Mortgages

Questions and Answers

Mortgages?

Q) Hi does anyone know a mortgage lender that will lend against a timber framed house? Why do lenders have a problem with them? went for a mortgage with northern rock and payed out money then got survey back and basically wasted all that money for nothing! Me and my partner have a joint income of around £250000 a year. Northern rock are sadly the only lenders who will give us money the highest they would lend was £118000. Its not a log cabin! just a normal house that uses timber to built its frame.

A) I'm surprised at this, most lenders don't care about this sort of thing. As long as the valuation and survey's OK I don't know why they would do this. There are thousands and thousands of timber frame houses in the UK and I think there would be a lot of worried people if this were the case!

Mortgages........?

Q) Does anyone know of any mortgage companies who will lend 4-5 times salary? We are not first time buyers but are struggling to get a bigger mortgage

A) Northern rock just lent us 4.5 our salary plus an unsecured loan at the same rate to top it up. so for our low joint salary of £27000 we borrowed £130000 on a 100% mortgage over 30 years the rate is a bit high but £120000-£130000 is the starting price for houses in our area so had no option it worked out at £775 a Month on a repayment mortgage which is manageable when you compare it to rental costs. Hope this helps and Good luck. p.s. Just remembered a couple of weeks ago we went into our lloydstsb branch and the mortgage adviser collared us and put our figures in, and said he could match our current mortgage but not beat it and that mortgage multiples are not such a big thing now. Things must be changing because 6 months earlier he only offered us £90000 p.p.s. We are locked in for 5 years but after that you can always shop round for a better deal

mortgages...............?

Q) is it possible to get a mortgage with quite bad credit rating, i have a joint mortgage but am being bought out and would like my own but have bad credit rating

A) We got a mortgage from Kensington who provide "bad credit" mortgages. It was a "bad credit" mortgage as I'd missed two payments on a mobile phone contract and on a credit card (yeah shocking I know, LOL!) and my partner had a bad credit rating due to taking out a loan when he was 18 to buy a car for his disabled mum. He couldn't keep the repayments up and it was repossessed. The only problem with bad credit mortgages is the HUGE interest rate! We're paying £400 a month on an interest-only mortgage! But its still cheaper than renting - its about £550 pcm to rent around here and thats just dead money going into a landlord's pocket. A high street bank would have a much better rate of interest - but then if you have so much as a speck on your credit rating they won't touch you so are not much use really. Also bad credit mortgages trend not to offer repayment holidays and all the other nice little "Perks" the high street banks offer. But hey, if it would end up cheaper to pay a mortgage than to rent (which it usually does) then go for it! Get in touch with a mortgage broker - they should be able to hunt around and find someone who will accept you and lend to you.

Mortgages??

Q) How can I tell what kind of mortgage is right for me?

A) All of these answers are great! You really need to consult with a professional who can analyze your particular needs along with you. There are so many programs available to borrowers, but without guidance, you can get stuck in something that just is not suitable! Contact me, if you would like. I represent one of the nation's largest lenders... BEST OF LUCK TO YOU! I hope that someone is able to "show you the way HOME!" =)

Mortgages..?

Q) What is the criteria for obtaining a mortgage? What steps do i need to take to ensure i can get one? Thanks guys x

A) By using the 'affordability criteria' you can figure out if you can obtain a mortgage. This takes into account all your usual monthly expenses and assesses whether what remains is enough to support your mortgage repayments. Traditionally lenders want to know what your credit score is, how much you make, your employment history (last two years in same industry), and any outstanding judgments that are listed on your credit report. If you are unable to fall within this category than some lenders will lure clients in with creative financing and/or stated income -- high interest loans. I would be very cautious on any transaction you decided to make for real-estate mortgages. Always make sure that you do your homework on the company.

Mortgages?

Q) About two years ago my sister and I bought a house together to get us on the ladder, we have done the house up and now are ready to move our seperate ways with our profit. She is moving in with her boyfriend but I have fallen in love with the cottage and want to stay. How do I go about buying her out? If I cant afford the mortage on my own (which I wont be able to) my mums boyfriend is going to come in with me so I dont lose the house and as an investment for him (not live there) but act as a silent partner, how does that work? can someone give me advice on what I do next? how to get the ball rolling? Libby

A) check with ur lawyer who w'd help u out ur problems.

