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About Mortgage

A mortgage is a method of using [property] (real or personal) as [Security (finance)] for the payment of a [debt].

The term mortgage (from [Law French], lit. dead pledge) refers to the legal device used for this purpose, but it is also commonly used to refer to the debt secured by the mortgage, the [mortgage loan].

In most jurisdictions mortgages are strongly associated with loans secured on [real estate] rather than other property (such as ships) and in some cases only land may be mortgaged. Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately. See [mortgage loan] for residential mortgage lending, and [commercial mortgage] for lending against commercial property.

In many countries it is normal for home purchases to be funded by a mortgage. In countries where the demand for [home ownership] is highest, strong domestic markets have developed, notably in [Spain], the [United Kingdom] and the [United States].

Participants and variant terminology Legal systems tend to share certain concepts but vary in the terminology and jargon used.

In general terms the main participants in a mortgage are:

Creditor The [creditor] has legal rights to the debt or other obligation secured by the mortgage. That debt is often the obligation to repay the loan by the creditor (or its predecessor lender) who provided the purchase money to acquire the property mortgaged. Typically, creditors are [bank]s, [insurer]s or other financial institutions who make loans available for the purpose of real estate purchase.

A creditor is sometimes referred to as the mortgagee or lender.

Debtor The [debtor] is the person or entity who owes the obligation secured by the mortgage, and may be multiple parties. Generally, the debtor must meet the conditions of the underlying loan or other obligation and the conditions of the mortgage. Otherwise, the debtor usually runs the risk of [foreclosure] of the mortgage by the creditor to recover the debt. Typically the debtors will be the individual home-owners, landlords or businesses who are purchasing their property by way of a loan.

A debtor is sometimes referred to as the mortgagor, borrower, or obligor.

Other participants Due to the complicated legal exchange, or [conveyance], of the property, one or both of the main participants are likely to require legal representation. The terminology varies with legal jurisdiction; see [lawyer], [solicitor] and [conveyancer].

Because of the complex nature of many markets the debtor may approach a [mortgage broker] or [financial adviser] to help them source an appropriate creditor, typically by finding the most competitive loan.

The debt is, in [Civil law (legal system)] jurisdictions, referred to as [hypothecation], which may make use of the services of a hypothecary to assist in the hypothecation.

Other terminologies Like any other legal system, the mortgage business sometimes uses confusing jargon. Below are some terms explained in brief. If a term is not explained here it may be related to the [mortgage loan]s rather than to the legal process.

[Conveyance] The legal document that transfers ownership of unregistered land.

Disbursements All the fees of the solicitors and governments, such as stamp duty, land registry, search fees, etc.

[Freehold] The ownership of a property and the land.

Land Registration A legal document that records the ownership of a property and land. This is also known as a [title (property)].

[Leasehold] The ownership of the property and land for a specified period, which may be sold separately from freehold, which may be owned by another person.

Legal Charge A legal document that records the data of the rightful owner of a property or land.

Mortgage Deed A legal document that stated that the lender has a legal charge over the property.

Sealing Fee A fee made when the lender releases the legal charge over the property.

Seasoned mortgage A mortgage which has been paid in a timely manner by the mortgagor for a period of typically no less than six months, and often for more than one year. The term is associated with the secondary market, where mortgages with similar characteristics are bought and sold in bulk.

Legal aspects There are essentially two types of legal mortgage.

Mortgage by demise In a mortgage by demise, the creditor becomes the owner of the mortgaged property until the loan is repaid in full (known as "redemption"). This kind of mortgage takes the form of a conveyance of the property to the creditor, with a condition that the property will be returned on redemption.

This is an older form of legal mortgage and is less common than a mortgage by legal charge. In the UK, this type of mortgage is no longer available, by virtue of the [Land Registration Act 2002].

Mortgage by legal charge In a mortgage by legal charge, the debtor remains the legal owner of the property, but the creditor gains sufficient rights over it to enable them to enforce their security, such as a right to take possession of the property or sell it.

