How to land the best Mortgage deal

Several strategies can be adopted to land that mortgage deal that you so much wanted. These include:

• Making a large deposit: A large deposit significantly sweetens the pot when seeking a mortgage to purchase a home. With a large deposit, loan seekers are able to secure better interest rates as most lenders tier their interest rates from 90% financing. This is done to encourage loan applicants to deposit as much as possible in order to reduce their final interest rates.
• Having a good credit history: The demise of the subprime market has thrown many people’s credit history into a tailspin. This has made it difficult for mortgage seekers to get new loans to purchase or refinance their homes. Although you may be in debt, various measures can be adopted to improve your credit rating. This will significantly boost your mortgage success possibility as it shows your intention to improve your economic condition.
• Level with your broker: Be frank with your mortgage broker. Let them know the truth about your financial condition. With this knowledge, they will be able to match you with the best mortgage loan that suits your situation. Holding back information may result in you falling deeper into the financial abyss.
• Go for fixed rates: Although fixed rate mortgage may not sport the best numerical value on the market, fixed interest rates is the best option for long-term mortgage. Fixed rates are not affected by the ups and downs of the economy. We have seen a reduction in interest rates because of the current recession, but be sure, as soon as the economy improves, the fed will increase interest rates in order to control inflation. If you take flexible rates, you will see the same effects of what caused the subprime crisis where homeowners are unable to afford the new interest rates.
• Shop around: If you are applying for your first mortgage, always shop around for the best mortgage deal. Here we stress package and not just interest rates. This mortgage should provide support during difficult times, low processing fees, financial advice and affordable monthly payments. Many individuals have complained that most lenders with excessively low rates have huge amounts of hidden processing fees and penalties that often make more difficult for borrowers in the long run.
• Do your research: Having some knowledge of how mortgages work will go a far way in getting the best mortgage deal. This allows you to know when you mortgage broker is taking you for a ride.

Obtain the Best Deal that you can

It is extremely important that you select the right mortgage loan keeping in mind how much you can afford. An independent mortgage broker can help you find the best mortgage deals on the market. Mortgage brokers have access to the entire mortgage market and are up-to-date on the lowest mortgage rate deals. Even if you have been declined before or have poor credit rating, you may still be able to secure a decent mortgage loan.

Mortgage Brokers can help

Mortgage brokers do not give you loans but they will help you find a lender that matches your circumstances. Mortgage brokers have access to many lenders. This can mean a wider selection of loans and terms from which you can choose. Mortgage brokers will generally contact several lenders that they think are a good match based on your application, but they may not be obligated to find the best deal for you unless you assign them to act as your personal agent. You should also consider contacting more than one mortgage broker, just as you would with banks or other institutions.

Lending Criteria not what it used to be

Keep in mind that obtaining the best mortgage deals will depend on your financial situation and credit rating. Today mortgages have become a bit difficult to get due to lenders tightening their lending criteria thus making it that much more difficult to find competitive deals. The best thing to do is to compare rates, negotiate and keep shopping around until you do.

Comparison Shopping Will Save you Thousands of Dollars

Mortgage loans are available from several types of lenders such as, banks, mortgage companies, credit unions and through mortgage brokers. Each type of lender may quote you different prices; this is why it is so important to shop around. You will have to contact several lenders to make sure you are getting the best price on the market.

Obtain all Important Information Regarding the Loan

Be sure to let your broker know how much of a down payment you can afford to make and find out all the costs involved in obtaining the loan. Knowing just the amount of your mortgage payment or the interest rate is not enough information to make a good decision. When comparison shopping make sure to ask the same information to each lender and broker, such as:

• The same loan amount,
• loan term and
• type of loan

Protect Yourself – Obtain a Lock-in

Once you are completely satisfied with the loan and terms, you will need to get a written lock-in from the lender or broker. The lock-in will show the mortgage rate agreed upon, the lock-in period and the number of points you will need to pay. Lock-ins is a great way to protect you from rate increases while your loan is being processed. However if rates fall, you could end up with a less favorable rate. If that happens, see if you can renegotiate with your broker or lender.

Finding the best mortgage deals on the market will take a lot of shopping around and negotiating on your part, but in the end it is well worth it.

