Best Fixed Home Equity Loan Rate - 3 Hints for Finding the Best Rate

A home equity loan allows a homeowner to use the equity they have built up over several years living in their home as collateral for a second mortgage. Homeowners can essentially inject liquidity into their asset holdings, freeing up cash for investments or to cover expenses. This can be a great way for homeowners to cover unexpected costs such as medical bills, or help put their children through college. Many people are unsure how to find the best fixed home equity loan rate. Here are three hints to help you find the best rate to suit your long-term financial plans.

Loan rates are determined by many factors

The rate equity loan rate that your mortgage broker will quote you is based on a number of different factors. Banks and lenders use a variety of methods to calculate their own interest rates, understanding their processes allow you to better negotiate your loan terms to get the best deal for you. Typically, the lender will begin with the prime rate of interest set by the Federal Reserve. This prime rate is the benchmark, or the rate that the bank would charge to customers with perfect credit. The bank will then consider their own risk in lending, given the current economic climate and make adjustments to protect their bottom line.

Finally, the bank will take a look at your credit profile to see how great a risk you will pose as a loan borrower. Depending on your current ratio of assets and liabilities, your history of making payments on time, and your credit score, the bank will then determine the risk that your loan would impose on them, and offer you the effective interest rate that will be signed into contract. Luckily, you can choose different loan options and terms to negotiate a lower rate to some degree.

Fixed vs. Variable Rate Interest Loans

Fixed rate mortgages are fairly simple. The effective rate of interest listed on the loan contract is the rate you pay for the duration of the loan. It never changes, unless you take on another mortgage. A variable rate, on the other hand, fluctuates with the market, and allows the banks to stay profitable in bad times by raising your interest rate. Usually and adjustable rate mortgage or ARM has a cheaper interest rate than its fixed counterpart.

Furthermore, an ARM can modified to limit the amount it can be adjusted in a given time period, or even grant you the ability to convert it to a fixed rate after a few years, to help you mitigate the risks of a volatile economy. In general, all ARMs adjust in an upward trend over time, whereas a fixed rate mortgage holds far less risk. If you plan to have more money in the future, you can often take advantage of an ARM to pay a lower rate in the first few years of the loan.

Get Multiple Quotes

Finally, you can often get lower rates and better terms simply by shopping around. If you are comfortable doing so, you can often find, apply for, and receive your equity loan entirely online. Online lenders have lower overhead costs than traditional banks, so they can usually offer better terms and lower rates. Get several quotes from both online and traditional lenders. If you are not confident navigating loan terms and rates, you might consider speaking with a mortgage broker who can educate you and shop from many different lenders to find the best rates and terms to meet your needs.

To find out how to get the best interest rate on your home equity loan visit BadCredityEquityLoanApproval.com today!

Article Source: http://EzineArticles.com/expert/Rocky_C_Rhodes/1304233

Common Home Loan Frequently Asked Questions

Here is some of the common home loan terms that one comes across while applying for a home loan.

· What is an E.M.I?

An E.M.I refers to an equated monthly installment. It is a fixed amount which one pays every month towards the loan. It comprises of both, principal repayment and interest payment.

· What is Pre E.M.I interest?

In the case of part disbursement of the loan as in when the property is under construction and possession is not given, monthly interest is payable on the disbursed amount only. This interest is called pre-EMI interest (P.E.M.I) and is payable monthly till the final disbursement is made, after which the E.M.I would start.

· What is Fixed Rate of Interest (R.O.I)?

Fixed R.O.I stands for the Fixed Rate of Interest. The rate of interest remains unchanged for the entire duration of the loan irrespective of the drop/increase in the market rates.

· What is Floating Rate of Interest (R.O.I)?

The Floating Rate of Interest is one that fluctuates according to the market lending rate. This comes with a little risk as in whenever lending rates go up the loanee will have to pay more than the amount set aside for loan payment per month.

· What is P.F?

P.F is the processing fees and has to be paid upfront by the customer being fees charged at the time of submission of the application for processing

· What is I.I.R?

I.I.R is Installment to Income Ratio and denotes the portion of your monthly installment on your home loan as a percentage of your income. The same is capped between 40% to 60 % of income subject to applicant's income & profile.

· What is I.C?

Whenever a customer delays the payment of the monthly installment, a collection team is sent to the customer's house to recover the money. The expenses incurred on such occasions are called Incidental Charges (I.C)

· What is L.T.V?

L.T.V stands for the Loan to Value and is used to calculate the loan amount that a person is eligible for on the total cost of the property.

· What is Margin Money?

Banks & N.B.F.C fund around 80% to 85% of the cost of the house. The balance 20% to 15% has to be borne by the customer himself. This difference amount is called the Margin Money.

· For what purpose can I avail a home loan?

You can take a loan for constructing a house, purchasing of a ready possession house / flat or a flat in resale, takeover of existing loans from approved banks / housing finance companies, the purchase of a plot of land, for renovation of and extension of the house.

· Who can avail of the loan?

Salaried individuals, Self-employed professionals or businessmen and individual N.R.I's.

· Who can be a co-applicant for the loan?

All co-owners need to be co-applicants. Spouse/parents/children can be co-applicants and his / her income can be clubbed to enhance the loan amount.

· What security is to be provided?

Security for the loan is a first mortgage of the property to be financed, by way of deposit of title deeds / or such collateral security as may be necessary. The title to the property needs to be clear, marketable and free from encumbrance. There should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely.

· Can loan be repaid ahead of schedule?

Yes, the loan can be paid ahead of schedule, however if the loan is prepaid or transferred to another bank or H.F.C, a nominal fee @ 2% of principal outstanding is charged

· Are the Bank policies subject to change?

Yes. These policies are reviewed periodically.

· How is the loan repaid?

An E.M.I refers to an equated monthly installment. It is a fixed amount which one pays every month towards the loan. It comprises of both, principal repayment and interest payment.

· When does the repayment start?

E.M.I repayments start from the month following the month in which the full disbursement has been made.

· What happens in case if a P.D.C bounces?

In the case of a bounced cheque or delayed payment, charges and outstanding dues will be charged as per the prevailing company policy.

· What is the minimum /maximum loan amount?

Home loan are available from 5 lakh to 5 crore.

· What is the time frame for a loan to be approved?

It takes a 7/10 working for the loan to be sanctioned after submission of all documents.

· When is the loan disbursed

The loan will be disbursed on:

- Submission of the legal documents.

- Legal and technical clearance of the property

-Submission of Registered copy of agreement.

· What is an amortization schedule?

