Agreement of Sale

When the time comes for you to purchase your new home, both you and the seller will have to come to an agreement.

The major component of the sale that both you and the seller will have to agree on is the purchase price. On a smaller scale, you both must come to an agreement on the down payment, what stays and what goes, and any minor work the property may need, etc.

Once you and the seller have come to an agreement, you will both be required to sign the agreement of sale which is provided to you by your realtor. Your realtor, who acts as your advocate will go over all of the stipulations with you before you sign the actual paper work.

Once the agreement of sale is signed, you can than move on to following through with all of the other necessary conditions required to purchase your new home.

An agreement of sale is defined as follows:

A written signed agreement between the seller and the buyer in which the buyer agrees to purchase certain real estate and the seller agrees to sell upon terms of the agreement. Also known as contract of purchase, purchase agreement, offer and acceptance, earnest money contract or sales agreement.

What is a Reverse Mortgage

Reverse mortgage is a new kind of loan against your home that you need not pay back as long as you live in that house. With reverse mortgage you can mortgage the value of your home in cash without repaying the loan every month and as well as without moving out of the house, and this cash can be repaid in several ways like you can pay at one stretch in single lump sum of amount, or in regular cash advance monthly, or in credit line account that is you can decide how much available cash can be paid or combinations of any of these methods.

No matter how you pay back this loan, as you do not need to pay back anything until your death or sell your home or move out of your house permanently. For the eligibility of reverse mortgage you should have own your home and your age should be 62 years or older.

For other kind of loans the lender check your income documents for the verification of your repayment status monthly, but in reverse mortgage there is no need of repayment of loan monthly, so you need not require any income proof, even if you have no source of income but still you are eligible of reverse mortgage.

With other kind of mortgages you may lose you home incase if you do not make your repayment monthly, but in reverse mortgage you may not lose your home by not making the repayment, mostly reverse mortgages does not require any repayment as long as you live and that is the reason reverse mortgage differs from other loans

With reverse mortgage your debt gets increased and the equity of your home decreases, as the lender lends you the cash and you don’t make the repayment, and the debt amount get increased as the interest is being added up with your balance loan amount and ultimately your debts increase and your equity decreases, unless the value of your home is getting increased. Incase if the value of your home decreased there will not be any equity left out except your loan amount so it is nothing but spending down your home equity while you live in your home with out the need of making repayments.

Exception in reverse mortgages are when you get the loan advance without interest charged on it your debt would remain the same and your equity would grow with the increase in home value. But normally home value does not grow at high rates and also the interest rate is also charged so finally the majority of the reverse mortgages ended up with “falling equity and rising debt” loans.

When and Why You Should Consider Refinancing?

There are some cases when something is giving you a better option to pay off an existing loan and replace it with a new one. This process is what we call as "refinancing" a mortgage.

There are times that refinancing your mortgage is actually better but what is very vital for you as a homeowner is to have a clear grasp of all financial objectives. More importantly, you have to keep these objectives in mind so that you will be able to acquire the loan that's most appropriate for you. This article will look at a few of the major reasons as to why people decide to refinance their mortgages. But of course, the decision on which is best based on your financial situation is up to you, as a homeowner.

Goals of Refinancing:

· To create equity faster by securing a lower interest rate - one of the top reasons of refinancing is to lower your existing loan's interest rate. Aside from saving money, reducing your interest rate also increases the rate at which you build equity in your home. Furthermore, it can also decrease the burden you bear for your monthly payment.

· To adjust the length of your mortgage - when adjusting your mortgage, you have to options:

o Increase the term: Reducing the amount that you pay each month will increase your mortgage's term. However, you also have to consider the fact that the total amount you end up paying will also increase because of the interests per month.

o Decrease the term: Mortgages in short-term basis generally have lower interest rates. Moreover, you pay off your loan sooner than usual.

· To convert from ARM to Fixed-rate mortgage or vise-versa - having an adjustable-rate mortgage or ARM will change your monthly payment as the interest rate changes. With this type of payment, your payment can increase or decrease.

On the other hand, there are some who find their selves uncomfortable with the possibility that their monthly payments could rise. In this case, it is better to switch to fixed-rate mortgage because you will have a steady rate and thus, have a peace of mind. Fixed-rate mortgage is also a great idea if you think that the interest rate will increase in the future.

Conclusion:

Refinancing can be an excellent move if it helps you create more equity faster, shortens the term of loan, or decreases your mortgage payment. It can also be a useful tool when making your debt under control as long as you use it carefully. Before refinancing, you need to look at your financial situation and ask yourself how long you plan to continue living the house and know how much money you will save by refinancing.

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A Quick Guide To Bad Credit Mortgages

Trying to buy your own home but can’t get a mortgage because of your bad credit rating? Stop applying for regular mortgages now and start looking at the bad credit mortgage market.

Traditional mortgage providers rarely offer their mortgage products to people with bad credit. Why? Because if you’ve had trouble paying your bills, credit cards or loans in the past, you’re a bad risk. Lending you tens or hundreds of thousands of pounds could be a bad idea.

The recent increase in the number of people in this situation, however, has meant that demand has risen for suitable mortgage products. The larger lenders are still wary of bad credit risks, so it has fallen to more specialist lenders to fill the gap in the market. Consequently, the bad credit mortgage market is growing, and is competitive, which means that customers suffering from poor credit can find a range of mortgage products that suit their needs and that help them get their finances back on track.

