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Islamic Mortgages
27/06/09
According to the Islamic law, Sharia, the Muslims are forbidden to pay or receive interest. Most of the mortgage products on the market thus were unsuitable for Muslim borrowers as these mortgages are mainly based on interest.
As a result of the increasing demand by the Muslim borrowers, lenders have in the recent years expanded their product ranges with Sharia compliant mortgages. Under Sharia law, two mortgage types are available to potential homeowners: Ijara (Lease To Own) and Murabaha (Deferred Sale Finance) loans.
The Ijara Loan
By this method, the mortgage lender would buy the property from the vendor; becoming the owner. The lender then leases the property to the over 20 to 25 years with a monthly lease payment. The lease payments would take all of the lender’s costs into account.
Now the Muslim borrower’s payment would now be treated as rent instead of “interest”. And the payments would fluctuate with the interest rate changes.
The lease agreement would also specify that the occupier can buy the property off the lender for a very small sum, usually £1, at the end of the lease period.
The Murabaha Loan
By the Murabaha method, the mortgage lender purchases the property and immediately resells it to the Muslim borrower at a higher price.
The profit that the lender essentially makes out of this transaction is the equivalent of all the interest on a fixed interest loan as well as any costs incurred. The borrower then buys the property from the lender at that gross figure, which is then repaid to the lender in equal installments for a period, typically of 15 to 20 years.
By: Adil Akkus
About the Author:
As a result of the increasing demand by the Muslim borrowers, lenders have in the recent years expanded their product ranges with Sharia compliant mortgages. Under Sharia law, two mortgage types are available to potential homeowners: Ijara (Lease To Own) and Murabaha (Deferred Sale Finance) loans.
The Ijara Loan
By this method, the mortgage lender would buy the property from the vendor; becoming the owner. The lender then leases the property to the over 20 to 25 years with a monthly lease payment. The lease payments would take all of the lender’s costs into account.
Now the Muslim borrower’s payment would now be treated as rent instead of “interest”. And the payments would fluctuate with the interest rate changes.
The lease agreement would also specify that the occupier can buy the property off the lender for a very small sum, usually £1, at the end of the lease period.
The Murabaha Loan
By the Murabaha method, the mortgage lender purchases the property and immediately resells it to the Muslim borrower at a higher price.
The profit that the lender essentially makes out of this transaction is the equivalent of all the interest on a fixed interest loan as well as any costs incurred. The borrower then buys the property from the lender at that gross figure, which is then repaid to the lender in equal installments for a period, typically of 15 to 20 years.
By: Adil Akkus
About the Author:
Adil Akkus is the managing director of the Appleton Estate Agents in Reading and Appleton .
Posted in: Mortgage Refinance : : Comments (0)
Does A Charge Off Happen Often?
27/06/09
By: Court Tuttle
About the Author:
Court provides information about unsecured personal loans and teaches people how to pay off private student loans.
Posted in: Debt Management : : Comments (0)
Subprime Mortgages – Information
26/06/09
Undoubtedly, you’ve heard the radio commercial claiming you can get a mortgage despite having bad credit. Bad credit mortgages are better known as subprime mortgages.
Subprime
“Subprime” is a euphemism for a borrower who simply doesn’t qualify for a traditional home mortgage. Subprime loans used to be very difficult to get, but things changed in the 1990’s. Banks began to realize there were a lot of borrowers with less than stellar credit or other problems. More borrowers meant more revenues, so banks started creating subprime mortgages and the game was on. As a result of these new loans, home ownership in the United States has risen to all time highs.
One of the biggest determinants in qualifying for a loan is your credit score. A borrower’s credit history is analyzed using a “FICO” score, named after Fair Isaac and Company, Inc. Generally, a FICO score below 620 is considered an indication of bad credit. The borrower is then classified as a subprime borrower.
Importantly, a FICO score below 620 is not the only reason a person may be classified as subprime. An infrequent borrowing history, new employment position or expensive home may also key the designation. In fact, nearly 50 percent of subprime borrowers have FICO scores above 620.
