Beg, Borrow or Steal, Make that Mortgage Payment

One of the most common things I hear when a prospective client contacts us for a mortgage refinance is "I just missed a mortgage payment and I want to refinance before it's too late". When I ask them about their credit, most of them reply "Oh I pay everything on time, I just got behind this one month on the mortgage".

It breaks my heart to tell them that in many cases, it already is too late. The reason is simple if you really think about it: If your home is your biggest investment, your greatest potential asset and your largest current liability, there is nothing more important than showing that you are able to make the payment on it every month. If you are in a cash crunch, you're better off missing or underpaying almost any other payment, such as a credit card bill, even your utility bill, instead of missing or even delaying your mortgage payment, because missing one mortgage payment can cost you tens of thousands of dollars over the years.

When you miss a mortgage payment, your credit score may not go down dramatically. But your mortgage credit quality will take a serious beating, and you'll carry it around for years. When you start out with a mortgage, regardless of what your FICO credit score is, you are rated an "A", meaning you make your mortgage payments on time. If you miss a payment, and even if you're just late enough to qualify as 30 days late, the lateness is recorded and you will become an "A-" or a "B". Just one mortgage lateness can keep you out of the refinance market for up to two years by automatically locking you out of the lowest payment programs such as Option ARMs or low-rate fixed mortgages, and you can forget about stated income programs, you will now have to prove where every penny comes from and you'll need more of them too. If it sounds a bit like high school, it is, but this time its for keeps. Keep missing or delaying payments, and you'll quickly see your mortgage quality decline to a "C" or "D", which could prevent you from refinancing entirely by eliminating your eligibility from even standard rate programs. I have seen customers who started out at 6% wind up at 10% or more solely because they chose making payments on cars or credit cards over making their mortgage payment on time.

This hurts the most when you refinance or are ready to buy a new house, because you are usually borrowing more money than you were previously, either to pay off bills or make home improvements, or because you're getting a bigger house. So not only are you moving to a higher balance, but your now derogatory mortgage credit will force you into a high rate. If you need the cash to pay off bills and improve your credit urgently, or to purchase a home in a new area because you are relocating for work, you can wind up in a horrible Catch 22, very often disqualified for financing entirely, or with financing so unaffordable that you would rather not.

So what can you do about this? If you do better with automatic payments, sign up for direct debit payment with your lender, or arrange for your bank to automatically pay your mortgage every month on a specific date which far enough ahead of the due dates for your other bills that you won't be tempted to pay something else. The day after payday is a great day to do it. And the date should be far enough ahead of your due date that the bill is paid and posted on time. It might hurt that first month, but it will even out once you get used to the new schedule.

And if you are even thinking that you might miss a mortgage payment, call up a loan officer, and not one who works for your current lender, and get refinanced today. Not only will this put a little extra cash in your pocket and help you pay off your other bills, but it will usually allow you to go a few extra weeks without making another payment out of pocket. In fact, for qualified borrowers, we even have Zero Payment & Zero Interest for 90 Day loans which are perfect for people who are at risk of missing their next payment. Because there are no payments for up to 90 days, this is a very popular product amongst our customers. Fixed-Rate Option ARMs (Hybrids) are also excellent products for people who are having trouble making ends meet temporarily, but expect to get back on their feet within a few months or a few years.

Loans generally take 15-30 days to close, so you really need to think ahead a little bit, which is hard for all of us. But instead of freezing up, or scrambling around looking for money, call up an experienced professional and get out of that jam before you get into trouble. You're better off dealing with the issue in the present instead of regretting the past. And no matter what, make sure you satisfy your mortgage payment obligation. Everything else on your credit report can be repaired, negotiated, but not your mortgage lates. Don't wind up in a situation like many of my callers are in, ready to dance but too late to the party, plan ahead and as always, protect your financial future today!

Tristan Hunt is a seasoned financial professional with a wealth of experience in the mortgage business, advising clients on their biggest single investment at Refinance One, one of the nation's leading specialty mortgage companies.

Phone: (800)515-8443
Email: Customers@RefinanceOne.net

Favorite Topics Include: Adjustable Rate Refinance, Fixed Rate Refinance & Fixed Rate Cash Flow Mortgages

Mortgage Payment Protection Insurance

A mortgage is often the single biggest financial commitment that many people make during their lifetime, yet fewer than half of all residential mortgage holders choose to take on protection of their mortgage repayment ability with mortgage protection insurance.

Mortgage protection insurance, or mortgage payment protection insurance, is a form of insurance that ensures mortgage repayments are met should the mortgage holder become unemployed, fall critically ill or be unable to earn income due to an accident. This type of protection insurance product is quite cheap to maintain, and allows mortgage holders to set an insurance amount for monthly protection pay-out that covers mortgage costs and additional expenses up to a set percentage above mortgage outgoings.

Most mortgage payment protection insurance policies are strict on protection insurance claims. For instance, should the mortgage holder become unemployed through their own free will, then they would not be covered by the mortgage payment protection insurance policy. However, redundancy does qualify for payment through the protection insurance policy, providing that the mortgage holder actively seeks new employment. Additionally, mortgage protection insurance may not pay out if the claimant takes on voluntary or part-time work, although the protection insurance terms & conditions relating to this area will vary with each type of mortgage payment protection insurance product.

