The term "mortgage" (from Law French, lit. dead pledge) refers to the legal device used for this purpose, but it is also commonly used to refer to the debt secured by the mortgage, the mortgage loan.
A mortgage is a method of using property (real or personal) as security for the payment of a debt.
In most jurisdictions mortgages are strongly associated with loans secured on real estate rather than other property (such as ships) and in some cases only land may be mortgaged.
Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately. See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property.
In many countries it is normal for home purchases to be funded by a mortgage. In countries where the demand for home ownership is highest, strong domestic markets have developed, notably in Spain, the United Kingdom and the United States.
Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts
Friday, February 29, 2008
The Advantages of a Professional Mortgage Broker and Mortgage Lenders
Advantages to using a mortgage broker
Mortgage brokers are companies or individuals that work closely with wholesale mortgage lenders to provide their customers with a wide selection of mortgages. A mortgage broker originates loans while the mortgage lender actually funds the loans. They are knowledgeable about the entire loan process, and they are able to use their superior knowledge to help their customers secure the best loan to fit their needs.
Another big advantage to using a mortgage broker is that they deal with mortgage lenders from across the nation. Advantages of using a mortgage broker instead of a local bank Offer a larger variety of mortgage options Normally offer the most competitive rates nationwide mortgage brokers only deal with mortgage loans, so the are highly specialized highly motivated to get their customers' loans approved.
Mortgage Brokers are the experts who assist people in finding and negotiating the financing that fits a particular situation. Mortgage brokers on the other hand, deal with a vast number of mortgage lenders while professional mortgage brokers are individuals and companies who know the laws and regulations pertaining to real estate financing individuals you can trust with your confidential information.
Mortgage Broker License
Mortgage licensing for mortgage brokers has evolved in order to protect consumers while they obtain mortgages. The license indicates that the mortgage broker has what it takes to help consumers through the maze of the mortgage origination process.
The states differ on whether a mortgage broker even needs a mortgage license, whether the mortgage broker can loan on both 1st and 2nd mortgages, or whether a physical office in the state is required. States also differ on how much continuing education they require of the mortgage brokers. To further the protection of the consumers, the National Association of Mortgage Brokers (NAMB) was formed in 1973.
Mortgage brokers are companies or individuals that work closely with wholesale mortgage lenders to provide their customers with a wide selection of mortgages. A mortgage broker originates loans while the mortgage lender actually funds the loans. They are knowledgeable about the entire loan process, and they are able to use their superior knowledge to help their customers secure the best loan to fit their needs.
Another big advantage to using a mortgage broker is that they deal with mortgage lenders from across the nation. Advantages of using a mortgage broker instead of a local bank Offer a larger variety of mortgage options Normally offer the most competitive rates nationwide mortgage brokers only deal with mortgage loans, so the are highly specialized highly motivated to get their customers' loans approved.
Mortgage Brokers are the experts who assist people in finding and negotiating the financing that fits a particular situation. Mortgage brokers on the other hand, deal with a vast number of mortgage lenders while professional mortgage brokers are individuals and companies who know the laws and regulations pertaining to real estate financing individuals you can trust with your confidential information.
Mortgage Broker License
Mortgage licensing for mortgage brokers has evolved in order to protect consumers while they obtain mortgages. The license indicates that the mortgage broker has what it takes to help consumers through the maze of the mortgage origination process.
The states differ on whether a mortgage broker even needs a mortgage license, whether the mortgage broker can loan on both 1st and 2nd mortgages, or whether a physical office in the state is required. States also differ on how much continuing education they require of the mortgage brokers. To further the protection of the consumers, the National Association of Mortgage Brokers (NAMB) was formed in 1973.
Wednesday, January 30, 2008
What Are the Risks in Rent to own Real Estate?
Rent to own property investments and lease purchase options have inherent risk factors that cannot be removed. These, as with risk factors involved in any type of investment scenario, are just the nature of the beast. However, in order for a real estate investor to be able to profit from such a venture, these risk factors must be acknowledged and addressed to minimize potential loss. What are the general risk factors in rent to own and lease purchase options?
Consider that the tenant buyers with whom you will be working are those with whom standard mortgage companies and banks are unwilling to work. This is usually due to insufficient credit, lack of steady work, high debt to income ratio, and other factors that are considered high-risk for a mortgage loan. This means that you are automatically signing up to accept a form of credit,through a contract, with someone that is not able to receive formal credit approval elsewhere. This is one of the risk factors that must be taken into consideration.
