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Archive for the ‘Mortgage Borrowers’ Category

Are you in the market for buying a home? The first thing most home buyers think of is what are the current mortgage rates like? In the past, mortgage options were fairly simple. The question was simply “should I take a closed or open mortgage?” However, In today’s complex economy there are a host of mortgage options.

Consider this list of the types of available types of mortgages. Mortgage rates vary with the each option.

• Conventional Mortgage

• High-Ration Mortgage – CMHC / GE Capital Insured

• First Mortgages

• Open Mortgages

• Closed Mortgages

• Fixed-Term Mortgages

• The Adjustable Rate (A.R.M.) Mortgage

• Secured Lines of Credit

• Equity Mortgages

• Multiple Term Mortgages

• The 6 Month Convertible Mortgage

• All-Inclusive-Mortgage (A.I.M.)

• Bridge Financing

Let’s explore just one option from this list: The Adjustable Rate (A.R.M.) Mortgage.

An adjustable rate mortgage is also known as a variable-rate mortgage or a floating-rate mortgage.

Simply put, in this option, the mortgage rates paid on the outstanding balance varies with the fluctuating interest market. The initial interest rate is normally fixed for a period of time after which it is reset periodically, often every month.

An article from Investopedia.com has some good points to consider regarding this type of mortgage.

“Homeowners who took out ARMs in order to be able to afford the maximum house on a minimum payment could be in for an unpleasant surprise. While the adjustment rates are fully disclosed prior to purchase, many buyers fail to consider the future implications. This is particularly true with interest-only mortgages. Like other ARMs, interest-only mortgages provide a set period of time in which the payment consists only of interest on the loan. The homeowners get the benefit of a low payment, but the loan’s interest rate can rise in the future – and the loan’s principal must be repaid too. The end result can be ugly.”

“That’s not to say that ARMs, even interest-only ARMs, aren’t valuable tools. If you don’t plan to stay in the property for more than a few years, ARMs can help you get a nice place to live at a reasonable price. If you are affluent and investment savvy, ARMs can also be a great tool. However, in a rising interest rate environment, taking on an ARM is a questionable strategy.” source www.investopedia.com

Another point to consider is that the mortgage rates you are personally quoted will depend in a large part on your own ability to repay the loan and something most people do not consider; your own credit rating. Individuals with an excellent credit score will be offered the best mortgage rates.

Still think getting the best mortgage rates is only about closed or open mortgages? With such a huge investment as home ownership, mortgage rates are only one item to contemplate. A knowledgeable mortgage professional is invaluable when helping to decipher the mortgage maze.

In spite of the financial blows prevailing in the present mortgage industry, an increasing percentage of small private lending agencies remain unaffected. As a result, these entities made use of the momentum and they are prepared to provide loans for different business requirements.

Small entrepreneurs who need funds for business expansion can make use of a commercial mortgage loan for their commercial property such as apartments, warehouse or retail space. These commercial mortgage loans, on the other hand, require a commercial property, and not a residential one, as security for the loan.

To make use of the right mortgage solution for your property, you may ask the helpof the NCF and similar private lenders. It becomes tempting for property owners to pledge an apartment or mobile home park as collateral because lenders charge only 1%-3% interest rates.

What You Can Get Out of a Business Mortgage Loan

Borrowers must do a careful computation of projected expenses, cash flow, and revenues to establish that the project is feasible and the loan can be repaid. Mortgages of this kind span for 15 years at most and can be difficult if dues arent settled on time. The good thing is, disadvantages are overpowered by the advantages:

* In a mortgage loan, full ownership of the business or the estate will stay with the property owner as the lender can only claim the interest of the mortgage.

* The borrower is given the instant funds for emergency expenses and upfront payments.

* Cash out options provide borrower access to finances that can be managed and used for other purposes.

* With a standard repayment scheme, monthly payment is pre-determined and finances can be easily managed.

* Tax deductions on interest payments.

The consequence of the mortgage begins with the drain on finances, but through prudent selection and management of the mortgage, the obstacles can be overcome.

Buying versus Letting a Property

Careful planning is needed before one should decide on buying an estate since it will drain out the finances of the buyer. On the other hand, a purchased (not a rented) estate provides more potential for business growth and added income.

You may want to search for the best rates and rents. This endeavor becomes more manageable and less stressful because of the lesser mortgage rates offered by some lenders and the fact that payments for this loan is pre-determined.

While renting is less expensive compared to purchasing a business property, it has its own dangers. Risks such as non-renewal of the lease contract and yearly increases in rental will negatively affect the business.

If you’re torn between renting or buying a property, you should consider several factors first. Its important that there’s an evaluation on the expenses associated with the purchase. A lawyer or an accountant will also be very helpful in making this decision.

There’s no need to hurry and immediately aim for a big loan as small commercial loans can be used to finance small projects. What is of significant importance is the planning and awareness dedicated in making the informed choice.

Private hard money lenders are in the business of providing loans and loan services to people who require hard money loans (loans collateralized by real estate.) Private hard money lenders may be direct hard money lenders or brokers of hard money loans. Most private hard money lenders are, in actuality, brokers. Some private hard money lenders are both brokers and direct lenders. In these cases, the private hard money lender generally funds one or up to a few small loans per year and serves in the broker capacity to clients for the loans they help to originate.

Deciding on whether to work with a hard money broker or a private hard money lender is similar to deciding on whether to purchase real estate with the assistance of a broker/agent or whether to make an offer direct to the seller on your own.

The advantages of working directly with a true private hard money lender are immediately evident: You may sometimes save money by going direct. Brokers are paid for their services via a percentage of the points you pay on a hard money loan. Therefore, the more brokers involved in a deal, the more you are likely to pay in both points and percentage to accommodate that cost.

If you have selected a direct hard money lender who is a good match for your project, you will be able to speak directly with the decision makers, avoiding the ‘run around’ that so many hard money borrowers fall prey to. You are told that your loan is going through, only to hear the next day that the lender has elected not to take on your hard money loan and now your loan is on another desk in yet another direct lender’s office – or worse, on the desk of another broker who may know a broker who knows a lender who may want to fund your loan. Sometimes, the choice of direct lender is based more on the commission the broker will get than on your best interests.

By working with a direct hard money lender, you can avoid the ‘run-around’ and may be able to close more rapidly. After all, no one knows your situation like you do, no one can explain any extenuating circumstances better than you can, and no one is as committed to your business and your hard money loan as you are.

The advantage of working with a commercial mortgage broker is also clear: a seasoned, well-informed, honest commercial mortgage broker will have the knowledge of and access to the direct hard money lenders in Ontario, Canada, and the United States. A commercial mortgage broker will know where your loan has the best fit. A good commercial mortgage broker will help you ‘package’ your loan to your best advantage, helping you determine how much to expect based on the equity in your property
, type of property you are collateralizing, how soon you need to close the deal, and more. A good commercial mortgage broker will be able to assist you through the lengthy application process and submit your loan request to the best direct lenders for your situation. More often than not, working with a commercial mortgage broker will save time. By representing you and presenting your loan request to the best direct lenders, it often makes the transaction run more smoothly and take less time than if you were to take on this task yourself. This often saves you time and trouble in the long run and be well worth the cost of using a mortgage broker.