Does anyone know any mortgage brokers that deal with future mortgages?

Q) I am looking to get a mortgage with future mortgages but I have phoned them and they only deal direct with brokers so now I need to find a broker. Or any brokers that could get 100% mortgage for people with bad credit?

A) I know that Manning Staintons deal with Future Mortgages as this is who we have our mortgage with. As far as I know Manning Staintons do provide an independent financial service. It may be worth contacting them!

Anyone know lots about mortgages?

Q) How much is a typical monthly mortgage payment? How easy is it to cahnge mortgages based on circumstances? Can you let your property without informing the mortgage lenders? Is there anything else I should know about mortgages, which are the best for first time buyers etcc? (By 'letting' I mean leasing or renting your property out) Thanks for the many replies, really helpful!

A) 1) Depends on the type of mortgage, the cost of your house, and your credit rating. 2) Not that hard - but possibly espensive - as you'll pay closing costs each time you change. 3) Yes. 4) do NOT accept an "Interest Only" loan, unless you are unusually disciplined - otherwise, you;lll end up paying a huge amount of money indefinitely, even though the monthly payments are lower than traditional mortgages.

100% Mortgages?

Q) 100% Mortgages, 95% Mortgages, can I get one?

A) Yes and you wont necessarily pay through the nose. I borrowed about 110% to pay my solicitors fees etc, i was a first time buyer and the rate is fixed at 5.69% with Northern Rock. Rate is fixed for 5 years but i can sell or re-mortgage after 3. A 5 year fixed may sound a long time but considering you cant trust the Bank of England as far as you can throw them with regards to interest rates im quite happy knowing my rate is safe. I think i got a good deal. This was last year.

Portable Mortgages?

Q) i know about portable mortgages and what they are but if i were to move house would i have to prove my income again when transferring or would my existing mortgage just move straight over without having to do this??

A) Typically you have to fill in a new application form & one question will be what your income is .. however when I moved (with the same company) they never asked for any additional proof.

mortgages...?

Q) hypothetically asking, if you buy a house with a 30 year mortgage from a bank, and the bank went out of business. no sell out, no merger, just incompetent people running the place. do you still have to pay the remainder of the mortgage or is the house yours to own for good?

A) Unfortunately, the now defunct banks loans are picked up by another bank that the borrower would now need to pay. This does happen from time to time, and most of the time the loans are sold prior to the bank going under, so there is no lapse in payments. The borrower would receive a new payment notice from the new bank before the next payment was due.

mortgages?

Q) does anyone know a good website to get a mortgage for people who have really bad credit?

A) how bad of credit and in what state? Depending on these two factors I may be able to help you personally, or I can refer you to a coworker who can work with you to get a mortgage.

Assumability of FHA Mortgages and release of liability?

Q) I am receiving conflicting information. I have one mortgage broker stating that no conventional fixed rate mortgages are assumable and must be refinanced. The bank itself is giving conflicting information. The rep on the phone states they will send out an Assumption of Mortgage and Release of Liability package, while the rep that the broker deals with for that bank says they don't have assumable mortgages. According to this site http://finance.yahoo.com/loan/mortgage/ask_the_professor/article/101609/Should_I_Assume_the_Sellers_Mortgage it would appear that if the mortgage is FHA insured that it IS assumable. Are all FHA loans assumable, or only those that do not have "due on sale" clauses? Who is right? The bank doesn't even seem to know the answer. Located in NJ. Are Freddie Mac mortgages assumable under any circumstances?

A) All FHA loans are assumable, but many years ago they changed it so that the new borrower must qualify and you were still held liable if they went into default. I have been a mortgage broker, real estate salesman for 25+yrs and can tell you that you are getting some bad info, if you want to IM me we can discuss it further

I have 2 mortgages and a second mortgage on my unsold house what are my options to transfer my second mortgage

Q) I need to transfer my second mortgage to my new home so I can lower my asking price for my unsold home. I am currently paying 2 mortgages and a second mortgage. Is there a way to transfer my second mortgage to my new home? I have only lived in my new home for 4 months and finances are getting tight. The equity is low to none in the new home.

