Idea Transcript
Minding Your Mortgage How To Alleviate Your Home Loan Headache
Traditional Loans Are Better Than Seller Financing When it comes to buy a house, one would usually need to take a loan as paying the whole amount as down payment may not be possible for a common man. While borrowing, there are two sources of funds that can be of help. The first one being traditional sources like banks and the second source would be seller financing. Seller financing is the option where the loan is given by the seller of the property to the buyer. It works out like this that the buyer makes an initial down payment of the total amount for the house and then the rest of the amount is being paid by the buyer in installments. The seller would then charge a certain rate of interest over the pending amount. While seller financing is much more convenient and easy to access, yet it is believed that the traditional mortgage would still have the upper hand. Here are the reasons why. Not many options available The first point where traditional mortgage would beat seller financing is that the former offers a lot of variety in terms of rate of interests, tenure of the loan, fixing monthly installment amount etc. These varieties are normally not available in seller financing. Most of the times, the buyer has to be happy with whatever limited options the seller has in his kitty to offer. Threat of foreclosure It might be the case that the buyer is paying the monthly payments on time; however the seller is not paying the same to the senior financing institution if there is any. Under such a situation, the property would stand the threat of foreclosure and the buyer would be at a total loss without any fault of his. There would be no such threat in case of a traditional mortgage as the buyer would be the sole person paying the monthly installments.
At the will of the seller When the buyer goes for the option of seller financing, the seller may be smart enough to ask for a balloon payment wherein the buyer would be required to pay a bulk amount initially and pay off the entire loan in a short period. In this case the buyer will have to arrange for a different most inconvenience to the buyer. Also, if the seller comes to know that buyer has not qualified for traditional mortgage, he may charge a higher rate of interest and the buyer would have no option but to go for it. Hence it is always recommended that the buyer should first try out all possible options of traditional mortgages and then try his luck in seller financing as in the former, he does not have to live as per to the wills and fancies of the seller. Selecting the right house for your family is very important and along with that what is important is to select the financing option that will help the buyer buy the house of his dreams. One may seek professional legal help before deciding on the source of funds so that later on there are no grey areas and the overall transaction is smooth and transparent. This entry was posted in Uncategorized on May 12, 2014 [http://mindingyourmortgage.com/traditional-loans-are-better-than-seller-financing] by mymadmin.
Fixed Rate Mortgages Are Not Always The Best Option When it comes to choose between fixed rate mortgages and those of adjustable rates, there are quite a few circumstances that needs to be taken into account so that you do not fall into any false situation where you end up paying more. While a fixed interest rate have certain advantages especially when it come to long term dealings, at times this type of loan structure could become disadvantageous. Let us understand when. You pay the same even when rate of interests drop Of all the circumstances that will make you bite your nails for choosing fixed rate loans would be the situation when rate of interest take a dip in the southward direction. As you have signed up to repay a fixed monthly amount over the very long term, you will end up paying similar interest whereas people who had opted for floating interest will enjoy the benefits of a decreasing rate of interest. This essentially mean that when markets are going down, you will be paying above the market. The irony of this can be suffocating to some people. You end up paying more When you go for a long term mortgage plan, the overall amount that you have to pay in the form of interest is much more than you would have paid if the term was short. Fixed mortgage plans are designed in a way that will make you pay higher amounts as interest over a long period. The monthly repayment makes up a portion of interest and a portion of principle. The total sum you pay is calculated based on the full tenor of the initial loan structure.
No benefit on foreclosure The amount you pay back every month is actually a combination of the principal amount and the interest amount. The calculations are done in way that during the initial phase majority of the amount that you pay back monthly is interest and a lesser portion comprises of the principal. Hence during initial years you pay more of interest and less of principal back to the mortgager. In case you want to foreclose the mortgage you will have the following disadvantages: While foreclosing, you pay back the principal amount and a small penalty on the principal amount (although many companies are waiving the foreclosure fees nowadays). You need not pay the outstanding interest amount in case of foreclosure. As during a long term loan you pay less principal in the initial years and more interest, hence while foreclosing the overall outstanding principal amount would be very high hence all in all you would be ending up paying a lot more amount which certainly is a huge disadvantage. Overall rate if interests are higher The rate of interest that you are required to pay for a short term package is much lower as compared to a long term one. The high rate of interest will make you pay an extraordinary excess amount. This however is being neglected by many borrowers as what matters to them is the monthly payment that they need to make and as long as that amount is low, not many people are bothered what is the overall amount that is getting drained out of their pockets. When you have to go for mortgages, it is usually recommended that if your financial budget allows, you should opt for short term plans and not long term plans. While working out your budget and financial forecasting, remember to involve your spouse and other family members so that you will not miss out on important commitments that will affect your budget. This entry was posted in Mortgage Rates on February 17, 2014 [http://mindingyourmortgage.com/fixed-rate-mortgages-are-not-always-the-best-option] by mymadmin.