Typically, mortgage holders will have to endure a mortgage payment protection insurance qualifying period before receiving payment protection pay-outs. The qualifying period on mortgage payment protection insurance policies is normally 90 - 120 days. If the mortgage holder is still eligible for mortgage payment protection insurance after this period, then protection payments are commenced on a monthly basis.

Insurance companies often require holders of mortgage payment protection insurance to renew their mortgage protection insurance claim every month by completing a form. Sometimes the insurance companies will request evidence from the mortgage holder so they can evaluate the mortgage holder's eligibility for the continuation of mortgage protection insurance payments. This could be a doctor's note of illness or copies of job applications if claiming mortgage payment protection insurance pay-out because of redundancy. Mortgage payment protection insurance pay-outs are normally paid directly into the mortgage holder's bank account one month in arrears.

Pay-outs on mortgage payment protection insurance are often limited to a set insurance period. Depending on the insurance company, monthly protection payments over six months or twelve months from the first mortgage protection pay-out is normal. As two out of every ten people who are made redundant take over a year to re-establish themselves in a new job, mortgage payment protection insurance could mean the difference between keeping your home or losing it.

About The Author
Gary Tallon has been writing in the finance industry for over 10 years and is currently working with life insurance http://www.powerinsurance.com for PowerInsurance.com.

No Down Payment Mortgage Loan - Ways to Buy a Home with Zero Down

If you want to buy a new home, but have little money in the bank, there are ways to get approved for a home with no money down. New homebuyers have a multitude of mortgage options available to them. These options make buying a home with little out-of-pocket expense more attainable.

Understanding Traditional Mortgage Loans

Prior to the flood of new mortgage loans, buying a home required waiting until you had the ideal circumstances. This usually meant saving enough money for a down payment (about 20% of the home price), building a high credit rating, and having adequate funds left over to pay closing fees.

Unfortunately, the prefect circumstances rarely present itself. Thus, several home loans have been established to help people achieve their goal of owning a home. Although new types of home loans are common, traditional mortgage loans have not become extinct.

There are advantages to traditional home loans. Typically, these loans involve a lower interest rate and better terms. However, meeting the qualifying requirements is difficult. Moreover, traditional mortgage loans require some form of down payment.

First Time Home Buyer Loans Programs

Several local housing departments have programs setup to help new homebuyers acquire a home loan. In some cases, homebuyers must successfully complete a home buying workshop.

Afterwards completing workshop, homebuyers become eligible for down payment assistant programs and government grants. Unfortunately, some cities establish income restrictions. Thus, if the annual household income exceeds a certain amount, you will not qualify for down payment assistance.

No Money Down Home Loans

If seeking a conventional home loan, there are many programs offered by Veteran Administration and FHA that involve no money down home loans. In either case, the lender financing the home will likely approve the homebuyer for 100% financing.

Try using one of ABC Loan Guide's Recommended No Money Down Mortgage Loan Lenders.

Buyers may also obtain funds for more than the purchase price, which is usually enough to pay for closing costs and home repairs. These loans are labeled 103% and 107% financing. If using a prime lender, good credit is required. Homebuyers that do qualify for prime rates may obtain up to 103% financing using a bad credit mortgage lender.

View our recommended lenders for Mortgage Financing. Also, view our recommended sources for Home Loans For People With Poor Credit.

How to Lower Your Mortgage Payment and Avoid Foreclosure With Obama's New Stimulus Package

The stimulus bill can help you lower your mortgage payments. There are no qualifications or lengthy paper work and there are no strings attached. All you have to do is get a loan modification. Let me explain.

Obama has allocated fifty billion dollars of the stimulus package to lowering loans for homeowners facing foreclosure. In the past banks have cut back on issuing modification negotiations because of the tough economic situation. However, these attempts have resulted in even more foreclosures and even more losses for banks. This plan will alleviate this crippling situation by benefiting both banks and homeowners by allowing both to avoid foreclosure- the worst situation possible. The way the plan works is that Obama will distribute the money to major banks as an incentive to lower interest rates and negotiate more lenient payment plans for those in a bind. This means that banks will be more likely to accept your negotiated proposal.

Do not miss out on this opportunity. There are other ways to take advantage of this new stimulus bill but getting a your loan adjusted has the least restrictions. For example, Obama has devised a plan to lower your tax credit. However, this plan is only applicable to individuals who make less than 75,000 dollars per year. Those who meet the restrictions will be given priority.

Even if you have been unsuccessful in the past, you should still try to negotiate a modification again. Banks will be more generous this time around because of aid from the stimulus package.

A loan modification is always your best choice over a short sale or a deed in lieu of foreclosure. This is the only way that you can reduce your debt while still keeping your house.

This article is written by Timothy McFarlin - an experienced loan modification attorney. Tim has many years of loan modification and bankruptcy experience and has helped many corporations and people with securing a better life. You can visit his website at McFarlin and Geurths LPP Law

Four Ways to Lower an Expensive Monthly Mortgage Payment

Many homeowners would be able to afford their mortgages if not for a temporary financial hardship or an inopportune interest rate reset. They are not facing a serious long term change in their income, but were only temporarily unable to make a payment. Interest rate resets on adjustable rate mortgages may be even more unfortunate, as it is clear so many borrowers did not understand and were not made aware of the fact that the cost of the mortgage would drastically increase a few years after they bought their home.

