Qualifications of Reverse Hawaii Mortgage Loans

August 26, 2011 by  
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One of the common loan types these days is the reverse mortgage. This is easy to qualify for; you simply have to be 62 years of age and older. Aside from this, you need to be the owner of your home. There are quite a few other things required before you can qualify. Read on to find out what these are.

When opting for a reverse mortgage, you are given the chance to convert the home’s equity into cash. There are quite a few ways by which you can get the payments. You may go for the lump sum payment or you can get it in monthly checks. Why would anyone choose to convert his or her equity?

One reason to do this is that a reverse mortgage is a great financial strategy for those who are retiring. If this is your situation, the reverse mortgage might be your sole income source. The term ‘reverse loan’ is used because the inflow of money is the other way around. Rather than building up your equity on the home by paying off your mortgage, you lessen your equity by taking money from the property. Since you have already built up equity over the time that you have owned the house, these savings can be obtained through the reverse mortgage.

There are certain charges and fees that you have to take care off when you go for a reverse mortgage. This is the same as if you were getting any other kind of loan. You have to pay for the title fees, appraisal fee, escrow, originator fee, ongoing service fees, and recording charges. If you have enough equity on your home, the fees and the charges can be reflected on the loan.

There are no payments for you to make on the reverse mortgage. But the situation is not the same if you have chosen to sell the home or if you moved away from it. If you changed residences and the property is no longer your permanent residence, the payments will be due. The same is true when you sell the property. The loan balance can never go beyond the home’s actual market value.

Qualifying for a reverse mortgage is very easy. Credit checks will not be done and the banks will also not look at your health condition. They will rely on your age, the home’s appraisal and the FHA maximum limit on loans in your state.

Hawaii Home Loans or Mortgages – Which One to Choose?

September 26, 2010 by  
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Home loans and mortgages are known as facilities that allow individuals to acquire assets without needing to pay an amount in full on the spot. Building a home equity loan will lead to a debt that can be seen in the value of the borrower’s house. As this loan is designed, the equity that is built will act as collateral for the home loan.

In this case, collateral refers to a back up asset that can repay the debt in the event of un-payment. With the real estate term, the equity set in an asset means the difference that exists between a property market price and the borrower’s house equity loan. Equity will represent the interest paid by a borrower on the loan.

On the other hand, mortgage implies the process through which one presents the property as a security to make the debt repayment. It is considered a device to secure an asset. Arranging for a mortgage, the borrower can acquire a residential place as well as a commercial space, not needing to pay in full for the price of the acquisition.

Now the question is: which one to go for – a home loan or a mortgage? You should first revise the following:

* The majority of the home loans will check on an individual credit history needing to have it as a good record. Therefore, those persons who have an average credit history can expect to have their request for a loan denied.

* ‘Closed-end Home Equity Loan’ sets a fixed interest rate for a period up to 15 years. By the end of the settlement there is a lump sum of money which is known as the transaction. Once this one is concluded, there is no other loan that a borrower can get as an extra loan. A borrower can obtain a maximum of a sum that depends on the income, credit records and the value of the collateral along with other aspects financially related.

* ‘Open-end Home Equity Loan’ is known as the loan that has a flexible interest rate. The borrower is the one to decide when and how he can borrow the money while putting the equity on the stake. This is again dependent on the credit report, income and other finances related criteria. Through this loan one can extend the repayment period up to 30 years.

* Mortgage loans are represented by two main types:

– The Fixed Rate Mortgage – FRM – that goes for a fixed amount that needs to be monthly paid while the term goes from 10, 15, 20 to even 30 years. Some lenders even extend the term up to 40 and even 50 years.

– Adjustable Rate Mortgage – ARM – can be fixed for some time after which this one can be adjusted according to the index indicated by the market. These rates are adjusted at periods of time (months or year) and can be set in ranges of 0.5% to 3%.

