Category: Mortgage

How to Choose a Mortgage Broker

Posted by admin on May 12, 2016


A mortgage broker is a specialist who is trained to help you choose the
best deal in the market. Their services do not come for free, but the
fee is worth the money because your mortgage is more than likely to
outlast much of your furniture! So how does one choose a good broker?
Here are a few tips to help you;


a) Do you need a broker: Unlike the good old days of yore, mortgage
calculation isn’t simply about choosing between variable and fixed
interest. Almost every borrower has laid claim to a special type of
loan- you can now choose from a self-certification mortgage, an offset
mortgage or some other type. A broker can make sense of the different
types and help you choose one that suits your circumstances. If you are
one of the those who can’t be really bothered about shopping for the
best financial package, and would rather prefer someone else do it for
you, a mortgage broker is just right for you.

b) Choosing
between a tied or independent brokers: Tied brokers work for a
particular service provider and offer you loan options related to his
employers. They usually work for free, but are not always reliable.
Independent mortgage brokers however, do not work for anybody. They
charge you a onetime commission, but in return give you different
options offered by other borrowers. He or she can suggest you a loan
scheme that best matches your condition.

c) Credentials: In the
UK, mortgage brokers should be authorized by the Financial Service
Authority or FSA to give you advice on financial matters. You can always
check if your broker is registered with the FSA through the agency
website. The Mortgage Code Compliance Board or MCCB is also an authority
on this issue.

d) Get everything in writing: Mortgage brokers
in most cases promise you a lot, but when it comes to enforcing them,
almost all of them disappear into thin air! Make sure that these
promises, including details about their fees in writing.

e) Open Communication: The mortgage broker should openly communicate about the process.


f) When things go wrong: If things turn sour between you and the
broker, you can always lodge a complaint or ask the MCCB to address your
grievances. If the broker is tied to the Mortgage Code and does not
offer a satisfactory reply, the MCCB can initiate disciplinary action
against the broker.

These are just some of the points to be considered to help you find a mortgage broker.

How to Defend Against Mortgage Fraud

Posted by admin on May 8, 2016


When it comes to financial fraud in Canada, mortgage fraud is the most
prevalent. According to Equifax, this made up for two-thirds ($400M) of
the estimated dollar amount of monetary fraud in 2011.

Mortgage
fraud happens when an applicant lies about his/her financial situation
by altering personal documents. These documents can include notice of
assessments, job letters and pay stubs. There are many services out
there that will alter your government tax slips for a fee. This results
in scenarios like this: Someone with a spotty job record suddenly makes
$200,000 per year. Or someone who just purchased a 3,000 square foot
detached home as owner-occupied buys a small downtown condo as another
owner-occupied residence.

First-party mortgage fraud is surprisingly very common — with lenders losing an estimated $1.6-million per day in Canada.


Several years ago, a study was conducted in the U.K. The Financial
Services Authority found that many smaller mortgage brokers were aware
that some kind of application fraud was taking place. Yet only 41%
actually verified applicants’ income and only 11% obtained evidence of
the source of applicants’ wealth. Because the brokerage industry is so
heavily commission-based, many representatives do not want to turn away a
potential deal.


As devastating as mortgage fraud seems on the surface, financial
experts say police do not take it very seriously. Money laundering and
the exchange of counterfeit bills are often considered a more serious
threat than first-party mortgage fraud. It is this attitude by Canadian
officials that allow unethical applicants to obtain loans
illegitimately, making things harder for the rest of us who remain
honest and diligent about our financial situation.

But the
problem with mortgage fraud is that it can lead to other criminal
activity, particularly within organized crime rings.
Illegitimately-obtained loans are often used to facilitate marijuana
grow operations and other drug laboratories. Criminals will also use the
mortgage to purchase properties for the enslavement of people, fuelling
the prostitution trade.

Unless officials take more action to
curb mortgage fraud in Canada, we can only expect the practice to become
more popular. An unstable economy coupled with tighter mortgage rules
means more and more homeowners are finding it harder to obtain a loan.
It is under these types of circumstances that fraudulent behaviour
soars.

