. It seems that British Parliamentarians can claim generous second home allowances because their place of work is away from where they normally live. Most private sector managers with jobs and salaries similar to MP's, neither get or expect to be treated so leniently.

Mr Cameron has said that he has not broken any rules, and nobody is suggesting that he has. However, there is hardly a voter in the country, who does not believe that the rules are an insult, to the expectations of most hardworking people. It has also been suggested that when property prices were overheating to unsustainable levels, the last people who wanted it to cool down, were some of those who were maximizing their property interests, by extraordinary means.

The leaders of the British political parties, including the Prime Minister must wonder what is going to be revealed next. There is little doubt that what some 'honorable members' have been receiving in various housing benefits, including mortgage interest payments, is quite scandalous, whether it is within the so called rules or not. It will certainly have an impact on the British politics, and indeed party leaders now seem to be competing to say who is going to do most to clean up the system.

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Of course it is nice for everyone who buys a home to see its value increasing. Prior to the last decade there have been peaks and troughs but the general medium to long term trend has been upwards. Modest sustainable growth in property prices is healthy enough but if an unprecedented, unregulated property boom is allowed to get out of hand it will always end in tears for the majority. Its not nearly so bad though for those whose mortgage interest, furnishings, garden expenses and much more are met by taxpayers who are already in shock from the great banking fiasco!

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Stairway to the Stars or Housing Ladder?
Stairway to the Stars or Housing Ladder?

Subprime Mortgages

2009-05-25T05:09:00.000-07:00

The one thing that has been blamed for the world's current economic problems is the subprime mortgage crisis in the United States. It wasn't just that people took on mortgage loans they could not really afford, but that they were encouraged to do so by lenders who should have known better. Furthermore, international banks parcelled up mortgages, and they were traded as mortgage backed securities.

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Banks seemed to believe that they had found a never-ending source of easy money, as evidenced by the massive bonuses they lavished on themselves. To say that there was a lack of control would be an understatement as there was no sensible regulation. Banks were sucked in, Governments were sucked in, but it would seem that the general public in the form of taxpayers were the final suckers. International banks had to be bailed out using taxpayer's money.

As mortgage backed securities were devalued because of falling house prices, initially in the US, world banks began to see the error of their ways. However, it was too late to stop the rot and many of them had to be bailed out with public money. You could not blame the subprime mortgage crisis on the people whose only requirement was to own a home of their own. But many of them were trapped as the unsustainable rise in house prices went into reverse. It meant that many of those who has been persuaded to buy a home they could barely afford, were trapped in negative equity, where their mortgage loan exceeded the value of their property.

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Surely someone should have seen it coming. But greed had almost become endemic. There were massive bonuses available and bankers wanted to share in the spoils. The higher up the managerial ladder you were, the more you got, and the rewards seemed to spiral onwards and upwards. Talk about 'manna from heaven' but it was all too good to be true. In fact it wasn't good at all. When the bubble burst, as all bubbles eventually do, the US subprime mortgage crisis affected global banking on a vast scale.

Now, poor old Joe Public has to foot the bill, and will have to do so in some countries for generations to come. There is a good case for getting some of the beneficiaries to pay back some of the spoils, but it won't happen. Capitalism isn't defunct but it has had a terrible shock. There is no doubt that it will recover eventually, until the next time that everything is sacrificed, in the absence of regulation, to unbridled greed.

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subprime mortgages
subprime mortgages

Mortgage Cheats Never Win!

2009-05-22T09:36:00.000-07:00

It would be nice to think that mortgage cheats never win, on either side of the mortgage market. Unfortunately, it's not true and there are unscrupulous mortgage lenders, and unscrupulous mortgage borrowers who may get away with it. It must be said that most lenders are honest, and those who are termed unscrupulous, are not usually proper mortgage loan providers anyway. There are people that go round knocking on people's doors, offering this and that, who are just out to defraud. So, if you are seeking a mortgage or endeavoring to renegotiate a better mortgage deal, don't be taken in by casual callers.

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On the other side of the coin are mortgage borrowers who are not having trouble meeting their obligations, but say they are to secure a better deal under one of the government sponsored schemes. That is not to say that it is wrong for any mortgage borrower to try to obtain a better deal legitimately. However, it is wrong to pretend (lie), to get a better deal that is being made available to assist those in financial difficulties, through losing their jobs or have otherwise suffered financially, because of the credit crunch. For a start government sponsored schemes rely on taxpayer funding, so there have to be rules to deter people from becoming mortgage cheats.

Mortgage borrowers who believe that they qualify for assistance, under one of the government schemes will be required to fill out a form that will spell out the conditions of the arrangement. It is wise to answer the questions honestly, and indeed it is an offence not to do so. Don't let this put you off if you can satisfy the required criteria. There is nothing to fear, and may be much to gain for those experiencing financial hardship under set circumstances. If you are in doubt, about whether you qualify or not seek the assistance of your loan provider, who should be acquainted with the rules and procedures. Just be honest and you can't go far wrong.

You will be required to certify that the information you give on the form is the truth. You wouldn't really want it any other way because we are all taxpayers and you wouldn't want to support anybody who was on the fiddle. Understandably there are penalties for mortgage cheats who tell lies to bolster their own applications. That is only fair, but it is also fair to apply a proportion of taxpayer's money to help people in trouble with their mortgage payments through no fault of their own. Not everybody agrees but unforeseen circumstances can overtake anybody, and when that happens it is good that a degree of help is available.

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Mortgage Cheats Never Win
Mortgage Cheats Never Win

Obama Introduces More Mortgage Help

2009-05-21T11:19:00.000-07:00

President Obama must be just about the most quoted man in the world. So, if you quote him in your blog, and if you know anything about Google duplicate content filters, you might not get much credit for what you say he says! But here goes anyway.

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"I believe we're moving in the right direction, but I want to remind everybody that it took many years and many failures to get us here, and it's going to take some time to get us out," Obama said. "The stock market will rise and fall. The job market has taken a beating and won't be back immediately. The housing market still has a long way to go. But I'm confident we will get there."

That is what the president recently said at a White Ceremony to launch further measures to assist some of the people in trouble with their mortgage payments. Apparently, there is a government program called, 'Home For Homeowners', that hasn't yet helped as many people as intended. Therefore, it is hoped that the new measures will assist in publicising the scheme to assist those mortgage borrowers who can benefit. A new bill also includes the provision of a further $2.2 billion to assist homeless families.

There is no doubt that the president has a greater interest than anybody else in steering the economy towards better times. Equally, there is no doubt that many people continue to suffer from the recession, and many of them will not be aware of just how much help is available or how to get it. Some people may even be too proud to ask, but there is no shame in falling on hard times, especially when it is through no fault of your own.

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The message is facilities are in place to help people in trouble with their mortgages. It may be that not everybody can be helped, but there is an old saying that if you don't ask, you don't get. Responsible lenders have had funds made available so that they in turn can assist many borrowers. So, don't be put off, talk to your loan provider and find out how you might benefit from government supported schemes, particularly those designed to assist homeowners in trouble with their mortgage payments.

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Obama Introduces More Mortgage Help
Obama Introduces More Mortgage Help

Bill to Catch Mortgage Cheats

2009-05-20T05:03:00.000-07:00

President Obama is set to sign a bill designed to assist in bringing mortgage outlaws to justice. Supporters believe the bill will be self-financing, because the cost of implementation, estimated to be around $265 million per year, will be recovered through fines and other penalties levied against the perpetrators.

Unfortunately, when times are hard, and people are finding it difficult to meet their financial obligations, there will always be unscrupulous villains out to take advantage. It is good to know that the US government is determined to do all it can to catch these fraudsters, and make them pay dearly for their crimes.

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Moves are afoot to have the FBI mortgage fraud squad increased by around 160 special agents. That should go some way to ensuring that many of the mortgage outlaws finish up in jail, with their ill begotten gains being confiscated and used to support the program.

The fact that the US government, is contemplating spending so much money on catching the mortgage conmen, serves to show how common the problem is. In such circumstances there is a need for homeowners to be particularly vigilant. Just remember if you are offered anything that seems too good to be true it probably is! But the conmen are very good, or bad, at what they do, and they will not readily take no for an answer. As a general rule, do not sign any paperwork or part with any money unless you know for certain whom you are dealing with, and even then be very careful.

You certainly, should never be prepared to discuss your financial circumstances with strangers, who might come knocking at your door, even if they seem to promise the earth. Fortunately, there are reputable people with whom it is safe to deal. They number among them qualified individuals who work at banks and in government departments. So, it is by far the best plan to discuss your requirements at respected premises, with qualified people who have been recommended to you, or whom you know you can trust. Whilst it is true that the image of the banking world has slipped, personal deposits and loans are frequently backed by the state.

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Finance is a bit like health in that you cannot protect yourself against every eventuality. However, with due diligence you can be one of the vast number of people who are not victims of financial fraud. Just remember to be on your guard and don't get taken in.

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Bill to catch mortgage outlaws
Bill to catch mortgage outlaws

British MP's Mortgage Fiddle

2009-05-18T03:00:00.000-07:00

There is a scandal raging in the UK about the expenses of members of Parliament, including the way some honorable members have claimed mortgage assistance.

It seems that there has been a very lax system of expenditure control, as a result of which some MP's have milked the system for all it's worth. There are even instances of phantom mortgage claims. Astonishingly, it has been suggested by the British Daily Telegraph, which has launched a campaign into the mortgage scandal, that several MP's were offered opportunities to claim phantom mortgage payments.

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As the name suggests a phantom mortgage is about claims against a mortgage that has already been paid off. The Telegraph has suggested that although phantom mortgages were eventually discouraged around 2004. those MP's who benefited have not been asked to pay the money back. However, they are like rabbits caught in the spotlight, and it may not be long before they are named and shamed.

Dodgy mortgage claims are just part of an expenses scam that is currently tainting British politics. It would be an understatement to suggest that the public at large are disgusted at the conduct of some of their representatives. The economy generally is in a bad state, and many people have had to tighten their belts or worse. There have been many job losses and mortgage foreclosures, and the last thing people want when they might be experiencing genuine mortgage difficulties of their own, is avaricious excesses by those in public office.

Of course, not all Members of Parliament have acted dishonorably, but some of those who have, suggest that they have not broken any rules but are part of a rotten system. The public find this hard to swallow, and it seems that whenever there is a general election, which must be within the next 12 months or so, they will get a chance to 'get their own back' by sweeping many of their representatives out of office.

The phrase 'getting their own back' seems particularly apt, because MP's expenses are met from public funds. Some party leaders are requiring some of their own MP's to pay some of the money back, but presently that seems to be only the tip of the iceberg, of a story that is set to run and run.

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British MP's Mortgage Fiddle
British MP's Mortgage Fiddle

Obama Mortgage Plan Progressing

2009-05-14T13:32:00.000-07:00

It seems that there has been a slow start to the Obama plan to assist millions of homeowners avoid foreclosure through reducing the amount of their mortgage repayments.

At this time there are only about 55,000 homeowners who have taken advantage of the Obama administration mortgage repayment reduction plan, whereas it is estimated that a further 2.1 million homeowners will loose their homes this year. Those who have succeeded suggest that they have done so with sheer persistence, Therefore, the message must be that if at first you don't succeed, try, try, try again, although the situation is forecast to get easier as lending sources get up to speed. Meanwhile, interested parties are advised to familiarize themselves with mortgage procedures.

There is an excellent article in the New York Times giving information about progress of the Obama mortgage plan. An extract is reproduced below but please click on the heading to read the full article:

Slow Start to U.S. Plan for Modifying Mortgages

"The Obama administration’s plan to help millions of troubled homeowners avoid foreclosure by reducing the size of their mortgage payments is just getting off the ground.

Because of the size and complexity of the modification program, the administration has only recently assembled most of the pieces. In late April, officials fleshed out their plan to modify or forgive second mortgages — one of the big stumbling blocks in modifying primary mortgages — and provided more details on the Hope for Homeowners program, for borrowers who owe more than their homes are worth. Congress is close to acting on legislation to protect mortgage servicers from potential lawsuits from investors, while also expanding the Federal Housing Administration’s ability to modify loans."

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Obama Mortgage Plan Progressing
Obama Mortgage Plan Progressing

Mafia Mortgage Repayment Problem

2009-05-13T16:13:00.000-07:00

It has been reported, as far away as the UK, that even Mafia families can have difficulties in meeting their mortgage repayments.

It just goes to show that nobody is immune from the difficulties that can arise when personal circumstances change, and income is insufficient to meet outgoings. Of course, one of the main expenditures of any family is the mortgage repayment. Mortgage repayments may not be the sort of difficulty that you would expect Mafia families to get into, but they are symptomatic of what has been happening to people from many different and diverse backgrounds.

All many people want is a home of their own, and the means to pay for it, which is relative to secure employment. Unfortunately, governments in the USA and at the other side of the pond have not set the best examples, unless it is only how to make a fast buck! It seems that all the chickens have come home to roost at the same time, and the housing ladder has become a bit of a snake.

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An extract from the news item is reproduced below. Please click the heading to read the full article:

Daughter of Mafia boss faces eviction for mortgage arrears

The daughter of a notorious Mafia crime boss has to sell her mansion or face eviction for mortgage arrears.

Victoria Gotti, 46, who starred in the reality TV series Growing Up Gotti, owes nearly £500,000 and has not made payments for two years, court papers say.

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Mafia Mortgage Repayment Problem
Mafia Mortgage Repayment Problem

Understanding Mortgages

2009-05-10T12:08:00.000-07:00

Whilst most people aspire to own a home of their own, there are many who, through no fault of their own, do not have a clear understanding of mortgages. In this respect there is an interesting article in the Real Estate columns of the New York Times, explaining how the Bank of America is endeavouring to enlighten and help their mortgage customers.

Of course there is already plenty of mortgage related advice available from various sources, but anything that is new, and born out of recent problems in the housing market is welcome. It is always good to know that the information you are seeking is up to date. This applies to the financial services sector in general and the mortgage industry in particular. After all a home of their own is the biggest single investment that many people will need to make. Therefore, any assistance to understand how the various mortgages fit in with personal circumstances will be particularly welcome.

An extract from the New York Times is reproduced below, and those who are interested in learning more about mortgages are invited to click the heading to read the full article:

An Emphasis on Simplicity

"SOME good may come from the home-foreclosure crisis. While the federal government imposes industry wide changes, at least one major lender has instituted improvements of its own.

