Ditech : Mortgage Life Insurance

Mortgage life insurance repays the entire or most part of the mortgage, when the borrower becomes critically ill from disease or accident, or suffers from death. So, the mortgage life insurance protects the family, co-borrowers, or co-guarantors from repaying the entire mortgage.

Depending on the insurance policy, the insurance company pays for the entire mortgage or maximum amount. For example, the insurance company pays up to maximum of $600,000. If the mortgage went over the maximum amount, the insurance company repays the portion of the mortgage up to the maximum amount.

The borrower usually purchases home thru mortgage. It takes a huge amount income to pay off the mortgage. In case of critical illness, debilitating accident, or depressing death of the borrower, the family needs to replace the loss of income to pay off the mortgage. With mortgage life insurance, the family does not need to worry about repaying the mortgage.

Mortgage life insurance differs from private mortgage insurance also known as PMI. The PMI protects the mortgage lenders in case of default of mortgage payment. The mortgage lenders risk the inability to re-sell the property high enough to pay off the mortgage. When the borrower lacks enough money for twenty percent down payment, the mortgage lenders requires PMI. As soon as borrower pays off or the home equity reaches twenty percent, the mortgage lenders automatically cancel the PMI premiums.

Mortgage life insurance is voluntarily. It is the decision of the borrower to sign up for the mortgage life insurance. In order to see the need, the borrower must sit with a certified insurance agent. The insurance agent will analyze the overall financial picture of the borrower.

The insurance policy starts at the same day of the approval on mortgage. Even though the borrower has not paid the first mortgage payment, the borrower still gets the benefit.

As the borrower pays off the mortgage, the mortgage decreases. Naturally, the coverage decreases as well. When the borrower paid in full amount of mortgage, the coverage is gone. And, the borrower no longer needs to pay the premiums.

When the borrower engages in mortgage refinancing, the borrower needs to qualify to the new mortgage for mortgage life insurance again.

Should You Use a Bi-Weekly Mortgage or Prepayment to Get Ahead?

So you have decided that you want to buy a house and perhaps have even found the house of your dreams -- now you just need to find the right mortgage to be able to finance it!

If you know how much you need to borrow from a mortgage lender, a mortgage calculator will give you some idea of what the payments are likely to be.

A bi-weekly mortgage allows you to pay your mortgage every two weeks rather than once a month. Check this on a mortgage calculator to see how quickly you will repay your mortgage and save on interest payments.

Although a bi-weekly mortgage may seem a great idea, and the advertisements may seem like you are getting a good deal -- check the figures carefully on a mortgage calculator and read the small print.

It could be that regular payments against your mortgage principal are more financially attractive.

You may have also wondered should I prepay my mortgage? Being in a position to prepay your mortgage is reassuring; however, the penalties and loss of tax breaks, may make it less attractive than opting to invest the money elsewhere.

A prepayment versus investment mortgage calculator can help you start to see where the best alternative may lie.

Ditech : Bad Credit Mortgage Lenders

If you are a homeowner looking for a mortgage with a poor credit rating you will most likely need to borrow from a subprime mortgage lender. Subprime mortgage lenders are lenders that specialize in writing bad credit mortgages. You need to be careful when selecting a bad credit mortgage lender as some will take advantage of your situation and overcharge you for the loan. Here is what you need to know when selecting a subprime mortgage lender.

If you have a poor credit rating your options for mortgage lending are somewhat limited. Most traditional mortgage lenders do not have programs for individuals with poor credit ratings. There are however, many mortgage lenders that specialize in mortgages for people with poor credit ratings.

How to Get a Bad Credit Mortgage

Subprime mortgage lenders are easy to locate using the Internet. You may qualify for better financing using a mortgage broker if you have bad credit. Mortgage brokers have access to mortgage offers that you might not find shopping on your own. You need to be careful when shopping for a bad credit mortgage and compare offers from a variety of lenders and mortgage brokers; by carefully comparing loan offers you will be able to avoid mortgage lenders looking to take advantage of you.

