Shoked Mohol asked:




For any inhabitant of Florida, there are a lot of practicalities to consider when buying an FL mortgage. It is probably a time of emotional turmoil for you as well, considering that buying a home is usually a sort of a landmark moment in most people’s lives, most of the time. This may be especially so when you are in the position of having to consider an FL mortgage to seal the deal in the first place. It is important for a Florida local to arrange your finances well at this point in your life, because when you take that mortgage on, this is what follows.

You are going to be paying interest rates on monthly or annual payments for a good number of years to come. Making sure your funds and documentation are all in order is the first step to making that application to a bank or any financial lending institution. This is because your application has to get accepted and approved by the bank. It is a process that can take anywhere from twelve to fifteen days. During this time, they go through the application form you have filled, the documentation you have provided and the funds at your disposal. What they also do is determine how creditworthy you are.

If you do not know what that means, there is a little something called a ‘credit score’ that is calculated on the basis of your credit history. That shall also be explained. It is basically how regular you are with your payments when you owe anyone or any organization credit. It also evaluates the funds at your immediate disposal and calculates the kinds of funds you will have over the next so many years and presents a figure of the installment amount for how many ever years. This credit score is looked at by many institutions, lenders, employers, potential employers, landlords, etc to evaluate basically, how good you are at paying your debts back and on time. In this case the lending institution you have approached to assist you buy your new home would gauge the same in terms of a loan or FL mortgage of any kind.

Post this stage, if your application is approved, the lending institution would inform you that the premises they are assisting you purchase would need to be evaluated for its value as a property, a piece of real estate. Understand that they now have a stake in this purchase. In case your payments fold at any time or you are inconsistent with too many installments to pay that FL mortgage off, they will seize the house and either retain it or put it up for sale with all your belongings in it at the time seizure being auctioned off for an additional profit.

Mortgages are a necessary evil unfortunately in today’s world and these times. Still it is best to take the plunge and take the step of someday owning your own home. Renting is more expensive in the long run. Certainly, if you are ever planning to start your own family or already have one, constantly moving through rentals would have a detrimental effect on the wholesome happiness of all involved. Every state and country has its own peculiarities of law and legalities, statutes and financial mores where loans and finances are concerned. Florida has its own as well. Its best to understand the ins and outs of the process at your local financial institution before you sign on for a mortgage.

Chad

Mark Greggs asked:




Planning for your retirement should start in your earlier years; however life unfortunately doesn’t always go to plan!

Here we discuss the merits of the niche interest only mortgage product; the Halifax Retirement Home Plan which is becoming an increasingly popular way of providing mortgages for pensioners.

Since writing my original article on the Halifax Equity Release plan, interest has certainly been escalating. The main reason being that people in retirement are unaware of their mortgage options once they finish work. But life must go on.

What is the history of the scheme?

Established in 1984, the Halifax Retirement Home Plan was initially available through the Halifax branch network and was developed to provide low cost mortgage finance for the retired & elderly.

However, under the Financial Services Authority review of the lifetime mortgage market in 2006, Halifax withdrew the branch license to offer lifetime mortgage advice.

Therefore, the responsibility for providing advice on the Halifax Retirement Home Plan was left completely with lifetime mortgage qualified advisers including independent specialists Equity Release Supermarket.

So what is the Halifax Retirement Home Plan?

In simple terms the scheme is an interest only mortgage for people who are retired & facilitates the release of equity tied up in the property. The release of funds can be for almost any purpose including:-

· debt consolidation including paying off credit cards/loans or mortgages
· holidays including cruises or just day trips
· replacement car or caravan
· home improvements
· gifts to the children providing a deposit for house purchase
· supporting your lifestyle through retirement.

Qualification for the Halifax equity release scheme is based on income. Halifax will only accept non-earned income & this must be in the form of: -

· Occupational pensions
· Private pensions such as personal pensions or retirement annuities
· State pensions
· State benefits including pension credits & disability benefits

The minimum age for the Halifax Retirement Home Plan is 65. However, as long as there is no earned income & justification for the size of the mortgage can be based solely on the above income, then ages lower than 65 can be achieved.

How much can be released?

The minimum release on the Halifax Retirement Home Plan is only £15,000. However, to establish the maximum release possible would require the use of an affordability calculator.

Halifax does not base the size of release on a multiple of income, but whether the interest only mortgage can be afforded through retirement.

The data Halifax requires for this calculation includes income, credit status, number of applicants & credit commitments outstanding after the new mortgage commences.

This procedure can be carried out by qualified advisers such as Equity Release Supermarket & is an accurate assessment of the potential borrowings on this scheme.

The overall maximum release available can never be more than 75% of the valuation of the property. Therefore, should the affordability calculator show a figure greater than this, it will still be capped at 75% of the property value.

Does Halifax require a repayment vehicle?

The answer to this is NO.

As the Halifax Retirement Home Plan is an interest only mortgage for pensioners, no form of repayment is required.

In contrast, the mainstream mortgage market is actually tightening its grip on new interest only mortgages, whereas the Halifax equity release scheme will still accept repayment by virtue of the eventual sale of the property. This would be on death of the surviving partner, moving into long term care or earlier property sale.

The term allocated to the Halifax home retirement plan is 40 years which should provide ample time for it to run for the rest of one’s life! This removes any concern about having to find the funds to pay off the Halifax scheme during your lifetime.

