Reverse Mortgage Disadvantages

Reverse mortgages allows an elderly homeowner to make use of their home’s equity in order to generate monthly funds for themselves. This is a type of loan that works in the opposite manner of a traditional mortgage, thus the name reverse mortgage. Instead of paying the lender, the lender sends you money on a monthly basis, on a lump-sum, or on a needed basis. The total amount owed by the borrower will not be paid until they are no longer able to occupy the house.

To be qualified for a reverse mortgage, you or your spouse should at least be 62 years of age. The home used for the reverse mortgage should be your primary residence and it is completely paid or nearly completely paid. When the time comes that you or your spouse will leave the house due to illness or death, the amount owed will need to be paid back. The heirs will now decide on how to handle the loan. It’s up to them if they will sell the house and use the amount for the repayment or remortgage the house with a traditional home loan. The lender usually gives the heirs up to one year for the decision making process.

Although this is one way to answer the financial needs of some elderly people, one should know the several disadvantages involved in reverse mortgages. Some of the reverse mortgage disadvantages are as follows:

  1. High Cost – Due to the fact that the lender assumes many risks, closing cost and interest rates are relatively high with reverse mortgages. For example, the life expectancy estimate is off, and the borrower stays at the house past what is expected, the lender misses out on what should have been returns of his or her money if it was invested elsewhere.
  2. Compounding Interest – With reverse mortgages, the interest is added back to the principal and compounded each month making the growth of the loan very fast. The owed amount could even appreciate faster than the value of the home itself.
  3. Impact on Heirs – With reverse mortgages, the value of your home will drastically fall. This is because the total loan amount including the interest will be taken out of the equity of your home.

If you are planning not to stay in the same home for a very long time, getting a no closing cost refinancing loan can be a great deal for you. There will be an additional .2% to 1% on the interest rate of no-cost refinance loans if compared to a standard refinance loan. You can save a considerable amount of money if arranged on a short-term basis rather than in a long-term basis.

There is also a refinance guide when it comes to refinancing after bankruptcy. Give yourself a certain amount of time to rebuild your credit and get a better rate before refinancing. Yes you can readily get a refinance loan after you go bankrupt, but taking one step at a time will show the lender that you are on the right track and you have learned your lesson, thus the lender will be more than willing to arrange a better rate for you.


Look for cheap mortgages. The cheapest mortgages allow you to pay less monthly interest, saving you from paying potentially very large amounts through the course of the mortgage.

Best Mortgage Deals

Did you ever wanted to buy a house but refrained from doing so because of financial reasons? You may have told yourself many times that buying a home is just too expensive. Or perhaps wouldn’t believe you could because of outstanding debts. You need not sulk in anxiety. It’s time you make use of the power of the internet to find you the best mortgage deals available for you.

Cheap mortgages parade in the web pages and there are just so many that sometimes surfing online becomes stress-causing. Financial advice always tell you that best deals are always relative to one’s situation and present circumstances. This brings us to the reason behind why it is important to know first the type of mortgages available for us. [Read more]

Cheap Mortgages

The internet has played a great part in giving mortgage applicants various options to choose from in terms of which lender to go to for loan applications. On the other hand, because the options are quite a lot, sometimes it becomes very difficult to decide which one to take.

In most cases, people will choose cheap mortgages. provides a 4-question guide which needs to be satisfied before deciding which cheap mortgage loan suits one best. The questions are the following:

  1. How long do you intend to occupy the home?
  2. Would you prefer lower payment or more rapid accumulation of equity?
  3. What do you feel interest rates will do in the future?
  4. How well do you tolerate risk?

[Read more]

Bad Credit Mortgage Refinancing

Debt is one of the major stress-causing problems in the United States these days. This is also one of the reasons why families disintegrate, friendships crumble, and personal economy regresses. Hoffman Brinker and Roberts published credit card debt statistics in their website, some of which are shown below:

  • The average credit card debt per household is about $15,700.
  • The US Census Bureau reports that U.S. Citizens have over $886 billion in credit card debt in 2010.
  • In 1990, the average household’s credit card debt was $2,966. In 2007, however, it went up to $9,480.
  • $59.1 trillion worth of liabilities was incurred by the U.S. Federal government which translates to roughly $516,000 per U.S. household.