An amortization schedule is a table giving the reduction of the loan amount by monthly installments. The amortization schedule gives the breakup of every E.M.I towards repayment of interest and outstanding principle of loan.

Apex Finance & Marketing was founded in april 2006 by Subhrajeet Talukdar and is the promoter of eazeeloans.com.

For details log on http://www.eazeeloans.com

Article Source: http://EzineArticles.com/expert/Subhrajeet_Talukdar/328112

How to Get a Good Deal When Buying Your First Home

A first home purchase is an important step. Your two "best friends" throughout the process will be your real estate agent, and your loan officer. Working closely with them will help get you the home you're looking for, with as little turmoil as possible. Those with experience in the business will tell you that a determined buyer can find a home that suits him/her in about 2 weeks.

After conferring with you, your real estate agent will be able to select homes for your consideration that will match your specifications, and fit within your price range. An experienced agent can use long-reaching contacts to find listings and arbitrate prices.

Your loan officer will help you with the all-important decision of what type mortgage you should apply for, and then keep you abreast of what's going on during the application process. He/she will stay in contact with your real estate agent.

There are some things you need to think about - you should set yourself a budget, and stick to it. Don't forget to include home insurance, and consider utilities and maintenance expenses. Find out about the taxes you will pay on the home - City Hall can provide this information.

Where do you want to live? Consider the daily commute to and from your workplace, gas prices, or availability of public transportation. What is within walking distance? If you like the idea of being close to restaurants, museums, movies, etc., an urban area might be the kind of place to start looking for your home. If you have children, you'll want to seek out the best school districts as far as size, after school activities, sports offered, and location from the home site.

Next, what type of home are you looking for? There are so many choices here. There's the traditional single family home, or the maintenance-free condo living, or you might even consider a duplex, where you live in one space and rent out the other. If you opt for a house, there are still choices to make - one-story ranch, colonial, tri-level? How much space will you need?

What about a basement, or a fenced in yard, if say, you have a dog? Make a list of the things you really must have, add some "perks" that you'd like to have, then go house hunting.

Don't try to see it all at once. Your realtor will probably guide you through maybe 5 tours a day. Any more might cause confusion trying to remember what you saw where. While you're going through a home, your realtor will point out any flaws.

When you're making the rounds of the homes you may consider buying, bring along a camera. Take pictures of each home you visit, and tag each group of photos with the appropriate house number. Make notes - list the outstanding features, color schemes, and design aspects. Be aware of the surroundings - landscaping, traffic noises, neighboring houses or buildings, etc.

Right after you see a home, give it a rating from 1-10, don't wait till later to try to recall what you liked. Re-visit the homes that you felt good about - you will see things you may have overlooked the first time around. Your realtor will contact the sellers of the homes you have taken a serious interest in, to check if they are still on the market at the listed price.

Think of buying your own home as making an investment, both personal and financial. Use the professionals to get the information you will need to make a smart purchase.

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Article Source: http://EzineArticles.com/expert/Chris_Pistorious/1425325

Home Equity Loans With Bad Credit: Finding the Best Deal Quickly

Bad credit scores are not such a major hurdle to securing loans anymore. Lenders know that lending to bad credit borrowers is not always a major risk it seems, and if security is provided, approval is practically guaranteed. Little wonder applicants seeking home equity loans with bad credit can feel so confident.

Of course, there are a number of factors that go into securing loan approval, not just a form of security. There are basic criteria that need to be satisfied first, and only then can the application be considered properly. But getting fast approval is certainly more likely with security.

A home equity loan can be substantial in size, allowing for major debts to be cleared in one go. The advantage of converting value in the home into hard cash is clear to see, but there are still factors that need to be considered.

Know Your Credit Status

Reading and understanding your credit report is very useful when it comes to comprising a loan application most likely to be approved. Too often, an applicant fills out the application form without knowing what their credit status is. Even when seeking home equity loans with bad credit, the information in a report can be used to strengthen the application.

The key information is how the credit score was calculated. It may be that some loan repayments were late, so ensuring timely payments can rectify the problem. If some household bills are unpaid, then clearing them makes a difference too. And if bankruptcy is the issue, then simply delaying the application until after the 24-month window makes getting fast approval possible.

When the right strategy is decided upon, the credit score can be improved. This results in lower interest rates and in a more affordable repayment sum on the home equity loan. And with equity as security, the savings can be significant.

Finding the Best Loan Deal

Applying for a home equity loan with bad credit is no different to applying for any other loan. Identifying the best deal is a core factor, and this can be done quickly when approaching your existing mortgage provider. Because they already know the applicant approval is more likely.

And because the relationship is already established, it is easier to negotiate a good deal. They are open to agreements because the element of uncertainty is not there, so a deal on interest can be secured. What is more, getting fast approval is much more possible too.

Different lenders offer different terms, with factors like interest rates and repayment schedules differing most. Both of these have a direct influence over the affordability of the loan, so it is worth seeking clarification from the prospective lender before agreeing to a home equity loan.

Study the Small Print

As with all financial deals, it is important that small print of a loan agreement is carefully considered. There could be charges and fees that the lender does not publicize, and if there are then it is in this section of the contract they are to be found. While a home equity loan, with bad credit or not, is a safe bet for a good deal, the large sums involved can mean larger charges.

Online lenders are the a popular option, but there is the risk of finding unscrupulous lenders on the Internet without knowing, especially when getting fast approval with less hassle is promised.

It is essential that the reputation of any unfamiliar lender is checked out before committing to any deal with them. Consulting the Better Business Bureau website, or the Verify1st site, is the best way to weed out the suspicious lenders. That way a home equity loan that appears to be a great deal, can be enjoyed as one.

Mark Venite is the author of this article and a successful financial advisor with 20 years of experience. He helps people to get approved for Bad Credit Personal Loan and Student Loans with Bad Credit. For more information about his services please visit him at AccessMyLoan.com

Article Source: http://EzineArticles.com/expert/Mark_Venite/1134449

Tips Before You Apply for a Home Loan

Availing a home loan or obtaining the mortgage is an oxymoron process, so it is necessary to choose the lender that is able to understand your requirements well. With the advent of increased home ownership, a plethora of real estate financing options is available to customers. Hereby, we have enlisted some of the best simple methods to avail the home loans

Research - The first and foremost thing is to do extensive research about the available type of loans that a bank or other financial institution offers. It's always into your top benefit to analyze about the rate of interest, tenure of loan and repayment options.

Credit Reports - It is necessary to maintain a clean and clear credit report in order to avoid problems like approval of loan application. Research about the options that can be taken if you are under a negative situation or there is a problem of substandard credit.

