If  you want a mortgage, a personal loan, a credit card, a business loan, interest free credit for furniture, or any kind of credit, your credit report usually has to be reasonable.

An impaired credit report can affect your ability to purchase a house, to obtain any new credit cards, to increase limits on existing credit cards, to obtain an overdraft from your bank or most other kinds of credit facilities.

When you start to see early warning signs of debt beginning to become hard to manage..take steps to immediately address your debt problems and protect your credit report. Taking early action will keep your credit report clean and help you in your success when applying for future credit.As soon as you begin to overextend yourself and you find yourself defaulting on payments you are heading to a situation where you are in danger of ruining your credit report.

This will limit the number of credit vehicles available to you. Most banks will not consider a loan and/or issue a credit card. Only the lenders that specialise in lending to higher risk clients will be in a position to lend you money. Those loans will be at above average interest rates to compensate for your perceived higher risk.

These higher rates put you at more risk to default on a loan as your loan will be much more expensive than the average person’s. This illustrates how having a bad credit report can affect you in the long term. It makes it easier for you to get in financial trouble. 

Your credit report is an indicator of your ability to manage money. As well as containing negative information it should also contain positive information about previous credit applications. This information supports any application you make in the future and should help you secure an approval any time you make an application.

You may think that finding that prefect home to turn a profit means spending all your life savings.  However, that’s not necessarily true. That perfect money maker may very well be a real bargain. Once you decide you’re willing to look for that special deal on a home you have to know how to spot the bargains that other people miss as stated in
www.fliphousesnow.com

The first thing you must know when trying to spot the real deals is to know that some areas will have better bargains than others. These may be the ones to reward you more in the future. It is all about timing and timing is key when looking for a deal because you must be ready when the opportunity arises. Checking out auctions is one of the best places to spot a bargain because many times there are circumstances involved which eliminate the long process of wheeling and dealing to obtain a good deal on the property. They need to sell quickly and there isn’t as much competition.

Another tip is to look for the properties which have been on the market the longest. In most cases that means houses that have been out there for more than 5 months. But always keep in mind that if it looks too good to be true than more than likely it is and that’s when you want to pay attention and look into the matter more closely. If you’re really interested in the property then it would pay you to hire an inspector to use his professional eye to check things out for you. Other than a flat market, there is usually a very good reason why a property isn’t selling or is being offered at a really low price as mentioned in www.fliphousesnow.com

So use all the tools available to you, whether it’s the media, your family and friends, a real estate agent or your own research to help you house hunt and you’ll be sure to spot the bargains that other people miss.

For properties homepath eligible – buyers have access to a minimum down-payment loan with no MI.

The number of first home buyers in the marketplace has dropped significantly, but according to Deanne Lamprey from First National Real Estate Burnie, there is still plenty of opportunity for first home buyers to realise their dreams of home ownership.

“Since October last year, market share for first home buyers has decreased from 26 per cent to 22.1 per cent currently,” Deanne Lamprey said.

“And the potential for escalating interest rates, which have now been on hold for three consecutive months, along with government taxes and high up-front costs may make things even harder for first time buyers to save for that ever-important, yet growing in size, deposit.”

Deanne Lamprey does have some advice to offer first home buyers, whose confidence is waning as house prices are set to continue soaring growth throughout 2010.

“First home buyers need to be more financially savvy if they are going to get into the housing market in the coming twelve months,” Deanne Lamprey said.

“They need to be able to make sound financial decisions, based on a level of certainty around interest rates.

“This is why we recommend they seek the services of a financial advisor who can assist them to establish a savings plan and budget to track their expenses and identify areas where they can cut back on their expenditure.”

Establishing a budget is about setting realistic timeframes, estimating income and expenses accurately and then tracking and monitoring spending to identify areas where belts can be tightened.

“There are also still in place a number of government assistance schemes, such as the First Home Saver Accounts and First Home Owners Grant which can also assist greatly,” Deanne Lamprey said.