Taking Your Crashed Car to the Workshop? – Things To Know Beforehand You have met a nasty car accident and now you need to get the vehicle repaired at the workshop. But you won’t be able to complete the action without several hitches here and there. The reason behind that are the several hidden facts and clauses in your automobile insurance policy that goes unnoticed by you till a crises occurs. Well, this does not only happen to you, but it is a common problem faced by most car owners at some time or another. Therefore it is always advisable to go through your insurance policy documents to know what to do in case of a car accident, so that you may avoid future hassle and harassment. If the accident was not at your fault, but because of a hired driver, then the liability is of the driver and his insurance company. However both the driver and his insurer would try to avoid and neglect it through various ways. It is just how the world works. Insurers sign us up playing up the benefits of claims. And when you do make one, they tend to investigate every reason to stop you from getting one or minimize it completely. Therefore you must follow a few steps to keep things in your favor should a costly incident occur. And though these things are not advised in your policy document, yet practical experiences of multiple victims made people aware of these unspoken steps to be taken. State of your driver You must confirm if the driver was drunk or sober while driving. Once you get off your car after a crash, make a conscious effort to notice the stench of alcohol. If there is indeed a whiff of it, report it to the police. Alcohol levels stay in our blood for hours before it eventually dissipate to a legal level. This means that even if a drunk driver takes a test an hour after an accident, the data recorded can still show detrimental information on a drunk. Needless to say, if a reporting police officer finds that you were drunk during the accident through tests, then you will never get your claims for car repair, and also the driver’s insurer would wash off their hands from the case. Appointed workshops To prevent workshops from making a quick buck by overstating damages and repair costs, most insurance organizations now work with appointed workshops. As the costs of these repairs are paid by the insurers themselves, it is no wonder, that greater control has to be implemented to avoid being taken for a ride by these mechanics. These are garages that have been screened and approved on their panel list. Meaning you cannot just take your car down to your favorite place then request that they fix up a new spoiler while they are at it. You will have to review the list of appointed workshops and take your vehicle to one that is on the list in order to be eligible for a claim. car-accident-insured
Report to your insurer within 7 days In case of an accident, you must report the crash to your insurer within 7 days of the accident. If you fail to inform within the timeline, then also you must try to inform within a reasonable time failing which your claims won’t be settled. Failing to report within the stipulated time can mean an increase premium on your renewal or even the removal of no claim discount. The time frame for reporting after an accident can vary from place to place. There is no universal rules on reporting. So do check out the exact terms you fall under. However in case your driver is the one involved in the accident, and you are nowhere at fault, your driver has the responsibility to inform his insurer of the case. But generally a driver avoids this step, and to ensure that you are not left in such a situation, you must follow these steps: Get the name, address and contact number of your driver and the contact number of his insurer so that you may personally inform the insurer of the case. Even better if you can take a picture of their identity card. Inform your car insurance company as well of the case, so that in case the driver’s insurer turns away their face from the case, you get help from your insurance company. It is like a money cycle. If your insurer has to pay you, they will go all out to get the money back from the other driver at fault. If the driver gives a statement before you, you must try to file that immediately to the reporting police officer or nearest police station before the driver changes his statement later to avoid responsibilities. Check you excess The excess is the amount that you have to pay for repair bills. There are policy riders you can sign up for to completely cover your excess. But not mane drivers do take up these riders. If for example, your plan includes an excess for $300, get that money ready as you are required to pay it by the terms of the contract. Better settlement On following the above steps in order, you will be able to get better settlement from either the driver’s insurer or your car’s insurer. Both ways you will be saved from bearing unwanted expenses. To avoid all such hassles it is thus always recommended that you get your driver’s full details before appointing him for the job. This way you will have all information at hand in case you are at crises. The weird thing is that auto insurers have an emphasis on financial aspects rather than the health or safety of drivers. Your insurance premium is calculated heavily based on your history of claims. So even if you have had an accident in the year, you could be looking at a cheaper renewal if you have made no claims and have had no claims filed against you. As puzzling as this can sound, it could benefit all parties involved if there can be a settlement that does not involve any claims being filed from anyone. This entry was posted in Car on February 12, 2014 [http://mindingyourmortgage.com/taking-your-crashed-car-to-the-workshop-things-to-know-beforehand] by maz.
