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BD Nationwide Mortgage Introduces a Second Mortgage and Home Equity Loan Compatible with the Controversial “Pick a Payment Loan” Featuring a Negative Amortization Option
Posted on August 12th, 2011 No comments
BD Nationwide Mortgage Introduces a Second Mortgage and Home Equity Loan Compatible with the Controversial “Pick a Payment Loan” Featuring a Negative Amortization OptionEncinitas, CA (PRWEB) September 24, 2006
BD Nationwide Mortgage introduces a break-through second mortgage loan that is compatible with payment option first mortgages featuring options for fixed rate, interest only, and the controversial negative amortization. BD Nationwide is excited to release the “Neg-Am Compatible Second Mortgage Loan.” This unique home equity loan product allows homeowners to qualify for a cash-out second mortgage while keeping their existing payment option loan. This revolutionary equity loan can be subordinated to 100% combined loan to value behind a negative amortization existing first mortgage. This new home equity feature opens the doors for many homeowners who have found it very difficult to get a second mortgage or home equity loan behind any mortgage that has a negative amortization.
Payment option loans have been controversial in the mortgage industry because they are attached to volatile indexes in which the interest rates can adjust rapidly and the borrowers can find their mortgage payment increasing 100% to 200%. Mortgage product analyzers point out that default ratios may increase significantly with these risky loans that allow borrowers to choose their payment each month. Most traditional home equity lenders are weary of offering second mortgages behind this type of loan, because with negative amortization, the interest is deferred and added to the balance of the consumers principal balance at the end of the year. This concerns most mortgage lenders and banks because these consumers have rising mortgage balances rather than the decreasing mortgage balances that traditional principal and interest home mortgages have.
Unfortunately there are too many loan officers that are not properly placing the payment options loans with the right borrowers. Too often the option ARM is offered to borrowers who are trying to increase their home purchase power because initially these loans offer interest rates as low as 1.25 percent and the borrower qualify for a home that would normally be out of their price range. Unfortunately we find that these same homeowners do not have a plan for paying their mortgage when the rate adjusts back to a fully indexed payment. BD Nationwide Mortgage found that borrowers were rarely informed when they financed their home about the potential difficulties for qualifying for a second mortgage behind a negative amortization1st mortgage.
According to IHE executive, Sandy Sarconi, “Adding a home equity loan to a negative amortized 1st mortgages increases the risk factor and most lenders will not allow subordinate financing with payment option mortgages.” BD Nationwide Mortgage is one of the few lending brokers to offer second mortgages behind neg-am loans and payment option 1st mortgages. Even if a borrower is deferring the interest on their first mortgage now, BD Nationwide can help you find a great second mortgage. The mortgage broker offers 2nd mortgages for people with good and bad credit scores ranging from 500-800. BD Nationwide also provides prime rate home equity loans, as well as non-prime second mortgages for people with past late payments, collections or bankruptcies.
Brendon Daly, a Mortgage Consultant at BD Nationwide, said, “This second mortgage enables my clients to get additional cash out of their home without refinancing their current mortgage.” According to Daly, “The payment option loans were designed for the self-employed borrower with cash flow obstacles as well as savvy investors who are freeing up funds to buy more properties.” Daly continued, “These types of borrowers are more likely to use their home equity and take out a second mortgage to raise cash. Being able to offer this 2nd mortgage product to my borrowers may create new opportunities because their are less lending restrictions.”
BD Nationwide Mortgage suggests going online and getting additional advice from experienced mortgage brokers. Start with reading the relevant loan articles. The company also recommends to research loan program parameters and credit qualifications for sub-prime credit second mortgages. Consumers searching for current interest rates, should visit: Home Equity Loan Rates.
About BD Nationwide Mortgage Company
BD Nationwide Mortgage is a second mortgage broker from Southern California who specializes in home equity loans and debt consolidation. They offer cutting edge loan products for refinance, second mortgages, home credit lines, and jumbo purchase loans. The company continues to promote second mortgage loans with more options for people with all ranges of credit. Always striving to offer “out of the box” loans, BD Nationwide Mortgage is determined to help expand home financing solutions so more Americans can maximize the financial rewards of being a homeowner.
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How Home Loan Calculators Can Make Your Life Easier
Posted on December 16th, 2010 No comments
Lam Bong asked:
Generally, people do not want to deal with the math of loans or mortgage. This is a typical attitude because we know that these calculated figures are important but hard to understand. Worry no more because most mortgage and loan websites give you access to home loans calculator. The 80% of home buyers who logged into these online calculators attests at how easy it is to use for your loans needs.
Of course, different loans expect different figure inputs or variables. Luckily, most home loans calculator are built almost similar in features. Usually, they have a form for you to fill out with information. You need to have initial loan shopping to have the necessary details needed in calculation so you can get the best loan deal. Also it is recommended to use loan calculators that are targeted to your region. For example if you live in a state, then find online loan calculators that are located in your area. This can prevent confusion because these calculators have already been subjected to other factors in loan processing as it varies from place to place.
