money sectionmoney section
Mortgage insurance can be defined by looking at a few different aspects of a plan. Learn about the definition of mortgage insurance with help from a mortgage professional in this free video clip.
When you are looking to get a home loan, one of the first things you should do is get pre-qualified with any lender. This stage occurs before you even submit a formal application and it helps you assess your financial strength before you shop for a home and mortgage.
An easement is the right for one person to use another's property for a specific purpose. Two types of easements that are commonly confused are access easements and road easements. Knowing the difference between the two can help you protect your property rights and avoid unnecessary conflicts when others want to use your property.
When you purchase real estate property, you might assume that you have sole rights to use the land as you wish. However, this is not always the case. Easements are rights held by others to use a portion of your land or to use your land in a specified manner. Easements in gross are the most common types of easements in the United States.
According to Black's Law Dictionary, a leasehold is "an estate in realty held under a lease or an estate for a fixed term of years." Therefore, a leasehold interest is a specific legal right to occupy or control a portion of leased property. Occasionally, when two or more individuals or business entities have a leasehold interest in a single piece of property, there is a need to separate or partition the property to create two distinct property interests.
An easement is a property interest that allows a non-property owner to use another person's property for a specific purpose. There are different types of easements, and different ways to create them. Easement laws can differ depending on where you live, so talk to a real estate attorney for legal advice about various methods to create an easement in your area.
An easement is a legal claim to use land owned by someone else. For example, a business might pay for an easement on neighboring property to use it for parking. Additionally, utilities often use easements to run cables or pipes across private property. Easements occasionally become issues in bankruptcy cases, and there are circumstances under which a bankruptcy court or an appeals court reviewing a bankruptcy might vacate, or eliminate, an easement.
State and federal laws protect the productive use of property by ensuring that it can't be landlocked -- that is, denied access to a public road -- even if it has no direct road access of its own. In most cases, simple remedies keep property from being landlocked. In the case of some federal and formerly federal lands, however, the situation is more complicated.
If you gave a person the right to use your land, you granted an easement. Different circumstances can cause an easement to expire, such as in a case where both parcels of land come under the same ownership, or the easement holder expresses that he will no longer use the easement. No matter how the easement expired, you may file a claim against the person who no longer has the right to use the easement but continues to do so.
An easement is a right to use land that belongs to another person. The owner of the land grants the easement holder a right to use the land for a specific purpose. Otherwise, the Georgia easement holder does not have the right to possess and enjoy the owner's land. An easement lasts for a perpetual duration, and when the easement comes into disrepair, the easement holder has the duty to perform maintenance on the easement.
Selling property with a boundary dispute can be daunting because potential buyers will not want to take on your headaches. However, you can either resolve the dispute or decrease its effect on the sale of your home. Even if neighbors are uncooperative, as is often the case in boundary disputes, there are specific actions you can take that can resolve or neutralize the effects of the disagreement. Plan ahead so your potential buyers can relax about the impact of the dispute on the value of your property.
Easements and right of way are very similar under the law. Although easements and right of way essentially grant owners use of land, they typically arise in different contexts. Easements arise in private contexts and right of way arise in public contexts. Individuals and courts grant easements in the private sector; governments grant right of way in the public sector.
Landlocked property is not desirable for property owners because its use is limited. Cities or counties may inadvertently create landlocked property when a new highway is built with no entry or exit alongside a piece of property, such as farmland. Some possible remedies exist, but the value of the land is always affected.
A court considers foreclosure an equitable remedy because the remedy is only granted at the court's discretion. A lender must convince the court to grant foreclosure under current regulations. This also gives the borrower an opportunity to submit an equitable defense as a means of challenging the lender's motion to repossess the home. A successful equitable defense can defeat a lender that acts unethically in attempting to foreclose on a home.
Both rights of way and easements give one party rights to the land or structures of another party. A right of way grant typically allows the recipient to access land of another owner, while an easement may grant the same access or additional rights, such as the right to use a structure on another person's land. In both cases, various types of affidavits -- sworn statements -- may be used to clarify or terminate the grant.
In most situations, a property owner who grants an easement on his land continues to be responsible for the taxes and assessments charged to that land. However, it may be possible to negotiate a cost sharing arrangement, especially if the purchaser of the easement is a private party instead of a government entity.