When a lender writes a mortgage, it is betting on whether the borrower will repay the loan completely and in a timely manner. The better your credit score, employment history and so, the better deal you will get from the lender. Obviously, subprime borrowers aren’t going to get the best deal. Instead, a lender may require a larger down payment and will certainly designate a higher interest rate than given to “good” borrowers. In addition, subprime borrowers may have to pay points just to get the loan.
The trade off of all of this, of course, is that you get a loan to buy a home. Home ownership has consistently proved to be one of the best long-term investments in the United States. While Americans are criticized for failing to save money, they are effectively doing so by purchasing homes and building equity in them.
Should you apply for a subprime loan if you have less than stellar credit or other problems? There is no right answer, so you should consider sitting down with an independent mortgage broker to analyze your situation.
By: Sergio Haros
About the Author:
Subprime
“Subprime” is a euphemism for a borrower who simply doesn’t qualify for a traditional home mortgage. Subprime loans used to be very difficult to get, but things changed in the 1990’s. Banks began to realize there were a lot of borrowers with less than stellar credit or other problems. More borrowers meant more revenues, so banks started creating subprime mortgages and the game was on. As a result of these new loans, home ownership in the United States has risen to all time highs.
One of the biggest determinants in qualifying for a loan is your credit score. A borrower’s credit history is analyzed using a “FICO” score, named after Fair Isaac and Company, Inc. Generally, a FICO score below 620 is considered an indication of bad credit. The borrower is then classified as a subprime borrower.
Importantly, a FICO score below 620 is not the only reason a person may be classified as subprime. An infrequent borrowing history, new employment position or expensive home may also key the designation. In fact, nearly 50 percent of subprime borrowers have FICO scores above 620.
When a lender writes a mortgage, it is betting on whether the borrower will repay the loan completely and in a timely manner. The better your credit score, employment history and so, the better deal you will get from the lender. Obviously, subprime borrowers aren’t going to get the best deal. Instead, a lender may require a larger down payment and will certainly designate a higher interest rate than given to “good” borrowers. In addition, subprime borrowers may have to pay points just to get the loan.
The trade off of all of this, of course, is that you get a loan to buy a home. Home ownership has consistently proved to be one of the best long-term investments in the United States. While Americans are criticized for failing to save money, they are effectively doing so by purchasing homes and building equity in them.
Should you apply for a subprime loan if you have less than stellar credit or other problems? There is no right answer, so you should consider sitting down with an independent mortgage broker to analyze your situation.
By: Sergio Haros
About the Author:
Sergio Haros is with Great Western Mortgage – San Diego Mortgage Brokers – providing San Diego home loans. Great Western Mortgage is a San Diego mortgage company writing San Diego mortgages and San Diego refinance and home equity loan.
Posted in: Mortgage Refinance : : Comments (0)
Georgia Mortgages
26/06/09
One of the ironic elements in the recent explosive growth in mortgage fraud is that it is the lenders who are being ripped off, even more so than the consumer. The impact of mortgage fraud in Georgia has led to the formation of the Georgia Real Estate Fraud Prevention & Awareness Coalition (GREFPAC). This group is made of principally of professionals in the industry who have a compelling interest in closing the loopholes in the lending process that allow for theft.
GREFPAC has a website that provides a volume of consumer information regarding the types of mortgage fraud that exist and how to spot a scam. Mortgage fraud often involves defrauding the lending institution, but the term also includes types of scams that lead to consumers losing their homes in phony refinancing deals. This organization is also making an effort to educate the law enforcement community on the nature and sophistication of mortgage fraud in the state, particularly in the Atlanta area. Visit their site at http://www.grefpac.org/.
