April, 2010:

Usually the Interest Rates for a commercial mortgage is Depends on your credit score but around 10 to 12%.

Commercial Mortgage Calculation Methods

My bank wants to use the 360/365 method to calculate mortgage interest:

Rate ÷ 360 × Loan Balance = Per diem interest

But some of my research indicates that the 360/365 method, while widely used for business loans, is not used for mortgages. Instead, commercial mortgages use the 360/post method, which although more complicated, saves the borrower both principle and interest over the life of the mortgage.

My bank says the 360/365 method is their usual method.

Is it considered accepted practice for commercial banks to use this mortgage calculation method?Is there anyone knowledgeable out there about this who can shed some light?

An interest only mortgage,is a loan type that allows a borrower to make payments that consists only of the interest. The borrower is given the option to pay only interest for a certain period of time. Usually the interest only period is for the first few years, but borrowers are allowed to pay back parts of the principal if they have the money to do so.

Interest Only Mortgage loans are not to be taken if you do not have the need to. You must layout a plan of payment before taking this type of loan in order to minimize the risk. This type of loan has many benefits and will help you do a lot more with your business if you know how to use it.

Interest only mortgage loans are not suitable for every kind of borrower. It should be only used if you have a proper reason to pay the interest at first. This is suitable for people who have incomes that are not stable. When they do not have enough money to pay principal and interest, they have the option of paying just the interest. When they do get enough money they can pay back as much principal as they like.

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The fee for mortgage insurance is because the bank is taking on more risk if your down payment is not enough (less than 20% down payment). They want some assurance that they will get their money if you do not make your payments. The 20% cushion is because there are other legal fees involved in foreclosure, and prices can fluctuate, especially since they would likely get less at a foreclosure auction than if they had more time to sell it normally.

Do I need to buy a life insurance because of mortgage?

I guess it’s partly down to how much of a contingency versus risk couple you are. The insurance may be an additional burden that you don’t fancy much but then how much more of a burden is losing a partner unexpectedly who isn’t as fully insured as they could be…..therein hangs the tail. I don’t like to rain on any ones parade but having been put in a similar position, while money does nothing to change outcomes of loss, it goes a quite a long way in terms of increasing security in the ability of the surviving partner to maintain the family home without unnecessary financial worry.

My advice would be that if you think you can afford it then take out the level of cover you need, sit down with your partner & do the math. For example if you have kids and you’re the main carer, then could your partner afford child care if you died and he still had to work?

Make the list of pros & cons and talk it through face to face with an expert then you’re making an informed decision

Q: Can mortgage insurance come off of an FHA loan?If you pay down 20% of the principal balance on an FHA loan, can the mortgage insurance come off?

A: Generally YES, but may require you to wait set time or to get professional appraisal
It’s an extra expense, and one avoided by putting down 20%

PMI? Private Mortgage Insurance cost?

With 10% down – if you qualify (0% down days are long gone).You’ll pay $219.33 monthly on PMI Remember that this money is not tax deductible and does not apply towards principal or interest.

PMI is also hard to remove once you reach 80%,You may have to get appraisals or reach 25% equity to have this removed.Do everything you can to come up with 20% down – you’ll thank yourself.Consider buying a smaller home.

Q: We have a lot of debt and would like to take out a secound mortgage. Where could I look with somewhat bad creidt?

A: Currently banks are not likely to lend with bad credit. I would advise talking to a credit counselor with a non-profit group to try to avoid the second mortgage. You don’t want to get in with a shady group and take out a 2nd that you can’t afford and lose the house.

Tips on Get a secound Mortgage With bad Credit

You should seek secondary mortgage from the same lender who gave the first mortgage loan,the lender will check the 3 facts- current market value of the property, outstanding amount from the first loan, and the credit history.Only after analyzing these 3 factors will the lender decide upon the loan.

The lender is taking a big risk to finance you a secound Mortgage,Obviously, the 2nd mortgage rate will be high than the previous one.Another reason is poor credit. Poor credit home loans are available but they are obtained only after careful scrutiny of past credit history and credit rating.

If applying for a 2nd mortgage with poor credit, your choice of lenders may be few. Some homeowners obtain their loan from the existing lender. However, if you applied for the original loan with a high credit score, and your credit score has since decreased, the lender may not approve the request for a 2nd mortgage.

In this case, homeowners would need to find lenders willing to approve loans to persons with less than perfect credit situations. These include sub prime or high risk mortgage lenders. Even though applicants will pay more interest due to their low credit rating, they may have the opportunity to refinance the 2nd mortgage, and obtain a lower rate when credit improves.

How to Get a secound Mortgage With bad Credit Relate post:

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1.Cut out all the extra expenses that don’t really matter as much,Take all this extra money and apply it towards your mortgage payments.

2.Consider increasing your income. For most people, the easiest way to do this will be to get a part time job. Take the earnings from this extra job and apply it towards paying down the mortgage.

3.Look at improving your credit score by eliminating any mistakes that are on it.You could qualify for a shorter term loan with a much lower interest rate. If it makes financial sense to do this, you can save money on the interest and end up getting your home paid off much earlier.

4.Sell of some things that you really don’t need.There could be thousands of dollars of items in your home that you could sell and apply towards your mortgage to get it paid off months earlier.

Some question on Pay Off Your Mortgage Early

Q: Does paying off your mortgage early reduce interest?I have owned a home for 6 years. We are now building a new house and will sell our current house. Since we have been paying interest based on a 30 year note, when the mortgage is paid off after only 6 years and sold to someone else, do they recalculate interest so that the actual amount you still owe is less?

