What Is A Funding Fee?

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

If you have already become involved in the process of getting a loan through the Veterans Administration, there is a fee you might want to be aware of as you are proceeding with your application. It is called a funding fee.

Essentially, you will be required to pay a 2% funding fee to the VA unless you happen to qualify for specific exemptions. If you can pay a down payment of 5% or more, this fee will be reduced to 1.5%. If you manage a 10% down payment, that fee will be lowered to 1.25%.

If you are an eligible Reserve or National Guard seeking a loan, you will have to pay 2.75% funding fee. Like other veterans, paying down payments of 5% or more, or 10% or more will reduce the funding fee to anywhere from 2.25% to 2%.

If you are in the process of refinancing a loan with the VA, the new VA loan with have a funding fee of 0.5% to lower the interest rate. If you are a veteran and you’re planning to use an entitlement for a second or subsequent time, and you do not put down at least 5% as a down payment, you will be charged a 3% funding fee.

Mortgage Broker License: Tool to a Successful Career

It can sometimes be hard to decide which career you want to go into. There are so many different fields to choose from. One of the best ways to decide is to evaluate the demand for the job, and the pay. If you can find a high demand job that also pays a lot of money, then you’ll be set. One of the best jobs that falls under this category is mortgage brokerage. Mortgage brokers are people who help prospective home buyers find the best loan that fits their needs and personality. They essentially help with all of the financial aspects of buying a house. Since people are always buying houses, this job is very much in demand. It also pays very well if you are good at what you do.

If you want to be a mortgage broker, you can’t just start working. Unlike many jobs, you need to be certified and have a license first before you can ever start helping people with their mortgage. A mortgage broker license essentially shows people that you know what you are doing. This is very important in this field because there are all sorts of regulations and laws when it comes to mortgage loans. If you don’t have a mortgage broker license, you won’t likely know anything about those laws. This can cause a lawsuit not only for you, but for your clients and customers as well.

You can’t just get a mortgage broker license. You first need to take classes. These classes will tell you everything that you need to know about the job. Depending on the state you live in, you may need to take as many as 24 hours of classes in order to qualify for the license. While this may seem excessive, you have to remember that there is a lot that you need to know.

After you take the classes, you’ll then need to show that you actually learned something by passing a licensing exam. These exams are good because they will make sure that you really know what you are doing. Again, you can’t get your mortgage broker license without taking and passing this exam. Once you do, though, you are pretty much guaranteed that you will receive your license.

After passing the test, you will then be able to get your license. Barring any unforeseen circumstances, you should definitely be able to get it. With your new mortgage broker license, you are now able to practice this amazing new career. If you get really good at it, you will definitely be making a lot of money

A Few Reasons Why VA Loans Can Be Better Than Standard Loans

One of the major advantages of a VA loan over a traditional loan is its application process. Rather than the large volume of paperwork and certification you have to go through in order to qualify with regular loans, a VA loan can be so simple. Let’s look at the process.

First, you will need to contact a local VA office and apply for the Certificate of Eligibility. Once you’ve been approved, you can look for the house you would like to buy. After you have found the right place, contact one of the VA approved lenders. It will be up to the lender to have the home appraised, look at your credit and employment histories, and your income levels. Any closing issues are dealt with as title checks. If there are no problems, the lender will simply give you the loan and you can start moving in to that new home.

This short and easy application process makes VA loans very attractive to veterans who desire to purchase a home after they have been discharged from the military and want to begin their private sector lives in style.

Is A Reverse Mortgage Right For You?

A reverse mortgage is the exact opposite of a traditional mortgage. Instead of you paying the bank to live in the house, the bank pays you to live in it. This may seem a bad deal for the bank, but there are a lot of reasons why a bank will allow a reverse mortgage. Typically a reverse mortgage is only approved for someone 62 or more years of age that has paid off his or her original mortgage. With all that equity in the home, the senior sitting in it might want to stay in the home but face additional expenses in medical or living costs that they can’t cover. Instead of selling the home and downsizing, they may choose to do a reverse mortgage with a bank instead thus allowing them to remain in the home.

How It Works

The reverse mortgage is a little more complex to close than a traditional mortgage. There are a number of different rules surrounding this type of mortgage loan. The age limit is one barrier and also the condition of the home may be another. The home has to be in good condition, free of major faults, before the bank considers doing this type of mortgage. Closing costs are significantly higher than the traditional loans and fees can also eat into equity. However, the upside is that you can get a disbursement of cash to help you pay immediate expenses while not having to vacate your home. This cash can come as a lump sum, a monthly payment, or even a credit line. The terms of the loan may differ with the bank involved and you should check to see what happens if you eventually sell the home instead of staying in it until you die.