Bank of America recently introduced three service improvements: a Web site to help consumers choose loans more intelligently, a disclosure document that explains loan terms more simply, and a loan with an all-inclusive closing fee. The company last month shuttered Countrywide Home Loans, which it acquired in 2008, and formally absorbed that business into a newly branded division, Bank of America Home Loans.

“We wanted to change the conversation to ‘How much house can I comfortably afford?’ rather than ‘What’s the maximum I can buy?’ ” said Aditya Bhasin, the product, pricing and strategy executive for Bank of America Home Loans.

Once would-be borrowers type in their financial information, the Web site offers “sliders” that show how the loan picture might change, say, if they reduced their monthly credit card debt."

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understanding mortgages
understanding mortgages

Home Loan Program for Senior Citizens

2009-05-09T02:52:00.000-07:00

There is an interesting Associated Press article in Google News about senior citizens helping to finance their retirement, by using reverse mortgages to borrow against the equity they have built up in their homes.

It is not difficult to realize why schemes of this nature are popular to some senior citizens. It seems that the government is also interested in keeping the scheme going. Apparently they have asked Congress for a $798 million subsidy, to enable them to continue with a plan to insure lenders against losses incurred when a property is sold for less than the total loan amount.

Please Click below to read the full article, an extract from which is included:

Home loan program for seniors needs $798M rescue

"The government said Thursday that the Federal Housing Administration needs the money to support a program that lets homeowners over 62 obtain "reverse mortgages" to borrow against their equity.

A reverse mortgage allows borrowers to convert equity in their homes to cash, without making payments until they die or sell their home. Interest is due at that point.

But with home prices projected to appreciate slowly, if at all, over the next few years, lenders that participate in the government program may not be able to collect the full loan amount from some borrowers. The government, which insures lenders that participate in the program, is on the hook if the house is sold for less than the total loan amount.

Borrowers can draw on about 60 percent of their home's equity. But they are also allowed to receive payments monthly for the rest of their lives, without any cap.

If they live longer than expected and home prices rise slower than expected, that could mean losses for the program."

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Home Loan Program for Senior Citizens
Home Loan Program for Senior Citizens

Mortgage Freeze - Australia

2009-03-19T03:27:00.000-07:00

There are many people who seem to doubt the depth of the current economic crises or accept that it is a worldwide phenomenon. Yet it has recently been announced by the Commonwealth Bank of Australia that they are prepared to offer mortgage repayment holidays for periods up to 12 months for people who have lost their jobs.

It seems that a measure of agreement has been reached, between Australian government officials and major banks, to assist families struggling to pay their mortgages through unemployment, which is progressively worsening. A major objective is to prevent people falling into arrears with their mortgages that are often a prelude to foreclosure.

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Measures to restrict foreclosures have previously been announced, as part of a so-called financial stimulus, in other leading countries, including the USA and the UK. In fact the twenty leading nations are to meet in the UK in April to try to reach agreement on what they can do together to limit the severity of the recession.

There are similar schemes to those being introduced in Australia, to assist people behind with their mortgage payments in other countries and it is a welcome trend. Losing a home is a personal disaster, particularly when it is as the result of economic downturn, over which individuals have no control.

Governments are often criticized for saying what they are going to do and falling short on the implementation. It is to be hoped that they will treat help for mortgage payers as an urgent priority, and ensure that funds earmarked for the process are readily available. In this respect the banks have an opportunity to improve their recently tarnished image by giving as much publicity as possible to government initiatives. That way, people who suffer from the scourge of losing their jobs, will know that help with paying the mortgage is readily available.

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Mortgage Freeze - Australia
Mortgage Freeze - Australia

Obama's Fairy Tale Ending To Mortgage Problems!

2009-03-10T04:57:00.000-07:00

The US housing stimulus plan, allocated with $275 billion dollars of government money, a.k.a. taxpayer's money, is to be known as the "Making Homes Affordable" program.

An article in the Christian Science Monitor likens the plan to a "Goldilocks" endeavor. As children's books go, the plan might be more appropriately connected with the three little pigs, who were up to their necks in real estate. Remember, a house of straw and a house of wood, were readily disposed off, before the wicked wolf was stopped in his tracks by the brick built variety!

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Whether what is being offered by the Obama administration can keep the wolves at bay, and dramatically reduce foreclosures remains to be seen, but there is no doubting their good intentions. Around one in five US homeowners are in negative equity, which means that they owe their lenders more than their houses are worth. It sure is a pretty miserable situation, but then again who would like to see house price inflation take off to anything likes the dizzy heights it previously reached?

Dissenters of the plan may be pleased to know that you don't have to be behind with your mortgage payments to qualify for help. However, borrowers will have to prove that they have suffered financial hardship by way of losing a job etc. The outstanding loan balance must be greater than the value of the home, so we're back to negative equity!

Some of those who don't qualify as above may take advantage of another tier. This part of the mortgage package could affect up to a further 5 million homebuyers, who are finding it tough going, without being seriously behind with mortgage repayments. It is aimed at Fannie and Freddie connected mortgages, and allows successful participants to take advantage of more affordable mortgages, such as fixed rate deals.

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There are also to be tax credits for some first time buyers who purchase a home in 2009. So, there are millions of Americans who could benefit from the "Making Homes Affordable" program. There are many who may find it difficult to determine whether they qualify for help or not, and the program is certainly more complicated than mentioned here. However, there are vast sums of public money involved, and a seemingly genuine desire to help. There will be plenty of advisers who will be familiar with all details of the plan. So the best advice to anyone who is affected is "IF IN DOUBT ASK".

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Obama's Fairy Tale Ending to Mortgage Problem
Obama's Fairy Tale Ending to Mortgage Problem

Mortgage Cramdowns and Bankruptcy

2009-03-06T10:29:00.000-08:00

By a vote of 234 to 191 the House recently passed a bill for housing related initiatives, including the controversial issue of allowing judges at bankruptcy proceedings, to modify the terms of home mortgages.

Under the bill, bankruptcy judges would be empowered not only to cut the interest rate and extend mortgage terms, but to reduce the principle as well. These provisions, known as cramdowns are not popular with everybody, as many people who have kept their mortgage payments up to date, see themselves as bailing out those who have not managed their affairs so well. Representatives are aware of this and are wary about how it could affect voting patterns.

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It seems that the banks also opposed the cramdowns. Apparently, they anticipated increased losses, as a result of a stampede of homeowners taking advantage of favorable bankruptcy terms, to reduce their liabilities. But the Obama administration is staking $75 billion to stem foreclosures, including making the mortgages of troubled homeowners more affordable. There are proposals for the banks to receive government funding, to recompense them for the cost of mortgages, reduced at the bankruptcy proceedings.

The proposed cramdowns remain complicated as well as controversial with various proposals being suggested. For instance, it has been muted that if a beneficiary of a bankruptcy-reduced mortgage was later to dispose of the property at a profit, the gain should be shared with the lender.

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Vast sums of government, (taxpayers) money, are being allocated to reduce or contain the number of foreclosures, and give a much-needed boost to the housing market. The current recession is affecting just about everybody, and even the doubters may concede that drastic times need drastic measures.

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mortgage cramdowns and bankruptcy
mortgage cramdowns and bankruptcy

Fixed Rate Mortgage Opportunity

2009-03-05T02:35:00.000-08:00

With interest rates at historically low levels it may be a good time to think about a fixed rate mortgage.

The most popular term for a fixed rate mortgage has been two years. But there is a case for seeking a longer term fixed rate mortgage, and not just to avoid recurrent arrangement fees. Low interest rates, below 5% are available in some instances, although it may be that substantial deposits are required.

It seems unlikely that mortgage interest rates will fall much further. It must be remembered that in the present economic climate investors are suffering, and there may be a limit to what they are prepared to endure, as low returns clobber their livelihoods.

There is an old adage that, 'if you don't ask, you don't get'. So, those whose fixed mortgage deals are coming to an end , could do well to talk to their loan providers, about a fixed rate for a longer term. They could discuss the advantage of as favorable a mortgage rate as is available, coupled with a saving on the recurrent fees.

The other side of the coin is that as house prices are still falling, it doesn't seem like a good time for first time buyers to get involved. However, it appears that for those with existing mortgages there could be fixed rate mortgage deals worth shopping around for.

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fixed rate mortgage
fixed rate mortgage

Will President Obama and Prime Minister Brown Discuss Mortgage Crisis

2009-03-03T10:06:00.000-08:00

President Barack Obama is due to meet UK Prime Minister Gordon Brown this week, and there is no doubt that global financial problems will be high on the agenda. It is thought that the President will be appreciative of the Prime Minister's experience of financial matters, during his long period as the British Chancellor of the Exchequer, which is the equivalent of the United States Treasury Secretary.

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There are sure to be many people, suffering from the effect of the global financial crises, including those struggling to meet their mortgage payments, who will be hoping that something useful emerges from the meeting. The situation is as bad in Europe, as in the US, and it is generally agreed that it will take a united effort by many nations to turn things round.

In the meantime it has recently been reported in Yahoo Business News Citigroup have introduced measures to allow some unemployed homeowners to temporarily reduce their mortgage payments.

Citigroup to allow jobless to cut mortgage payments

"Citigroup Inc said on Tuesday it will allow some newly unemployed homeowners to temporarily reduce payments on their mortgages.

The bank will lower payments for three months to an average of $500 per month for certain borrowers who lost their jobs and are at least 60 days delinquent. It plans to work case-by-case with borrowers who are still unemployed after that time.

While Citigroup said thousands of borrowers may be eligible, the program is likely to make only a small dent in the ranks of distressed borrowers as unemployment rises and housing prices extend their declines.

Citigroup's program is limited to people who have mortgages that are owned and serviced by CitiMortgage, and excludes the 4.3 million mortgages that Citigroup services but does not own. Qualified borrowers must live in their homes, and in general must have loans no larger than $417,500."

The Citigroup program seems to support President Barack Obama's plan to reduce mortgage payments for millions of struggling homebuyers. Many people in the UK will hope that this kind of assistance becomes available to them, as Banks bailed out with £billions of taxpayers money start lending again.

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Obama and Brown - Mortgage Crisis
Obama and Brown - Mortgage Crisis

The Great Mortgage Fiasco!

2009-02-27T15:07:00.000-08:00

It has been reported that UK house prices have fallen by 15% in the last year, and that if the trend continues five million homebuyers face negative equity. That is what happens when the value of their homes is less than the outstanding mortgage. It is a trend that might further depress the market, because people who were intending to move house for whatever reason, will tend to stay put in the hope that the situation will improve.

It seems that every day bigger and bigger losses are being reported by UK major banks heavily committed to the great mortgage fiasco on both sides of the Atlantic. It has constantly been suggested that the blame is mostly to do with the North American sub prime mortgage market. But who forced UK banks to get involved with what was happening the other side of the pond? In any event these captains of finance do not seem to have done too well on the home front either. It almost seems that they were recklessly trying to outdo what was happening over there.

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The media are constantly reporting, about increasing billions that have been lost by banks that could have been managed better by Punch and Judy. Some of the biggest names in banking have been on UK television apologizing for their ruinous policies. However, the latest scandal is that some of those responsible are to profit immensely for virtually breaking the banks. Lifetime pensions of around £700,000, equating to about a million dollars, seem to have been secured by some of these sorry men!

These momentous events are coming at a time when so many non-bankers, sometimes known as ordinary decent working people, are losing their jobs and wondering whether they will be able to afford to stay in their homes. They quite rightly wonder what on earth is going on and where will it all end? There is no wonder that confidence is at rock bottom.

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Some British banks that have been reluctant to continue lending in the present climate have been cajoled into doing so, on the back of a massive injection of taxpayer's money. However, the housing downturn continues and the best advice to first time buyers is probably to wait and see. People who need to move, and who have little or no outstanding mortgage, may have to sell their property for less. But when they move they will buy for less and to some extent things may balance out.

For those who really know what they are doing there may be some bargain properties and bargain mortgages available. But the old adage, 'let the buyer beware', has never been so applicable.

Tags:
The Great Mortgage Fiasco
The Great Mortgage Fiasco

Obama Mortgage Plan To Stem Foreclosures

2009-02-23T05:22:00.000-08:00

In a bold bid to resuscitate the housing market the President Barack Obama mortgage plan earmarks $275 billion, out of a massive $2 trillion financial stimulus package, for mortgage relief. A significant aim of the Obama mortgage plan will be to stem foreclosures, seen as a major factor in the continuing housing slump, which in turn has a devastating effect on the economy at large.

Not everybody agrees with the proposals, as many of those who have kept their mortgage payments up to date resent bailing out others who are seen to have bitten of more than they could chew. However, it is not really that simple because a massive lack of confidence, as is being experienced, affects almost everybody. People stop spending and there is a real danger of the economy grinding to a halt. Therefore, timely intervention by the federal government is not so much necessary as essential.

Of course the Obama mortgage plan will have to be properly administered. The grave problems in the financial sector will not be solved overnight, but confidence should start to be restored once people become convinced that plan is having the desired effect.

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The new president talks confidently, as though he means business, and his words suggest that he is well informed regarding what needs to be done. That in itself is a good thing, and it seems that a new and self-assured occupant of the White House might just pull it off. It may prove to be a long haul, but when things start moving in the right direction they are inclined to gather pace. Let us hope so, because there are millions of Americans, and billions of others throughout the world who want the presidents mortgage plan to succeed. Not just for its own sake, but for the financial security of us all.

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Obama mortgage plan to stem foreclosures
Obama mortgage plan to stem foreclosures

Barack Obama Discount Mortgage

2009-02-10T05:19:00.000-08:00

It's tough at the top and it seems there will always be snipers out to get you! Judicial Watch, the public interest group that investigates and prosecutes government corruption had been looking into a discount mortgage, obtained by President Barack Obama when he was a Senator back in 2005. The Federal Election Commission (FEC) has confirmed that Senator Barack Obama did obtain a discount mortgage, but that no laws were violated.

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Of course the spotlight is on anything to do with mortgages and the housing market, and Barack Obama might be considered to be fair game. But it has been revealed that the Presidents mortgage was granted on similar terms to other gold plated borrowers, and Northern Trust, the mortgage loan providers, have said that it was simply a good business proposition for them. They produced evidence of loans to other similarly situated borrowers, but not everybody was satisfied with the explanation.

