Mortgages are often the source of financial hardship for many individuals and parties. The fact is that the mortgages can be a very complex undertaking, one that can have substantial impact on a person’s fiscal considerations.
In many cases, many will often times take out a mortgage loan without knowing some of the basics in regards to mortgages. Mortgage help is available through various sources, often times concentrating in helping individuals with particular and specific aspects of mortgage and related topics.
Even though mortgage help does exist, it is strongly recommended that before considering going through the mortgage process, that one be knowledgeable of at least some of the basics in regards to mortgage loans so that mortgage help can be avoided in the future.
Know the Basic Process of Mortgages
Knowing how a particular mortgage works and what the included factors are is crucial before applying for a mortgage loan. The following are some basic terms that a person should know before entering mortgage loan procedures:
1. Mortgage Loan: A type of loan that is granted using real property as collateral to secure the loan.
2. Lender: Usually a bank or financial institution that offers mortgage loans. Often times, a lender can also be an investor that has vested interest in the mortgage through various financial instruments.
3. Borrower: The person that applies and is approved to borrow a determined amount of money to purchase real property.
4. Interest: Fees that are charged by the lender for providing the mortgage loan. Interest will be in the form of percentage of the total amount that is appropriated in the loan.
5. Principal: The actual or original amount that is provided by a mortgage loan. Often times, the principal amount of a loan may include interest and other incurred fees.
6. Foreclosure: The act in which the lender of the mortgage loan may undertake in the case that the borrower cannot repay the mortgage loan. This typically entails the actual repossession of the property.
Types of Mortgage Help
Mortgage help can exist in different variety of ways, depending on the context of the issue at hand. For some, mortgage help can consist of actually securing a mortgage loan.
Because there are different financial institutions that offer different types of mortgage loans and different terms, prospective borrowers may often times be confused or unsure of which kind of mortgage loan is necessary for them to complete the purchase of a piece of real property.
This can often times be solved by consulting with a real estate agent, the individual’s bank of choice, or consulting private mortgage brokers.
Mortgage help can also exist in terms of providing for financial assistance for those experiencing difficulty making payments on loans. It will prove to not be an uncommon situation for many to seek mortgage help in the form of financial relief. The fact is that a person’s financial situation is subject to change over time, making it difficult to pay the monthly mortgage payments on a home or property.
In the situation of financial crisis, a borrower can seek mortgage help through various sources. It is best to consult with the agency that provided the loan to explore any possible options that may make the burden of mortgage payments easier to bear.
Also, there are various agencies that exist solely to provide for mortgage help in a financial context. These agencies may consider options such as modifying the terms of the mortgage, refinancing the loan, or consider a person’s eligibility for other loans or government grants to help repay the mortgage loan.
A mortgage lender is any time of financial institution which offers various types of mortgage loans to people and companies that are interested in purchasing some form of real estate or property. Most individuals and businesses will most likely not have the necessary financial funds to purchase real estate or property by providing cash for the full asking price amount, and thus, will require a mortgage loan to help secure and purchase the property.
What is a Mortgage Lender?
Most commonly, a mortgage lender will be a bank or a financial institution that concentrates is services solely on mortgage loans. Mortgage lenders will also provide for a variety of mortgage loans in order to provide a wide array of services to the public and consumers. Home mortgages, commercial mortgages, and property loans will most often times all be offered by a single mortgage lender. It is not unusual for even some credit unions to also offer mortgage loans, and thus, being a distinct type of mortgage lender.
Purpose of a Mortgage Lender
Though mortgage lenders exist to provide financial services to consumers, they have the overall of making some sort of profit from the loans they provide the public.
Even though mortgage loans are given based on collateral, mortgage lenders stand to make profit by charging for providing the loan, also known as origination fees. Furthermore, a mortgage lender stands to make a profit particularly based on the interest rates that are applied on mortgage loans.
Most often, the calculation of the interest rates applied on a specific loan are calculated based on various factors, with the borrower’s financial history being a key component. The best qualified borrowers will receive the best mortgage interest rates. What constitutes a particularly qualified borrower will depend upon the criteria set forth by each individual mortgage lender.
The purpose is to ensure that the borrower is one that has the best potential of being able to repay the mortgage loan, and thus, being at least risk of defaulting. Generally speaking, a qualified borrower will be the one that can show that he/she will make monthly payments in full and on time in accordance to the terms of a particular mortgage loan.