The Potential Negatives

Seniors are targeted by unscrupulous lenders with predatory lending practices that can include a high fee reverse mortgage. Most lenders will be asked to undergo counseling before they take out a reverse mortgage, but that might not be enough to assess whether the mortgage is what you need at this point in your life. As always, if you aren’t certain of what you are signing, don’t sign. Instead, try to review the documents with someone who is knowledgeable and can answer any questions you might have about this type of mortgage. There are some downsides to a reverse mortgage. They can impact your ability to receive Medicaid benefits and government financial assistance. So, be sure to not only look at the terms of the mortgage but also check with your local government offices to see if the mortgage product might actually reduce your income instead of increasing it, due to the offset of benefits.

What are Interest Only Mortgage Loans?

What exactly are interest only mortgage loans and when can people avail of these kinds of loans? In a nutshell, interest only mortgage loans are home loans that give borrowers the chance to pay only the interest of the loan during a given period of time. This type of loan is suitable for those who are anticipating a rise in income in the future. It is also useful for people who want to save up a certain amount of cash while paying for a house at the same time. Interest only mortgage loans give borrowers the chance to either pay only the interest during the agreed upon period of time or pay off part of the principal along with it. Those who take out this kind of loan have the option to save up the money that is meant for the payment of the principal of the loan.

When a person takes out an interest only mortgage loan, he is often told the terms that are available to him and how much he is expected to pay once the grace period for the principal payment is up. This can be a double edged sword if the person is not ready for the sudden rise in payments when the interest only period is up. While you can take advantage of the fact that you can save up money during the interest only period, you should also be preparing for the impending rise in monthly payments when this period is up. This is why interest only mortgage loans are not an ideal home loan for all people. People who opt for this kind of a home loan should be responsible enough to know the consequences of such a loan. While it may be a good loan to use to save up a huge amount of money while paying for a house, it is also a possible trap for those who are not sure of their future finances.

Interest only mortgage loans are good for people who have a keen eye on investments and who know that they can make ample returns on the money they are pouring into investments. This kind of a mortgage scheme is ideal for those who invest in certain businesses or stocks and who can foresee an ample amount of money coming in the future. People who are planning to make a big purchase at the beginning of their mortgage period will also find this kind of mortgage loan beneficial. Purchases like furniture, vehicles, and all that can be made along with the purchase of a house when you use interest only mortgage loans.

Online Mortgage Application: The Documentation Needed to secure your Loan

With the event of the Internet and electronic technology everything becomes easier and faster including making an online mortgage application for that first home or refinancing your existing home.

Many reputable financial institutions are now providing an online mortgage application and accepting your electronic signature for signing purposes. The borrower is now longer limited to the traditional methods of acquiring a mortgage through walk in branch offices, and head offices. Mortgage lenders are no longer limited to advertising through the media, TV, newspapers, and magazines. To compete in the global market it is understood, that a strong Internet presence is just as beneficial to the lender as it is to the borrower.

In order to have a loan approved there is of course certain information that will be collected first and this information will be asked within the standard online mortgage application.

Personal information such as name, current address, and occupation are common fare for an online mortgage application. But you must be prepared to have other information available for an online mortgage application. Some of this information is specific to the type of online mortgage application and some will again be standard.

You would have to qualify for a loan, meaning that you have the ability to pay back the loan. You would need to provide proof of income.

In some cases, depending upon the online mortgage loan you are trying for, such loans for self-employed individuals having difficulty showing proof of income, it might not be a major requirement.

Another way of determining your ability to repay a loan is your credit history. Frequent late payments, bankruptcy, and other issues are taking into consideration by the online mortgage lender. Within a few days an applicant can obtain their credit score aka fico score.

The three major credit score companies in the USA are Equifax, Experian and TransUnion. These places look at your credit habits; borrowing and paying back. They assign a score called a fico score. Once the online mortgage lender receives the score they can determine if you are a good risk for business or you are not. To guarantee an online mortgage application approval the fico score should be at least 650. There are some very large lenders called “sub prime” lenders that can afford to approve applications with fico scores as low as 580 but these lenders are not your standard lenders.