This online calculator tool can greatly help you in the math of your product loans. Loans calculator makes it easier to use them for the following computations:
Monthly Payments Loans calculator online can compute just how much you need to pay for your mortgage payments. You just have to enter the loan amount, the length of your mortgage, starting date, and interest rate so that the calculator would give you the monthly payment you have to pay. When you click “Submit” the next page shown to you will often show a summary of the details you gave and the result of the calculation. Some sites even offer types of loans that fit your financial profile or loan expectations.
Amortization Schedule. By entering your loan details of the amount borrowed, the term, and the annual rate of interest you can get your amortization schedule from the loan calculator.
Bi-weekly Mortgage. Some borrowers prefer to pay bi-weekly mortgage to lessen their interest and shorten their recovery period. Loan calculators can also compute the amount of your bi-weekly mortgage and you just have to input the following details: balance of the loan, the annual interest rate and the amortization period.
Scenarios. By entering different details in the blank form of the calculator, you can create possible scenarios and mode of your loan terms. This can help you in determining the alternative options that you can avail in loans.
Missing variable. Home loans calculator can also give you a missing detail piece of your product loans just in case a lack of information has you wondering about other variables in the loan calculation.
This online loan tool device has helped a lot of people in determining the best loans that they can have or that are available in the market. Most especially they can be tools to better inform the borrowers of what they are looking for – the best loans for their homes.
Aaron -
Telling the Truth About Mortgage Lending
Posted on April 17th, 2009 No comments
Kristin Abouelata – Home Loans asked:
There’s a bunch of important points to review when considering a mortgage. And a ton of paperwork to look over. So much so at times it can be quite overwhelming. A Good Faith Estimate is one document to consider, and many people focus solely on it. But, in 1968, our lawmakers wanted to make sure lenders made it clear to the consumers just exactly what they were paying and that this information was consistently disclosed lender by lender. And for that, we have the Truth in Lending document, created by the Truth In Lending Act and outlined by Regulation Z.
The Truth in Lending document, or TIL as it’s affectionately known in the Biz, tells the consumer a lot about what he/she is getting into. It tells so much so that it can confuse a person, too. Thus, it is important to know and understand what it tells you. It allows one to make an informed decision. A TIL should be part of the beginning of the loan process and the end. When it’s all said and done, a mortgage customer should have reviewed an estimated TIL before closing, and then have also signed his/her final TIL at loan closing. The information found on the estimated TIL shouldn’t be too far off from the final TIL. If it is and you don’t understand the explanation for it, it’s time to put on the brakes.
A TIL will reflect your loan amount, interest rate and the amortization of your loan. A TIL comes in a standard layout, and most TILs will look the same from a distance, though there may be a few variations, like a payment reflection, lender’s logo, etc. But the nuts and the bolts should be identical in format.
The main thing you notice about TILs is they all have four boxes containing numbers stretched across their horizon. These boxes don’t mean much to you until they’re explained. But these are important numbers, which is why they are so blatantly highlighted in these little boxes. They shouldn’t be brushed off. If the TIL is an estimated or intial TIL, you’ll see a little “e” by the numbers in the boxes. Pretty straight forward – “e” means estimate. The final TIL you sign at closing should reflect all the numbers on your HUD-1 settlement papers and the “e” should be gone. That means you’re signing the final, real McCoy that is calculated by your final numbers.
The first box on the TIL reflects the Annual Percentage Rate (APR) or cost of your credit expressed as a yearly rate. Don’t panic, this rate is not your interest rate. It is the rate that the closing costs are actually costing you annualized over a year, and generally it is higher than your interest rate. However, if your mortgage is locked at a 5% interest rate, but your APR rate is 10%, you should reconsider the deal or get a second opinion. You’re paying too much.
The second box is the Finance Charge or the dollar amount the credit will cost you. It is the total amount of interest calculated at the interest rate over the life of the loan, plus Prepaid Finance Charges and the total amount of any required mortgage insurance charged over the life of the loan. The third box reflects the Amount Financed or the total amount credited to you on your behalf, minus Prepaid Finance Charges.
The fourth box is the one that gets most people’s attention – the Total of Payments. It’s the amount that a customer will actually pay back in principal, interest (and mortgage insurance, if applicable) if they keep the loan for the full term and stick to the outlined amortization schedule. Ouch. People find this number a little incredulous. I guess it really sends it home that mortgage lending is a business, and some company is going to make some money from it.
There are three other things on a TIL I like to point out to a customer. One is the late payment penalty. People need to know what it will cost them if their check gets to the Servicer late. It’s usually 4% or 5% of the monthly principal and interest payment, depending on the loan type. Another VERY important feature a lender should point out to a customer is if there is a PRE-PAYMENT penalty on the loan. A pre-payment penalty means that if you pay the loan off before a pre-determined time, you pay for the luxury of doing so. Make sure you know the terms of the pre-payment penalty if you should have one, and that you are certain you can live with it. They can be quite costly. Finally, the TIL tells you that should you pay off your loan early, you won’t be entitled to any of your closing costs or interest being refunded. In other words, don’t expect to get any of the money you have already paid back.
Simple enough, right? To tell you the truth, it is confusing, even for a mortgage lender. Take time to understand this document and ask all the questions you have regarding it. Don’t be shy.
DUNCAN