What is a Private Mortgage?

Private mortgages are a special and very interesting type of mortgage option that most people are not too familiar with. The most basic definition is a mortgage contract in which the lender is not a registered financial institution but may be a friend, family member or individual investor.

Because banks and other financial institutions have strict guidelines for lending that limit their ability to finance certain scenarios and borrower profiles, private mortgages are used to meet those unique needs. Some typical situations where a borrower may need private financing include:

- Financing for a cottage or unique property

- Financing for renovation projects and construction

- Financing for an individual who can't prove their income by conventional means

- Financing to consolidate debt or recover from a bankruptcy

- Financing for individuals who have income tax or property tax arrears

There are several benefits to the borrower and investor alike in this type of mortgage arrangement.

From the borrowers point of view, private mortgages can be an excellent alternative when a suitable bank mortgage is impossible to obtain. Reasons why a borrower may require a private mortgage include; need for a second mortgage, poor credit, income tax arrears, tax arrears, construction financing, financing on properties that institutional banks may not consider prime, cases where an individual has recently gone bankrupt or just can't prove their income. A private mortgage should never be a long term strategy for a borrower, as the interest rates tend to be higher and do not always have the features and flexibility that institutional mortgages offer.

Anybody can lend money through a mortgage. You don't have to be a bank to lend money, it is possible for anyone to offer a private mortgage so long as it is arranged through a licensed mortgage broker in Ontario. Private mortgages are a great investment vehicle which provides monthly income. In addition, mortgages are negotiable instruments which can be assumed, renegotiated, and transferred as needed. All the while the investor is protected by the security of the real estate on which the mortgage is registered.

Regardless of whether you are a borrower or an investor a knowledgeable mortgage broker who is specialized in private mortgages is necessary in order to arrange the mortgage and also provide the guidance needed to make informed decisions.

Christopher Molder is a Toronto Mortgage Broker who is continuing in the footsteps of his father Arnold Molder, a mortgage broker with over 4 decades of experience. His blog http://sonofabroker.com is a source of entertaining, enlightening and educational mortgage information for all Canadian homeowners. To learn more about Christopher and his unique perspective on mortgages visit his blog http://sonofabroker.com

Article Source: http://EzineArticles.com/expert/Christopher_Molder/521401

Facts and Tips about New Construction Home Loans

New construction home loans are not the same as your typical, everyday home loans. They tend to have different requirements and adhere to different rules. If you wish to know more about new home construction loans, read on. You just might find an easier way to own your dream home.

The Definition of New Construction Home Loans

When you ask for this type of loan, you're asking the mortgage provider to give you the money you need to build your own home.

The Basis of Approval

First and foremost, your mortgage provider would require a detailed explanation as well as accounting on the estimated costs for your home-building project. They'd want to know how much experience you have in the field of construction, how much you estimate you're going to spend on your house and how it's going to look in the end.

Only after you've passed the initial screening, they ask you to submit the usual documents that would enlighten them about your earning capabilities and credit reputation.

The Types of Construction Loans

There are different types of construction loans.

A construction to permanent loan is a two-in-one loan ideal for most people since it would only require you to submit documents and pay closing costs once. This type of loan is a combination of a construction loan and permanent financing. Rather than applying for a construction loan initially, then following it up with a typical home loan, an approved CTP loan can help you save money and time.

A remodeler loan is a second mortgage that's designed to provide financing for a home improvement or remodeling project.

A bridge loan allows you to use the equity on your present home as down payment for your new home.

Lastly, a lot/land loan gives you the resources to buy land instead of building a home.

Home Loans [http://www.WetPluto.com/A-Guide-To-Home-Equity-Loan-Rates.html] provides detailed information on Home Loans, Home Equity Loans, Home Improvement Loans, Home Equity Loan Rates and more. Home Loans is affiliated with Home Improvement Loans Info [http://www.i-homeimprovementloans.com].

Article Source: http://EzineArticles.com/expert/Kent_Pinkerton/44498

Mortgage Reducing Term Assurance (MRTA)

How much should I pay for insurance?

