Reverse Mortgage Program

Reverse Mortgage program as the name suggests is a convenient program, where people who are sixty years and above, can mortgage their existing property to get a tax free monthly amount from the bank. The name reverse suggests that after mortgaging the property, bank pays the mortgagee monthly cash payments, which is the other way about in a normal mortgage. The reverse mortgage program is based on the statutory laws related to the particular region and the bank policies. 

Reverse Mortgage program is usually opted for by senior citizens, as it gives them more benefits and a flexible payback options. The amount on a reverse mortgaged property is based on the age of the person who has mortgaged his property, the current value and other basic criteria to qualify for the loan.

Besides an individual home, condominiums, or houses in a township are eligible for reverse mortgage. The proceeds from a reverse mortgage are not taxable and can be used by for any purpose. For example, the borrower can use the money for paying medical bills, for renovating the current property and paying the insurance policy.

Reverse Mortgage Program does attract a service fee, charged on the volume of amount received. The senior citizen, who has mortgaged his property, can continue to enjoy all benefits by the government like medical aid. One of the major benefits of the reverse mortgage program is that you do not have to pay back the loan amount. But if you opt to pay back the borrowed amount, you can do so by either selling the house or refinancing the existing loan.

Reverse Mortgage Pros and Cons

Reverse Mortgage pros and cons explains both the advantages as well as disadvantages of the reverse mortgage program. It is in your interest to study in detail all aspects of mortgage, before going in for one. Considering the positive factors, if you have pledged your property, you continue to remain the title owner.

The mortgaged property can be used by you in any manner and you can also carry out any alterations. You will enjoy a fixed monthly income from the bank on the property pledged. You need not pay any taxes to the government on the income received.

Reverse Mortgage Pros and Cons weigh equally for the property pledged. Considering the cons of reverse mortgage, they are quite expensive as they attract a service fee by the bank. The interest accrued rise on a continuous basis and borrower may have to pay higher interest rates in the long run.

Thus the title owner of the mortgaged property is also required to pay mortgage insurance premium, property taxes, maintenance tames and insurance bills of the existing property. If the home owner opts to take the mortgage amount in bulk and if he exhausts the entire amount on sundry expenses, then he is in a bad financial condition. He may not be able to pay back the borrowed amount with accrued interests. The rising cost of living may make it impossible to meet the expenses with monthly payment received from the bank.

Reverse Mortgage Pros and Cons are thus to be studied in detail and carefully analyzed by all home owners, before pledging their house with a bank.

Reverse Mortgage Refinance

Reverse Mortgage Refinance is opted for by house owners who would like to refinance their property to a different bank, when the property value increases two fold and the interest rate goes down. The person takes a new mortgage loan to pay the existing loan in order to gain by way of higher loan amount at lower interest rates. Many banks are willing to refinance borrowers, considering their age and value of the property.

Reverse Mortgage Refinance helps the elderly to make some quick money, when the Interest rate on the loan amount is going down.

A person should go in for a refinance only if:

• He gets a higher value for his property, under prevailing market conditions.
• The interest rates on the loan amount have come down.
• He would get more monthly payments from the bank.
• His age is always on the upper limit.

Reverse Mortgage Refinance will not yield a good return, if the value of the property has not increased. Opting for refinance under these circumstances will not see any significant increase in the loan amount paid by the bank. So it is very important for an elderly person to consult a good banker on the pros and cons of refinancing an existing mortgaged loan.

People go in for refinance to meet ad hoc expenses or pay for a huge insurance. The banks do charge a hefty fee on refinancing and seniors must take the help of an experienced financial advisor to gain more insight in to such matters. Refinancing should be considered based on the age of the person who mortgages the property.

List of Mortgage Companies You Can Count On

A quality list of mortgage companies include all those companies that deal with mortgage business and have complete expertise in this particular industry. Mortgage companies have a mortgage broker or a mortgage agent who act as a mediator between the companies and individuals.

About Mortgage Lenders

All banks and financial institutions deal with mortgages, which is a lucrative option for making profits. Many mortgage companies have sprouted all over the United States, Australia, UK, and Canada and in all the developed countries. These Mortgage companies are governed by strict state banking laws. These laws vary with each country depending on the local jurisdiction.

The number of mortgage companies is huge, as the market for mortgage is picking up momentum with each passing day. New companies are added to the existing list and you can find every company with a credible client list performing well. People in the current scenario, are increasingly turning to mortgage companies, banks and other financial institutions, before buying a home or a commercial property. Some mortgage companies do charge a high processing fee for the service rendered. The interest rates on the loan vary from one company to another.

Having a good list of top mortgage companies helps us know the credentials of all the mortgage companies operating in the industry. Home mortgage attracts nominal interest rates and varies from one company to another. Brokers are best mediators, when it comes to home mortgages. They have wide contacts with banks, finance institutions and private money lenders and can get you the best possible deal.

The list of best mortgage companies include reputed banks like Bank of America, Citicorp, Federal banks and many others who offer expert service to customers. Some reputed banks and finance companies have their own mortgage agents, who deal with clients on behalf of the banks. They can be trusted for their service as they have a vast clientele from all over the world. The companies do provide all possible options before going for a mortgage loan. The borrower should study the various interest rates applicable in the market and choose a fixed or floating rate according to the company’s advice.

Finding a list of mortgage companies that have the best rates and services based on the customer rating is essential. It is up to you to go through all laws related to mortgage, best mortgage deal, best interest rates and so on. This will prevent you from getting entrapped with an inexperienced and incompetent company. Mortgage companies do have their own attorneys to deal with all legal issues ensuing from the mortgaged property.

