There are reports of refinance misconduct in the industry which is well regulated. The refinance mortgages and mortgage loans are regulated products. The providers of these products must keep it straight and narrow. Although usually the case, there are bad apples in any industry. Customers must always be in their guard. Here are some Refinance misconduct signs;  

Main problem seems to be pushy and impatient mortgage advisors. The reports suggest that they use a very well known sales technique completely wrong in the refinance mortgage industry. The advisor suggests to the applicant that he has pulled some strings especially for this particular customer and got a very good refinance mortgage deal. The advisor caries on with the killer punch to add that this offer is only available if it is taken now. The refinance applications are not that simple to decide on the spot. Even though there is an offer to expire on the day, the advisor should be able to save this offer for the clients without signing a mortgage deed. Usually reputable mortgage providers set a mortgage product. The applicant either qualifies for that offer or not. The proper consultant should advise the prospective applicant to read through the documents first, before signing anything. Mortgage is the largest financial commitment most people will have in their life. Someone expecting a decision on the spot can not be serious.

It seems that some advisors go beyond the definition of advisor and urge the applicant to take certain mortgage product on the basis that the mortgage consultant knows what he is talking about. Every salesperson loves to conclude the sale as fast as they can. The applicant is the one who should put the brakes on when they have not got enough knowledge to decide the quality of the refinance mortgage offer. They should ask full details of the mortgage offer so that they can compare it with other offers in the market. Anyone can tell that their product is the best. Talk is cheap.

Another common problem is that the advisor keeps pushing for the same product without showing the other products available. The mortgage advisor may be paid a higher commission on that particular product. Thank the person and walk away to check other products before going ahead with it. He may be telling the truth, but the mortgage applicants do not know that without checking.

If the mortgage offer is not laid out clearly, showing all the interest rates, APR, fees and charges, ask the offer to be more detailed and clear. Tell them that your solicitor will have a look at it for you. See if they will come clean.

Do not trust cold callers. Check their credentials. Refinance mortgage lenders are sizeable institutions and do not operate this way. Those people are mostly pushers. Reputable refinance mortgage lenders would not want to be associated with those people as they are not only interested in closing the sale but also find a good risk.   

Some applicants are being suggested to falsify documents or lie about their circumstances. It seems that some people will do anything to close a sale. Once a refinance mortgage is taken, the customer will make payments years to come. It is not wise to get a mortgage that beyond customer’s means, even though it is possible to get it by providing false information. The mortgage applicant should always avoid overstretching. However, the good advice to improve the mortgage application should not be confused with falsifying. There is nothing wrong with rewording the application to improve the chances of being offered a mortgage with good interest rate.   

As a general rule, no refinance mortgage papers should be signed until the home owner is fully satisfied to switch the lender. Legal advice or independent financial advice should be sought if there is any doubt.

Filed under: Refinance Home Mortgage Loan by JS Lee
Comments Off

You may not need an excuse for wanting a bit of extra cash. Tapping into your home’s equity for this purpose however is more than just wanting. It needs serious consideration and vigorous application process. There are a few things to take into account regarding your circumstances. Such as, how much you would like to borrow, for how long and what you would like to accomplish with the extra money. Then how you would like to do it comes into equation. i.e. Refinance, second mortgage (home equity loan) or even personal finance. Here are a few tips for you to save time and money on second mortgage.

1. Get online. Find out all the possible loan options you might have. Check their minimum requirements, rates and get a quote. Do not just think about it, but think about it with a few options in mind. It is really easy to do online.

 2. Now find out how you would be seen by a mortgage underwriter. Check your credit score and see how good you would be received. Good credit score is the highest recommendation you would get.

3. You will be asked to verify your earnings, send bank statements, credit card statements and income and expenditure statements. Prepare these documents in advance. 

4. Your reasons to want extra cash may not be as appealing to a mortgage underwriter as it is to you. For example, I would like to build a snooker room in my basement may not be the best answer. However, home improvement might just be good enough.

5. Truly explore your options. Consider pros and cons of every loan possibility. You may start with wanting a second mortgage and decide that refinance is the best option for you.

6. Get what you really want, not what looks good to start with. The introductory rates (code name: teaser rates!) may not last long. For example, if you want a fixed rate mortgage get a fixed rate mortgage not a flexible rate that has a one year fixed period.

7. Mortgage application may not be fun, but it has got to be done properly. Get all your documents out and fill the application honestly and completely. Incomplete applications will only delay the process. You may even have to start all over.          

8. Do not overestimate your abilities to pay the mortgage or underestimate the burdens a slight rate increase might bring on to you. Always leave little bit of manoeuvre space for yourself, do not have it too tight.

9. Your partner may say yes to your desires of having a snooker room in the basement (or remodel the kitchen), because she (he) loves you. But, they may have few concerns, listen to what they say and take into account. 

10. If you are not fully satisfied, you do not have to take the loan. In the same way, the loan may not be perfect, nevertheless perfectly serve your current needs. Get the balance right.

