By financen | January 14, 2021 - 5:58 pm - Posted in Mortgage

If you are a home buyer looking for a loan, it would be in your best interests to hire a broker. Hiring an experienced and competent professional brings a lot of advantages to the table. However, there are some important things you should know before hiring one.

What Does A Mortgage Broker Do?

A broker is a middleman who connects borrowers to lenders. He/she also manages mortgage loan processes for their customers. Brokers also help their clients to approach new lenders or manage fees. This saves their clients from the numerous hassles they would have gone through if they did it by themselves.

Their duties include ensuring that the terms and conditions of the transaction are understood by the customer, and searching for the best deals for their client. They are also responsible for submitting all the paperwork to the client and ensuring that their client gets an option that saves money. Click here to learn more about the duties of a broker.

Who Needs a Broker?

If you need a loan for a house, car or any other property, a good broker will help you obtain them at the best interest rates possible, without all the stress involved. Brokers also present you with loan opportunities that you would not have found if you were searching by yourself.

Benefits of a Mortgage Broker

Mortgage brokers bring various advantages to the table such as…

1. The Expertise and Skills Necessary to Meet Your Requirements

Brokers lead their clients through the various procedures involved with obtaining loans, handling any issues on the way, and also taking care of the process of the transaction. If, for instance, their client has poor credit, they look for lenders who are more favorably disposed to meet their client’s needs. Because of their knowledge in these matter, they are also helpful to people who want to obtain larger loans from institutions such as banks.

Note: Keep in mind that some banks don’t work with mortgage brokers.

2. Saves You a Lot of Time

Instead of filling forms for individual lenders, you are only required to fill one if you are working with a broker. He/she also provides you with a comparison of the recommended loans and points out closing costs, cost differences, and rate points of each loan. This saves you a lot of time in the long run, and ensures that you go through all the best available options.

3. Saves You a Great Dealof Money Without Any Hidden Costs

Brokers receive loan offers from lenders from a wholesale perspective. Some have even built long-term relationships with the lenders. As a result, their clients are offered the best available rates. This lowers the overall cost of the loan for the borrower. Good mortgage brokers should give you the details of the total loan cost and also inform you of how they receive payment for their work.

4. Searches for the Best Deals Available

Rather than preserving the interests of lending institutions, good brokers should have their client’s interest at heart. They act as knowledgeable consultants and agents for their clients. Good brokers also offer great value when it comes to loan products, interest rates and repayment amounts. This comes as a result of having access to various mortgage products. In order to identify your needs, a broker will interview you.

Depending on the situation, the loan may be more demanding than a 15 year or an ARM (adjustable rate mortgage). In such cases, complex strategies and solutions are required; this is another benefit of hiring reputable and experienced brokers. With their years of experience in the field, they can easily and efficiently plan everything out for you. You can visit sites such as https://www.wealthyyou.com.au for some of the best mortgage brokering services for readers in Australia.

5. Gives You Access to Numerous Loan Options

Due to their network and years of experience, competent brokers can offer you different loan options from various lenders. This increases your chances of getting your loan at the best interest rate possible.

Downsides of Hiring a Mortgage Broker

Despite the various benefits that come with hiring mortgage brokers, there are also a few disadvantages which you should take into account such as…

1. Diminished Benefits Today

In the market of today, you may not benefit much by enlisting a broker. In previous times, brokers were hired by people who had trouble accessing lending programs by themselves. However, today, you simply have to do a search online and compare the available lenders. As a result of this, you don’t have to spend money paying a broker. Even though some lenders don’t work with brokers, this doesn’t mean they are obsolete. You can still hire them to help you with your loans.

2. Not Always Working to Preserve Your Interests

If we are being honest here, no broker is going to tell you that they don’t have your best interest at heart. However, there are some that don’t. Most brokers try to connect you to a lender that meets your needs but some will direct you to lenders that will pay them higher commission. The rates offered by such lenders may not be ideal for you and may be more expensive than what you are comfortable with. That’s why you must choose the best mortgage broker available. It’s important that you check carefully to ensure that the broker isn’t just looking for his/her own personal gain.

3. Cost to Hire Them

One major downside of hiring brokers is paying them. They receive payment from you, even if you don’t pay them directly. Some lenders will give them a fee for bringing a customer. In some cases, their fee is subtracted from the loan, regardless of the process. In such cases, the chances of getting a discount from your bank are slim. As a result, the broker’s payment is added to the loan’s closing cost. This may not seem like a big deal to some people, but you need to keep in mind that every dollar counts.

How Much Would It Cost To Hire A Good Broker?

The fee collected by most brokers is a combination of payments from the borrower and from the lender. The price varies depending on the expert you hire. However, they take about 1% to 2% of the total loan most times. Always ensure that you are informed about their fees before enlisting their services in order to avoid any surprises when you finish a transaction.