To protect the lender, a mortgage by legal charge is usually recorded in a public register. Since mortgage debt is often the largest debt owed by the debtor, [bank]s and other mortgage lenders run title searches of the real property to make certain that there are no mortgages already registered on the debtor's property which might have higher priority. [Tax liens], in some cases, will come ahead of mortgages. For this reason, if a borrower has delinquent property taxes, the bank will often pay them to prevent the lienholder from [Foreclosure] and wiping out the mortgage.

This type of mortgage is common in the [United States] and, since 1925, it has been the usual form of mortgage in [England and Wales] (it is now the only form - see above).

In [Scotland], the mortgage by legal charge is also known as standard security.

In [Pakistan], the mortgage by legal charge is most common way used by Banks to secure the financing. It is also known as Registered Mortgage. After registeration of legal charge, Bank's Lien is recorded in land register stating that the property is under mortgage and can not be sold without obtaining NOC (No Objection Certificate) from the Bank.

Equitable Mortgage

In an Equitable Mortgage the lender is secured by taking possession of all the original title documents of the property and by borrower's signing a Memorandum of Deposit of Title Deed (MODTD). This document is an undertaking by the borrower that he/she has deposited the title documents with the bank with his own wish and will, in order to secure the financing obtained from the bank.

In Pakistan most of the time a loan is secured by using two ways of mortgage, Registered Mortgage along with Equitable Mortgage.

See also: [Security interest#Types of Security]

History At [common law], a mortgage was a conveyance of land that on its face was absolute and conveyed a [fee simple] [estate (house)], but which was in fact conditional, and would be of no effect if certain conditions were not met --- usually, but not necessarily, the repayment of a debt to the original landowner. Hence the word "mortgage," Law French for "dead pledge;" that is, it was absolute in form, and unlike a "live gage", was not conditionally dependent on its repayment solely from raising and selling crops or livestock, or of simply giving the fruits of crops and livestock coming from the land that was mortgaged. The mortgage debt remained in effect whether or not the land could successfully produce enough income to repay the debt. In theory, a mortgage required no further steps to be taken by the creditor, such as acceptance of crops and livestock, for repayment.

The difficulty with this arrangement was that the lender was absolute owner of the property and could sell it, or refuse to reconvey it to the borrower, who was in a weak position. Increasingly the courts of [Equity (law)] began to protect the borrower's interests, so that a borrower came to have an absolute right to insist on reconveyance on redemption. This right of the borrower is known as the "[equity of redemption]".

This arrangement, whereby the mortgagee (the lender) was on theory the absolute owner, but in practice had few of the practical rights of ownership, was seen in many jurisdictions as being awkwardly artificial. By statute the common law position was altered so that the mortgagor would retain ownership, but the mortgagee's rights, such as [foreclosure], the power of sale and the right to take possession would be protected.

In the United States, those states that have reformed the nature of mortgages in this way are known as [lien] states. A similar effect was achieved in England and Wales by the Law of Property Act 1925, which abolished mortgages by the conveyance of a fee simple.

Foreclosure and non-recourse lending In most jurisdictions, a lender may [foreclose] on the mortgaged property if certain conditions—principally, non-payment of the mortgage loan—apply. Subject to local legal requirements, the property may then be sold. Any amounts received from the sale (net of costs) are applied to the original debt.

In some jurisdictions, mortgage loans are [nonrecourse debt] loans: if the funds recouped from sale of the mortgaged property are insufficient to cover the outstanding debt, the lender may not have recourse to the borrower after foreclosure. In other jurisdictions, the borrower remains responsible for any remaining debt, through a [deficiency judgment].

Specific procedures for foreclosure and sale of the mortgaged property almost always apply, and may be tightly regulated by the relevant government. In some jurisdictions, foreclosure and sale can occur quite rapidly, while in others, foreclosure may take many months or even years. In many countries, the ability of lenders to foreclose is extremely limited, and mortgage market development has been notably slower.

Mortgages in the United States Types of Mortgage Instruments Two types of mortgage instruments are used in the United States: the mortgage (sometimes called a mortgage deed) and the deed of trust.