A) You're in a situation that a lot of people are facing right now and there are more than a few solutions to your problem. 1. You can obtain a loan for 105-125% of you new homes value. This may or may not be enough to pay off your existing second mortgage but it may help pay down your second mortgage enough to lower your asking price. Keep in mind that the rate associated with this may be higher than what is typical for a second mortgage on a home with more equity. 2. You may, on the other hand, want to consider a short sale on your old home. A short sale is where you contact the bank on your second mortgage and have them agree to take less than what you owe. This may affect your credit in a negative way, however, it won't be as bad as a foreclosure. 3. Your third choice, is to refinance your old home and get the cash you want/need and then rent it out. This might have some tax benefits that you should talk to a CPA about. If you got into a good loan, then you would not only have your equity but you could rent out your old home for more than your monthly mortgage obligation. I hope this helps. If you need more info, feel free to email me for my phone number.

What different types of mortgages are there? I dont want to be scammed?

Q) I dont want to get scammed into taking a mortgage I dont need. Can a mortgage expert enlighten me on mortgages. i would also like to hear the laymans views as well. How many types are out there; Pros and cons. I just heard of an inerest only but the only sense I can make from it is that there is no principal on the loan. Does that mean I would have to take another mortgage on the principal. What a balloon mortgage? Sounds like something that would blow up if I'm not careful. Once I decide on the mortgage that would best suite me do I then look for a bank. I dont want 5 different bank looking into my credit report. Can I run my own and hand each one a copy? What are the pros and con of using a bank instead of a mortgage boker and vice versa.

A) Ok first off: What is your main reason for wanting to refinance? There are litereally hundreds of loan programs on the market today. Some are horrible for one person and the best for another. Interest only loans are great if you want to keep your monthly obligation to your mortgage payment at a minimum. However if you simply make the required monthly payment nothing goes to principle. But you can always make additional payment to the principle. You can run a copy of your credit at www.annualcreditreport.com this is the website the FTC recommends to use for a free credit report. However when you do go to apply, the lending institution will still need to run your credit. A balloon mortgage is a loan amortized over say 30 years but the balanced is owed say in 15 years. So if you refinance before the 15 years is up you would not need to pay off the loan on the 15 year. These are usually for 2nd mortgages or people with bad credit. Across the nation, it has been proven that Mortgage Brokers have an average interest rate & fees that are less then Banks (because they are more competitive. So I would recommend using a licensed agent at a broker's office. Make sure the loan agent/officer is licensed! If you live in California, I am a licensed Loan Officer and I would be happy to show you your options. The best thing for any loan officer to do for you is find out what your future plans are for the property as well as future financial goals, then customize a loan program to meet those goals & needs.

Types of mortgages for a commercial building?

Q) I am trying to purchase a mixed use building (5 residential units and 2-4 commercial stores) in NJ. I know that commercial mortgages are a little different from home mortgages (i.e. there are no 30 year loans). What different types of mortgages are available for purchasing a building like this? Also, the money borrowed to buy a home is called a mortgage, is it also the same term used for buying a commercial property?

A) Commercial loans have only a little similarity to commercial "business loans". The common denominator between the 2 is usually you. They almost always use your credit, your current assets, possible using your equity in other sources (as a means of collateral). The other factor of course is the actual property you wish to purchase. If it debt services strongly enough, many options can open up to you. Commercial business loans are a lot more complex than residential and take considerably longer to complete. You would be surprised what is available to in the commercial market for a loan. Each loan scenario has it's own conditions, and you need a professional consultant to help you find the loan that best fits your need. I know of 30 year loan options, 90% loans, leverage buy-out investments, SBA loans (7A & 504), Stated Income, etc.

Why aren't there more "assumable" mortgages?

Q) I know this probably will be a dumb question for anyone in the real estate/mortgage business, but I'll admit that this is one area that I'm not too knowledgable on. I know that there are some assumable mortgages out there, but they are rare and hard to find - I'm just wondering why that is.... Say Joe Blow doesn't want to or can't make his mortgage payments - he doesn't want to default on his mortgage or just walk away from it, but here's Sally Doaks who's willing to take over the payments for him and basically assume the mortgage. If she has to put down a little "earnest money" she can. The only reason I can see that this option isn't offered more is that maybe there isn't enough money in it for anyone in the mortgage business. I'm probably missing something here - like I said, I'm not too knowledgeable about the mortgage business, maybe someone can explain this one to me. Thanx! All good answers so far - it's going to be hard to pick a "best answer". Everyone's added a little something different - too bad I can't combine a few together for a combo best answer :-) I didn't realize that in a lot of these cases the original holder of the mortgage was still held liable if the second person defaults. I guess I just took it for granted that in an assumable mortgage, the second person that assumed the mortgage also legally assumed the liability for defaulting on it. If that's not the case, then I can see why most people would not want to do it, I certainly wouldn't if I were the original holder of the mortgage. But that still leaves the question - why aren't there more assumable mortgages where the liability for default is also assumed? One answerer mentioned that with all of the costs and work involved in this for lenders, they would be just as well off originating a new mortgage, and that makes sense too.... Anyway, thanks for all of your answers so far

