Foreclosure & Debt Guide
Types of Mortgages: Pros and Cons of Each

In this article we are going to look at mortgage types to offer you some mortgage tips regarding your next mortgage. There are about five mortgage types we will be looking at in this article. With a list of pros and cons for mortgage tips hopefully you can find your next mortgage.

Fixed Rate Mortgage: A fixed rate mortgage is the most popular of the mortgage types available in the market, according to mortgage tips experts. This mortgage offers a constant interest rate during the life of the loan, even if you have the mortgage for thirty years. A fixed rate mortgage as one of the mortgage types normally has the lowest interest rate, best terms, and most affordable payments.

This is not always true, but it is a rare case that you will have a more expensive loan in the end with a fixed rate. A fixed rate loan requires a good to excellent credit history. First time home buyers have a lot of success in getting fixed rates according to the mortgage tips.

Adjustable Rate Mortgage: The second most popular mortgage types are the adjustable rate mortgage. In this mortgage you have an interest rate that will change with the economic changes. If the base rate increases your interest rate increases, according to mortgage tips. When the base rate decreases you could see a decrease or no change on the interest rate. It all depends on the loan terms that you have with the adjustable rate mortgage. Mortgage tips warn against adjustable rate mortgages unless you are using them for a specific reason. They can quickly become very expensive mortgage types.

Interest Only Mortgage: This is a type of the adjustable rate mortgage. It is the least popular of the mortgage types. It is an agreement to enter into only if you know you will be selling the home or paying the loan off in a short period of time. The interest only mortgage will only pay the interest on the loan and not the principle. As mortgage tips go you want this as an investment loan. If you are doing a fix and flip project in which you make a bit of an interest payment and then sell the home for a profit, you are doing great.

Balloon Payment Mortgages: A balloon payment mortgage can be any type of the three mortgages above. Mortgage types offer different reasons for having them. In this type of mortgage you can be looking for a cheap way to get a monthly payment, by offering a huge payment at the end of the mortgage. This is why it can be any of the three above. Mortgage tips offer this as a possible payment type on mortgages only if you will have the money saved at the end of the terms. Normally the terms are shorter, like 10 to 15 years. A commercial mortgage often has a balloon payment, which is another of the mortgage types. By following the mortgage tips you can gain a better mortgage in the end. The last of the mortgage types is the commercial mortgage or investment mortgage. This type of mortgage allows you to purchase a property for rent or a business in which you make the payments and gain income from the property. The terms on these loans will differ according to the mortgage tips.

Top 10 Things to Know About Reverse Mortgages

Reverse mortgages are just one type of mortgage you can have when you get older. There are ten things you should know about reverse mortgages before you apply for one. Mortgages are designed to help in any way they can, but sometimes things aren t as great as they seem. There are pros and cons to reverse mortgages that you should be aware of.

1. A reverse mortgage is different from other mortgages in that you are gaining equity from the home that you have built up over the years and there is no repayment until the borrower sells the home or dies.

2. In order to qualify for this type of mortgages you need to be 62 years or older.

3. You must also own the home outright in order to get any reverse mortgages on the home.

4. You can only have one mortgage on the home at one time for the reverse mortgage to work.

5. With reverse mortgages you can take all of the equity at once or take it out over a period of time. In other words this type of mortgage works as a pension plan as well. You can take the money as you need it; therefore there is less to pay back or you can take all the equity there is in the home.

6. The five mortgages points that we have mentioned above are all good reasons to have this type of home equity loan. There are some drawbacks to look at below regarding reverse mortgages.

7. Mortgages generally have a repayment status in which every month you pay the loan back. With reverse mortgages the loan is either paid back at your death or when you sell the home. This is a disadvantage because you are still going to have to repay the loan with interest. The longer you have the loan the more you have to pay back. 8. Reverse mortgages are generally paid back in the event of death or a sale. If you have taken all the equity out of the home, plus interest a sale may not cover what you own on the mortgage.

4. What is the purpose of negative mortgage amortization?
According to mortgage tips the purpose has been to reduce the mortgage during the month. In other words if you have an interest only loan you are paying off the interest, but not the balance. This mortgage tip of paying off the interest works only if you can t afford to make a larger payment or are using the loan for an investment. In an investment scenario you don t want to pay out more than you have to as you expect the buyer will pay the mortgage as well as offer a bit of additional income or profit off the sale. Only enter into this scenario, according to mortgage tips if you have no other alternative.