Deal smartly - Many financial institutions offer introductory rates to the novice loan borrowers by hiding additional charges. Initially the loans are proffered at low interest rate and later the hidden charges are disclosed. By understanding the exact cost of the home loan, you'll keep yourself away from the fake promises or claims. Consolidate is the buzz word. The majority of the people avails loan even if they have other outstanding loans under their belt. The idea is to invest in a consolidated home loan that will not only help you to buy a dream home, but it will also assist you in clearing off the other outstanding bills, loans and credit card. So, in a nutshell the right home loan lender can help you to streamline the finances.

Expend Less - The thumb rule is to spend less and save more. This saving will act as a pipeline for the future time. Through this, you'll receive the dual benefits i.e saving in terms of cost and protecting yourself from the further debt trap.

Opt for Portable Loans - At present times, the only certain thing is the change. Keeping this metaphor in mind, you will never know when you need to relocate. Hence, it is better opt for the portable loans that can be easily transferred with the property. Actually, it is a smart decision in which loan can be easily transferred to another property, in a situation of home relocation.

Every different scheme has different features but one purpose. It is necessary to avail home loans from a financial institution or a bank that is backed by strong rapport or credibility. The best idea to get a phenomenal deal on the home loan is to understand the scheme and to stay away from the hidden charges.

Thus, it is imperative to understand the basics of the home loan before you make a choice.

Article Source: http://EzineArticles.com/expert/Dnesh_Khandelwal/1441508

How to Get a Home Equity Loan With Bad Credit Without Losing Your Home

The importance of having a good credit score in helping you get financing for many of your projects can never be overstated. You need it for getting credit cards at low interest rates, getting home loans and auto loans at interest rates you would otherwise have to only dream about. A good credit rating would sometimes be required if you wanted to live in certain kind of residential areas.

If you have bad credit it just makes things a little more tricky when you need a loan or a credit card. But if you have a home, it can help convince lenders to give you the money you need. Using your home's equity, you can get a home equity loan, with your home being used as collateral.

Lenders prefer this arrangement because it gives them assurance that they can always get their money back should the borrower default because of bad credit behavior or history. They would essentially take your home as payment for the loan because you used as collateral. This is a danger for someone who has poor credit history and owns a home because they have a historical tendency to default on the loan.

So if you have a home and would like to use the equity in the house to get a loan use these 6 tips to help keep your home.

1. How much equity do you have in your house?

Evaluate your home's equity. There are two ways of doing this:

(a) Have the house's current value estimated or appraised to know the equity in the house.

(b) You can also deduct the current mortgage balance from the value of the home to give you the equity in the house.

2. How much disposable income do you have?

Determine how much money you have left after your total expenses. Using your yearly checking account leger, add your total expenses from last year and divide that by 12. This will give you your monthly expenses. Then determine your total net income for the past year. Deduct your total expenses from your total net income to know how much you have left over.

3. How much can you comfortably borrow from the lender?

Determine how much you can afford to borrow from a lender. The most practical way of doing this is using a home equity amortization calculator. Go to WellsFargo.com to use an online calculator. Also remember that you can normally borrow up to 80% of your home's equity.

4. Now it's shopping time.

Go to loan comparison websites to look for the best lenders. When giving your information on lenders forms, be totally honest with regards to your bad credit score or history. Why? It will give you the most suitable lenders and also protect you from unexpected charges and fees later on. Entering information that projects you better than you really are will not do you any favors.

5. What if the big lenders ignore you?

If you are refused by any of the famous mortgage lenders, don't lose heart.

There are other lenders who specifically give home equity loans to people with bad credit. You can find them on mortgage-lenders-plus.com. However, make sure to confirm each of lenders reputation with the Better Business Bureau, BBB. If you find a lender you would like to borrow from but can't get information about them from the BBB's database, stay away and look for another lender.

6. Be cautious.

Sometimes when you are on loan comparison websites, somehow people get to have your information and what you are looking for without you knowing. Before you know it, you are being sent information you actually did not request expressly. If you have not solicited any information from any lenders, be wary of doing business with them.

Find out as much as you can about them, especially on review sites about what others are saying about that company. If the offers presented to you seems too good to be true, be extra careful too. Never assume that because you have bad credit score you need to pay more.

If you follow these steps you should be able to get a home equity loan easily even if you have bad credit rating.

How to Get Mortgage Loans With Bad Credit

There are many people today who would want to own their own home and avoid all the troubles that come with renting. However, that thought seems like an impossible achievement because their credit rating is poor. You can still get mortgage loans with bad credit if you just followed a few tested steps and ensured that there are some things in place. What do we mean? Getting a mortgage is not a walk in the park and is not for the unprepared. And so in this article we try to offer every help we know to help you get a loan approved.

One of the primary determining factors before lenders would give you a mortgage loan is a good credit score. However, it is not the only factor. Having a stable job with a steady income flow and other assets can persuade lenders to give you a mortgage loan even if you have bad credit. You see banks do not have problem with giving you a loan if you can prove to them that you are capable of paying back their money, with any interests.

And when it comes to a mortgage, it even becomes more critical because normally the amount of money involved is big. So although you may have bad credit, if you can prove to lenders that you can repay the loan, then you stand the chance of being approved. And we have these 5 that will help you in the process.

1. Why do you have bad credit?

The first thing lenders would ask you of or check when it comes to reviewing your application is your credit rating. Yes you may know that you have bad credit rating but have you taken some time to find out why that is? So here's what to do:

Get erroneous information on your credit report removed. Inaccurate data concerning your credit behavior on your credit report can bring down your credit score. Get your credit report and if there are inaccurate entries, inform that credit reference agency and do so in writing. When you do that you give them the power to look into the entries you are disputing.

If the creditor cannot prove that they are correct, the agency will remove it from your report. This alone will make your rating go up. Usually all these would take about 60 days before the new or corrected info will appear on your report.

2. Determine the amount of debt you are carrying.

So you corrected mistakes on your report and still you have bad credit. That's OK. Let's take the next action. Determine how much debt you have. 

If you have too much debt in comparison to the amount of money coming into your life every month, most banks will not give you a mortgage because they know you are already over-burdened.

What can you do then? You know much you are owing in debts. So pay down some of your debts so that the ratio of your debt to your income will become very small. The more debts you owe the less your chances of being approved for a mortgage, even with a high credit score. So take steps to save some money. You can cut out some of the 'non-essentials' such as eating out and entertainment.

You might think these are small amounts of money but it will surprise you if add all of them up at the end of the month. A high debt-to-income ratio brings down your credit rating significantly. Therefore paying down as much of your debts as you can will improve your credit standing, making you appear as a good risk to mortgage lenders.