Georgia’s Department of Banking and Finance also has a consumer oriented resource located at http://dbf.georgia.gov/00/channel_title/0,2094,43414745_46296143,00.html. There you can find information on the Georgia Fair Lending Act; this legislation puts teeth in the regulations regarding excessive fees and loan misrepresentation. There is also a Mortgage FAQ section that covers issues for both professional and consumer. There are sections on licensing; fees; escrow accounts; insurance and many other relevant topics. Finally, the web page has a section on financial issues for seniors that covers reverse mortgages in some detail.
The same State Department has also compiled an alphabetical list of FAQs that you can search by letter. They extend from adjustable rate mortgages to vehicle leasing; there are no w; x; y or z FAQs. There are some unexpected surprises among the information there; a random selection of ‘escrow fees’ led to a HUD web site that explained how escrow fees are limited by federal law and escrow violations detailed in the same federal act. Their section on ARMs leads to the Federal Reserve Board’s consumer basics on these loans. There is also a mortgage shopping worksheet at the Fed’s site that could prove to be useful.
Georgia’s state regulatory apparatus seems to be up to date on the problems in the present mortgage market and has a solid record of consumer advocacy. In 2002, Georgia passed one of the country’s toughest anti-predatory lending laws. Among other things, it would have made not just the originator of a loan liable for abusive practices, but any investor who purchased the loan in the secondary market. Numerous lenders threatened to stop doing business in Georgia.
Shortly afterward, the two principal federal regulators – the Office of the Controller of the Currency and the Office of Thrift Supervision – said that Georgia’s law didn’t apply to their regulated institutions. This notion of pre-emption has caused the paralysis in Washington over irresponsible banking to impact state-level legislation. Georgia later weakened the law’s most contentious provisions.
By: G. Mundy
About the Author:
GREFPAC has a website that provides a volume of consumer information regarding the types of mortgage fraud that exist and how to spot a scam. Mortgage fraud often involves defrauding the lending institution, but the term also includes types of scams that lead to consumers losing their homes in phony refinancing deals. This organization is also making an effort to educate the law enforcement community on the nature and sophistication of mortgage fraud in the state, particularly in the Atlanta area. Visit their site at http://www.grefpac.org/.
Georgia’s Department of Banking and Finance also has a consumer oriented resource located at http://dbf.georgia.gov/00/channel_title/0,2094,43414745_46296143,00.html. There you can find information on the Georgia Fair Lending Act; this legislation puts teeth in the regulations regarding excessive fees and loan misrepresentation. There is also a Mortgage FAQ section that covers issues for both professional and consumer. There are sections on licensing; fees; escrow accounts; insurance and many other relevant topics. Finally, the web page has a section on financial issues for seniors that covers reverse mortgages in some detail.
The same State Department has also compiled an alphabetical list of FAQs that you can search by letter. They extend from adjustable rate mortgages to vehicle leasing; there are no w; x; y or z FAQs. There are some unexpected surprises among the information there; a random selection of ‘escrow fees’ led to a HUD web site that explained how escrow fees are limited by federal law and escrow violations detailed in the same federal act. Their section on ARMs leads to the Federal Reserve Board’s consumer basics on these loans. There is also a mortgage shopping worksheet at the Fed’s site that could prove to be useful.
Georgia’s state regulatory apparatus seems to be up to date on the problems in the present mortgage market and has a solid record of consumer advocacy. In 2002, Georgia passed one of the country’s toughest anti-predatory lending laws. Among other things, it would have made not just the originator of a loan liable for abusive practices, but any investor who purchased the loan in the secondary market. Numerous lenders threatened to stop doing business in Georgia.
Shortly afterward, the two principal federal regulators – the Office of the Controller of the Currency and the Office of Thrift Supervision – said that Georgia’s law didn’t apply to their regulated institutions. This notion of pre-emption has caused the paralysis in Washington over irresponsible banking to impact state-level legislation. Georgia later weakened the law’s most contentious provisions.