However, it is still possible to obtain a mortgage with a lower score through traditional methods. Unfortunately, this service is not yet available through the online mortgage application.

If you are planning to take out a home equity loan, you may be required to provide an appraisal of the value of your existing home that is possible to do online as well.

When submitting your online mortgage application you would include a “Fannie Mae” appraisal as well as “title insurance company” to guarantee the title for your existing property. These documentations submitted with your online mortgage application will guarantee a faster approval sometimes the very same day.

Trust Deed Forms

Trust Deeds work the same way as home mortgages, acting as a loan with a lien on the home until the loan is paid in full. Trust Deeds are slightly different then mortgages and each state differs on if they use mortgages or Trust Deeds.

Trust Deeds, also referred to as Deeds of Trust, are sometimes preferred over mortgages since they last for only a few years instead of decades like most mortgages. Trust Deeds also require three entities where mortgages need two, and rely on a non-judiciary foreclosure method which eliminates the need of the courts.  The three parties needed for a Deed of Trust are the Trustee, Trustor, and Beneficiary. The Trustee is responsible for the deed to the home or property and will relinquish the deed to the Trustor when payments are complete, or to the Beneficiary should the Trustor fail to make all payments. Should the Trustor fail to make payments then the home will go into foreclosure. Unlike mortgages, Deed of Trusts do not rely on the courts for the foreclosure procedures which eliminates much of the time and hassle often involved in these cases.

To establish a Deed of Trust you will need two forms the Promissory Note and the Deed of Trust itself. These two documents are crucial to the process of receiving the loan and understanding the terms and conditions of the agreement.

The Promissory Note is a written promise signed by the Trustor acknowledging the loan and the debt. The Promissory Note will have the sum of the loan along with the interest rate, which the loan is to be paid back at, and the amount of the monthly payments. The Promissory Note will remain in the Beneficiary’s possession so you will want a copy on the day of the signing.

The Deed of Trust itself transfers the title to the Trustee for the remainder of the debt. Trustors are advised to find a third party Trustee that will act in the best interest of both the Beneficiary and the Trustor. There are several companies and organizations willing to act as Trustee in Deeds of Trust cases. Whoever holds the title to the property will be able to sell the home should payments go into default in order to recover the money lost.

These forms, the Promissory Note and the Deed of Trust form, can be found in several locations on the internet, either for free or for a small fee. Most of these documents accurately represent what the actual state approved documents look like and are a great way to acclimate yourself to the terminology and appearance of the forms. Your lender will also have the forms needed and many find it convenient to use the forms that the lender provides.

A Deed of Trust is often the answer to financial woes but should be used in a responsible manner. Defaulting on payments can result in the loss of your home and economic security. The forms of the Deed of Trust procedures can be found online or at the lender’s office. Make sure you study the forms and understand the phrases, which will provide you with a greater amount of confidence so you can get that better deal.

About the Midland Mortgage Company

The Midland Mortgage Company is the mortgaging arm of the MidFirst Bank. It is based in Oklahoma City where it was founded in the 1950s. For 50 years, the Midland Mortgage Company continues to provide excellent service to its customers.

The Midland Mortgage Company follows unconventional lending methods to keep up with its mother company’s unique brand of banking. MidFirst Bank is among the 100 largest banks in the United States. And though privately owned, it continues to provide unparalleled service. The Midland Mortgage Company has highly competitive products that are easily accessible to its clients through its banking centers. Largely based in Oklahoma, the bank has a large following even in the other states. In fact, the Midland Mortgage Company has branches in Chicago, Houston, New York, and Southern California.

Taking your business with the Midland Mortgage Company is a very good decision since it is considered to be an expert in the field of mortgaging, having been in business for half a century. You are assured of safety and financial stability. The Midland Mortgage Company offers different types of loan namely the Conventional purchase loan, FHA purchase loan, VA purchase loan, Piggyback Loan, My Community Loan, Flex 100, Interest Only, Adjustable Rate Mortgage, Balloon Mortgage, Bond Programs, and Home Free Mortgage.

When you become a customer of the Midland Mortgage Company, you are ensured of getting fast and accurate service, security, value, excellent customer concern, and basically are in good hands. You get fast and accurate service since they have specialized departments that handle the different concerns of their clients. You are secured since the company constantly updates its procedures of operation to provide an optimum level of security.