A mortgage contract may not initially require the homeowner to make payments that are large enough to pay off the principal of the mortgage. When a bank offers a mortgage under this condition, it includes a recast term in the contract. When the terms for the recast are met, the minimum mortgage payment increases so future payments will cover the loan principal.
The law of easements addresses property that is landlocked. Easements come in different forms; however, the definition remains the same regardless of the type of easement. Put simply, an easement is an irrevocable privilege to use another individual's land for a specific purpose. To encourage land use, courts imply easements where a person would otherwise lack the ability to enter or exit his property.
When a piece of property is landlocked, the owner is at a disadvantage because he has no legal right to get to the property. In order to get there, he must trespass on the land. In some cases, an owner may allow an adjacent property owner with road frontage to simply walk or drive to his land out of kindness, but if the owner with road frontage sells her property or moves, the new owners or renters may not be as kind. It is important to try and get a deeded easement to the landlocked property so that there are…
When a mortgage is created, the lender, borrower and the escrow company involved often create documents that make it clear who holds the title for the property and why they hold it. This often comes down to various levels of interest in the property. The borrower holds interest as the purchaser, but the lender holds interest in the property because it was used as collateral, and so forth. In order to manage these different levels of interest, the laws regarding real estate make use of terms like "successor in interest."
A wrap-around mortgage is a tool that is often used in seller financing. The current owner to sells the home for more than what is owed on it and the buyer pays the owner directly. The seller then pays the original mortgage holder and keeps the remainder. Sometimes, the seller is also the bank, which may require more paperwork. Assumable home loans used to be far more common than they are today. Lenders now have many more restrictions and qualifications as to who can assume a loan.
In times of financial difficulty, debtors can request forbearance from their lender to obtain temporary relief from their debt payments. If granted, forbearance can stop payments, giving the debtor time to get back on his feet financially. If you are at risk of being unable to meet your obligations, talk with your lender to see if it offers forbearance and what the requirements are to enter the program. Typically, lenders that agree to a forbearance request will expect you to continue making interest payments on your loan and expect you to resume your payments on a specific date.
A mortgage modification is the process of changing mortgage terms in order to make the loan easier to pay off for the borrower, after the original terms have proven too difficult for the borrower to meet in a current financial situation. Borrowers seek mortgage modifications in order stop foreclosures and salvage their credit scores while keeping their houses. The process of modifying a mortgage can be complex and timeframes vary widely based on the lender, lender standards, and how many modifications the lender is currently dealing with. To help, lenders assign negotiators to each modification in order to manage the…
A dominant estate is when the owner of a property divides and sells a portion of his property to the owner of an adjoining property but retains the right to access the divided-off portion. The owner of the adjoining property is the servient estate, or servient tenement.
If you hold an easement, you have the right to use another person's land. There are two basic types of affirmative easements: an easement appurtenant and an easement in gross. An easement appurtenant involves two parcels of land, while an easement in gross involves only one parcel of land. If you hold an easement in gross, the owner of that one parcel of land has granted you the right to use a part of his land.
When a lender transfers a loan obligation to a third party through an assignment of mortgage a third party may become the recipient of your mortgage payments. Likewise, if your lender wants to begin foreclosure proceedings on your home, it needs an assignment of mortgage to prove that you owe it a financial obligation.
Unless you're a spelling bee champ or you've had some education in the field of property insurance, this four-syllable word is probably something of a mystery. In fact, if you own real estate, you've already signed off on contract language that affects the portion of the land you've purchased located around your home. You're responsible for this surrounding property so, as a wise consumer, you'll want to know all there is about the appurtenant insurance that covers this land and those structures.
You own a 30-year fixed-rate mortgage. Its final payoff date looks awfully far away. But you can get there faster thanks to a financial strategy known as principal curtailment: If you make extra payments on your mortgage loan each month, you'll chip away at your loan's principal balance at a faster rate. If you make enough of these extra payments, you can shave months or years off the time it takes to pay off your mortgage loan.
You can save a lot of money by reducing the time it takes you to pay off your mortgage. Various methods of doing this are known as mortgage curtailment or acceleration of mortgage amortization. While your scheduled payments are split between the principal and interest on your mortgage, 100 percent of a prepayment is applied to the principal. Prepayments reduce the amount on which you are paying interest and make your mortgage shrink more quickly.