Equifax says mortgage fraud is on an upward trend with no
signs of slowing down. Banks and brokerages also need to be firm about
the consequences for employees who turn a blind eye to fraudulent
behaviour.

Purchase Dream House With The Assistance of Mortgage Brokers

Posted by admin on March 29, 2016

The real estate industry is rapidly increasing worldwide. The
industry helps in providing a wide range of opportunities for all sorts
of individual. Purchasing a new home for a first time buyer is a
daunting task. Everyone prefers to have a dream house that fulfills all
their requirements. Buying a property has lot of issues and looking for
loans, therefore it is necessary to hire the services of mortgage
brokers. The World Wide Web is the most informative source that helps
you finding the professionals that understand the market, client’s needs
and find loans accordingly.

There are many online service providers that offer
mortgage services that have several different parameters and
technicalities. This is leading and renowned company that helps
customers for their mortgage needs, structured financing package and
complete explanations of all mortgage details. They have a team of
mortgage professionals that are well trained, trustworthy mortgage
specialists and most knowledgeable in the industry. They are committed
to provide you the excellent customer service that is convenient. Having
years of experience in this industry, they assist you with your future
financing needs.

If you are considering out taking a home loan,
then you might consider reputable montreal broker. They are licensed
mortgage broker and will do the following: – identify home and
investment loan options that best suit your needs, arrange all paperwork
and supporting information necessary to secure the finance, act as your
lawyer in negotiations with investors to secure the best deal and guide
you in the right direction for encomiastic services required for a
total financial solution.


They are considered as the top broker Montreal that understands the
entire mortgage related information. These brokers will help sort out
all the issues and offer the best deals available in the market. Hiring
qualified professionals will help you get a good interest rate on your
mortgage which will save you a lot of money in the long run. These
brokers are connected within the industry and are aware of the ways.
With the assistance of their services, you can save a lot of time and
all work is done with the least amount of hassle.

Apart from
purchasing a home, you have to make sure that you are getting the deal
that fit within your budget, for that my calculator Montreal can be a
powerful tool. This type of calculator can be extremely valuable for
loan firms who are able to figure and select when the client has linked
them for that mortgage. Mortgage Calculator is a really useful
instrumentation when you are looking to increase access to income within
the loan market.

Find a Lender That Will Fulfill All of Your Mortgage Needs

Posted by admin on February 27, 2016

High Net Worth Mortgage Market is Prospering in the UK

Posted by admin on February 18, 2016


The mainstream mortgage market in the UK has, in recent years, been
beset by a number of crises brought on by the economic slump. This has
made it difficult for ordinary borrowers to reliably access mortgages
that would have been easy to secure a few years ago in better times.
But, conversely, the high net worth mortgage market servicing those
looking to borrow 1 million or more has not suffered in the same way and
continues to prosper.


With continuing economic uncertainty within the Eurozone and the wider
global economy many overseas investors are buying property in London’s
most prestigious areas resulting in a London property market that is not
suffering the same stagnation or downturn as in many other parts of the
UK. High end estate agents and mortgage brokers are benefiting from
these prosperous times whilst their counterparts in other regions are
still feeling the pinch of the recession. However, there are only so
many prime properties that are desirable to wealthy overseas investors
looking for a prestigious address in the capital and estate agents are
struggling to keep up with the continuing demand, especially when many
of the very top-end homes usually remain in the same family for several
generations.

The pressure has been eased somewhat by some of the
high quality new developments of recent years such as the Shard or the
homes at One Hyde Park but, nevertheless, there are still waiting lists
of high net worth buying wishing to invest in the London property
market. This is making anyone involved in selling property think about
the less obvious alternatives for buyers wanting a family home. For
instance, many period apartment buildings in the capital were originally
a single house and can be returned to that state without too much
difficulty, provided planning permission can be obtained. This is
clearly not an easy solution as every apartment in the building would
have to be purchased but it can be one worth considering, especially if a
potential buyer has been waiting a long time for the right property to
come to the market. Even more so if they have lost out to higher bidders
when their ideal property eventually comes up for sale.


Another alternative to waiting for the ideal family home is to consider
buyer a commercial building that could be developed for residential
use. Again, not an easy option but commercial building often have high
ceilings and large spaces that can make excellent and unique family
homes. With property developers buying such buildings and waiting for
their short leases to expire there is clearly a market for converting
commercial buildings into residential property. An added bonus is that
planners tend to look favourably on converting commercial buildings into
new homes.