Other hints for first home buyers include keeping an eye on the market at all times, talking to good agents about where the bargains lay in a suburb, and shopping around for good mortgage deals.

“Look for mortgage deals where you are able to pay back more than the monthly repayments, which can often reduce the term or interest payable on the mortgage significantly,” Deanne Lamprey said.

“Or, consider switching from a standard to a basic, or no frills, home loan which can potentially cut interest rates by around 0.4 per cent, but potentially may take away the flexibility to achieve other savings such as extra repayments.”

First home buyers need to reclaim their share of the property market and take advantage of the services and incentives currently on offer.

Adjustable rates mortgages have gotten a bad rap but with the reverse mortgage they should be considered.  While considered the most desirable, a fixed rate is not necessarily the best option.  Let’s discuss the advantages and disadvantages of each.

First you need to know how the loan amount is determined.  With the reverse mortgage the Principal Limit or maximum loan amount at the time of origination is determined by the home appraised value or FHA’s Maximum Claim Amount ($625,500 through 2010), the age of the borrower, and the Expected Interest Rate.  The Expected Interest Rate is only used to determine the loan amount it is not necessarily the same as the interest rate on the loan.

Currently the Expected Interest Rate on the Fixed Rate is lower than on the Adjustable Rate therefore the initial Principal Limit on the Fixed Rate option is higher than the Adjustable Rate option.  But this still does not make the Fixed Rate always the best option.

The Adjustable Interest Rate has the option of receiving funds as monthly payments, a line of credit, lump sum or a combination of these.  All the funds need to be drawn as a lump sum to receive the best interest rate with the Fixed Rate option.  While HUD requires that lenders offer the monthly and line of credit options with Fixed Rate, the interest rate would be so high that these options are never even discussed with the Fixed Rate.

Jerri needed some extra funds and was doing a reverse mortgage to meet these needs.  Her situation was she didn’t have a current mortgage and she was already receiving Medical Assistance (Medicaid in MN).

When we compared the Fixed Rate to the Adjustable Rate based on her home value and age, Jeri would receive more funds with the Fixed Rate.  However if she would choose the Fixed Rate option she would have to draw all the funds up front.  Drawing all the funds up front would mean that unless she spent them in the month they were received she would lose her Medical Assistance.

While not receiving as much available upfront, by choosing the Adjustable Rate she could take out what she needs immediately in the lump sum and leave the balance in a line of credit and draw it when she needs it.  Being the Line of Credit grows at a half percent more than the interest rate of the loan, she could have more funds available to her in the future.

Jeri chose the Adjustable Rate so she would not lose her Medical Assistance yet have the funds she needs to meet her needs.

Tom wanted to improve his cash flow and found that making the mortgage payments on his current mortgage was a challenge.  With the reverse mortgage Tom’s cash flow would improve because his current mortgage would be paid off eliminating his $1,200 monthly payments.  And with the reverse mortgage monthly payments are not required.  This means he has the $1,200 that he was paying in mortgage payments to no use as he needs.

In his situation the Fixed Rate would pay off his current loan and provide Tom about $8,000 more in a lump sum.

When we compared the Adjustable Rate option to the Fixed Rate, there was about $10,000 less available with the Adjustable Rate option.  And in order to pay off his current loan Tom would need to bring about $2,000 to the closing.  (The reverse mortgage lender needs to be in first lien position so all current loans need to be paid off with the reverse mortgage.)

In comparison Tom would receive $8,000 additional funds at closing with the Fixed Rate versus having to bring $2,000 to the closing with the Adjustable Rate.

Being Tom is not on Medical Assistance and he also wanted some funds upfront to pay off some credit card debt the Fixed Rate would not negatively impact him.

When Tom met with the reverse mortgage counselor he was told that if he could come up with the $2,000 the adjustable rate would be able to be done and they would have more funds when the reverse mortgage was being paid off.  This is not necessarily the case.

On the surface when looking at the Estimated Amortization Schedule it does appear that the remaining equity would be higher.  However it is speculative to guess what the interest rate is going to be on the Adjustable Rate option in the future.  And one needs to keep in mind that the Amortization Schedule is an estimate based on the current interest rate.

