There are many different types of mortgages in the finance and real estate market. However, one of the most popular types of mortgage loans is a blanket mortgage. What does a blanket mortgage mean? The idea behind a blanket mortgage is quite simple – get a single loan by putting up more than one piece of real estate as collateral. Putting up more than one piece of property actually leads to a better evaluation of the loan amount and gives greater flexibility on the terms of payment. This flexibility is allowed because there is more than one collateral and the mortgaged property is an appreciating asset, most of the time. This simply means is that the price of a landed property keeps increasing over time in most places and this makes the collateral more credible. Top reasons why blanket mortgages are popular Blanket mortgages come with more than a fair share of surprising advantages that most people fail to see immediately. There are times when having real estate lying around can really help turn a bad situation into a good one. You Might Also Like:  10 Tips For Getting A Mortgage Here are the top three reasons why blanket mortgages are so popular.

Any mortgage that you take after a primary or first or senior mortgage is called a junior mortgage. If your house faces a foreclosure, you will be required to pay the senior mortgage first. How a second mortgage works A second mortgage or a junior mortgage is a type of loan that is granted to you against a house that already has a loan on it. The primary loan becomes the senior mortgage and the secondary becomes the junior mortgage. However, it is not advisable to take on a junior mortgage for anything other than house expenses. To get a junior mortgage, you have to apply for it against your home that already has a mortgage on it. The primary or the senior mortgage will have to be paid off first. The interest rates on junior mortgages are lower than those on any other type of credit, but these can be higher than those on primary mortgages. Generally, senior mortgages are used to buy a house, whereas junior mortgages are mostly used for other home-related expenses such as renovation and repair work. The most common type of junior loans is home equity loans and HELOCs (Home equity lines of credit).

Mortgages are a way to cover the shortage of funds when the requirement inevitably occurs. The simple fact is that a mortgage loan is an easy loan to get. As long as the curation and inspection of the asset pass a standard mark, any financial institution is happy to lend out the money, because there is always collateral to go with the deal. The best way to deal with a sudden shortage of cash, however, is not always met by financial institutions because of an occasional delay. In such a case, there is only one alternative – borrowing from private lenders. In such cases, reverse mortgages are an excellent idea. Reverse mortgages allow the borrower to give up equity in their property, especially landed property, in exchange for annuities. It is so named because the concept of a reverse mortgage is the polar opposite of a regular mortgage. In a regular mortgage, the borrower has to pay annuities. In a reverse mortgage, the borrower gets paid annuities instead. Biggest benefits of reverse mortgages Reverse mortgages have been in practice for a long time and there are several benefits to get a reverse mortgage. The only responsibility is an absolute obligation on the part of the borrower to pay the taxes regularly and diligently.

The market is an extremely unreliable place. We have witnessed its decline for the past several years. If we are to consider the real estate market alone, it has faced a lot of criticism for being a highly unreliable marketplace. Fortunately, we have experienced nothing but growth in the real estate sector for over a decade now. Yet, there are times when we are questioned by this unresting thought that makes us wonder the value of our property in not only the present years but also the future. Nothing can add to your worries more than knowing that the property is yet to be fully paid for and that your house is still under a mortgage. Such a situation where your house is worth less in the market than the amount that you paid for it when you first bought it, is a perfect explanation of an underwater mortgage. An underwater mortgage is, as the name suggests, a mortgage that has kept your house under the water, that is, under the expected value. It is necessary to understand why this is a problem because a property is the biggest security for anyone living not only in this country but anywhere in the world.

There are many types of mortgage insurances, but the one that most borrowers worry about the most is private mortgage insurance (PMI). This insurance is basically to protect lenders in case borrowers fail to pay them back. The reason you need to pay private mortgage insurance (PMI) If you as a borrower pay less than 20% of the cost of your house as down payment, it poses a higher risk to your lender. So PMI or Private Mortgage Insurance protects the lender in case you default on your payments. Generally, in the case of default, there is usually a foreclosure on the house. Since foreclosed homes sell at lower prices, the lender needs to ensure the mortgage doesn’t cause much loss, and this is where a PMI can be helpful to the lender. Calculating loan to value (LTV) ratio Whether you require to pay PMI or not is determined by calculating the loan to value (LTV) ratio. If you take the current value of your home and compare it with the amount of the loan you’re taking, you will get your loan to value ratio. This ratio needs to be less than 80% if you want to avoid making the PMI payments.

