Some American and Canadian banks offer a “100% Mortgage Program”, which means that the entire value of the home being purchased is paid for with a mortgage loan. Because of this, it is not necessary to make a down payment. Some providers of these mortgages claim that closing costs are likely to be lower as well. However, there are usually some restrictions on the types of properties which may be purchased using a one-hundred percent mortgage program.

The overall financial impact of not making a down payment should be taken into consideration before using any mortgage program which doesn’t require them. For example, not making a five-percent down payment on a $250,000 home would produce immediate savings of $12,500 dollars. However, based on a thirty year loan at six percent interest, this would result in payments of about $75 more per month (and about $27,000 more during the entire thirty years). Still, this might be worth it if the $12,500 is used to pay off high-interest debt such as credit card balances.

According to the Bank of Hawaii web site, which has a 100% Mortgage Program, they are willing to provide such mortgages on single-unit properties priced at up to $539,475 (as of 12/2007) dollars. They also require that the owner live in the home being purchased, but they do not charge a pre-payment penalty on early mortgage payments.

Wachovia offers a fixed-rate “100% Financing Mortgage”; according to their web site, buyers who desire to use this program should have an “excellent” credit history. It also indicates that applicants can gain a reduced mortgage origination fee from Wachovia if they apply online.

Canada’s Scotiabank introduced a mortgage program of this type in early October, 2006. Their web site indicates that these mortgages are only available for residential properties. It states that a five percent (or higher) down payment is expected for their other mortgages. They also offer a similar “Free Down Payment Mortgage”, which has a fixed rate for five or seven years.

Basically, a 100% mortgage program reduces the cost of initially purchasing a home, but increases the amount of principal and interest which will have to eventually be repaid. It increases the risk faced by the bank or other lending institution, so they apply more restrictions on the type of property and may expect the home buyer to have a good credit record as well.

Regardless of whether you have a fifteen, thirty, or fifty year mortgage, paying it off early can save a great deal of money in the long run. However, paying off a mortgage early has both pros and cons, which vary to some extent depending upon the type of mortgage.

PROS

The positive aspects of paying your mortgage off early include lower and more predictable monthly expenses, as well as less overall cost in interest. If your mortgage is paid off early, you will no longer have to worry about making the monthly payments; this makes it easier to retire or spend time on efforts which don’t produce an immediate economic benefit.

It can also greatly reduce the amount of money spent on interest. The amount of interest paid during 30-year or longer mortgages is typically more than the principal. You also won’t need to be concerned about potential interest rate increases in the future.

CONS

There are also some drawbacks. You won’t have the money used for paying it off any more; it will no longer be possible for you to use the money for making large investments, purchasing another property, buying an automobile, paying off other debts, etc. However, there will be hundreds (perhaps thousands) of dollars more in available income each month.

You may have other debts which are more important to pay off early than your mortgage. For example, if you have thousands of dollars in credit card debt at eighteen percent interest, it is costing you more than an equivalent amount of mortgage debt. Be sure to compare the interest rates on any other debts as well, such as auto or student loans, and consider whether or not they are adjustable, as well as their late payment policies.

Another potential drawback is that some mortgages have pre-payment penalties. This means that you must pay a substantial fee if the mortgage is paid off early; be sure to determine if this applies to your mortgage before considering whether or not to pay it off early. It may still be worth paying the fee if it is not especially large, when the amount of interest you will save is taken into consideration.

Overall, the pros of paying off your mortgage early usually outweigh the cons, but prepayment penalties or less ability to immediately pay other large expenses can be problems for people in some financial situations.

While Reverse Mortgages are a great idea for some people, they aren’t for everyone. First of all you have to be 62 years old or older and own your own home to qualify. The home must also be your permanent residence and it must be a single-family home, two to four unit building, or a condominium. It also has to meet HUD’s minimal property standards.

The purpose of a Reverse Mortgage allows you to use part of your home equity for cash. The cash is normally meant for home improvement projects. The loans do not require repayment as long as you live in the house, which means that your income level has no bearing on your loan eligibility.

To apply for a Reverse Mortgage you basically have three avenues – single-purpose reverse mortgages, federally insured reverse mortgages and proprietary reverse mortgages. Single purpose reverse mortgages are available from state and local government agencies and certain nonprofits. These loans have to be used for one specific purpose, such as home repairs or property taxes, as determined by the lender.