Requesting a mortgage forbearance from your mortgage company can help you avoid a foreclosure. Forbearance approvals can either suspend home loan payments for several months or result in a reduced monthly payment. But before your lender approves the request, you'll have to submit a forbearance letter, also known as a hardship letter.
When a car for sale has outstanding financing, that means the current owner has not fully repaid the loan he took out to buy the car. The lender has a lien on the car title, meaning that the lender has the right to repossess the car if the owner does not repay the loan. Ensure the previous loan is paid off so you own the car free and clear.
A commercial loan curtailment is the partial prepayment of the loan principal amount. If a corporate borrower pays the full principal amount -- that is, settles the obligation -- financial analysts call the transaction a "full curtailment." Business debt curtailment transactions generally happen in a specific economic or corporate context.
An easement is a type of encumbrance that limits a real estate property owner's rights to use his property or permits the rights of others to access and use the property. Appurtenant easements and easements in gross are the two primary types of easements. An appurtenant easement allows the owner of an adjacent property to enter the affected property for a purpose such as access to a road. An easement in gross, conversely, does not involve a second property.
Legal issues regarding property often turn on the extent to which a person can use and enjoy a parcel of property. In some instances, a person who is not the owner of a piece of land has rights to use land owned by another. In this scenario, an easement typically arises. A deed of easement is a written record that creates the easement and defines its scope.
An easement gives one person or organization the right to use another's land, but not possess the land. An easement on your land may be granted to your neighbor if he can only access his land by crossing yours. Easements are also frequently given to public utility companies to run pipes or electrical wires. Terminating an easement once created is tricky, so the best way to protect your land is to prevent the easement.
Taking out a mortgage loan is a big financial responsibility. For most people, buying and financing a home is the biggest financial decision they'll ever make. Because of this, you want to make sure to take out a mortgage loan that you can afford, and one that won't place a strain on your family's financial health. Fortunately, there are several financial factors that you can consult when searching for the safest mortgage loans.
A principal curtailment is a mortgage payment that a homeowner sends in before it is due in order to reduce the principal balance on the mortgage. The mortgage contract determines what types of principal curtailment payments are acceptable. Principal curtailment has tax disadvantages. A principal curtailment reduces the amount of mortgage interest that the homeowner pays, which means less interest can be deducted from taxes.
A short sale is a last resort for homeowners on the brink of foreclosure. A short sale is an agreement between the owner and the bank to sell the house on the open market for less than the mortgage balance in lieu of foreclosing. However, not all financially challenged or cash-strapped homeowners need to resort to this. In fact, many lenders are willing to work with borrowers on loan modifications to help them stay in their homes, avoiding a short sale or foreclosure altogether. The reason for this is that it costs the lender more to undertake a short sale…
The real estate market works on two levels from which mortgage loans are originated and then sold or invested. Primary lenders, such as banks, originate the mortgage loans used to finance homes. Secondary lenders purchase these loans, which then become secondary mortgages. Secondary mortgages make money once they're sold and converted into investment products.
When people say a mortgage is assigned, they can mean different things depending on the management of the mortgage and the party being referenced. Assignment essentially means that a party is taking responsibility for the mortgage, and the contract specifies the obligations and role of each party, whether borrower or lender. Assigning or reassigning a mortgage can fundamentally change the way the loan works in some cases. However, in other cases, the borrower may not even know it happened.
A modified mortgage is any mortgage that has been changed in order to make payments easier for a borrower that can no longer meet the original mortgage terms. Lenders may not want to give up on the mortgage, so they agree to alter the terms. Lenders can lower the interest rates, extend due dates, defer payments, recombine late payments in to the mortgage or a combination of approaches. Despite their usefulness, modified mortgages also come with risks.
Lenders have created various types of mortgage to appeal to different customers and different financial circumstances. There is no clear line dividing a traditional mortgage from a newer mortgage option, but traditional mortgages are typically thought of as home loan structures that have been used often in years past and are not influenced by recent changes in the market or new regulations. These mortgages also may be called conventional loans, and there are several common types in the United States.
A mortgage is an instrument used to secure payment of a debt for a home or other form of real property. The borrower of the mortgage is required to completely pay the mortgage loan as agreed between the lender and the borrower. When the borrower fully satisfies the terms of the mortgage, the lender must release the financial lien against the property.