The mortgage In all but a few states, a mortgage creates a lien on the title to the mortgaged property. [Foreclosure] of that lien almost always requires a judicial proceeding declaring the debt to be due and in default and ordering a sale of the property to pay the debt.

The deed of trust The deed of trust is a deed by the borrower to a trustee for the purposes of securing a debt. In most states, it also merely creates a lien on the title and not a title transfer, regardless of its terms. It differs from a mortgage in that, in many states, it can be [Foreclosure] by a non-judicial sale held by the trustee. It is also possible to foreclose them through a judicial proceeding.

Most "mortgages" in California are actually deeds of trust. The effective difference is that the foreclosure process can be much faster for a deed of trust than for a mortgage, on the order of 3 months rather than a year. Because the foreclosure does not require actions by the court the transaction costs can be quite a bit less.

Deeds of trust to secure repayments of debts should not be confused with [trust instrument]s that are sometimes called deeds of trust but that are used to create trusts for other purposes, such as estate planning. Though there are superficial similarities in the form, many states hold deeds of trust to secure repayment of debts do not create true trust arrangements.

Mortgage lien priority Except in those few states in the United States that adhere to the title theory of mortgages, either a mortgage or a deed of trust will create a mortgage [lien] upon the title to the real property being mortgaged. The lien is said to "attach" to the title when the mortgage is signed by the mortgagor and delivered to the mortgagee and the mortgagor receives the funds whose repayment the mortgage secures. Subject to the requirements of the [recording (real estate)] of the state in which the land is located, this attachment establishes the priority of the mortgage lien with respect to other liens on the property's title.The failure to record a previously made mortgage may, under some circumstances, allow a subsequent mortgagee's mortgage to be recognized as prior in right to the otherwise prior mortgage. Liens that have attached to the title before the mortgage lien are said to be senior to, or prior to, the mortgage lien. Those attaching afterward are said to be junior or subordinate.Of course, the lienholders can agree among themselves to a different priority arrangement through [subordination (finance)]. See, R. Kratovil and R. Werner Modern Mortgage Law and Practice Chs. 30 & 38 (2nd Ed. Prentice-Hall, Inc.) The purpose of this priority is to establish the order in which lien holders are entitled to [foreclosure] their liens in an attempt to recover their debts. If there are multiple mortgage liens on the title to a property and the loan secured by a first mortgage is paid off, the second mortgage lien will move up in priority and become the new first mortgage lien on the title. Documenting this new priority arrangement will require the release of the mortgage securing the paid off loan.

See also

Related to South Africa

Bond (SA) - a term used loosely but interchangeably for a "home loan" or a "mortgage" in South Africa. Thus, one can say one is looking for a "bond" for one's house, when one is looking for a residential mortgage.

Legal details

[Deed] - legal aspects
[Mechanics lien] - a legal concept
[Perfection (law)] - applicable legal filing requirements

Notes and references

Information Reference: Wikipedia.org

Mortgage

Questions and Answers

Mortgages (U.K) - guarentor mortgage - calling anyone who knows!?

Q) My partner currently has a mortgage in the UK and has done for a good few years. We are now looking to move in London and my parents think I should go on the mortgage with him which I can afford. The only issue is that I am a contractor in a professional role with a steady market of contract roles however I dont think any mortgage company would give me a joint mortgage because I dont have a 'steady' permanent income (which is only true in theory as I have had no problems going from one contract to another and earn pretty well). My partners current mortgage company said that they would probably look at me if I was a self employed plumber or electrician as there is always work! A solution may be that my father has said that he would be a 'guarentor' for me and would accept liability to pay the mortgage if I defaulted. Does anyone know if any mortgage companies would do this and allow the 2nd person to have a guarentor but be named as the mortgage? Help appreciated! Thanks!

A) most banks and building societies should now offer this type of mortgage, normally theyn will ask for a 10-20% deposit Abbey, Natwest, Halifax, Lloyds. - Newcastle building society seems to have one that seems quite good. Speak to an IFA -

mortgage problems help?