Currently the initial rate on the Adjustable Interest Rate is lower than the Fixed Interest Rate so it may look more favorable.  Unfortunately we don’t know if the Adjustable Rate will remain as low as it currently is, in other words it’s not guaranteed to remain the same.  So if the interest rate jumps high at some point in time in the future, the remaining equity could be the same or less than what could be available from the Fixed Rate.

The Home Equity Conversion Mortgage (HECM), currently the only reverse mortgage option available in Minnesota, is insured by HUD.  HUD guarantees the funds are available to the borrower, helps keep the interest rate lower, allows for the funds in the Line of Credit to grow and protects the borrower as a non-recourse loan.  This means there is no personal liability to the borrower or the estate as long as they are not retaining ownership.

In Jeri’s situation by doing the Adjustable Rate while she may not receive as much up front, she will have the funds guaranteed and the growth rate on the line of credit.  Additionally even if the reverse mortgage interest rate does go up, when the loan is due and payable if the loan balance is higher than the home can be sold for, she or her estate will not need to come up with the difference (the non-recourse protection).

In Tom’s situation, while when the loan is due and payable he may or may not have more equity if he did the Adjustable Rate, with the Fixed Rate he is receiving $8,000 at closing rather than having to come up with $2,000.  By using the $8,000 wisely, i.e. paying off credit card debt with very high interest rates and then saving the remainder in a saving account that may earn a little interest, he has the reverse mortgage interest rate guaranteed.

As was the case when the Fixed Rate was first introduced, at some point in the future the Expected Interest Rate on the Adjustable may be lower than the Fixed Rate and provide more funds to the borrower.  Not having a crystal ball we need to review each interest rate option and look at each situation as an individual circumstance without judging whether the Fixed Rate or the Adjustable Rate is better.  One shoe doesn’t fit everyone and one reverse mortgage interest rate option does not fit everyone.  The Adjustable Interest Rate may fit better for some circumstances and the Fixed Interest Rate better for others.

Related Articles:

• New Protocol For Reverse Mortgage Counseling
• Reverse Mortgage Closing Costs – High or Mythical?
• Misconceptions of Reverse Mortgages Abound… What Do You Know?
• Finance Retirement With A Reverse Mortgage

© 2010 Beth Paterson http://bethsreversemortgageblog.wordpress.com 651-762-9648

Residential markets across major cities of India have seen significant appreciation in values towards the close of 2009. This trend is most prominent in NCR and Mumbai, the two key residential markets in India, where values in Oct-Dec 2009 appreciated, compared to the same period the year before, says Cushman and Wakefield in a report.

The report said that recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010. However, it would be premature, the report adds, to predict a bounce-back for the entire sector. The other markets which are still witnessing some correction are expected to stabilize only in the next 3-6 months. These are expected to see positive signs of recovery by the middle of this year, when values across the board would stabilise but will remain within acceptable range.

The average increase in capital values in various micro-markets in these two metro areas has been in the range of 3% to 25% over the previous year. Most micro-markets in these two cities have recorded stable to appreciating capital values over the last quarter as well.

NCR and Mumbai have shown a faster recovery than other cities due to the fact that these are high-demand markets, both from end users and investors, who were holding back their requirements as a result of economic slowdown , which created a kind of uncertainty in the job markets. The best outcome of the slowdown is the emergence of affordable housing in the country.

At the same time, the strong recovery in the economy led to sharp upward correction in the capital values for mid-ranged housing due to the quantum of demand and affordability.

Certain broad trends that were noticed across cities were that peripheral and the suburban markets witnessed the highest correction but were also one of the first markets to bounce back, C&W says. Another shift in the trend is the rise in demands for properties under construction.

The report said, there was a clear shift towards ready-to-move-in properties during the beginning of the year, when there was uncertainty on the capability of a developer to complete a project. But that has receded now resulting in a rise in risk appetite for properties under construction.