When a person buys a home, he most often takes out a mortgage to purchase it. Traditionally, these home loans would remain in the possession of the lender who issued them. As these loans were paid off, the payments would flow to the lender, who would use the income to issue new loans. However, in the second half of the 20th century, lenders started reselling home loans to investors on the secondary mortgage market.
Illinois homeowners are required to show a legitimate cause for a financial hardship before being qualified to sell a property under terms of a short sale. The hardships that qualify for an Illinois short sale are numerous and most homeowners who are not able to make payments on a house are in such circumstances because of one of the qualifying conditions. Lenders are not likely to argue over short sale terms with anyone meeting Illinois hardship qualifications.
Mortgage insurance provides assurance for your lender in the event you cannot pay your mortgage payments. The mortgage insurance premium is the amount that the borrow pays toward a mortgage insurer as payment for the insurance. You should understand how this insurance can affect you. This type of insurance is generally required on many loans where you put down less than 20 percent as a down payment on a home.
Mortgages make the dream of home ownership possible, but they can also present hidden dangers. Rising interest rates, falling home values and hidden fees can strain homeowner budgets and threaten their financial security. Mortgages don't need to present unnecessary risks if you know what to look for and what to avoid during the mortgage shopping process.
Many people purchase a home and finance it with two different mortgages. Usually, there's a first mortgage and a second mortgage, sometimes with the same lender and sometimes with two different lenders. The first mortgage lender appears first on the title and the second mortgage lender appears second. If the homeowner sells the home, or if the home falls into foreclosure, the first lender receives its payoff before any other party, including the homeowner.
A gap mortgage, also known as a "bridge" or "swing" loan, is a real estate loan obtained to cover the transition between selling a current home and buying a new home. While it is not always necessary for a buyer to obtain a gap mortgage when transitioning between homes, this type of loan exists to allow a homeowner to purchase a new home prior to completing the sale of her current residence.
Buying a home requires more than an affordable payment for the mortgage debt. Lenders require hazard insurance to pay for rebuilding the property if damaged or destroyed. The homeowner may not have $100,000 to repair the home if a fire rages through the home. Hazard insurance provides coverage for these catastrophic accidents. Additionally, the county assesses property taxes and can seize the home if they are not paid, which forces the lender to foreclose to protect its rights. Mortgage lenders prefer these costs be included in the monthly payment and puts them into an escrow account.
People with multiple mortgages refinance their homes on a regular basis. Depending upon where the second mortgage is located, on the primary residence or on another property, may change how the qualification is determined. Some people even may have multiple mortgages on multiple properties and still be eligible to refinance. Many banks offer second mortgages on vacation homes and investment properties. Depending upon your situation, you may qualify for one circumstance and not the other.
When you buy a house and take on a mortgage loan, you're given the privilege of using the property but you do not own the house yet. It's important to know every party involved in the transaction from the seller to the lender or broker who closes the loan. You should also identify the mortgage holder when examining the details of your mortgage loan.
A mortgage loan for an owner-occupied residence usually has better rates and terms than a mortgage for a second home or investment property. A change in occupancy type can violate the terms of the owner-occupied home loan, causing it to go into default, even if all payments have been made on time.
There are two basic types of residential mortgages: fixed rate, where the interest rate is fixed for the mortgage term; and adjustable rate, where the interest rate is adjusted, usually on an annual basis. Several institutions offer residential mortgages, including savings and loan associations, commercial banks and mortgage brokers. Current mortgage rates can be found at Bankrate, Erate and on the websites of lending institutions.
If you plan on moving frequently, a portable mortgage may be a type of loan that you want to consider. A portable mortgage is one that you can take with you from one home to another. Using this kind of loan could save you a considerable amount of time and hassle as a homeowner.
Lenders refer to the interest rate charged on loans for the most creditworthy customers as the prime rate. People who have low credit scores cannot borrow funds at the prime rate and pay a higher rate of interest known as a sub-prime rate. Monthly payments on some sub-prime loans are very high, which means these loans have a higher default rate than prime loans.