3. Have a higher initial down payment than usual.

Generally, down payments are between 5-20% of the total price of the house. When you have bad credit, the lender may require you to pay more than the 20% down payment. It will also mean that you finance less of the loan and you may not be required to have a private mortgage insurance policy on the house.

4. How much assets do you have?

People with high amounts of money in their bank accounts and have other liquid assets such investments and bonds are seen as less of a risk to lenders. So although you may have bad credit for whatever reason, the more assets you have, the higher your chances of being given a mortgage or home loan.

5. Consider other financing options.

With your bad credit, you may want to explore the opportunity of the Federal Housing Administration, FHA, where people with credit as low as 580 can obtain mortgage loans with full financing. There are other alternatives such as seller financing and lease with option to buy.

These are all options you can consider to help you get a mortgage. If you do not understand any of these alternatives given in step 5 above, please do speak to your mortgage advisor.

Now if you have further questions concerning how to get a home loan with bad credit, we would like you to visit our comprehensive lending and credit site by Clicking Here now.

Article Source: http://ezinearticles.com/expe

How to Buy a House When You Have No Money and Poor Credit

Getting onto the property ladder is the number one ambition for many people. This is partly because of how rewarding it is to be on the property ladder - and how owning your own home will allow you more freedom to decorate the way you want and to stop having to answer to landlords. At the same time though it is also due to the financial benefits that come with being a home owner - which means no more paying rent that will literally be money down the drain. When you have a property you invest your money and everything you pay into the mortgage you'll get back - probably with interest - when you come to leave.

But the problem is that many of us can't quite afford to buy a home, and if you have no savings, or you have a bad credit score, it might seem pretty much impossible to own your own property.

Fortunately though there are lots of reasons that this isn't the case, and if you know where to look there are many ways you can get a mortgage and pay less in total for your home. Here we will look at some of them.

Bad Credit Mortgages

Bad credit mortgages are mortgages designed specifically for people who don't have a good record of paying off debt. These loans cater specifically to that group, and so they will overlook the fact your history. The interest is likely to be higher, but over the long period that you'll pay the loan back it won't matter that much.

Make a Deal With Your Parents

If your parents own their own home, then there's no reason they shouldn't be able to help you out. Ask them to take out a loan instead and pay for your property, but then just give them all the money. The property will be in their name, and this will have some consequences, but at the end of the day it means making the investment and having somewhere to live while your finances recover.

Team Up

Another way you can get by with a little help is to team up with others in a similar position to you and buy a property together. This is a great option for those who are young and single, as it means that you will be able to live in a fun house share without having to waste lots of money on renting. Alternatively if it's just the repayments you're worried about, then taking on a tenant in one of your rooms can also be very helpful financially.

Schemes

There are also a large number of schemes available that are designed specifically to help you find a property if you can't afford to buy outright. One example of this is 'rent to buy' which basically means you rent the property, and then have the option to put that money toward buying the property at the end of your agreed term or not. Other options allow you to buy just half your property.

Getting a bad credit mortgage is one way you can buy a property with poor credit. For more help with your finances click here!

Article Source: http://ezinearticles.com/expert/Brianna_Harmer/508286

Increase Your Chances of Being Approved for a Home Loan Mod

The downturn in both housing and financial markets in 2008 affected more than half of all American households in one form or another. As financial markets struggle to regain pre-bubble levels, the after-effects of the dramatic decline in home values are still being sorely felt all across this country.

Ask your neighbors, friends, and family just how much this decline in home prices has impacted their spending habits, buying power, and overall consumer confidence. The answers are sure to shake even the most hardened fiscal conservatives. Many homeowners in today's economic environment are either upside-down in their mortgage or have very little equity in their property. Perhaps they have even witnessed their own block and/or neighborhood being littered with foreclosure signs or advertisements by brokers for short-sales or loan modifications. 

If you are like many Americans you have been raised by your parents with many of the same values that we all universally share. One of those values pertains to paying your debts, and more specifically, paying your bills on time each and every month.

But, what happens when you lose your job, your spouse loses his or her job, your small-business dries up, the factory that you have been dutifully employed at for many years folds? Worse; what happens when the manufacturer sends your job to a lower-skilled, lower-paid, worker in China? What happens when you get hurt on the job, and have very little or very poor medical coverage? Or, no medical benefits whatsoever?

Unfortunately, these are all of the case scenarios the American family is faced with today! Sometimes paying your bills on-time is virtually impossible. It's at that moment that as the head-of-household you are forced to make some very tough life-altering decisions. Do I pay my mortgage this month or stop paying because this is the biggest bill I have, and we need to buy groceries and gas? Do I skip paying my credit-card bills because after-all I will just use cash or debit? Credit Cards are a luxury, aren't they?

Well, if you stop paying your mortgage and at least your minimum payments on your credit cards, on time, you can count on severely negatively affecting your credit score. Usually, if you are at the stage of "survival-of-the-fittest" then maintaining a good credit score takes a back-seat to getting through this economic downturn unscathed.

A few years ago the government created a program known as the "Home Affordable Modification Program" to assist homeowners who are behind in their mortgage payments, and at risk of having their home foreclosed upon. Essentially, the lender that provided the original loan to you is much more apt to consider modifying or refinancing your mortgage once you are well-behind on payments. The crux of what makes the modification work is that it is a well-known fact that your lender does not want to evict you from your home.

Contrary to popular belief, the lender does not want to take your home away for a variety of reasons. First of all, your home may not be in tip-top shape and it can be very expensive for the bank to fix-up or rehabilitate the property. Secondly, because markets in many parts of the country are still soft; it would be a long-shot for the bank to kick you out, and then get fair market-value for your home. Thirdly, the pool of qualified potential home-buyers has evaporated because of extremely stringent lending requirements by the banks.

In a nutshell, if you are behind on payments, and can establish a legitimate argument to the bank as to why they should modify your mortgage, you have a strong chance at getting approved. Most banks will want to speak to you directly; and have underwriters that will want to get a sense of your personal commitment to wanting to retain your home. The banks will read a hardship letter that they themselves will provide to you. That letter is a blank canvas that you have to fill-in with a well-written, heartfelt, strong, and well-articulated reason as to why they should help you.

Finally, the government is investing in our banking infrastructure by reimbursing banks that help their clients... you the consumer. So, in essence, their is very little risk on behalf of the banks. The banks are therefore more inclined to help you stay in your home because their executive teams know the government will step in to help "them." However, if you are in financial trouble, and at risk of losing your home, don't wait around and do nothing. Be pro-active... help is available to you.

