People are generally liable to fall into a circumstance where they would need to seek financial assistance through loans.  In these economically challenged times, especially, many individuals, having lost their means of employment, will have to borrow money in order meet their daily expenses.  Unfortunately, not all will be able to completely pay off their debts, if at all.  Thus this often results in an accumulation of debt.  Reliable, effective means to promote debt reduction are greatly needed to resolve such problems.   Individuals in debt need to find the best ways for debt elimination in order to relieve their financial stress.

A mortgage is a type of loan involving the transfer of property from a creditor to a lender, wherein the property serves as a security for a debt.  A mortgage is often availed of for a loan of money. And though the mortgage in itself is not a debt, it serves as the lender’s security for the debt which the borrower has applied for.  Often, mortgages are closely connected with loans which are secured on the basis of real estate rather than on other property.  There are some instances where only land is allowed to be mortgaged. A mortgage is generally regarded to be the standard means through which individuals and business establishments can afford to acquire real estate without being required to pay the full value of the estate immediately using their own financial resources.

Individuals facing financial hardship have several options to choose from in order to deal with the situation, and search for ways on how to get rid of debt.  It is advisable to investigate these matters carefully.

By: Marian Fides Aldana

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Kansieo.com

An Early Redemption Charge is a fee you must pay for paying off a mortgage before the agreed end of a deal with a lender.

Why are such penalties applied?

In order to attract borrowers, lenders are often forced to compete by offering mouth-wateringly cheap deals in the first two or three years, sometimes for longer periods.

The hope is that borrowers will then stick with them not just through the course of the deal itself but for several years afterwards.

Clearly, if borrowers were to jump from one mortgage to a cheaper one whenever they wanted to, lenders could lose a lot of money. So they protect themselves by applying charges on those who do.

Either way, lot of borrowers don’t become aware of these charges right up until when they wish to remortgage or pay off their mortgage early.

However, with most early redemption fees being in the thousands, it is vital you know beforehand if you will be liable to pay up and how much the cost might be.

Redemption fees can be calculated in the following ways:
Percentage of the original mortgage loan value Percentage of the balance still owing on the mortgage Percentage of the amount repaid Number of months’ interest

For short-term fixed or discounted mortgages of, say, two years, the interest penalty will generally be a set amount of months’ interest.

In the case of longer-term mortgage deals, the fee may be set on a sliding rate. For example, say you have taken out a five-year fixed mortgage.

The redemption fee might be:
Six months’ interest for the first year of the mortgage Five months’ interest for the second year

By: Liam Gerken

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By: Vishal Verma

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Orange Technology

Reverse Mortgages were created with the purpose of giving retired Senior Citizens, age 62 or older, a steady income. The senior citizen must also live in his/her home. This income is derived from the equity of the home by a lender. The lender is not reimbursed until the time the home is sold. One caution about reverse mortgages is that the APR on reverse mortgages is usually higher than that of a traditional mortgage. There are three types of reverse mortgages.

The first type of reverse mortgage is Single Purpose reverse mortgage. Single Purpose reverse mortgages are usually granted to those with low to moderate incomes usually by the government. The purpose of this type of mortgage is to help the homeowner pay for things involving the home and property such as taxes, improvements, and/or repairs.

The second type of reverse mortgage is Home Equity Conversion Mortgages (HECM) also known as federally insured reverse mortgages. This loan is backed by HUD (Housing and Urban Development). This type of loan is pricier than the Single Purpose loan but does not require single purpose use. HECM loans require that you meet with a counselor to discuss costs, risks, and possible alternatives including choosing one of the other two types of loans.

The third type of reverse mortgage is proprietary. The companies that have created them insure these loans. They are very similar to the HECM reverse mortgages in that they are pricier than the Single Purpose loans and follow the same guidelines in determining who qualifies for one and how much. Proprietary reverse mortgages differ from HECM loans because they do not require meeting with a counselor before applying for one.

Both reverse mortgages however determine the amount you may borrow from assessing factors such as age, home value, location, and interest rates. To determine which reverse mortgage is right for you, you should contact a loans officer knowledgeable of reverse mortgages or a HECM counselor.

By: Milos Pesic

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By: Ted Batron

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Home Mortgages