When you finance a new home or refinance your existing home, a mortgage is assigned to your lender. A mortgage is a document filed with your county stating the mortgagee, mortgagor and a legal description of your property. A mortgage is a lien on your property and is paid back according to the financing terms of the loan. Some mortgagors or lenders will service their own loans, while some will assign the mortgage to other lenders. Mortgagors or lenders must notify you of mortgage assignment within 15 days before the transfer, according to the Federal Trade Commission.
A traditional mortgage loan involves providing a mortgage lender with a down payment on a home and, in return, receiving financing for the property. The borrower then makes monthly payments to the lender until he pays off the loan and the bank's interest charges. Although non-traditional mortgages are available for certain borrowers, they sometimes carry higher risks for homeowners.
Homeowners sometimes take out a second or even a third mortgage on their home. These mortgages are classified as junior mortgages. A homeowner may use a junior mortgage for a variety of purposes. The legal standing of a junior loan is an important consideration for the lender and the homeowner in certain circumstances.
The passing of the Homeowners Affordability and Stability Plan in 2009 gave lenders financial incentives to work with homeowners who fall behind on their mortgage payments. Lenders now have loan modification or workout departments to specifically deal with foreclosure prevention. Mortgage forbearance is one foreclosure prevention option, along with loan modification, interest rate reduction and loan repayment extensions.
Home to the world's first McDonalds franchise, first skyscraper, and four presidents including Abraham Lincoln and Barack Obama, Illinois is an interesting place to live. Curiously enough the name, Illinois, comes from a Native American word meaning "tribe of superior men." There are plenty of beautiful homes in Illinois for sale. Buying one can be confusing if you're not prepared. Whether you are a first-time home buyer or even considering purchase a second home, there are many factors to consider when buying.
Contiguous property owners are the owners of tracts of real property connected by a common boundary. The property can be private, public (owned by government), commercial (including industrial), or residential.
Mortgage securitization creates a single investment vehicle from a pool of mortgages. Proceeds from monthly mortgage payments provide mortgage-backed security investors with a regular cash flow. In addition, securitization helps the bank that originates the mortgage to generate an immediate return instead of waiting for the length of the loan to realize profits.
Homeowners struggling to meet their mortgage obligations can explore alternatives. A variety of assistance programs are available. Depending on your location, the length of the foreclosure process will vary. For example, the foreclosure process in Pennsylvania lasts about 10 months while the average is just 45 days in Maryland. Homeowners should communicate with their lenders directly to create an agreeable solution. If keeping the home is not possible, there are alternatives to foreclosure that may work for you.
An easement is an encumbrance on real property, or real estate, that allows an individual or entity other than the owner to use the property for a specific purpose. Appurtenant easements involve adjoining properties: the servient property is used by the dominant property. A driveway easement is a common example. It may grant use of the servient property's driveway to a landlocked dominant property. In an easement in gross, use of a property is granted to an individual or entity, like a power company. There are several ways in which easements may be created.
People may own and eventually transfer their real estate on a fee simple basis, meaning that they own or transfer total ownership of both the land and any buildings thereon. However, another way to gain the ability to use a piece of property is to simply rent the right to use it. Although you may be familiar with the concept of renting an apartment or a storefront, it's also possible to simply rent a piece of land.
A home is a major purchase, and most people would be unable to buy one without a mortgage loan. But some lenders participate in unfair lending practices, which can prevent borrowers from buying the homes they want or force them to spend more than they should. Mortgage redlining is one such discriminatory practice, involving lenders that deny loans based on the demographic make-up of neighborhoods. The U.S. Department of Housing and Urban Development, along with state agencies, enforces oversight of the mortgage industry to prevent unfair lending.
A mortgage guarantor is a third party who backs the creditworthiness of a home buyer. Commonwealth countries, such as Canada and Britain, commonly use this term, while Americans frequently refer to a mortgage backer as a co-signer. A guarantor mortgage can help first-time home buyers qualify for lower down payments and interest rates on a home loan than they would otherwise not be able to obtain with their own credit. Young people may require a co-signer due a lack of credit and employment history. Because of the risks of co-signing a mortgage note, the guarantor is usually related to the…
You might feel a strong temptation to tell little white lies, or not-so-little white lies, on mortgage loan applications. After all, as long as you pay the mortgage and do not default, no one will get hurt. It is just so you can get a better deal. Take owner-occupied home loans, for example. They are often several percentage points lower than investment property loans and require a much smaller down payment. The benefit to lying leaves many to wonder what the risk is and if it is worth it.
