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 Loan, Credit, Lien, Liability & debt

 

What the Heck is a Jumbo Mortgage  Loan, Credit, Lien, Liability & debt?

You may have heard of the term jumbo mortgage  Loan, Credit, Lien, Liability & debt and wondered what it means. Well, in this short article I will take you through the meaning and why it is important for you...

jumbo mortgage  Loan, Credit, Lien, Liability & debt, mortgage,  Loan, Credit, Lien, Liability & debt

You may have heard of the term jumbo mortgage  Loan, Credit, Lien, Liability & debt and wondered what it means. Well, in this short article I will take you through the meaning and why it is important for you to understand it.

In basic terms, if a mortgage  Loan, Credit, Lien, Liability & debt exceeds a certain amount, it is considered a jumbo mortgage  Loan, Credit, Lien, Liability & debt. Currently (as of 2006), a jumbo mortgage  Loan, Credit, Lien, Liability & debt is a  Loan, Credit, Lien, Liability & debt more than $417,000. The limit typically changes each year. In 2005, the amount was $357,650.

The great part about a jumbo mortgage  Loan, Credit, Lien, Liability & debt is the approval process is the same for conventional  Loan, Credit, Lien, Liability & debts for most lenders. Unfortunately, the interest rate for a jumbo mortgage  Loan, Credit, Lien, Liability & debt is typically 1/4% higher than a conventional  Loan, Credit, Lien, Liability & debt but this does vary and the difference seems to be less year after year.

Since brokers are typically compensated based on the amount of the  Loan, Credit, Lien, Liability & debt and a jumbo mortgage  Loan, Credit, Lien, Liability & debt is a larger amount than a conventional, you should feel comfortable negotiating the  Loan, Credit, Lien, Liability & debt rate with your broker or lender. I am amazed that people will negotiate a $100 tire purchase but will fail to ask the broker compensation on a $1,000,000  Loan, Credit, Lien, Liability & debt. A good mortgage broker is happy to discuss fees and in most cases appreciates it. This way there are no surprises or concerns after escrow closes.

Anytime you start the  Loan, Credit, Lien, Liability & debt process whether refinancing or purchasing a home, I recommend the following steps:

1) Review current mortgage rates on the internet and get a feel for the current market. Interest rates change frequently so this step just gives you an idea. When looking over rates make sure you are reviewing jumbo mortgage  Loan, Credit, Lien, Liability & debt rates as there is a rate difference.
2) Assess your  Loan, Credit, Lien, Liability & debt needs and the amount you think you need
3) Ask family or friends for a reference of a mortgage broker
4) If you cannot find a referral, you should proceed cautiously and develop a list of questions for your prospective mortgage broker.
5) Questions you should ask include: how long have you been doing mortgage  Loan, Credit, Lien, Liability & debts, are you full-time mortgage broker, how do you price your jumbo mortgage  Loan, Credit, Lien, Liability & debts, and what education do you have. Asking these questions will give you a good first impression of the mortgage broker.
6) Determine if you need to pre-qualify for a  Loan, Credit, Lien, Liability & debt
7) Complete the  Loan, Credit, Lien, Liability & debt application thoroughly and accurately

If you work with an experienced mortgage broker, the process will be very painless as the mortgage broker will anticipate problems and deal with them proactively.

If you follow the steps in this article, you are well on your way to getting a great jumbo mortgage  Loan, Credit, Lien, Liability & debt and will build a long-term trusting relationship with a mortgage broker.