Q) we recently went for a meeting with a mortgage adviser, who told us we could borrow £90000, so we went away and searched for properties, we now have found one that we have fell in love with, only to be told by other mortgage lenders that we are not eligible for a mortgage n that they do not understand how any other mortgage lender could offer us £90000, i am now worried that we have found our dream home only for it to slip away, i have tried to see the mortgage lender who told us we could borrow £90000 but he has gone away for two weeks, i think when he gets back he is going to tell us the same as all the other mortgage lenders n that he got it wrong. if that is the case has anyone got any mortgage advice for us we are desperate, we have no debts or marks against our names, but we have a low income, we know we can afford the mortgage because we pay £400 rent a month and pay all our bills n shopping and still have money left over to save..... anyone help

A) If you really can afford the mortgage go to a b/s that does a self assessment mortgage and they will let you have it.

Mortgage Help?

Q) I have signed a mortgage in principal agreement with my mortgage advisor to get a mortgage which at the time was the best on the market. However, as it took about a month for the actual mortgage offer to arrive, the interest rate on the offer has increased, and would work out to cost us about £700 over the lifetime of the agreement. This is despite the mortgage advisor guarantee us upon signing the mortgage in principal agreement that the rate was then secured. What can I do about this and who can I complain to?

A) What the advisor means is that that PRODUCT rate is secure, so if for example your mortgage is, say, 0.49 above base, then the amount you pay will change with the interest rate changes. If however the advisor has guaranteed you a rate but has changed the product, or the product has been withdrawn subsequent to his promise, then I would try to get a result from him. Ifyou cannot, then approach the Financial Ombudsman.

Mortgage Advice?

Q) I have signed a mortgage in principal agreement with my mortgage advisor to get a mortgage which at the time was the best on the market. However, as it took about a month for the actual mortgage offer to arrive, the interest rate on the offer has increased, and would work out to cost us about £700 over the lifetime of the agreement. This is despite the mortgage advisor guarantee us upon signing the mortgage in principal agreement that the rate was then secured. What can I do about this and who can I complain to?

A) I'm a mortgage broker from Edmonton, Alberta. Over here you have a guaranteed rate hold on a closed mortgage, this can be up to 120 days. If I was you I would look at who is the governing body for mortgage advisors in the UK. Then I would complain about your mortgage advisor to them in writing. If you do nothing then nothing will be done

Transferring mortgage into single name only after divorce?

Q) Hello As part of our divorce settlement I have agreed to let my ex keep our house for which we currently have a joint mortgage. I am now in the process of buying my own property and in order to get a new mortgage confirmed on that property I need written confirmation from my existing mortgage company that I have been released from my old mortgage. I have signed a document from my old mortgage company agreeing that the mortgage andproperty can be transferred to my ex's name only but after 4 weeks nothing has happened. My old mortgage company say that it is likely to take 3 months before they are in a position to provide me with a letter confirming I have been released. Does it really take this long? Thanks for your help. I should have said that my ex has bought me out of our current property hence why I am letting him keep it. The form was signed under the watchful eye of my solicitor who only let me sign it at the appropriate stage. The mortgage company has approved my ex taking over the mortgage in his own name having carried out a credit check etc but they are still saying they need the title deeds transferred to his name only before they will confirm I have been released from the mortgage. My ex's solicitor says this will take a couple of weeks but despite that the mortgage company are still saying it will be 3 months or so before they confirm in writiing that I have been released from the mortgage.

A) One thing to be mindful of is that your mortgage company has no obligation to honor your request. Since there is nothing for them to gain financially from this transaction and they are a business, you might find that they aren't quick to eat up legal and man power resources to get it done. If your ex is in a good loan and you both are patient it may be worth it to wait as it will save you the closing costs of refinancing. If time is of the utmost importance than refinancing is fastest way to accomplish your goal. It's funny how quick the bank's retention department will vie for your business the minute you order a payoff demand though.....just food for thought.

Joint Mortgage issue?