For families in this situation, it would seem easy enough to identify the goal that would allow them to keep their home; namely, they must lower their monthly mortgage payment. Of course, this is much easier said than done, but there are a number of routes that borrowers can take to try and obtain a more affordable payment, even if they have bad credit or they have recently changed jobs. While using a foreclosure lender is a viable option, in times of a credit crunch and lower property values, it may be wise to consider other solutions first.

Before they try anything else, all homeowners should call their lender and ask the loss mitigation department what is needed to qualify for a mortgage modification. Borrowers will probably have to send in a number of financial documents and fill out bank forms proving they can make a reasonable payment every month. This solution may significantly lower the payments but will typically not lower the total amount owed on the loan, as a modification is usually just about reducing the interest rate in order to make the monthly cost more affordable.

Borrowers may also want to consider the use of a foreclosure help company to do the services listed above. If they do not have the time to spend on hold with the bank for hours a day, then they might want to unload this part of the process to professionals. The owners can do pretty much everything else to qualify for a workout solution on their own, but banks currently have so many foreclosure cases that they need to be called almost everyday until the homeowners are given an answer to their application. If the borrowers can not make that call everyday, the should seriously consider paying someone else to do it on their behalf.

Another, more speculative, option is for homeowners to default on their loan completely and hope that the bank sells their mortgage to the government. The government will probably step in and negotiate the balance down and reduce the borrowers' monthly payment before selling the loan back to some other bank to collect the payments. Wall Street banks are being bailed out for hundreds of billions of dollars of foreclosure victims' money -- homeowners behind in payments might as well get in line to get a piece of their own money to save their homes.

Finally, as one last option to lower monthly payments dramatically, homeowners can try to fight the foreclosure in court for as long as they can get away with. It may take years for the legal process to be over, if borrowers answer the initial complaint and demand that the bank show proof that it can foreclose on the house and has been in compliance with all the applicable laws. There are so many regulations that banks will have violated some clause in a state or federal law, or lost the original mortgage note. In any case, some homeowners have lived mortgage free for nearly a decade while they file motions in court, wait for hearings, and file appeals at every step of the process. Even if they lose the house in the end, they will have a long period of time in which to save money and pay down other debt.

Families who experience a temporary setback in their income may find it almost impossible to get back on top of their mortgage payments, with little help offered from the mortgage company itself. The banks make it difficult to do so, as they begin accelerating fees and interest in an attempt to eat up as much equity from a house as possible, if it goes to a foreclosure sheriff sale. But homeowners do have options to lower their payment, either through modification of the loan, a potential government bailout, or fighting the lender in court, not to mention refinancing with a specialized foreclosure lender.

Nick writes for the ForeclosureFish website and blog, which aim to provide homeowners with foreclosure advice and solutions they can use to save their properties while they still have time. The site describes numerous options to use for this purpose, including foreclosure refinancing, mortgage modification, deed in lieu, short sales, and more. Visit the site today to read more about how foreclosure works and how best to avoid it in your situation: http://www.foreclosurefish.com/

Behind on Your Home Mortgage Payment? Work with Your Lender!

When you get behind on your home mortgage payment, it can be a scary proposition. The chances are good that if you're like most folks in that situation, your house payments aren't the only financial obligations you're behind on. You're being stressed, emotionally and financially, and your home life may be suffering as a result.

If you're in that situation, it's important that you do the one thing that 2/3 of Americans DON'T do--reach out, talk to your lender, and work out an alternative plan. It's an amazing statistic, but a recent survey by Freddie Mac and Roper Public Affairs and Media has showed that more than half of all borrowers faced with foreclosure of their homes never talk to their lender at all during the process.

On the other hand, ¾ of those borrowers do remember having been contacted by their lending institution. There was a significant percentage of reasons people gave for not following up those contacts with their own attempts to work out alternative payment plans, but the most often cited was a belief that their lenders couldn't help them with late house payments. The next most-often reasons cited involved pride, fear, and embarrassment. Borrowers thought they could take care of their problems themselves or were afraid to call because they simply didn't have the money to make their payments. Another common reason was that borrowers didn't know who to contact for help.

That last reason, although cited significantly less often than the others, is still important, because some 61 percent of delinquent buyers responded that they didn't know a person could work out an alternative payment plan to help them out of their short-term financial bind. The survey showed that 92 percent of those borrowers would have talked to their lender if they had known that such an option was open to them.

The survey found that demographics made no difference in borrower responses. Whether the borrower was male or female, white, black, or Latino, the survey showed that there is a genuine need for educating borrowers as to how to work out temporary plans to avoid foreclosure.

So if you find yourself in a financial bind that is difficult enough to threaten the loss of your home, don't be afraid or embarrassed. Lenders are in the business of lending money. It's not their job to become homeowners. So they'd rather help you keep your home rather than have to deal with taking over and then reselling a foreclosure.

Don't ignore the correspondence from your letter if you get into trouble. You have everything to gain and nothing to lose by talking frankly with your lender about working out a plan to save your house. You'll be surprised at how willing most lenders will be to help you stay in your home, even if you are behind on your mortgage.