The federally insured mortgage is provided by the U.S. Department of Housing and Urban Development (HUD). You have to first locate and speak with a HUD approved counselor before applying for this type of loan. The proprietary reverse mortgage is available through private companies. Although both of these types of loans have expensive up-front costs, they can be used for any purpose you choose.

The amount of your loan will depend on how old you are, the interest rate, your home appraisal value and the FHA mortgage limit that applies to your area. You can take the money as a lump sum, monthly payments or a combination of these two methods.

As with any type of mortgage look into different loan terms and offers available to you and read all of the paperwork before signing the contracts.

The House Judiciary Committee of the U.S. Congress recently approved a bill regarding mortgages and bankruptcy. The legislation (H.R. 3609) would enable homeowners with some mortgage types, including subprime and interest-only, to gain more favorable mortgage repayment terms as part of a chapter 13 bankruptcy.

According to a press release issued by Congress member Linda Sanchez’s office, the mortgage bankruptcy bill is intended to provide “relief” to homeowners affected by the crisis involving subprime and other unconventional loans. It was co-sponsored by Sanchez and North Carolina congressman Brad Miller. The bill applies to non-traditional mortgages which were initiated during the time between 2000 and the date when the bill comes into effect, if it is passed.

Sanchez was quoted as saying that the bill would provide assistance to “hundreds of thousands of families” at risk of having their homes foreclosed upon. However, she also stated that the bill incorporates “safeguards” designed to prevent it from benefiting those who simply bought a home which was more expensive than they could afford.

The press release indicates that this mortgage bankruptcy bill, if passed by Congress, would allow bankruptcy judges involved in chapter 13 bankruptcy cases to extend repayment periods, change the mortgage principal to be the same as the home’s true value, decrease excessive interest rates, and take other measures to enable continued home ownership by people with subprime and other unconventional mortgage types.

Chapter 13 is a type of bankruptcy which helps income earning individuals who are having difficulty making payments to repay some or all of their debts. According to uscourts.gov, chapter 13 cases involve arranging installment payments over a period of three to five years. It indicates that, in cases involving a mortgage, this can enable people to keep their homes, but they will still have to afford each of the mortgage payments under the new payment arrangement by the date at which they are due.

Overall, the mortgage bankruptcy bill in Congress would help home owners with unconventional mortgages who are facing bankruptcy to potentially avert foreclosure, by obtaining more reasonable mortgage payment terms. However, it will have to be approved by the full Congress and the President before it can take effect.

Subprime loans, which offer higher interest rates to home buyers with poor credit records, have come under increasing scrutiny in recent months due to high foreclosure rates and deceptive practices applied by some lenders.

Freddie Mac and Fannie Mae are two corporations which were created by the U.S. federal government decades ago, but are now owned by share holders. They play an important role in the mortgage industry which impacts home buyers, lending institutions, and investors.

Freddie Mac was created decades after Fannie Mae came into existence. According to FreddieMac.com, the company’s goals were defined by the U.S. Congress in 1970; they include the expansion of affordable housing and making sure that lenders have sufficient money to issue low interest mortgage loans. The web site states that Freddie Mac doesn’t directly issue mortgage loans to homeowners. Instead, it buys mortgages from lending institutions which want to sell them; this provides lenders with more money and allows them to make additional loans. Then it earns money from interest paid on the mortgage, as the original lender would if they had retained possession of the loan. It goes on to use the mortgages as a basis for selling “mortgage-backed securities” to investors. The company also takes measures to educate potential home buyers about mortgages and home-buying in general, including informational sections on its web site and free workshops which are held across the nation. Freddie Mac is another name for the Federal Home Loan Mortgage Corporation.

Fannie Mae, or Federal National Mortgage Association, was formed in 1938. The Fannie Mae web site indicates that it was originally a government agency, but became a separate corporation in 1968. The goals stated by its web site are much the same as those of Freddie Mac. It indicates that Fannie Mae works with over one-thousand lending institutions in the United States. It is based in Washington, D.C. unlike Freddie Mac, which is headquartered in Virginia. Both corporations have a limit ($417,000 dollars in the continental U.S., as of 2007/2008) of how large a mortgage they are willing to purchase from lenders. This contributes to the higher interest rate on mortgages for more expensive homes, as banks aren’t able to sell them to Fannie Mae or Freddie Mac. Fannie Mae also makes charitable contributions aimed at eliminating homelessness and promoting the expansion of home ownership.

