Ross Bainbridge asked:




A mortgage is a device for a lien between a lender and a borrower. Through a mortgage, the borrower pledges the property to the lending agency as a security. This way the loan is secure and the lender can foreclose the property and recover his loan if the borrower fails to make mortgage repayments. A mortgage lien comprises the actual mortgage and a note that registers this lien. This process is also called hypothecation.

Mortgage loans in California, as in other parts of the country, are essentially of two kinds: fixed-rate loans or adjustable rate loans. A fixed rate loan is called an Amortized rate Mortgage (ARM) where the interest rate on the mortgage is agreed to and fixed for the entire period of the mortgage. In an ARM, the lender assumes the risk of interest rate fluctuation. This means that if the market rates go down the lender benefits from it but if they go up, the lender has to continue to charge only the fixed rate.

Adjustable rate mortgages have variable interest rates that can vary monthly or annually. In these loans the interest rate risk is transferred to the borrower. Therefore, loan rates of adjustable loans are also marginally lower than existing market rates. Many California homeowners also capitalize on the equity of their home by applying for a second mortgage on their homes.

Typically, most homebuyers apply for a pre-approval to loans. Through this process, the lending agency judges the loan repayment capacity of the borrower by their credit ratings, equity, income, etc. Once the loan is pre-approved, the borrower can easily enter into a mortgage lien with the lender once he actually locates a house.

Last but not least, a home mortgage loan with no down payment on the house is a popular option that many homebuyers opt for. This allows them to own a home and yet not invest all their savings into buying it.

Betty

Carrie Reeder asked:




Getting a home loan with bad credit has actually never been easier than it is today. Here are some tips to help improve your chances of success:

Find A Good Real Estate Deal – If you can find a property that has some equity in it when you purchase it, you may have an easier time getting financing on that property. To the lender it may be almost as good as if you had some kind of down payment on the property. Some lenders will consider the properties loan to value ratio when they consider the loan. Talk to your mortgage broker and see if this factor could help you get qualified.

Try Creative Financing – See if the seller would be willing to carry back a second mortgage on the home. This is where you set up a contract or agreement with the seller that you will pay them monthly payments, including interest of, let’s say, $150/mo on $10,000 dollars of the price of the property, as a second mortgage. Then, to make it nice for the seller, perhaps put in the agreement that the entire amount is due in full within 2 years or something. That should give you plenty of time to refinance and then the seller doesn’t feel permanently locked into the contract.

Save For A Down Payment – There are lenders who may be able to qualify you for 100% financing, even with low credit scores, but your interest rate will be much lower if you can put even 3-5% down. If possible, try to save as much as possible for a down payment. Sometimes it may be better to wait about 3-6 months to get into a new home loan if it means the difference of having a down payment. The interest rate could be quite a bit better because of that factor. However, if you don’t want to have a down payment, you can always refinance later for a lower interest rate.

Shop Around – There are some mortgage brokers out there that you will talk to who will say, “I can’t help you, and if I can’t help you, no one can help you.” But, if you persist in talking with other brokers, 10 minutes later you could be talking to someone who knows a way to help you, no problem. Most brokers feel that if they can’t help you, no one can. However, the ironic thing is that each broker is varied in the types of loans they can do. Some brokers have relationships with flexible mortgage lenders and others do not. I recommend applying online to mortgage services that will submit your application to multiple lenders. That way, your credit is only pulled once, and you can analyze offers from multiple lenders. To see our list of recommended bad credit mortgage lenders, visit here recommended bad credit
mortgage lenders

Improve Your Credit Score – There are some really simple ways to improve your credit score without spending too much time at it. All 3 major credit bureaus now have areas on their websites where you can dispute incorrect items on your credit. The process is very quick and easy. Make your current payments on time to help your score. Keep your number of credit inquiries down. Too many inquiries can hurt your credit score. If you want to buy a house, don’t apply for any credit cards, auto loans or any other type of loan if you can avoid it. For your reference, here are the links to all 3 major credit bureau’s websites: www.abcloanguide.com/credithelp.shtml

If you really do want to get into a home, don’t let bad credit stop you. There are lenders out there who can help you, it just takes some persistence. Apply with multiple lenders. Like I said, apply with mortgage services that specialize in bad credit mortgage loans and will submit your application to multiple lenders with only having one credit inquiry.

Duane

dave s asked:


I am planning to buy a new house. What would be better, to take two loans (primary and secondary) on the new home, or to take one loan and home equity from my first home (which was paid in full) to put into the new house?

Norma