If you have ever purchased or refinanced a home, you may be familiar with the term LTV, which means loan-to-value. Every lender has its own mortgage underwriting guidelines, one of which is the percentage of LTV they will lend on a mortgage.
A leasehold property is a piece of real property (including either land or buildings) owned by one party, the lessor, who then legally grants another party, the lessee, the right to use the property for a period of time. The lessor does not give the lessee any actual ownership rights in the property, only possessive rights. There are several different types of leaseholds, each with its own rules.
Mortgage foreclosure is a procedure aimed at terminating an owner's right to property. When a homeowner stops paying his mortgage, his lender will repossess the property and sell it to recover its money. Depending on the state and type of mortgage, a foreclosure can be judicial or non-judicial.
A vendor take-back mortgage is when the seller of a property lends the buyer money to purchase it. This makes it easier to make a quick sale, as the buyer may not be able to come up with the money on his own, or be able to find an outside lender.
A Mortgage Release of Lien Certificate is called many things including a Satisfaction of Mortgage, a Cancellation of Mortgage and a Certificate of Satisfaction. This document is given to a person who pays off a mortgage debt in full.
Mortgage impairment is a type of insurance used to protect a mortgage. All mortgage impairment insurance policies offer unique policies to the bank holding the mortgage.
The term TBA, to be announced, mortgage is used when referring to a mortgage backed securities trade. Buyers purchase securities that are not specified until a later point. The amount is agreed upon at the time of contract.
A guarantor is someone who legally agrees to take on financial responsibility for another in the event of failure to meet debt obligations. A mortgage guarantor agrees to bear the burden of meeting mortgage payments, should the borrower be unable to pay.
Collateralized mortgage obligations, or CMOs, are created by bundling many mortgage loans into groups. These groups of mortgages are then securitized, with the loans most likely to be repaid receiving AAA investment grade. Subprime loans, such as no documentation loans or those without proof of income, are considered to have the highest risk and a lower investment grade.
According to the Business Dictionary website, an equitable mortgage is one that does not meet the legal requirements of a mortgage and must be accompanied by an agreement between all parties verifying its legality.
A gap mortgage, referred to as a Consolidation, Extension and Modification Agreement (CEMA), is a financial tool that acts as an interim loan. This interim loan allows for easier transfer of property rights.
When you pay extra money in addition to your monthly mortgage payment, you have paid a mortgage curtailment. A mortgage curtailment shortens or ends a mortgage term before the agreed-upon date.
A release of mortgage is a document issued by a mortgage lender once a borrower has repaid a loan. It indicates that the borrower now owns the home without any further obligation to the lender.
Houses are extremely expensive especially when compared with personal income. Most people do not have several hundred thousand dollars just sitting in their bank accounts. This is what mortgages are for; a residential mortgage is a loan from a bank or other lender for someone to buy a house in exchange for monthly repayments with interest.
Buying a second home provides a dream getaway location for many families, particularly locations on the coast or in the mountains away from the routine of daily life. However, new buyers need to understand how real estate financing rules work to get approved for a second home mortgage. And tax ramifications occur as well.
A mortgage assumption is a real estate transaction that takes place between a current homeowner with a mortgage and a buyer who is interested in the seller's property. During the transaction, the buyer attempts to take over the seller's mortgage.
A loan that uses personal property, such as a house, as collateral is known as a mortgage. Buyers turn to lenders to secure money for a home, and they will find the mortgage deed an important part of the loan process.
Sometimes events occur in the lives of borrowers, and they find that they are unable to make mortgage payments, at least for a while. The borrower knows that they will be able to pay the mortgage again in the future, but cannot make current payments for a certain period of time. The lender knows that it will be costly to deal with a defaulted loan and that they may make more profit by allowing the borrower to continue maintaining the loan. As a result, a mortgage forbearance is created.
First-time home buyers or current homeowners with a good credit rating usually have the ability to utilize multiple mortgage loans. These loans can be considered primary, secondary, and so on. Generally, the primary loan is used to finance the purchase of the home and any secondary loans can be used to make home improvements or pay off other debts. When dealing with multiple loans, it may be necessary to subordinate one of the mortgage loans.