Filed under: Home Equity Loan by JS Lee
Comments Off

The new breed of mortgage brokers understand that the times have changed; sitting in their offices will not bring them the business. They are coming to homes through computers. Many mortgage brokers now have very informative websites full of articles and tips as well as mortgage rate checkers, online mortgage quotes and credit score checkers. There are sizeable brokerage firms who manage to get more applications in than many banks.

Many people are well aware of the benefits of using a mortgage advisor. They save time on knocking the doors of every lender. They will come up with several options to choose from instead of one lender pushing its own product. You have the same benefits from online brokers from the comfort of your home. They are passionate about mortgages, loans, refinance and their clients. They have carried the same spirit to worldwide web. They are well aware that many of their customers prefer a broker. But with the change in technology, they prefer them online. They still want them research and find the best deals for them though.  Being an independent financial advisor requires that automatically. Some of the online brokers may or may not keep their licences in place, but I do not think they are required to be licensed to run a website. It is limited what they can offer on internet. They do their best to include useful links and informative articles, but those are general advices. They can not perform proper evaluation of the client’s circumstances and offer specific advice from their website. For that clients really need to see a mortgage advisor or fill their forms online.

However, many people are well informed now. Most people gather information online and offline on their own and are able to compare the deals and evaluate what they want to achieve with a refinance home mortgage loan. When more information is needed, they can always Google it. Of course, information and advice are two different things entirely. For a decent refinance home mortgage loan advice, people still could make an appointment with their financial advisor and let him explore the possibilities and provide guidence specific to their circumstances and needs. Independent financial advisors offer vital services like lawyers and accountants and they will be around for many years to come.

Filed under: Home Mortgage Broker by JS Lee
Comments Off

During refinance home mortgage loan processes the applicants need to get several quotes and compare those quotes. Is Annual Percentage Rate (APR) the single most important factor in comparing mortgages? Analyzing APR during mortgage refinancing or home equity mortgage loan search stage can be a very tricky proposition.

The term annual percentage rate (APR) describe the interest rate for a whole year (annualized), rather than just a monthly rate, as applied on a loan, mortgage, credit card, etc. APR takes into account all costs (loan fees, documentation fees, private mortgage insurance, discount rates) involved with a loan to show the actual percentage interest paid on an annual basis.  In other words, yearly cost of carrying a balance on a credit line. In most countries the mortgage lenders have to disclose the APR by the law.

Although APR seems to be a magic number to compare the mortgages, it is rarely the case. Most consumers have no idea what makes up this elusive number.  APR is a valuable tool in comparing various mortgage loan programs, but it should never be relied upon as the sole determining factor in choosing a loan, for the following reasons: 

1)   Not all closing costs are calculated within the APR uniformly.  There is a huge variance among lenders, mortgage loan officers, and even states as to which fees they include in their APR. There is no standard among the mortgage industry, let alone among competing mortgage companies. 

2)   The costs themselves can be manipulated within the loan.  For example, prepaid interest (the amount of interest a consumer pays at closing which is for the interest from that date until the end of the month) can be represented as anywhere from 1 to 30 days, a potentially huge difference, especially on larger mortgage refinancing loans.

3)   Ordinarily, the title company’s closing fee is an APR fee, while their title insurance cost is not. In order to minimize the effect to the APR, title companies began simply decreasing their closing fee, while subsequently increasing their title insurance fee by the same amount, thereby reducing the APR. 

These inaccurate numbers could result in the consumer making a poor decision even though no one intentionally misleads them. It would be almost impossible for an ordinary consumer to know how each lender calculate their APR. It would be hard for them to understand even it was explained. As well as looking at APR as a guide, mortgage applicants could determine which mortgage offers a better deal by looking at the costs provided to them in the form of a Good Faith Estimate and/or a Truth In Lending Statement. They could easily compare the interest rates, monthly mortgage payments, arrangement fees and each closing costs.

The decision can not be based on a single number, as the mortgages are not uniform products. As well as the standard fixed rates and adjustable rates there are so many variations and hybrid products that the home owner needs to understand and evaluate how each product serve their objectives. For example, a mortgage that is fixed for 15 years may have a higher APR in comparison with a low start flexible rate to start with. However, should the interest rates rise considerably over the next few years, the fixed rate mortgage would end up being far superior. There is no way APR calculations can tell the home owner that.

Filed under: Mortgage Rates and Fees by JS Lee
Comments Off

Consumers requiring cash advance to cover unexpected bills unavoidably turning to payday loans. These loans are providing hefty profits for the loan company. Considering how short they are the charges are acceptable only to desperate customers who have nowhere else to turn to. Since they make big money, the payday loan companies can advertise heavily. As a result they catch many more customers every day.

How someone who has struggled to find the cash in the first place is expected to sort his problems out in as short as 14 days? The answer seems to be that they can not. A recent government report suggest that many payday loan customers got caught in a cycle of payday loans. They keep borrowing until the next payday to cover the previous loan. This cycle seems to go around as much as 12 times before the borrower can get out of it, paying thousands of dollars in the process and becoming much worse off.

