How to Pay your Mortgage Bi-Weekly

March 30th, 2016


All loans are setup to collect a payment from you once a month. That
means you are making 12 payments each year. Interest is added to your
loan based on the balance you owe and the rate per your original
contract. So, for example, If you have a loan for $100,000 and your
interest rate is 4% for the first month you are going to add to your
balance $400.00 or 4% of the $100,000 loan balance. Each month you’ll
add 4% of whatever the remaining balance is. If you really want to save
your thousands of dollars and cut years off your mortgage you want to
reduce the principal balance so the interest charges are less.

How does it work?


There are 12 months in a year, and in every year there is 52 weeks. If
you pay mortgage payment with a Bi-Weekly program you pay 26 payments of
one-half your payment instead of 12 regular payments. This results in
two additional half payments each year or one full payment. The extra
payment goes towards the principal of the loan. By reducing the loan
balance the homeowner is also reducing the interest charges. By paying
like this your loan will have less interest costs and the term of the
loan will be reduced.

How much you can save?


On a $200,000 mortgage at 5%, you’ll cut the total term by about five
years and shave off more than $34,000 in interest costs. This is not
some magic formula. Rather, it’s careful and diligent planning which
achieves a reduction of the principal balance.

Most lenders won’t accept a Bi-Weekly payment. They want to process your mortgage payments on a monthly basis.

Do it yourself Biweekly Payments


If the lender does not allow homeowner for Bi-Weekly program but the
homeowner is interested in paying the loan off early, then he can open a
bank account and he has to made arrangement for the mortgage payments
to come out every month in two bi-weekly payments. And at the end of the
year, the homeowner can write a check on the account for an amount that
will be the same as the monthly payment and sent into the lender. Or, a
customer can simply pay extra payments throughout the year. However,
the easiest way is to contract with a Bi-Weekly Payment Program and let
that company manage this account for you. The results will be achieved
by following the program and for the small cost of enrollment you can
achieve substantial results.

Myth for Biweekly Payments


Paying your mortgage twice a month gives you better credit: This is
wrong, bank often use an automatic bank draft, which means all your
mortgage biweekly payments will be made on time. But if you want you can
get the same effect on a monthly payment plan using automatic bank
draft.

Advantage of Mortgage Biweekly Payment

Below are the few things which Biweekly payments can do

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Low Risk Borrowers Favored in the Mortgage Market

March 27th, 2016

Low risk home loan borrowers who have a mortgage at a low loan to
value, so that they have significantly more equity in their homes than
the amount they have borrowed, are the main beneficiaries of the record
low interest rates currently available in the UK. This low rate
environment in the current mortgage market means that home loan lending
is rising.

In addition to the low rates available (due to the
Bank of England’s base rate holding at a mere 0.5 per cent for nearly 5
years), there has also been increased competition between lending
institutions and two government schemes to encourage lending. These
facts have led to some of the lowest mortgage rates the UK has ever
experienced. But the benefits of this low rate environment are really
only available to the low risk borrowers.

High net worth mortgage clients benefiting from some of the lowest mortgage rates ever


With the UK governments Funding for Lending and Help To Buy schemes
offering banks and building societies access to inexpensive funds they
are able to offer some genuinely low rates, especially for high value
mortgage borrowers who are perceived as low risk.

It is these
high value, large mortgage borrowers with low ‘loan to values’ that have
benefited most because the most competitive mortgage deals are reserved
for those with a deposit of 30 percent or 40 per cent; a level that is
plainly unlikely to be available for young first-time buyers. The real
winners in this situationare the relatively small numbers of potential
home buyers who fall into the low risk category of lending.


Given that first time buyers are the life blood of the property market,
this situation cannot continue forever without further damage to the
already stagnant market. There will come a time when the lending
criteria imposed by banks and building societies will have to be
adjusted if they are to have any volume of business in the home loans
sector. There is an enormous potential market for first-time
buyersmortgages that is not being serviced while the few who are
fortunate enough to be able to borrow will see increasing competition
between lenders for their business. Loans at higher LTVs may soon start
to appear in greater numbers.

It is obvious that certain types
of borrower with plenty of equity and a high, secure income have seen
the cost of their mortgages fall significantly in recent years. Islay
Robinson, director of million pound mortgage specialist Enness Private
Clients believes that deals for borrowers with a 30 per cent to 40 per
cent deposit available have rarely, if ever, been lower. And, the
private banks and other non-traditional lenders thatLondonmortgage
brokers speak to on a daily basis have a keen appetite to lend to high
net worth finance clients.

For the mortgage market in the UK to
return to pre-credit crunch levels, these sorts of deals are going to
have to become available for first time buyers and those borrowers with
only 10 to 20 per cent of the purchase price available as a deposit.
Nevertheless, low risk, large mortgageborrowerswill continue to benefit
from superb deals.