So, what is a bad credit mortgage?

A bad credit mortgage is a financial product that’s specifically designed to let you buy your own home even if you have a bad credit rating.

• Interest rates on these mortgages are typically marginally higher than for traditional mortgages. This is because the risk to the lender is higher.

• There may be some additional conditions on your mortgage, which are placed there to give security to the lender. These might include a larger arrangement fee at the start of the mortgage, or stricter redemption penalties.

• These mortgages are usually only made available through specialist mortgage advisors, who, in the UK, must be authorised by the Financial Services Authority (FSA).

• A bad credit mortgage can help you to address your financial difficulties and even to improve your credit rating over the long term.

Getting rejected by lenders for traditional mortgage products is something that gets added to your credit history. Avoid this by speaking to an independent, experienced mortgage advisor who can help you buy your house with a mortgage that’s designed for people in your circumstances.

Reverse Mortgages Provide Money for Retirement

Want to retire in 2013?
Consider a reverse mortgage...

Many Boomers are looking to retire but not sure how they can afford it. While savings and retirement plans may have gone down in the past decade there are still options that will allow you to retire in 2013. Many retirees have bought their home years ago and have been faithfully paying ever since. Whether your home is paid off in full or your balance is low, this home loan can turn your asset into a source of income. Speak with a mortgage banker to learn how HECM loans can help you achieve your finance goals.

Reverse Mortgage Information
• Age matters. The minimum age to qualify for a reverse mortgage is 62. This can be three to five years prior to you qualifying for full social security benefits. A reverse mortgage can carry you through those crucial years.

• Income. You don't need any! Traditional refinances require you to have an income source in order to make monthly payments. For example if you wanted to take out $100,000 from the equity of your home and use the funds to make payments - you would not qualify unless you had an income source. You do not need an income to qualify for a reverse mortgage, making it the ideal loan for retired seniors.

HARP 2.0 Mortgage Relief Bill Helps Underwater Homeowners

A new bill called the Responsible Homeowners Refinancing Act of 2013 has been introduced in Congress for the purpose of simplifying the process of changing mortgage providers by eliminating some of the closing costs, such as home appraisal costs under HARP 2 programs.

By way of recap, the Home Affordable Refinance Program was originally made law in early 2009 for the purpose of assisting homeowners whose homes had declined in value by enabling them to refinance mortgages that were held by Freddie Mac and Fannie Mae at lower mortgage rates. It also eliminated the requirement to purchase new private mortgage insurance (PMI) in the case of homeowners who had made a twenty percent equity payment initially and then lost their equity when housing values plummeted.

Additional relief was provided to homeowners under HARP 2.0 in 2011. The requirement that Loan-to-Value (LTV) could not exceed 125% was removed and replaced with no limits on LTV. Two cities which especially benefited from this change were Miami Florida and Las Vegas Nevada, where many homes had lost half of their value.

Equity Release, the Best Method for a Carefree Life

After retirement, many people are facing financial problems. Now, you no longer have to worry: the equity release is the alternative of a steady income on the age when you need to focus on the beautiful side of life.

Nowadays, a lot of people use equity to help fund of their retirement. You need to be at least 55 years old and own a property you can release the equity.

This is a good way to use on the money currently tied up in your house. You'll have the chance to use this money as a source of income, without giving up your property. First of all, you have to know that you have two possibilities to use it: home reversion plans and lifetime mortgages.

Home Equity Loans and Mortgage Interest Rates

American spending will slow because it is more expensive to borrow, and because consumers will see less of an increase in home equity to borrow against. Oil prices have dropped and may help offset some of the obstacles in the marketplace, suggesting that consumers may slow down, but prices are unlikely to go into reverse unless mortgage rates continue to be lowered.

In the current economy, home equity loans are available as sub-prime loans in any amount from the equity in the collateral to 100%. A few non-conforming home equity lenders will even offer 125% of the home value balance less the first mortgage balance. If a property has both a first and second mortgage equal to 100% of the property value and interest rates have dropped below both mortgage rates, the lender may do 100% refinancing.

Lenders who are involved with 100% financing will obligate the borrower to acquire private mortgage insurance (PMI). PMI is temporary and will be canceled when the home value goes up and the balance decline causes the loan to drop below 80% of the mortgaged property. There is no PMI required with home equity loans.

The most common methods used to refinance high rate home equity loans is an equity line of credit or a home equity loan. Both types of equity loans have reasonable closing cost depending on the state in which the borrower lives. In a home equity loan the cash is disbursed up front, while in an equity line of credit the funds are reserved for the borrower and he may draw on them as needed. This is referred to as the draw period. Both a second mortgage and an equity line of credit may have a fixed interest rate or an adjustable rate tied into an index.

If a property is mortgaged above 80% of the fair market value, the mortgage lender will require a higher rate of interest. If a second mortgage is close to 100% of the security used for collateral the lender may ask for a premium on the loan to offset the risk taken.

A mortgage lender holding a home equity loan in notice of default scenario, would have to buy out the first mortgage to protect their interest in the property. If the home had an 80% first mortgage and a security value of $100,000, the second lender, in order to protect his interest at foreclosure, would have to satisfy the first mortgage to acquire the property.

If the second mortgage only made both 1st and 2nd mortgages equal to or less than 80% of he property value the interest rate would have little or no premium. Home equity loan rates will vary depending upon equity to value, credit score and loan amount.

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