This is how rapidly liabilities and debt increase every day.

Mortgage Refinance with Bad Credit

If you would take debt problems to a Financial Consultant, you will always be told that debts are byproducts of mismanaged finances.  How then can one recover in case he or she gets entangled in it? One option growing in popularity these days is bad credit mortgage refinancing.

Bad credit mortgage refinance is when one applies for a loan in order to pay off another loan secured against the same properties, assets, etc. It is effective only when the latter loan made is offered at a lower interest rate compared to the original loan. [Read more]

Refinancing After Bankruptcy

Refinancing after a bankruptcy can be a very challenging task but it can be a lot easier. Six months after your bankruptcy has passed, you can research on willing lenders to refinance your mortgage. In fact, there are many lenders who are willing to extend refinance after bankruptcy, although interest rates are higher than the average. Refinancing mortgage is a wise decision if you just got out of bankruptcy. This helps rebuild your credit standing in about two years. Here is a simple refinance guide to help you look for the best refinance lender in your area.

How to Refinance After Bankruptcy

After you have gone out of bankruptcy, you have 6 months to prepare yourself for refinancing. You can start by establishing on time payments to your bills and current mortgage.  You may open a credit card account to start rebuilding a good credit history. At this time, you may want to consider having an extra income to raise funds for a savings account. Remember, when you have more cash assets, you will have better chances in your application for refinancing.

When you are ready to refinance, ask people you know who were able to get refinancing with bad credit. They may possibly refer you to their mortgage lenders who can extend you some good rates too. You may also do your research mortgage lenders and their rates online. You can easily compare online mortgage websites. Compare refinancing quotes particularly interest rates and fees. Slightly higher rate with low fees usually offer the best mortgage deal.

With bankruptcy on your credit report, expect to work with sub prime lenders. They offer their rates at a fewer points higher than the average mortgage.

When choosing your refinancing package, shy away from opportunities and chances to cash out part of your home’s equity – looks for the best mortgage deals available. This will just jeopardize your chances of improving your credit. Keep your home equity in place to ensure substantial improvement on your credit standing.

Read on the terms and conditions carefully. If the context is too vague for you to understand, ask questions. Make sure that you understand all the details stated on it then you can finish your application on line. Refinancing mortgage quotes may change as it varies according to market rates so expect some slight changes when your application has been approved.  Before your application is finalized, review the loan again. Make sure that everything is in place accordingly.

With your refinancing completed, your credit standing is building up. Plan to refinance your loan after 2 years to avail a lower interest rate. Regular payments are important for substantial results in improving your credit. You may opt for auto debit payments so as not to miss on any repayments schedule. Remember there is a difference between on time payments and current payments. Get in touch with your bank to set your account in auto debit transactions.

Review your credit report every 6 months. You can get a copy of your credit score from 3 major credit bureaus; Experian, Trans Union and Equifax. Correct any discrepancies in the report if you found one. With a solid credit history behind you, you can apply to traditional mortgage lenders. So if a friend asks you, “Can I refinance after bankruptcy”, tell them the answer is yes.

How to Refinance

Refinancing home mortgages may mean paying off your existing mortgage with a new loan. Many home owners are considering refinancing for various reasons. Common reasons are getting a better rate from high adjustable interest to a lower fixed interest – or even refinancing after bankruptcy. This can also be a way for home owners to have lower monthly payments or take out cash against their home equity to support urgent financial needs.