Most mortgage providers will only accept a mortgage term up to age 70-75 or in rare instances age 85. However, this only buys time as eventual repayment would be required. However, this scenario may still be suitable should one be downsizing at a predetermined date in the future.

The Halifax Retirement Home Plan therefore removes any element of capital repayment risk.

So what interest rates & products are available?

Dependent upon whether you are a new or existing Halifax customer will determine the interest rates & products applicable.

Currently, the better deals are offered to new customers as they have access to the whole mainstream Halifax product range. This is a great advantage, as there is full access to current low rate tracker & fixed rate products.

These include deals such as the current 2 year tracker rate at just 2.59%. Based on borrowing £50,000 this currently would only cost £107.92pm (3.6% APR).

Additionally, if remortgaging from another lender then there is the benefit of a free valuation & free standard legal fees, which reduces the set up costs significantly. I have experienced clients who have just £800 outstanding on a mortgage or even documents kept in deed store that qualified for this free remortgage package!

What if I already have a Halifax mortgage?

The good news is you can still apply for the Halifax Retirement Home Plan. However, the situation here requires completely different advice & procedure. Should you wish to merely transfer onto the Retirement Home Plan then you can port over your existing rate which can be good news if on a standard variable rate. However, if you wish for additional borrowing then the process becomes a little more complicated.

The product range for existing Halifax customers is rather sparse & with the best deals starting currently at 4.99% fixed, hence there is a distinct advantage for new customers.

Such applications will be paper based & therefore processed manually which involves more human input. Experience has shown this results in a different underwriting approach to the process undertaken on new applications.

Can I pay off the Halifax Retirement mortgage early?

The simple answer to this is YES.

Unlike equity release plans where penalties can potentially apply for the rest of your life, the Halifax interest only mortgage will only have early repayment charges for the initial product term. Therefore, should you have opted for the 2.59% 2 year tracker product discussed previously, the penalties would only apply for the first 2 years. After, this 2 year period the mortgage would then revert to the Halifax standard variable rate, currently 3.5%.

However, before the initial rate expires you will have the option to take out a new product from the Halifax mortgage range available at that time.

So what is the advantage of the Halifax Retirement Home Plan over an equity release scheme?

The obvious answer to this is the fact that the Halifax mortgage is interest only & therefore requires a monthly payment of interest. The balance will always remain the same throughout the term of the plan. E.g. borrowing £50,000 today, will result in £50,000 requiring repayment once the house is sold.

In contrast, equity release schemes do not require any monthly repayment & therefore the balance will increase over time. Roughly speaking the balance of equity release schemes will double every 11/12 years.

From a beneficiary’s point of view, the Halifax interest only mortgage will guarantee an inheritance, as the final balance of the mortgage will always be known. This would be favourable for people who want to ensure the children definitely receive an entitlement to their parent’s inheritance.

With all this information & options available it is more important than ever to receive specialist advice to obtain the best deal for your personal circumstances.

Evelyn

William Bud Gragg Jr asked:




Normally the kind of mortgage advice we give is for people who may need to get out of their mortgages. But what if you’re looking to dive into the housing market? What kind of mortgage advice do you need?

Well, it certainly is a buyer’s market out there with over a million foreclosed houses alone available for sale! If you’re moving to take a new job or just like the idea of owning the place where you live, this might seem like a great time to invest in a mortgage and in a roof over your head.

With that in mind, as Realtors we do have some solid mortgage advice for you.

First, don’t think of any house you buy as an investment. Yes, you may get lucky, and property values might rise enough for you to get some money out of the house after your mortgage is paid off, or even before. But if you look at your house as an investment bank that’s going to constantly pay off for you-well, those days are long gone.

It’s much more likely that the property you’re looking at will fall in value before it ever rises again.

The next thing you need to know about mortgages is that there is one kind of mortgage that you should never, ever get-even if you have to walk away from the sale. That mortgage is called an adjustable rate mortgage, or ARM.

With ARMs you get a nice, low monthly payment for the first 1-7 years, depending on the terms you get. After those 1-7 years, though, the mortgage resets to reflect inflation. And it keeps resetting every year after that. Sure, if inflation goes down, you’ll see a decrease in your mortgage payment. But don’t count on that happening!

When you’re applying for mortgages, the mortgage lenders are going to be looking at something called a loan to value (LTV) ratio. That’s the ratio of the amount of the mortgage to the actual value of the house. For example, if you take out a $130,000 loan on a $150,000 house, you’ll have an LTV of 87%-you’ll owe 87% of the house’s current value on your mortgage.

Mortgage lenders are only likely to write you a mortgage if your LTV is 80% or less-especially these days!

We know that there are some incredible-looking deals out there. Property values have dropped so low in some places that you might be able to buy at least a condo outright! But before you decide to make a mortgage commitment of any size, we want you to ask yourself these questions:

· How is this area economically? Is the economic base diverse enough that you aren’t going to be as likely to have to move and then be stuck in a mortgage you don’t want to pay anymore?

· Property values are likely to drop even more before things get better. And it’s unlikely we’ll ever see a real estate bubble like we did during the past decade and a half. In that case, would your money be best spent on a mortgage or on your financial future?

Finally, be sure to get someone beside a mortgage lender-or anyone else who has a stake in your financial decisions-to give you personalized mortgage advice based on your family’s specific situation. You’re going to want to learn as much as you can online, of course, but there’s no substitute for a qualified person who can tell you how the ins and outs of mortgages can affect you personally.

Jesse