Purchasing real estate can be a complicated process if you are misinformed. Understanding important terms and definitions can help to ease the stress of the closing process. Easements are the rights a third party has to a portion of someone’s property.
The Federal Housing Administration (FHA) has a program for home buyers offering low down payments and easier qualifying criteria for mortgages. For this backing, the FHA charges borrowers mortgage insurance premiums.
A prime mortgage is a high-quality mortgage that meets the standards of Fannie Mae and Freddie Mac. Borrowers with good credit histories and a monthly income three to four times greater than their anticipated housing expenses will generally qualify for a prime mortage. Prime mortgages may be purchased or securitized in the secondary mortgage market. Problems arise when borrowers take on other debts and obligations, lose their jobs, or when prime mortgages are bundled with subprime or other lower quality financial products, putting holders of such products at risk during periods of financial instability.
Mortgages can be used for many purposes beyond buying houses, including investment and large projects when contractors need substantial funds. Sometimes it is better for a developer or a wealthy individual to take out mortgages on multiple pieces of property to raise money. In this case, many lenders allow borrowers to use a blanket mortgage instead of more common loans.
Many people opt to use a mortgage loan to finance the purchase of a home. Mortgages are available with different terms and conditions to choose from. A closed mortgage offers lower interest rates, but not the option of early repayment.
Mortgage securitization plays a large role in the U.S. mortgage market. Mortgage securitization results in mortgage backed securities, which allow banks to sell their loans quickly while allowing investors to invest in the mortgage market. Investors should understand the source of any mortgage backed securities they might own, and homeowners should know where their mortgage payments go.
Mortgage derivatives are a special kind of derivative whose underlying asset is mortgage-backed securities or pools of mortgage income. Mortgage-backed securities were historically created with a number of underlying assumptions based on historical data and mathematical models. The creators assumed that historical default rates would remain within a given range and that housing prices would continue to rise. The performance of mortgage derivatives was tied to that of mortgage-backed securities or mortgage payments themselves.
When you take out a residential home loan, or mortgage, the contract can be full of terms that are similar and unfamiliar. Dwelling is one such term. According to Webster's Dictionary, dwelling is a word from the 14th century that refers "a shelter in which people live." The word can mean a little more in legal contracts.
Simply stated, a leasehold mortgage is a mortgage that is taken out on leased property. The mortgage takes second place to the owner of the property. The lien on the property is said to be in subordinate position to the owner's interest. It is common for larger financial institutions, such as insurance companies and larger banks, to hold a mortgage on leasehold estate properties, since leasehold mortgages are usually large and represent a higher classification of risk. Many commercial properties are built on leased land, and the owner is said to hold title in leasehold estate.
When you buy a home, there are many forms that you must review, sign and keep for your records. These forms cover everything from the details about the property you are purchasing to local city, county and state ordinances that apply to the real estate transaction. One of the most important documents is the mortgage note.
A mortgage recast is a recalculation of the loan balance in the midst of an active mortgage amortization (repayment) schedule. The recalculation uses the current balance, current interest rate and program, and remaining years left on the loan. This transaction could increase or decrease the monthly payments, depending on the details of the loan being recast.
Most people have to take out a mortgage to pay for their home. The mortgages are for a large amount of money so even a small difference in the interest rate can save you a significant amount of money over the life of the loan. Some lenders offer you the option to pay extra costs, called points, at the start of the mortgage in exchange for having a lower rate over the life of the loan.
A portable mortgage has been an option for those who are buying a home but plan to relocate in the near future. This may be good for those who travel with work, are in the military or are just planning a move. They have enabled homeowners to build equity without having to go through the hassle of applying for a new mortgage when it comes time to move.
Understanding the definition and underwriting guidelines of an owner-occupied mortgage is essential for a smooth loan transaction. Whether purchasing or refinancing a home mortgage, the characteristics of an owner-occupied mortgage and property vary from "second home" or "investor" types. Prospective borrowers should know and follow the rules to avoid raising underwriting red flags or, worse, being declined for a mortgage.
S.A.F.E. Mortgage Act, which is known as the S.A.F.E. Act, stands for the Secure and Fair Enforcement for Mortgage Licensing Act, which was signed into law in July, 2008 as part of the Housing and Economic Recovery Act (HERA). HERA is designed to help communities across America recover from the housing market downturn that started in 2007. The S.A.F.E. Mortgage Act is one of the key components of HERA.