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Article Source: http://EzineArticles.com/?expert=Justin_Donald

What Happens When You Want to Sell Your Home, But You've Taken Out an Equity Release?

When you decide to apply for an equity release against your home, you will need to go through various plans and schemes before you find the best one for you. Not all plans are created the same so feel free to take your time and really give it plenty of thought. The plan you choose will depend on a number of factors including your financial needs, the value of your home and whether or not your home is fully paid off. If you still need to pay off a part of your initial mortgage, then you will not be able to release as much equity as you could on a home that has a zero balance with the bank.

If you decide that you wish to sell your home but you have already taken out an equity release against that property, you will need to scrutinize the terms and conditions of your agreement. While some plans allow the home owner to sell the property and pay the amount owing, other schemes do not. Upon selling your home, you will need to repay the equity release amount as well as any outstanding amount on your mortgage before you can enjoy whatever remains. For added financial freedom, many homeowners choose to use their released funds to pay off their mortgage. This way, if the home is sold, it is only the equity release that will need to be taken care of and not the mortgage.

There are some release plans that strictly prohibit the sale of your home unless you pass away or need to relocate to a long-term care facility. In many instances, if you wish to sell your home and repay the equity release amount before the minimum term has been reached, you could be liable for penalties. If this applies to your policy, it will be stipulated and detailed in your agreement. This is why you need to go through your agreement with a fine tooth comb and ask all the necessary questions before you sign.

When you first think about applying for any kind of equity release plan, you might not even think about the possibility of wanting to sell your home. Since life has a way of throwing curve balls your way when you least expect it, it is a good idea to prepare yourself for anything and make sure that your plan is as flexible as possible.

Find out more about home reversion plans (http://www.talkequityrelease.co.uk/home-reversion-plans.htm)

Article Source: http://EzineArticles.com/?expert=Andrew_Larkin

How to Get Money to Buy Equipment for Your Business

When some people open a business, there are times when they think that they have enough money to open, but they don't. This is because they have not thought their budget through enough.

They think that they have thought things through, but often times they will have budgeted for the price of rent, operations and staff, but they might not have included the equipment that they need to actually do the work.

If this has happened to you, then you will know that you have made a massive mistake and you will know what it is like to feel like the bottom has completely fallen out of your world.

Imagine if have spent your budget and then you realize that you don't have the tools to actually do the work and get paid for. You will have got the business halfway running and then you will have fallen at the last minute.

This is not a good way to start a business and you will be left with two options. Take the loss and give up now, or find a way to get the money to get the equipment and then start your business.

Most people will go with the latter because with the amount of money that they have already invested, they won't want to give up. Taking a loss now might mean that they can't make a little and it will be a massive dent to their pride.

Therefore, you will probably make the same choice as everyone else and start to look for ways to get extra money. It is going to be hard to find the money, but you do have a few options, so read ahead for some help with getting started.

1. Mortgage - You might already have a mortgage on the property that you have bought to operate in, but you can go back to the same broker and see if they have options for you to add more money on top of the mortgage that your already owe. This will mean an increase in your monthly payment, but you will be able to buy the equipment that you need and you should have bought in the first place. You might find that you have to wait a few weeks until you can change your mortgage, but it will be worth the wait because your worries will be over in the end.

2. Loan - You could go to another bank and ask for a separate loan to buy the equipment. If you have already got a mortgage and you haven't even opened your business yet, you might be too much of a risk for banks. They are operating in a climate where they are clawing themselves out of recession, so they might not want to offer you a loan. You do have to option of lending of the government because sometimes they have small business loans on offer for new business owners.

3. Lease - A good option is to lease the equipment that you need. This is where you basically pay to rent the equipment and when you don't need it anymore, you can just give it back and stop the rental fees. Another good thing about leasing is that the leasing company is usually responsible for any maintenance or repair fees. This is will save you money if the equipment breaks down. Some leasing companies will give you the option of leasing with the intention to sell, so you are renting the equipment but at the end of the contract, you can pay a reduced price to buy the equipment.

You can visit their website at http://www.gertmartens.ca

Article Source: http://EzineArticles.com/8341506

Tips for Negotiating Your First Mortgage

Obtaining your first mortgage is certainly a proud achievement. Home ownership can bring about an increase in your quality of life and is generally seen as a positive step for both individuals and families alike. But as thrilling as this period may be, negotiating the terms of your first mortgage can be a stressful task.

First-time buyers often make the mistake of putting off their research until the very last minute. They also fail to take advantage of professional advice and end up signing on to an agreement that is not suitable to their needs. A mortgage is the single biggest loan you will ever take on. Never take this type of commitment lightly as it can have a huge financial impact on other areas of your life.

Below are some tips for negotiating your first mortgage to ensure that you're protecting yourself and your residential investment.

Do your homework

There are basic terms in the mortgage industry that all homeowners should be aware of. Read up on the definitions for things like "fixed rates" and "variable rates" and compare them side-by-side. Learn why one might be better for you than the other and be prepared to talk about these options with your lender. You will also have to choose between a "closed" and "open" mortgage, so stay on top of what these terms mean and how they apply to your situation. The more knowledgeable you appear, the better negotiating you will do as you sit across from your lender.

Customize your mortgage as much as you can

A loan that looks good to your next-door neighbour may not be the best option for you. Try to customize your mortgage terms as much as possible so that the rules work in your favour. For example, a loan with a cheap interest rate may look attractive on the surface. But these types of mortgages often come with extravagant penalty fees if you ever wish to cancel. Unexpected life events do occur that could force you to break your mortgage before its renewal date. Avoid getting locked into terms that require hefty fines because the banks will make it very difficult for you to break out of your mortgage early.

Enlist the help of a financial planner

A professional financial expert has access to various lenders outside of the banking realm. Although it may seem easy to go straight to the bank where you do your daily banking, it's not a bad idea to see what other institutions are offering..

You have more power than you know 

Approaching big banks can be intimidating, even for the experienced homeowner who is familiar with the mortgage industry. But today's shaky economy and competitive housing market means lenders are actually the ones competing for your business. Not the other way around. Remain confident and know that any financial institution would be lucky to have a responsible individual like you as their client!

Financial experts or mortgage brokers can shop around for you, based on your current financial situation. Remain honest with him/her about your current debt load and what you can and cannot afford.

How to Afford the House of Your Dreams

When people are looking for new houses, most of them make the mistake of going to look at houses before they have calculated what they can afford. Therefore, they fall in love with a house that they cannot afford.