So London’s prime property market continues to be
buoyant, unlike the mainstream market, and still has many opportunities
in the most sought after postcodes for investors willing to think
outside the box. Savvy developers are helping meet record demand for top
end properties for high net worth buyers and specialist London mortgage
brokers are also helping by arranging large mortgages for these, often
overseas, buyers.

Can Mortgage Borrowers Take Advantage of Headline Deals

Posted by admin on December 15, 2015

Despite the Bank of England Base Rate continuing at a record low and
mortgage rates falling to record lows, millions of UK homeowners are
still finding it difficult to meet the criteria required to benefit from
some of the market leading mortgage deals.

Lending institutions continue to be criticised for
their stringent affordability criteria and also for increasing the high
fees that must be paid to secure some of the best rate deals. However,
some experts think that paying higher fees for lower interest rate deals
may actually be a good long-term solution, especially for some high net
worth mortgage clients. Keep reading to learn more.

High value mortgage clients can benefit from paying a higher fee for a better deal


The UK government’s Funding for Lending and Help To Buy schemes have
enabled high street banks, building societies and other lending
institutions to access cheap funding in return for their lending more
readily to private individuals and small businesses. However, opponents
of these schemes are of the opinion that they only work for those with a
substantial amount of equity in their homes already and they do not
help those whom they were designed to help i.e. first-time buyers
seeking a mortgage.

Figures reveal that average two-year
fixed-rate mortgages have fallen significantly for those borrowing 75
per cent or less of their new home’s cost. But borrowers who require 90
per cent of a home’s value are still paying more; in some cases up to 1
per cent more for their borrowing, ironically the people who can
arguably least afford it and who the government schemes were supposed to
help. All of this while some lenders are now offering some of their
cheapest-ever mortgage deals, with the proviso that the borrower can
meet the stringent affordability criteria.


However, the best deals are available to those mortgage clients who
have at least a 40 per cent deposit, or equivalent equity in their
current home. But although there are extremely attractive rates for
those with substantial deposits the associated arrangement fees have
been steadily increasing with some fees pushing 2,000.

Experts
are also warning those borrowers considering a fixed-rate deal,
especially one as short as 2 years, to check what the rate will be once
the fixed rate period expires. For example, some two year deals around
the 3 per cent mark will almost double after the end of the fix period
so dramatically increase the monthly repayment amount on the mortgage.


Mortgage deals with high arrangement fees but a lower rate may make
these products seem less attractive for borrowers with a small mortgage
but high value mortgage clients may actually benefit from lower rates
and higher fees over the life of the mortgage. So it is always essential
to look at the overall cost of the mortgage not just the initial
headline rate; take into account arrangement fees and the reversion rate
one any fixed rate period is over. These high value mortgage deals
show, more than ever, that high net worth finance clients should take
all the fees and charges into account when choosing a large mortgage.

The Majority of People Fail to Grasp the True Cost of Their Mortgage

Posted by admin on December 15, 2015


The mortgage fees and charges applied by banks and building societies
are not always as clear as they could be and many people do not
understand exactly how much a mortgage will cost them over the lifetime
of the loan. Many simply ficus on the monthly repayments and the
interest rate they are paying. Yet research has revealed that only five
in a thousand people in the UK understand the true cost of their
mortgage deals. The survey by which found that a staggering 99.5 per
cent of borrowers failed to grasp all the costs involved with the
average mortgage deal.


Lenders are being urged to change the way they communicate their
mortgage fees as a result of this research from the consumer group.
However, the data is not wide ranging as it only looked at 2-year fixed
rate deals based on a 100,000 home loan but it did indicate that the
average consumer found it difficult to assess which was the cheapest of a
range of deals because of the lack of transparency in the fees and
charges and this is what is of most concern.

Whilst the results
varied depending on the type of borrower questioned, the survey
nevertheless showed that only a minority could correctly order 5
mortgage deals from most expensive to least expensive so this is
worrying research as it clearly shows that most borrowers find it hard
to work out the total cost of a large mortgage deal taking all costs
into account.