Responsibilities and Duties of a Mortgage Lender
When individuals or companies seek out the services of mortgage lenders, they will have to meet certain criteria in order to qualify to receive a mortgage loan. The mortgage lender will have the responsibility of conducting research in regards to the loan applicants in order to make sure that they have the necessary financial means in order to pay back any loans rendered.
Mortgage lenders will consult the credit history and annual income of the applicant as well as the value of the assets and the real estate property being purchased. The terms of a particular mortgage loan will be based on such criteria, and then be presented to the applicant.
The applicant will then have the opportunity to evaluate if the terms of the loan will meet his/her goals and best interests.
In type of mortgage loan, there will be mortgage rates applied by the financial services offering the loan. Mortgage rates are often times one of the main factors considered by consumers when seeking out and comparing mortgage loans. Mortgage rates refer to the interests that are applied and accumulate of the life of the loan. These interests serve as a form of payment to the financial services for providing the loan.
What are Mortgage Rates?
Mortgage rates will usually refer to the interests that included in particularly mortgage loan. However, mortgage rates will differ quite greatly, which is why consumers will usually spend a good amount of time comparing the various mortgage rates by mortgage lenders to evaluate which will meet their best interests. There are various factors that are to be considered in mortgage rates, which some of the consisting of:
Mortgages will apply interests in accordance various factors. Among them are the applicant’s credit and financial history, the type of mortgage loan, the value of the property being purchased, and the state of the real estate market. Furthermore, interests also exist in various forms, with the most common being fixed interest rates and variable interest rates.
Fixed Interest: The interest percentage will remain the same and unchanged for the life term of the loan.
Variable Interest: The interest percentage will change at certain times in pre-determined periods throughout the life term of the loan, which means they can fluctuate either increasing or decreasing the initial interest rate.
Mortgage loans will impose a certain term, which will consist of the total number of years it will take to pay off the total loan amount. The term of the loan will prove to influence the mortgage rates and interests, which will depend on the overall life term of the loan. Most loans are considered to have amortization, which means that the principal amount of the loan will decrease as payments are made. However, there are various types of mortgage loans which will implement different terms, interests, and payment schedules.
3. Payment Amounts and Frequency
How payments are made is calculated using various factors, which will include the amount borrowed, the interest rate applied, and the length or term of the loan. Most payments are usually factored to be made on a monthly basis. However, depending on the mortgage rates and terms of the mortgage loan, the payments made may increase or decrease overtime.
Often times not a main factor at plain sight, prepayment options can affect the overall mortgage rates of a loan. Many lending institutions will impose strict limitations on being able to pay the total amount of the loan before the expiration of the loan’s term. Often times, this also applies to paying more than required in terms of monthly basis as well. Prepayment terms can affect the mortgage rates applied due to penalties imposed by lending institutions, usually in the form of fines.
5. Down Payment
Most mortgage lending companies will require that approved loan applicants make a down payment in order to receive the loan. The down payment is usually a percentage derived from the overall cost of the property. Mortgage rates applied will depend on the amount that is furnished by the borrower for the down payment.
PHH Mortgage, also commonly referred to as the PHH Corporation, is a corporation in the United States that provides services to financial institutions and mortgage lenders.
It is considered to be a mortgage outsourcing company and retail residential mortgage originators, with the overall purpose of handling mortgage loans applications and processing them on behalf of the lending institution. PHH Mortgage is considered to be one of the top five retail residential mortgage originators in the United States.
PHH Mortgage Services – As a private mortgage company, PHH Mortgage offers a variety of services in regards to mortgages throughout the United States.
The main service offered at PHH Mortgage is in originating mortgage loans for lenders and financial institutions. PHH Mortgage can, therefore, originate a source of income for mortgage companies and financial institutions by providing a source for new clientele.
PHH Mortgage will also be involved in the actual mortgage process, having direct contact with prospective mortgage loan borrowers and applicants. The company can also provide services to take and process mortgage loan applications as well.
Essentially, PHH Mortgage will act as an intermediate party, establishing a connection between the lender and the borrower in order to give both parties the opportunity to engage in a transaction of offering and securing mortgage loans.
PHH Mortgage will specialize in providing services to lenders by following the guidelines and specifications in regards to mortgage loans applications and processing imposed by the different mortgage companies and financial institutions.
Aside from the mortgage application processing, PHH Mortgage will also conduct services after the loans have been secured, offering collection and processing services for mortgage payments as well.
PHH Mortgage Guarantees – Dedicated to providing the best services possible to their clients, they offer certain guarantees in regards to overall efficient and quality of their products. One of the guarantees made by PHH Mortgage is the Best Price Guarantee.