How to Apply for Refinance Home Mortgage Loan in Hawaii – Tips

July 12, 2010 by  
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Being concerned with the high mortgage monthly payments, the refinance home mortgage loan seems to be a good solution. This implies an application for a second loan in order to compensate the one that already exists as a home mortgage loan.

But what is there different with this refinance mortgage loan? The whole thing is that the existing mortgage will be replaced with better terms and conditions of payment referring as well to lower interest rates.

You should see that a refinance mortgage loan most of the times comes with plenty of benefits, such as: the total payment on the mortgage value will be decreased, it provides assistance in getting a part of the built equity either in lump sum or installments.

These benefits have become popular around the world of mortgage borrower, therefore more people adopt the refinance mortgage loan as a solution to their high monthly rates. The most important benefit is that refinance mortgage loan comes with lowering the monthly mortgage payments.

With the nowadays financial environment there is a control over the monthly rates that you expect to pay and as such you can face either increasing or decreasing interest rates due to the flexible financial factors.

So, it is obvious that the best time for you to apply for refinance mortgage loan is when the rates have quickly dropped. Thus when you will exchange your higher interest rates for the other mortgage lower interest rates than the obvious result will be the reducing of your monthly mortgage payments.

There is another advantage that you might not be aware of: it can cut down on the term of the existing mortgage and here is a way that you can save thousands of dollars on the interest that you would have otherwise paid. More of your payment will be therefore added to the principal allowing you to build an equity faster in your home.

The refinance mortgage loan can be of an extra help in case you have set the first mortgage interest rates to be adjustable. As great as these adjustable rates might sound especially when the interest rates are down, imagine how ‘great’ it would be when the market of interest rates increases.

For you to have a stability of your expenses the best solution would be to have that adjustable rate exchanged with a fixed rate of a refinance home mortgage loan. In case you are one of those with a bad credit reports the option of a refinance mortgage loan could seem a far and away dream to achieve.

The same goes for those whose house under mortgage has decreased in value. Therefore, a consultancy with a mortgage broker will enable you to evaluate your situation and choose what is best for your given situation.

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What You Should Know about Mortgage Life Insurance

June 13, 2010 by  
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Mortgage life insurance is the best way of protecting your loved ones; basically, it is an insurance policy that would help your loved ones pay off the outstanding balance on your mortgage in the event of your death.

Mortgage life insurance, also called mortgage term assurance by many insurance companies, is sometimes obligatory when you take up a mortgage, as most lenders will want to be on the safe side and recover their investment should any unfortunate event occur.

Mortgage life insurance is a means of protection for you, your family and your creditors. However, you should not mistake mortgage life insurance with mortgage payment protection, because they are completely different products and they have different characteristics.

Mortgage life insurance is only meant to payout your mortgage in the event of your death, while mortgage protection is taken out to safeguard your monthly premiums against the possibility of unemployment or incapacity to settle your debts.

Before deciding on a certain insurance policy, you should consider comparing offers and checking all the details of the policy you are considering to take out; the provider should let you know all the information you require, and any quotes need to come with what is known as the key facts policy, which means all the information about coverage and any other details found in the policy, including the term of the insurance – meaning the time you will have left to pay on your mortgage.

There is more than one way for you to pay off your insurance rates. The decreasing term insurance means the premium would decrease in line with the mortgage; the amount you pay decreases as time goes by, but you should know that so does the amount you get back at the time of passing. The sum though will always be enough for your family to be able to pay off the mortgage, so you won’t need to worry about that.

There are also insurance policies that allow for two beneficiaries, if two names are on the mortgage. Insurance companies will probably offer you a joint insurance policy, and in the event of either of you passing away, the insurance company would still payoff the rest of your mortgage.

This will assure you that your loved ones will be protected in case anything unpredicted would occur, so you won’t have to worry about them having financial problems. Your family would not be faced with the daunting task of making monthly repayments, as without you their financial status would not be the same.

In order to be sure you made the best possible decision for your family, you need to search for the most suitable insurance policy with the best price-coverage rate.