Real estate listings will sometimes contain the following type of fine print: buyer must be approved by the seller's or agent's lender. At first, this might sound fair enough. The seller and the real estate agent are doing what they can to ensure that the loan, and therefore the sale of the home, will not fall through. In fact, this statement is considered mortgage steering and is both unethical and unlawful, according to consumer rights laws. Potential home buyers should be familiar with mortgage steering and its consequences before they begin the process of looking for a home.
"Mortgage redlining" occurs when a lender refuses to issue home loans to people in a certain geographic area, or when the loans it will make in those areas are significantly more expensive because of higher interest rates or large fees.
APR is an abbreviation for annual percentage rate. In the context of a mortgage, the APR refers to how much the loan will cost the borrower on an annualized basis. The APR, along with other information, is useful for home buyers or homeowners who want to compare the costs of different loan offers from different lenders.
It is easier to understand what a non-traditional mortgage is by first learning what is considered traditional. In a traditional mortgage, the buyer makes a down payment of 20 percent of the purchase price or more, and the bank lends the remainder at a fixed rate of interest. Terms of 15 years and 30 years at fixed rates are the most common. Other types of mortgages do exist, but because they don't conform to the long-accepted standard, they are "non-traditional."
An assignment of mortgage is a transfer of mortgage from one mortgagee to another. A written document serves as proof of the transfer.
Mortgage indemnity policies are common when people are purchasing homes. They are designed to help the lender in case of a property buyer's inability to pay mortgage payments.
A mortgage is a type of loan that uses the value of a home or piece of property as a guarantee for repayment of the amount of money borrowed. Some borrowers choose to refinance their mortgage at some point during the life of the loan.
While a chattel mortgage may sound like a term used for mortgaging a house, it is car financing available in Australia. It is a source of financing for the purchase of a vehicle when a car buyer does not have enough or doesn't want to buy the car with cash in a lump sum.
The wrap-around mortgage is a financing technique in which the payment of the existing mortgage is continued (by the seller) and the buyer pays a new, higher-interest mortgage, which is larger than the existing mortgage. The seller accepts a promissory note from the seller. The buyer does not get ownership, and the seller remains on the original mortgage and title. If the new buyer defaults, the seller reclaims the property. The new mortgage is junior to the pre-existing mortgage.
A mortgage document serves a number of purposes in the legal system. To be valid, a mortgage must be completed with the appropriate signatures. Mortgages can be relied upon to make sure a debtor makes his payments.
A home buyer is said to be in arrears when he or she has missed a series of mortgage payments. That is usually caused by unforeseen financial difficulties or poor financial management. When buyers are in arrears, lenders have the right to take legal action.
Mortgage insurance (MI) protects mortgage lenders when mortgage loans go into default. If a mortgage loan is foreclosed, the lender files a claim for its losses and is reimbursed by the MI company. MI is required for mortgage loan amounts exceeding 80 percent of a home's appraised value, and borrowers are required to pay for it.
Collateral mortgages are used to give consumers the ability to finance real estate and own homes. Collateral mortgages can vary in type, but generally, they define a loan that uses a piece of real estate to secure the loan.
Once you purchase a home, there will be several factors that determine the amount of equity you have. There are certain things you can do to increase your equity. Different factors can sometimes affect the amount of equity in your home. You may not be able to control every single factor.
Mortgage escrow accounts are a type of savings accounts set up by lenders. In cases where a lender's collateral is lost, escrow accounts help ensure the lender does not lose out on his investment. Collateral is the building or property being bought or sold. Disasters like fires, earthquakes and foreclosures due to unpaid taxes are ways that lenders can lose collateral.
There are many factors to consider before entering into a mortgage agreement. Because a mortgage is legally binding, it is important to deal with real estate agents, mortgage brokers and lenders with whom you trust. Here are some of the more common terms and their definitions.
Fannie Mae, the government housing guarantor, defines mortgage fraud as "deliberate deception for unlawful or unfair gain." This mortgage fraud definition applies to both borrowers and lenders. To be considered mortgage fraud, a lender's or borrower's practices include the following characteristics.