9. Your children may be responsible for paying the mortgage back. If you take out a reverse mortgage so the home goes to your children at your death you could be doing them a disservice with a reverse mortgage.

10. If you have a reverse mortgage and need to move into a nursing home for full time care, you have to pay the mortgage back before you move. In other words you will need to sell the house. It works out fine if you took just a bit of the equity within the mortgage, but not when you take all the equity out.


Mortgages like the reverse mortgage needs to be examined for all loop holes. There are definitely issues with a reverse mortgage option such as how the money will be paid back, the interest you accrue, and keeping the house in the family later on.

The Difference between Fixed Mortgages and Adjustable Mortgages

The two most common mortgages are the fixed mortgages and the adjustable mortgages. We will examine the similarities and differences with these two loans to help you understand which loan might be best for you.

Fixed mortgages are mortgages with a fixed interest rate. The fixed mortgages will have the same interest rate whether you hold the mortgage for two years or thirty years. Fixed mortgages tend to last for a longer duration because individuals recognize a great interest rate when they have it. They don t want to have to worry about their repayment. Fixed mortgages can be a little hard to obtain depending on your financial status. Typically fixed mortgages offer a better rate because you hold them longer, and to be awarded the mortgage you have a better credit history.

Adjustable mortgages are loans with a variable interest rate. This means the adjustable mortgages interest rate can increase or decrease according to the current market. If the market experiences trouble the interest rate on the adjustable mortgages tend to go up. Usually the only time an adjustable mortgage s rate will decrease is if the base rate decreases significantly. In other words if the Federal Reserve Bank does a three quarter percent reduction like they did early in 2008 then you might see your adjustable mortgages rate decrease. Adjustable mortgages tend to last for a shorter time period than the fixed mortgages. One reason for the shorter period is the rate. Since the rate can fluctuate and become too expensive during the repayment period a person will remortgage to fixed mortgages once their circumstances improve.

In other words when their credit history improves these individuals can get a better loan than the adjustable mortgages. Adjustable mortgages tend to be short term solutions with penalties and balloon payments at the end, which differs from the fixed mortgages. A fixed mortgage can be paid off at any time because the company assumes you will hold on to the great rate for a while. Adjustable mortgages have a prepayment penalty.

If you pay the mortgage off during the penalty period you have to pay an additional amount to the loan company. If you wait until after that period, which is usually two or three years, you don t have to concern yourself with the penalty. If the mortgage is adjustable then you might have to pay it off in 15 to 20 years or less. To get the payments lower the agreement may state that you pay 50,000 dollars as a balloon payment at the end. In other words, if the mortgage is 200,000 dollars for 15 years you are paying 150,000 dollars in the first 15 and the last payment must be 50,000 dollars. You can of course pay more during the month to lower the balloon payment or pay off the loan earlier.

It is up to what you can afford. As you can see there are some differences and similarities to the loan options you have. Make sure the mortgage you purchase is affordable to your situation.

How to Find Your Dream Home?

If you are trying to buy a home that fits the bill as your dream home there are many things to consider. You ll need to find home styles that meet your tastes, find home locations that fit your particular criteria and find home mortgages that you can afford. Each criterion and many more are important items on your checklist if a dream home is in your future.

Find home locations that work for you

When you start your search to buy a home begin with a few criteria that are musts. Don t however, limit yourself. If you are lucky enough, you may find home locations that are just right for you in your first region of choice, but looking at all locations to begin the search is a smart move. Buy a home that fits your initial criteria but be flexible enough to also consider schools, taxes and access to transportation routes.

A friendly place

When you buy a home you want the home to meet all your expectations. But you also need to find home locations that make you feel safe and wanted. There is little hope of finding your dream home if you are unhappy at the prospect of seeing unruly neighbors every day. Buy a home where the people seem nice and somewhat like you. Perhaps one of the better ideas in this regard is to find home associations to get a feel for the people. You might also try to find home design groups or organizations that find home locations that suit your needs.

A safe home

When you buy a home it needs to feel safe, otherwise it wouldn’t t be a dream home. Find home inspectors that can make sure your dream home doesn’t t fall down around you. Buy a home that seems to have been taken care of. If you buy a home that requires a lot of cash and repairs it would be difficult to call it a dream home. You may also want to consider trying to find home protection companies that can advise you about crime in the area. You most certainly wouldn’t t want to buy a home located in a high crime area. These companies can usually help.