Top 10 Mortgage Broker Companies in Alabama

Dealing through a Mortgage Broker certainly reduces tension and confusion in obtaining the best mortgage deal. Whatever your requirements are, mortgage brokers can get you what you need without hassles. They charge a service fee for the services rendered by them. Here is a sample list of the top 10 mortgage broker companies in the State of Alabama, with changing performance, positions tend to change.

1. Collateral Holding - A mortgage banker who specializes in the business of mortgage lending has its head quarters in Birmingham. The revenue of the company per year is around $20,000,000.
2. Worthington Mortgage Group, Inc – A private company incorporated in the early 1980’s, specializes in the business of mortgage broking with head quarters in Huntsville. The company has annual revenue of $1,000,000.
3. Anchor Mortgage Service, Inc – Listed among one of the good performers in the mortgage lending services, Anchor Mortgage was established in 1988 and is located in Montgomery.
4. Advantage Investors Mortgage Corporation – The company is located in Pelham and is classified in the list of mortgage loans and services company.
5. Midland Trust, Inc – This private company offers the services of mortgage broking. It was established in 1982.
6. New South Federal Savings Bank - This private bank also offers mortgage broking services.
7. Wachovia Bank – This bank is also into mortgage lending and is located in Gulf shores.
8. Countrywide Home Loan, Inc – This private home loan company located in Orange Beach also offers the services of mortgage broking and mortgage lending.
9. SouthTrust Mortgage Corporation – This is a business unit of Wachovia Mortgage Corp, is located in Decatur, offers mortgage lending and broking services.
10. CTX Mortgage Company - This mortgage banking and broking company is situated in Tuscaloosa, AL.

The list presented is only a sample list. It is advised that borrowers take ample caution when dealing with mortgage brokerages and do a thorough inquiry before proceeding to lock a mortgage deal.

Understanding Reverse Mortgage

In order to understand the potential of reverse mortgage you should know the following.

What is a Reverse Mortgage?

A reverse mortgage transaction is all about getting returns from your house property, even while living in it. Of course you did pay monthly installments to wind up the mortgage loan on the property and imagine the amount of money that has gone into the house you are living in. It is time now for you to get money from the home equity which you have invested. As the name suggests it is the reverse of a regular mortgage transaction where in you get money in instead of paying it.

How does Reverse Mortgage work?

In a mortgage loan transaction, the installment paid went to reduce the loan amount borrowed, their by increasing the amount of equity on loan. A reverse mortgage loan in turn reduces the equity and increases your debt on the property. As long as you continue to live in the house you need not repay the loan amount. On sale of such a property for an amount much larger than the loan amount borrowed, the difference is allowed to be retained by you.

What are the Eligibility Criteria for Reverse Mortgage Deals?

Those intending to apply for reverse mortgage should be home owners who aged of about 62 years. This scheme is specially meant for those senior home owners to get money out of their house. Manufactured homes, condominium units, town homes are all eligible for reverse mortgage. It is also equally important for you to obtain an approval from authorized reverse mortgage counselors.

What is my Loan Limit?

The amount of loan which can be borrowed on the property clearly depends upon the age of the borrower, location of the property and certain other considerations as specified by the counselor.

Points to note in a Reverse Mortgage deal

• A reverse mortgage deal has a number of costs to be incurred. Starting from service counselor fee to insurance premiums, servicing cost, third party fee, origination fee and finally the interest cost. All these cost put together is referred to as Total Annual Loan Cost. This is expressed in a percentage. You can pay them out of the loan proceeds received.
• You can either receive the loan amount in a lump sum or in installments as you choose. The fixed rates are applied for lump sum disposal and variable rates for disposal in equated installments or a combination of lump sum and installments.
• Know you needs well. Remember the proceeds of the reverse mortgage transaction is your capital. Ensure you use it only for essential requirements. Any careless spending will only result in loosing your home.
• At any point in time you can always estimate the value of home which still belongs to you. You also get to know how much you need to repay in order make your home free of debt.
• The availability of some of the benefits certainly depends upon how you spend the reverse mortgage proceeds. It is only treated as a loan advance hence not taxable. Your medicare benefits is definitely not affected because of reverse mortgage transaction, while those such as Medicaid and SSI are likely to get affected where you do not disperse the amount received within a month of receipt. It is always better to take the advice of a tax expert to know the exact position of the fund and its taxability.

Knowing what reverse mortgage loan option can do for you is important to decide whether or not to opt for one. Whenever a question of loan arises, remember to go for it, only it is an emergency.