In the NCR region, demand for affordable housing in the range of Rs 20 lakh to Rs 40 lakh could be understood from the fact that a number of projects completely sold out within a couple of days of their launches. Recently, in Noida, Supertech , which launched apartments for Rs 9.75 lakh, (this is the first project in NCR for sub-Rs 10 lakh) could sell around 500 apartments in a couple of days.

The new trend has led to increase in the volume of transactions. Supertech CMD, R K Arora, says that the developers have now shifted to high-volume business from high margin ones. However, he also pointed out that this became possible because of the relaxation in the density norms (number of apartments allowed to be constructed on a given area). Therefore, the construction activities are set to rise in 2010.

West Australians expect the biggest pay rises of any workers in the country, believing the global recession is over and the mining boom has arrived.

A report by Westpac has found 14 per cent of West Australians expect a pay rise of at least 8 per cent over the coming year, while another 21 per cent think they’ll get a rise of between 4 per cent and 8 per cent.

It is the highest proportion of workers in any State who think they will be rewarded with a wage rise two or three times the rate of inflation.

And in a sign of the confidence of WA workers, just 0.4 per cent of those surveyed say they will have a pay cut – the lowest proportion of any State. By contrast, more than 6 per cent of South Australians fear they will have their pay cut while just 19 per cent expect a pay rise of at least 4 per cent.

More than 35 per cent of those aged between 18 and 24 expect a pay rise of at least 8 per cent compared to less than 10 per cent of people aged 55-64. While 35 per cent of respondents who earn more than $100,000 a year expect at least an 8 per cent rise, less than half of those earning under $40,000 expect any pay rise.

CommSec chief equities economist Craig James said that despite signs of optimism, Australian consumers were increasingly conservative. While household disposable income had grown almost 8 per cent last year, close to the fastest rate in 19 years, consumer spending had lifted just 2.2 per cent or the slowest in 16 years.

“And then there is the news that 70 per cent of Commonwealth Bank home loan customers are ahead in their loan repayments – making higher repayments than they need to,” he said. “How long this new conservatism continues remains anybody’s guess.”

Source  :  www.thewest.com.au

State Bank of India (SBI) chairman, said the bank is looking at tapping the retail bond market next year with a 10-year issue, although the initial issue size may be as small as Rs 50-100 cr.

“If it turns out well, we may think of raising more money through this route. But we do not require capital immediately, it is only one of the option we are looking at,” he said, speaking at the sideline of a seminar organised by Confederation of Indian Industries (CII).

State Bank of India (SBI) chairman indicated that SBI would prefer rights issue route to strengthen its capital base. “I would want the government to continue to hold a majority stake in the bank,” Chairman OP Bhatt said when asked about capital raising plans. The comment made by Mr Bhatt is in the context of the proposed amendment in the SBI Bill which allows the government to dilute its stake in the bank to 51 percent, in line with other PSU banks. Currently, the government cannot lower its stake up to 55 percent. The government is the largest shareholder with 59.4 percent stake. SBI had raised Rs 16,736 cr thought the rights issue in 2008, wherein the government had subscribed Rs 10,000 cr.

In the interim, Mr Bhatt said the bank has not yet finalised the next associate bank it will acquire after State Bank of Indore. RBI has cleared the SBI proposal to merge its associate bank State Bank of Indore with itself but it is awaiting approval from the government. Following the approval, the board of SBI and State Bank of Indore has to approve the merger. SBI has six associate banks (including State Bank of Indore) and it has earlier announced plans to merge all associate banks with itself.

SBI has already merged two of its associate banks with itself — State Bank of Saurashtra and SBI Commercial and International Bank with itself. “No other bank is lined up now,” said Bhatt, while declining to give the swap ratio.

With regards to interest rates, Bhatt said he does not expect interest rates to rise in the beginning of the next fiscal. On surplus liquidity, he said excess liquidity has fallen to an average of Rs 50,000 cr now against Rs 75,000 cr in December 2009. The share of high-cost deposits has fallen to 3 percent of the total deposits.