This places a promise on behalf of the company that PHH Mortgage will compete with other lenders in regards to the fees charged. If any lender manages to provide an applicant a better price or fee, PHH Mortgage will pay the customer $500 cash.
PHH Mortgage also guarantees that a decision on the loan application will be made on the same day that the application is filed. This places a strong focus on customer service, making PHH Mortgage an attractive company both the lenders and mortgage applicants.
In the case that a decision is not made within the same day the application is received, PHH Mortgage will pay the application $250.
The third guarantee PHH Mortgage makes is in regards to the closing date of a mortgage loan. In the case that PHH Mortgage does not meet the desired closing date provided by the customer, the company will then respond by lowering the imposed mortgage rate by one-eight percent for the entire life term of the mortgage loan.
A reverse mortgage is a financial operation that allows individuals of a certain age to access the equity of their homes to use for cash expenses. Equity is a term that refers to the difference between the overall market value of the home and the amount that is owed on a loan, such as a mortgage.
Typically, equity is achieved upon selling the property. In the United States, a person must be at least 61 to qualify for a reverse mortgage, as well as having no existing mortgage loan in the property. A reverse mortgage essentially allows for the remaining mortgage amount to be paid off, and using the difference as a source of cash.
In the even that a qualified individual is considering using his/her home’s equity as a means to generate income, he/she may consider using a reverse mortgage calculator.
What is a Reverse Mortgage Calculator
Obtaining a reverse mortgage is subject to other factors aside from the applicant’s age. Issues such the interest rate of the current mortgage, the value of the property, and the remaining balance of the current mortgage will also be considered.
A reverse calculator is meant to help take into consideration such factors in order to help determine the total value of the equity on the property, and thus, the amount of funds made available through a reverse mortgage.
How Does a Reverse Mortgage Calculator Work?
The four main factors that are used for calculating the value of home equity are age, current interest rates, market value of the property, and balance of the mortgage.
The current interest rates will be based on the current market index, in addition to a pre-determined margin, which will be the fee that the lender is allowed to charge for the reverse mortgage.
An example of a basic reverse mortgage calculator result could be an individual that qualifies for a $200,000 reverse mortgage. However, the individual still owes a total of $150,000. Therefore, only a total of $50,000 would be available to the lender, which does not factor in the applicable fees for the reverse mortgage.
A reverse mortgage calculator will take into consideration of the incurred fees by the lending institution if the rates are known. However, typical rates regarding fees will usually consist of about $30 to $40 a month charged in accordance to the borrower’s expected lifespan.
Therefore, reverse mortgage fees can prove to be quite an expensive undertaking. Many lending institutions will require that the fees, often times referred to a service fee set-aside, be paid up front. Therefore, the overall amount that is provided as a result of the reverse mortgage can be affected considerably.
Obtaining a mortgage loan can prove to be quite a difficult procedure and is often time the source of frustration for those in the market to purchase a new home. This aspect may prove to be more applicable for first time home buyers that are entering the mortgage process for the first time.
When considering buying a new home, often times the first issue addressed is mortgage comparison. A mortgage comparison can take various forms, though it will usually consist of comparing mortgage lenders, mortgage types, and mortgage options.
Mortgage Lender Comparisons
Often times the best place to start when doing a mortgage comparison is by comparing various mortgage lenders. Due to the vast amount of lending institutions and banks that offer mortgage loans, conducting research on the lenders themselves will not be all too difficult.
However, one should not attempt to compare all available mortgage lenders all at once. The purpose of mortgage comparison is to make obtaining the mortgage loan easier. Often times, it is recommended to start comparing among the various types of mortgage institutions, such as a bank, a private mortgage lending company, and even existing governmental programs.
This may prove to give an overall scope of the difference between each, and thus, make determining which kind of mortgage lender may be best
When comparing mortgage lenders, the initial comparison should contrast the difference between the varying mortgage interest rates. Each institution will prove to apply different rates to different kinds of mortgage loans.
Contrasting and comparing the interest rates can give a prospective borrower an idea as to how much a lending institution is to charge for their services.
When comparing mortgage rates, one should look at the difference between a Fixed Rate Mortgage and an Adjustable Rate Mortgage. Both will have different mortgage rates, and thus, a particular type of mortgage rate may be most suitable for a particular borrower.
However, one should also consider how the interest rates are to vary in an ARM, for introductory rates may be extremely enticing though the changes in the interest rates throughout the term of the loan may prove to be undesirable in the long run.
One particular aspect that will require a mortgage comparison is the existence of wide array of mortgage loan types. Each mortgage type will have different aspects that may prove to be positive, while others that are not necessarily desirable.