Transparency in the dealings of elected representatives is a vital factor of any democracy; otherwise double standards may arise that are at the very least, distasteful to the electorate. In this respect the United States is considered to be much to the fore. It seems that the situation is not always so clear in some other leading democracies, which are frequently drip fed stories about the way their parliamentarians behave. Surely one of the great benefits of a free press is to keep the house/s in order!

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It is necessary, and right, that the highest politicians are open to scrutiny, and good to know that Barack Obama has been exonerated from any particular fault in this investigation. Much is expected of the new man in the White House, and there seems to be no reason why through the implementation of right decisions, the honeymoon should not continue for some time to come.

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Barack Obama Discount Mortgage
Barack Obama Discount Mortgage

Fannie, Freddie, and Barack Obama - Mortgage Rescue Initiative

2009-02-09T08:30:00.000-08:00

It is reported that the Barack Obama Administration is working closely with Fannie May And Freddie Mac, to see what can be done to expedite plans to assist hundreds of thousands of borrowers with their mortgages. It would appear that similar plans already under way have stalled, and only assisted a tiny minority.

Officials are reported to be determined to ease the restrictions which have limited the success of past endeavors, whilst remaining alert to the problems of using billions of dollars of taxpayers money.

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Negotiations include plans to replace many high cost mortgages, thereby reducing the incidence of foreclosures, and allowing as many as 1.5 million people to remain in their homes. Any moves are likely to prove to be expensive and complicated, but where there's a will there's a way! Of course Fannie and Freddie are already government controlled, and have been reorganized to assist with the current housing crisis.

Unfortunately, progress has not yet met with expectations. Therefore, additional measures are under serious and urgent consideration. It is intended to target between $50-$100 billion mortgage aid out of the $700 billion financial rescue package, to ease the housing burden. The aim is to make funds also available to other mortgage companies, to allow them to follow the lead of Fannie and Freddie. These two, jointly own or insure around 31 million mortgages, but despite the best intentions, very few have so far qualified for help.

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So substantial funds have been earmarked, and there is now a concerted effort to find the best way of injecting the money to provide help where it is most needed. There are some legal hurdles to overcome but top level intervention, may be just what is required to bring about the necessary stimulus.

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Fannie, Freddie, and Barack Obama - Mortgage Initiative
Fannie, Freddie, and Barack Obama - Mortgage Initiative

Mortgage Default and Foreclosure

2009-02-08T07:34:00.000-08:00

There are many borrowers who are unsure of what could happen if they default on their mortgages.

As with most things there are serious cases and others that are not so bad. This applies to mortgage default as much as anything, and it is unlikely that there would be foreclosure, because a borrower was experiencing temporary financial difficulties and fell behind with a month or two's mortgage repayments. However, if the position became more serious the position would be looked at on its merits. In any event, the best way forward is to discuss the situation with your loan provider, as soon as you are aware that your finances are becoming overstretched.

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As a general rule Banks do not want to own houses, and incur the associated expenses, such as insurance and real estate taxes. Of course speculators attend foreclosure sales but they are inclined to 'cherry pick', leaving the bank stuck with properties they don't want. Most times, and particularly at present, banks have matters they consider more important to be getting on with, than foreclosures.

In the first instance talk to your loan provider and see whether you can work out a mutually satisfactory arrangement. It might be possible to modify the loan by applying a lower interest rate or a longer term. It may even be possible to arrange a repayment holiday, and you may be pleasantly surprised by the banks willingness to help.

In the second instance seek help from federal agencies and/or local or state sources, because there is a lot of endeavor being targeted at supporting people in danger of losing their homes. Remember you are not alone in your predicament, and additional assistance is under consideration at the highest levels.

Please Click Here to visit the Free Mortgage Advice Web Site.

Thirdly seek information regarding other schemes such as shared equity arrangements. These might be thought of as a last resort, and you should be aware of financial and other implications. However, unless the situation really is becoming hopeless, there are ways and means of avoiding foreclosure. It is about the nastiest way to lose home, but should be increasingly avoidable as government plans materialize.

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free online mortgage advice
free online mortgage advice

Real-estate agent gets 41 months in prison in mortgage-fraud case - Denver Business Journal:

2009-02-07T05:08:00.000-08:00

A recent article in the Denver Business Journal covered the case of a real estate agent imprisoned for mortgage fraud.

The acting US attorney for Colorado, commenting on a recent mortgage fraud case, stated that, "During these difficult economic times, the citizens of Colorado and the nation must have confidence in the financial marketplace. Those who perpetrate this crime must be held accountable.”

Please click below to read the full article:

Real-estate agent gets 41 months in prison in mortgage-fraud case - Denver Business Journal::

"Real estate agent Linda Edwards was sentenced Friday to up to three years and five months in federal prison and ordered to pay nearly $800,000 after her conviction in a mortgage fraud case.

Edwards, 55, of Centennial, operated Affable Realty in Aurora. She was convicted July 25 after a jury trial on charges of wire fraud, false statements, and false use of a Social Security number, according to the office of David Gaouette, acting U.S. attorney for Colorado."

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Most citizens agree that those involved in mortgage fraud must pay the consequences. However, there will undoubtedly be some who get away with it.

There is a lot of anger at the way the financial institutions have behaved, not fraudulently, but recklessly playing a part in the damage to the nations economy. It seems that many are still receiving bonuses that many ordinary people see as a reward for failure. There seems to be a suggestion, in high places, that the bonuses must continue to be paid otherwise highly skilled financial managers will week work elsewhere, possible overseas. Many people see this merely as a system trying to justify and protect its own!

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It seems unfeasible that there are not business graduates who could handle top jobs in the financial centers without breaking the banks! Leaving the same people to clear up the mess is a bit like putting a rat in charge of the cheese factory!

Should Americans Be Forced To Pay Their Neighbors Mortgages?

2009-02-06T09:17:00.000-08:00

As more tax payer's money is designated to assist the ailing housing market. Republican Jeb Hensarling, R-Texas, has asked, "While Americans all over this country are struggling with their own mortgages, should they be forced to pay their neighbors mortgages?" However, there are many who take the opposite view that not enough is being done, and that such help that is available is not fast enough.

There is anger, in some quarters at proposals to subsidize borrowers who some consider, have acted irresponsibly and are largely to blame for their own predicaments. However, the Obama economic team appears to be sympathetic to assisting homebuyers experiencing difficulties, as there is a view that such help would assist the wider economy.

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There is no doubt that the number of foreclosures is a major factor in depressing the housing market. Government intervention will not prevent all such foreclosures, but it could assist in stemming the tide, and restore a measure of confidence.

It has been reported that the Obama Administration want to spend $100 billion to assist people to stay in their homes. Various proposals are under consideration including tax breaks of up to $15,000 for buyers of new or existing properties.

The government had hoped that measures introduced by the lending industry would stem the increase of foreclosures, but that hasn't happened. Unless effective help is made available the position is likely to get even worse as unemployment rises in the continuing recession. It was intended that bail out money handed to the banks would assist in halting foreclosures, but so far that has not happened.

It seems that well-intended plans to assist homeowners in trouble, are not having much of an effect so far. There is no denying the Government's will to offer positive assistance, but there seems to be some difficulty in implementing the right way to go about it.

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should Americans be forced to pay their neighbors mortgages?
should Americans be forced to pay their neighbors mortgages?

Democrats and Republicans Consider Reducing Mortgage Rates

2009-02-05T01:15:00.000-08:00

Republican policymakers are proposing a plan to reduce interest rates on 30-year mortgages by one per cent from 5.1% to 4.1%. The $300 billion plan, would be part of a $900 billion financial stimulus, with the aim of kick starting the ailing housing market, so vital to the US economy as a whole.

The plan would be intended to assist prospective new homeowners thereby stimulating the housing market, and also increase the spending power of existing homeowners by lowering their borrowing costs. It would lead to a saving of around $180 per month on a $300,000 mortgage that would be available to drip feed into the wider economy, to add to the impetus of other elements in the overall plan.

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President Obama's economic team is said to be considering the proposals, along with other leading Democrats. There is a general consensus to get the cost of mortgages down to stimulate markets, and assist in restoring confidence.

It has been estimated that each percentage point drop in mortgage rates can assist with 500,000 house sales. That should assist with the over supply of properties, that is a major factor in the continuing downturn. Of course, there is no magic wand to cure the ills of the depressed housing market.

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It is good to know that there is consensus and cooperation, between Democrats and Republicans, to help things get back to some degree of normality. There is little doubt that the current crisis continues to affect millions of ordinary Americans. Regardless of which way they recently voted, there are expectations that all their elected representatives will unite to do whatever is necessary to overcome the current malaise.

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Democrats and Republicans Consider Mortgage Plan
Democrats and Republicans Consider Mortgage Plan

Why Help 'Buy To Let' Landlords Get Rich Part 1-Free Mortgage Advice

2009-02-04T03:46:00.000-08:00

Why Help 'Buy To Let' Landlords Get Rich Part 1-Free Mortgage Advice

The following is an extract from an interesting article about the 'Buy to Let' sector of the housing market. The gist of the article is that it generally preferable to buy your own home rather than rent from a landlord. There are pros and cons both ways. Although the trend of house prices has generally been upwards, resulting in substantial potential gains for homeowners, at times like the present, the market turns, and negative equity shows, its ugly head.

"If anybody told you that you could buy a home, without having any monthly payments to find, and that you could keep all the profits in the event of a sale, you might think they were mad.

There are many people who have jumped on the buy to let bandwagon and recently some of them have caught a cold. It had become all too simple, and there were easy pickings until the housing market downturn. However, it must be remembered that prior to the downturn prices had rocketed to unprecedented levels, and there has been nothing like a correction to the levels apparent before the bubble burst.

Some people have done very well out of buy to let, and many are still doing so. Sure, there are those who have caught a cold, because they over extended themselves when prices were high. There is not a great deal of sympathy for them, because at the end of the day they were in the game to make a fast buck. That some may not have done so is down to the luck of the draw, or in some other cases to lack of investment know-how."

Please Click Here to visit the Free Mortgage Advice Web Site, and read the full article.

Option Adjustable Rate Mortgages

2009-02-02T08:08:00.000-08:00

Option adjustable-rate mortgages are counted among the so called 'sucker mortgages', widely available during the housing boom. It is understandable that people desperate to acquire a home of their own, could resort to mortgages that might be considered risky in normal times. Most people who had not profited substantially from the housing boom knew somebody else who had. Therefore, almost everybody wanted to jump on the bandwagon, and lenders were only too willing to oblige.

The trouble was that many people were encouraged to take out loans they could not really afford. It's all very well taking out an option ARM with very small initial outlay but what about when the day arrives to reset the terms. Not so bad if you are in progressive employment with housing prices soaring, but what about the downturn with all its painful consequences.

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There were many in the mortgage sector who were prepared to sell option ARM's to almost any applicant. They were getting substantial; most would say unreasonable bonuses, and ostensibly helping others onto a housing ladder extending forever upwards. There were, of course those who knew that the bubble was sure to burst, but human nature being what it is few were prepared to contemplate an end to the boom, and a largely unregulated situation prevailed, until the alarm bells started ringing.

If there is nothing better than obtaining a home of your own, there is nothing worse than losing it. Those who are in the unfortunate situation of not being able to afford mortgage repayments should talk to their loan providers at the earliest opportunity. It may be that the resetting of option ARM's requires mortgage repayments that are beyond your means. Whatever the reason, if you are in financial difficulties, or likely to be in the near future, talk to your loan advisor. Remember that there is no shame in seeking help, and it is because a bad situation has been allowed to get worse, that the worst consequences often occur.

President Obama has pledged to assist homeowners by lowering costs, and responsible mortgage providers are expected to be sympathetic to periods of temporary hardship, including those with option adjustable rate mortgages. There will always be investors who buy and sell speculatively, and there are many ordinary people who have sold their homes and made substantial gains. Of course it is all relative for those who sell a home to buy a similar priced property elsewhere. The general trend of property prices, over time, has been upward, and there are many middle-aged people whose property value far exceeds their initial expectations.

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There is a lot of consideration being directed at the housing and associated mortgage markets. Foreclosure is rightly being considered as a last resort, and a major contributor to current malaise. Repossession and foreclosure auctions force prices down further, as those involved seek fast cash returns. There will come a time when prices will bottom out and property will again become not only a fundamental necessity but a good investment as well. In the meantime, resist foreclosure if it is within your means to do so, and take advantage of the help that is becoming increasingly available.

Tags:
option adjustable rate mortgage
option adjustable rate mortgage

Obama Help For Home Owners

2009-02-01T10:57:00.000-08:00

President Barack Obama has pledged to help homeowners by lowering mortgage costs as part of a financial rescue package. He seems determined to bring his influence to bear to assist homeowners, many of whom believe that the only assistance so far has been directed towards bankers, whom they consider to be largely to blame for the current crisis.

It seems that the housing market is suffering from a crisis of confidence as much as anything, and any stimulus to stop the rot would be welcomed by homeowners and the construction industry at large. People who had become disillusioned by the Bush Administration swept Obama to power, as much on a desire for change as anything else. The collapse of the US housing bubble has affected millions of homeowners and is widely considered to be at the center of the recession.

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The outlook for an improvement in the property market remains grim, but it is to be hoped that the Obama factor will help to turn things round, and restore a measure of confidence in the housing sector. Donald Kohn, the Vice Chairman at the US Federal Reserve, has spoken out about the need to utilize government funds to assist the ailing mortgage market. He stressed the link between preventable foreclosures, affected borrowers and their communities, and the knock on effect to the broader economy and financial system.

There are expectations, that part of an Obama inspired rescue package, may be used to buy up so called toxic assets, through the creation of a bad bank or the issue of guarantees. Such measures may assist in freeing up the credit that has tended to freeze up during the banking crisis.

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There are many analysts who believe that in addition to the $700 billion already approved, much more will be required to begin to restore confidence to financial markets. However, there is a great deal of unrest at the sort of money being allocated to assist the rescue of the banking sector and Wall Street whilst ordinary people are losing their homes and their jobs. There is particular outrage at the way some banks have continued to pay what are generally believed to be absurd bonuses while being bailed out by taxpayers.

There is little doubt that the 'man in the street' expects to share in the benefits of any further application of taxpayer's funds. All too often those who lose their homes become the actual man on the street. The financial crisis is causing a great deal of hardship and unrest, not only in the United States, but also in Europe and throughout the world.