That's exactly how much you need to find out - The MRTA calculator gives you the figure you need to calculate your mortgage reducing term assurance or MRTA. First, the definition of MRTA.

MRTA is defined as Mortgage Reducing Term Assurance; reducing term life assurance specially designed to protect a loan borrower against death or TPD (total permanent disability) due to natural or accidental causes.

>> Firstly, check your MRTA Premium and how much you should pay for your insurance.

MRTA is very often a lump sum and the lending institution will arrange fire and Mortgage Reducing Term Assurance of insurance cover. Should anything happen to you during the period of the loan requested/applied, the Insurance Company which issued the policy will pay the outstanding balance of the repayment to the bank/finance institution.

How will MRTA benefit you? 

1. Premium financing Pay a small sum to accumulate over with the plan. It's affordable and reliable.
2. Single premium payment Full protection for a one-time fee. For life.
3. Liberal TPD explanatory If you cannot perform your regular work for six (6) consecutive months, TPD benefits will be feasible. Some packages offer only permanent disability.
4. Guaranteed acceptance Acceptance is guaranteed for loan borrowings up to RM150,000 and entry ages up to 50 years next birthday. Subject to other terms and conditions.
5. 24 hours worldwide coverage Anywhere in the world you're covered, not only in the respective country you apply.
6. Guaranteed benefit to settle your balance mortgage The repayment of your housing loan will be settle should there be any causes of death of TPD.

>> Get the MRTA Calculator here [http://www.fiscal-wise.com.my/FiscalWiseWeb/FinancialTool/MRTA.aspx].

Written by John of Fiscal

http://malaysiahomeloan.blogspot.com/

Article Source: http://EzineArticles.com/expert/John_Li/222723

What to Know Before Getting a Reverse Mortgage

After living in a home for years and years, many people consider using the equity in the home as a resource for financing other expenses, such as tuition or to pay down debt. A reverse mortgage is one option for those who have owned their home for a long time. Senior citizens primarily utilize them. The process is not more difficult than a traditional home mortgage, but there are many differences that the applicant must know about before moving forward.

Definition

This is a special loan that provides homeowners with the opportunity to use part of their home equity as a liquid asset. This essentially turns part of the home's value into tangible cash that can be used for other expenses. The accrued equity can be paid out to the homeowner to use as they see fit. While this sounds much like a home equity loan, there are some substantial differences. This type of arrangement does not require repayment until or unless the homeowner is no longer using the house as his or her primary residence.

Significant Differences in Home Equity Loans

There are some additional differences between a reverse mortgage and a home equity loan. Standard equity loans require a regular monthly repayment on the principal and interest on the loan. The reverse mortgage pays the homeowner rather than making payments to the bank. Utility payments, insurance, and any taxes will have to be paid, however.

Home Loans That Are Eligible

Not all housing situations are eligible for this type of specialized loan. The home must be a single-family house with the owner living in it. Any house that meets FHA standards is also approved for these loans, including condos and manufactured dwellings.

Questions About Inheritance

A common question that comes up when someone inquires about a reverse mortgage is how the house will be dealt with after they pass away. Many homeowners want to leave a home behind as an asset for family members to utilize. These specialized loans do not cause debt to be passed to the estate. Instead, any money paid to the owner, along with finance charges and interest, will have to be repaid to the bank. If it is sold and the profit is greater than the selling price, the extra money will be provided to the estate to be distributed among heirs.

Cancelling the Loan

While some find this arrangement appealing, others may decide to change their mind and cancel the loan. The owner has three calendar days to cancel the process. Different lenders will have varied approaches with how they handle this process, which is referred to as a three-day right of rescission.

Before jumping into a reverse mortgage, be sure to fully review the information provided by the lender in order to fully understand the process. If there are any questions, it is best to ask them well in advance of moving forward with the lending process.

When looking for a reverse mortgage, homeowners visit FirstBank Mortgage. Learn more at http://firstbankreversemortgage.com/.

Article Source: http://EzineArticles.com/expert/Andrew_Stratton/83489

Your Paying 161% Interest For Your Mortgage!