 

Mortgage essentials: a few facts about mortgage  Loan, Credit, Lien, Liability & debts

A mortgage can be regarded as a type of  Loan, Credit, Lien, Liability & debt which is guaranteed by the property purchased by an individual. A typical mortgage deal is based on the opportunity of the lender (the party providing the money for a home purchase) to sell the house in case the debtor is unable to pay off his mortgage  Loan, Credit, Lien, Liability & debt. Basically, a mortgage can be viewed as a housing  Loan, Credit, Lien, Liability & debt, which is probably the fastest way to buy a house nowadays.

mortgage,  Loan, Credit, Lien, Liability & debt, credit, finance, home equity  Loan, Credit, Lien, Liability & debt, bank

A mortgage can be regarded as a type of  Loan, Credit, Lien, Liability & debt which is guaranteed by the property purchased by an individual. A typical mortgage deal is based on the opportunity of the lender (the party providing the money for a home purchase) to sell the house in case the debtor is unable to pay off his mortgage  Loan, Credit, Lien, Liability & debt. Basically, a mortgage can be viewed as a housing  Loan, Credit, Lien, Liability & debt, which is probably the fastest way to buy a house nowadays.

Different financial institutions can act as mortgage lenders. Shopping for a home mortgage  Loan, Credit, Lien, Liability & debt you should consider the following options on your way:
-banks
-building societies
-home mortgage companies
-credit unions
-state pension unions
-housing societies
-insurance companies

Also there are a number of certified mortgage lenders which are called private mortgage lenders. It’s quite obvious that there are many different sources for initiating a mortgage  Loan, Credit, Lien, Liability & debt. Quite a lot of mortgage lending companies have established strong presence online. Many mortgage lenders succeed in their business arranging online mortgage deals because such an approach is fast, efficient and well secured.

There exist different types of mortgage  Loan, Credit, Lien, Liability & debts on the contemporary market. Different mortgage packages are offered by different mortgage lending institutions. And quite often, terms and conditions differ a lot.

Obtaining a mortgage  Loan, Credit, Lien, Liability & debt the buyer should choose between either a fixed mortgage rate or variable mortgage rate and some other hybrid mortgage solutions combining the features of the two principal mortgage types. A particular mortgage  Loan, Credit, Lien, Liability & debt affects regular mortgage payments,  Loan, Credit, Lien, Liability & debt interest rate and overall mortgage costs. A good mortgage company provides customers with many different options in order to give people the flexibility they need. Before deciding in favor of a particular mortgage lender one should carefully review all mortgage opportunities, study available mortgage plans and packages in order to make the right decision. A casual approach to choosing a mortgage  Loan, Credit, Lien, Liability & debt can result in a great loss of funds due to high mortgage payments and unexpected raise of the mortgage rates.

There are quite a lot of costs and fees associated with a mortgage deal. Costs can vary from lender to lender and many of them are negotiable. The most common mortgage fees are an appraisal fee, mortgage insurance fee, application fee, early repayment and a number of others. Let an experienced lawyer or mortgage broker handle your mortgage deal – that will help a lot.

Tiberias Financial Group, Inc. http://www.TiberiasMortgage.com is an example of a typical player on the contemporary mortgage market since it offers a wide variety of services and mortgage related opportunities. Whether you're buying a home, refinancing, or looking for a home equity  Loan, Credit, Lien, Liability & debt or home equity line of credit you will be serviced by professionals and get what you want.

 

Mortgage  Loan, Credit, Lien, Liability & debt Basics: Interest Only  Loan, Credit, Lien, Liability & debts, Pay Option ARM

To understand  Loan, Credit, Lien, Liability & debts and mortgages we need to understand  Loan, Credit, Lien, Liability & debt limits first. If your  Loan, Credit, Lien, Liability & debt amount exceeds the amount below, you will qualify for a Jumbo  Loan, Credit, Lien, Liability & debt, which carries higher interest rate.

mortgage  Loan, Credit, Lien, Liability & debt basics, finance basics

To understand  Loan, Credit, Lien, Liability & debts and mortgages we need to understand  Loan, Credit, Lien, Liability & debt limits first. If your  Loan, Credit, Lien, Liability & debt amount exceeds the amount below, you will qualify for a Jumbo  Loan, Credit, Lien, Liability & debt, which carries higher interest rate.

One-Family (single family homes) $417,000
Two-Family(duplex) $533,850
Three-Family (triplex) $645,300
Four-Family(fourplex) $801,950

FIXED  Loan, Credit, Lien, Liability & debts:

30 Year Fixed Mortgage Rates
This  Loan, Credit, Lien, Liability & debt program is fixed for 30 years. Your interest rate will not change for 30 years. This is ideal for people who plan to stay at their present property for a long period of time.