Copyright © Jeanette J. Fisher

FREE Credit Help Teleseminar. Get expert advice on building your credit from mortgage brokers and real estate college instructor Jeanette Fisher. More free credit tips http://worryfreecredit.com

Wind Inspections Reduce Your Mortgage Payment - Homeowner's Reduce Your Monthly Payment

Wind Inspections are helping homeowner's reduce their mortgage payments by applying for credits on their homeowners insurance policy. Eligible credits include new home discounts, wind mitigation credits, type of construction discounts like concrete block with rebar, and alarm discounts like fire or burglary. In Florida every county with a coastline has areas considered high wind borne debris zones. Because of this classification, homes have to be constructed to withstand high winds and wind blown debris. That means each roof truss must have a metal strap tying it down to the walls and the walls have to have reinforcing bar if made of cement or cement block and stud bolts through the bottom plate if they are made of wood. These bolts and rebar secure the home to the foundation slab preventing a strong wind for lifting or twisting the structure.

Other important building designs include the use of 8-10d nails to fasten the roof deck, bracing on gables or hip roof construction, hurricane shutters over all the openings like windows and doors or the use of impact and wind resistant products. The roof construction is generally the best reason to get a wind inspection because it corresponds to the largest reduction in a homeowner's premium. Since every home built after 2002 and many built prior to that have the high wind type construction. If you had your roof replaced in the past year, new Florida legislation made updating the roof construction mandatory. That means many Florida homeowners are sitting on an opportunity to reduce their mortgage payments and don't even know it.

In today's economy, reducing your monthly mortgage payment can mean the difference that keeps you in your home. And it is as easy as getting a wind inspection. Some homeowners can qualify for inspections at reduced prices. If you want to have a wind mitigation inspection conducted on your property some inspectors are helping to make it easier by offering their services for a discounted fee. Outside of installing shutters and hurricane-proofing your home, you can shop your policy and get the best premium for the same coverage or more appropriate coverage that fits your needs.

J. Malan is the owner of Malan Group LLC. Brevard, FL's first choice in water damage repair and emergency water removal and remediation. Malan Group LLC offers a free wind inspection on all claims they handle. When you experience an insurance claim, we can handle all your repairs and settle directly with your insurance company with no out of pocket expense to the propery owner. http://www.malangroupllc.com

Mortgage Payment Protection Insurance Or Loan Payment Protection Insurance Can Be Much Cheaper

Loan Payment Protection Insurance

Loan payment protection insurance pays your monthly loan repayments if you become unemployed through accident, sickness or disability.

Normally people who are taking out a loan arrange it quickly and by default accept the loan payment protection insurance that is offered by the loan company.

In actual fact this doesn't have to be the case, loan payment protection insurance can be arranged independently which can save hundreds of pounds or even thousands over the term of a loan.

Mortgage Payment Protection Insurance

Mortgage payment protection insurance pays your monthly mortgage payments if you become unemployed because of accident, sickness or disability.

This insurance is the icing on the cake for mortgage lenders; they have made one of their most lucrative sales (the mortgage) and then they 'add on' the protection insurance, to give them a bit extra!

Once again by shopping around, enormous savings can be made, especially when you consider that mortgages typically run from 15 to 25 years! Many homeowners don't take out policies at the time of the initial home purchase, but wait until things are 'looking bad' at work, this is a bad mistake as prior knowledge of redundancy is often an exclusion clause for this kind of policy.

The majority of borrowers take mortgage payment protection insurance from their lenders as they don't know about the alternatives.

Payment Protection Insurance on TV

A British Channel 4 TV show, 'Tonight with Trevor Macdonald" was broadcast in 2006 where loan payment protection insurance was the subject. It was revealed that most people with loans didn't even realise they had an option to use an independent insurance company.

In the show there was a short interview with Simon Burgess from British Insurance Ltd.

Simon said that the reason that taking out payment protection insurance from lenders was more expensive than 'going independent' was purely the fact that the lenders were greedy and took too much commission. He stated that "there was nothing inferior about his British Insurance polices, but the premiums were cheaper as they took 10% commission whereas the lenders took up to 50% in commission".

The author of this article is Rick Lomas. With the help of Steve Pritchard, Rick was one of the original pioneers (from 1999) of setting up web sites to sell payment protection insurance online. British Insurance Ltd is now one of the UK's leading insurance company to provide mortgage payment protection insurance for the British homeowner. Independent mortgage payment protection insurance can be arranged by British Insurance Ltd at http://www.uk-insurance-online.com
Free ebooks containing information and advice about loan payment protection insurance, mortgage payment protection insurance and income payment protection insurance can be dowloaded free from http://www.ukinsuranceonline.co.uk

5 Power Tips to Lower Your Mortgage Payment in 2009

1. A Lower Fixed Rate - In real dollars per month, when we consider that many people out there who are holding a 30 year fixed rate from the last Refinance Boom of 2005 will have an interest rate of around 6.00% to 6.75%. On a 400,000 loan amount at say 6.375% that equals a monthly payment of 2,495.48. Now, moving forward with a refinance in 2009 a very realistic .750% reduction (less than 1%) in the rate of interest will reduce those payments by 224.33 and so when you "road map" those savings over the next 15 years that is over 40,000 in interest costs that the consumer saved in just one area of their budget!

2. My Loan contains a Variable Rate Feature - The key on these is (a) what kind of Variable Feature do you have? and (b) Understanding when it changes - how will that impact your monthly payment? The fact that you have a Variable Feature is nothing to be fearful about. You simply need a basic understanding of how the changes are structured and knowing that - you can then better decide how best to either get out of the loan you have or stay with the loan you have. If you review your Note from your loan documents, the complete outline of "the how and when" is contained on those pages.