Many home buyers are tempted to get the 30-year fixed rate mortgage. However, you can get a lower interest rate with an adjustable rate mortgage. The fixed rate mortgage loan provides security but is more expensive while the interest rate on the adjustable mortgage may fluctuate. Let us try to lay it all out on the table and see what is a good fit for you. Most ARM’s (Adjustable Rate Mortgage) come with an initial fixed rate and adjust every year on the anniversary of the mortgage. The rate is set 45 days in advance of the anniversary based on an index and some adjust every month. If this is very uncertain for you, you’re better off with a fixed rate mortgage. If you’re planning on staying in the house only for a few years, go for the adjustable rate as it has a lower interest rate and your payments will be lower. This will allow you to save for a bigger place. Look at the market conditions. If the market interest rates are higher, ARM’s allow you a lower rate initially. If the rates are falling, there’s a good chance you’ll get a better deal on the payments. If the rates are low, it might be better to get into a fixed rate mortgage.

If your application for a mortgage has been denied, the first thing you need to do is find out the reason why it was denied, the period you need to wait before applying again, and the things you need to make sure of to prevent the decline from happening again. The most common reasons for the decline of a mortgage are listed below. Low credit scores When you apply for a loan, lenders look at your credit scores. They want to see a proof of a good credit history that shows you have successfully paid the required amount every time you have taken a loan. If it is a case of bad credit, you will be given a notice of adverse action with reasons behind it. The notice will also inform you about how to view your credit reports. Credit report Lenders will also want to make sure that you earn enough to make their payments on time. The usual ways to do this is by calculating your debt to income ratio. This is done by comparing how much you earn each month and how much you put into debt repayments. Before applying again make sure you’ve read your credit report thoroughly and there are no errors in it.

When you apply for a mortgage, you are handed over certain rules and regulation to follow during the procedure. You are also given a document containing all the information about fees and other payments that you are required to make before your application is processed and you move ahead. All mortgages have a certain fee attached to them. This may be used for the lender’s own benefit such as service, administration costs, time invested in your application, and the likes of it. In a no-fee mortgage, the lender does not ask you to pay any charges, which includes not paying the processing fees, application fees, third-party costs, etc. When the buyer is exempted from all the above-mentioned fees, he/she is able to save 3-5% of their money on these additional costs. However, what may seem like a great deal on the outside may be extremely misleading. The fee that you are not required to pay at the beginning can result in you paying it later on in the form of interest or closing fee. To avoid becoming a victim of such a scheme, which is nothing but a clever wordplay, it is essential to learn everything that there is to know about a no-fee mortgage.

A no-cost mortgage or an NCM is a mortgage in which all kinds of fees for the borrower is waived. The lender pays the loan settlement costs of the borrower. The lender adjusts this cost by charging a high-interest rate to the borrower. When the lender sells this mortgage into the secondary mortgage market, he will then receive a price, which is calculated on the interest rate of the mortgage. A mortgage broker would also do the same based on the amount of the discount they might have received from the lender. A no-cost mortgage is never a no-cash mortgage. In the case of a no-cash mortgage, the settlement costs are included in the principal balance of the loan and are paid over a fixed term along with the compounded interest. However, in the case of a no-cost mortgage, the borrower pays a high-interest charge on a low principal balance. The borrower should perform a thorough analysis to determine which is more suitable for them, a no-cost mortgage or a no-cash mortgage. The no-cost mortgages have a very interesting feature. As the lenders who offer NCMs pay for the services which are obtained from the third parties, like the title companies and the appraisers, they get access to an incentive to find those service providers who offer the lowest price.

A mortgage is a loan that is secured by a property or any kind of real estate asset. In exchange for the money received by the homebuyer to buy any kind of property or a home, the lender is assured of the fact that he will be paid back the funds within a certain time frame and with a certain interest rate. The mortgage is entirely bound by legalities and gives the lender the right to have all kinds of legal claims against the borrower’s home if the borrower is not able to pay back the money. Basically, it is the lender who owns the property until the money is completely paid off. What is included while repaying home mortgage? The mortgage amount is paid back in the form of monthly installments. This consists of the interest and the principal divided by the number of months, which was fixed for paying back the entire mortgage amount. A monthly home mortgage payment includes taxes, interest, insurance, and the principal. Taxes are meant to be the remittances towards the local government as a percentage of the value of the property. These tax amounts differ depending upon the borrower’s residence and are generally assessed on a yearly basis.

If you’re in the market for a home loan, it would be wise to consider all the options including a balloon mortgage. Most people think about the fixed rate and the adjustable rate mortgages. A balloon mortgage is similar to a fixed rate mortgage where at the end of the term the mortgage is paid off making monthly payments. On a balloon mortgage, you need to pay one big installment at the end to cover the remaining principal on the loan. Now, these kinds of loans come with better interest rates compared to fixed mortgages. There are certain drawbacks too though as the final payment can run into thousands of dollars. Let’s examine if this is the right option for you. Selling your home If you plan on selling your home before the final payment is due because you want to make a big profit, this might be the way to go. If your future income will rise If you expect your future income to go up considerably in order for you to make a big final payout, then you could consider going in for a balloon mortgage. Reset option If your balloon mortgage comes with a reset option at the end of the term which allows you to reset your interest rates based on prevailing rates and reset your amortization schedule, then it will be a good option.