Q) ive split from my partner. we have a joint mortgage but he hasnt been making his share of the mortgage payments for the last 6 months. he also moved out of the property 6 months ago. im in the process of having him released from the mortgage. the property hasnt gone up in value. if my ex refuses consent to be released from the mortgage, when the property does come of value, is he still entitled to 50% of the profit, even though i can prove he hasnt made any contribution to the mortgage and the fact that my continued mortgage payments (not his) have resulted in the profit in the first place? mispipik-why do you have to judge people?people ask Qs for advice!!if you cant see that then your the IDIOT!!!!!!

A) No he will not, keep your payments to hand, the judge will give an order in your favour. You can have him 'releaed' as he has failed to pay his fair share, ither go to the Citizens advice bureau, or to the county court, they are usually extremely SSSLLLOOOWWW, but have leaflets there, so they don';t have to work.

Help-Mortgage issue!!!!!!?

Q) me and my partner have split up. we have a joint mortgage. he hasnt paid the mortgage for the last 6 months and has moved out. i have since been paying the mortgage alone. i have obtained consent from the mortgage lender to have my ex released from the mortgage, the property has no equity. i have instructed solicitors to do the transfer and to have my ex released but he will not consent to the transfer and being released from the mortgage. is there anything i can do? i dont want to sell as i will incur a massive loss with all the redemption penalties and due to no equity.

A) Find another partner that is handsome and loving like me and then in time he can replace your old partner and put his name on the house and pay with you

Repayment mortgage or interest only.?

Q) I would like to afford a repayment mortgage on my house i want to buy, but the payments are more than i pay in rent. I was thinking of having a interest only mortgage, i know you have to find the money you have borrowed at the end of the mortgage term, but at this present time that is all i can afford. I was thinking at least i am buying it and not throwing my money down the drain or am i. As anyone else had a interest payment mortgage and is it a good idea or should i wait untill i could afford a repayment mortgage, please any good advice wanted. I was offered a fixed rate repayment mortgage for 3 years but it is still higher than i can afford. But with a fixed rate interest only mortgage i could just afford that. Obviously i know nothing about mortgages so would appreciate advice. Could u stil change to a repayment mortgage if your circumstances change for the better in the future,the one thing i do know is with a interest only mortgage you have to find the amount you borrowed in the first place and pay that back at the end of the mortgage term. 6.4% I have been offered fixed for 3 years. I meant 6.14% fixed rate for 3 years on an interest only mortgage . Would anyone else buy a house on a interest only mortgage

A) Firstly what I would say is shop around for your mortgage - I'm guessing that you're from the UK??? if so, then 6.4% seems pretty high - although I do not know your circumstances. For a rough estimate of what other interest rates could be offered to you by other lenders look at Moneysupermarket.com. Secondly, I currently have a fixed rate (4.69% - oh the good old days!! anyway....) repayment mortgage just simply because I like to know that every month the balance of what I owe the bank is decreasing - also if in the future I wanted to lend more - to do an extension etc etc - the possibility of the lender allowing me too, would be increased, and thats without hoping that the house prices in my street have increased. However, if you're a bit of a gambler then interest only can be very advantageous!!! (I used to work for the Halifax PLC - endowment mortgages!! there were some amazing figures when their endowment policy had matured... but not everyone got these amazing figures - be warned) also if you can't afford repayment there is no harm in starting on interest only!! Anyway the choice is yours - I wish you good luck in finding the answer you require to your question.

debt mortgage sellup & move? what to do?

Q) Hi, This is doignmy head in, can you help? I have a £255k house with a160k mortgage with 25 years to go, im 33. I have about 24k loans/debts/credit cards (£600 a month) i take home £1700a month & after paying off energy mortgage, food car etc etc , my debts arent going down or up! just breaking even. I asked my bank about selling my house and getting a smaller house and another mortgage so to use equity to pay off loans/debts but the bank have said i would only get 100k mortgage now. so that 100k mortgage after solicitors fees/debts/loans moving im looking at 70k deposit so i can get a house for £170k it would have to be somewhere i dont want to live. or, just carry on do as much overtime as possible and live skint for next 6 years stressed until debts have gone? moving away from this area i really dont want to do but the cheapest 2 bed around here is 200k.. I know alot of people are in worse case and some may not even be able to get a home. what to you think i should do plz

A) Can you rent a roon out? I think you can earn around £80/week from doing that without declaring it and paying tax so you could clear say an extra £250/month of the debts and keep £70 to give you some breathing space

another mortgage...(UK)?