3. Lowering my Mortgage Payment & Beyond - The beyond part is simply taking the amount of savings you end up with on your refinance and putting those saved dollars to good use, like reducing a credit card, helping out a family member with expenses or simply placing it into a savings or investment account, this is a major benefit of the refinance process that I think deep down most everyone in their heart is seeking to have.

4. What about a Fixed 5 year Term? - I love these when they are low. The reason is that you can typically obtain a 5 year fixed term in the mid 4's at the same time that the 30 year fixed terms are in the low to mid 5's. You should have a strategy at work in looking at the 5 year fixed term versus the typical 30 year fixed term, let me explain. The 5 year fixed term I am referring to is a 30 year loan with a fixed rate in the "first five years of the loan" and then it turns into a variable loan for the remaining 25 years. In the example up above you could be saving double the monthly amount since these loans offer a lower rate over the fixed 30 year loan terms. The strategy is that you (a) really need to obtain the lowest rate possible without a very risky loan and or (b) you may not be staying in the home for more than 5 years and therefore you want to enjoy the maximum savings possible before that event takes place.

5. Buying a Rental Home - What about That? - There is no question that there are great buying opportunities out there in this 2009 economy however the lending guidelines are much tighter than ever before with today's underwriting through Fannie Mae & Freddie Mac. A 20% down payment is the "norm" and you must know the reason why you are investing. Why do you want to do this? When & How do you plan to get out?. You need to nail down your expectations in these two areas well ahead of a planned attempt on an offer to purchase. The reason I bring this up is because about 50% or more of the foreclosure market that is getting "hammered" in our great American Cities is a direct result of borrowers who bought not one, not two, but three or more Rental Houses with the sole intent of keeping them for a short ride and making a nice profit in two or less years.

Wade is a Successful Mortgage Specialist with extensive experience in originating, processing and fulfilling underwriting requirements to close and fund loans. Wade has a strong work ethic, consistently producing through all economic upturns and downturns. Wade's problem solving techniques, extensive knowledge of investor products and guidelines along with his ability to lead others in achieving their financial goals means he does care about making certain you are receiving the utmost of care, concern and integrity throughout the loan process.

Decrease Your Monthly Mortgage Payment And Build Wealth At The Same Time

Financial advisors and banks have been telling folks for years that they should hand over extra money every month toward their mortgage in order to reduce the time period for paying off the loan and to cut down on the interest forked out.

Boiled down, a $200,000 at a rate of 5% would cost about $1074 per month over 30 years. Over 30 years, you would actually hand over $1074 x 360 (months), which is $386,640. That's $186,640 in interest!

You could cut 10 years off your mortgage payment period if you could simply fork over your typical mortgage charge plus an additional $246 each month. On top of that, you would cut the total to $316,664 and save an incredible $69,756!

OK, so maybe now the little voice in your head is saying something like, "I don't want to pay more every month I want to pay less every month like the title of the article says. Now I am to show you why forking over much more money toward your mortgage is not the best move that you can make. The flaw in this technique is that it ignores the time value of money.

However, before we get into the time value of money, let me first explain why the banks and financial advisors preach what they do. With the banks, it's pretty simple your paying your mortgage faster means less risk to them and it gives the opportunity to lend the money to someone else. In addition, when banks decide what people to target for foreclosures, they always pick the people that have PAID MORE toward their mortgage because they expose themselves to less risk. This is contrary to the beliefs of most people that tend to think that because they coughed up a lot more, the bank won't target them. Homeowners are actually safer from foreclosures when they OWE MORE money to the bank.When homeowners OWE MORE to the bank, they actually make themselves less of a target and are much safer.

The Hilton Hotel empire is probably the best example of this. During the Great Depression, when homes were being foreclosed on left and right, the Hiltons did not have one property foreclosed on even though they fell behind in the payments several times. Basically, since they owed so much money (and still do since they never pay off their properties) they made sure that the banks would not target them.

I really have no idea why, when it comes to financial advisors, that they tell their clients to go this route. They know that the banks first target those that have forked out more. Finally, having their clients pay off their mortgage actually costs their clients and themselves (because they get paid by making their clients money) a ton of lost profit because of the time value of money.

Just about every single person knows that money was worth more when they were younger because of inflation. Using the mortgage example above, in thirty years time, the last amount of $1074 will only be worth about $437 in today's money.

A dollar today is always worth much more than a dollar a year from now, or 10 years from now, or 100 years from now.

How does the time value of money affect our example?

You cannot simply subtract the mortgage interest amount for a 20 year mortgage from the interest on a 30 year mortgage. Instead, you must calculate the "Present Value" of every mortgage option to determine which is best.

The Present Value of a 30 year mortgage fixed at a 5% interest rate and with payments of $1074 is $200,066.

The Present Value of a 20 year mortgage with repayments of $1320 at a 5% interest rate is $200,066. The Present Value of a 20 year mortgage fixed at a 5% interest rate and with payments of $1320 is $200,066.

The two repayment schemes are exactly equal.

The $69,756 "savings" in the interest rate is really just the effect of adding the extra $246 a month into the repayments - in fact, that $246 a month adds up to $59,040 over 20 years.

Now, what would happen, for example, if you took that $246 a month and invested it elsewhere in something safe and conservative like a mutual fund?

If you could get an average return of 10%, after 20 years you would have $186,804 (Note: the S&P 500 has averaged 10.83% over the last 50 years and would make an S&P 500 Index Fund a safe yet powerful choice.) That would be worth about $102,597 in today's money with inflation hovering around 3%.