When Do Brokers Receive Payment?

Most times, brokers receive payment after the release of funds and when the loan is closed. This depends on the accounting schedules of the lenders. In some cases, this could be a month after closing the loan. To learn more about this, you can read this article.

Conclusion

Enlisting the services of a mortgage broker opens up a lot of opportunities. You get a wide range of loan options and have access to the best interest rates available. Even if you have poor credit, they can connect you with a lender that can provide you with the amount you need to buy a property. In a few cases, he/she may be looking for his/her own gain. It is advised that you ensure that whoever you hire has your best interests at heart.

By financen | November 22, 2020 - 6:55 am - Posted in Mortgage, Refinance Mortgage Loan, Refinancing

Are you looking to lower your mortgage payments? Maybe they’re just too high for you at this point in time or maybe you’re simply looking for more flexibility in your monthly budget. 

Either way, you’ll be happy to know that this can be done, and the way to go about it is refinancing. 

Now, there are several paths you can take to make this happen, and you should also keep some important things in mind before you decide to initiate the process. 

Don’t worry, we’ll cover the most important of them in this text and prepare you well. Let’s get going!

Refinancing because the interest rates are lower

It’s not uncommon for people to refinance their mortgage because they see that the interest rates have become lower. It certainly seems logical – why not take the chance to pay lower monthly instalments if you can?

Just remember that if you’re changing lenders, you may need legal help to complete the process, and Optimal Solicitors from Manchester specialize in that.

However, there is a catch. If you opt for this, you can expect to have to pay the so-called refinance closing costs. And this can be a fairly significant amount, too.

So, you have to calculate how much you stand to save if with a lower rate and compare that to the total refinancing costs that you’d have to pay. It is generally considered worth it if you can get the rate down by one per cent, but that depends on your situation, of course.

Refinancing to gain more time to repay the mortgage

Another popular solution when it comes to paying the mortgage is refinancing in such a way that you extend the period you have for that. Essentially, you will be moving the deadline down the road.

For example, if you have a 30-year loan on your hand, a part of which you’ve already paid off, you can transform the remainder into a completely new 30-year loan. That way, you get your mortgage payments down.

However, the main thing to consider when making this move is the interest that will accrue this way. Yes, you will breathe much more easily every month but will also end up paying more in total. You have to ask yourself is that really worth it.

Naturally, if you simply can’t make the payments anymore, this move can be a lifesaver that helps you get back on your feet.

Getting rid of insurance

Apart from helping you directly with lower payments, refinancing can also help you in another way. If you refinance and turn your mortgage into a standard loan, you may be able to be rid of mortgage insurance, which will bring your payment down.

Just remember that if you were sold payment protection insurance in a dishonest way, there are legal experts that can help you get compensated for that.

The fee that applies to insurance can be anywhere between approximately 0.5% and 1% on an annual level, but this will depend on a variety of factors.

So, you have quite a few options when it comes to refinancing your mortgage. Analyse them all before making a decision, preferably with expert help by your side.

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By financen | September 9, 2019 - 7:26 pm - Posted in Mortgage, Refinancing, Uncategorized

In 2018, the national average price for homes reached an average of $218,000. Luckily, homeowners can take out a mortgage to ease their burden. However, the loan is no longer the best choice for their financial condition.

Refinancing a mortgage is an option most home-buyers choose. But mortgage refinancing can go both ways. It can either help a person save money or cost them more. 

It’s important to understand what mortgage refinancing is in order to figure out the right time to do it.

What is Mortgage Refinancing?

In an unstable economy with possible high-interest rates, it can be quite difficult for homeowners to pay off their debt. People who find themselves in this situation may consider refinancing their mortgage.

Basically, homeowners who refinance mortgage are replacing their original loan with a new one. The new loan is ideally a better one. This will allow them to have better interest terms and rates.

The new mortgage isn’t made to throw out the old one. Homeowners who refinance their mortgage can use the new loan to pay off the original mortgage.

But this isn’t the only reason why people choose to refinance. People do this to lower their interest rates, reduce monthly payments, or change mortgage companies.

Other borrowers refinance mortgage when they have equity in their home. Equity is the difference in the value of the house and the amount owed to the mortgage company. 

When Should You Refinance Mortgages?

Refinancing mortgages can be a slippery slope if one is ignorant about the topic. With the proper knowledge, refinancing can bring a lot of benefits to the homeowner.

But when should one refinance?

  1. Refinance mortgages when interest rates are low

This is one of the top reasons for homeowners to refinance. A difference of 2% in savings is enough reason to refinance.

Reducing the interest rate of the mortgage does not only help with saving money. It lowers the monthly payment and increases the rate of building equity for the house.

  • Refinance mortgages to shorten the duration of the loan

Homeowners can refinance their mortgage to shorten the loan’s term. This will significantly lessen the interest that they have to pay.