Sometimes the deal with a higher arrangement fee
can work out costing less and sometimes the deal with the lowest
interest rate is not the cheapest. It, obviously depends on the level of
mortgage you want to take out, the interest rate basis (fixed, tracker
or standard variable) and the mortgage term. It is often worth taking
specialist advice to establish which is the best deal for your own
personal and financial circumstances


On the whole mortgage borrowers find it difficult to accept that a low
interest rate deal is not necessarily the cheapest; a typical borrower
is still attracted by the headline rate rather than by the overall cost.

Nevertheless, lenders should be more transparent when showing
their charging structures so that borrowers have the opportunity to more
easily compare total costs rather than simply headline rates. This is
so important because more than 80 per cent of the thousands of mortgages
available in the UK include arrangement fees or other types of fee. And
mortgage arrangement fees have been rising rapidly over the past 2 or 3
years.

Many of the very low mortgage interest rates now on
offer can seem very attractive, as indeed some are, but the flip side of
those low rates is that big mortgage arrangement fees are being
imposed. These fees have risen dramatically,making it even more
important for borrowers to understand the cost of their mortgage over
the lifetime of the deal, especially those with large mortgages that are
likely to incur higher charges. If people are struggling to understand
such an important financial commitment them lenders should be doing more
to help clarify the costs.

Are Private Banks an Alternative for Mortgage Lending

Posted by admin on November 30, 2015


How satisfied are you with the state of UK banks? Have you found that
you have been unable to borrow the level of mortgage that you need
because mainstream lenders simply have a tick box mentality with regard
to affordability criteria? Are you struggling to find a good home loan
deal at a favorable rate of interest? Are the stringent lending criteria
of the high street banks and building societies preventing you from
moving house?


If you have experienced any of these problems then you are not alone.
Research has revealed that the majority of high net worth customers
believe that the UK banking industry could provide a better service to
borrowers. High Net Worth individuals (HNWs) are those who earn over
300,000 per year or hold over 3 million pounds of assets.

So, if
you’re looking for better banking or lending, a private bank mortgage
or bank account may be the answer. Private bank mortgages offer a great
alternative to ‘tick-box’ focused lenders.

The research from
Duncan Lawrie Private Bank questioned 1,000 clients, all of whom hold
assets of over 250,000. The survey found that seven out of ten of these
high net worth finance clients believe the UK banking industry could do
better.

Around three quarters of respondents (76 per cent) to
this particular survey would prefer a more personalized service from
their banks. And, nearly one in ten said they have had their bank
accounts hacked. Of those people who were hacked, 18 per cent stated
that their bank did not recognize the change in spending habits that
should have flagged up a problem.

And it is not just the very
wealthy who have formed this opinion of banks. Mortgage Solutions has
reported that the banking sector has come under criticism in recent
years for its bonus culture, putting short-term profitability ahead of
customers and, more recently, the Libor-fixing scandal, which continues
to appear in the news long after it was first exposed.


As far as consumers are concerned the retail banking industry has
changed significantly in the last 30 to 40 years. Whilst bank customers
value the advantages of internet banking and mobile banking to help them
manage their accounts and finances more easily, they also wish for a
return to the traditional values that the banks once had as trusted
advisers who put the customers’ interests first. And this is why private
banks have increased in popularity.

As well as offering a
better banking service, private bank mortgages have also become more
popular, particularly among high value mortgage clients, in recent
years.Over the last few years, private banks have plugged a gap that has
been created by the reluctance of mainstream banks and building
societies to lend high value mortgages to high net worth clients.


Many London mortgage brokers have, during this period, built up strong
relationships with dozens of private banks in the UK and overseas. These
banks have an appetite to lend and are eager to offer their bespoke
services to high net worth mortgage clients.

High value mortgage
borrowers often have complicated income and property ownership
structures which fail to meet the ‘tick-box’ lending and affordability
criteria of mainstream banks.Private banks are much more likely to take
these factors into account and make a lending decision based on common
sense. They can offer flexible, tailored large mortgages and a level of
service which is demanded by high net worth clients.”