Fire Vs Home Contents Insurance – Main Differences After buying a house, the next thing you would do is get some form of home insurance. This is the smartest and one of the most mandatory things to do, yet there are a few confusing factors that bothers most real estate owners and prospective insurance buyers. Often people want to get all their valuables and commodities inside a house insured. This can be done in 2 ways, but with different conditions. You may take up property coverage on home contents. This will protect you against all sorts of damages done to your home, and give you full coverage on all valuables inside your home including valuables, antiques, artwork, etc. You may also choose to take up fire coverage. This is just another branch of property insurance and acts almost the same way like the one for home contents, but only in the case of losses due to fire damage. Confused? Let me explain them in details. Main difference Fire insurance can be said to fall under a category of home content insurance. But general home content by definition is much broader than just fire. Since the most probable reason for a house to be destroyed is usually by fire, most home owners only see financial coverage for fire hazards are necessary. Home content insurance protects all the things inside a home, apartment or house, and these include both living and non-living things. All sorts of damages due to all types of factors, mishaps, accidents etc are covered here, and any valuable inside the home when damaged is repaired or replaced under the home content insurance coverage. For such comprehensive coverage, you can expect to pay a price. Fire insurance fall under the home content or property insurance category, as this also gives protection against any damage of the contents in the home, and that too for both living and non-living content of the home. However, it gives this coverage only upon destruction due to fire. Any reason or factor other than fire won’t obligate the insurer to pay for any damage, repair, reconstruction or replacement. So in the instance that your home is destroyed due to a natural disaster like a hurricane, you will not be able to make a claim. This is because all these details and terms are clearly stated before a home owner signs up. fire-hazard-home-contents
War is not covered in fire insurance If damage to the contents in a home happens due to any natural or manmade causes, the home contents policy covers for the damage totally. If fire is the cause and because of any manly conflict then also the insured amount is paid. Different companies can have different terms and conditions. A different country can also have varying terms and conditions. So before you ask for the moon from your agent, take into consideration that there is no universal rule or loophole you can play. But if any war, violence or man-made factor is the case of a fire breakout, then the fire insurance policy won’t provide the coverage. This is why we see movies on property owners committing arson to their own homes or warehouses hoping to make a windfall claim from the insurer. They will then be found out and be unable to get what they initially planned. If this confuses you, your best action is to call up your agent for the details applicable to you. Liability cover difference A person, who is not the actual owner of a property, but stays under the permission of the owner, is also covered with all property and contents in the home under the home contents insurance; and this type of cover is called the liability cover. If you are a landlord, take this into account. But take note that there are other types of products that cater to the specific needs of a landlord or tenant. When you are running a business, it makes sense to plan for contingencies. In the case of a fire related policy, there is no benefit to give coverage to an individual who is not the owner. In fact a non-owner of a property may never own or opt for a fire insurance ever. This is to prevent individuals from abusing the system and profit from a payout without even being a stakeholder with vested interest. Concluding notes If you are in a fire prone area and are concerned simply about a fire breakout due to bonfire or volcano etc, then you should better opt for fire insurance. This is an extreme example as who would insure a volcanic-prone house. But you get the idea being brought across. Otherwise by no means should you have only fire insurance, and instead must include protection for home contents. This entry was posted in Wisdom on February 10, 2014 [http://mindingyourmortgage.com/fire-vs-home-contents-insurance-main-differences] by maz.