Q) i have a buy to let mortgage(49k) on property no1, which is successfully let to long term tenants. I have a sizeable deposit (10k) for a 2nd mortgage on somewhere i hope to live. will my 1st mortgage in any way affect my proposed 2nd mortgage? if so, how and why? i intend to see a mortgage adviser asap, but am curious...

A) Your first mortgage should not effect a second property if you brought it on a buy to let basis. If not change it to a buy to let mortgage by a remortgage. Then your mortgage for the house you intend to reside in will be worked out on your salary and the lenders multiplies. Hope this helps. I know a good independent adviser if you need one

Mortgage???????????

Q) I recently got a letter from my bank saying I owed them $199 from "late payments" on my mortgage. (you know how your mortgage is due and if you pay it late they tack on a charge) Well, everytime my husband went to pay our mortgage even if it was late, the bank teller never tacked on the charge. Anyways, they are saying their going to take us to collections for the amount due, does this mean their going to try and take our house? We have never missed a month on our mortgage, just a few times they didnt tack on the late charge...can anyone answer? It's was late a few times because our son was sick and we spent a ton of money going back and forth to st judes. But that wasn't my question, will they try and take our house? and we are making them on time now.

A) Sounds to me like their taking what you owe for the late payments to collections unless you pay it. I would call first thing and get it straightened out..they normally work well with you. Good luck.

Mortgage...?

Q) For his birthday, little Joe asked for a 10-speed bicycle. His father said, "Son, we'd give you one, but the mortgage on this house is $280,000 & your mother just lost her job. There's no way we can afford it." The next day the father saw little Joe heading out the front door with a suitcase. So he asked, "Son, where are you going?" Little Joe told him; "I was walking past your room last night and heard you telling Mom you were pulling out. Then I heard her tell you to wait because she was coming too. And I'll be damned if I'm staying here by myself with a $280,000 mortgage & no bike.

A) Excellent.......lol Awesome joke......VERY FUNNY or not Keep em coming!

mortgage??

Q) if i buy a home of $350,000 detached / semidetached and 10,000 down payment then how much mortgage will i have to pay every month???? thanks for the answers :) well if not 10,000 then wat abt 20 or 25 ?

A) depends on your interest rate lets say you did a 30 year 5% fixed 1825.19 would be your monthly http://public.propertylinx.com/custom/templates/mortgage_calculator.asp?price=350000 here's a calculator.. toss around your own numbers.

I have a mortgage on my name but house is not on my name anymore, person responsible for paying the mortgage?

Q) person responsible for paying the mortgage is not paying on time, he dosnt want to put the mortgage on his name nor he wants to sell the house. ,what are my options, should I tell mortgage bank that they should call him and take off my name from mortgage, what are my legalities and rights since deed his on his name and he doesnt return my calls. he is a mortgage officer and he knows everyone in real estate proffession from attorney to agent, I am getting very scarred as I m getting calls every month from mortgage company that my mortgage is due, as he is already one month behind. Month of april alreday shows on my credit report as a late payment. please someone help me with a professional advice. well, he is an investor not living there (mortgage officer), he is the one approved my loan for this house, his friend find me this house (real estate agent), the house is in NY, and both are in NY . I have nothing to do any thing with NY, I am from NJ, this Mortgage officer is my cousin !!! , initially he told me that you have nothing to do but sign the papers and i will get you good chunk of money in 3-4 months, i dont know what comes to me and i signed the papers. I dont know how can I go about and what to do, initially he forge the papers to approve for loan (he put his address as I am living there in NY, my income level is also showed as 10 times which i make, thats a long story), I didnt take any money from him matter of fact I have paid 3 mortgage payments from my pocket, he promised me orally that he will give me back my money once He sold the house, we didnt have any written contract. It is a 2 family house and both floors are rented. rent is not covering the mortgage. he puts his name on deed, but the mortgage is on my name, i dont know if deed and title are the same papers.

