Craig Romero asked:




Most of the families end up paying their mortgage loans for as long as 30 years. What’s involved is an incredible amount of interest payment and significant drop in savings. Biweekly mortgage payments were seen as an effective way out of the financial mess. While there are definite benefits in biweekly mode of payments, they are not very significant.

Mortgage cycling, on the other hand, is a bold financial plan assuring definite and significant savings. Generally, a large part of your overall mortgage payments is paid as interest on the principal amount. Mortgage cycling works on the theory that lesser the principal amount, lower will be your interest payments. This simple idea is the basis of the mortgage miracle, that is mortgage cycling.

Now, mortgage cycling requires large half yearly equity payments which reduce the principal amount and consequently the interest too. If you don’t have the money in hand, you can always save the money over a period of six months given that your small savings have a cumulative effect in terms of interest savings.

A saving of around five thousand dollars for six months makes you the ideal candidate for mortgage cycling. As you pay these large installments every six months, the principal amount chargeable for interest gets progressively lower and the interest rates sink with each payment.

You can also use home equity loans to make the half-yearly equity payments. This way you make the equity payments in time and get extra time to save up for the next round of home equity loan payment too.

The best part of mortgage cycling is that it does not depend on the condition of economy. The theory of mortgage recycling is simple. The principal amount gets smaller and so does the interest rates. Thus no matter what the prevailing interests are, your savings will be higher compared to any other alternative.

Mortgage cycling is effective for all types of mortgage debts. The determining factor is: Are you eager to pay off your mortgage debt quickly? Many say that mortgage cycling is not for everyone given that it requires large payments. But the truth is that mortgage cycling promises phenomenal benefits as no other financial plan does. In exchange it requires financial prudence and well planned saving.

Wilma

Urban Sotensek asked:




Each mortgage scam contains some type of misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. Mortgage scam is easily practiced particularly where mortgage industry professionals are involved. The true level of mortgage scam is largely unknown because a significant portion of the mortgage industry is void of any mandatory fraud reporting and in addition, mortgage fraud in the secondary market is often under reported. Based on various industry reports and analysis, mortgage scam is pervasive and growing. Mortgage scam can be basically analyzed as:

* Fraud for Profit – Sometimes referred as “Industry Insider Fraud” and the motive is to falsely inflate the value of the property, issue loans based on fictitious properties or revolve equity. Based on existing approximate reports, eighty percent of all reported mortgage scam losses involve collaboration or collusion by industry insiders

* Fraud for Housing – An illegal action perpetrated solely by the borrower. This type of mortgage scam is done by a borrower who makes misrepresentations regarding his income or employment history to qualify for a large loan. The motive behind this scam is to acquire and maintain ownership of a house under false pretenses

Fraud for Housing can not be compared to the scam done by mortgage scam industry professionals which affect the borrowers. Predatory lending usually is targeted towards senior citizens, lower income and challenged credit borrowers. Mortgage lending representatives force borrowers to pay exhaustive loan settlement fees, sub-prime or higher interest rates, and in some cases, unreasonable service fees. The usual result is the borrower defaulting on his mortgage payment and undergoing foreclosure or forced refinancing. Our focus is to recognize the mortgage scam that could happen to us, the borrower.

MORTGAGE SCAM SCHEMES

False or Stolen Identity – A fake identity may be used on the loan application. The applicant may be involved in an identity theft scheme and use someones personal information without the true person’s knowledge.

Inflated Appraisals – An appraiser acts in collusion with a borrower and provides a misleading appraisal report to the lender. This report inaccurately states an inflated property value.

Silent Second Mortgage – Buyer of a property borrows the down payment from the seller through the issuance of a non-disclosed second mortgage. The primary lender believes the borrower has invested his own money in the down payment, when in fact, it is borrowed. The second mortgage may not be recorded to further conceal its status from the primary lender.

Nominee Loans – The identity of the borrower is concealed through the use of a nominee who allows the borrower to use the nominee’s name and credit history to apply for a loan.

Equity Skimming – An investor may use a nominee, false income documents, and false credit reports, to obtain a loan in the nominee’s name. Subsequent to closing, the nominee signs the property over to the investor in a quit claim deed which relinquishes all rights to the property and provides no guaranty to title. The investor does not make any mortgage payments and rents the property until foreclosure takes place a few months later.

Property Flipping – A property is bought, falsely advertised at a higher value, and then quickly sold. What makes this property illegal is that the appraisal information is fraudulent. The schemes typically involve one or more of the following; fraudulent appraisals, doctored loan documentation and inflated buyers income… Kickbacks to buyers, investors, property and loan brokers, appraisers, title company employees are common in this scheme. A home may be appraised for $100,000 but is actually worth $30,000.

Air Loans – This is a non-existent property loan where there is usually no collateral. A broker invents borrowers and properties, establishes accounts for payments, and maintains custodial accounts for escrows. They may even set up an office with a bank of telephones, each one used as the employer, appraiser, credit agency for verification purposes.

Foreclosure Schemes – Are one of the worst. The loan agents mislead the homeowners into believing that they can save their homes in exchange for a transfer of the deed, usually in the form of a Quit-Claim Deed, and up-front fees. The perpetrator profits from these schemes by re-mortgaging the property or pocketing fees paid by the homeowner without helping to prevent the foreclosure. The victim suffers the loss of the property as well as the up-front fees. Be aware of offers that promise to save homeowners who are at risk of defaulting on loans or whose houses are already in foreclosure. If you are near a foreclosure seek a qualified credit counselor or attorney to assist.