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Obama help for home owners
Obama help for home owners

Fixed Rate Mortgage

2008-12-11T09:24:00.000-08:00

Questions frequently arise regarding the advantages and disadvantages of fixed rate mortgages. Sometimes the advice is straightforward and helpful, whilst at other times it can be misleading. An interesting article about fixed rate mortgages can be found at Fixed Rate Mortgage-Free Mortgage Advice. An extract from the article is reproduced below.

"As the name suggests, a fixed rate mortgage is an arrangement under which the sum borrowed is repaid over an agreed number of years, at a constant rate of interest, agreed at the time the mortgage loan is negotiated.

Many people prefer fixed rate mortgages because they are not subject to interest rate fluctuations, so they are better able to control their finances. Fixed rate mortgages enable people to plan ahead, without the possibility of rising interest rates creating hardship.

As with other types of mortgage, a fixed rate mortgage may run for differing terms, to suit the applicant. Loan terms of between 15 and 30 years are fairly common, and either could be suitable for particular circumstances. Obviously the monthly repayments would be higher for a fixed rate mortgage over the shorter term, but the total outlay would be considerably less than for a longer term deal. It is really a case of what you can best afford, in consideration of your present and future circumstances."

If you would like to read the full article please visit Fixed Rate Mortgage-Free Mortgage Advice.

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fixed rate mortgage
fixed rate mortgage

First Mortgage Loan

2008-12-08T02:56:00.000-08:00

One of the most exciting things to contemplate, as young people become young earners, is owning a home of their own, and embarking upon their first mortgage loan. It is not a decision to be taken lightly and it should be realized that if it runs for the full term, that first mortgage loan would have cost more than the property it is associated with.

As an example, consider a first mortgage loan of $250,000 at 8% with a 30-year repayment term. By the time the loan was paid off, to the extent of the property becoming debt free, over $410,000 in interest would have been paid. The upside is that over the years domestic property has proven to be a sound investment, and historically prices have risen over time. Therefore, as well as the obvious pleasure of living in a home you enjoy, there has been an overall financial gain.

Please Click Here to visit the Free Mortgage Advice Web Site.

Not least because of the relatively large amount of money involved, those seeking a first mortgage loan should do their homework thoroughly. Not all mortgage deals are the same, but fortunately there is no shortage of advice from which intending homebuyers could benefit. For instance, you may consider a:

Fixed Rate First Mortgage Loan

With fixed rate mortgages the interest rate is set at the start to be continued throughout the term, regardless of whether it is for ten, twenty, thirty, years or any other period. Such a first mortgage loan would have the advantage of ensuring that the interest rate did not vary, upwards or downwards, no matter what else was happening in financial markets. It would be a good way of being aware of your obligations and of knowing that they should remain constantly affordable.

With a fixed rate first mortgage loan, you could be sure that if market rates were, to rise suddenly, your outlays would not be affected. Playing it safe, is a good way forward for many people, and a fixed rate mortgage offers that sort of opportunity.

Adjustable Rate Mortgage Loan

There are undoubtedly many people who have gained financially from an adjustable rate mortgage loan. However, before you enter into such a deal you should be aware that interest rates could go up as well as down. If your finances are less than predictable, an adjustable rate mortgage could be too much of a risk. On the other hand, if your circumstances are absolutely secure, you may consider that some risk is justifiable, and could pay dividends.

Balloon First Mortgage Loan

If you do not intend to remain in your first house for long, you could consider a balloon first mortgage loan. This would provide funds at a low rate of interest for an agreed period of a few years after which the rate would rise significantly. If your circumstances were to change, as a result of which you decided to stay put, your outgoings could rise dramatically.

You should be able to grasp why proper planning and an understanding of mortgage markets is vital. There is no great virtue in biting off more than you can chew. Fortunately, there is so much good advice available, from qualified advisors, books and libraries, and of course the Internet. So please do your homework and you have every chance of negotiating the best mortgage deal to suit your personal circumstances.

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first mortgage loan
first mortgage loan

Amortization Mortgages-Free Mortgage Advice

2008-12-06T13:13:00.000-08:00

Understanding Amortization Mortgages

Many prospective home buyers are aware of the term, amortization mortgage, but that does not mean to say that they understand all its implications. Because home loans are about the largest financial commitment many people will enter into, it is essential that they familiarize themselves with amortization mortgages amongst other considerations.

There is an interesting article covering amortization mortgages on the Free Mortgage Advice web site, Amortization Mortgages-Free Mortgage Advice, and an extract is reproduced below:

"An amortization mortgage requires the repayment of the amount borrowed by periodic repayments, usually monthly, over an agreed period of time.

Amortization mortgages are frequently used to pay off home loans by equal monthly installments. There are two parts to an amortization mortgage, namely the principal amount that is the sum of money borrowed, and the interest amount that is the benefit due to the lender for providing the money.

The principle is at its highest at the time the loan is initiated, and in the early years most of the monthly repayments mainly pay off the interest, with a relatively small sum being applied to reduce the amount borrowed. During the latter years the situation reverses and a greater proportion is applied against the principle. Some borrowers have failed to grasp this aspect and have been disappointed, to learn how much of the principle remains, if they have decided to pay off their mortgage, even after an initial period of ten years or so into a thirty year term."

To read the full article please visit the Free Mortgage Advice Web Site.
Tags:
amortization mortgages
amortization mortgages

Mortgage Payments Help - Will Obama Follow Brown?

2008-12-04T10:36:00.000-08:00

The UK Prime Minister, Gordon Brown, has announced plans to enable people who are struggling to meet their mortgage payments, to receive generous assistance. This is a move to try to stem an increasing number of foreclosures that have been forecast to rise to similar levels as those experienced in the recession of 1991.

This latest initiative, to assist with mortgage payments, is aimed primarily at people whose jobs are at risk, or where a demonstrable drop in income has occurred. Help is to be available for up to two years and for mortgages secured against properties valued at up to £400,000. It seems that many, but not all, of the major lending authorities have agreed to participate in the scheme.

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It would appear that full details of the intended scheme are still being assessed. However, it would seem to be of potential benefit to both borrowers and lenders. It would assist borrowers with their mortgage payments, during difficult times, and the government would guarantee any additional exposure by the loan sources. If the circumstances of participants had not improved, after the two-year period, the banks would not suffer additional losses because of their commitment to the plan.

There can be no more unpleasant prospect than the threat of losing a home, when job prospects are declining, and mortgage payments are high. Therefore, most pundits have welcomed the plans as a step in the right direction. Others have suggested that it may be only delaying the inevitable. But that is a gloomy view, and the whole world has a vested interest in doing whatever possible, to limit the effects of the downturn.

The situation in the United States will be clearer after the inauguration, but as with Prime Minister Brown it is known that President-elect Obama, will want to do all he can to help homeowners at risk. Global problems need global solutions to restore the confidence that is currently lacking.

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Mortgage Payments Help
Mortgage Payments Help

Adjustable Rate Mortgage - Free Mortgage Advice

2008-11-28T09:43:00.000-08:00

Adjustable rate mortgages are not the best proposition for all prospective home buyers, but for those who are aware of the implications, they may be well suited to meeting their requirements. An extract from an informative article about these types of mortgages is reproduced below:

"Sometimes people are surprised, by the relatively low interest rate, advertised for adjustable rate mortgages.

Adjustable rate mortgage loans frequently have low rates applicable in the short term. However, they are subject to fluctuation as market rates change, because of which they may move upwards or downwards.

Variations in market rates mean that it can be difficult to accurately assess your outgoings, with an adjustable rate mortgage. Some types have limits, beyond which the interest rate cannot increase, but this may be for a specified term after which market rates apply.

It is essential that those who sign up for an adjustable rate mortgage, are aware of their obligations, and choose the right type suited to their personal circumstances. Because they can be risky, and somewhat indeterminate, it is necessary to be sure that you can afford to cover possible interest rate changes."

If you would like to read the full article, Please Click Here to visit the Free Mortgage Advice Web Site.

Mortgage Repayment Reduction Plan

2008-11-18T10:34:00.000-08:00

The US government recently announced a scheme, that is essentially a mortgage repayment reduction plan, that will make it easier for many people to be able to afford to repay their mortgages.

The scheme will make it possible, for those who qualify, to considerably reduce their mortgage repayments. It is aimed at people who have little or no equity in their homes, and who are at least 90 days in arrears, but it only applies to loans guaranteed or owned by Fannie Mae and Freddie Mac, or other participating loan companies.

Critics of the scheme, suggest that it is likely to encourage people to get behind with their payments deliberately, so that they can qualify for advantageous terms. Others suggest that those who have ensured that they can afford their mortgages are being lumbered with tax hikes to assist those who have not been so prudent. However, it is not really that straightforward, and even President Elect, Barack Obama, has suggested that millions of Americans have been victims of predatory lending.

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Successful applicants will be able to get their mortgage repayments, including significant related expenses, reduced to 38% of their gross income. This could be achieved by reducing the interest rate, or by extending the loan period up to 40 years, or by reducing the principal against which the loan interest is charged. In the latter case the amount by which the principal had been decreased would be added back when the property was resold or refinanced.

Reduced interest rates would be available for a period of five years at rates down to, but not below 3%, after which they would revert back to market rates. On expiry of the term agreed under the scheme, there would no adjustment, to claw back the difference between the concessionary and market rates.

Obviously this is not a plan that will help everybody, but many people, who it could assist in staying in their homes, will welcome it. They would be well advised to seek full information regarding the scheme from their lender or government sources.

Please Click Here to visit the Free Mortgage Advice Web Site.

There has already been a lot of hardship associated with the credit crunch, but it seems that the government is more than willing to play its part in alleviating financial problems, for homeowners.

Tags:
mortgage repayment reduction plan
mortgage repayment reduction plan

Subprime Mortgages

2008-11-14T09:54:00.000-08:00

The mortgage business in the USA is quite different to that operating in the UK. For example, in the US 100% of mortgage interest payments are tax deductible. Furthermore second and third mortgages qualify for the same benefits, meaning that mortgages of one sort or another are a very favorable way of borrowing money.

Such advantageous terms do not apply to consumer goods, including motorcars that for many people are the second most expensive purchase after their house. Therefore, before the incidence of subprime mortgage lending, there were many poorer people, without homes of their own, who had to pay higher interest rates for anything they purchased on credit.

Along came sub prime mortgage lending and an unprecedented borrowing spree, usually secured against rising house prices. It was all very well while house prices kept on rising, and lenders and borrowers were having a whale of a time. It seemed that times were too good for anybody to even contemplate that the bubble could ever burst.

Burst it did and house prices went into reverse. There were just a few professionals who saw the downturn as a correction rather that a decline, simply because a totally unregulated market had almost gone berserk and was defying gravity. Eventually it came down to earth with a bang, and we are all suffering the consequences. The unthinkable happened, and banks and mortgage companies began to fail, including some that were household names who had been considered to be almost invincible.

Please Click Here to visit the Free Mortgage Advice Web Site.

The domino effect didn't just affect the US economy but had major repercussions all over the world. Other countries had jumped on the bandwagon, some more than others but the global effect has only narrowly avoided catastrophe.

Many countries are now joining together in an endeavor to make the best of a bad thing. It has been made more difficult by happening at the latter stages of a presidential campaign. President Elect Obama has successfully sought high office at a very difficult time. The world will be watching and wishing him well.

Better Deal For Mortgage Borrowers

2008-11-13T07:55:00.000-08:00

It has been announced that mortgage brokers and lenders in New York have been instructed to give house buyers better information, concerning loan terms and conditions. Guidelines issued by the Department of Housing and Urban Development require loan sources to provide reliable estimates of closing costs.

It has been difficult for prospective buyers to properly assess cost, for comparison with what is available elsewhere, in the mortgage market. There have been a flood of foreclosures many of which are reckoned to be associated with over zealous lending policies, and many people have not had a clear understanding of their liabilities.

Please Click Here to visit the Free Mortgage Advice Web Site.

In future prospective buyers will be given closing costs estimates, so that they will be clear about their obligations, and be equipped to shop around for the best deals. It is thought that in some instances the new system could save borrowers hundreds of dollars.

Although the guidelines do not provide for penalties against banks who do not comply with the new procedures, borrowers would be in a stronger position to sue should the need arise. The new arrangements cannot cover every eventuality but they are welcome, as they have come at a time when many borrowers have been hit by unforeseen circumstances, and they are the first changes of this sort for thirty years.

Mortgages - UK Banks Respond To Criticism

2008-11-07T13:33:00.000-08:00

HBOS, the UK's biggest mortgage lender, along with other major sources, has agreed to pass on the full benefit of the Bank of England's 1.5% cut in interest rates. They had been under tremendous pressure to do so from Alistair Darling, the British Chancellor.

The high street banks have come under fierce criticism, from the popular Press, for not responding more quickly to recent cuts. However, they have now taken action within a day of the latest unexpected cut. There are many who hold bankers responsible for the international credit crunch, and it is undeniable that they have played a part. As the banking fiasco resulted in a taxpayer bailout, many of whom have mortgages, there was a head of steam building up for interest rate cuts, and it was essential that the bankers start to play ball.

Please Click Here to visit the Free Mortgage Advice Web Site.

It seems that the executives of the major banks attended a breakfast meeting, and were left in no doubt of the UK government's expectations. As UK taxpayers, through their government, are now major shareholders in the banks, there were some who were demanding that a stronger line be taken to protect their interests, including interest rate adjustments in favor of mortgages and businesses.

Although the banks agreement to pass on the recent interest rate cut in full is welcome, there are many who consider that they should have responded to the requirement, without what amounted to a public outcry. There has been a lack of confidence in the banking sector, with banks being reluctant to lend to each other. That situation was in danger of spreading, and creating some sort of stalemate whereby no funds were available for normal banking functions. The Chancellor has shown that he is prepared to get tough, if the need arises, but it may be that in the face of so much media criticism, loan sources will act more responsibly in future.

Tags:
UK mortgages interest-rates-cut
UK mortgages interest-rates-cut

Mortgage Relief Expected As UK Slashes Interest Rates

2008-11-06T09:31:00.000-08:00

In a surprising move the Bank of England has reduced interest rates to a fifty-year low. They slashed 1.5% off the rate, which means that at 3%, it is the lowest it has been since 1955.

The Bank of England may have acted in sufficient time, to boost the economy in the seven weeks leading up to Christmas. However, high street banks have not been very swift, in passing on more favorable rates to business or domestic borrowers in the past, including those with mortgages. It the interest rate cut was passed on to mortgage borrowers in full, it could reduce their repayments by approximately £90 a month per £100,000 borrowed.

