Wednesday, June 16th, 2010 at
3:28 am
Buying a house is one of the biggest decisions a person can make, there are so many things that need to be considered. Probably the most important aspect of buying a house is getting a mortgages. A mortgage is a loan from either a bank or other financial institution that is large enough for you to buy your own house.
There are various ways of finding out information about mortgages and a person looking to apply for a mortgage needs to find out as much as possible about the process. First of all you will need to find out how much you can reasonably expect to borrow, and in order to do this you must contact mortgage lenders who will assess your financial situation.
Where do I find out more about mortgages?
There are several ways of finding out about which lenders are right for you. One way is to use the Internet and perform a search. Typing mortgages into your chosen search engine will bring up a list of lenders who all have websites. From this list you can browse the various lenders and find out more about the mortgages they have to offer. Many lenders websites even have a ready reckoner which you can use to input your financial details to see roughly what kind of size mortgage you will be able to obtain. It is worth noting however that these are not a mortgage offer and before any lender will enter into an agreement with you they will need to perform credit and various other checks in order to gain a full picture of your creditworthiness. If you then find a mortgage that seems to be right for you the next thing to do is to contact the lender directly and speak to someone.
What if I don’t want to use the Internet to search for mortgages?
If you don’t want to use the Internet for your search, don’t worry, there are other ways of getting a mortgage without turning a computer on. You can visit a mortgage broker who will look through the various mortgages that are available to you and help you come to a decision. This is good if you prefer to talk things through with someone face to face and have the time to spend going to appointments with your broker. Such services however are not free and many brokers will charge a one off setting up fee for your mortgage, this can be added to the mortgage in some cases.
Perhaps a broker isn’t ideal for you either, in that case you can spend time telephoning various banks and building societies and speaking to them about their mortgages. This is a very time consuming process and you need to be aware that all banks and building societies will try to convince you that their mortgage is the best one for you. If you decide to look for a mortgage this way be prepared to say no if you are not happy with the information you receive.
Why are there so many different types of mortgages?
The reason that there are many kinds of mortgage is that there are many kinds of financial situations and incomes that people will have. Some people will prefer to have an interest only mortgage on which they will only pay the interest but monthly payments will be lower than a repayment mortgage . There are also different interest rates attached to mortgages and these can vary depending on your credit score. A high credit score will, like with loans, result in a lower interest rate, and vice versa for a low score. However the only way to find out what kind of mortgage is right for you is to do your homework and make sure that you know all about mortgages before you sign on the dotted line.
By: Jason Jones
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Friday, June 4th, 2010 at
12:16 am
Property prices for even the smallest apartments are beyond the reach of many first time buyers nowadays. As a result, more and more people are clubbing together with friends to share a mortgage and ownership of a property. It’s a very good way to get on the property ladder, but as such arrangements are never normally for life and one or more party will inevitably want to sell eventually, the fine details should be agreed clearly at the outset to avoid financial loss or the loss of friendships.
The terms of a joint ownership mortgage are no different from a standard mortgage. Regardless of the amount of deposit that each person pays or the salary that they are earning, each shares equal liability for making the mortgage repayments as far as the mortgage lender is concerned. So if one person stops making repayments, the others will have to cover their share to ensure that the full repayment amounts are paid. It’s up to the joint owners to decide how they will divide the mortgage repayments and ownership of the property between themselves.
Clearly, a legal agreement is the best way to ensure that everyone understands their rights and responsibilities. This isn’t a sign of mistrust, it’s simply a guarantee of protection for everyone. Although not compulsory when taking out a joint mortgage with friends, it’s certainly wise to do so. It won’t cost much to have one drafted up by a solicitor. In fact so many people are taking out mortgages in this way that some mortgage lenders provide specially tailored joint ownership mortgages that include the drafting of a legal agreement.
Although the mortgage calculation is based on the sum of everyone’s incomes combined, the mortgage lender doesn’t give people different sizes of share in the mortgage or property. How much each person contributes towards the repayments is up to the joint owners to decide. It doesn’t have to be directly related to each person’s salary. This should be set out in the written agreement.
It can become more complicated in circumstances where individuals have put down different deposit amounts. However, again it’s up to the joint owners to decide how they want to divide the shares in ownership and in the mortgage.
If there’s only a small difference in the amount of deposits paid by everyone, it can be evened out informally by those who paid a smaller deposit making separate repayments to those who paid a larger deposit until their contributions are balanced out.