  • Refinance mortgages to switch to a fixed-rate or adjustable-rate mortgage

Usually, adjustable-rate mortgages start with a lower interest rate compared to fixed-rate mortgages. When periodic adjustments begin for adjustable-rate mortgages, interest rates start increasing.   

Once this occurs, homeowners can switch to a fixed-rate mortgage. Converting into a fixed-rate mortgage would eliminate concerns regarding future interest hikes.

Converting from a fixed-rate to an adjustable-rate mortgage is also advantageous when interest rates fall. This is great for homeowners who don’t plan on keeping the house for a long time. When interest rates fall, they can save money without worrying about the future.

The Bottom Line

Refinancing can be the perfect financial move for every homeowner. It can lower monthly payments, shorten loans, and even increase equity. When done carefully, it can help bring debt under control. It’s a valuable tool for financial responsibility.

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By financen | April 3, 2019 - 6:13 pm - Posted in Home Buyer, Mortgage

For a first time potential homeowner, there are many things that one never knows. Or even if they do know, understanding them might not come as easy. When buying a house, there are a lot of things that one needs to keep an eye one. Here are some of them.

Deposit at Least 20%

Most people whenever they think of owning a home they think of taking out a mortgage, and that is it. However lucrative it may seem to take out a full financing mortgage plan, experts at Sun West Mortgage advice against this. It is always a safer option to deposit 20% of the value of the house and then take out a mortgage for the remaining amount. This will lessen the burden of paying interest at the same time private mortgage insurance.

Have Some Backup Money

When one rents a home, its maintenance is the least of worries that they can have. The reason is that the landlord fixes any issues that the tenant may experience while leasing the home. This is usually part of the lease agreement. Things change when owning a home; Sun West Mortgage advises that one have some money kept aside for repairs and any unforeseen spending.

It is essential that one is well informed before making a buying decision. Real estate when invested in with full information is a safe investment for many. The opposite is also true.

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By financen | August 13, 2018 - 5:02 pm - Posted in Debt, Mortgage

Today, one of the most believed misconceptions out there is that different debts like credit card debts, student loans, personal loans, etc. are canceled when debtor dies.

Thinking that your debts are off if the worst happens to you can prove to be devastating for your family because the financial situation you leave them in can have a critical impact on their lives.

This is due to the fact that creditors/lenders (the ones you owe money to) reserve the right to file a claim against your assets for any debt that you owe at the time of your death.

Someone who has zero assets (property or money) no dependents will be safe from the lenders as there will be nothing to take from. On the other hand, for someone who owns a property, it could possibly mean that their loved ones can lose the property to the creditors.

To make this more saddening for your family, any debts that are held jointly will mean that the other individual is now legally responsible to pay all of the outstanding debt. This consists of the largest debt that you will most likely ever counter in your life – your mortgage.

Let’s see if we can make this more clear for you with the help of an example: Mr. A earns $90,000 annually. His wife Mrs. A, who is a housewife has no earnings, and they have two young children.

The property was bought on a joint mortgage of $200,000 and it is worth $350,000. (Even if Mrs. A have no income of her own, she can still legally be party to a mortgage because her husband’s earnings cover it).

Unpredictably, Mr. A’s health goes down and he passes away. In this situation, Mrs. A has to deal with the dual misery of losing her life companion and now become the one who needs to pay off a mortgage that she no longer has the resources for.

So after losing her husband, Mrs. A now faces a situation where she runs the risk of being homeless because they are unable to cover the outstanding debt.

At this point, it must be recognized that debt is not something that can be passed onto your next of kin. The only way a person would be loaded with your debts on your death is if they jointly held the debt with you as stated in the above example.

This means that the debts stay. In reality, it can imply that your partner has a long waiting period before he/she can actually get control over your assets.

In case of your death, your legal advisor or attorney of your property will calculate the value of your assets, and if the total is more than $5000, then a process called probate must be adhered to.

The probate office will then specify the terms for how the assets will be distributed and it is vital for the executor to get a grant from the office before they can conduct the search bank or savings accounts.

Money can be withdrawn from the estate by the executor to fulfill the funeral costs. After which all the money must be used to clear any secured or unsecured debts before handing over the remaining money to the deceased’s next of kin or to the one who has been set out in the will.

For example, if you think that having $50,000 in your bank account will offer your family a chance to lead a good life after you, and all your debts plus the mortgage are $40,000, then all they will be getting is only $10,000.

Hope this post has assisted you to get closer to the reality of debt after death. So, make sure to abide by your financial plans for the betterment of your family.