When taking a loan from the company, you just don’t get the basic service. In addition to these basic services, the company provides interactive portals for easier access to your loan details. They even have insurance that can be added to your monthly payment on your mortgage. The company truly cares for you so if you have certain concerns regarding your mortgage payments; it has solutions to each and every problem.

The Midland Mortgage Company is surely one financial institution to visit if you plan to take on a mortgage. Its track record of providing mortgages to over 300,000 people in Oklahoma and a lot more from the other states just show that indeed it is a leader in the mortgaging business. And especially if you are taking your first mortgage, it is but fitting to go for a business you can give your trust to.

Applying a Proper Letter to Creditor

In regards to a letter to creditor or creditors, it is hard to be objective and realize that the worst responsibility in the world is for creditors to deal with nonpaying customers. And to be perfectly honest, usually a letter to creditor or creditors is not ever sent. Most nonpaying customers are struggling financially and emotionally by the time the creditor letters of past due bills begin to arrive, sent to customers who pretend the letters are not there.

If a letter to creditor is sent immediately, informing them what is going on and why the bill has not been paid, usually they are fair and pretty decent about it, willing to work out payments. Otherwise, they become frustrated to the point the bill is sold to another debt collector who is more ruthless with even higher interest rates, and so on. Individuals who have debt issues and are thinking of bankruptcy are of two types: those whose serious mound of debts are just beginning, or those who are longer into it—like neck deep and knee high. So to be fair, let us assume that the bills have just started coming in, and money is not available. What is to be done before things get too bad?

Before preparing a letter to creditor or searching for a template to do so, work on a list of the available household income, expenditures, and debts, which is called a “Statement of Affairs.” This is necessary in order to find out how much surplus income can be distributed to the people who have money owed to them. A letter to creditor will not be able to be written, until this is done and the debtor has a fair idea of what money is available for them to spend. Once this list is done, many types of letters to a creditor can be prepared from the “Statement of Affairs” list.

It is possible to request a pro-rata basis for the time being from the creditor, in addition to asking for reduced payments for a designated period of time due to the extenuating circumstances. The thing to remember is this, in order to control the credit problem, do not offer more than can be afforded to pay. This could be making an offer of payment with such a high payment than cannot be maintained is extremely unwise, as the creditors are already taking a gamble with a non-paying customer. They really do not have to work out any further plans to get their money.

If an offer is made to a letter to creditor, regardless whether or not they will accept it, then make sure it is sent with proof and verification is used—first priority, return receipt, etc.. Send a registered bank check or bank money order, instead of the 50-cents money order at the local grocery store. The reason for this is because if the creditor says they never received it, the bank can back it up while the local grocery store takes up to six months, if at al.

Deeds of Trust

Deeds of trust are very commonly used in the purchase of a home or real estate. Many may not be aware of the fact that deeds of trust are different from mortgages. Although they may be similar, they are still not the same thing. The main difference between deeds of trust and mortgages is that deeds of trust involve a trustee that handles everything. A mortgage is the actual description of the real estate that you own or are purchasing. If you had to take out a loan to purchase the property, the lender will have a lien on your property until the loan is paid off. A lien means that the lender and you both own the property until the loan is paid in full. If you default on the loan agreement, the lender can foreclose and take the property from you and sell it as they see fit.

Deeds of trust, which is the security on your loan, are the documents that are recorded either at a title company or some other office of public records. Deeds of trust involve three different parties. They involve you, the buyer and often referred to as the trustor. They involve the beneficiary, which is the bank or lender and they involve the trustee. The trustee is the entity or person that holds the title of the property until the loan is paid off. In most cases, the title is held by a title company, although occasionally the seller of the property may also hold the title or deed.

Whether you are the buyer or the seller, deeds of trust must contain certain information. Most importantly, the must contain the amount of the loan, the parties involved in the transaction and the legal description of the property or real estate that is being used as collateral for the mortgage. Legal descriptions must be very detailed and extremely accurate. Many mortgage loans that found themselves in a court of loan for default of payment were questioned because of an inaccuracy of the legal description. In some of these cases, the borrower was not able to foreclose on the property because of a small discrepancy in the legal description.

Other important information that must be on deeds of trust are the dates the loan was started as well as the maturity date, any provisions or requirements of the mortgage, late fee amounts, acceleration clauses, prepayment penalties, interest rate terms and all possible legal procedures.

The trustee is the one that will handle any problems involving the deeds of trust such as late payments, taking care of the satisfaction when the loan is paid up, foreclose for default of payments and holding the title.

Next Page »