Basically, Freddie Mac and Fannie Mae perform a similar role in the economy, which benefits both lending institutions and mortgage borrowers. They help lenders gain revenue from mortgages more quickly, and enable home buyers to have greater access to new mortgage loans.

There are basically four groups of people that are looking to refinance: those that want to reduce their monthly payments, those that want to consolidate debt, those that want to use the built-up equity in their homes and those that want to get out of their current mortgage. However, it doesn’t always make sense to refinance. Here are some guidelines.

There are definitely expense involved in refinancing so you should weigh the advantages and disadvantages of refinancing. If you are thinking of refinancing to pay less interest or to lower a monthly payment you won’t see any potential savings immediately because you will have to pay lender fees and closing costs for your new mortgage. If you plan on moving within 5 years, you most likely will not recoup these costs and so should probably steer clear of refinancing.

Also consider if you have a prepayment penalty on your current mortgage. If you do have one you’ll have to pay it once you refinance. This can be particularly expensive as many lenders charge up to six months of interest on 85% of your original loan balance for this penalty.

Finally, calculate how much it will cost you to refinance. Remember to include application fees, lender fees, title insurance, legal expenses and closing costs when determining how much it will cost you to refinance. Many people believe that if a new interest rate isn’t at least 1.5% lower than your current rate, refinancing isn’t worth it.

There are many condominiums springing up in downtown and urban areas. Couple with a recent housing crisis some people are wondering if buying a condo is a good idea. Here are 5 reasons that it is.

1. A condo is still an investment. If you are not quite ready for or can’t afford, a whole house, buying a condo is like taking a baby step. It will be more affordable and you won’t be throwing your money away on rent.
2. Owning a condo is easier than owning a home. If the idea of mowing the grass or repainting a house causes you to shudder, buying a condo might be the best choice for you.
3. Condos usually have amenities. Since condos have many people contributing to a shared fund, it’s possible to have more luxuries than you could afford on your own, for example a pool or gym may be part of your condo’s complex.
4. You can get more space for your buck. A house and a condo that are the same size can be much different prices. If you aren’t concerned with having a big yard, this option could work out well for you.
5. Condos are social places. If you are new to a city and want to meet people, it’s much easier to do so in a condo because it’s already a mini community.

However, keep in mind there are some things to watch for when buying a condo. Find out how much your homeowner association dues are and what’s covered in them. Also ask if any of the other owners are delinquent in their dues and how much the dues have increased over time. Also look into any pending litigation against the complex and how the complex deals with repairs and complaints. And you can always find any other issues in the minutes of recent homeowner association meetings.

A jumbo loan is a type of mortgage which is for purchasing expensive, luxury homes. It is considered to present a higher risk to the lender than a loan for a smaller amount, so the interest rate is set somewhat higher. A jumbo loan is more likely to be necessary in states and regions where average home prices are high, especially in the continental U.S.

FreddieMac.com indicates that the maximum limit for non-jumbo (conforming) loans is currently four-hundred and seventeen thousand dollars, in the continental United States. In Hawaii, Alaska, Guam, and the Virgin Islands, it is significantly higher, at $625,500 dollars. A mortgage above these limits is considered a jumbo loan. The limits increase if the home has more than one unit; for example, a three unit residence in Alaska could be mortgaged for up to $967,950 dollars before it would be referred to as a jumbo loan. Their web site also states that these limits will remain the same through next year (2008).

According to wikipedia.org, lending institutions generally favor a greater down payment on jumbo loans, and consider them more risky because it takes longer and is more difficult to resell a foreclosed-upon luxury home at its full value. It also indicates that a mortgage for an amount greater than six-hundred and fifty thousand is referred to as a “super jumbo” mortgage. Additionally, Wikipedia points out that such a loan may be more costly to refinance because of higher closing costs, and that the increase in monthly payments upon a rate increase (if the mortgage is adjustable) can be quite significant (due to the loan’s large amount).