This is a mistake because they will be sad that they could not afford the house that they wanted and when they find a house that they can afford, they will never feel at home. It will not be the house that they wanted so they will never settle there. Those people will probably move around a lot in their lives.

If you are in the position where you want to buy a house and you want to start booking viewings, then the trick is to never see the houses that you can't afford. That way, you will never fall in love with a house that is out of your league.

That may seem a bit brutal, but being disappointed and leaving beyond your means is a bad path to be on. You will end up in debt and you might lose the dream house in the future.

Plan Your Budget

Before you even start looking at homes, you need to plan a budget for your new house. Look at your wage slip and calculate how much you can afford to pay each month.

If you can't afford what you expected, then you should be thinking about downsizing. At first, this does not mean that you should look for a smaller place. It means you should go through everything in your house and if you haven't used something in a year, then you should sell it.

You should save the money that you make on all the junk that is lying around the house and put that towards your deposit. Most companies will require that you have a 10% deposit on the house that you want to buy. If you have more than that then you might be able to get a cheaper mortgage and you can afford the house again.

Therefore, you will have taken the steps that you needed to do, to afford the house of your dreams. And, you will have done it the right way. You haven't gone into debt, or put any financial strain on yourself to do so.

Now, if you have done everything that you can and you still can't afford the mortgage on the house that you want, then you are going to have to look somewhere else and find something cheaper. You should not stretch your finances to try and live in a house that you cannot afford. You will be miserable and that house will become a symbol of a struggle, not a symbol of your happy life.

Mortgage

Before you start looking at homes, a good idea is to make an appointment with a mortgage advisor and see what services that they can offer you. They will work out how much you can afford to pay and hopefully they will leave you some money left over to put into a savings account.

They will need to know how much money you make, and how much you spend on things like food, electricity, entertainment and clothes. A good broker will leave you with enough money to pay for these things. They won't allow you to put all your left over money towards your mortgage payment. You will need money left over to live on.

You will also need to ask them if you can leave some money aside for an emergency. This is so you can plan ahead in case you suffer from an illness in the future and you can't work, or something breaks in the house. If you don't have emergency money, then you will lose the house before you have even bought it, in a way.

Gert Martens is a mortgage associate who works for Dominion Lending Centres. Dominion Lending Centres is a comparison website which lists Canada's largest banks, credit unions, trust companies and financial institutions. They are able to have financial services from the institutions that are only available through the website. Dominion Lending Centres offers a product line that is usually only available to mortgage professionals and their clients. They are well equipped to make sure their customers are able to get the home of their dreams. They can do this through a low interest rate mortgage product line and using the best technology, paired with staff members that are trained to the highest ability. You can visit their website at http://www.gertmartens.ca

Best Ways To Get A Mortgage With Bad Credit

In order to purchase property, mortgages need to be obtained from a bank based on sound financial history. It can be incredibly difficult for consumers to obtain these funds if a poor FICO score is possessed as conventional lenders rely on a positive repayment history to ensure that the debt is settled over a specified period of time. There are a number of ways to obtain bad credit mortgage loans to assist individuals in buying a house.

The slow growth of economies across the globe and a rise in foreclosures make obtaining mortgages a daunting task for those who do not possess positive FICO scores. A conventional lender will look at analyzing your credit score in order to determine the success in application for a loan. Care should be taken to have a financial assessment performed to ensure that your credit rating is accurate.

There are a number of financial lenders available that will assess your financial history. It is important to consider the options available and to ensure that you are able to indicate that you have been working towards settling the expenses that are contributing to a less than desirable FICO score. Such steps are often viewed favorably among lenders increasing the odds of receiving a mortgage.

If you are applying for mortgages from lenders or unions, it is important to understand that the repayment rates will be considerably higher in comparison to regular loans. The interest that is charged is a lot higher because of the associated risk when taking out such a loan. An adjustable rate mortgage is also available allowing individuals to select loans based on variable interest rates.

It is important to reveal that you are earning a stable income and have a permanent job to ensure that the bank is provided with security in the event of a failure to meet the repayments. Indicating that you are receiving a steady income and a stable job will aid in convincing lenders that you are able to settle the finances. Time should be taken to first establish these aspects before proceeding with the request for a mortgage.

If possible, work on paying off outstanding debts and start with the smaller bills before moving onto larger amounts such as a credit card. This will assist the banks in determining whether you are practicing good financial measures and able to settle the outstanding bills. Do not allow your debt to accumulate as this will simply result in a lack of interest in the banks delivering these options for those with a poor financial background.

When applying for a mortgage always try to put a large deposit down. This will allow for better investment and proves that you are interested in accessing the funds at a reduced rate. Time should be taken to calculate available funds and which of these will deliver the best possible and most affordable outcome.

Bad credit should not stop one from being able to get a mortgage. Practicing financial responsibility and determining the ways that you can address and settle outstanding debts can prove most favorable. Shopping around can aid in comparing the different interest rates and greater value sought.

Even if you have had, or are now faced with some worrisome or severe credit issues we have bad credit personal loans to meet your needs. Visit us now for bad credit personal loans, an easy online application, and fast approval.

Five Strategies For Home Loans With Bad Credit Rating

If you have a bad credit rating then it becomes more difficult for you to get approval for a home loan in normal rate of interest. That means, borrowing the desired amount gets more expensive along with less repayment options.

However, these days, there is some provision that makes it possible for people with low credit score to get approval on their loan application. Here are the five strategies that may increase your chances, despite of having a bad credit rating -

Use security or collateral

You can use assets like your home, property, boat or car as collateral to secure your loan. Most of the lenders are ready to offer loan based on the equity or valuation of the collateral.

Apply for a loan from credit union

A credit union is also a favourable option for many to seek home loan without much hassles. These organisations derive money from investors or individuals and do not have contact with banks. Therefore, the documentation process is not complicated. However, they follow specific criteria to approve bad credit loans, as they do not aim to lose their money.

Find a co-signer or guarantor

If you have a guarantor or co-signer who has a good credit rating and constant source of income, it will become easy for you to get a quick approval on a home loan. However, in case you are not able to repay the loan amount as per the terms, than your co-signer will pay the loan amount on your behalf. All it takes is to convince your guarantor that you do not have any intentions to put him or her under this sort of compromising situation.

Declare your savings present in your saving account

Declaring your savings account serve as an assurance that you have sufficient fund in your account, if in case there will be any shortage of fixed or regular income. There is no need to have a huge amount, as even in small savings, you can prove to a moneylender that you are capable of repaying the loan.

