Posts Tagged ‘Amortization’

BD Nationwide Mortgage Introduces a Second Mortgage and Home Equity Loan Compatible with the Controversial “Pick a Payment Loan” Featuring a Negative Amortization Option

Posted in Second Mortgage on 06/08/2011 12:45 am by admin

BD Nationwide Mortgage Introduces a Second Mortgage and Home Equity Loan Compatible with the Controversial “Pick a Payment Loan” Featuring a Negative Amortization Option











Encinitas, CA (PRWEB) September 24, 2006

BD Nationwide Mortgage introduces a break-through second mortgage loan that is compatible with payment option first mortgages featuring options for fixed rate, interest only, and the controversial negative amortization. BD Nationwide is excited to release the “Neg-Am Compatible Second Mortgage Loan.” This unique home equity loan product allows homeowners to qualify for a cash-out second mortgage while keeping their existing payment option loan. This revolutionary equity loan can be subordinated to 100% combined loan to value behind a negative amortization existing first mortgage. This new home equity feature opens the doors for many homeowners who have found it very difficult to get a second mortgage or home equity loan behind any mortgage that has a negative amortization.

Payment option loans have been controversial in the mortgage industry because they are attached to volatile indexes in which the interest rates can adjust rapidly and the borrowers can find their mortgage payment increasing 100% to 200%. Mortgage product analyzers point out that default ratios may increase significantly with these risky loans that allow borrowers to choose their payment each month. Most traditional home equity lenders are weary of offering second mortgages behind this type of loan, because with negative amortization, the interest is deferred and added to the balance of the consumers principal balance at the end of the year. This concerns most mortgage lenders and banks because these consumers have rising mortgage balances rather than the decreasing mortgage balances that traditional principal and interest home mortgages have.

Unfortunately there are too many loan officers that are not properly placing the payment options loans with the right borrowers. Too often the option ARM is offered to borrowers who are trying to increase their home purchase power because initially these loans offer interest rates as low as 1.25 percent and the borrower qualify for a home that would normally be out of their price range. Unfortunately we find that these same homeowners do not have a plan for paying their mortgage when the rate adjusts back to a fully indexed payment. BD Nationwide Mortgage found that borrowers were rarely informed when they financed their home about the potential difficulties for qualifying for a second mortgage behind a negative amortization1st mortgage.

According to IHE executive, Sandy Sarconi, “Adding a home equity loan to a negative amortized 1st mortgages increases the risk factor and most lenders will not allow subordinate financing with payment option mortgages.” BD Nationwide Mortgage is one of the few lending brokers to offer second mortgages behind neg-am loans and payment option 1st mortgages. Even if a borrower is deferring the interest on their first mortgage now, BD Nationwide can help you find a great second mortgage. The mortgage broker offers 2nd mortgages for people with good and bad credit scores ranging from 500-800. BD Nationwide also provides prime rate home equity loans, as well as non-prime second mortgages for people with past late payments, collections or bankruptcies.

Brendon Daly, a Mortgage Consultant at BD Nationwide, said, “This second mortgage enables my clients to get additional cash out of their home without refinancing their current mortgage.” According to Daly, “The payment option loans were designed for the self-employed borrower with cash flow obstacles as well as savvy investors who are freeing up funds to buy more properties.” Daly continued, “These types of borrowers are more likely to use their home equity and take out a second mortgage to raise cash. Being able to offer this 2nd mortgage product to my borrowers may create new opportunities because their are less lending restrictions.”

BD Nationwide Mortgage suggests going online and getting additional advice from experienced mortgage brokers. Start with reading the relevant loan articles. The company also recommends to research loan program parameters and credit qualifications for sub-prime credit second mortgages. Consumers searching for current interest rates, should visit: Home Equity Loan Rates.

About BD Nationwide Mortgage Company

BD Nationwide Mortgage is a second mortgage broker from Southern California who specializes in home equity loans and debt consolidation. They offer cutting edge loan products for refinance, second mortgages, home credit lines, and jumbo purchase loans. The company continues to promote second mortgage loans with more options for people with all ranges of credit. Always striving to offer “out of the box” loans, BD Nationwide Mortgage is determined to help expand home financing solutions so more Americans can maximize the financial rewards of being a homeowner.

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A Home Equity Line Of Credit May Be Just What You Need

Posted in Non Fiction on 03/23/2010 09:27 am by admin
Joseph Kenny asked:


When you are looking for the cash you need to fix up your home, a home equity line of credit (HELOC) may be just the thing for you. This would be especially true if you have a project in mind but are not sure what it may cost. A HELOC could be just the solution you are looking for – because it offers you cash with different options than a traditional mortgage. Here are some of the benefits.

A home equity line of credit is to be considered as a second mortgage. After you fill out the paperwork, and the lender looks over your credit report and your ability to repay the loan, you will be given a credit limit. This means that an account is set up for you, and you will be given access to it either with a credit card or with checks. This way, you can draw out the money as you need it, and only as much as you need.

A home equity line of credit is usually based on a 25 or 30-year time frame. There is a draw period and a payment period. The draw period could be up to 11 years, and the rest of the time period is used for repayment.

You only pay interest on the amount that you draw out. This is an excellent way to save some money, because you still have access to more if you do need it. During the draw period, you will be paying interest – adjustable rate, on the amount of money you have taken out. The interest rate does not amortize the loan in any way – since you are only paying interest.

At the end of the draw period, however, the amortization period starts. Your payments will be calculated on how much you have withdrawn and your payments will be determined at that time. These payments will fully amortize the loan within the time remaining – most of the time. Some lenders do not calculate the payments to fully amortize the loan. Obviously, you will need to watch for this before you sign the agreement.