A) Sadly, this type of thing happens more often than people realize. It's important to trust your instincts from the beginning. If something doesn't seem right - ask questions, and if in doubt, get out. I'm sorry you've found yourself in this situation. It will not be an easy one to get out of. I would do as these other fine people have suggested and retain a lawyer, then report this guy. A similar thing happened to my brother-in-law and he wound up losing tens of thousands of dollars plus having a foreclosure on his record that prevented him from buying a house of his own for a few years and also will cause him to pay a higher interested rate due to the impact on his credit, and who knows how much that will end up costing him. (BTW, it was also a relative that did this to him.) I hope you can take this as a lesson learned that if it sounds too good to be true, it probably is. I don't live in NJ and I'm not a lawyer, but I'll give you this advice. Keep track of all of your paperwork (including any correspondance and e-mails.) It may be a good idea to send a certified letter to him wherein you explain the situation and detail the oral agreement you had. I'm sure a lawyer can give you advice on this, but anything you can do to get him to sign something in writing will be to your advantage, such as a contract, IOU or a promise to pay. Good luck and best wishes to you.

Mortgage question?

Q) You take out a mortgage today of $350,000 with a 25-year amortization period, a 5-year term, and a 6.25% (annual) posted mortgage interest rate. Suppose four years from today, you decide to refinance your mortgage at a 5.50% (annual) mortgage interest rate. Also, you would like to increase your payment frequency from monthly to weekly. (Assume your mortgage payments are made at the end of each month or week). (a) What is your original monthly payment on the mortgage? (5 marks) (b) What is the remaining balance on the mortgage after 4 years? (c) What will be your weekly payment on the refinanced mortgage? (There are 52 weeks in a year. (d) Are you paying more or less on a monthly basis once you refinance your mortgage if your discount rate is 8%, compounded annually? (Assume that there 4.3333 weeks per month)

A) 5 years from now YOU will not find a 5.5% annual rzte except in your dreams . Do your homework else where please.

Mortgage Interest Deduction?

Q) I have an odd question about Mortgage Interest deductions. Here's the situation: My step-father was paying on a mortgage, but abruptly had to go abroad to care for his ailing parents. He made no mortgage payments in 2006 at all, nor supplied any income for my mother. My mother had a couple part-time jobs, but could not pay the mortgage. Therefore, the entire year of 2006 I assumed the bill and payed all of the mortgage payments myself. My question is, who deducts the mortgage interest paid? Should it be on her tax return since the mortgage is in her name? Or, should it be on mine, since I obviously paid it. I worry that if I put it on hers, the IRS will wonder how she paid all that interest, when she didn't have even a third of that income. Any thoughts? Thanks...

A) The only person that is eligible to deduct the mortgage interest is the person that is on the mortgage. The mortgage company will send her a tax form at the end of the year that shows how much interest she paid during the tax year. This interest deduction follows the social security number of the borrower. At the closing of the mortgage loan, the borrower fills out a form that makes them eligible to deduct the interest. Although I see your point since you paid the interest throughout the year, I do not beleive you can deduct on your tax forms. Good luck!

Mortgage Insurance ?

Q) I was looking into buying mortgage insurance to cover me in case something happens. I found out this existed when someone I know died very suddenly. I went to the bank where my mortgage is and they told me they only offer it on new loans( my mortgage is 2 years old ). I was not offered this protection when I applied for this mortgage ( actually it was a refinance of my original mortgage ) as I applied through a mortgage company.I was told the best thing to do now was take out a life insurance policy, which I already have, but that dosent cover my husband or myself if we lose our job or become disabled.Does anyone know where I could look into this or is it even worth it? The insurance company that carries my house and auto insurance does not offer mortgage insurance.Any help would be greatly appreciated! Thank You