Get some help

One of the first things you will want to do in your search for a dream home is to try and find home realtors that know the region or town you are considering. When you buy a home you may be going into the process blind. These people know how to buy a home in that particular region. Believe it or not, you will find home nuances quite different from region to region and town to town. If you choose to go it alone in your fist scouting mission to locate your dream home consider a quick visit to the police station of the town you are considering. They will know what is what when it comes to not only crime, but speeding, traffic, towns around yours and how the local kids behave.

How To Avoid Foreclosure

BRIEF OVERVIEW OF FORECLOSURE

Unfortunately, it has been way too easy for people to face foreclosure. In this day and age, with the housing market slumping and the economy floundering, too many people just cannot make ends meet. In order for them to keep their homes and avoid a quick sale, they really need to keep in contact with their creditors and make payments on time. In past decade or so, it has been too simple for people to get home loans. It has been a little alarming to find out that even people with suspect credit are easily approved. This is a very big reason why so many people face foreclosure and a quick sale of their home. Buyers begin to over extend themselves, and before they know it, they face foreclosure. They are usually facing some type of financial hardship before loosing their home. After taking your home, the bank will usually auction it off for a quick sale.

KEY POINTS TO KNOW ABOUT FORECLOSURE

That is why it is so crucial to take some steps in order to avoid foreclosure and a quick sale. First, you need to call your lender if you feel like you can t make your mortgage payments. They may be able to help you keep your property. Always remember that lenders want to find a way to keep you in your home, not turn it over in a quick sale. They would rather have you as a customer and not loose your business. And as far as not making payments for 2 or 3 months at time, don t do it. It is especially bad to not call them either. Maybe they won t feel quite so bad about taking your home away and offering it up for a quick sale. If you are on the verge of foreclosure, you really need to consult a lawyer. They can tell you how to legally protect your home from foreclosure.

ALWAYS KEEP IN TOUCH WITH LENDERS

You should make notes about your income and what you are paying out every month to help the lender if they call to talk about finances. Keeping in touch with your lender may have a very positive outcome. For example, talk with them before you miss a payment and they may offer you forbearance. This means they will take the payment you would have missed and put it at the back of your loan. And this will also help you because you won t take a hit to your credit for missing a payment. With so many people loosing their jobs these days, it is critical to let your lender know if you loose yours. They may allow you to skip a few months of payments until you get back on your feet. If you happen to have some equity built up in your home, lenders can allow you to restructure your loan to lower your payments.

When your loan payment is four months pat due, but no more than twelve, the FHA may be able to help you. The FHA Insurance Fund will provide you with a one-time payment to help you out.

THE FORECLOSURE PROCESS

Many people have problems that are so terrible, they can t help but face foreclosure. If this is happening, you need to sell your home in a quick sale. Then, pay off your past due debts. This will help you to avoid foreclosure. If you still are unable to sell your home, avoid a quick sale by signing it over to your mortgage provider. Doing this is considered a voluntary foreclosure. When all of these other options fail, you need to file for bankruptcy. It sounds terrible, but there is some good news.


All foreclosure proceedings usually stop until your bankruptcy case is finished. Your home wont be put up for a quick sale either. In the end, you may save your property and avoid foreclosure, but your credit will be damaged for seven years.

Real Estate News and Tips For Buyers

With the horrific foreclosure rates in this country, coupled with the weak economy, you may have a difficult time figuring out if you should or should not purchase a home now. You should take the time to read real estate news. It will give you informative buyers tips. There are so many variables and unknowns that make you second-guess yourself every time you think you want to buy a home in this sagging market. Another consideration is that you don t want to purchase a home that may actually still end up decreasing in value in this slumping housing market. Find all the information you need, along with buyers tips, in the real estate news.

THE RESIDENTIAL REAL ESTATE MARKET

You probably want to know if the residential real estate market has hit bottom yet. That is a tough question to answer. You nay want to read real estate news for answers.

Maybe this is a descent time for home hunters to buy a home? Again, this is difficult to answer. But let s get more in depth here with buyers tips.