To get even more answers, let's ask the question we asked before. Why would the banks recommend that you pay off your mortgage quickly? Surely the longer the income stream lasts, the better, right?

Banks love to prove that they will "save you money" and make it seem like they are doing it only for your benefit. But in reality, the banks really understand the time value of money. The banks know the true value of that extra $246 a month that you're giving them now is much greater now than it will be in the future.

There are some arguments for paying your mortgage back quickly - for one thing, the quicker you cough up, the quicker your equity grows. But you should understand that every dollar you give the bank now is a dollar that you can't invest.

Giving your money to the bank to avoid forking out 5% interest means that you can't use that money to earn 10% or 12% or 15% somewhere else.

Finally, many people have a misconception about the wealthy that I want to dispel. Most people believe that wealthy people own their homes completely and do not have mortgages. The fact of the matter is that most do not own their homes free and clear because they understand that their money can make them much more money in other investments rather than sitting in the walls of their homes. Bill Gates took out a mortgage for his new home. The Home Depot doesn't own any of the land or buildings that they use. Why should you pay off your house?

Of course the title of this article talks about actually reducing your monthly expense while building wealth at the same time and I would love to show you how to do exactly that. If you would like to know how to decrease your monthly expense while at the same time build your wealth then please contact me, Ed Brancheau, at 310-770-2369.

Ed Brancheau is a mortgage financing Whiz who can teach you to decrease your payments, pay off your mortgage much faster and build wealth. Call him at 310-770-2369 for more info.

Mortgage Payment Protection Insurance-A Small Price to Pay for Complete Peace of Mind

Have you ever thought of how you would meet your mortgage repayments if you lost your job or if you are unable work due to an accident or a long illness? If you have not thought about this, it is time you did! Because you have an excellent cost effective option to protect your home in such circumstances- Mortgage Payment Protection Insurance.

What is Mortgage Payment Protection Insurance?

Mortgage is one of the biggest financial commitments in a persons life. Mortgage Payment Protection Insurance is a sensible option for anyone who wants to protect their home from advent of unfortunate circumstances. When you choose Mortgage Payment Protection Insurance you can pay your monthly mortgage repayments even if you are off work due to illness or you are unemployed. Mortgage Payment Protection Insurance from some companies also cover building insurance.

These policies require a Qualifying Period of around 28 days, which is a minimum number of days before you can claim against the policy. Once you qualify the insurance company you have applied with will pay you until you get a job or reach the maximum number of months that the insurance company will pay out (which is generally for a year with exception of few companies which will pay for two years).

You might feel that Mortgage Payment Protection Insurance with your mortgage lender is the logical step. However most mortgage lenders charge heavily. In such cases Mortgage Payment Protection Insurance from specialist providers is the cost effective option. The borrower needs to research and weigh the pros and cons of the policy before applying for it.

Are you eligible for Mortgage Payment Protection Insurance?

You are eligible for Mortgage Payment Protection Insurance if:

•You are over 18 years of age and under 65 years of age

•You have already availed a mortgage or will be taking out a nationwide mortgage

•You are employed and have been employed for the last 6 months. However you need not be employed for 6 months if you are taking a new mortgage or a further advance

•You will be living in United Kingdom permanently

However there are a few exclusions when Mortgage Payment Protection Insurance will not pay out. For instance when you voluntarily leave your job because of misconduct or dishonest behavior or if you suffer from long term financial problems which dont display any realistic chance of recovery. Most homeowners who have a full time working partner or savings to the tune of £8,000 will not be able to claim Mortgage Payment Protection Insurance.

Life is full of uncertainties. It is difficult to imagine how you would cope with unemployment, accidents and many other unfortunate circumstances. But you can ensure that you sail through trying financial times with Mortgage Payment Protection Insurance. Protect your home and yourself with Mortgage Payment Protection Insurance.

Log onto Mortgage UK for more information and help.

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Getting First Time Home Buyer Grants - Down Payment and Mortgage Assistance

If you have a mortgage or are a first-time home buyer looking for financing, you are looking at a great time. First time home buyer grants are one of the many government financial aid programs that can be secured regardless of your current credit or income history.

By getting the first time home buyer grant, you can receive up to $15,000 to $20,000 that can help you cover the initial down payment or closing costs. Some of the government programs can help you refinance and get liquid cash to put in the newly bought home. The cash crunch can be beaten that way.

With the current trends in the real estate market and overlapping mortgage crisis, it has become difficult to get a 100% mortgage loan for buying a home. Normally a buyer expects to put down $20,000 or more as a down payment but as a first time home buyer, coming up with extra cash to pay up legal fees, taxes and closing costs can be a nightmare.

To fill this gap, new home owner grants can help you get the desired finances to buy the home of your dreams. The first time home buyer grant is almost tax-free cash that is provided for no interest, nor do you need to repay the grant funds. In most cases, if the new home is retained for over 3 years, the grant money doesn't need to be repaid. Generally, these grants give you at least $15,000 in free funds that are available for you to help you get a new home and cover those extra costs such as legal fees, closing and documentation fees without the worry of paying these funds back.

Anyone over 18 years can search the government grant database and find grant funds that are available. Once you fill out the required information, the database can list the available funds that you may qualify for. The provided information can help you quickly apply and be approved for the home buyer funds you need.