Furthermore, not all lending institutions will offer all types of mortgage loans. This aspect may prove to be important in the case the borrower already has a strong idea as to which loan best suits his/her needs, thus being able to rule out those mortgage lenders that do not offer that particular loan.
Comparing mortgage loans can prove to be quite confusing, due to the variety of different options and features that exist. One should have all the options thoroughly explained by the mortgage professional in order to properly be able to move on with a decision. If not all aspects of a particular mortgage type are clear, it is important to make they are explained.
Consider Eligibility Requirements
All lending institutions, as well as mortgage types, will have certain qualification criteria in place. When comparing mortgage types and features, one should ask in regard to the qualifications for that particular loan. It would be futile to consider a loan for which one is not qualified for.
Therefore, one should have considered his/her own personal situation quite diligently, outlining issues such as income, credit history, ability to pay off a loan, type of home wanted, and other similar concepts before beginning the mortgage comparison. Having a distinct and precise idea as to one’s needs and wants will help in obtaining the best possible mortgage loan that will best fit one’s own criteria.
A mortgage refinance results in the gaining of a new or additional mortgage that is derived from the first mortgage. Mortgage refinancing is not analogous with obtaining a second mortgage, nor is it the same concept as remortgaging; mortgage refinancing is an entity in and of itself.
A mortgage refinance must occur while the individual is working within the parameters of the primary – albeit existing – mortgage; this procedure entitles the borrower to explore financial options that exist in conjunction with a primary mortgage in lieu of an entirely separate mortgage.
Steps for a Mortgage Refinance
In order to engage in mortgage refinancing, the borrowerwill be required to apply for a new mortgage from the owner of the initial mortgage.
1. Upon an individual’s decision to apply for a mortgage refinance, the mortgage lender will, perform an analysis of the current state of that individual’s financial affairs with regard to the primary mortgage, which can include the current real estate market value of the property in question, the applicant’s credit rating, and any other outstanding financial matters.
2. In many cases, individuals who have been approved for mortgage refinancing gage loan have proved that they are capable – in the fullest extent – to illustrate good faith in the satisfaction of a mortgage loan; credit scores and the payment history with regard to the initial mortgage are instrumental in determining the rates of mortgage refinancing.
3. Subsequent to approval, the borrowerwill confer with the lender responsible for the approval of the mortgage refinancing loan and discuss methods of repayment, as well as the intended use for monies garnered as a result of the mortgage refinancing.
The Rates and Costs of a Mortgage Refinance
The costs that are involved in mortgage refinancing can consist oflender points, fees concurrent with financial document preparation, tax fees, title fees, appraisal and home valuation fees, and other additional costs dependent on the individual circumstance.
• The ideal rate of mortgage refinancing will have a lower Annual Percentage Rate (APR) than the initial mortgage; furthermore, the individual engaging in a mortgage refinancing will be encouraged to express the fullest intent to satisfy both the initial mortgage loan, as well as the loan resulting from mortgage refinancing.
• Mortgage refinancing is typically – but not limited to – those borrowers who intend to reside in the property in question for a duration that can be classified as ‘long-term’; although some individuals can apply for mortgage refinancing in a short-term setting, the probability of approval is exponentially higher in circumstances of long-term residence.
Legality of a Mortgage Refinace
The parameters and protocols surrounding both the application and approval process of mortgage refinancingvary on an individual basis and in conjunction with the borrower’s respective state of affairs; all mortgage refinancing forms should be completed to the fullest extent in a meticulous fashion. In the event that an individual experiences difficulty completing – or understanding – the requirements of mortgage refinancing, they are encouraged to consult an attorney specializing in real estate, property, finance, debt, collections, and contracts.
A mortgage is a type of loanthat is utilized by an individual interested in obtaining property whose value exceeds the financial means possessed.Subsequent to the receipt of a mortgager, the individual is indebted to a mortgage lender, which is the institution that provides a mortgage loan.
Associated Mortgage Finances and Fees
In addition to the receipt of a mortgage, there exist additional fees and financial restitution that accompanies a mortgage loan.
• Interest accrued from the initial loan
• Penalties for failure to make payments on a mortgage loan
• Collateral in the form of the property being occupied by the individual in receipt of the loan; the mortgage lender holds the property as collateral in order to guarantee satisfaction of the mortgage loan
Decorum of Mortgage
Upon the property being held as collateral in a mortgage loan, the individual who has received the mortgage loan continues to occupy the property as though they are the sole owners. Although there are a number of types of mortgages, the role of the property as collateral is simply a means to guarantee payment.