The Best Life Insurance Plan Possible for Your Family

June 13, 2010 by  
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Life insurance has become mandatory these days, because the world we live in is full of hazards and unpredictable events. Therefore you want to protect yourself and your family form any unpredicted event; in case anything should happen to you, your family should not be burdened even further by high expenses they might not be able to afford.

In order to make sure you make a good decision, you should conduct a thorough research before you take out a life insurance policy. You need to find the most convenient solution, with the best coverage and at the most affordable rates, so you will need to make an informed decision. There are several things you could do in order to achieve a cheap premium, at a great coverage.
Basically, when you search for family life insurance, there are a few things you could do in order to avoid getting the wrong insurance coverage. First of all, you should know that children and seniors do not need life insurance, so you could avoid introducing them in the life insurance plan; this way, you will get convenient life insurance.

You shouldn’t worry, you are not risking anything, since statistically, it is highly unlikely for you to ever make any claim regarding your children or senior family members, as children are a very low risk and seniors are usually covered for a lot of money, considering their age. In fact, the rate will be proportional to the age of the insured person.

One of the very important mistakes people shouldn’t make when purchasing life insurances not having enough insurance to cover the replacement of a family member’s income. That is very important, because the income of each family member contributes to the general family income, and all expenses are calculated based on that. it you do not have enough to cover for that loss, you could end up having a drastically reduced income, and that will affect your family’s life further.

When considering insurance, the rule is that you should take the annual income and multiply it by 10 and that would be the amount you’d need to replace their income. For example, you should consider things like this: if the annual income is $50 000, times 10 equals $500,000. you should take the $500,000 and put it into a conservative mutual that would give you an average annual rate of return of 10%, which is $50, 000.

That is what the annual income was in the first place, so you will basically make sure your income will not be affected.

You should also include any debts that you couldn’t or you’d find hard paying for. Any mortgage or credit card debt should be considered, so that in the event of a family member’s death, you could still make the payments and you wouldn’t have any debt problems.

A Few Facts on High Ratio Mortgages

May 19, 2010 by  
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In case you face financial problems, or you want to open a business which needs plenty of investments to be made, you think of a way to get these money and for this you call in the mortgage loan.

In this area of loans you find out that there is actually a high ratio mortgage that can be available for your house, but under some terms: if you are an applicant with a qualified income then the high ratio mortgage for your residential home that you can get is the excess of 80% of the real estate security concluded for the property. As a self employer, this percentage becomes 75% of the property’s security.

An insured mortgage, as high ration mortgage is sometimes referred to, can represent a higher risk than the standard mortgage due to the fact that the amount of equity of the house is reduced if you, as a borrower, fail to support the mortgage payments. In this respect, all the conventional mortgage lenders have to insure their granted loans that are more than the maximum of a standard mortgage in Hawaii.

This action has resulted in reducing the capital reserves banks which were meant to act as losses covers displayed by such mortgages. High ratio mortgage insurance companies such a GE, CMHC, and AIG have approved on the re-reimbursement of the lenders who have suffered losses on insured mortgages.

AIG was the insurance company which in 1952 was established as an insurer ready to help with the expansion of housing as a result of the many demands emerged in that period of time. In this way owning a house started to be highly accessible without the need of the house owners to appeal to mortgage loans. It ended up in a housing explosion that continued to decline due to the down-payments and the advent of investment properties used to increase their speculative capacities.

High ratio mortgages are sometimes more preferred in the area of mortgages. These systems applies for the borrowers who have cash flow on a steady basis but can not save the money needed for a down payment or they can work as well for the people who have recently come to the job market, such as college graduates, etc.

Insured mortgages are the ones available for first and second mortgages but they can be also concluded on secured lines of credit. If you happen to be a borrower who doesn’t present a steady regular income you can still pass as reliable for a mortgage lender.

With the existence of the high ratio insurance, many investors have ventured into acquiring properties to produce income with a reduced equity of the property and as such being able to increase the returns following the process of leverage.

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