You read the title correctly and you're not in a deep sleep having a nightmare. I am sorry that you had to find this out from some stranger but this is a Truth. I am in the mortgage business and when I discovered this I almost fell of my chair. For example if you have a 200,000.00 for a thirty year term at 6% and pay it to full maturity the effective interest rate will be 161%. Now do you understand why 95% of all Americans will never own their own home and if you are reading this, odds are you are one of them! It blows my mind to think that Americans will make mortgage payments for 20, 30, and 40 and 50 years and still will never achieve home ownership, why!

What I discovered is there are two factors why we will never own our home. The first is a banking instrument called amortization and the second is to continually refinance your current Mortgage. Let's first take a look amortization and explain the origins of it and how it works. After the great depression the president of the United States, FDR realized the government needed something to stimulate the economy what they decided to do is to focus on new home construction. His advisors discovered that home construction was a viable way to jump start the economy. The benefits of new home construction are that it creates jobs and affects numerous sectors of the economy.

One of the obstacles in their plan was how to finance homeowners. Before the great depression homeowners would put down 80% and finance 20%. After the depression potential buyers didn't have the resources to make large down payment. What they proposed was to increase the term of the loan, great idea but now the lenders were taking on greater risk with longer term loans. Whenever the banks liability or risk increases the lending institute will then pass it on to the consumer in the form of compound interest or cost. To solve that problem and reduce the risk to the lender they created the bank instrument called amortization. A definition of amortization in its simplest form, the bulk of the interest on the mortgage will to be paid in the first 7 to 10years of the loan.

On a 200,000.00 mortgage for a thirty year term at 6% interest it is not until the 21st year of the loan does principal overtake interest? Let me give you an example for the above scenario. On this loan the payment would be approximately $1,199.00 per month, in your first month $1,000.00 would go to interest and $199.00 would be applied to principal. Don't take my word for it look at your Truth and Lending Statement and you will see that you'll pay two and a half times for your home. Albert Einstein said "Compound interest is the 8th wonder of the world. He who understands it earns it! He who doesn't pays it!" He could have said it about Relativity, Physic's or Electricity but he did not. He understood the power of compound interest and so do the banks.

Here is an example of compound interest. If you would open a savings account at 3% and would deposit $ 1,000.00 and leave it there for 48 years or a working lifetime you would have a return of $ 4,000.00. The banks will take the same $ 1,000.00 and will get 18% on there money and at the end of 48 years will accumulate a return of $ 4,096,000.00. No you don't need glasses you read it correctly. This is why there is a bank on every corner and more banks than churches.

The second component is refinancing your existing mortgage. Every time you refinance, you're resetting the amortization schedule which puts the bulk of interest in the first 7 to 10 years. The national average says Americans will refinance their home every 3 to 5yrs. Mr. Einstein also made another profound statement "the definition of insanity is doing the same thing over again and expecting different results". We have been taught to refinance our homes every time we are able to save a percentage point or more. That's what the lenders and mortgage companies want you to believe. Presently there are few options available to homeowners to reduce mortgage debt, one is a bi-weekly and the other is adding extra money to your current mortgage. Both will eliminate a few years off your debt but most individuals are not disciplined enough to do so and that includes myself.

By now you are probably asking yourself how I can stop the insanity. Now there is an award winning product revolutionizing the way we pay our mortgage. It is reducing mortgage debt by one third the time. A similar concept is being used throughout Europe, Australia and New Zealand and is reducing mortgages by fifty percent. Are they smarter than we are, no but they have found a solution. You need stop this cycle and let me show you how to become debt free through mortgage cancellation. My passion is to see you financially free.

For more information contact me at jmridings@paidinfull.org or go to http://www.paidinfull.org and watch the 10 min video overview. It will change your financial future. I want to help you please call me at 708-983-3431 for a free copy of 101 Ways to Stop the Money Leak.

A successful restaurateur in Chicago, One day I woke up and all that I had labored for was taken away. Starting over at 49 is a journal of my journey back to the place of achieving my goals for my life. Also to help Americans achieve financial freedom.

Article Source: http://EzineArticles.com/expert/John_Mark_Ridings/211378