By: G. Mundy
About the Author:
G. Mundy is a freelance writer, specializing in Georgia mortgages and finances. He recommends that you visit Mortgage Lenders Plus.com
Posted in: Loans : : Comments (0)
Before the mortgage crisis you used to be able to walk into a bank with a bad credit rating a get a loan approved during the same visit. Millions of home foreclosures later, that is no longer possible. Lenders have drastically increased the lending requirements when it comes to getting mortgages approved. Stated income mortgages used to be very popular because you could simply state your income in the mortgage application. However, since the housing crisis stated loans have stricter criteria for loan approval.
If you want to apply for a stated income mortgage loan, you should ensure that your credit rating is good. Most lenders require the borrower to have a good credit rating because there is a significant risk that the lender bears when taking on the risk. Due to the fact that the borrower can state his income in the application, lenders usually require you to show bank statements and give your tax return for the past two years. The can give them some sense of how much income you are currently making.
Stated loans are very popular for people who are self-employed. People who are self employed usually have a difficult time coming up with the proof of income in mortgage applications. Stated income mortgages are very popular for these people because it allows them to get loan approval. Because many predator lenders gave no documentation loans out to people who should not have qualified, there was a high amount of default among stated income home borrowers. The net result of this led to many lenders eliminating stated income mortgages from their lending practices.
By: Kris Mathews
About the Author:
If you want to apply for a stated income mortgage loan, you should ensure that your credit rating is good. Most lenders require the borrower to have a good credit rating because there is a significant risk that the lender bears when taking on the risk. Due to the fact that the borrower can state his income in the application, lenders usually require you to show bank statements and give your tax return for the past two years. The can give them some sense of how much income you are currently making.
Stated loans are very popular for people who are self-employed. People who are self employed usually have a difficult time coming up with the proof of income in mortgage applications. Stated income mortgages are very popular for these people because it allows them to get loan approval. Because many predator lenders gave no documentation loans out to people who should not have qualified, there was a high amount of default among stated income home borrowers. The net result of this led to many lenders eliminating stated income mortgages from their lending practices.
By: Kris Mathews
About the Author:
Stated Income Loans are very popular among people who are looking to apply for a mortgage. If you are interested in apply for a Stated Income Mortgage you should go online to find the best lender available.
Posted in: Home Equity Loans : : Comments (0)
No Doc Mortgages
20/06/09
Are you looking for a mortgage and you know proving your income is going to be a problem? There are programs that are designed specifically for those that have trouble proving their full income. They are called no doc mortgages or stated income mortgages. Here are the situations that are perfect for no doc mortgages.
If you are a self employed individual, then you are exactly the type of person that the no doc programs have been designed for. When these programs first came about, they were used only for self employed individuals and the requirements were not easy. You had to have perfect credit, but now you just have to have pretty good credit.
Another type of individual that the no doc mortgage is for is the tipped employee. We all know that if you are a bartender or server or you work for tips doing something else, then you know that you don’t claim all of your tips. This makes it hard to prove that you make what you really make and it will make it hard to get a mortgage without using a no doc program.
The last situation that is perfect for a no doc mortgage is the independent contractor. This could be a sales representative or someone working in the construction field. This is the type of person that gets paid by cash, personal check, or money order and does not claim all of their income due to expenses and other reasons. The no doc program is perfect for you.
No doc mortgages are not hard to find and just about every bank and mortgage company has a no doc or stated income program for those that cannot qualify for a normal mortgage. You will have to expect your rate to be a bit higher and you will need to have good credit to qualify, but this might be the best choice for you.
By: Gressly Stevens
About the Author:
If you are a self employed individual, then you are exactly the type of person that the no doc programs have been designed for. When these programs first came about, they were used only for self employed individuals and the requirements were not easy. You had to have perfect credit, but now you just have to have pretty good credit.
Another type of individual that the no doc mortgage is for is the tipped employee. We all know that if you are a bartender or server or you work for tips doing something else, then you know that you don’t claim all of your tips. This makes it hard to prove that you make what you really make and it will make it hard to get a mortgage without using a no doc program.