Rates for jumbo loans can vary substantially from one bank to the next. Bankrate.com indicates that thirty-year jumbo loan interest rates in the United States currently (December, 2007) range from 5.75 to 8.5 percent. The average rate has increased in the past six months. Like other mortgages, they are available in the form of a 15-year loan as well, which typically has somewhat lower interest rates (but higher monthly payments) than a longer-term equivalent.

Basically, a jumbo loan is necessary when purchasing an expensive residence, and will have a somewhat higher interest rate; otherwise, it is not greatly different from other mortgages, at least from the borrower’s perspective. Mortgage borrowers can avoid the higher rates of jumbo loans by making a larger down payment or purchasing a less expensive home.

The National Reverse Mortgage Lenders Association, or NRMLA, is an organization with a membership made up of lenders involved in the reverse mortgage industry.

According to NRMLA’s web site, the association was founded in 1997 with the goals of educating consumers about reverse mortgages, promoting reverse mortgage (RM) lending in the media, improving the reverse mortgage industry’s professionalism, and providing training for lenders. They also uphold a “Code of Conduct and Best Practices” and advocate government policies favorable for reverse mortgage lenders.

Their web site lists a number of benefits which are made available to members of the association. These include newsletters, an online listing in their directory of lenders, discounted informational booklets to give to potential borrowers, discounted entrance to RM conferences, access to members-only information on their web site, and Committee participation. The dues help NRMLA in its work to promote favorable govt. policies as well.

Non-members can access information on the web site about upcoming association events, press releases, links to media news reports on the industry, the “NRMLA Washington Update” electronic newsletter, and contact information for the association’s staff. Areas of the web site which non-members cannot access are usually indicated by an orange square with the words “Members Only” next to it. A few examples of members-only information include an article on how reverse mortgage lenders can comply with the “Do Not Call” list, an analysis of the implications brought about by additional different RM “products” which are now available, and various national & state statistics. A membership application in PDF format, which includes information on the amount of dues to be paid, is available on the web site as well.

The National Reverse Mortgage Lenders Association also operates a web site for consumers, which is called ReverseMortgage.org. It features a reverse mortgage calculator, information on how this type of mortgage works, a directory that allows borrowers to locate lenders in their state which are members of NRMLA. It includes details on both the positive and negative aspects of rev. mortgages. Under the “Borrower Profiles” menu, it provides details on how various individual borrowers used reverse mortgages to their benefit. The web site offers free consumer guides which can be downloaded in PDF format or ordered by mail.

Basically, the NRMLA helps mortgage lenders improve and promote their businesses, while assisting consumers in learning about RM and finding local lenders of this type.

The act of choosing a selling price for your real estate property should be taken into careful consideration so as to select an amount which is both realistic and likely to produce the desired outcome. Here are a few tips on choosing the right selling price.

1. Compare your home or business to others for sale in the same area or region which have similar features. If you are using a real estate agency, they should be able to do this, and may be able to provide examples of other properties which have recently sold. If the realtor suggests a specific price, keep in mind that he or she may be in more of a hurry to finish selling the property than you are, so the suggestion might be lower than it could actually sell for if you are patient.

2. Unless it is necessary to sell the home or business very quickly, choosing a selling price which is somewhat higher than the amount you actually want for the property is often a good technique. Buyers frequently offer less than selling prices, although a few will pay the full amount (especially if some sort of favorable terms are accepted). Keep in mind that sellers have to pay some of the closing costs (consider researching this to find out how much it is likely to cost in your area). The price can always be lowered if the property won’t sell. If you need to sell a property as soon as possible and want to ask the minimum you are willing to accept, use the word “firm” after the amount you are asking for, when advertising it.

3. Consider choosing to offer a “bonus” if the buyer pays full price, and adding part or all of the item’s value to the selling price. Some sellers have offered to include all appliances and furnishings, a home warranty, or even an automobile to buyers for paying the full selling price. This can also help compensate for shortcomings of the property; for example, including an older four-wheel-drive truck or a snow blower with a home that has a long and/or steep driveway would be encouraging to potential buyers. It makes the property more memorable for them as well.

Applying these tips in the process of choosing a selling price for your home, business, or other real estate property should help in the selection of an amount which will enable you to sell the property within a reasonable period of time at a fair value.