Benefits and Needs of Second Mortgage

Posted by admin on November 6, 2015


A second mortgage is the process of getting another loan in addition to
your original mortgage. Before entering into the second mortgage,
homeowners should carefully understand the merits and demerits of taking
a second mortgage and should also carefully analyze the different
available options.

Types of second mortgages:


There are two main types of secondary mortgage available: home equity
loans and home equity lines of credit. With home equity loans, the
lender will give you the lump sum of amount all at once and you repay it
at regular intervals over a particular time period. With home equity
loans, the interest rates are fixed.

Home equity lines of credit
are like a credit card, you can spend the money as you need it. In this
type of loan the interest rates are adjustable.

There are few
restrictions available on the second mortgage. Most people are using
this type of loan for the purpose of home repair and maintenance or for
other big expenditures. It is not a good idea to buy this loan for
something insignificant such as for new clothes or for a vacation,
because you are risking your home in the process.

Merits:


Second mortgage is having huge advantage, because it may give you a
large sum of amount that you can spend it when in need. Also, interest
rates are low and the interest paid on this mortgage is tax deductible.

Demerits:


The major drawback of a second mortgage is that the loan is secured by
your home. So, you may lose your home if you don’t do the proper
repayment. Also, you may have to pay the minimal fees (3 to 5% of your
total loan amount) to obtain it.

How much money a borrower can get?


The amount of money you can get will vary on a number of things such as
your credit score and the loan to value ratio (LVR). Most lenders won’t
provide you more than 70 to 80 % of the LVR of your first and second
mortgages combined.

Where to get a second mortgage?

You
are not having the chance to get your second mortgage with the lender
who gave you the original mortgage. You can find a second mortgage with
any other lender. Since the lender in the second position takes on more
risk, not every lender offers this type of mortgage; it will vary from
individual lender’s risk tolerance.

The Wealthy, as Well as Middle Class, Can See Real Benefits From a Reverse Mortgage

Posted by admin on October 30, 2015


When used properly and with correct planning a reverse mortgage can be a
useful tool for both the middle class and even wealthy borrowers. The
key lies in analyzing the borrower’s current needs and making the best
decision for them.

Typical Situation for Middle Class


Many people in the middle class work in a career for 30+ years and
retire in their mid to late 60’s with a home that is either paid off or
close to being paid off within a handful of years. Thankfully, paying
off the mortgage will free a sizable portion of their income.
Unfortunately, most people retire with a noticeable decrease in their
monthly income.

A reverse mortgage can help this situation in a
number of ways. The easiest solution is to borrow 65% to 70% of the
home’s value and receive monthly payments. The payments will usually be
enough to offset most of the loss in income. A second method is to get a
lump sum distribution and use the money to invest in safe resources
like bonds and low risk mutual funds that will yield enough interest to
supplement the borrower’s income. Other possible resources that can be
purchased would be rental property or a silent partnership in a stable
company.

Typical Situation for Moderately Wealthy


People that have been accustomed to a 6 figure job will find it
mentally and emotionally difficult to drop down to a slightly less
expensive lifestyle when they retire. Fortunately, these individuals
usually have homes that are in the higher price range of $400,000 and
up. With homes at these price levels it is possible to get a higher
reverse mortgage amount. The current maximum reverse mortgage amount is
$625,500 but that may likely change at the beginning of the new year
back to $417,000.


Even at the lower amount it is still possible for borrowers to get a
sizable loan and use it for investing purposes. Like the previous
example, the borrowers can use the money to invest in multiple ways. The
difference is that the bigger amounts would allow for a wider range of
diversity.

For instance, if a couple aged 65+ chose to get a $400,000 loan they could use the money in the following way:


Purchase a modest home for $125,000 and rent it out for $875 to $1125
per month, depending on the areaInvest $100,000 in bonds and mutual
funds that are yielding between 4% and 5% annually, resulting in $3,300
income per monthBuy a vacation home in the mountains or the beach that
averages $400 per month in rental incomePut $50,000 away in savings for
possible medical bills

Grand total of monthly income from investments: $4,575


As you can see, a reverse mortgage can literally change a person’s
financial status in a short amount of time and put them in a much better
position to live a comfortable life while also building up a sizable
nest egg to leave to their children.