A: Yes it will be much less because intrest is only charged to you on the amount of time you had there money so if you pay it off early you can save thousands.

Q: What amount needs to be paid to principal each month to pay this off early? Mr.Gold just got a 30-year mortgage, and plans to pay $200 towards the principal each month. Tp pay the mortgage off 10 years early, how much does he have to pay on principal each month? (Do not consider interest expense in your response.)

A. $400.00
B. $300.00
C. $100.00
D. Other

Please give the correct answer and explain.

A: Since we’re dealing with the principal only it’s relatively straightforward arithmetic (and also unrealistic situation!)

30 years * 12 months/year * $200/month = $72,000 is the cost of the house.
To pay this off in 20 years:

$72,000/(20years*12months/year) = $300/month

In fact it’s even more obvious than that because it should be clear that 30 x 200 = 20 x 300

Ways to Pay Off Your Mortgage Early Relate post:

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What Is Involved In Refinancing Your Home

FHA Vs Conventional Loans

Conventional loans are less expensive but they work best for people with good credit. If Your credit is above average so you should get the conventional loan, if you qualify. FHA loans are for people with bad credit or “no” credit.

After assessing his or her financial situation and weighing the pros and cons of FHA and conventional loans, an applicant can determine the best loan for his or her situation. Different loans are beneficial for different types of situations and it is important to be well informed so the best choice is made. An FHA loan would likely be more beneficial for those wanting to borrow more than 80% of the purchase price or home value, those with lower credit scores, or those who do not have a lot of money for a down payment because they can have access to lower interest rates. This loan might also be better for borrowers who want a cash-out loan because they will likely receive a lower rate than with a conventional loan.

Q:If you already have a conventional loan, can you get a hud loan to buy a new primary residence?We’re looking for options to get into a new home. We have a conventional loan and want to rent this home out.We have excellent credit, but not a lot to put down. We want to keep our current home for a rental, but weren’t sure what kind of loan we’d be able to get on a new house.

A:You can also get an FHA loan, but you will have to qualify for the new FHA payment along with the conventional loan payment. Also, FHA will not allow you to use the rental income off the other property to offset the conventional loan payment.FHA use to let you use the rental income to offset the other payment but at about a year or two ago they changed the policy.

Q:I applied for an FHA loan, but somehow the paperwork was switched to a conventional, whose at fault?
I feel there is something shady going on. From what i was told people rarely get 100% financing on conventional loans

A:FHA requires a 3.5 pct down pymt if your scores are good enough they could do better going conventional Who is responsible That would be the loan officer or his boss. FHA not only require’s 3.5% dn. they also require upfront PMI I wanna say it is 1.75% in addition to the Down pymt so id say their looking out for you.

What is the major difference between FHA and Conventional Loan?

FHA loans typically lend at a lower limit than a conventional loan, but also provide the option of purchasing with less equity, lower downpayments, lower PMI rates, and better rates for people with imperfect credit. A conventional loan is really only better for people borrowing substantial purchase amounts but have perfect credit and can qualify for PMI avoidance type loans such as an 80/10/10 or an 85/15. Be careful of these loans though, as the secondary mortgages are often set up as interest only loans to lower the payment deceptively, leaving you with a large amount to payoff or reifnance at the end of your mortgage.

Conventional loan may be better for those who have excellent credit, those borrowing less than 80% of the purchase price/home value and those not wanting to get a cash-out loan because they can receive low interest rates and, unlike FHA loans, they will not have mortgage insurance if the loan amount is less than 80% of the purchase price or home value. For those who need further assistance choosing a type of loan, there are a variety of resources available. Speaking with a knowledgeable loan specialist is a good way to make the decision process less complicated.

Refinance Mortgage With Bad Credit Success

As we know,Some people do successfully refinance their home with good terms even if they have bad credit scores.why?

These people interest and good conditions for your mortgage refinancing plan is to increase your credit score before applying for a loan modification. desirable credit score of 700 is a good score you have, and the realization that if you need a model of a modified home loan for yourself! How to increase your credit score can ask you? Well, not quite close to their accounts, pay debts, rather be slow and safe, meet their payment schedules. If you have credit cards, make sure that you miss at least minimum monthly payments, the payments are, and to delay or to comply!

These people understand that there are many opportunities in terms of lenders out! these plans to refinance bad mortgage on the property is easily accessible for those who need it and these people know how to choose according to several offers from different lenders out there! In addition, negotiation with lenders and ensure that they receive very good condition before refinancing a mortgage plan agreed to modify their loans.

How to refinance a mortgage with bad credit?

Q:My mortgage company won’t help me (GMAC) I dont have good credit at all..I have had a few late payments..just had a baby..i dont get paid that much and my husbands work is slow.. i just want to Refinance no cash out..house is worth approx 70K owe about 65K and dont want to pay for a loan modification cuz if i had the money to do that i would be on here asking for suggestions.

A:Well a refinance will cost at least $1000, so it’s hardly free. And when you’re applying to refinance, as far as the bank is concerned, it’s just the same as when you apply for a mortgage the first time.

With the tight credit these days, and the fact that you’ve only got $5000 in equity in the house (granted, it’s better than being negative), and poor credit, I can’t imagine any bank offering you a mortgage, at least at a reasonable rate. They know that you’re a risk to walk away since the cost of selling your house (real estate fees) will be more than $5000.
I guess the best answer is to just keep the status quo (why do you feel the need to refinance anyway?) or to try to sell the house if the payments are too much and then rent.

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