Access first time home buyer grants to help you find and apply for free grant money that can help you buy your new home. See how much you qualify to receive by searching the grants directory now.

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How Do I Figure Out An Interest Only Mortgage Payment?

Basics

An interest only payment is one where a a borrower pays only the interest due on a loan.

No payment is made to pay off the principal of the loan. The interest only payment is lower than a regular loan. When only an interest payment is made the loan balance remains the same.

When you purchase a property you build equity on it in two ways:

• rise in property value
• paying the loan off

A 30 year loan takes 30 years to pay off. Your equity this way is built up very slowly over time. This is the part you can control.

One the other side is the market value of your property. You do not control this end.

If the property value has increased by 10% in one year, and you have a regular 30 year loan on the property nearly all of your increase in equity has come from the rise in the property. Very little of the equity has been made by paying your mortgage down slightly.

For this reason many real estate buyers and investors choose to have interest only mortgages.

Figuring Out An Interest Only Payment

Your interest only payment is easy to figure out.

Multiply your loan amount by the annual interest rate. This is your total annual interest payment. Divide this number by twelve to get your monthly payment.

For example, a $120,000 loan with a 10% interest only payment has:

• an annual interest expense of $12,000
• a monthly interest expense of $1,000

You will notice that the loan term does not factor in here at all. It doesn't matter if the loan term is 5 years or 30 years, since you are paying only the interest on it.

There are many free mortgage calculators available online to help you figure this out.

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Tips for Lowering Your Mortgage Payment

If you are interested in paying less money for your mortgage, you are probably trying to lower your mortgage payment. There are a few different ways you can lower your monthly mortgage payment. You can change the term of your mortgage. Since the balance of your mortgage is spread out over a longer period of time, your payment is lower.

If you have a thirty year mortgage and one of your financial goals is long-term savings, you may want to consider shortening your term to twenty or even fifteen years. Your payment will be higher, but you will pay much less in interest over the life of the loan, saving you thousands of dollars in the long run. In addition, you can lower your payment by refinancing an interest-only loan.

With an interest-only loan, the minimum amount you are required to pay is the amount of interest for a certain period of time, though you can pay as much principal as you like. One helpful too is the refinance calculator that will allow you to see how you could lower your monthly mortgage payment. Keep in mind that it is important to consider what mortgage rates are doing. Since mid-2004, the Federal Reserve has raised interest rates several times and is expected to keep raising rates in the near future.

This means that if you have an adjustable rate mortgage, it may adjust to a rate that's higher than a fixed-rate mortgage. You should consider refinancing to a fixed-rate loan. Additionally, you need to consider how long you plan on being in your home. Many people move within nine years so it may not make sense to pay a higher interest rate for a 30-year fixed-rate mortgage when you are not going to be in the home that long. Doing so may be costing you money.

Consider refinancing to an ARM instead. You will get a lower rate as well as lowering your monthly mortgage. You also have to think about the fact that if you are only going to be in your home for a few more years, it may make sense not to refinance out of your ARM. The equity you have in your home can act like a savings account that you could access through a home equity loan or a cash-out refinance.

This is usually done when you want to finance an important home improvement, pay for college or pay off high-interest credit card debt. Whatever your reason, this may be the right option for you.

The interest you pay on a credit card is not tax-deductible and you pay a higher rate than you would on your mortgage. Consequently, credit card debt is often referred to as bad debt whereas your mortgage is considered good debt. Using your home equity to pay off your high-interest credit card debt can save you money in the long run.

Using your home equity, rather than your credit cards, to finance expensive purchases can also be a smart move.

Deciding on when to refinance your mortgage will depend on the circumstances of your situation: how long you'll be in the home, what your financial goals are, whether interest rates are dropping, and so on.

For more resources about Interest rate or even about Home loans and especially about Home loan please review these links.

How High Can My Adjustable Rate Mortgage Payment Go?

Basics

An adjustable rate mortgage is typically a loan that is:

• fixed for a certain time frame
• adjustable after the fixed period is over for the remainder of the loan

A loan may be fixed for several months or several years.

The interest rate on a mortgage will typically adjust based on a predefined interest rate index.

Many mortgages have a lifetime total cap on their interest rate. This is the maximum interest rate over the life of the loan. Mortgages may also have have periodic caps, such as a maximum rise in the interest rate over a given period of time. This type of feature is to keep the interest rate from changing too fast.

Measuring Your Risk

You can figure out your maximum interest rate risk by using an online mortgage calculator.

The mortgage calculator will help you figure out what your maximum possible payment could be.

You will need to factor in your loan amount, interest rate, and loan term.

A Risk Example

A $460,000 mortgage:

• 7.5% interest rate
• 30 year loan term
• monthly payment $3,216

The same mortgage if the rates rose to the interest rate cap of 11%:

• 11% interest rate
• 30 year loan term
• monthly payment of $4,381

You can see this is your maximum possible increase in your payment.

There are many free mortgage calculators available online to help you figure this out.

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Calculator Home Loan Payment Guide For Mortgages

A mortgage calculator helps us to determine just how much we can afford to borrow in order to purchase a property. Calculator home loan payments can also be used to compare the costs or real interest rates between several different loans. They can also be used to determine the impact the length of the mortgage if you make added principal payments or bi-weekly instead of monthly payments. It is an automated tool that enables the user to quickly determine the financial implications of any changes in one or more of the variables that relate to a financial arrangement such as a mortgage.