Try to improve your credit score with the help of a financial advisor

Is there any irrelevant details mentioned in your credit report that is affecting your credit rating? It might be possible that a poor credit rating may be due to delays in paying bills that had already been settled. Thus, it is recommended to consult this matter with a financial advisor who help you to improve credit score with their proven tactics. 

Home Loans - Tips To Get A Good Deal

Buying a home calls for a huge investment. However, buying mortgage of and the interest of a loan often exceeds the house's cost. Hence, a home buyer should try to get a good deal on the mortgage. However, getting a low-interest rate is not an easy job. One should buy a mortgage very smartly. This article offers some effective tips to get a good deal on a home loan.

Wait 

Home buyers should wait until the rates of interest on home loans lower down. Interest rates vary to great extents. One can notice fluctuations in interest rates even in a single day. At times, the rates are far lesser than the rates at other times. However, when applying for cash back home loans, buyers should keep in mind that at times during which interest rates are low, prices of houses are often high.

Improve credit 

Buyers should make loan payments and other payments on time, especially before the months of his loan application. Negligence in timely payments will lead to a low credit score. The better is the score; the better will be the deal. However, one should remember that improvement in credit takes around two years. One should not close accounts after making payments as credit ability is credit scoring's important part.

Get mortgage first 

If multiple monetary obligations are likely to emerge in the future, one should get his mortgage first. Many credit inquiries, like new credit card applications, can lower down a borrower's score. The score will be much affected especially if the borrower files the applications at the time just before his loan review process. Moreover, if one adds new debt expenses just before filing his mortgage application, the loan underwriter will think whether the borrower can pay the loan on time or not. Hence, borrowers should avoid buying expensive things in the time before applying. Home buyers should save a large amount to pay as down payment. When the down payment is big, the buyer has large equity in the home right from the beginning. When the equity is large, the loan poses a low risk to the lender. Buyers making large down payments get a low rate of interest.

Lessen upfront expenses 

Points and different other upfront fees can lead to a big increase in the loan cost. Home buyers should consider this when they shop for a mortgage. Points are a great way to get a low rate of interest.

Think small 

Buyers should avoid the temptation to buy a large house by applying for a huge loan. At the time of approving loans, lenders think about "payment shock". If one switches over from a low housing payment per month to a very high one, he will end up paying a very big loan or will not qualify at all.

Research well 

Mortgage rates vary from one lender to another even for the same borrower. Hence, it is important to shop around and research well to find the best rate. If the borrower has a cordial relation with a bank or belongs to a credit union, he is likely to get the best rates at those places. However, checking around is always a good idea. Borrowers can hire a mortgage broker to find great rates in fixed rate home loans.

With these tips, a home buyer can get a great deal in a home loan. These tips will also help buyers get no deposit loans.

Leaor Willem has written many articles on home loans. In her articles, she offers valuable advice on how to get cash back or fixed rate home loans. Visit Easyloans4u.Com.Au

When Should You Refinance Your Home?

If you're contemplating a home refinance the Fed's exit from buying mortgages (MBS) this October will affect mortgage rates.

The purchase and sale of MBS is directly responsible for mortgage rate movement. Demand for MBS causes mortgage rates to decline whereas weak demand for MBS causes mortgage rates to rise.

Economic news influences investors to buy or sell their MBS investments. When there is positive economic news investors typically sell their MBS in favor of higher paying stocks. When there is negative economic news, investors buy MBS as a safer investment.

The Fed has been artificially keeping mortgage rates low by consistently buying large blocks of MBS. This October the global markets will decide if they have an appetite for MBS. If they don't you can expect mortgage rates to rise.

Homeowners who have a fixed rate mortgage have fixed consistent payments. If you have an adjustable rate mortgage a refinance prior to October might be a good idea. Although pure speculation, mortgage rates are predicted to rise due to recent consistent economic reports that show the US is finally pulling out of a recession.

The MBA Mortgage Finance Forecast predicts robust growth in new housing and existing home sales as well as increasing home prices. It's likely that investors will shy away from MBS investments and buy higher yielding stocks as company profits increase and applications for unemployment insurance decrease.

If you refinance after October, additional money called discount points can be paid to reduce the interest rate. Refinances to pay of debt are often a benefit even in a rising interest rate market and I would not be surprised if pre-payment penalties are once again offered in exchange for a lower interest rate. Note: In this case, a loan without a pre-payment penalty must also be offered.

What is surprising to many people is that they can refinance into the same rate or a higher rate and their payment can be lower. This is particularly true if they have been paying on their home loan for several years.

This is because with each payment you are making a principal payment and thus you would be refinancing a lower loan amount and re amortizing the loan payments. This is assuming you do not have an "Interest Only" loan and that you are refinancing into the same original loan term as you had before.

Example would be if you are in a 30 year fixed rate loan you would be refinancing into another 30 year fixed rate loan. A shorter loan term would likely cause your payment to rise even if the rate was lower. The best way to know if a refinance makes sense is to speak to a licensed mortgage loan officer.

To learn more about this author visit http://RaleighHomeLoans.org or http://www.VirginiaHomeLoans.org

Tips to Improve Chances of Being Accepted for a House Mortgage

Deciding to apply for a house mortgage isn't something that should be taken lightly. You have to remember that every applicant is considered as a risk to the lender and they take steps to ensure that you can afford to repay back the loan, not only for their own peace of mind, but also to ensure you don't find yourself in financial difficulty.

One of the first steps you should take is to get a copy of your credit report and score. Every lender will carry out a detailed credit check, so knowing what your score is in advance and seeing if you need to improve this can help you determine whether to apply now, or work on improving your report before applying. Remember too much debt is a red flag, so try and get all your accounts in order before submitting an application.

The next step to improving your chances of being accepted for a mortgage is to sit down and work out your budget. You will need to have your monthly income and then work out all of your expenses. Your expenses need to include any credit card or loan debt, any dependents that rely on you monthly, any other bills such as phone, insurance, electricity. With these written down you can deduct your expenses from your income to see how much you have left each month, don't forget you will still need gas, food and some spending money.

Stay with the same employer for as long as possible. The same applies for your home address. If you are constantly moving, this can have a negative impact on your credit report. Lenders want to see that you are not a flight risk and that you are settled and ensured of income in the foreseeable future. If you have recently changed jobs or recently moved home, it's worthwhile holding off on your mortgage application for a while to put their minds at ease.

Work on reducing your debt. While this may sound obvious and you can't believe anyone would take on a mortgage when they are knee deep in debt, paying off bills, paying off credit cards and finishing off on loans can be a huge benefit to your application and your monthly budget. Paying off debts is much harder than taking out debt, you need to be determined and patient. In some cases you may have to wait a few months before applying for a loan, ensuring your other debts are in order first.

You will need proof of income or if you work for yourself, you will need copies of your accounts. If you get paid straight into your banking account and don't really worry with your pay slips, maybe losing them along the way, ask your HR department for copies. This is an essential document that you need in order to get mortgage approval. Showing the lender your bank account with the money being paid in each month isn't enough, you will need to produce at least the past three pay slips, so get this in order now.

The final tip which can help increase your chances of being accepted for a mortgage is to save up as much as you can to put down a bigger deposit. Obviously lenders want to lend you the money, but at the same time they want their risk to be minimal. By putting down a larger deposit, you take a smaller loan, this can help increase your chances of being accepted and buying the house of your dreams.

Gert Martens is a Canadian mortgage broker who works for the fast growing finance company, Dominion Lending Centers. With over ninety banks, financial institutions, trust companies and credit unions to choose from, Gert Martens assists customers in finding the best deals at the lowest possible rates. She works for her customers offering her years of knowledge and experience and ensuring she provides each customers with the highest standard of customer service. Gert Martens has an extensive range of financial products available to suit each customer's unique requirements. To find out more and see how Gert Martens can help you secure your mortgage, visit http://www.gertmartens.ca.

What to Avoid When Choosing Your Equity Release Advisor

In the near or distant future, you might need extra cash to maintain your current quality of life, or you may need an urgent influx of funds to pay for an emergency. You never know when something as critical as a medical emergency or significant home repairs will require your attention. When faced with this kind of situation, it's easy to feel the pressures of stress, and you can quite easily be tempted into signing with the very first equity release advisor you come across. Holster your pen and don't let your troubles get the better of you. Take your time to consider all of your options and be mindful of the following common pitfalls:

Diving in head first

When you sit down for your very first meeting with your very first advisor, they might come across as genuine, knowledgeable and impressive. Don't be duped by all the sales talk and stay focused on the actual facts and figures. Don't attend any meeting with the intention of signing on the spot. Ask the adviser for information that you can take home with you. You will need to think about it, discuss it with your partner or spouse, and you will need to compare various options. Let each advisor know that you are visiting more than one. When they know that they are competing for your business, they will be more inclined to make the best offers to get your business.

Once you have met with several advisors, you should take some time to look into their reputations. See what existing and past customers have to say about each company and just how happy they are with their service.

Prepare yourself

Before you set up your first appointment, do yourself and the advisor a favour by writing down all of the questions that are on your mind. Do everything you can to research the points that are of interest and try to find some answers for yourself. Even if you do find the information you are looking for online, you should still ask a professional when you have the chance to sit down for a one on one meeting. By preparing your questions prior to your meetings, you will avoid forgetting to ask something important that could quite possibly affect your decision.

Independence is key

If you approach an advisor who has ties with a particular financial institute, you are in for biased advice and limited options. Look for an independent advisor so that you can learn about all of your various options. Independent advisors won't try to force a particular product. Instead, they will lay everything out on the table and let you decide. They will provide their professional opinion, but the choice is still yours.

Find out more about lifetime mortgages (http://www.talkequityrelease.co.uk/lifetime-mortgages.htm)

Are You Over 55 With Money Worries? Then Consider the 5 Benefits of Equity Release

This is a way of releasing money tied up in the bricks and mortar of your home. You take out a loan secured on the value of the property.

You are able to borrow money based upon the value of your home or the amount of equity in it. In the future this money has to be paid back plus interest. If you are on state benefits taking equity release could have an effect on them.

Benefit 1. You do not have to move out of the home and you receive the money you need.

There are two main types of equity release scheme: Lifetime mortgage and Home reversion.

LIFETIME MORTGAGE

This allows you to take out a loan, secured against the value of your home. But you keep ownership of the property. Lifetime mortgages can be taken out on an individual basis, or jointly with a spouse or partner. The total debt (loan and interest) is not repaid until you move out of the home for good (you move into long term care) or after the death of joint parties.

Benefit 2. You keep full ownership of the property and You do not make any repayments during the life of the loan.

If you enter into this type of contract, make sure you the company offers a 'No Negative Equity Guarantee.' This guarantees that the maximum you or your estate has to repay will not exceed the value of the sale price of the property.

Benefit 3. The total debt is recovered by the equity release company, on the sale of the property.

Tip: Ensure selling costs of the property are included within the lifetime mortgage contract and are not deducted from your estate.

There are two types of loan available: A single lump sum or a series of smaller sums over a period of time. Unfortunately, depending on what the money is to be used for, taxation may be payable on any investments/investment gains you make with the borrowed money.

Benefit 4. You have a choice and can borrow a single (one off) lump sum or a series of smaller sums over a period of time.

You must consider the way interest is charged on any loan you take. For example, taking a series of smaller loans, may attract a higher interest charge than a single (one off) lump sum. The amount to be paid back when you take a series of smaller loans will be a lot higher than expected. The result of this would be a smaller sum of money available, to be added to your estate when the property is eventually sold.

HOME REVERSION SCHEME

You sell either all or part of your home but retain the right to live there. You no longer own your home with this type of scheme, or may only own a portion of it. This will depend upon the type of loan you take out. You receive a lease allowing you to live there but you may also be required to pay a small rent.

If you sold 100 percent of your home then any increase in equity the property experiences, will benefit the equity release company only and not your estate. If you sold only a part of the property, then the reversion company takes a percentage of the sale proceeds.

Benefit 5. Lump sums of money obtained from the sale of your own home are not taxable.

A reversion scheme can be taken out individually or jointly, in which case it continues until the death of the second person. This type of scheme can be set up to pay a single lump sum or a series of smaller payments.

The home reversion company will be repaid on the sale of the property. This will occur when you leave the property for good.

RESTRICTIONS

The restrictions on taking out a Lifetime mortgage or Home reversion are:

• Age: depending on the company may require a minimum of 55 to 65 years of age

• Minimum market value/equity value

• Mortgage: you may be expected to pay off any mortgage you have with a portion of the borrowed money.

• Minimum property standard/condition

• Charges: There will be costs associated with setting up these schemes

Costs will vary, from arrangement fees, valuation fees, solicitors fees and possibly early repayment charges and possibly more.

Tip: Costs must be considered and factored in, before any decision is made to take out one of these schemes.

Tip: The amount you can borrow is dependent upon your age. Typically, the older you are the more money you can borrow. However it is highly unlikely to equal the total amount of equity in the property.

Edwin Cleever is an authority on making money in retirement and the financial markets. To get a FREE report on alternative methods to make money, go to http://www.howtoretirewithmoney.com