Forbes List of America’s Top Mortgage Companies Include: Citigroup, Bank of America, Wells Fargo, Wachovia, BB&T, Golden West Financial, Marshall and Ilsley, M&T, AmSouth Bancorp, Popular, Synovus Financial, Zions Bancorp, Compass Bancshares and Commerce Bancorp.

What is Mortgage Loan

A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which securesmortgagemortgage loan. the loan. However, the word alone, in everyday usage, is most often used to mean

A home buyer or builder can obtain financing (a loan) either to purchase or secure against the property from a financial institution, such as a bank, either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably.

Mortgage loan types

There are many types of mortgages used worldwide, but several factors broadly define the characteristics of the mortgage. All of these may be subject to local regulation and legal requirements.

• Interest: interest may be fixed for the life of the loan or variable, and change at certain pre-defined periods; the interest rate can also, of course, be higher or lower.
• Term: mortgage loans generally have a maximum term, that is, the number of years after which an amortizing loan will be repaid. Some mortgage loans may have no amortization, or require full repayment of any remaining balance at a certain date, or even negative amortization.
• Payment amount and frequency: the amount paid per period and the frequency of payments; in some cases, the amount paid per period may change or the borrower may have the option to increase or decrease the amount paid.
• Prepayment: some types of mortgages may limit or restrict prepayment of all or a portion of the loan, or require payment of a penalty to the lender for prepayment.

The two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable-rate mortgage (ARM) (also known as a floating rate or variable rate mortgage). In many countries (such as the United States), floating rate mortgages are the norm and will simply be referred to as mortgages. Combinations of fixed and floating rate are also common, whereby a mortgage loan will have a fixed rate for some period, and vary after the end of that period.

• In a fixed rate mortgage, the interest rate, and hence periodic payment, remains fixed for the life (or term) of the loan. Therefore the payment is fixed, although ancillary costs (such as property taxes and insurance) can and do change. For a fixed rate mortgage, payments for principal and interest should not change over the life of the loan,
• In an adjustable rate mortgage, the interest rate is generally fixed for a period of time, after which it will periodically (for example, annually or monthly) adjust up or down to some market index. Adjustable rates transfer part of the interest rate risk from the lender to the borrower, and thus are widely used where fixed rate funding is difficult to obtain or prohibitively expensive. Since the risk is transferred to the borrower, the initial interest rate may be from 0.5% to 2% lower than the average 30-year fixed rate; the size of the price differential will be related to debt market conditions, including the yield curve.

The charge to the borrower depends upon the credit risk in addition to the interest rate risk. The mortgage origination and underwriting process involves checking credit scores, debt-to-income, downpayments, and assets. Jumbo mortgagessubprime lending are not supported by government guarantees and face higher interest rates. Other innovations described below can affect the rates as well.

Mortgage underwriting

Loan to value and downpayments

Upon making a mortgage loan for the purchase of a property, lenders usually require that the borrower make a downpayment; that is, contribute a portion of the cost of the property. This downpayment may be expressed as a portion of the value of the property 

The loan to value ratio is considered an important indicator of the riskiness of a mortgage loan: the higher the LTV, the higher the risk that the value of the property (in case of foreclosure) will be insufficient to cover the remaining principal of the loan.

Capital and interest

The most common way to repay a loan is to make regular payments of the capital (also called the principal) and interest over a set term. This is commonly referred to as (self) amortization in the U.S. and as a repayment mortgage in the UK.

Interest only

The main alternative to a capital and interest mortgage is an interest-only mortgage, where the capital is not repaid throughout the term. This type of mortgage is common in the UK, especially when associated with a regular investment plan. With this arrangement regular contributions are made to a separate investment plan designed to build up a lump sum to repay the mortgage at maturity.

No capital or interest

For older borrowers (typically in retirement), it may be possible to arrange a mortgage where neither the capital nor interest is repaid. The interest is rolled up with the capital, increasing the debt each year.
These arrangements are variously called reverse mortgages, lifetime mortgages or equity release mortgages (referring to home equity), depending on the country. The loans are typically not repaid until the borrowers die, hence the age restriction.

Top 10 mortgage companies for bad credit

Mortgage companies for bad credit that are leading the line provide the best customer service, a large network of support and maintain the reputation throughout. The top ten mortgage companies for bad credit according to the Forbes list are all corporate giants, serving people and organizations throughout the globe. Looking at the best mortgage companies, we have Citigroup shining out the Forbes list. 

Citigroup, established in America, outshines most of the mortgage companies, spreading its roots throughout the world. This mortgage company is now operating in 54 countries outside the US, having current assets of about $1.3 trillion and $108 billion in revenues in year 2006. Citigroup is widely known for providing excellent bad credit mortgage loans.

The next in line is The Bank of America, the third largest bank in the US. This leading bank offers mortgage services and small loans, and has now become a leader in credit card dealing. The Bank of America has been ranked at the second place in the Forbes list of the best mortgage companies.

Wells Fargo is another important American mortgage company, with 1000 branches across the US and all around the world. It has been rated third in the Forbes list of the best mortgage companies. The estimated revenue of the company was $33 million, and this huge amount of revenue was generated from mortgage lending.

Wachovia, lands at the forth place in the Forbes list of the best mortgage companies, whereas BB&T, Golden West Financial, Marshall and Ilsley, M&T, AmSouth Bancorp, Popular, Synovus Financial, Zions Bancorp, Compass Bancshares and Commerce Bancorp follow the list down the line of the best mortgage companies. These are the best mortgage companies providing mortgage assistance for bad credit to their clients, helping them out with their problems.