If you want to buy a home in this market, you can still find some descent bargains if you know where to look for them. Check in the real estate news for some. For example, areas where the foreclosure rate is low are a good place to look. You can find this information in the real estate news along with some buyers tips. And also areas that are in close proximity to mass transportation are good. For most of these areas, over all home prices have dropped less that 20%. And they seem pretty unlikely to fall much farther. The main reason for this is what are called up market sellers.

These sellers can usually afford to out wait this down turn in the market and not have to put their homes up for sale. Sometimes they have inside buyers tips to work with. For more info on that, read the real estate news. In the more affluent neighborhoods, fewer people needed to take on risky adjustable rate mortgages to begin with. And that s a good buyers tips to use. You may find more in a real estate news paper.

STILL DIFFICULT TO BUY HOMES FOR MANY

Even with these opportunities to purchase property, they definitely are not for everybody. Here s a buyers tips. Mortgage rates are still a little on the high side. Find out more about it in a real estate news magazine. And you should also be ready to make a sizeable down payment of around 20% or more. Not to mention having an income that can be verified, and be making enough to pay the monthly payments. Here is another buyers tips. If you are a young couple or single person, you may have your parents either guarantee the loan or make a large down payment. Most of this information can be found in a real estate news paper. And that is a good buyers tips.

AREAS TO AVOID WHEN LOOKING TO BUY A HOME

What are some areas that you should avoid buying in? Read about them in a real estate news paper. Try to keep away from those mega sized sub divisions. Specific examples include Florida, California and possibly Nevada. The reason for this is you just don t want to jump into buying in an area where foreclosures are still on the rise. That is another good buyers tips. Another problem in the housing markets there is new homes are still being built, with no one to buy them. This ends up flooding and depressing the housing market even further there. Other areas to avoid are the lower income sections of suburbs and cities.

These areas were some of the worst offenders when it came to sub-prime loans. All of this information can be found in a real estate news magazine. So many families who could never really afford a mortgage were given one. Foreclosures rates were at their highest in these areas.

AREAS THAT HAVE POTENTIAL

With all of this negative talk about slumping housing markets and neighborhoods you should stay away from, we will now focus on some other possible areas to buy in (or at least think about). The homes we so lovingly refer to as mcMansions are one possibility. Usually they are located in nicer, farther away suburbs. These homes can be up to 5,000 square feet in size. Prices for these homes may have dropped by up to a third or more. There are also nice properties at a fair price in upscale neighborhoods.

Buying a Foreclosed Home

Foreclosures are happening more and more now that the economy is in the dumps. Foreclosures are a smart way to cash in on a cheap home and perhaps flip if for more money down the line. Searching your local property listing won’t be enough to find foreclosures. A property listing usually only has regular homes for sale through Realtors. Foreclosures can be a great opportunity for any who finds them. Foreclosures can be difficult to locate and execute the transaction, but if you do it can open up new opportunities. A property listing is fine for buying a home listed by realtors, and usually that is where you find the best homes. But if you are looking for a bargain, or perhaps something you can flip later down the line, then foreclosures are the way to go.

•    Like I mentioned above, going through a property listing is not the way to find foreclosures. You need to do research and some digging. The internet is a great way to find some great deals.

•    You should understand that foreclosures means that the original owner has become unable to pay the mortgage. These properties aren’t posted on a property listing, but instead the lender takes back the property.

•    Realtors are proficient with properties on their property listing as well as foreclosures. Getting an experienced realtor to represent you is the best bet as some sellers won’t deal with unrepresented buyers.

•    Your local property listing might offer some bargain foreclosures from time to time. But you usually don’t find the really good deals

•    Once you find a foreclosed house, either by property listing or through a realtor, then you need to have it inspected if you decided you are interested.

•    You should find out if there are any unpaid taxes and who is liable for them

•    Even though you can find some great deals on your local property listing, the best ones are usually not listed. You have to be like a vulture and jump on any opportunity you may find to get the best deal

Foreclosed home can be perfect if you are looking for a project and need some extra cash. It does take some work however. Foreclosed homes usually need some fixing up and it would be wise to invest even more money in them to raise the value further. Search your local property listing, check the internet and talk with your realtor often if this is something you are interested in. If you are not experienced in buying foreclosed homes, it might be a little stressful at first, but that’s why you need to speak to a professional. When you get the hang of things, buying and selling foreclosed homes could be your full time job, and a very lucrative one at that. Being good at Do it Yourself could come in handy also if you decide to buy and flip homes. Buying a foreclosed home is also great to live in if you like the location and the town.