20 Year Fixed Mortgage Rates
Fixed for 20 years. Your payment will be higher than 30 year fixed  Loan, Credit, Lien, Liability & debt becuase your  Loan, Credit, Lien, Liability & debt term is only for 20 years. Interest rate will not change for 20 years.

15 Year Fixed Mortgage Rates
15 year fixed  Loan, Credit, Lien, Liability & debt has a  Loan, Credit, Lien, Liability & debt term of 15 years and will not change during this period. Your monthly payment on this  Loan, Credit, Lien, Liability & debt program will be much higher than 20 years fixed or 30 years fixed. Use this  Loan, Credit, Lien, Liability & debt program if you plan to sell your home in 5-8 years. Interest rate will not change for 15 years.

ARM (Adjustable Rate Mortgage)

ARM  Loan, Credit, Lien, Liability & debts are fixed for a certain period of time, where after that period ARM  Loan, Credit, Lien, Liability & debt becomes an adjustable  Loan, Credit, Lien, Liability & debt. How do they work?

Each ARM  Loan, Credit, Lien, Liability & debt Program has these options:

1) Index: Most comon index-LIBOR

2) Margin: Is given to you by your lender, and it is the difference between the index rate and the interest charged to the borrower

For example 5/1 ARM. This  Loan, Credit, Lien, Liability & debt is fixed for 5 years after which in 6th year it becomes an adjustable  Loan, Credit, Lien, Liability & debt. Your  Loan, Credit, Lien, Liability & debt officer will tell you what your index is and what your margin is. Usually 5/1 arm is tied to 1-year treasury index and margin is around 2.00%-3.00%

Your index + margin = Fully Index rate . Your new note rate (interest rate) after 5th year.

What about the 6th year? What would your payment be?

Let's say that your  Loan, Credit, Lien, Liability & debt officer told you that your margin is 2.5% with 1 year treasury index. You will have to look up 1 year treasury index for a specific month.

1 year treasury as of Oct.2005 is 4.18, and you know that your margin is 2.5%. Therefore you new interest rate is 1 year treasury 4.18% (index) + 2.5% (margin) = 6.68% for the begining of 6th year.

Index rate are move on monthly basis, therefore your payment may flunctuate each month. In most cases banks wills end you a statement advising you that your rate will change.

3) To protect consumers from high index rates, lenders implemented a CAPS.

An example of this is a 2/6 cap, which allows the interest rate on your ARM  Loan, Credit, Lien, Liability & debt to go up or down by no more than two percent every adjustment period, and has a total limit of six percent for cumulative changes. Therefore a 2/6 cap on a 5% ARM will allow a maximum rate (6 + 5%) of no more than 11%.

In some cases you will see 2/2/6, which means 2% adjustment with 2 year prepayment penalty and total of six percent of cumulative changes.

4) With an arm you can have either a fixed rate or you can choose an Interest Only structure  Loan, Credit, Lien, Liability & debt.

1/1 ARM Mortgage Rates
1 year ARM (Adjustable Rate Mortgage) is fixed for 1 year and in 2nd year it becomes an adjustable.

3/1 ARM Mortgage Rates
3 year ARM (Adjustable Rate Mortgage) is fixed for 3 years and in 4th year it becomes an adjustable.

5/1 ARM Mortgage Rates
5 year ARM (Adjustable Rate Mortgage) is fixed for 5 years and in 6th year it becomes an adjustable.

7/1 ARM Mortgage Rates
7 year ARM (Adjustable Rate Mortgage) is fixed for 7 years and in 8th year it becomes an adjustable.

10/1 ARM Mortgage Rates
10 year ARM (Adjustable Rate Mortgage) is fixed for 10 years and in 11th year it becomes an adjustable.

Interest Only  Loan, Credit, Lien, Liability & debts

For example, if a 30-year fixed-rate  Loan, Credit, Lien, Liability & debt of $100,000 at 8.5% is interest only, the payment is .085/12 times $100,000, or $708.34. This is an example of interest only payment.