There is a chance that your tenant buyer will not continue payments as agreed in the lease purchase contract. You may find that, at the end of the contract, your tenant has decided not to purchase the property, at which point you again have a property on your hands to sell. Perhaps it turns out that, once the tenant buyer is in the home, he or she leaves it in a state of disrepair that is unacceptable and refuses to pay to repair it. That means you now have a property that is not only in your hands awaiting a new tenant but also must be repaired before being rented out again.
In order to minimize these risks, you need to have all aspects covered in the initial contract. Be sure you make it clear that the tenant buyer is responsible for regular maintenance of the property and that it is too be kept in acceptable condition. Cover the monthly payments in terms of amount, terms of the lease (how long payments must be maintained), and consequences of nonpayment. Make the tenant buyer gets renter's insurance and you have a rental policy on the property.
Have a lawyer attend to the documentation so that everything is legally binding, and make sure all parties have signed and dated copies of the agreement. Make sure you have a copy filed with the county as well so that the entire agreement is on record and there are no disputes as to what the original agreement was. This will also cover you in the event that the tenant buyer wants to reduce the offer on the amount for which the house was to be purchased.
Be prepared to take over your leased property if the tenant buyer decides not to make the purchase so that you are not surprised or negatively affected if they simply move out. It may be their choice, or they may still have insufficient credit to qualify for the mortgage loan they need. Make sure you have the means of advertisement to get the real estate property back out on the market quickly so you can find another tenant; there are always those who are looking for this kind of alternative buying method.
Most of all, keep track of the paperwork and make everything legally binding. You cannot remove the risk factors from rent to own housing options, but you can reduce the amount of risk by taking the necessary precautions.
Charles W. Moore is a U.S. Army Veteran who began Real Estate investing in 2001. He's now a Successful Investor, Webmaster, Speaker and Author.
Get a Free Report on Rent To Own Real Estate at: http://www.Rent2OwnExposed.com - Learn More about Real Estate Investing visit: http://www.REIeBooks.com
Consider that the tenant buyers with whom you will be working are those with whom standard mortgage companies and banks are unwilling to work. This is usually due to insufficient credit, lack of steady work, high debt to income ratio, and other factors that are considered high-risk for a mortgage loan. This means that you are automatically signing up to accept a form of credit,through a contract, with someone that is not able to receive formal credit approval elsewhere. This is one of the risk factors that must be taken into consideration.
There is a chance that your tenant buyer will not continue payments as agreed in the lease purchase contract. You may find that, at the end of the contract, your tenant has decided not to purchase the property, at which point you again have a property on your hands to sell. Perhaps it turns out that, once the tenant buyer is in the home, he or she leaves it in a state of disrepair that is unacceptable and refuses to pay to repair it. That means you now have a property that is not only in your hands awaiting a new tenant but also must be repaired before being rented out again.
In order to minimize these risks, you need to have all aspects covered in the initial contract. Be sure you make it clear that the tenant buyer is responsible for regular maintenance of the property and that it is too be kept in acceptable condition. Cover the monthly payments in terms of amount, terms of the lease (how long payments must be maintained), and consequences of nonpayment. Make the tenant buyer gets renter's insurance and you have a rental policy on the property.
Have a lawyer attend to the documentation so that everything is legally binding, and make sure all parties have signed and dated copies of the agreement. Make sure you have a copy filed with the county as well so that the entire agreement is on record and there are no disputes as to what the original agreement was. This will also cover you in the event that the tenant buyer wants to reduce the offer on the amount for which the house was to be purchased.
Be prepared to take over your leased property if the tenant buyer decides not to make the purchase so that you are not surprised or negatively affected if they simply move out. It may be their choice, or they may still have insufficient credit to qualify for the mortgage loan they need. Make sure you have the means of advertisement to get the real estate property back out on the market quickly so you can find another tenant; there are always those who are looking for this kind of alternative buying method.
Most of all, keep track of the paperwork and make everything legally binding. You cannot remove the risk factors from rent to own housing options, but you can reduce the amount of risk by taking the necessary precautions.
Charles W. Moore is a U.S. Army Veteran who began Real Estate investing in 2001. He's now a Successful Investor, Webmaster, Speaker and Author.
Get a Free Report on Rent To Own Real Estate at: http://www.Rent2OwnExposed.com - Learn More about Real Estate Investing visit: http://www.REIeBooks.com
Why Lease Options are Excellent for Real Estate Investing
As the real estate market evolves and changes, there are fewer mortgage loans available and fewer people who qualify as the factors for qualification become more stringent. Having less than perfect credit puts, a cramp on the ability to obtain the necessary financing for a traditional home purchase, but that does not mean that fewer people want to settle into a home and become a homeowner. Real estate investors are learning that they can benefit from this situation and make a profit by offering nontraditional means of obtaining a home to those with credit that is not well established or is less than satisfactory to a mortgage lender.
