Interest rates are on the rise and show no signs of slowing down. Most housing markets are finally starting to peak and come down a little, but potential home owners are worried about what rate they can get a with a home loan.
Potential mortgage customers are also concerned about different loan types. They’ve been hearing about the recent foreclosure rates and are worried about being trapped in a loan that they won’t be able to afford in a few years due to adjustable interest rates.
With all this concern, a consumer must know there are options to find and apply for low rate mortgages. Some mortgage sites allow a consumer to fill out a brief form that will be submitted to several lenders. The lenders then review these forms and make offers to the consumers. The consumer wins because the banks and lenders are competing for their business. The competive nature of the site allows the mortgage consumer to choose which lender and which terms work best for them.
These sites also allow the consumer to learn more about the different types of mortgages. There are also areas about debt consolidation and equity loans, where consumers can apply for those type of loans as well.
The amount of people applying for mortgage loans fell slightly over the latest week. The Mortgage Bankers Association has notified news services that the index of mortgage activity has dropped 5.5 points to an index of 641.1 over the past week. This is most likely due to a decrease in home purchase activity, and possibly that an influx of new applications experienced in early August has peaked.
The Washington Post reports:
Applications, however, may have climbed earlier in August as a major lender hurt by turmoil in mortgage bond and other financial markets closed its doors, forcing borrowers to reapply elsewhere, said Jay Brinkmann, a vice president of research at the MBA.
“The drop in applications we see here may be an indication that those borrowers have now been taken care of,” he said.
The slight drop isn’t indicative if whether or not lenders will be willing to accept riskier loans due to a decrease in demand. This will most likely be a momentary deflux.
Interest rates, however, continue to rise according to the Post:
Fixed 30-year mortgage rates averaged 6.49 percent last week, excluding fees, up from 6.45 percent the prior week.
Source: The Washington Post
Mortgage Insurance
Mortgage Insurance is insurance for the lender and is sometimes required by lenders on lower down payment loans. It’s insurance that protects the lender in case you’re unable to pay. Borrowers are able to purchase homes that they wouldn’t otherwise be able to afford, due to high 20 percent down payment requirements.
Private Mortgage Insurance–PMI–is insurance on your mortgage designed to assure your mortgage company against non-payment should you not make your loan payments. Keep in mind that this insurance protects the lender, not necessarily you. Private mortgage insurance is frequently called for by mortgage companies because of the larger number of defaults that come with minimal down payment mortgages. The good thing about PMI is that it allows borrowers to get into properties that they might not otherwise be able to purchase because of large down payment requirements.
ROP Term Life Insurance
Would you like Term Life Insurance that refunds your money if you don’t die? Well now you can–it’s called Return of Premium Life Insurance. One of the biggest objections to buying term life insurance is that people see themselves outliving the specified term and often think of the premiums as wasted money. The insurance industry has answered that objection with the recent introduction of Return of Premium term life insurance.
Return of Premium or ROP combines the benefits of traditional term life insurance with a return of premium feature. Simply put your family receives a lump sum death benefit if you die, otherwise if you win your bet with the insurance company and you live the insurer returns all your premiums. This money-back guarantee can be particularly comforting for those that believe death will not occur during the term of coverage.
Car Insurance
Will you get your cars actual value from your car insurance company? If you get in an accident and “total” your car, it’s your insurance company’s responsibility to provide you with an amount of money that would purchase an equivalent car. This doesn’t always happen, unfortunately. They have their own formulas and will often consider quotes from various dealers that aren’t always that attainable, and this isn’t always a good indication of your specific vehicle’s true worth. Every car is different, with things like condition, mileage, and repairs playing vital roles. If they choose to use one of these methods, you may want to present them with some local quotes of your own. It’s recommended that you keep a documented vehicle history as well, so you can present repair and maintenance receipts if there’s a dispute. Make sure the amount you and your insurer settle on includes sales tax for the purchase of your replacement automobile.
The Money Alert is a well-known financial site covering insurance matters. Their popular Renters Insurance articles have been published by several publications throughout the United States. Please visit The Money Alert dot com to learn about insurance topics.
While most of the mortgage industry faces tough times brought on by the housing bubble and the meltdown in the subprime market, one section of the industry is shining brightly: reverse mortgages. Reverse-Mortgage-Information.com reports that activity in home equity conversion mortgages, the most popular type of reverse mortgage, is up 49% in the first forur months of 2007 over the same period last year.
There’s just no escaping the fact that millions of babyboomers embarking on retirement are counting heavily on tapping the equity they’ve built up in their homes to help finance their retirements. Reverse mortgages are one of the most cost effective tools around that allow senior homeowners to do this.
With a reverse mortgage, the lender makes monthly payments to the homeowner which accumulate (with interest) until the homeowner no longer owns the home. At this point the reverse mortgage is repaid, usually from proceeds of the home sale.
Reverse mortgages are complex and need to be fully understood by the borrower. The best resource we’ve found to get up to speed is Reverse Mortgage Info, an independent website that provides self-assessment tools, information and tips for seniors considering a reverse mortgage. If you’re thinking about a reverse mortgage, or just want to learn more, be sure to check this site out.
by Joseph Kenny
Finding the best loan means that you will have to look and see which one best fits your particular situation. Since people have different ideas about buying a home, you will need to look around and find one based on your needs. Here are some different home loan types to help give you an idea of what is available. (more…)