Please Click Here to visit the Free Mortgage Advice Web Site.

Of course, the changes will only affect repayment levels of variable rate mortgages, mortgage relief expected as UK slashes interest ratebut where applicable they will be a welcome seasonal relief. At a time when there has been so much doom and gloom with rising prices, and threats of redundancy, this seems likely to be a step in the right direction.

This latest move by the Bank of England might be considered a risky undertaking, because of inflationary pressures. The pound has been worryingly devalued against the dollar, as London has become less attractive to international investors, seeking the best return. That trend may now be set to continue; although the upside is that it makes the USA a more favorable market for British exporters.

Interest rate cuts of .25% have been the norm until recently. Now that the Bank of England is acting more boldly, it is to be hoped that these shock tactics help to bring about the start of a recovery. It is worth noting that at the same time as the latest 1.5% UK cut in interest rates, the European Central Bank has announced a cut of just .5%, and it will be interesting to see how the money markets perform over the next few days.

Tags:
mortgages mortgage-borrowers
mortgages mortgage-borrowers

Mortgage Holiday In Spain!

2008-11-05T02:38:00.000-08:00

In a dramatic move, the Spanish Government has announced that it is to offer a repayment holiday to the unemployed, and to some pensioners. Their Prime Minister said the scheme could affect as many as half a million people, who should appreciate that their government is ready to help in this positive way. It remains to be seen whether other European countries will embark on a similar course, but it seems sure that some will introduce comparable facilities.

Under the Spanish scheme, those who become unemployed, along with some pensioners who have families to support, will be allowed to defer up to one half of their mortgage repayments, for a period of up to two years. It seems that the government will guarantee payments under the scheme, to ensure that lenders do not lose out. The maximum mortgage to qualify under the scheme will be €170,000.

Please Click Here to visit the Free Mortgage Advice Web Site.

Spain has enjoyed a decade of growth in the construction industry, which is closely related to tourism requirements. Unfortunately the industry is suffering as the worldwide building bubble burst. However, with the credit crunch threatening to get worse before it gets better, the moratorium will be seen as a welcome measure. In common with the rest of Europe mortgage lending has fallen significantly, and any stimulus the government can offer will be welcome.

It must be said that the Spanish government has regulated its financial sector better than some other European countries. Therefore, the situation is not as bad as it could have been, but as the downturn continues it is possible that one of the first things people will cut down on is holidays. That could have a serious affect on tourism, and it is difficult to forecast when international circumstances will improve.

Tags:
mortgage holiday in Spain
mortgage holiday in Spain

Mortgage Christmas Box

2008-11-04T08:02:00.000-08:00

There is optimism about interest rates being slashed to bring Christmas cheer to millions of mortgage borrowers.

The European Central Bank is under global pressure to reduce its rates and it seems that when it does the Bank of England will follow suit. In the US, where people have an election to think about as well, rates have already been cut. Whether any changes will be sufficient to boost ailing property markets is questionable, but lower rates would also be welcomed by shops and other traders who have been having a lean time. With recession being just around the corner, any stimulus to the economy would help business and customers alike.

Please Click Here to visit the Free Mortgage Advice Web Site.

Mortgage loan providers are not always as quick or as willing to pass on lower interest benefits to customers. They are understandably wary but there are many who will consider that more caution should have been exercised before the credit crunch hit them. It is always easy to be wise after the event, but it seems that most banks went into free fall, after the free for all, when just about anybody could have as much as they desired!

Some people seem to forget that with any loan there is a payback time, and that there is no such thing as a free lunch, with the possible exception of bonuses for bankers who threw caution to the wind. The after-burn has been both dramatic and catastrophic, with total meltdown only being avoided by government intervention.

Anyway, Christmas is coming, the bankers have gotten fat, and a little bit of mortgage help, may save passing round the hat!

Tags:
Mortgage Christmas Box
Mortgage Christmas Box

Mortgages Market Remains Tight

2008-11-03T02:33:00.000-08:00

Despite Alistair Darling's instructions, and the UK governments refinancing of major banks, mortgages are relatively hard to get. This does nothing to restore confidence in the housing market, and house prices continue to drop.

Prospective buyers are finding it hard to obtain mortgages compared to the situation prevailing only a few short months ago. There are various schemes afoot to assist would be house buyers, but it may be that many entering the market for the first time, are waiting to see how far prices will fall before they commit. There are still favourable schemes available, including the advance of 95% of a property's value, and a multiple of four times joint earnings, but the market remains sluggish.

Please Click Here to visit the Free Mortgage Advice Web Site.

The UK government has stated, that they don't intend to directly manage the banks they have assisted, with billions of pounds of taxpayer's money. However, it is difficult to see how that squares with conditions they imposed when agreeing to the massive bailouts. It seems that there will be government representation at boardroom level, so presumably the banks are expected to ease borrowing restrictions to house buyers, and small businesses.

Many sellers are reluctant to admit that the value of their property has fallen. They are unrealistically asking what the value was before the credit crunch, or simply waiting until the situation improves. So the hesitancy of lenders to deal with anybody other than rock solid borrowers, coupled with sellers and buyers intentions continues to depress the mortgage market.

Although it is tough for many people to get the mortgage they want or could have secured a short time ago, the situation is by no means impossible. For those whose requirement is to obtain a mortgage now, the best advice is to shop around. Different mortgage lenders have different plans, and they might well find something to meet specific requirements. House builders are also feeling the pinch, and they are offering various schemes, including help with deposits, and even agreements to make up any difference should the price of their new builds diminish in the shorter term.

The domestic housing market is exactly that, and not the way to instant riches, as it may have previously appeared to be. However, it plays a major part in the UK economy, and it may pay first time buyers in particular to find out what incentives, if any, the government is offering that may assist them in buying a home of their own.

Tags:
mortgage market remains tight
mortgage market remains tight

Mortgages - House Prices - Negative Equity

2008-10-31T10:47:00.000-07:00

It is reported that more and more homeowners, both sides of the Atlantic, are being burdened with negative equity. That is the unhappy situation when your outstanding mortgage exceeds the value of your house. It stifles the housing market, because unless they have to, people are reluctant to sell in a downturn.

Those with negative equity, who also have limited or nil savings, could not meet their outstanding mortgage loans if they were to sell their houses. This need not be a problem, because most people consider their house, and the mortgage secured against it, to be a medium to long-term investment. They believe that if they stay put, the current downturn will be over, and property prices will rise again. That has always been the case in the past, although there have been short-term hiccups.

Please Click Here to visit the Free Mortgage Advice Web Site.

This time round, the situation has been made worse by injudicious lending; to people that couldn't really afford to fund the mortgages they were granted. Unfortunately, one bad turn often follows another, and a period of unemployment can fast eat into savings, or worse still, maximize other debts. It's a bit of a chain reaction that can only intensify in the impending recession. What could be worse than losing your job at the same time as property prices are falling, but the price of oil, and seemingly everything else, is rising? It may seem like a bit of a recipe for disaster.

The majority who can survive the financial storm will be alright, and come out of it virtually unscathed. But what about the unfortunate minority who are out of work and finding it difficult to meet their mortgage repayments?

The best advice is to discuss your plight with your mortgage provider at the earliest opportunity. There are various ways they may be able to help you. They might agree to extend the mortgage repayment period, or allow interest only repayments for a time. They may even consider a repayment holiday, if they believe that your setback is only temporary, and there are signs that your circumstances will improve.
There are joint equity schemes whereby loan authorities buy a stake in the property, and repayments are proportionately reduced.

Tags:
mortgages-house prices-negative equity
mortgages-house prices-negative equity

Mortgage Bankers Heckled

2008-10-29T10:06:00.000-07:00

Never in the field of buying houses, was so much, grabbed by so few, from so many, who were encouraged to borrow more than they could afford to repay!

It's not only in San Francisco that mortgage bankers have been booed by consumers who believe they have been let down. Irresponsible lending, has been used as an excuse for paying phenomenal bonuses, to bankers who did little more than create an unsustainable house price bubble. It is worse than the dot.com crash which hit people who knew that they were gambling, rather than people whose only aspiration was to own a home of their own.

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The Gordon Gekko 'Greed is Good' syndrome was everywhere from get rich quick bankers, to buy to let investors who were led to believe they couldn't lose. Investment is a speculative proposition, which is just another way of saying that it is a gamble. The greater the risk the greater the return is a quoted maxim, which is why long shots in horse races, are at long odds, and rarely win. Gekko always won because the insider trading he was involved with controlled markets. By ignoring established banking practices, mortgage bankers have had a field day, but escaped with the spoils before the day of reckoning.

In horse racing, and other forms of gambling, the bookmaker usually wins, as opposed to recent banking ventures whereby bankers always won in the form of ridiculous bonuses. It's the sort of greed excess that allows Gekko type aspirations, to siphon proceeds off to the undeserving few! There are many to blame for the ensuing fiasco, whether they will ever be taken to account is another question!

Tags:
mortgage bankers heckled
mortgage bankers heckled

Mortgages - Once Bitten Twice Shy!

2008-10-28T03:39:00.000-07:00

Mortgages are still readily available in the US, but as might be expected, mortgage loan sources require full evidential documentation to support income statements. It may be a case of 'once bitten twice shy' because it is generally agreed that credit policy has been too relaxed, which largely contributed to the current crisis.

Not very long ago it would have been inconceivable to imagine mortgage giants, Fannie May and Freddie Mac, being taken over by the federal government. Equally it would be wrong for the government to proceed with policies that had created unprecedented problems. Therefore, it is unsurprising that a more cautious approach is being followed. In fact it is vital when taxpayers money is involved.

Please Click Here to visit the Free Mortgage Advice Web Site.

When credit standards are tightened up fewer people qualify for mortgages, which does nothing to improve the market. It favors financial stability, with mortgages only approved for those who can best fund repayments. For such borrowers there are bargains to be had, but unfortunately at the expense of those who have become overextended.

There are reports that the government continues to support affordable housing, whilst recognizing the need for responsible lending. It's a difficult path because it was irresponsible lending that led to the present predicament. There is little doubt that the US, and the world at large, will recover from the financial storm, but in the short term, there will continue to be credit restrictions and other hardships to endure.

Tags:
mortgages harder to get
mortgages harder to get

Mortgage Bubble - Double Trouble

2008-10-26T08:34:00.000-07:00

Despite UK government assurances of help, home repossessions are forecast to rise substantially. The economy is lumbered with recession and all that it entails, including falling house prices and job insecurity.

Please Click Here to visit the Free Mortgage Advice Web Site.

In fact UK repossessions are likely be up 50% on last year, to around 45,000. It is a worrying trend and comes at a time when households are having to pay more for almost everything. Since the oil price peaked it has returned to more normal levels. However, it seems that OPEC is to reduce supplies to maintain prices, and it may not be long before that is again passed onto the consumer in rising fuel costs. People were told that energy prices, that is to say gas and oil, were high because the price was linked to the price of oil. They are quite rightly questioning why, when the oil price dropped didn't energy prices follow as quickly as they did when it went up?

It seems that getting more for less is almost encouraged by the government. Nobody would deny that conserving energy, thereby assisting with global warming is an admirable objective. However, it seems that the more you save the more you pay simply to maintain gas and oil company profits at whatever levels the energy companies say is necessary. It may be necessary for shareholders, and director's remuneration, but the poor old consumer seems last in the queue.

There are government-sponsored schemes whereby insulation can be obtained with various grants and monetary incentives. Again not many would disagree with the theory, but if the end result simply means that people will be paying twice as much for half as much energy, to support energy companies profit objectives, it makes it easy for them and hard for everybody else. Almost a licence to charge what they like!

It wouldn't be nearly so bad if everything wasn't going up, when for lots of people the threat of getting behind with their mortgage, or worse, is on the cards. There are many who believe that the government is not doing enough to help at this difficult time. Insofar as energy is concerned they are probably right.

Tags:
Mortgage Bubble - Double Trouble
Mortgage Bubble - Double Trouble

Buy To Let Getting Tougher

2008-10-18T02:21:00.000-07:00

A recent report in The Times provides useful information about the Buy-To-Let property market.

With house prices falling faster than they have done for decades, it seems as though Buy To Let landlords may be in for a hard time, especially if they entered the market when property prices peaked. Some investors will undoubtedly weather the storm, whereas others may not be so fortunate.

Please Click Here to visit the Free Mortgage Advice Web Site.

The current trend is all the worse because of gloomy economic forecasts and the threat of recession, which many experts believe is now a certainty.

The following is an extract from the article in The Times:

"It has been an uncomfortable fortnight for Britain's army of landlords. House prices are falling faster than at any point in the past 50 years and experienced lenders have been backing out of the market.

Some commentators have been declaring the death of buy-to-let and experts agree that there is little to be gained from entering the market in the current economic climate.

It has not been all bad news. Rental demand is expected to continue to grow as first-time buyers delay the purchase of their first home. There are 1.6 million 20 to 39-year-olds who are renting because they cannot afford to get on the property ladder, according to Hometrack, the property data company. A 20 per cent fall in house prices would still open the market up to only 600,000 young buyers.

Richard Donnell, of Hometrack, says: “Rental demand is fuelled by young people in their twenties and thirties who cannot afford to buy. Even a sharp fall in house prices won't bring that many people into the market, thus fuelling rental demand for the next 18 months at least.”"

Please Click Here to read the complete story TIMESONLINE.

Tags:
Buy To Let Gets Tough
Buy To Let Gets Tough

Wells Fargo To Assist With Problem Mortgages

2008-10-18T01:45:00.000-07:00

Wells Fargo, who service about twelve per cent of US mortgages, are to join forces with the NACA (Neighborhood Assistance Corporation of America) in a scheme, to assist people who are behind with their mortgage payments, to stay in their homes.

These two organizations intend to work together, to assist those who are finding their mortgage payments difficult to maintain, to obtain a more appropriate repayment level. This is a welcome initiative, as it should assist many at risk house buyers to remain in their homes. Moreover, as NACA has hundreds of professional counselors available expert assistance is accessible for those able to take advantage of the plans.

Please Click Here to visit the Free Mortgage Advice Web Site.

This joint approach by two such respected names in the mortgage business will be extremely welcome at this critical time. Wells Fargo are at the forefront of retail mortgage lending, and the NACA are a non profit making organization, whose assistance has already benefited many thousands of mortgage holders.