Lease purchase options, or rent to own homes, are a great source of income for the creative real estate investor who wishes to make money while helping those who cannot get into a home with their own credit to realize their dreams of owning a home. Lease purchase options work much like a leasing a vehicle, only on larger terms. It benefits the tenant buyer who cannot obtain a mortgage to purchase the home by offering them the opportunity to build their credit and make the choice to purchase later while also assisting the investor by maintaining an additional source of income for the duration of the lease period.
When a car is leased, there is a nonrefundable deposit paid to the dealership that equals a percentage of the car's value. This is also done in a lease purchase or rent to own agreement and is referred to as the Nonrefundable Option Payment, securing the tenant buyer's ability to choose whether or not to purchase the home at the end of the lease contract agreement. As with a vehicle, there is a lease contract signed in which the tenant buyer agrees to make a payment of a certain amount each month for a predetermined length of time, usually 12-24 months. This can be done in a manner that includes payments to be credited toward the purchase of the house or not, depending on how you want to set up the lease.
Finally, at the end of a car lease, the driver has the option to finance the remainder of the "balloon payment" owed on the vehicle in order to purchase it or to turn it back over to the dealership. In real estate, when working with a rent to own or lease option contract, this is referred to as the Option to Purchase contract, in which the tenant is given exclusive rights to purchase the real estate property without you offering it to the highest bidder first without obligating them to purchase when the lease is up.
If the option contract was signed so that the payments made during the lease period were credited toward the purchase of the home, the tenant buyer will need to obtain a mortgage loan equivalent to the remainder of the purchase price originally agreed upon. If there were no rental credits, the tenant buyer will need to obtain the entire purchase amount.
Lease purchase options and rent to own housing are excellent ways for a real estate investor to make a lot of money because there are three different sources of money coming in, all of which add up to a sum greater than the original investment by far. You put little money into the purchase, and in exchange, you receive an up-front payment, monthly installments, and finally a purchase payment equal to an amount greater than you paid.
Charles W. Moore is a U.S. Army Veteran who began Real Estate investing in 2001. He's now a Successful Investor, Webmaster, Speaker and Author.
Get a Free Report on Rent To Own Real Estate at: http://www.Rent2OwnExposed.com - Learn More about Real Estate Investing visit: http://www.REIeBooks.com
Lease purchase options, or rent to own homes, are a great source of income for the creative real estate investor who wishes to make money while helping those who cannot get into a home with their own credit to realize their dreams of owning a home. Lease purchase options work much like a leasing a vehicle, only on larger terms. It benefits the tenant buyer who cannot obtain a mortgage to purchase the home by offering them the opportunity to build their credit and make the choice to purchase later while also assisting the investor by maintaining an additional source of income for the duration of the lease period.
When a car is leased, there is a nonrefundable deposit paid to the dealership that equals a percentage of the car's value. This is also done in a lease purchase or rent to own agreement and is referred to as the Nonrefundable Option Payment, securing the tenant buyer's ability to choose whether or not to purchase the home at the end of the lease contract agreement. As with a vehicle, there is a lease contract signed in which the tenant buyer agrees to make a payment of a certain amount each month for a predetermined length of time, usually 12-24 months. This can be done in a manner that includes payments to be credited toward the purchase of the house or not, depending on how you want to set up the lease.
Finally, at the end of a car lease, the driver has the option to finance the remainder of the "balloon payment" owed on the vehicle in order to purchase it or to turn it back over to the dealership. In real estate, when working with a rent to own or lease option contract, this is referred to as the Option to Purchase contract, in which the tenant is given exclusive rights to purchase the real estate property without you offering it to the highest bidder first without obligating them to purchase when the lease is up.
If the option contract was signed so that the payments made during the lease period were credited toward the purchase of the home, the tenant buyer will need to obtain a mortgage loan equivalent to the remainder of the purchase price originally agreed upon. If there were no rental credits, the tenant buyer will need to obtain the entire purchase amount.
Lease purchase options and rent to own housing are excellent ways for a real estate investor to make a lot of money because there are three different sources of money coming in, all of which add up to a sum greater than the original investment by far. You put little money into the purchase, and in exchange, you receive an up-front payment, monthly installments, and finally a purchase payment equal to an amount greater than you paid.
Charles W. Moore is a U.S. Army Veteran who began Real Estate investing in 2001. He's now a Successful Investor, Webmaster, Speaker and Author.
Get a Free Report on Rent To Own Real Estate at: http://www.Rent2OwnExposed.com - Learn More about Real Estate Investing visit: http://www.REIeBooks.com