Balloon Payment Mortgage

A balloon payment mortgage is a fixed-rate non amortized mortgage with a large final payment. Typically, the mortgage matures from five to seven year term. At the end of the term, the borrower pays final payment which is much larger than the regular mortgage payment. Hence, the final payment represents the balloon.

Most balloon payment mortgages are interest only mortgage. The borrower only pays the interest on periodically. So, the principal remains the same. At the end, the borrower pays the substantial principal.

For example, the monthly mortgage payment comes to $3,333.333 on a $200,000 mortgage with 20% annual percentage rate. First, you calculate the total interest which comes to $40,000 ($200,000 x 20%). Then, you divide the total interest with the number of payments on a year. Thus, the monthly mortgage payment comes to $3,333.33 ($40,000 / 12 monthly payments).

The mortgage payments on balloon payment mortgage are commonly based on a thirty year mortgage with a term of five to seven years. It is also easier to qualify for this mortgage. And, the interest rates are much lower than traditional mortgage.

The borrower usually sells the property before the mortgage matures to avoid the final payment. At the end of the term, the borrower needs to pay the final payment. The borrower must sell the property, refinance the mortgage, or convert the mortgage before the end of term.

The borrower can convert balloon payment mortgage into traditional amortized mortgage. In an amortized mortgage, the mortgage payment pays off the principal on each periodic payment.

Ditech : Internet Mortgage Leads

Internet mortgage leads are indispensable for mortgage lending companies and brokers. The mortgage leads are lifelines to their business. That’s why they always look for qualified and cost-effective Internet mortgage leads. Borrowers often search for mortgage lending companies on the web. Initially they get in touch with the lead generation companies with their loan requests. They submit their requests to the mortgage lead generation companies by filling out an online application form. The lead generation companies send the applications, after screening them carefully, to the mortgage brokers and lending companies. Here the screening is necessary to ascertain the reliability of the loan application. The mortgage applications then become leads. Mortgage brokers and lending companies in turn contact the borrower via e-mail or telephone.

Lead generation companies use advanced technology to find suitable Internet mortgage leads. Here the quality of Internet mortgage leads depends on how sophisticated the lead generation process is. Mortgage-generating companies always aim to offer suitable and profitable mortgage leads to lending companies. Internet mortgage leads are of two types - exclusive and non-exclusive. With more and more mortgage borrowers going online to search for mortgage lending companies, the popularity of Internet mortgage leads will definitely go up. Mortgage borrowers have found the Internet useful to study and compare different mortgage lending companies. That’s why mortgage brokers and lending institutions are ready to grab the best mortgage leads to stay ahead of their rivals.

Thanks to the Internet, mortgage seekers can now request quotes from mortgage lending companies while sitting at home. The mortgage lead generation companies introduce the mortgage seekers with the mortgage brokers and lending firms. So, Internet mortgage leads have made the process instant and effective for both the mortgage borrower and lenders. From the mortgage lenders’ perspective, quality Internet mortgage leads add to their business.

What Is Capped Mortgage

The capped mortgage is basically an adjustable rate mortgage in which the maximum interest rate is set. Any spike of interest rate over the maximum interest rate will not affect the mortgage repayment. The borrower knows the maximum mortgage payment.

When the interest rate takes a dive, the borrower pays a lower monthly mortgage payment or bi-weekly mortgage payment. Using the capped mortgage, the borrower is protected from a spike in interest rate.

This protection on interest rate spike comes with a price. The mortgage lenders will charge a slightly higher interest rate. For example, the current interest rate is 4.5%. The borrower pays 5.0% interest rate.

The main benefit of capped mortgage is peace of mind. The borrower knows exactly how much is the highest mortgage payment. And, the borrower knows that the mortgage payment will not exceed the maximum mortgage payment.

Recently, the mortgage lenders suffered from mortgage meltdown. The interest rate went up high enough that the borrower could not repay the mortgage. There were so many foreclosures. In this instance, the capped mortgage could have been advantageous for the borrower.

The interest rate for capped mortgage is a compromise between the fixed rate and adjustable rate. So, the interest rate will be slightly over the fixed rate.