Mortgage Scam per e-Mail – Many of the emails imply that the recipient has already been approved for a loan by making a vague statement such as “we are accepting your mortgage application”. Recipients may believe that they are actually being offered a loan. These emails are basically just poorly implemented tricks to get recipients to click on the link provided and fill out a form which in turn will defraud you in one way or another. If enough information is provided, scammers might even be able to steal your identity. A lot of the sites will last only a few days before they are taken down. But new will arise as soon as they are suppressed. Often they consist of just one page containing a form.

There is no information about the company offering the service, no privacy policy or a legal document, and no contact options other than the form provided. Often,the form is not secure (https), which is a good indicator that the site is not legitimate. No credible company would expect potential clients to submit information via an unsecured form. Never deal with spammers, regardless of how attractive their offer may seem. If they are unscrupulous enough to send unsolicited email, or allow their affiliates to send unsolicited email, then they have immediately shown themselves to be untrustworthy and you should avoid them at all cost. In general try to avoid the use of online mortgage loans.

Zachary

homeloanninjas asked:

from www.homeloanninjas.com | ask a ninja mortgage faq | how much do i need to put down when buy a home?

Francisco

Leon L Cote asked:




A reverse mortgage is a loan against your house that you don’t have to repay for as long as you live there. It can be paid to you all at the same time, as a regular monthly advance, or at times and in amounts that you select. You pay the cash back and interest when you die, sell your house, or permanently move out of your house.

Who’s Eligible All owners of the home must make an application for the reverse mortgage and sign the loan papers. All borrowers must be at least 62 years old for most reverse mortgages. Owners sometimes must occupy the home as a principal residence ( where they live the bulk of the year ). Single family one-unit dwellings are eligible properties for all reverse mortgages. Some programs also accept 2-4 unit owner-occupied dwellings, together with some condominiums, cooperatives, planned unit developments, and made homes.

Mobile houses are often not eligible. How they’re employed Reverse mortgage loans typically need no repayment for so long as you live in your house. But they must be paid back in full, including all interest and other charges, when the last living borrower dies, sells the home, or permanently moves away.

As you make no standard payments, the balance you owe grows larger over a period. As your debt grows bigger, the quantity of money you would have left after selling and clearing the loan ( your “equity” ) usually grows smaller. But you typically can’t owe more than your house’s worth at the time the loan is repaid. Reverse mortgage borrowers continue to have their houses.

So you’re still in charge of property taxes, insurance, and repairs. If you fail to execute these responsibilities, your loan might become due and payable in full. What You Get These loans can be paid to you all at the same time in a single one-off sum of money, as a regular monthly loan advance or as a creditline letting you decide how much money to use and when to use it. Or you can select any mix of these payment plans. Some reverse mortgages are offered by state and local central authorities.

These “public sector” loans sometimes need to be used for categorical purposes, for example paying for house maintenance or property taxes. Other reverse mortgages are offered by banks, mortgage corporations, and savings associations. These “private sector” loans can be employed for any reason.

The amount of money you can get from a personal sector reverse mortgage usually relies on your age, your house’s value and location, and the price of the loan. The best money amounts often go to the oldest borrowers living in the most costly houses on loans with the lowest costs. The quantity of money you can get also relies on the specific reverse mortgage plan or program you select. The variations in available loan amounts can change significantly from one plan to another.

Most owners get the biggest money advances from the federally insured Home Equity Conversion Mortgage ( HECM ). HECM loans frequently provide much bigger loan advances than other reverse mortgages.

What You Pay The lowest cost reverse mortgages are offered by state and local regimes. They sometimes have low or no loan charges, and the rates are generally low or moderate too. Non-public sector reverse mortgages are extremely costly, and include a number of costs. An application fee generally includes the price of an appraisal and a credit history. Other loan costs sometimes include an origination fee, closing costs, insurance, and a monthly servicing fee. These costs often can be paid with loan advances, which mean they are added to your loan balance ( the balance you owe ). Interest is due on all loan advances.

Reverse mortgages are most pricey in the early years of the loan, and then become less dear over a period. The price tag can be really high in the near term, and is least expensive if you live longer than your life outlook. The federally insured Home Equity Conversion Mortgage ( HECM ) is in generally less costly than other personal sector reverse mortgages.

Buyers considering a personal sector reverse mortgage other than a HECM should punctiliously think about how much more it may cost before applying. Other articles in the fundamentals section of this site’s Reverse Mortgages info provide more details on measuring and comparing the final cost of these loans. Taxes, Estates, and Public Benefits Reverse mortgages might have tax results, affect suitability for help under Fed and State programs, and effect on the estate and successors of the householder.

Ernest

Mary Stasiewicz asked:




Opting for a second mortgage is a decision which warrants a great deal of consideration. Before entering into a second mortgage, homeowners should carefully weigh the advantages and disadvantages of taking on a second mortgage and should also carefully review the different options available. A second mortgage is often enticing because these closed-end loans can be used for any purpose and may even be tax deductible but caution should be exercised because defaulting on these loans can put the home under which the second mortgage was secured in jeopardy.

The Benefits of a Second Mortgage

We have already stressed the importance of carefully weighing the available options in deciding whether or not to take on a second mortgage. In this section we will outline the benefits of a second mortgage. Although a second mortgage may increase the amount the homeowner pays in the long run, there are other worthwhile benefits to this type of mortgage. Some of these benefits include: