Author: Mike Stepney

Taking your first steps in the buy to let marketplace can be a daunting prospect. However, with the right advice, the right mortgage and the right property; there’s no reason why anyone can’t become a successful property investor.

Start by talking to local lettings agents or property managers. They will be able to give you advice on what types of properties are most in demand, the most desirable areas for tenants and what you can expect as a monthly rental income. Remember you’re talking to the experts so don’t make the mistake of thinking you know best. If you intend to invest in a university town get in touch with the student accommodation officer.

Once you have a firm idea of the type of property you are looking for; you’ll need to turn your attentions to finding the right buy to let mortgage. As with all aspects of the financial services industry, the key is to do as much homework as possible. High street banks and the money pages of the Sunday broadsheets still provide fertile hunting grounds, but you’ll find some of the best deals with the help of an online broker.

As a rule of thumb you’ll find that most lenders will offer up to 85 deposit. Hence, if you want to purchase a property for £200,000 you’ll need an initial lump sum of £30,000. You’ll also need to factor in the broker’s fees, solicitors fees and valuation costs.

An experienced broker will be able to help you decide which of the following mortgages is most suitable for your needs:

Standard Variable Rate: With a SVR the percentage rate is controlled by the lender and can go up or down to reflect changes in the Bank of England’s base rate. One criticism of SVR mortgages is that lenders pass percentage increases on faster than decreases

Fixed Rate Mortgage: If you are a cautious investor, who likes to have tight control over your monthly outgoings, a fixed rate mortgage might be the answer. Safe from the fluctuations of the economy: you won’t loose out if there’s a downturn, but equally you won’t be able to take advantage of interest rate cuts

Capped Rate Mortgage: Capped mortgages are similar to SVR, but have a fixed limit above which the interest rate cannot climb

Discounted Rate Mortgage: Discounted mortgages offer borrowers a reduced rate for a set period (typically between 18-24 months), before switching to the SVR

Base Tracker Mortgage: Tracker mortgages are tied (a fixed percentage above or below) to the Bank of England’s base interest rate.

Because rates vary from lender to lender it’s a good idea to shop around. Remember that brokers often have access to preferential rates that aren’t available to the general public. If you decide to use a buy to let broker, make sure that you choose one that charges fees once the mortgage has been successfully arranged.

For further visit Vinson Mortgage Group.

SINGAPORE: Asian stock markets gained Thursday for a fourth consecutive day, their longest winning streak in seven weeks, after a recapitalization of Countrywide Financial, the biggest U.S. mortgage lender, reduced fears that a rout in credit markets would derail economic growth.

Mitsubishi UFJ and HSBC led financial shares higher after Bank of America invested $2 billion in Countrywide.

Source: Herald Eribune

Author: Patrick Bedall

Value beyond expectations, that’s why.

If you have ever thought about financing a commercial real estate property, the thought of using a commercial mortgage broker may have crossed your mind. However, if you are like some people, you may have debated using a commercial mortgage broker based on the belief that it is more expensive to use a broker rather than go directly to a lender. This common belief is a myth.

The reality is that there are a number of ways in which you can save money by engaging a mortgage broker to provide you assistance with your commercial real estate financing needs and objectives. If you take the time to determine the value of using a commercial mortgage broker you will surely see that it is money well spent.

-Locating a Lender

Locating a lender to fund your commercial mortgage is not as easy as it may seem. Due to the wide range of property types, loan types, and special circumstances a single lender simply cannot offer loan programs for all potential loans. You may waste a considerable amount of time simply trying to find a single lender that offers the program you need. A qualified and experienced mortgage broker will have multiple lender relationships in place who can offer a wide range of lending options. Some brokers may even have relationships in place that give you access to hundreds of lenders offering an unbelievable amount of loan options.

-Risks in working with a single lender

You may spend the time and locate a single lender that can meet your needs, but you are not out of the woods yet. By working with a single lender or bank you are putting all your eggs in one basket as they say. The approval process can take a good deal of time that you may not have. Then what happens if the loan application is not approved by that lender? Can you afford to go through the process a second time risking a similar outcome? By working with a broker, your loan application can be submitted to multiple lenders. This not only increases the chances that your loan will be funded, but it also gives you and your broker more bargaining power to get the best deal.

-Cost Variations Between Lenders

One of the most significant ways in which you can save money by using the services of a commercial mortgage broker rests in the fact that there can be notable differences in the interest rates, costs and other fees charged from one lender to the next. A broker will help you in identifying the most reasonably priced options available from these different mortgage lenders. On first blush the cost differences from one lender to another may seem small. But remember, in most instances we are talking about loans in the millions of dollars. Even if the interest rate difference is minimal on the surface, over time this can add up to a significant amount of money.

-Brokers Specialize

Commercial mortgage brokers, especially the good ones, will often specialize in a certain property or loan type. The added experience provided by a specialist guarantees that they have experience with exactly the loan you are looking to secure. Each and every property type and loan type has its own set of issues and pitfalls so it pays to find a broker that services your individual needs. In comparison, if you have a problem with your plumbing you want a plumber, not a general contractor.

-Inherent Expenses of Searching on Your Own

People tend to forget that when they are devoting time shopping around looking for a commercial mortgage lender – or anything else for that matter – it takes you away from other pursuits, including money making pursuits. Therefore, you do need to keep in mind that by engaging the services of a commercial mortgage broker you free up more of your valuable time to engage in other efforts that are more profitable than aimlessly wandering around looking for a mortgage lender.

-Support Services

Another avenue through which a commercial mortgage broker can help you save money is through their existing relationships with other industry professionals. A good commercial mortgage broker has a preassembled network of professionals including appraisers, accountants, lawyers and other service providers that they work with on a regular basis. Not only do you not have to spend the time to find these required resources on your own, but often times you can get a reduced rate on the services due to the brokers existing relationship.