A) Mortgage insurance is also called decreasing term. It's for the remainder of the mortgage, if you die, and only pays the payoff. It costs MORE than regular term. So, you're BETTER off if you buy a level term policy - it's cheaper, and it DOESN'T decrease each year. There's ALSO disability coverage. It's a different policy, and depending on your ages/health, it can be pretty expensive. Unemployment is NOT a private coverage in the us, you can ONLY get it through your state unemployment office. Talk to your agent that does house and auto - ask him if he sells level term coverage, and/or disability coverage. If he doesn't, ask him for a LOCAL referral. IF you're with a direct writer, ask a neighbor or friend who their local agent is. I really really strongly recommend dealing with a local agent. If you can't find one, these guys are pretty good, and licensed in most of the 50 states: www.zanderins.com

mortgage appraiser's rejection to to mortgage?

Q) I received the following from the purchaser’s lawyor: Quote: Please be advised that my client’s mortgage appraiser attended the premises and rejected the mortgage. Unquote: Question: 1.Does a mortgage appraiser have the right to reject a mortgage? 2.Who has the right to reject a mortgage? 3.What might be the most common reasons to reject a mortgage in addition to the condition of house? 4.As the financing is waved and the sale is “as is, where is”, if there is no sufficient reason to proof deterioration, con we consider that the purchaser forfeited his deposit to the seller? Please respond to cctvca@yahoo.ca as it is the most efficient way for me to receive e-mail. Thanks, Richard Wong

A) The appraiser has no dog in the hunt regarding approval or declination of loans. His sole role is to verify the security's value against the contract price using like kind sales in the area. If the appraisal fails to agree with the contract price, typically the buyer can either proceed anyway with the purchase and pay the difference, renegotiate the price to the appraisal price or failing either of the above kill the deal. It is unusual for a buyer who wants a home to simply kill the deal. Probably they decided it was not the home they wanted or located another after this one and this was a way to get out w/o penalty. You need a lender turn down letter to kill the deal over financing, unless the sale agreement had a poison pill regarding specifically the appraisal value equaling or exceeding the contract value. That would then be grounds to kill the deal over the appraisal. Again, it is unusual to not negotiate further under that circumstance.

mortgage taxes and itemizing multiple mortgages?

Q) here is my situation. my parents own a house and the mortgage is under their names. they have VERY low income so every year at tax time i itemize the mortgage interest and get a huge tax refund as a result even tho the mortgage is in their names. Now my dilemma is this...i plan to buy my own house with the mortgage in my own name. can i itemize the mortgage interest from both properties and get an even HUGER refund?

A) Wait.... You are saying your parents own the home. You are personally taking off the tax right off for a home you dont live in or worse a mortgage you dont have? Then you are asking can you buy another house and do the same? And you are stupid enough to post this online? You can only take of the interest for the house that you legally live in as a principal residence or a second home, the second home can not be rented. I think they have a delete key for your question. If you are taking tax credit for a house you dont have a mortgage for or you dont live in.... well they have a nice 10 by 12 cell for you. Its illegal. Im not an attorney but why dont you call IRS and ask them this question and see what they say, they have an 800 customer service number. P.S. Those little cop cars showing up to arrest you will have nothing to do with this.

Mortgage company won't accept my weekly payments, but I have no prepayment clause. Is this legal?

Q) My mortgage is a traditional 30-year fixed, with no prepayment clause, and was just sold to another mortgage company (the one in question). I recently setup my personal bank account to autopay (EFT) 1/3 of my mortgage bill every week. I did this to reduce accruing interest, and pay a little extra to principle each month. My mortgage company called and said they will not apply my partial payments - they put the funds into a 'Suspense' account until the value of partial payments reaches the monthly statement amount. BUT (here's the kicker), if I sign up for the mortgage company's own accelerated pay schedule they will let me make bi-weekly payments. I thought that if one has a loan, the lessor has to accept and APPLY funds they receive (unless there is a prepay clause). Are they allowed to hold my funds like this and not apply them to the balance? Does this fall under some usury law? Any mortgage brokers out there? Help!!! Thanks in advance!

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