Each  Loan, Credit, Lien, Liability & debt payment consists of Interest and Principal. Here you will be paying an interest each month and your principal will be adding to your balance, thus increasing it. You may also pay both principal and interest.

If a lender offers you an Interest only  Loan, Credit, Lien, Liability & debt these  Loan, Credit, Lien, Liability & debts are tied to an index just like ARM  Loan, Credit, Lien, Liability & debts.

MTA Index: The MTA index generally fluctuates slightly more than the COFI, although its movements track each other very closely.

. 1 Month MTA ARM Mortgage Rates
. 3 Month MTA ARM Mortgage Rates
. 6 Month MTA ARM Mortgage Rates
. 12 Month MTA ARM Mortgage Rates

COFI Index: This index rise (and fall) more slowly than rates in general, which is good for you if rates are rising but not good for you if rates are falling.

. 1 Month COFI ARM Mortgage Rates
. 3 Month COFI ARM Mortgage Rates

LIBOR Index: LIBOR is an international index, which follows the world economic condition. It allows international investors to match their cost of lending to their cost of funds. The LIBOR compares most closely to the CMT index and is more open to quick and wide fluctuations than the COFI.

. 6 Month LIBOR ARM Mortgage Rates
. 12 Month LIBOR ARM Mortgage Rates

Pay Option ARM  Loan, Credit, Lien, Liability & debt

Pay Option ARM in a new  Loan, Credit, Lien, Liability & debt program allowing customers to choose from up to 4 different payments. This  Loan, Credit, Lien, Liability & debt program is part of an ARM, but with added flexibility of making one of the 4 payments.

Your intial start rate varies from 1.000% to anywhere around 4.000%. The intial start rate is held only for one month, after that interest rate changes monthly.

4 major choises are:

1) Minimum payment: Fot the first 12 months interest rate is calculated using the start rate after that interest rate is calculated annually.

Example:

 Loan, Credit, Lien, Liability & debt Amount: $200,000.00
Initial Rate: 1.25%
Index: 3.326 (MTA as of October 2005)
Margin: 2.75%
Payment Cap: 7.5%
Fully Indexed Rate: 6.076% (ndex + margin )

Minimum Payment Changes:
Year 1 $666.50 Minimum Payment
Year 2 $716.49 = $666.50 + 7.50%
Year 3 $770.22 = $716.49 + 7.50%
Year 4 $827.99 = $770.22 + 7.50%
Year 5 $890.09 = $827.99 + 7.50%

The Option ARM's 7.5% payment cap limits how much the payment can increase or decrease each year, except for every fifth year (beginning in the 10th year on certain programs), when the cap does not apply. In the event your balance exceeds your original  Loan, Credit, Lien, Liability & debt amount by 125% (110% in N.Y.), the payment amount may change more frequently without regard to the payment cap.

Becasue you are paying "minimum payment" this option will defer a payment of an interest which will be added to your balance.

Minimum Payment Adjustment Period: The minimum payment is usually set to 12 months, unless negative amortization limit is reached.

Minimum Payment Cap: This is a limit on how much the minimum payment can change. Your payment cap will be 7.5% for the first five years. On your next payment due, your minimum payment cannot increse or decrease more than 7.5%. If it does than a  Loan, Credit, Lien, Liability & debt is recast.

Recast (Recasting) or re-calculating your  Loan, Credit, Lien, Liability & debt is a way of limiting negative amortization (neg-am). Option ARM's recast every 5 years. When the  Loan, Credit, Lien, Liability & debt is recast, the payment required to fully amortize the  Loan, Credit, Lien, Liability & debt over the remaining term becomes the new minimum payment

2) Interest Only Payment: With Interest Only you will avoid deffered interest, becausue you are paying principal and interest. If you pay only Interest or Principal your  Loan, Credit, Lien, Liability & debt balance will increase because you are adding either pricipal payment or interest payment to your  Loan, Credit, Lien, Liability & debt balance, thus leading towards Neg-Am  Loan, Credit, Lien, Liability & debt.