-Fees of Commercial Mortgage Brokers

You need to understand that commercial mortgage brokers appreciate that they are in a very competitive business. Therefore, these professionals are now taking great pains to make their services as affordable as possible. Don’t be afraid to negotiate the broker fee. And don’t be afraid to ask your broker questions regarding how they came up with the fee proposal. The good thing about using a broker is that they do not get paid unless your deal closes.

It is true that in the end, you do pay a fee for utilizing the services of a commercial mortgage broker. These fees can range from half a point to two points on conventional loans up to five or so points on a hard money deal. However, you will find, as many commercial investors have in the past, that working with a commercial broker will help ensure that your needs are met and that you get the best deal in the process. The bottom line is that what you are paying for is a professional on your side, someone to watch out for your best interests. Similar to the way a lawyer protects your interests in legal matters. You wouldn’t go to court without a lawyer, so don’t finance your commercial mortgage without a broker.

Author: Mike Stepney

Product Types

Standard Variable Rate

The Standard Variable Rate (SVR) is one where the lender sets its interest rate above the Bank Base Rate. This rate can rise or fall whenever there is a change in the Bank of England’s Base Rate. Lenders can be quick to react to rate increases yet slow to pass on decreases. There is no obligation to match changes to the base rate.

It is usual practice for a mortgage to be transferred to the SVR at the end of any discount or fixed rate period.

Fixed Rates

A fixed rate is what it says it is. The interest rate is fixed for a certain period. You will know the monthly payments over a set number of years. The downside is the loss of flexibility and increased early repayment charges if you repay the mortgage during the period.

LIBOR Rates

Some lenders calculate interest rates at a margin the London InterBank Offered Rate (otherwise known as LIBOR). This is very similar to the Standard Variable Rate; however the lender calculates the rate every 3 months. The amount you pay will be constant for 3 months. Because of the time lag against the Bank of England Base Rate, you could benefit by having a lower rate if interest rates start to increase, however the opposite could be true if they start to fall.

Discounted Rates

A discount mortgage offers a reduction off the lender’s standard variable or LIBOR rate. When the lender changes their rate, the interest rate will change, but it will remain at a set level below the SVR or LIBOR. A large discount will usually be for a short period followed by a further period at the SVR or LIBOR, during which time, you must stay with the lender or have to pay an early repayment charge to leave.

Capped Rates

By capping your interest rate you are effectively putting a ceiling on your interest rate but without fixing. The main advantage of a capped rate is that while the interest rate can fall it will not rise above a certain level for a fixed period of time. The maximum the capped rate can rise to is often slightly higher than fixed rates and discounted rates are often lower.

Bank Base Trackers A tracker mortgage, literally tracks the Bank of England Base Rate. The lender guarantees to automatically match any increase or decrease that the Bank makes. The rate is set at a percentage above the Base Rate, however it is possible to combine these with discounted rates below the Base Rate (these can tie you in to a higher rate after the discount period ends). You benefit when rates fall, however when rates are increasing, a capped or fixed rate could be preferable.

Flexible Buy to Let Mortgages

With a flexible mortgage, many lenders will allow you to make overpayments. This can be used to plan the early repayment of a mortgage. You can usually ‘re-draw’ the overpayments when you want to which is particularly helpful when it comes to redecorating your property of for repairs.

Minimal Status

Just because you can’t prove a high level of income doesn’t mean you are a bad credit risk! Many of our lenders recognise this, for example; you may have been made redundant and have sufficient capital to live off. Alternatively your partner/spouse may have a substantial income and the finance/property may be far more efficiently placed in your name for tax reasons. Another reason maybe that you are simply unable to prove (by normal means) your true income position.

Overseas Mortgages

British mortgage lenders are often reluctant to provide mortgages to people who do not live or work in the UK. This is because their mortgage approval systems are designed towards information received from the UK Credit Reference Agencies and the lenders reliance on applicants having a provable UK source of income.

Author: Charley Huang
A reverse mortgage calculator is a powerful and beneficial financial tool if you know how to use it correctly. Most of the calculators that you find are online are accessible and easy to use to get the data you need when you want it. But for many, using a reverse mortgage calculator may seem like more trouble than it is worth.

The American Association of Retired Persons (AARP) website features the most-accessed
reverse mortgage calculator on the internet. Their calculator consists of only four easy to use questions that when answered can allow you to roughly determine what you should anticipate if you secured a reverse mortgage within the near future. By knowing your age, the appraised value of your home, your spouse’s age and your zip code, a mortgage calculator can have you well on your way to knowing how much you could get out of your home if you signed up for a reverse mortgage. When you finally decide to use the reverse mortgage calculator on the AARP website, the first step for you is entering in all of the required information. If you do not know the value of your home, estimate based upon the appraisal value of your home for tax purchases, your purchase price or perhaps a rough estimated appraisal that you have find from online real estate services such as Zillow.com. Once you have entered all of the required data, you will be taken to a page that offers itemized details of how much you stand to acquire as a homeowner from a reverse mortgage. In addition to these initial details, a reverse mortgage calculator will also tell you if you can get a single lump sum payment, a line of credit account or the traditional monthly loan advance payment on your home. To find relevant details on something specific such as reverse mortgages ask your friends and co-workers for info they may have found out on it. You can also look up various groups on the web that discuss things such as newsgroups and forums. There is one on so many topics and you can post your own question. Vinson mortgage groupTo find relevant details on something specific such as reverse mortgages ask your friends and co-workers for info they may have found out on it. You can also look up various groups on the web that discuss things such as newsgroups and forums. There is one on so many topics and you can post your own question. See below for more information on Reverse Mortgage.