Mighty Mortgages

Some people gladly go through the process of mortgages, but few people realize the potential danger of reverse mortgages. But first, what is a reverse mortgage? It is defined as a loan available to seniors of a country (the legal definition of “senior” differs according to where you live), that is mainly used to release home equity in a certain property as multiple payments or one lump sum.  To make the whole process run more smoothly, many borrowers opt to use reverse mortgage brokers.

Until the owner dies, leaves, or sells the house, the homeowner’s obligation to repay the loan is postponed. In its essence, a reverse mortgage is to convert the equity in your home into a cash amount. You may ask, “Why should such thing be dangerous?” The objective of this article is to enlighten you about the true risks involved in a reverse mortgage.

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Mortgage brokers are dime a dozen. They are scattered everywhere. They come in different shapes and sizes, of course with different price tags too in terms of the amount of professional fees they charge or commissions they get.   Some of the different types include independent, wholes and reverse mortgage brokers.  In general though, mortgage borrowers need to hire the services of a mortgage broker to help him or her every step of the way to securing a mortgage loan.

Your choice of a mortgage broker can spell the difference whether the procedure in securing the mortgage loan for your dream house or property will be smooth and fuss-free or complicated and even fraud-ridden or anomalous.

First things first, make extra sure that you are dealing with a reputable organization. Choose a mortgage broker who is competent, credible, professional and, authorized or accredited by a legit company. Where do you find a mortgage broker like this? Your first consideration should be the advice or recommendation of friends or relatives who have recently secured a mortgage loan or purchased a real estate property.

You can also do your own homework or research. Ask around. Better yet, surf the web. There are a number of websites that provide listings of mortgage brokers as well as comparisons of the best or more reputable ones. You can make a short list, email them for inquiries or talk to them over the phone—which a better option.

Do not hesitate to ask all the questions you have in mind or discuss concerns, however small or irrelevant they may seem to you. Do not get sidetracked by the sales pitch of mortgage brokers. Stick to your questions and make sure they are answered and have been explained clearly to you.

There are also many offers or packages advertised everywhere, especially in the Internet. Do not get enticed right away. Some of these special deals are really too good to be true and most of the time they are. Trust your instincts and good judgment. Make sure these special offers are in black and white, in case you want to avail of them. Keep them in a record or file for future reference. It is better safe than sorry, as they say. So if in the future, disputes may arise, you have a proof or evidence.

Beware of mortgage brokers who cannot even provide a business or calling card, more so those who do not have an office. Even if you are dealing with an online mortgage brokering service, you should make an effort to visit the company’s office and see how they operate there.

It is also best to discuss professional charges and commission during the course of choosing for a mortgage broker. Most of these charges or fees would be shouldered by you. So you have every right to ask questions about them.

The most important thing in your search for the best mortgage broker is to find somebody with whom you would be comfortable dealing with. After all, you will have to deal with him or her for a great deal of time. Good luck.

Today we are going to discuss the combination of two great borrowing solutions known as the stated income home equity line of credit. This flexible product allows a homeowner to borrow against the equity built up in the home on a revolving credit line without have to provide documentation to support how much money he makes.

I covered previously in my article called Stated Income Home Loans, that the self-employed, small business owners and commissioned sales people often have a difficult time proving to a mortgage lender or other financial institution how what their true level of income is. They do not get W2s or pay stubs in the traditional sense and often “write-off” a large portion of their income to legitimate business expenses. This leaves them falling short of the debt service ratios that banks use when qualifying borrowers for loans and mortgages.

The stated income loan was introduced to address that problem by allowing strong borrowers to obtain credit without have to provide documentation to prove their income level. While this brought with it a bunch of new challenges for lenders, it allowed the self-employed and commissioned sales people to borrow money with greater ease.

A home equity line of credit is simply a revolving credit line that uses the equity you have built up in your home as collateral. Banks love real estate security and will gladly offer high limits and low interest rates in return for it. Once set up, a HELOC allows you borrow funds whenever you wish. As that amount is paid down, it becomes available to you to borrow again up to the limit of the line of credit. The funds can be used for anything from a down payment on a rental property to a new car to financing your children’s education.

The stated income equity line merges both of these unique needs into one great mortgage product. For those who are unable to support their income by traditional means, yet desire the low rates, high limits and flexibility of HELOC, this combined product is a perfect fit.

A good credit score is still really important. But having said that some stated income programs allow you to borrow up to 100% of the purchase price or the appraised value of the home in the case of a refinance.

Before the sub-prime mortgage meltdown, it was possible to obtain a stated income line of credit without verifying assets either. These are becoming increasingly hard to come by and it is more common to find stated income / verified assets loans and equity lines.

The days of one borrowing solution fits all are long gone. Lenders have gotten more and more creative to meet the unique needs of today’s home buyers. If you are self employed and have built up equity in your home and would like the ability to access it as you need it, instead of all at once in one lump sum, the stated income home equity line of credit was created just for you.