Steps to Refinance a Home Mortgage

  1. The first step is to determine if you are qualified to refinance. Lenders allow refinancing when you made at least 12months of payment to your mortgage. Know your reasons why you should refinance. Your reasons will help you decide on the right time to apply.
  2. After your reasons are established and you finally decide that refinancing is your only option, talk to your lender. Your lender may give you flexible terms in refinancing. They may even waive some refinancing fees and other costs involve. You can get sufficient guidelines and assistance on how to refinance your home. Your original lender can extend services beyond their limitation to keep their existing customers so it is best to approach them first. If you feel you are not getting the right service from your current lender then you may opt to change lenders.
  3. Find a lender who can offer the best mortgage deals in refinancing.
    1. Banks. Talk to your bank as they are already familiar with your credit history. They may offer you flexible terms and interest rates too.
    2. Mortgage broker. They are the best people who have access to various lenders. They can refer you to a lender who can offer the best deals in refinancing.
  4. In your search for lenders, it may be difficult to pinpoint the best and reliable lender. Compare lenders according to how much savings you are going to get against the total costs. It is also important to consider the costs of refinancing against sticking to your original loan. Remember that there are penalties involved if you decide to refinance your home. So if costs are greater than rewards, it may be better to stick to your original loan.
  5. When you are decided on a lender, go through the application process. You may apply online, through the phone or through paper application. Your loan officer will have to review your credit score and appraise your property as a requirement to the application process. You have to provide them documents as proof of verifiable income. These documents are W2s, pay-stubs or copies of tax returns for self employed individuals.

Your application may process in a maximum of 4 weeks given that your papers are complete and there are no problems with your credit score. To avoid hassles and delays, let the bank or the lender know if you have a home equity line of credit or an existing second mortgage that you plan to keep. If this is the case, there may be additional documents involve such as a subordination agreement from your existing lender.

Bad Credit Auto Refinance

Refinancing of auto loans are extended even to those who are currently experiencing bad credit. Having a poor credit can still qualify you to auto refinance with some conditions. This covers a new repayment schedule, low interest rate and a new set of terms and conditions.  Below will guide you to auto refinancing. Follow this and you will never go wrong.

  • Review your credit history to determine where you stand. Lending institutions base refinancing rates on your credit score. Your credit score can give you an idea on how much your interest rate will be when you opt to refinance you auto loan. The higher the credit scores, the lower your interest rate. Bottom line: you have to prove to them that you are a good payer so they will trust you.
  • Bad credit auto refinance works the same as acquiring refinance with outstanding credit standing. The difference is that individuals refinancing with bad credit are given around 4-5% higher interest rates as compared to the average auto refinancing. Interest rates are actually changing depending on the change in market rates. So if the market interest rates drop, you may consider refinancing at this time.

For instance if you purchased your car at 12% due to flaws in your credit score, you could always refinance your car when the interest rate drops and you may have it slashed down to 6% depending on the severity of your credit score.

  • If your interest rate is still high after refinancing and does not meet your monthly income, you can always refinance your auto loan anytime when your credit score has improved or started to build up. You may get big savings as your interest rate can always drop lower depending on market fluctuations. So it is also best to watch the movement of the market to know the best time to apply for refinancing.
  • Scout around for auto refinancing facilities online. Simply type the city and state where you live, it will deliver you lists of lenders in your area who could possibly extend refinancing options, from poor credit auto refinance to bad credit mortgage refinancing. You could also compare lender’s interest rates and terms and conditions. This gives you the opportunity to choose the best deal for your need of bad credit auto finance loans.

Advantages to Auto Refinancing

There are many advantages to refinancing. You can lower your net payable interest rate and loan amount, avail a new repayment schedule, get credit even with poor or bad credit standing, repair or customize your vehicle, and make a lot of savings.

Only a few are aware of these benefits and they are taking advantage of it. Those people who may not be aware of bad credit auto finance loan or bad credit mortgage refinancing are wasting a lot of time and possible savings. Let’s help them be aware and know the fact that refinancing can do them a lot of favor. Look for a refinance guide and have them speak to your loan officer to give you more options.