Annual Percentage Rate (APR)
The most attractive mortgages are not always considered to be the cheapest upon advertised price due to the fact that hidden fees and added stipulations exist. The standard in protocol with respect to the APR mortgages allow for the individual togauge the value of a given mortgage. Although all prices, fees, and costs must be included within a mortgage advertisements, the APR rate is a factor of a mortgage about which should be expressly inquired.
Private Mortgage Insurance (PMI)
Private Mortgage Insurance is a necessity for individuals who do not possess a sufficient amount of equity to receive a mortgage loan. Oftentimes, lenders will require that borrowers obtain Personal Mortgage Insurance in order to guarantee satisfaction of the mortgage loan. Upon the expiration of Personal Mortgage Insurance, the mortgage lender can both forecloseon the property, as well as the loan itself.
Refinancing a Mortgage
Upon refinancing, a borrower can extend the length of the mortgage in exchange for receiving lowered payments; furthermore, cash advances can be gained against the refinancing effort – and as a result – many individuals use this as an opportunity to make improvements to the home.
Choosing a Mortgage
Mortgage payments are suggested to fall below 28% of the total earned income of the borrower(s). Prior to receiving approval for a mortgage, an individual’s finances will be evaluated, which includes all debt, income, alternate loans, and credit scores.
The types of mortgages vary as well, which include fixed-rate mortgages, variable mortgages, short term mortgages, or long term mortgages. The parameters and protocols surrounding both the application and approval process of a mortgage vary on an individual basis and in conjunction with the borrower’s respective state of affairs; all financial forms should be completed to the fullest extent in a meticulous fashion.
In the event that an individual experiences difficulty completing – or understanding – the requirements of a mortgage, they are encouraged to consult an attorney specializing in real estate, property, finance, and contracts.
What is a Fixed Mortgage?
A fixed mortgage – also known as a fixed-rate mortgage – is defined as a type of mortgage in which the interest rate remains the same throughout the life of the mortgage. Fixed mortgages can be viable option for many individuals; however, as in any type of mortgage, there are both advantages and disadvantages latent in the fixed-rate mortgages.
Choosing a Fixed Mortgage
The institution of property lawisinstrumental to the development, maintenance, and legislation with regard tothe ownership of property, as well as Fixed Mortgages. Although Fixed Mortgage laws – akin to property laws – vary within the many regions of the United States.The status of the ownership and management of real propertycan be vastly altered by a Fixed Mortgage; this is due to the fact that monies, assets, debts, collections, and preexisting conditions are evaluated and analyzed with regard to the prospect of Fixed Mortgage on the part of the borrower in question.
Advantages of a Fixed Mortgage
• Individuals who are planning a budget and making future assessment of costs and funds, a fixed mortgage may be considered to be a good option; due to the fact that the interest rate is not subject to change for the life of the mortgage, there are not hidden charges or hikes in interest rate(s)
• Fixed mortgages are impervious to the economy or any peripheral, financial circumstance; by contract, interest rates must remain uniform – the interest rate(s) available at the time of the establishment of the fixed mortgage are the rates that remain uniform
Disadvantages of a Fixed Mortgage
• Fixed mortgages can contain late payment penalties in the event of late – or missed – payments; as a result, the requirement for prompt payment with regard to a fixed mortgage is a strict one
• Due to the fact that fixed mortgage interest are subject to neither through increase nor decrease, in the event that the real estate market offers considerably-lowered interest rates to potential buyers, individuals with fixed mortgage rates are not eligible to participate in them
The Process of Fixed Mortgage
The procedures and legislation not only implicit in the Fixed Mortgage process, but also the process of ceasing a Fixed Mortgage can fluctuate on an individual, case-by-case basis.
Elements examined in the determination of the validity and legality of a Fixed Mortgage exist in conjunction with preexisting factors, which include individual financial state, solvency, solubility, evaluation of assets, the condition of the property, in addition to any and all conditions and exception expressed in the initial property agreement.
Fixed Mortgage Legal Assistance
All details, records, and supplemental evidence expressly requested by applicable Fixed Mortgage documentation and applications should be provided in the most expedited fashion; furthermore, all deeds, asset lists, and related liabilities should be submitted – Fixed Mortgage forms should be completed to their fullest extent and in a detailed fashion.
In the event that an individual experiences difficulties with regard to the Fixed Mortgage process, they are encouraged to consult with an attorney specializing in the field of Fixed Mortgage legality, property law, estate law, contract law, and insurance.