On credit offtake, Mr Bhatt said the bank has been sanctioning close to Rs 2,500 cr every month under the Special SBI Home Loan Scheme where the borrower can avail of loan at a fix rate of 8% for the first year and rates are linked to prime lending rate in subsequent years.

The special home loan scheme will end by March 31 and he said the bank will take a call on whether or not to extend the scheme on March 31. But at the same time, he added that the bank has not seen much improvement in credit offtake this month.

Golden Gateway is a Reverse Mortgage Lender and their website vistors seem to be inputting higher values lately, so they assume that their home values are rising. They announced that “average home values for older Americans have halted their slide after remaining flat or declining for seven consecutive quarters.”

The problem is that most people have no idea what their home is worth and in many cases the person using the calculator may not even be the home owner at all (and have even less knowledge of the actual value.) It would be great if “older Americans” home values had stopped their decline, but why would “older Americans” properties be any different than the rest of the country?

Here is their data:

Humor could be described as a spice of life that can lighten a mood, liven a moment or linger as a memory.  Sometimes it can bring a full-roar laugh, a simple smile or like now, a sigh of relief that the topic does not apply to you.  We recently read an antidote on the recent RESPA changes and how some loan officers might be inclined to respond.  Allow us to share …

ARE  YOU HAVING TROUBLE EXPLAINING RESPA TO BORROWERS?

If RESPA changes are the final blow – swaying you to consider a simpler career path, say neurosurgery or something, you are not alone.

I have to vent for a minute, because I know you are with me on this one. Let’s see….

A new borrower comes to you because his Realtor told him that you are a fabulous loan officer and he needs to get pre-approved and get a Good Faith Estimate.

You look the new borrower square in the eye and have to say, “Wonderful! But I can’t give you a Good Faith Estimate because you haven’t identified a property. But I can give you this other “Non-Binding Settlement Estimate” form that my legal department has authorized, that has a 2-page disclaimer stating that you can’t hold me to any of these figures.”

So the new borrower, with a confused look on his face, takes your new form and goes back to his Realtor. The Realtor calls you trying to figure out what you said to the new borrower who now, doesn’t feel so confident about you or anything else in this transaction. You explain. The Realtor calms down.

The new borrower comes back with an identified property and says; “Now I want a Good Faith Estimate.” You prepare one, in perfect accordance with the new RESPA procedures and hand it to new borrower. He gasps. “This is $3,000 more than the previous estimate you gave!”

“Oh, don’t be alarmed,” you say in your most toddler-calming voice. “This isn’t what you are really going to be paying. This is just how I have to disclose it to you.”

The new borrower gives you a sideways suspicious glance, “But what about all the fees the seller is paying on my behalf? I can’t find a credit on this form for those.”

“Don’t worry…it will all work out at closing. This is how we protect you now. We give you inaccurate information all the way up until you actually close on the property. Isn’t that fun! Kind of like a surprise party!” you happily chime – beaming like an idiot while beads of sweat run down your torso.

The new borrower marches out to his car in tearful frustration and calls the next lender on his list.

Scalpel anyone?

This could not be farther from the truth for us at Awareness Home Funding.  The new Good Faith Estimate (GFE) is really a very simple document that helps you, the client, actually understand the real cost of acquiring your home loan.  It lets you know where you have choices in the services you will need, such as a home inspection.  It tells you what fees should not be changing by more than 10%.  And if they do, there will be a good reason, and time for you to understand what just happened before the loan process continues.  It also tells you what fees will not change at all.

So why don’t some loan officers like the new regulations and required forms?  Why can’t they explain the information it details for you?  Why can’t they provide the new GFE for you upfront?  Why such the cloak and dagger approach to helping their clients?  (Now this part, we do find really funny.)

Check us out (http://www.awarenesshomefunding.com/).  Give us a call (866-982-9273).  Let us help you understand the loan process.  That is why you go to a professional in the first place, isn’t it?