Getting the opportunity and means to construct your own dream abode is a wish harbored by all but very few get to realize this dream of their into reality. Since the entire project demands a huge amount of time and most importantly financial aid very few people dare to take on this task. Availing a mortgage loan may not be possible for every one. But this should not prove to be a deterrent for those wanting to carry on forward with the construction on their own. Help is at hand for these people so that the entire process of them building their house becomes one memorable journey and not a nightmare rigged with financial nightmares. An owner builder construction loan gives the borrower access to finances and in the process makes him earn in return quite some quantity of instant sweat equity. The only major deterrent attached with this owner builder construction loan is that the process of getting the loan disbursed from the time of filing the application is quite long and cumbersome. But with proper planning and time regulation this hurdle too can be successfully bypassed.
To start off the process for the loan it is very important to meet up with the designated owner builder construction loan officer for getting all the needed information required for filing the loan application. The application process requires the applicant to submit certain documents along with the form. The documentation needed include the asset and income documentation, the home plan and sketch, the expected budget needed to implement your ideas and the purchase agreement of the site. Once the documents are in order the applicant is required to get an appraisal done on the application based on the land of construction and your construction plans.
Also the estimated value needed to fund the construction project will be determined based on the assessment done on various sales of similar houses. The next step would require your owner builder construction loan application to go through the underwriting. The process of underwriting would be completed in two stages-one for your credit worthiness and the other to prove your project worthiness. Once through with all these modalities your owner builder construction loan process nears closure. You are finally required to sit with an attorney or closing agent and sign all the final paperwork. The owner builder construction loan permits you to take money in lots. Some owner builder construction loan allows the borrower to draw money from the lender based on individual construction items thereby prevents them from financing large chunks of construction at one time.
Tags: building loans, construction loans, mortgage loan
After working one’s entire life, everyone looks forward to the peace and relaxation bought with their retirement. After toiling for years it is now the time to reap the benefits of your hard work. But is this rosy and ideal situation being disfigured by thoughts that there might not be enough cash stashed away in your bank account to enable you a smooth sail? Well fear not, help is at your hand. A government sponsored financial aid program of reverse mortgage is devised specially for individuals with age of 62 years or above and is intended to help stabilize cash flow for them after their retirements.
In simple terms, a reverse mortgage provides homeowners qualifying for the mentioned age bracket with the option of claiming equity on their house of residence without having to move out or sell it. It may be noted that this little different from home equity. The mortgage company gives borrower the control over selection of the mode of payment desired by them when they opt of reverse mortgage. The funds can be made available to the borrower in three ways, it could either be given as a onetime lump sum amount, or, the entire amount could be divided into monthly allowances or could be made available as a Line of Credit. It depends on the borrower how he wishes to avail the facility of equity provided by reverse mortgage. The amount of funds which can be made available using the reverse mortgage is dependent on various factors, the important ones being the age of the borrower, the value of the house, the location of the house and lastly, the mortgage interest rate at that point of time. All these factors combined together help in asserting the funds which can be given to the borrower.
Making reverse mortgage all the more alluring is the fact that the amount which is funded here is entirely tax free. To add on to that, there are number of mortgage brokers and actual mortgage lenders who can provide you best deals in view of the high competition. However, if there is any other mortgage or any other financial aid on the house, it has to be cleared completely before availing the reverse mortgage facility. While a majority of the senior members utilize this fund as a supplement to their current income, others make use of it in paying prescription bills, medical expenses or on the maintenance of their property. With this program gaining popularity, reverse mortgages have surely proved to be a boon for the senior citizens.
Tags: mortgage, mortgage loan, mortgage rate, real estate, reverse mortgage
To own a house features high on almost everyone’s wish list. Turning this dream into reality was relatively easier in older times but now with real estate rates sky rocketing, making this wish come true without any financial aid or mortgage loan is very difficult. Providing respite in such situations are mortgages.
Mortgages are financial tools which allow individuals to finance their homes and also make the financial burden a little lighter for them. But before one embarks on the decision of availing it one must familiarize oneself with the kinds of mortgages available and then choose the one which best suits his needs. There are basically two kinds of mortgages available
- Fixed rate mortgage
- Adjustable/Floating rate mortgage
In a Fixed rate mortgage scenario the applicable rate of interest which will be charged for a pre defined time duration is fixed. Therefore, changes in the economy or any other such factor do not change this rate. The amount to be paid in principal and interest by the homeowner over the duration of the loan period is known to him. Hence, he is in a situation to chalk out his other financial needs accordingly. This type of mortgage is best suited for those individuals who get a good deal when the interest rates and low and wish to lock the interest rate for the entire tenure of the loan.
In the case of adjustable rate mortgage the interest rate payable by the house owner is not pre- determined and keeps on changing in accordance to the market situation. This type of mortgage allows the individual to make the best of fluctuating situations where, when the interest rate in the market dips to low levels it allows the individual to pay less than what he was doing initially. The major drawback of alternating rate mortgage is that the varying interest rates makes the due payment also vary hence not allowing much freedom for his other financial decisions.
While making a choice of selecting one of these options one should consider the present and the expected market conditions which could help him decide. Also one’s own financial health is a major bone of contention while making this decision.
Tags: mortgage, mortgage loan, mortgage rate, mortgage rate of interest, mortgage refinance, Mortgages, real estate