Annually, the mortgage lenders allow a certain level to pay additional or lump sum amount without paying mortgage penalty. When the borrower pays additional amount or lump sum amount over the certain level to pay off mortgage early, the mortgage lenders charge the mortgage penalty as well.

In most mortgage lenders, the capped mortgage is available mortgage options for buy to let mortgages. The buy to let mortgage is a mortgage in which the borrower purchase the property to rent. The borrower can purchase several property with buy to let mortgages.

Ditech : Private Mortgage Insurance Tax Deductible

The private mortgage insurance allows the borrower to acquire a mortgage in which the down payment is less than twenty percent. The borrowers pay the private mortgage out of their pocket. Now, the private mortgage insurance is tax deductible for US residents.

Actually, the mortgage insurance is either government or private. Whether the mortgage insurance is government or private, the mortgage insurance is tax deductible.

To acquire the mortgage insurance is an alternative for piggyback second mortgage. The piggyback second mortgage is plain simply a second mortgage. The borrower acquires another mortgage on top of the first mortgage for down payment.

The tax deductible applies for modest income earners. That means the borrower earns up to $100,000. In case the borrower earns over the $100,000, the borrower can only write off the private mortgage insurance partially.

Additionally, the tax deductible only applies to new mortgage. The mortgage financing must have happen in the calendar year 2007. Unless the borrower made a mortgage refinancing for the mortgage on or after the calendar year 2007, the tax deductible will not be allowed.

This is good news to the millions of Americans. Millions of Americans pays for the mortgage insurance. The mortgage insurance only cancels out when the home equity or total amount paid goes over twenty percent of the principal amount.

More importantly, the mortgage insurance will be made affordable with this turn of event.

Like the mortgage interest tax deduction, the mortgage insurance tax deduction benefits millions of American. Now, the borrowers or home owners have a choice between mortgage interests of second mortgage or mortgage insurance premiums as tax deduction.

Should You Pay Off Your Mortgage Faster?

If you are like nearly everyone else in the USA, then you are strapped tight to a mortgage. We all are dreaming of the day when we no longer have that burden, and many people are searching for ways to hasten the coming of that day of freedom. Many are finding answers in what is called Mortgage Acceleration.

Mortgage accelerators come in differing shapes and sizes, and perform at different levels. The bottom line is this: If you want to pay off your mortgage, you simply must apply more money to the loan. Preferably, we want to do this in the fastest manner with the smallest amount of risk and the least impact on our lifestyle and monthly payment structure.

Some acceleration programs provide you with a plan to make small additional payments each month. This is effective in shortening your mortgage term, because additional payments (made to principle only) will lower the overall balance that you owe. That means less interest due. Interest is the enemy. Paying an extra $100 per month can have the effect of shortening your loan term by as much as 4-5 years. The only way to go faster is to apply more money to your principle balance. But how? Most of us simply do not have much "extra" cash hanging around. If only there were a way to find extra money in our bank accounts, we could really accelerate our payoffs.

So, comes to market a whole new selection of options. It turns out that for over 15 years, folks in Australia, New Zealand, and parts of Europe have been using a system that squeezes more money out of their labors and applies it to their home loans. These people are paying an average of $150,000 less in interest for their homes than the average American. How do they do that?

What these Aussies, Kiwis and Euros are doing is combining their home loans, checking accounts, savings accounts, and lines of credit to create a new scenario in cash flow. The mathematics are sound and the results are undeniable. It works.

If you combine your primary checking account with a Home Equity Line of Credit, or HELOC, you can basically use your income to cancel interest in your heloc. This interest cancellation creates cash flow in a sense. This new cash flow creates opportunity for that "extra" money. You can actually use the bank's money "interest free" much like you would a credit card.

It is easy to see how, with a little bit of poor planning and bad math, you could get your self in financial hot water here. You need help. So here is where you must be wary. Help means involving someone else. Uh Oh! Red Flag! "Other people" usually means high fees or possible scams. That is a matter of record, after all. And when it comes to your money….Boy, these "other" folks need to be extremely trustworthy.