Home equity lines of credit can come with a number of repayment options. These range from balloon payments at the end of the draw period, to simply monthly payments for the rest of the term. Other options that may be included is the possibility of renewability. Some lenders give this option for those who want an ongoing line of credit.

Before you sign up for a home equity line of credit, though, be sure to compare a number of quotes first. A home equity line of credit may have monthly fees, annual fees, and more, so be sure you know about them all first. By comparing several plans, you can find the one that will be the least expensive, have the lowest rate of interest, and will be the best for you.



MELVIN
 

Home Equity Loan – Understanding the Basics of Home Equity Mortgage

Posted in Loans on 06/01/2009 11:06 am by admin
Julian Lim asked:


  

A home equity loan or home equity mortgage is an effective second mortgage on your home, taken out after you have developed some equity in your home. For example, if you purchase a home for $200,000 and you have paid $40,000 over the years against the loan principal and the market value for the home is now $250,000, you now have equity in the home of $90,000.  Theoretically, you could apply for a $90,000 loan against the equity, but in practice, most lenders prefer to keep the loan at 80% loan to value or, in this case $187,500.  In this example, a loan for $27,500 could be approved.

 

Definitions

 

Some of the definitions that you will need to be familiar with include equity, mortgage, interest rate, loan fees, loan type, principal and amortization.  If you don’t understand the meaning of these words and others insist on an explanation from the loan broker or lender.  You can also do the research yourself so that you are certain you understand the difference between an ARM and a fixed rate loan and why you should choose one or the other, depending upon your circumstances. There are some very good primer level books and classes on almost any subject you can name out on the internet including that of a home equity loan.

 

Terms

 

In the case of a home equity mortgage, the word ‘terms’ can mean ‘words’ or it can mean the length of time before the loan is paid off.  A loan against the equity of your home often will have a longer term than a personal loan.  You may see terms of 15 years, 20 years, even 30 or 40 year terms on the loan.  Of course, the longer the term, the more money in interest you will be charged and the larger the percentage of funds you pay are for the privilege of using the money rather than for the money itself.

 

Rates

 

The home equity loan rates are also called interest rate or interest. Interest rates are usually structured in one of two ways, although there are other types of loans as well.  The fixed rate loans set an interest rate up front and it remains in effect throughout the term of the loan.  The adjustable rate mortgage loan has an interest rate that will vary according to a predetermined index or formula.  For example the rate may be two point above prime rate, adjustable not more than twice every two years.  These requirements will vary depending upon the economy of the time.

 

Advantages and Disadvantages

 

A home equity loan or home equity mortgage has the advantage of being a lump sum of money that you can use in any way you see fit–presumably legal.  It has the disadvantage of increasing your debt loan and increasing the cost of money sometimes significantly. For example taking out was is actually a second mortgage on your home may raise your debt to value level to the point where private mortgage insurance is mandated by many lenders.  This can add thousands of dollars to the repayment amount over the years.

 



GIOVANNI
 

Home Equity Loan – Understanding the Basics of Home Equity Mortgage

Posted in Internet on 05/14/2009 02:17 pm by admin
Julian Lim asked:


A discussion of the nature, benefits and operational methods of a home equity loan in simple, easy to understand language is helpful in deciding whether or not such a home equity mortgage should be acquired.

A home equity loan or home equity mortgage is an effective second mortgage on your home, taken out after you have developed some equity in your home. For example, if you purchase a home for $200,000 and you have paid $40,000 over the years against the loan principal and the market value for the home is now $250,000, you now have equity in the home of $90,000. Theoretically, you could apply for a $90,000 loan against the equity, but in practice, most lenders prefer to keep the loan at 80% loan to value or, in this case $187,500. In this example, a loan for $27,500 could be approved.

Definitions

Some of the definitions that you will need to be familiar with include equity, mortgage, interest rate, loan fees, loan type, principal and amortization. If you don’t understand the meaning of these words and others insist on an explanation from the loan broker or lender. You can also do the research yourself so that you are certain you understand the difference between an ARM and a fixed rate loan and why you should choose one or the other, depending upon your circumstances. There are some very good primer level books and classes on almost any subject you can name out on the internet including that of a home equity loan.

Terms

In the case of a home equity mortgage, the word ‘terms’ can mean ‘words’ or it can mean the length of time before the loan is paid off. A loan against the equity of your home often will have a longer term than a personal loan. You may see terms of 15 years, 20 years, even 30 or 40 year terms on the loan. Of course, the longer the term, the more money in interest you will be charged and the larger the percentage of funds you pay are for the privilege of using the money rather than for the money itself.

Rates

The home equity loan rates are also called interest rate or interest. Interest rates are usually structured in one of two ways, although there are other types of loans as well. The fixed rate loans set an interest rate up front and it remains in effect throughout the term of the loan. The adjustable rate mortgage loan has an interest rate that will vary according to a predetermined index or formula. For example the rate may be two point above prime rate, adjustable not more than twice every two years. These requirements will vary depending upon the economy of the time.

Advantages and Disadvantages

A home equity loan or home equity mortgage has the advantage of being a lump sum of money that you can use in any way you see fit–presumably legal. It has the disadvantage of increasing your debt loan and increasing the cost of money sometimes significantly. For example taking out was is actually a second mortgage on your home may raise your debt to value level to the point where private mortgage insurance is mandated by many lenders. This can add thousands of dollars to the repayment amount over the years.



QUINCY