The last situation that is perfect for a no doc mortgage is the independent contractor. This could be a sales representative or someone working in the construction field. This is the type of person that gets paid by cash, personal check, or money order and does not claim all of their income due to expenses and other reasons. The no doc program is perfect for you.
No doc mortgages are not hard to find and just about every bank and mortgage company has a no doc or stated income program for those that cannot qualify for a normal mortgage. You will have to expect your rate to be a bit higher and you will need to have good credit to qualify, but this might be the best choice for you.
By: Gressly Stevens
About the Author:
Discover the companies that do No Doc Mortgages. Go here for more info:
Posted in: Mortgage Refinance : : Comments (0)
By: Xaviera Middleton
About the Author:
This article has been published by Xaviera Middleton. Are you having legal disputes? If you need some legal advice or want to talk to a solicitor , visit Find A Solicitor for more info.
Posted in: Debt Management : : Comments (0)
Debt Relief in Alaska
17/06/09
By: Cole
About the Author:
My name is Cole I am a professional in the financial fields of bankruptcy and debt settlement.
Posted in: Debt Management : : Comments (0)
By: Manuel Davis Jr.
About the Author:
Find more debt relief solutions by visiting http://www.endthisdebt.com a website that specializes in providing debt help advice as well connecting individuals with debt specialists based on their individual debt situation.
If you need help with your debt and would like to get a free debt consultation please fill out the form here.
Free Debt Consultation
Posted in: Debt Management : : Comments (0)
Commercial Second Mortgages
12/06/09
Second mortgages are important real estate tools that have been used for many years. A particular type of second mortgage is called a commercial second mortgage. These are used in combination with a first loan and as a main difference a second commercial mortgage will have a term much less than the first one (usually this new one is a 5 year loan).
In many situations, such a second mortgage is required, but the possibility to repay it must be taken into account and assessed properly. Borrowers must be sure that the money acquired will make a good investment for their commercial business or that they can pay their first loan and second loans at the same time.
Several qualified people are able to help borrowers find a good second mortgage. Also, whenever people apply for a commercial second mortgage a free assessment of their financials will be done. This is routine and is very helpful, as the borrower will then know exactly what they can afford, and their picture about their business and financial power will be up to date. With this information in hand, borrowers can then decide if taking the loan is a good solution or not.
People who are not approved will at least know their exact financial state and can risk it by applying somewhere else where they will be approved. The risks are higher but the rewards can be high if the borrower is careful in choosing the amount borrowed and the terms of the loan.
Taking a commercial second mortgage is a very big step and should be very well thought out. The repayment rates are higher than with a first loan and they must be paid on a shorter term. It is advisable to consult a financial professional before taking a commercial second mortgage in order to fully know and understand all of the available options.
By: Marcus Peterson
About the Author:
In many situations, such a second mortgage is required, but the possibility to repay it must be taken into account and assessed properly. Borrowers must be sure that the money acquired will make a good investment for their commercial business or that they can pay their first loan and second loans at the same time.
Several qualified people are able to help borrowers find a good second mortgage. Also, whenever people apply for a commercial second mortgage a free assessment of their financials will be done. This is routine and is very helpful, as the borrower will then know exactly what they can afford, and their picture about their business and financial power will be up to date. With this information in hand, borrowers can then decide if taking the loan is a good solution or not.
People who are not approved will at least know their exact financial state and can risk it by applying somewhere else where they will be approved. The risks are higher but the rewards can be high if the borrower is careful in choosing the amount borrowed and the terms of the loan.
Taking a commercial second mortgage is a very big step and should be very well thought out. The repayment rates are higher than with a first loan and they must be paid on a shorter term. It is advisable to consult a financial professional before taking a commercial second mortgage in order to fully know and understand all of the available options.
By: Marcus Peterson
About the Author:
Second Mortgages provides detailed information about second mortgages, second home mortgages, second mortgage brokers and more. Second Mortgages is affiliated with Mortgage Loans Dallas.
Posted in: Mortgage Refinance : : Comments (0)