Sometimes there is no alternative for the cash strapped people or the alternatives are worse. Their credit score is very important to many people and many of them principally can not accept to miss a payment. Missing a payment could have serious consequences in terms of credit score and higher cost of further borrowing with bad credit score.

If it was looked at objectively the big name high street banks are worse than the payday loan companies. Banks would charge $25 to cover a $5 shortage in customers account to pay for an outstanding cheque or payment, regardless of how many years customer may be with the bank. Banks would look worse than the payday loan company taking into account that they would return the fund request from a customer’s account unpaid if it was over $100 short. So they are happy to charge the customer $25 fee for a small unarranged credit extension, but not happy to take any risk over $100.

There seems to be few companies establishing on the back of the shortcomings of payday loans. 100 day loan is one of them. As the name suggest, the borrowers are given 100 day to pay. This company searches over 100 lenders to find the best loan deal for the applicant. Within 100 day consumer would be able to sort his problems. Therefore, these loans will help the borrower and still make good money for the loan company. Here is their detail; 100DayLoans.com

Filed under: Articles by JS Lee
Comments Off

Mortgages are long term products with a life of as much as 30 years. General thought is that people stick with their mortgage in the belief that one day they will own their home mortgage free. Well home owners may achieve that much sooner than they think with the ever innovated mortgage products that has all the flexibilities needed to allow owning a mortgage free home. Flexible mortgages will have lower monthly payments to start with. There are mortgage products that combine different aspects of financial affairs. These innovative home loans offer further savings by incorporating savings and checking accounts, home insurance and even credit card into mortgage. For example, they may allow to offset mortgage interest against savings in the mortgage savings account. Another flexibility would be the option to pay lump sum amounts whenever possible.

Remember here that flexibility may not really be what should be looked for at this time. For example a) home owner thinks the current mortgage rates are rock bottom and it can only go higher from now and b) intends to stay in the house for a long time to come. In that case, the home owner may as well forget the flexibility and go ahead and fix the mortgage as long as practicle. There are great fixed mortgage terms around. Slightly higher interest rate may need to be paid for fixing the home mortgage loan refinance rate, but it may be worth it in the long run. In return, the fixed rates would give the peace of mind of knowing how much exactly the monthly payments are going to be for the duration of the fixed term. People with good credit score will have plenty of options to choose from.

Home owners who think they are paying a bit much interest should take advantage of the current low interest rates and refinance home mortgage loan. All they have to do is a bit of math; total up the savings from low interest mortgage and subtract the cost of refinancing from it. If they can afford it, pay a bit more every month so that they get extra savings by reducing the term of the loan. Look for those mortgages that will give extra on savings or throw in other benefits.

All those savings that added up over the years may come very handy one day. People’s circumstances changes very fast. People would really want to hold on to every cent they earn. Saving is probably the best way of increasing household spendable income. People need to look into home finance carefully, switching and swapping to save money. It is hard earned money after all. It is amazing that people would switch their electricity providers twice a year, but would not even imagine to change their lender for a better Home Mortgage Loan.

Filed under: Refinance Home Mortgage Loan by JS Lee
Comments Off

I remember how anxious I was when I applied for my first mortgage. I liked the house and did not want to loose. Would the lender accept me? Was my credit score good enough? Don’t be like me or others. You can find out very easily if your credit score is good enough. You can check the lending criteria to see if you qualify.

What I am trying to say here is that it is one mortgage for us, but it is a business for the mortgage companies. They have to sell mortgages to make their business work. You see these people employed by the banks and lenders with fancy titles of bank manager, loan manager and mortgage adviser. The bottom line is that those people are just a salesperson not much different than the car salesman. They have to sell loans to keep their job. There is a serious competition among the lenders and that can only be good for us the borrowers. As I said you will not be getting home mortgage loans everyday in your life, however you will be paying for that loan for a long time to come. Find out more about your options, shop around for the best terms available to you.

First thing you need to find out is about you. What is your credit score? How much you can borrow with the income level you have? Is there ways to improve your acceptability? There may be something in your credit record that should not have been there and you may be able to improve your score by removing it. Another great way of improving your chances of getting mortgage is sorting out your bank statements. Probably the first thing they will look at is your last six months bank statements. So you need to start thinking and working well in advance of your mortgage application. Do not miss any payment or make any questionable transaction. Keep it very simple, clean and organised.

Don’t get me wrong here; you can not qualify for every mortgage offer that is available. Some mortgage offers are out there to get the customers in the door and they will be quick to tell you that you do not qualify for it. Stay realistic and go after the best mortgage you can get (that is not the same as best mortgage offer available by a bank). Remember no one likes a rejection and it is not good for your credit score. Go after the available loans that you can get. Never give the feeling to the loan manager that you are in the bag. Make him think what else he can offer to lock you in. To get more, you need to ask more. Do not worry. In worst case, you will get a confirmation that you have been offered the best refinance mortgage available by this company.

Filed under: Home Mortgage Loan by JS Lee
Comments Off