To those who have achieved their ambition of having a home of their own the threat of foreclosure is a demeaning and worrying prospect. However, schemes of this sort imply that help is readily obtainable for many people, and should greatly assist in helping them to avoid the agony of repossession.

Tags:
Wells Fargo mortgage help
Wells Fargo mortgage help

Voters Back McCain Mortgage Plan

2008-10-11T04:07:00.000-07:00

It has been reported in the Phoenix Business Journal that most US voters favor John McCain's mortgage rescue plan.

With the countdown to the Presidential election well under way, Senator McCain will be pleased about this support. The state of the economy is now the major issue, not only in American politics but also throughout the world.

Please Click Here to visit the Free Mortgage Advice Web Site.

It seems that Senator Obama is still the front-runner, but in the final run up to the election it is all very much to play for.

An extract from the Phoenix Business Journal is reproduced below:

"A majority of U.S. voters back a mortgage bailout plan forwarded by U.S. Sen. John McCain, R-Ariz., that would have the federal government buy distressed and upside down mortgages and refinance them so homeowners can avoid foreclosures and keep their homes.

A new poll by Rasmussen Reports shows 52 percent of those surveyed support McCain’s $300 billion plan, while 35 percent oppose it. Presidential rival U.S. Sen. Barack Obama, D-Ill., also opposes McCain’s mortgage plan.

Support for the plan crosses party lines with more Democrats backing McCain’s idea than Republicans, according to the Rasmussen poll. McCain unveiled the plan Tuesday at the second presidential debate in Nashville, Tenn."

Please Click Here to read the complete story Majority backs McCain’s $300B mortgage plan.

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Majority Back McCain Mortgage Plan
Majority Back McCain Mortgage Plan

Is Alistair The Bank's Darling?

2008-10-08T06:53:00.000-07:00

Have Gordon (Do what it takes) Brown, and Alistair (Do what it takes) Darling, done sufficient to reignite the UK housing market? A better question might be why they would want to stoke up, what was a significant cause of the problem in the first place. It is surely elementary that whenever anything overheats it eventually cools down.

The telephone number sums of money that are being used to bolster the system are staggering to perplexed, and sometimes angry, taxpayers. They understandably ask how can the people who got us into this mess, be trusted to get us out? There is 50 billion pounds here, 40 billion pounds there, and 6-700 billion dollars somewhere else. While all of this is going on, it is reported that greedy executives of Lehman Brothers were securing millions of dollars in bonuses; at the very time the business was collapsing.

All most people ever wanted was a reasonable home at a reasonable price, not a topsy-turvy, interbank mish mash of swapping mortgages and everything else! Could it ever last? No! Should it have been allowed to continue? No! So who should now foot the bill for all this folly? It looks like it will be the taxpayer; the poor bewildered man in the street!

Please Click Here to visit the Free Mortgage Advice Web Site.

It is a pity that those who created this ruinous situation, will not be asked to refund their ridiculous bonuses. They are the beneficiaries and it seems as though most of the rest of us will be their paymasters. Perhaps the Government mantra ought not to be - We'll do whatever it takes - but - We'll do what we like with your money!

Tags:
Is Alistair the banks Darling?
Is Alistair the banks Darling?

Don't Bank On Getting A Mortgage

2008-10-03T03:14:00.000-07:00

It seems that when some organizations, shed their building society boots and became banks, they bit off more than they could chew. Bradford and Bingley is a prime example, but by no means the only former building society that has caught a cold. Northern Rock and Halifax - Bank of Scotland, also spring to mind. Wasn't it Alliance and Leicester who boasted that you're a better investor.....?

You are certainly not a better investor with Bradford and Bingley, as it looks as though the dear old shareholders will get nothing, including those who forked out £400 million, for a rights issue in July. The great majority of shareholders are not millionaires, and those who were members when the building society became a bank, and have held onto their stock, are probably hanging on to worthless bits of paper. Such people you can feel sorry for but they are not the perpetrators of the problem.

Please Click Here to visit the Free Mortgage Advice Web Site.

Bradford and Bingley were very big in providing Buy to Let mortgages, and to a lesser extent the dubious practice of self certified mortgages. There is no wonder they caught a cold, because there are many who do not profess to be financial experts, who could see the problem coming. Of course the government have been particularly lax in not heading off a worsening situation. It almost seems as though; along with many others they saw mortgages, and house price inflation, as stairways to the stars.

House prices were driven up, not least due to 'Buy to Letters' and Self Certifiers. Many people were encouraged to borrow against the perceived increased value of their properties, and it was all sure to end in tears. But, and it is a reasonable question to ask, who for? British and American taxpayers to name but two, are being asked to foot the bill for excesses the likes of which have never been seen before. There used to be a saying that if you would like to know the value of money go and try and borrow some. That was before the banks borrowed shed loads of international money, and shovelled it out like snowflakes, or stardust!

The chickens have now come home to roost and there is no wonder. In an age of privatization, nationalization is back, and wonder upon wonder, it is some banks, the bastions of private enterprise, that are now in government hands. Many ordinary people are angry at being asked to fork out large sums to bail out irresponsible bankers and financiers. There is an election looming in the United States and there are many in the House of Representatives who have become nervous about recent bail out proposals. We watch with interest from both sides of the Atlantic, and no doubt throughout the world.

Please Click Here to visit the Free Mortgage Advice Web Site.

Tags:
don't bank on getting a mortgage
don't bank on getting a mortgage

Mortgage Quiz - Are You Greedy or Are You Needy?

2008-10-02T07:03:00.000-07:00

Most Americans are good people but there are some who are only motivated by greed. Most Europeans are good people but there are some who are only motivated by greed. Most Asians are decent people but there are some who are only motivated by greed. Better not leave out Africa and Australia because greed is not limited to a particular country or creed. So how can a vast majority stop the few causing financial misery to so many? There is only one answer and that is the ballot box!

That is why the American House of Representatives voted down the recently proposed $700 billion tax bill. They have been heavily criticized, but in a democracy the people elect the politicians, and it is the majority of the people that they should strive to serve. Not the few get rich quick bankers and speculators, but all the people, and it was good in this instance that those elected called at least a temporary halt to a scheme involving vast amounts of public money. At the very least they will get a better deal on the part of the electorate. They have succeeded in diverting some attention from the really, really, greedy, to the very, very, needy.

That's what the present mortgage crisis is all about. It is not going to adversely affect fat cats in the banking business. They have a way of squaring everything to suit themselves. Heads they win, tails you lose is their philosophy. That is why so many ordinary Americans with, and without mortgages are so angry about the proposed $700 billion dollar bail out. They feel that they are being asked to foot the bill, for other people's excesses, and quite rightly ask, why should they?

It seems that the financial sector has been operating almost without regulation. There have been ridiculous bonuses, and salaries, with obscene fortunes being made by unscrupulous people that have caused the financial system to be brought to its knees. Win or lose, they have managed to reward themselves. The problem has got to be sorted out, and it is as well that measures are afoot to prevent those responsible from getting away with it.

There was a famous Wall Street movie with Gordon Gekko extolling that 'greed is good'. The movie had a happy ending when he got his just deserts. We can only hope that reality, to some extent re-enacts the movie.

Please Click Here to visit the Free Mortgage Advice Web Site.

Tags:
mortgage quiz greedy or needy
mortgage quiz greedy or needy

Mortgage Malaise Continues

2008-09-29T06:46:00.000-07:00

Although it is reported that the powers that be, namely the sitting Republicans, and would be Democrats, are close to reaching an agreement on the mortgage fiasco, the malaise continues.

Significant events are taking place both sides of the Atlantic. Bradford and Bingley, the UK's eighth largest bank has been nationalized, seemingly because there is no viable alternative. They were one of the biggest operators in the 'buy to let' mortgage market, and like the larger HBOS seem to have got their fingers burned.

Please Click Here to visit the Free Mortgage Advice Web Site.

As the turmoil continues, many ordinary people are angry over what is going on, and find it astonishing that Bush in the US, and Brown in the UK, have allowed such situations to develop on their respective watches. It is almost as if they believe that Bill and Ben could have done better than Bush and Brown, to prevent Bradford and Bingley, and Fannie and Freddie going bust!

The main trouble with this unprecedented mortgage mess is that those who were largely responsible are not admitting it, and are being entrusted with sorting it out. This applies to both politicians and bankers and it seems to be a case of everybody loses except those who created the problems. People are in danger of losing their houses, and many more are so debt ridden, that in the present climate it will be difficult to recover. Meanwhile lenders and financiers have stashed their bonuses in safe havens and politicians retain high office.

The whole system is crying out for a breath of fresh air. With the presidential election imminent in the US, and the UK going to the polls in 2010, it may not be that long before someone appears with a new broom!

Tags:
free mortgage advice - mortgage malaise continues
free mortgage advice - mortgage malaise continues

Mortgage Morality - Political Mortality

2008-09-24T08:27:00.000-07:00

Is it reasonable or foolish for the United States Government to be considering buying up sub prime mortgages to the tune of $700 billion? There is more than one factor affecting such decisions. For a start there is Bush, McCain, and Obama. The one thing they all have in common is votes. Bush might be less concerned than the other two in this respect as his term is nearly finished, but there is enough that has already happened on his watch, without another crisis.

It makes you wonder who is really running the USA and possibly the world. At times such as this, when the administration is about to change, anything untoward is sure to be magnified. When the intended sub prime mortgage buy up was announced, financial markets steadied, but as the implications are studied it is not so clear that such a measure will be sanctioned. There have already been viable alternatives suggested, and the financial markets like nothing less than uncertainty. Therefore, shares have started to fall again and the only people sure to buck the trend seem to be financial speculators, although their wings, on short term selling, have been temporarily clipped.

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Initially there was a bounce in the markets followed by a run on the dollar, and what might happen next is anybody's guess. Of course the problems are not peculiar to the United States, although it is convenient for some to believe that's where it all started. It is a changing world in which Asia in general, and China and India in particular, are emerging as big players.

You can bet that mortgage markets and house price inflation do not dominate the growing Asian economies of China and India. That may come eventually but they now have a good model on what to avoid. China and India are the manufacturing nations that the likes of the USA and Britain once were. That was before most of their wealth was tied up in house price inflation, financial services, and dare I say it, greed.

If you manufacture and export cars, or computers, or oil and gas, there are tangible goods that are relatively easy to account for. But if your business is in swapping financial issues, that nobody really understands, in the interests of bigger and bigger bonuses, where do you go when the wheel of fortune stops? Banks used to be safe houses where you could save your money with impunity from any risk. Now they seem to have become little more than casinos, where the house bosses are the only ones guaranteed not to lose.

So will the US Government cough up taxpayer's dollars or not. At the moment it's still a case of wait and see, will they or won't they? What seems for sure is that where there is no regulation there is unprecedented greed, that benefits a few at the expense of the many. Many people are now asking the question, what sort of a society is that?

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mortgage morality - political mortality
mortgage morality - political mortality

Bush Seeks Authority For Massive Mortgage Bail Out

2008-09-22T08:34:00.000-07:00

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A report from the Christian Science Monitor suggests that the Bush Administration is ready for its next big spend. Seemingly they are set to inject around $700 billion of tax payers money to buy up bad loans. The debates regarding this latest venture are heating up, at a time when a change of government is imminent. Whether Senator McCain or Senator Obama agree with this course of action will be revealed, but for the time being they might not have much say in the matter.

Please read the full report here:

The mortgage buck stops where? | csmonitor.com

"Like a subprime mortgage, Congress may soon put taxpayers on a risky hook for mortgages gone bad. The Bush administration wants authority to spend up to $700 billion, or about the cost of the Iraq war, to buy up troubled loans. A federal rescue effort may stem a financial market meltdown. But it shouldn't be done without a reckoning.

Americans need to hear a full-throated debate by lawmakers about the range of players in this mortgage maelstrom who either lied, took on too much debt, or failed to check creditworthiness as these loans were issued and then sold up the financial food chain to the point where it has become nearly impossible to determine their value"

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Bush Mortgage Bail Out
Bush Mortgage Bail Out

Mortgage Market On The Move

2008-09-20T08:43:00.000-07:00

It has been reported that Laurence Fink, the chief executive officer of Blackrock Inc, the biggest US public money manager, believes that the US governments asset relief plan, will result in more mortgages becoming available to stimulate the housing market.

It was interesting to hear Henry Paulson, speaking on television, mention something to the effect that government action would help while the correction continued. That would seem to suggest a realistic approach and indicate an understanding that the market had in fact been overheated.

According to the S & P/Case-Shiller home Price Index US house values have dropped 18.8 per cent since their July 2006 peak.

Fink believes that a recovery is on the way and has already begun. He said, "Coupled with lower house prices and now a lower mortgage rate, affordability for housing has changed dramatically over the last 18 months."

It has certainly been an astonishing week with Wall Street dominating the news. Lehman Brothers filed for bankruptcy, and Merrill Lynch was sold to Bank of America. The American International Group, which is the biggest US insurer, was saved when the US government pledged $85 billion, to help with their debts.

It's been a real roller coaster, with dramatic and sometimes frightening headlines, that affect just about everybody in one-way or another. Japan got the jitters, but not perhaps quite as much as in Moscow where dealings were suspended due to wild swings in share values. In London, the major British Bank HBOS was in trouble, but was rescued when a merger with Lloyds was announced, presumably with the blessing of the British Prime Minister. By Friday share prices had almost recovered to the levels at which they started the week, but phew, that was the week that was!

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George Bush emerged from the White House to suggest that it was essential to sort out finances first, to deal with the problem, and look into the question of blame later.

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mortgage market on the move
mortgage market on the move

Mortgage Woes

2008-09-18T12:21:00.000-07:00

Could the unthinkable really happen? Could Britain's biggest mortgage lender really go bust? Well, on the 17th September 2008 it nearly happened, but in the event it didn't, thanks to some hasty reappraisal by the Government about competition rules. Of course they wouldn't have allowed it to happen anyway, but to ordinary people with a mortgage and depositors with a few quid put aside, it was and is, a worrying time.

It was not just HBOS Britain's biggest mortgage lender that was in trouble. The problem is that high flying bankers, have been lending money they haven't got, to people who couldn't afford to borrow it, on the back of a housing bubble that was sure to burst. But of course the government couldn't afford to let the bubble burst because they had staved off a recession by turning a blind eye to an unsustainable boom, almost encouraging people to live beyond their means, as they borrowed and spent against inflated house prices.