Alternatively, you may decide that each person has their deposit amount returned to them upon the sale of the property before the remaining profit is shared equally among the joint owners. This tends to work best in circumstances where the deposit amounts are low.
A common agreement for joint owners who have paid different deposit amounts, particularly if they are a large sum, is for the share in the ownership of the property to be equal but for each person’s deposit amount to be taken into account when calculating the mortgage repayments, so that those who put down smaller deposits have a bigger share of the mortgage. When it comes to one owner leaving or the property being sold, each person’s share in the profit is determined by calculating their share of the current balance of the mortgage deducted from the current market value of their share. This is fairer than taking an equal share of the gain plus giving each person back their deposit amount, as those who have been paying more towards the mortgage as a result of their lower deposits will actually have been paying more towards the capital than those who paid lower monthly amounts because of their higher deposit.
There are several different ways in which a person’s circumstances may change, thereby affecting their share of the mortgage and property. The details of what will happen in such situations should be ironed out in the legal agreement.
If for any reason one of the joint owners wants to leave, there are various possible options:
* the person keeps their share of the mortgage and property and rents out their room
* the person sells their share to the remaining owners who can then rent out the room if they wish
* the share is sold to a third party in direct replacement of the person leaving
* the whole property is sold and all parties leave
Insurance should be taken out as part of the legal agreement to cover situations in which people are unable to continue paying their share of the mortgage for a period of time, for example because of illness, injury, redundancy or death. For illness or injury, insurance cover will normally make their repayments for them for up to a year, and if the person is still unable to make repayments after this, their share of the property will almost certainly have to be sold.
If one of the joint owners dies, life insurance will provide a lump sum to pay off the person’s share of the mortgage, and, depending on the legal agreement drawn up, their share of the property will become part of their estate. Writing a will is a sensible precaution for ensuring that the deceased’s estate is distributed according to their wishes.
There are other things you’ll need to agree such as whether third parties can live at the property, and if so, for how long. You’ll also need to decide how you’ll split the fees for buying and selling the property.
All of these issues should ideally be specified in the agreement, which is best drafted by a solicitor to ensure that it’s fair and legally binding and covers all eventualities. Joint ownership with friends should be an enjoyable experience and you wouldn’t want to lose out on friendships or money as a result of misunderstandings.
By: Benedict
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Wednesday, May 26th, 2010 at
3:34 pm
Owning a home can be hectic especially if you have a family and have other financial obligations you have to fulfil. With bad credit you can actually make your way to paying your mortgage in the easiest and convenient way possible. If you are not in the best financial position there are simple ways or rather guidelines you can use to qualify for a bad credit mortgage.
To completely qualify for the bad credit mortgage you have to check your credit status by virtue of asking the bank for your credit history. With the credit history the bank should give you a report of your credit. Carefully check for errors and make sure that the credit report is correct, In some cases the company can make errors. Check the details with your credit provider and go through the credit report with them to make any corrections. Do not apply for the mortgage loan before clearing everything with your credit provider.
To be on the safe side when using the bad credit mortgage solution, make sure that you have no debts with other financial companies or any other lenders. Only apply after you have cleared all your debts. With current debts you may not qualify for the bad credit mortgage. There are many mortgage lenders offering loans to people but there are things you need to be aware of. First of all, shop around and go through all available companies before deciding on which services to choose. Applying for another loan may impact your credit standing again. Try to review your chances from the point of view of the company that you’re applying for a loan with. So do some backgrounds check on a lending service and know what they require from you and your credit report.
Since a credit default will stay on your credit records for as long as five years, the bad credit mortgage lenders have made it easy for people to apply for loans with five to ten percent deposits. Getting a mortgage with a bad credit has actually come a long way in assisting people to buy homes. It is however important to note that most lenders offer a much higher interest rate and the repayment may be a bit harsh and expensive.
To qualify for bad credit mortgage you have to make a sizable deposit of your savings to cover some buying costs. Therefore you are required to save a good initial amount to support the process. The discipline of saving is important for any borrower. You need to be able to do that in order to make timely repayment and avoid any future credit problems. Since the mortgage loan is more expensive than the ordinary home loan – try as much as possible to build and repair your credit score with the new lender. It may be a good idea because you may need to re apply for another loan in the future.
By: Niroshan
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