There are many types of mortgage calculators available all you need to do is a quick search of the internet for home loan payment calculators. Such calculators will not only estimate the amount of loan that you can afford based on the figures that have been entered but they can in some cases help to find the loan that is right for you.

For example you may be looking at a home equity loan which is a fixed rate mortgage although it can be priced at a spread to the prime rate. Normally it is not and does not vary with prime. Although apart from it being a fixed rate mortgage it is also a self amortized loan. This means that monthly payments you make cover both the interest for the month and some of the principal repayment. By the end of the loan term you will have paid off the note.

Then there is a home equity line of credit (HELOC) which is a variable rate loan that is normally price at a spread to the prime rate.

However using a calculator home loan payment system will help you to calculate the payments for either type of loan mentioned above. It can calculate the payments on an amortized loan as well as calculate an amortization schedule which shows you how the principal balance pays down over the time of the loan. As well as showing the cumulative interest. So it is vital that when looking for a home loan that you use a calculator home loan payment system to make sure that you can really afford the payments.

Dee Cohen is a webmaster and publisher at http://www.mountcollectables.com/loans/equity-home-loan-services.html. Stop by Equity Home Loan Information to read articles and learn more.

Planning Your Mortgage With a Mortgage Payment Calculator

Every type of mortgage you can get has its own set of advantages and disadvantages. When you use a mortgage payment calculator, you can see what type of mortgage will be right for you when buying your home. There exist many different types of mortgage payment calculators, but when comparing loan types for the first time it is better to stick with just one type.

It is only after you have chosen the variables that you have to check your calculations with other types of mortgage calculators. Before you think about buying it is necessary to check both fixed and adjustable rates. When you are trying to choose the best mortgage you always have to check the figures through a fixed and adjustable rate calculator.

An adjustable rate may be the better option depending on how long you plan on owning the home along with some other variables. Don't worry about it costing you anything to play around with a mortgage payment calculator. You can use it for free until you find what is right for your situation.

Always double check your calculations before you sign anything. When trying to make a decision about what the right type of mortgage is for your needs, you need to go over every option. Some of the things you need to compare before applying for a loan are the interest rates, length of loan and payment options. A mortgage payment calculator is one of the most valuable tools you can have on hand when your are looking for home financing. Sometimes you need to use an amortization table instead of a calculator, or sometimes you might have to use both.

Both of these will help you in figuring out your monthly payments on the home you are going to buy, but they calculate things in a different way. They each have very similar functions and each of these have there place when choosing what type of financing is best for you. With mortgage calculators you can get ones that do anything from calculate a simple loan, to ones that can work out what payments you can afford and ones that can tell you how much it is possible to borrow. They give you a basic idea of what you are going to need based on your current situation.

An amortization table is a little more involved and covers just about every detail of every type of loan including the length, interest rate and the other factors that can be a little bit more confusing to someone new to home financing. When you use a mortgage payment calculator it does not give you as much information that an amortization table would, but it can give you basic information that you need to know to come to the conclusion about what you need in your loan. After you figure this out an amortization table can be used for more in depth long term analysis of the loan. They can both be used on there own, but when used together it gives you a complete overview of the mortgage you will be getting into so you can plan ahead for the future if needed.

Get more great mortgage tips and advice online at ==> http://www.BasicMortgageAdvice.com and learn how to shave 20 years off a mortgage with no refinancing using the Mortgage Magic System

Mortgage Loan Payment Calculator

Buying a property is a massive undertaking. It is, no doubt, going to be the greatest expense of your life and one of the most nerve wracking purchases that you will ever make. We are talking about a very large sum of money and one wrong step could spell disaster and the loss of a lot of your money or even the loss of your home. If you are willing to undertake this kind of responsibility entirely on your own, then good luck to you. Most of us feel more comfortable getting some help in determining what kind of mortgage and financial help we should be asking for. One product that can help us to get started and understand the financial implications of the different loans available is a mortgage loan payment calculator.

A mortgage loan payment calculator will help you to establish a number of different facts. You will be able to enter your information into the calculator and then it will give you a whole range of interesting and very important figures. Then you will have a clear picture of how much you can reasonably borrow without having to worry about repayments. It would be disastrous to take on a mortgage only to find that you have bitten off more than you can chew and the repayments are much more than expected and too high to be managed.

Based on the information given, the mortgage loan payment calculator will be able to give a clear idea of how much you will be able to borrow based upon your earnings. This is the first step and will mean that you can realistically start looking at properties in the right price range. There is no point in drooling over a mansion and thinking that it could be a possibility when an apartment is going to be far more suitable. The calculator will be able to tell you what you can expect to pay in mortgage repayments. This is dependent on a number of factors. The term of the loan is a major point to consider. You will be able to establish whether a fifteen or thirty option is the best for your circumstances.

These are the main issues that you will want to have clear in your mind and these are within the capabilities of any mortgage loan payment calculator. Some of them will then go on to give you further information options such as tax savings, extra payment options, refinancing, insurance etc.

There are some excellent websites which are readily available through search engines offering you good advice and sometimes a very detailed mortgage loan payment calculator. Many of them are independent and there to help you with sound advice. As buying a property is such a huge undertaking, it is good to know that there is help at hand and it could save you a lot of money and possibly even your home.

Robert Grazian is an accomplished niche website developer and author.

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