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Even now there seems to be a reluctance to state the obvious, and that is that the housing market had seriously overheated, both in the UK and on the other side of the Atlantic. Why can't, at least the British Government, realize that the enormous rise in house prices was unsustainable, and that a return to an appropriate level is in everybody's interest.

If you were a newly qualified nurse or similar professional person you might expect to be paid around £20,000 per annum. If the average house price was £160,000, then it's difficult to see how you could ever afford one, at 8-x salary. Remember that it's not very long ago that the average was £60,000, and just about affordable for many prospective first time buyers.

Since that time there has been an unregulated unaccountable rise (bubble) that very nearly led to the ruination of all concerned. Even now politicians seem reluctant to allow house prices to reach a proper market level, and talk in terms of stimulating the housing market, kick starting the housing market, or whatever. Surely it would be better to allow prices to regularize with normal market forces.

Tinkering with markets is not something that the British government should be involved with, but proper regulation, that's a different matter. Grotesque bonuses have been on offer to banking executives as the property bubble was allowed to expand, and taken out of the government's inflation indices. The best that could happen is that house prices find an acceptable level that is affordable without people mortgaging the rest of their lives!

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mortgage woes
mortgage woes

Mortgage Bushfire - Lehman Brothers Crash

2008-09-15T06:34:00.000-07:00

World financial markets are in turmoil as the giant US investment bank Lehman Brothers, goes bankrupt. Respected pundit Alan Greenspan declares it the sort of event that only happens once in half a century, or even a century, and the worst financial crisis he has known. Ominously he went on to suggest that it's not finished yet!

World implications of this momentous collapse can be seen from Stock exchanges plummeting all over the world. The drop in London has been around 5%, with 4% in Germany, and around 5% in France. The major British bank Halifax Bank of Scotland lost about a third of its value with its shares trading at around £2.00 as against £10.00 not that long ago.

It was sad, to see some of Lehman's employees leaving carrying their possessions in boxes. Even worse when you realize that they own around 30% of Lehman's equity, which they stand to lose as well as their jobs.

Of course all this trouble is related to the sub-prime mortgage market, which really involved lending people more money than they could afford to repay. Banks climbed on the bandwagon seemingly disregarding that markets can turn, and a global free for all ensued.

There will be many who will not have that much sympathy with bankers perceived as being greedy instead of prudent. As with many issues it is those at the bottom who are likely to suffer more than those at the top. However, the current situation is something like a bushfire, unpredictable and don't know where it's going next. Not quite uncontrollable, but getting there!

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Mortgage Bushfire - Lehman Brothers Crash
Mortgage Bushfire - Lehman Brothers Crash

Prime Minister Brown and B of E Governor King May Disagree on Mortgage Issue

2008-09-15T03:56:00.000-07:00

It has been rumoured that Mervyn King, the governor of the Bank of England, could resign if Gordon Brown goes ahead with a state-backed controversial mortgage scheme.

With the British Prime minister in trouble, even with some members of his own party, the likelihood of King resigning could be another hammer blow. Much seems to hinge on a report, produced by Sir James Crosby, commissioned by the government, and now being studied by Chancellor Darling.

It seems that Mervyn King has let it be known privately, that he considers risk and reward to be part of the mortgage market, and that underwriting mortgages is not something that the Bank of England should get involved with.

Please Click Here to review the complete article in the Sunday Herald.

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King Could Quit Over Mortgage Plan
King Could Quit Over Mortgage Plan

US Government To Bail Out Fannie Mae and Freddie Mac

2008-09-07T05:14:00.000-07:00

It has been reported that the US Government is about to bail out Fannie Mae and Freddie Mac, the giants of the American mortgage industry.

This is a highly controversial use of taxpayer's money, but the collapse of the sub prime mortgage market has cost them billions of dollars. Between them these two colossuses are behind about half of all US mortgages, and have considerable impact on the US economy as a whole.

In the UK it seems that similar moves are afoot. Apparently the British Government have commissioned the Crosby report that could lead to billions of pounds of tax payers money being made available to mortgage lenders. It is not clear how this will operate, as the report is a recent undertaking. However, there are suggestions that the British Chancellor is now studying the report, so some form of decision may be imminent.

The British Government have already moved to support their own ailing mortgage market, but on nothing like the scale now being considered both sides of the Atlantic. Of course the UK authorities have already bailed out the troubled Northern Rock mortgage bank to the tune of a reported £40 billion. These are difficult times and there are still uncertain and contentious issues to deal with. Those countries, whose economies are not so reliant on what happens in housing markets, seem better able to weather the current storms.

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Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac

Housing Market Speculation

2008-08-31T09:25:00.000-07:00

Rumors are rife that the British Government is about to do something to assist home buyers, but this is surely a very controversial area to tinker with. They seemed quite prepared to stand by while the mortgage industry got itself into a proper pickle by a great deal of injudicious lending. Could they not see that the mortgage 'free for all' that preceded the present crises could not go on forever? It's difficult to guess what their intentions are so we will have to wait and see. However, they have got themselves into a bit of a mess, and have seemingly set many of the devices in their own minefields.

The trouble is that when a mess has been created is it wise to allow those who are responsible to sort it out. Unfortunately you don't always have a choice. Oh sure, you have the ballot box every five years or so, to try to make a bad situation better, but frequently all you get is more of the same. Then they wonder why so many people don't turn up to vote.

It is frequently reported in the press that UK government borrowings are at almost unprecedented levels, so where are all the billions they are to throw at the property market coming from. Is it money being spent to help desperate people, or to bail out a desperate government becoming increasingly aware of its own shortcomings. There is a world of difference in doing something to help a homeowner avoid repossession and assisting someone who saw the booming market as an easy way of making a fast buck. There is little doubt that the 'Buy to Let' market attracted many investors not particularly skilled in finance. Speculative investment has always borne an element of risk and in such instances it is not up to governments to bail out investors through the tax system.

So we must wait and see. There has been a high degree of election fever on the other side of the Atlantic. It will be followed before too long by electoral activity this side of 'the pond'. Before then there will be attempts to shore up quite a few flagging reputations. Only time will tell if that is possible!

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free online mortgage advice

More Mortgage Gloom

2008-08-24T09:11:00.000-07:00

It would seem that those anticipating an early end to mortgage problems for lenders and borrowers alike, will have to wait for quite some time.

There has been further speculation that the US Government may still have to bail out mortgage giants Fannie Mae and Freddie Mac Also Kenneth Rogoff, ex chief economist at the International Monetary Fund, has predicted that one of the really big investment banks could go under during the coming months. These are worrying trends indeed, particularly in the light of the mammoth losses already sustained by the leading players.

In the present malaise there have been many job losses and you could be forgiven for wondering where it is all going to end. It is well known that in the UK the Bank of England had to step in to support the Northern Rock Bank, and the US authorities have signalled their intention to follow suit if organizations such as Bear Stearns are similarly threatened.

There is speculation in Wall Street that Lehman Brothers is following a range of measures to strengthen its arm. As with many of their contemporaries it is apparent the sub prime mortgage market has cost Lehman dearly. Their problems may be intensified if the US commercial property market follows what has happened in the residential sector.

It could be more than a coincidence that the Chinese Bank ICBC, is reported to have overtaken HSBC as the world's most profitable bank, at a time when their superb Olympics is drawing to a close. With Europe, the UK, and the US, striving to avoid official recession, Asia is striding ahead, and there are undoubtedly bargains to be had by shrewd and cash rich investors. Testing times seem set to continue and it would be interesting to be able to move forward a year or two to determine the final outcome. In the meantime we must wait and see, and of course hope that established, and hitherto respected Western banks weather the storm.

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free on line mortgage advice
free online mortgage advice

Housing Repossessions

2008-08-16T12:42:00.000-07:00

It was recently reported in Yahoo News that foreclosures are still on the increase, in the USA.

This is a worrying trend because although housing repossessions in the UK, are nothing like as high as they are in the US, it seems that there is a severe knock on effect.

Economy - Thursday - Yahoo! News

Economy - Thursday - Yahoo! News: "U.S. home foreclosures spike

"Foreclosure filings jumped 55% in July vs. last year to 272,171 homes, just shy of May's record 273,001, RealtyTrac said. That's one per 464 households and signals that the nation's housing woes are deepening. Meanwhile, bank seizures of property almost tripled from last year to 77,295 in the biggest gain since records began in '05. Nev., Calif. and Fla. were hit hard.

Median single-family home prices in metro areas fell 7.6% in Q2 vs. a year before to $206,500, as rising foreclosures drove down values, the Nat'l Assoc. of Realtors said. Discount window loans to banks from the Fed averaged $17.7 bil in the week ended Aug. 13, breaking the prior week's record of $17.37 bil. Brokerages borrowed nothing. ECB official: economy healthy"

There has been much publicity, that Banks and other mortgage sources both sides of the Atlantic, have very much been caught out by the downturn in the property market. It had become customary to strengthen liquidity and potential profits by swap arrangements. As more people in the US are unable to meet their obligations, it is possible that those UK banks most involved in such arrangements, could sustain further losses.

There's no gain without pain, is something that may apply particularly to buy to let investors, as banks struggle to protect their own interests, through a tightening of lending policies.

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free online mortgage advice

Bridging Loans Are A Serious Matter

2008-08-11T10:54:00.000-07:00

A bridging loan may be negotiated to assist buyers to purchase another property before they have sold their own. It may be that someone has seen a house that they particularly like, offered for sale, but which is attractive to other prospective purchasers as well. In an endeavour to beat the opposition, they may be tempted to negotiate a bridge to enable them to make an offer, which might normally have had to wait, until they had sold their own property.

Bridging loans are not something that should be contemplated without serious consideration. They are usually provided by high street banks, and may be subject to higher interest rates and arrangement fees than those applied to normal mortgages. If the applicant then fails to sell their original property, within a reasonable time, they could become burdened with a level of total repayments that could cause them financial hardship. They would be liable for repayments on their original mortgage and on their bridging loan as well.

You can guess what could happen in a slow housing market. It would be a real worry if the original property was not sold for a year or two. It could become worth far less than the asking price, and where finances were becoming overstretched both the borrower and the lender would have cause for concern. Imagine what could happen if the first property had to be forcibly sold under the hammer!

As far as bridging loans are concerned it pays to be cautious. Whatever you do try not to bite off more than you can chew. It is disappointing to want to move, and to have found an ideal home, and then find that you can't proceed because a buyer hasn't been found for your existing property. Unless you are very sure about what you are doing, a bridging loan may not be the best answer. There will be other houses that you like just as much, when you are in a better position to proceed.

Don't be impetuous. There are always overpriced loans that may seem tempting when other considerations are holding you back. Be assured, that many are the times when prospective buyers have believed they have lost out, and then been rewarded with something even more desirable, after waiting until their circumstances matched their opportunities.

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free on line mortgage advice - bridging loans
free online mortgage advice - bridging loans

Is Mortgage Bribe - Just A Jibe?

2008-08-06T03:18:00.000-07:00

The highly respected Liberal Democrat Shadow Chancellor, Vince Cable, has suggested that measures the British New Labour Government is contemplating, amount to nothing less than trying to bribe people to buy houses in a falling market!

Indeed it would seem that Prime Minister Gordon Brown's economic policy, when he was chancellor, may have been so inexorably linked to house price inflation that his party's only way out is to try to re-inflate the bubble. As they lurch from one crisis to another they are throwing more money at the failed Northern Rock Mortgage Bank. Apparently £3 Billion, £3000,000,000, is being converted from a loan to equity, and it is feared that taxpayers might not see a return on their enforced 'investment'.

There has been much talk, of so-called amateur investors, catching a cold over buy -to-let investments. That is unfortunate, but those who really come out with egg on their faces, are a few well to do bankers, and of course the Government, who seem to have allowed circumstances to overtake them, and now to be clutching at straws. Some senior bank officials have kept their jobs and others have fared well with bonuses and the like. But if the government continue to throw taxpayers money about like confetti they could be torn to shreds at the ballot box.

Mr Cable has been a voice in the wilderness, but has spoken with the authority of one who knows a thing or two about financial issues. In fact he seems to be quoted more frequently than George Osborne who is his opposite number in the British Conservative party. Of course a certain Alistair Darling is now the Chancellor, but what was a good job is now something of a poison chalice, and a reshuffle could see someone not so close to Mr Brown being offered the position, more as punishment than reward!

There is a tendency to blame outside forces, particularly the United States sub prime market, for all ills. Nobody forced British Banks to invest in the United States mortgage market, and in any event it seems that injudicious internal home lending, is much to blame for the predicament in the UK,

Mr Cable for one thinks the UK Government continue to get it wrong. For British taxpayers to have to subsidize dodgy mortgage deals without so much as a House of Commons vote, might just be one mouthful too much to swallow!

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Mortgage Bribe Just a Jibe!
Mortgage Bribe Just a Jibe!

Bye, Bye, Buy To Let!

2008-08-04T04:20:00.000-07:00

It has been reported, that up to 200,000 buy-to-let borrowers have seen their investments plummet, as the downturn in the UK housing market continues. This figure seems sure to grow as the relative slump in house prices continues, but it should be remembered that the downturn followed a period of unprecedented growth.

Unfortunately, it seems that many people viewed housing as a treasure trail, particularly those whose experience of such matters was limited. Lenders must take their share of the blame, because in many instances they stoked up the buy-to-let market, sometimes without full consideration of the experience or financial status of their mortgage borrowers.

If a market becomes overheated the bubble will eventually burst. It happened with the dotcoms and now a similar thing has happened to those who got into the buy-to-let market at the wrong time. Of course timing is everything. Oh, what wonderful thing hindsight is! Even the experts don't always get their timing right, but they are able to read the signs before situations get really bad, otherwise they wouldn't be experts would they?

Apparently there are around a million buy to let mortgages in the UK and in the region of 200,000 of those were taken out at the height of the boom. Therefore, many buy-to-let borrowers are either in negative equity or on the verge of being so. If you compare the figure of 1000,000 buy to let mortgages, with the figure of 30,000 ten years ago you can grasp the scale of the issues involved.

It seems now that people will think twice before investing in buy-to-let properties, and that mortgage loan companies, will probably think three times before deciding whom to lend to. It may not quite be bye, bye to the buy-to-let market, but there will certainly be a period of enforced restraint by lenders and borrowers alike.

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Free on line mortgage advice - Bye bye buy to let!
Free on line mortgage advice - Bye bye buy to let!