So, who can help, and who can you afford? Wealthy people have financial planners who they pay very well to watch their bottom line. The typical middle class member can't afford their fees. So we just throw up our hands, go to work, and live paycheck to paycheck. But we still would like to be debt free and reach financial freedom. So let's explore the options again.

Do a search on Google for mortgage accelerators and you will find some interesting things. You will find the Big Boys there…Countrywide, Lending Tree, Quicken, Eloan, GMAC, DiTech, etc. These are the big mortgage companies who already have you in bondage, and now they want to ease your pain a bit with a bi-weekly pay plan or perhaps a nice re-finance package. Refinancing will only make your problems worse in the long run. The extra payment plan was already discussed. We want more.

Dig a little deeper and you will begin to see other companies there offering other options such as the Australian idea. Investigate these carefully. You want to find the option that is safest and offers the best results. And as for me, I don't have the time to learn advanced math and theoretical quantum financial physics. I need something that will make it easy. Let's peel back some onion skin.

Equity Accelerator is a bi-weekly plan. For one thing, that's not fast enough for me. They also charge monthly fees and THEY make your payments. Do you want "somebody else" accessing your money? That is a little scary.

CMG/ Macquarie/ Home Ownership Accelerator: These guys are using the interest cancellation effect of a line of credit. This is good stuff. You can cut a mortgage in half using this system. You have to refinance to their accounts, which may be an expensive endeavor. The way I understand it, your checking, mortgage, and credit line all get mixed together at a variable rate of interest. There are recurring annual fees. If you are saving years and thousands, then those fees are negligible in the end. I still don't like the idea of someone else being that much in control of my financial situation. This is good. Is there anything better?

Sydney Financial Group has a program that claims to pay off a mortgage in half the time or less. They, again are combining your checking and savings into one account which is held in a HELOC. They have online software that instructs you to make additional payments every month to your first mortgage company. This rapidly begins chipping away at your principle balance and eliminates very large amounts of interest. Sydney will set up your heloc themselves, and then their $3500 fee is taken out of that heloc to get you started. When I asked them about guarantees, they told me that if I follow the program it will work, but no guarantees.

United First Financial has brought to market a similar program that is beginning to catch on. They have reportedly spent 4 years and millions of dollars creating intuitive software that combines the best of ideas from Australia and Europe and the American banking industry. Their product, called The Money Merge Account, is a remarkable tool that provides a customized and flexible plan for each user. The user is guided by the software to pay off their 30 year mortgage and other debts in an average of 8-11 years. United First claims that there is no refinancing needed, no increase in monthly payments, and no change in lifestyle. They ran a beta test on 400 homes in Denver, Colorado with a 97.4% success rate. Everybody seems to be very happy with the product. The MMA also costs $3500, and that fee is also suggested to be paid from your heloc, where interest cancellation and cashflow pay for it without any additional monthly payments.

The MMA does not touch your money and it does not pay your bills for you. The MMA provides a real time financial "dashboard" that shows you where you are headed and also the real cost of miscellaneous purchases and deposits. Your payoff date goes up or down with each deposit or withdrawal. The MMA is transferable to your next property, and all updates are automatic and free of charge. U1st makes a projection of every year until payoff for you, and they guarantee that performance (if you follow the software) or your money is 100% refundable.

These are all good tools presented by reputable companies. They all have the ability to pay your mortgage off faster, and put you on the road to financial freedom at a faster pace. You will, of course, have to decide which program is right for you, and I am sure that more programs will be coming onto the stage as these ideas move more to the forefront of public knowledge. I will be sure to keep an eye on things, and report on new companies and plans as they develop in this exciting category.

Finally regular people can have access to a level of financial wisdom that was not available to them before. So, don't refinance or fall victim to scams that want to have access to your accounts. The time has come for you to take control. These ideas and products are literally transforming families from a pattern of debt to a new paradigm of wealth building.

Just think about what you can do with your monthly payments when they no longer are required to pay debts. Even a conservative investment strategy will amass huge amounts of cash when supplied with a steady flow of capital, like the flow going out to pay the interest on your home loan this month, and the next, and the next, and the… Don't let the banks make all of the money. After all, you are the one who works for it.