Refinance 2nd Mortgage

More and more home owners are looking for possibilities to refinance their second mortgage. Refinancing second mortgages offer borrowers funds that are placed against the equity of your home’s appraisal value. In order to have a better understanding on refinancing second mortgage, it is best to define what are second mortgage loans? Second Mortgage loans are loans being granted against the same assets of your first mortgage. A borrower has the option to refinance the first mortgage for a higher one or take out a smaller mortgage option.

For instance if your home is worth $300,000 and your loan balance on your first mortgage is $200,000, then the lender may qualify you for the 80% rule and allow you a second mortgage loan depending on your credit standing. After the first mortgage has been deducted ($300,000-$200,000) then you can still borrow $40,000 on your second mortgage. This is then recorded in county records offices and becomes a public record as there is a legal claim or hold against your property.

Choosing the Best Mortgage Deals

  • There are options to consider in refinancing second mortgage loans. The simplest option is refinancing from a high interest rate to a lower fixed rate loan which guarantees financial protection during inflation. You also have the option to refinance the first or the second mortgage or consolidate both in a single loan.
  • If you have multiple loans, it may be a wise decision to refinance your current second mortgage with your first loan into a fixed rate FHA mortgage. This can save you money by combining your first and 2nd mortgage together. You can also opt to take out a new 2nd mortgage loan and lock it into a fixed rate loan where its terms and payments are fixed for the duration of the loan.
  • Talk to your loan officer to get the best mortgage deals in refinancing. These people are qualified and knowledgeable about the loan process and its technicalities. They can give you a better deal accordingly.  Your loan officer can give you refinance guides and instructions on the process of refinancing 2nd mortgage loans. Part of their refinance guides are the required documentation that you need to provide. Be prepared with documentation that serves to show a good credit score and stable income history such as W2s and paystubs.
  • There are many cases that a borrower has a low credit score or has filed bankruptcy. This highly affects an application in refinancing. If this is the case, it is best to wait until you are able to improve your credit score or you should refinance within 6 months after your bankruptcy. Talk to your lawyer or your lender for other possible solutions.

In any refinancing or loan application, it is always advised to read the terms and conditions carefully so as not to be surprised at the end of the day. Learn to ask if you haven’t understood what is stated in the context. Therefore, it is important to have basic knowledge on loan processes and refinancing so as not to get lost in refinancing your second mortgage loan.

No Cost Refinance

No Cost Refinance is synonymous with the terms no free finances and no cost mortgage refinances. This new concept is a mortgage program or a loan transaction designed wherein the settlement costs are paid by the broker or the lender. These settlement costs include the usual fees such as but not limited to processing and underwriting fees, title search and title insurance, and attorney’s fees. However, this does not mean that you will no longer pay any fees because there will be some costs that the lenders will not undertake.

This may sound promising, but always bear in mind that lenders don’t give anything for free. There are three types of no cost refinance. First is no cash up-front but all the fees and costs are incorporated and clustered into the loan’s interest rate. Second is zero lender fees, but you will have to pay the third-party fees and the last one is the zero points, but you are required and obliged to pay the lender fees and the third party fees.

So this shows that no cost refinance is not really a true no cost mortgage after all. On a true no cost loan, a borrower should only expect to pay 2 kinds of payment. One is per diem interest which means that interest is to be paid from the day of closing to the first day of the following month. When it comes to refinance, the interest will only be paid from the first of the month to the closing day. The other kind of payment you expect to pay is escrows.

Therefore, based on the things mentioned above, why would a lot of people opt to apply for no cost refinance? This question will be answered by explanation hereunder.

Considering No Cost Refinancing

As a Refinance Guide, think carefully of the different steps and various considerations. You must first evaluate and ask yourself if it is right for you. Before jumping into a quick decision, consider first if it is advantageous to your situation.

Usually, it can only be a good deal if you refinance the loan in a few years but to be certain, compare the payments on a no free refinance with the traditional ones. If in case where before the breakeven point you were able to pay off the money borrowed then no cost refinance is right for you, otherwise it is not because it will cost you more.