Your payment may change on monthly basis based on ARM index (LIBOR,COFI,MTA).

3) Fully Amortizing 30-Year Payment: It's calculated each month based on the prior month's interest rate,  Loan, Credit, Lien, Liability & debt balance and remaining  Loan, Credit, Lien, Liability & debt term. When you choose this option, you reduce your principal and pay off your  Loan, Credit, Lien, Liability & debt on schedule.

4) Fully Amortizing 15-Year Payment: It is calculated from the first payment due date.

Negative Amortization  Loan, Credit, Lien, Liability & debt (Neg-Am  Loan, Credit, Lien, Liability & debt)

Negative amortization  Loan, Credit, Lien, Liability & debts calculate two interest rates. The first is called the payment rate the second is the actual interest rate. The true interest rate is calculated as simply the index plus the margin without periodic caps. Borrowers are given a choice of which rate to pay. Thus advertisers of negative amortization  Loan, Credit, Lien, Liability & debts often refer to these  Loan, Credit, Lien, Liability & debts as "payment option"  Loan, Credit, Lien, Liability & debts.

A  Loan, Credit, Lien, Liability & debt that allows negative amortization means the borrower is allowed to make a monthly mortgage payment that is less than the interest actually owed during that month. For example, let's say we have a $200,000  Loan, Credit, Lien, Liability & debt with an adjustable rate that's currently sitting at five percent. Simple interest on this  Loan, Credit, Lien, Liability & debt is easy to calculate. Multiply the interest rate by the  Loan, Credit, Lien, Liability & debt amount and you have the annual interest of $10,000. Divide $10,000 by 12 months and the monthly "interest only" payment is $833.33 or simply here is the formula for your monthly payment for interest only  Loan, Credit, Lien, Liability & debts:  Loan, Credit, Lien, Liability & debt balance x interest rates / 12 = monthly payment.

Now, let's say that there's a provision in the  Loan, Credit, Lien, Liability & debt documents that allow the borrower to make a minimum payment based on a "payment rate" of four percent. So your lowest payment would be $666.67 because the "payment rate" is based upon four percent, not the actual interest rate, which is five percent.

So if you make make the lowest allowable payment you are actually losing $166.67 in equity. The balance of the  Loan, Credit, Lien, Liability & debt increases to $200,166.67.

Exotic Mortgage

You may have heard this term before. So what are they?

The latest and most exotic mortgages out there include:

1. The 40-Year Mortgage: This is similar to a 30-year fixed rate mortgage, except the payment is being stretched over an extra 10 years. The lender will charge a slightly higher interest rate, as much as half a percentage point.

2. The Interest-Only Mortgage: With an interest-only mortgage, the lender allows the borrower to pay only the interest for the first so many years of a mortgage. After the grace period, the  Loan, Credit, Lien, Liability & debt essentially becomes a new mortgage with the interest and principal being stretched only the remaining years. Please refer above for Interest Only  Loan, Credit, Lien, Liability & debts.

3. The Negative Amortization Mortgage: This interest-only type of mortgage allows a buyer to pay less than the full amount of interest. The difference between the full interest payment and the amount actually paid is added to the balance of the  Loan, Credit, Lien, Liability & debt. Please refer above for more information.

4. The Piggy Back Mortgage: This is actually two mortgages, one on top of the other. The first mortgage covers 80% of the property's value. The second covers the remaining balance at a slightly higher interest rate.

5. 103s and 107s: You may not need to save for a down payment at all. You could borrow 3% or 7% more than your home is even worth. These  Loan, Credit, Lien, Liability & debts give you the option of borrowing money needed for closing costs and moving costs. You can include it all in the mortgage.

6. Home Equity Line of Credit: These aren't just for those who own a home! They are commonly known as HELOCs, and they can finance an original home purchase using a credit line instead of a traditional mortgage. HELOCs are variable-rate mortgages tied to the prime rate. If you use this mortgage as your first mortga

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