Vince Cable Warned About Negative Equity

2008-08-01T04:51:00.000-07:00

It looks like Vince Cable, Shadow Chancellor of the British Liberal Democrat Party, was right when he said that many people in the UK, would soon face negative equity.
The last similar crisis in the UK was in the years 1990-93, and Mr Cable is not the only significant authority to issue warnings on negative equity reaching similar if not worse proportions.

Mr Cable was quick to emphasize, that most people experience negative equity in a purely theoretical sense, because they don't have to move, and can sustain their payments. However, he went on to say that as much assistance as possible must be provided to homeowners with severe mortgage problems. The Lib Dem Shadow Chancellor has become a highly respected authority since he stood in as leader before Nick Clegg was elected, during December 2007.

The ratings agency, Standard and Poor's has suggested that if the current fall in house prices continues at the current rate, the number of people affected could be 1.7 million by mid 2009. That is higher than it was in 1990-93, and the situation could become much worse, if gloomier forecasts prove to be correct.

The Council of Mortgage Lenders has urged homeowners to bear in mind that negative equity only becomes a problem if you have to move. However, with unprecedented increases in energy prices, and other basic commodities such as food, and petrol at the pumps, many people are becoming increasingly worried.

In the USA, President George Bush has sanctioned measures to assist homeowners struggling to pay their mortgages. There has been some talk of similar measures being adapted in the UK, where Parliament has now adjourned for the summer recess.

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Bush Agrees Mortgage Relief

2008-07-30T09:38:00.000-07:00

A recent report in Yahoo Business News, confirmed that American President George Bush, has signed a major bill to provide mortgage relief for thousands of beleaguered
borrowers.

Bush signs housing bill to provide mortgage relief

By JENNIFER LOVEN, Associated Press Writer 26 minutes ago

WASHINGTON - President Bush on Wednesday signed a massive housing bill intended to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets.

Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto, in the Oval Office in the early morning hours. He was surrounded by top administration officials, including Treasury Secretary Henry Paulson and Housing Secretary Steve Preston.

"We look forward to put in place new authorities to improve confidence and stability in markets," White House spokesman Tony Fratto said. He said that the Federal Housing Administration would begin right away to implement new policies "intended to keep more deserving American families in their homes."

The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.

It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses.

The House passed the bill a week ago; the Senate voted Saturday to send it to the president.

Bush didn't like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.

But he withdrew that threat early last week, saying hurting homeowners could not wait — and even blaming the Democratic Congress' delays in action for forcing an imperfect solution.

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free online mortgage advice

Mortgage Rate

2008-07-20T11:57:00.000-07:00

One of the key considerations when negotiating a mortgage is the mortgage rate.

Mortgage rates may rise and fall in line with interest rates, but they are influenced by several other factors. To find out more we would recommend that you visit the Free Mortgage Advice web site, from which the following is an extract:

"Mortgage rates are affected by many factors, because of which they change frequently. A significant matter influencing mortgage rates is the issue of inflation. This occurs when credit is relatively easy to obtain, and demand for goods and services is high, stimulating an increase in prices. A boom period such as this can result in rapidly rising prices, including house price inflation, and the economy may be in danger of overheating. Mortgage rates may rise in sympathy with other inflationary pressures. Some people take on more than they can properly afford believing, that the upward cycle will continue forever, and may be caught unawares when the bubble bursts.

Although mortgage rates tend to follow the direction of interest rates, there are also various other issues that determine them. Mortgage rates are associated with the supply and demand for home loans in what is a competitive market. A variety of loan providers offer many different deals, so mortgage rates may differ, according to what has been negotiated.

At times when mortgage rates are relatively high, demand for mortgages slows down. To counter this, the Federal Reserve Bureau may adjust interest rates. So mortgage rates are linked to the rise and fall of interest rates, but as shown above, there are other factors to take into consideration.

Banks and other loan providers obviously need to plan ahead. They may be geared to providing a particular quota of mortgages in a given period. In a competitive market they may need to adjust mortgage rates downwards, for some deals, to achieve their planned objectives. Although the demand for mortgages may remain high, some mortgage rates might be lowered to meet particular business objectives."

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free online mortgage advice

Mortgage Rates Coming Down

2008-07-18T04:32:00.000-07:00

As recently reported in Yahoo Business News home loan rates in the US have fallen over the last week.

U.S. mortgage rates decrease

"Home loan rates fell over the last week as Treasury yields fell sharply amid financial woes and views that the Fed won't hike rates this year. The 30-year fixed-rate mortgage fell to 6.26% for the week ended July 17 from 6.37% a week earlier, Freddie Mac said. The 15-year fixed-rate fell 13 basis points to 5.78% this week. The 5-year Treasury-indexed adjustable-rate mortgage edged down to 5.8%, while the 1-year ARM fell 7 ticks to 5.10%. Treasury yields have picked up in the last few days"

This downward trend in mortgage rates has finally started to take effect in the UK house market, which continues to be depressed. Some forecasters are suggesting that UK house prices will drop as much as 18% this year, 2008, and there are others who are even more gloomy.

It is suggested that many of the UK's middle classes will go into negative equity, where the value of their home is less than their mortgage. It is a worrying situation, particularly when the cost of basic essentials, including food and energy, is also rising to unprecedented levels. There have been top level discussions to see what can be done about the fast escalating cost of oil, with its significant impact at the pumps.

For useful information concerning mortgages, Please Click Here to visit the Free Mortgage Advice Web Site.

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mortgage rates coming down
mortgage rates coming down

Free Mortgage advice - First Mortgage Loan

2008-07-14T07:05:00.000-07:00

Free Mortgage advice - First Mortgage Loan

Everybody who has purchased a home with a mortgage knows that if the mortgage runs the full term more is paid to cover interest charges than the initial cost of the house.

Consider a first mortgage loan for the sum of $250,000 at 8% with a 30-year repayment period. If such a first mortgage runs the full term it will incur more than $410,000 in interest against the $250,000 principal amount borrowed initially. Therefore the house that was offered at a selling price of $250,000 ends up costing $660,000.

It is absolutely imperative that before taking on your first mortgage loan, you familiarize yourself with the financial implications. Your objective should be to get the best deal for your first mortgage loan because it is amongst the biggest financial decisions you will be called upon to make.

Most people think of a mortgage as a loan but that is only part of the story. So remember when you are considering your first mortgage loan that you are seeking a sum of money in return for the mortgage you give to the lender. That is to say that the loan is secured against the property you are intending to buy.

Before you enter into your first mortgage loan commitment you should find out as much about mortgages as you can. There are many different kinds of mortgage some of which are listed below.

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first mortgage loan
free online mortgage advice

Free Mortgage advice - Interest-Only Mortgage

2008-07-13T08:07:00.000-07:00

Sooner or later you will be required to make a decision with regard to what sort of mortgage is best suited to your personal circumstances. There are many factors to take into account and you will find that the Free Mortgage Advice web site is a good place to start considering what is on offer. The site is not intended to be a substitute for your professional financial adviser, or broker, but may assist you in preparing a plan to better understand the various deals on offer. So, Please Click Here to visit the Free Mortgage Advice Web Site from which the following is an extract.

The term interest-only mortgage is misleading. Obviously, there is no such thing as an interest-only mortgage, because sooner or later you will still have to pay back the loan principal. The thing to remember is that when you get an interest-only mortgage, what you’re really getting is an interest-only payment method but somewhere along the line, the actual loan has to be repaid.

You should also bear in mind that the actual benefits of interest-only mortgages are frequently overstated. With a standard mortgage, as much as 95% of each dollar paid to the lender may be swallowed up in loan interest. Therefore on a $100,000 standard loan with 7% interest, the total payment could be $700 with the $665 going to interest and only $35 for equity.

A Brief History of Interest-Only Mortgages

Interest-only mortgages have been available for some considerable time, and the idea behind them was developed from the less rigid and innovative jumbo mortgage markets. Consequently, interest-only mortgages are often a loan type preferred by smart investors and better off clients, who may decide to utilize the principal portion of their payment on their wider investments.

Please Click Here to visit the Free Mortgage Advice Web Site,and read the complete article.

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interest only mortgage advice
interest only mortgage advice

Fannie Mae And Freddie Mac

2008-07-12T09:18:00.000-07:00

To many people outside the USA the names Fannie Mae and Freddie Mac sound like characters from a Walt Disney cartoon! Nothing could be further from the truth, or at this present time less funny, because these are the names of the two most important mortgage names in America.

As the share price of Fannie and Freddie plunged on Wall Street yesterday, stock markets throughout the world trembled in sympathy. No wonder, because these two American giants guarantee around $5 trillion of debt. Yes, that's right, not millions, not billions, but trillions of dollars.

It has been suggested that the US Government is planning a bail out, but they are unlikely to be hasty. Although, it seems inconceivable that they would allow these colossuses to go to the wall, they will probably play a game of wait and see, hoping that things will get better.

The ramifications of this latest news, affecting the US property market, are potentially very serious to other countries as well, and particularly to the UK. It seems that the British Governments financial policy has been linked to house price inflation, and encouraging borrowing bordering on the irresponsible.

There are now various schemes afoot to try to minimize problems in housing markets. Public money has either been used, or is being considered for use to plug shortfalls occurring due to imprudent lending.

It is unfortunate that the public at large, are being called upon to provide funds through taxation, to support circumstances resulting from what amounts to bad financial management. In many cases the bad managers responsible have been richly rewarded, and in most instances they remain in charge. Politicians though may be changed through the ballot box!

The Fannie Mae and Freddie Mac problems are symptomatic of what happens when prudent lending gives way to profit free for alls. It only works until the market turns and then, watch out. There are those in high places who have forgotten that property is a market, and not a continuous upward escalator. Now they would tinker with pretending to assist first time buyers with various schemes that are really designed to protect them from further criticism of their own shortcomings.

When the trend of property is downwards the best advice for first time buyers is to wait, and save, until the market has bottomed, which will be widely publicized. That way they will have a higher percentage of funds when measured against less of a total outlay.

Please Click Here to visit the Free Mortgage Advice Web Site.

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Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac

Brief Guide To Adjustable Rate Mortgages

2008-07-09T01:45:00.000-07:00

One of the biggest decisions many people have to make is about what sort of mortgage is best suited to their requirements. Home ownership is something that most people aspire to but choosing a mortgage must be an informed decision. Prospective mortgagees should obtain all the information they can and discuss various possibilities with qualified advisers. A useful guide is the Free Mortgage Advice website which contains web pages about various mortgage matters. It is not intended to be a substitute for the professional advice of a broker or loan advisor, but as an introduction to some of the issues involved is well worth a visit. So, Please Click Here to visit the Free Mortgage Advice Web Site from which the following is an extract.

Obtaining the most suitable mortgage obviously requires knowledge of mortgage rates. Mortgage rates are influenced by a number of factors, and one of them is the type of mortgage required.

Essentially there are two main types of mortgages for prospective mortgagees to consider. One is a fixed rate mortgage, in which the rates are fixed for the duration of the loan term. The other is an adjustable rate mortgage.

With adjustable rate mortgages, the interest rate is subject to fluctuation. The interest rate may either increase or decrease, in line with how prime rates, are adjusted. Therefore, an adjustable rate mortgage may vary downwards resulting in cheaper interest rates, and lower monthly repayments. But you must be aware that adjustable rate mortgages can also cost more when interest rates increase as and when prime rates are adjusted upwards.

Due to the level of uncertainty, involved, adjustable rate mortgages are sometimes reserved for experienced investors, who can use market fluctuations advantageously. When low interest rates remain steady, adjustable rate mortgages are relatively inexpensive. At such times those homebuyers willing, or able to afford to take on an element of risk, may reap the benefit of adjustable rate mortgages.

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free on line mortgage advice
free online mortgage advice

Big Banks Seeking To Expand Mortgage Business

2008-07-07T08:07:00.000-07:00

As recently reported in The Guardian Newspaper is is evident that the big banks are successfully endeavoring to increase their market share of the mortgage business

Big banks look to expand | Business | The Guardian:The contraction in the mortgage market means that big banks are now providing 90-95% of all new home loans. This compares with a market share of about 60% for the largest lenders under normal conditions. The number of mortgage products on offer has also shrunk. The amount of different home loans in the market today totals 3,430, according to Moneyfacts, the financial website, compared with 15,599 a year ago.

Smaller building societies and less well-capitalised banks have reduced their exposure to the home loans business because of the difficulties of obtaining funds, as the international money markets are in effect closed to them. Big lenders such as HBOS have traditionally held a large slice of the mortgage market. But the scarcity of funds for smaller banks has led HSBC and Barclays to target home loans as an area for expansion. Barclays now claims that it had a 28% market share in the first quarter compared with only 2% a year ago.

Although the banks are necessarily much more selective in mortgage appraisals, it seems that funds are readily available for the right clients. Nevertheless, new rules make it particularly difficult for first time buyers who are being asked for deposits of up to 25% to secure the cheapest deals. This will continue to depress the rest of the housing market which it seems will remain uncertain for some time to come.

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free on line mortgage advice
free online mortgage advice

Free Online Mortgage Calculators

2008-07-04T07:02:00.000-07:00

Free online mortgage calculators are very useful tools to enable you to choose the best mortgage to suit your individual circumstances.

There are free on line mortgage calculators to help you to evaluate many of the various loans available from mortgage providers. It is in your own best interests to get to know as much as you can before you approach a loan provider or mortgage broker. It would time consuming for most people to work out the various aspects of a mortgage manually, but it is a quick and simple task using one of the many free online mortgage calculators available from various web sites.

All you really need to do is to search Google, or one of the other search engines, using the term 'free online mortgage calculator'. You will be rewarded with a selection of calculators to meet most needs. Then you can make your choice, depending on what sort of mortgage your require.

Of course your mortgage loan provider will have mortgage loan calculators available. However, you will be better equipped if you have prepared some figures of your own to make comparisons, and to play your full part in the negotiations. There is not only the mortgage to consider but associated costs as well, and there are free mortgage calculators that can assist with these and other circumstances.

Free online mortgage calculators are not only useful for assisting with first mortgages. For instance, they can help with other financial situations such as refinancing. You will be able to work out and compare deals available from different loan sources. You might consider switching a loan for a deal more in line with your resources and even save yourself some money in the process.

Please Click Here to visit the Free Mortgage Advice Web Site.

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free online mortgage calculators
free online mortgage advice
free online mortgage calculators