Another one good reason why no cost refinance is preferable than the traditional refinance even if it will cost more because of the fact that you can use your cash to invest on any other profitable venture.

One more ideal reason is by transferring from ARM or Adjustable Rate Mortgage to a fixed-rate loan. The former changes with market condition while the latter offers a fix rate of payment even if the mortgage rate changes in the future.

The second step on refinancing guide is consider the loan process since you will have to start all over again and undergo with the same process when you took your current mortgage. Make sure to prepare all your records and the lenders will do you a favor of an easier qualifying process especially if you have a good payment history.

The third guide is Loan choices. There are several of loan choices that you can select from. You can choose a fixed rate loans with a period of 15 and 30 years, or an adjustable rate mortgages with varying adjustment periods. The government also provides loans like the FHA or Federal Housing Administration and VA or Veterans Administration, there are also conventional loans and jumbo loans, and also those that require PMI or Private Mortgage Insurance.

To wrap it up, follow the steps on how to refinance your mortgage.

First, know what will affect the rate that you will receive by considering the elements such as : your loan size, your credit score, what is the paid points, period of loan closure, the floating or the locked rate and the amount of debt to income ratio.

Second, know that the rates being advertised are not reliable.

Third, Think over and decide what type of loan you want that will suit your circumstance.

Fourth, shop around for the best rate and for the choice of credible lenders. Be on guard and be cautious of the marketing strategy of the lenders about no closing cost refinancing. This may sound good but there’s always a catch. Others use it to cheat and trick the borrowers to accept the hyper-inflated rates.

Lastly, know the mortgage terms especially if it would be your first time to engage in this kind of loan.

Refinancing with Bad Credit

With an all-time low in mortgage rates, refinancing offers are being snapped up left and right. Everyone is taking advantage of the appealingly low rates in order to get new loans with better terms. Of course, the ones having the time of their lives are the people with good credit scores. Refinancing with bad credit is often thought of as a horrible deal. For the most part, it’s true.

Can I Refinance with Bad Credit?

Yes, of course. Banks are all about the business. Refinancing is merely one part of it and they will never say no to your money. Most people who try to refinance with bad credit scores end up turning away after being shown just how high the fees or points will have to be in order to accommodate their needs. Ordinarily, brokers or lenders would be offering people with bad credit high rates on loans. However, with mortgage rates so low on the market, they’ve also decided to take advantage of people’s willingness to reduce their home and auto loans. What’s a little fee for the chance to get better terms and potentially huge savings on payments? Nothing except for the part where the fees are actually pretty high. Still, it isn’t impossible to get a good deal.

Refinancing Home Loans and Auto Loans

In general, the two most common loans that undergo refinancing are the ones for your house and your car. A home refinance with bad credit will cost you more than normal but an evaluation of future payments might make you realize that it will all be worth it in the end. The same goes for a bad credit auto refinance. If you have mortgages for both, though, it would be wise to choose only one to refinance. High rates and fees will be hard on you especially since other loans will also be affected by your bad credit. Calculate the total savings for each kind of loan and take into consideration just how long it will take until your refinancing costs break even with your saved mortgage payments. It is entirely at your discretion which mortgage you’ll refinance. If you can’t decide but are still confident about your math, you can always go for both.

How to Refinance with Bad Credit

The key to success in this area is persistence. If you look hard enough, there will be a bank or some other financial institution with an offer of pretty reasonable deals. Shop around different banks, their rates will vary but you’ll be able to draw a baseline of what’s a good offer and what’s not. These aren’t the old days where they’ll just turn you away for having bad credit. Some banks actually cater to individuals with bad credit scores as this means that high rates or fees won’t be a problem come agreement time. There are even lenders with ‘subprime’ rates that specifically go after people with bad credit. A refinance guide is nothing without instinct. Choose wisely and you may be able to refinance your mortgage without too much trouble. Or, at least, with less trouble than what you were expecting.

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