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Find a Lender That Will Fulfill All of Your Mortgage Needs

March 13th, 2016

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Act Now to Avoid Reverse Mortgage Rule Changes Coming Soon

February 20th, 2016

Homeowners in the Westlake Village/Thousand Oaks and local areas are
seeking a hassle-free reverse mortgage need to act now to secure one,
as changes to the Federal Housing Administration’s Home Equity
Conversion Mortgage program will make obtaining this financial product
more difficult. Mortgage bankers in Westlake Village/Thousand Oaks can
help local residents obtain a reverse mortgage before the January 2014
rule change.

What Is a Reverse Mortgage?


A reverse mortgage is a financial product that allows seniors to tap
into a portion of the accumulated equity in their homes. With a reverse
mortgage, the borrower retains title to the home throughout the life of
the loan. The borrower cannot, as a result of the reverse mortgage be
forced out of his or her home, as long as property charges, such as
taxes and insurance, are paid and the home is maintained in reasonable
living condition.

When the last borrower on the loan permanently
leaves the property as a primary residence, for whatever reason, the
loan becomes due. If there is equity remaining, the property can be
either refinanced or sold to capture that equity. Two of the great
safeguards for reverse mortgages are that they are structured so that
the borrower or his estate can never owe more than the value of the home
upon repayment. In addition, the HECM products are insured by the
Federal Housing Administration, an arm of the U.S. Department of Housing
and Urban Development (HUD

Over 800,000 reverse mortgages have
been secured by homeowners. Approximately 10,000 baby boomers turn 65
every day – the minimum age for this is 62.

New Rules


New rules are tightening the requirements for obtaining a reverse
mortgage, requiring homeowners to provide more information about their
financial situation to mortgage bankers Westlake Village, Thousand Oaks,
Conejo Valley, and Simi Valley homeowners seeking this will now have to
provide more proof of income and credit to lenders.

According
to the new regulations, lenders will now have to do a more rigorous
assessment of a homeowner’s financial status before issuing reverse
mortgages. Under the new rules, lenders will need to check for:


Any delinquent debt to the federal government borrowers may oweAny
unpaid debts on the property considered for a reverse mortgageCredit
history on credit cards, mortgages and other loansHistory of payment on
property charges

Under the new rules, homeowners will need to
submit more paperwork to lenders regarding their income and their
creditworthiness. This likely will make getting a reverse mortgage more
time- consuming and stressful for homeowners in need of the extra cash
this financial product can provide.

While reverse mortgages will
still be available under the rule change, the burden of verifying
income and credit has increased for bankers. Westlake Village, Thousand
Oaks, Conejo Valley, Simi Valley homeowners seeking this mortgage should
act now, before the January 2014 deadline, to secure a reverse
mortgage, to avoid the increased requirements and avoid unnecessary
hassle.

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What Can Private Banks Offer a Mortgage Borrower

February 10th, 2016

Mainstream banks and building societies are increasingly targeting
high net worth mortgage clients who typically have a large deposit and
so are viewed as lower risk. But are these lenders the best option for
someone seeking a larger than average mortgage? There are still other
options, in particular private banks that can offer competitive rates as
well as a greater degree of flexibility when it comes to the terms of
the loan. Private Banks continue to offer a real alternative to
mainstream banks in a large part due to the flexibility they show when
considering a potential client’s income stream and preferred methods of
repayment. Private banks for their part are particularly focused on
borrowers seeking mortgages of 1 million or more who have a range of
assets that the bank can also bring under their own management.

Some private banks have tightened their lending
criteria for borrowers who do not have other assets that they are
willing or able to transfer to the private bank’s management. Some will
not lend on a mortgage at all if they cannot also take over management
of assets, so-called “dry lending”. Therefore, the private bank route is
not the best option for everyone seeking a million pound plus mortgage
as these institutions view clients from a whole wealth planning
perspective.

What this means for wealthy individuals looking for
a very large mortgage without other assets or without wanting to commit
any of their assets to a private bank, is that they have a reduced
choice of options than they had a year ago when private banks were less
focused on creating a management relationship.

However, it is
still possible for high net worth borrowers to secure a competitive
mortgage from a private bank without transferring cash or other assets.
It is likely that a client will have a property to sell or assets to
realise in the future and some private banks will take these into
account in a longer term view of building their relationship with the
client.


It is unlikely that we will ever see private banks being able to
compete with the extremely low headline rates offered by some mainstream
banks and building societies but what they do offer is a cost effective
and much more flexible alternative for some wealthy borrowers.


So for certain borrowers, private banks can provide competitive interest
rates for large mortgages. A typical private bank mortgage currently
available is likely to be 1.5 to 2 per cent over Libor for a 5 year term
if an individual transfers assets under their management or around 3.5
per cent over Libor if there are no assets to manage.

A leading
London mortgage broker points out that often the ‘best buy’ deals listed
in the national newspapers will have maximum loan limits of 250,000 or
500,000. Sometimes a mainstream lender will be willing to advance a
large mortgage above these limits but some potential borrowers also have
complicated income streams such as offshore income, bonuses and trusts
so will find that, even then, they will not meet a mainstream bank’s
lending criteria.

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