A) The main reason mortgage loans are not assumable is that banks earn fees upon mortgage origination. A secondary concern is that at the time a property is sold (which is when you would want the mortgage to be assumed) the lender would have to reevaluate the condition of the property and the creditworthiness of the new borrower. If they are going to go through that work they might as well collect the origination fees that go along with it.

Understanding Mortgages in the UK?

Q) I want to understand how Mortgages work, 1. What determines the size of mortgage you get and how you pay it off? 2. And how do you switch a mortgage from proerty to property?? Im a dummy so please keep it simple!UK "Real Estate" only (Im sure its different in the US!)

A) there are generally two things will determine how much mortgage you get: 1, Obviously, how much the property you want to buy is. If it's £100,000 and you have £10,000 yourself then you'll need a mortgage of £90,000. Typically, most lenders will only lend you a maximum of 95% of the property value (i.e. £95,000 in the example above) but some are 99%, some 100% but expect to have to pay them extra for this. 2, How much you can 'afford'. Most lenders will only let you borrow a maximum of 4 times your yearly salary. i.e. if you earn £20,000 a year before tax then they probably will not want to lend you any more than £80,000. If you are getting a joint mortgage with someone else then it's usually 2.5 times your joint salary. (i.e. you £20,000, other person £15,000, total = £35,000 so maximum mortgage = £87,500) You generally pay it off in monthly repayments spanning many years (typically 25 years). All this time the amount you borrow is accruing interest so obviously if you can pay it off sooner then it will save you money. When you 'switch' a mortgage, the best way to think of it is you sell one house, and pay off your mortgage, and then just take out another mortgage for the next house.

Refinancing & Combining two mortgages?

Q) Hello, I have two mortgages that I would like to combine. The 80% mortgage has a rate of 6.0% until next year when it becomes adjustable. I have a 20% mortgage that is at 11.5%. I don't know if its a good time to refinance and combine both mortgages. I would love to lower my monthly payment. You're thoughts?

A) If you continue to wait chances are the rates are going to continue to increase. Therefore the longer you wait, sure you will be able to keep the 6% rate for 1 more year before your payment goes up, however the rate that you are going to get stuck with for the remaining 30 years is going to keep increasing (most likely). So you are most likely better off refinancing them into 1 now to get the best rate that you can for the life of your loan. Good luck to you, shop around with a few different companies to make sure you are getting a good deal.

Mortgages whats the catch? read on?

Q) I've seen on TV/internet where they offer $200,000 mortgages for $800- $900 per month. I have excellent credit and when I applied for a $150,000 mortgage my payment was going to be over $1,000 per month with no PMI. So what is the catch to those low monthly payments? Is it for a few years then they skyrocket?

A) Hi Dustin, I work for one of the big 6 financial instutions in Canada. Congratulations on having excellent credit! When it comes to the question of $200,000 mortgage with a payment of $800-$900/monthly, in all likelyhood the mortgage is going to a mortgage broker or insurance company who offer lower rates with stricter policies, and or terms/agreements. This means you could be locking yourself into an agreement that when you become displeased with the services, have a question, or problem you don't have the leverage or ability to say I am transferring my mortgage to another bank because of the penalties you may incurr. It is a legal contract you are signing. When it comes to mortgages check out all big 6's websites to view the mortgage calculators, and look for the book - banking for dummies (or something like that). Make sure you account for the downpayment needed to purchase- you want to make sure you have at least 25%(of the value of the home) as a down payment otherwise you are subject to a 2% surcharge(on the full value of the home) from Canadian Mortgage and Housing Corporation or General Electric insurance. The minimum you can put down on a house is 5%. There are some options for no down payments but the premium is HUGE. Always best to have a down payment!!! The advertisement may be from the USA- they have different mortgages than in Canada. Good Luck!!!