By financen | April 17, 2018 - 6:24 pm - Posted in Mortgage, Reverse Mortgage

The reverse mortgage is a financial instrument available to homeowners aged 62 years old or above. It takes the form of a loan which, as the name implies, works in the opposite way to a standard mortgage. With a regular mortgage, homeowners make monthly payments to a lender. Under the terms of a reverse mortgage, retirees are able to convert some of the equity in their home into cash, and they instead receive payments.

Reverse mortgages were initially introduced as a way to help retirees on a low income take advantage of any wealth they might have accumulated in their home. For many of these people, a reverse mortgage provides a lifeline, allowing them to cover basic living expenses and healthcare costs. However, there are no restrictions on how this money can be used.

The reverse mortgage is therefore a literal lifesaver for some senior Americans, but it is an option that too many remain unaware of. Read on for more information about the reverse mortgage and to find out whether it could benefit you.

Tax-Free Advance

What’s better than receiving a cash injection? Receiving a tax-free cash injection, of course! When the homeowner first takes out a reverse mortgage, they will be given cash from the lender. This is, for all intents and purposes, an advance payment. It is usually, but not always, tax-free. This money can be particularly useful for retirees who have expenses piling up, and not having to worry about the usual tax obligation reduces a common source of stress when seeking a financial boost.

Are There Any Risks or Downsides?

With any financial instrument or investment, there is always going to be some element of risk and unpredictability. The reverse mortgage is definitely a valuable tool for many people, but it isn’t the best option for everybody.

For example, you should be aware that interest will be added to the outstanding balance of the loan every month. Also, whatever money the homeowner receives through their reverse mortgage reduces their equity in the home. Consequently, should the home owner decide to move, or if they die, the equity that they leave behind will be reduced. This can be a nasty surprise for any heirs of beneficiaries.

If you are considering taking out a reverse mortgage, you need to make sure that you have fully understood all the terms and conditions beforehand. Many reverse mortgages come with some significant upfront fees, so you need to be prepared for those.

Is it Right for Me?

Retirees who are in need of some extra cash can benefit greatly from a reverse mortgage. For these people it can provide a lifeline by allowing them to cover their living expenses more easily. Many older Americans have complex healthcare needs and ballooning living expenses. If you think that a reverse mortgage could help you, have a look at those offered by American Advisors Group to get an idea of what a typical reverse mortgage looks like.

A reverse mortgage is a very useful financial instrument for many American retirees. Securing loans can be a stressful experience, especially for the older generation. The reverse mortgage can provide a less stressful option for many borrowers. Just make sure to check that there isn’t a more appropriate form of loan for you.

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By financen | March 20, 2018 - 6:10 pm - Posted in Mortgage, Reverse Mortgage

As you get older and grow more responsible, your priorities begin to shift. You get to a certain age where the thought of getting a reverse mortgage suddenly begins to appeal. There are many reasons why this should be so. One of them is the thought of using this special type of mortgage to get quick cash. This may be one of the only arrangements currently available to you that can yield this desirable result.

What is the Main Appeal of Receiving a Reverse Mortgage?

There are a number of features included in a reverse mortgage arrangement that give it a very direct appeal. The entire idea behind this arrangement is to give help to seniors – that is, people who are62 and older. This help can take many forms, including giving the necessary assistance to enable seniors to tap into home equity in order to help cover the cost of retiring from their work.

How Can a Reverse Mortgage Loan Come in Handy?

A reverse mortgage loan can give you a high level of leeway when it comes to increasing the extent of your financial independence. For example, you can use a reverse mortgage to cover the cost of medical care for various situations. If you don’t think you can retire without covering a number of monthly payments, such as your car, you can use your reverse mortgage loan to cover this particular cost.

You can also use it to protect your investment portfolio during slow times in the stock market. You can even use it to delay having to receive your Social Security until later. By doing so, you can increase the size of your monthly benefits when you elect to receive them.

There is No Telling How Much Money You Can Receive

One of the most appealing features of a reverse mortgage loan is that there is no set limit to the amount of money that you may be able to receive. The amount will depend on a number of factors, such as your age, the present market value of your home, the current balance of your mortgage, and the rates that are current in the reverse mortgage industry. You may be in for quite a bargain.

There is No Reason to Worry About Getting a Reverse Mortgage

Not every person shares your sanguine attitude when it comes to getting a new type of mortgage. There are also a great many people who have the wrong idea about getting a reverse mortgage. A quick discussion with an industry expert such as American Advisors Group ought to be enough to quell the fears of even the most cautious and battle shy skeptic. There is absolutely nothing to fear from getting a reverse mortgage.

The Time for You to Learn More About Reverse Mortgages is Now

It’s up to you to decide who to trust in this sensitive and highly personal matter. However, facts are facts. More and more people are getting in touch with companies who offer reverse mortgages as an option. It’s your prerogative to learn more about the special new AAG Reverse arrangement and what it can do for you. There is no better time than the present to get personally acquainted with this amazing new deal.

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