Some Commonly Asked Questions On Mortgages

An application for a mortgage plan and repayments of the mortgage loan can involve several issues. A mortgage is a lengthy process, and lenders impose a variety of restrictions on the applicant. Here are some clarifications to questions that may arise in the mind of an uninitiated borrower.

Q. Is there any penalty for paying off a mortgage early?

A. Lenders impose a fee on the borrower if he decides to pay off his mortgage before schedule. The fee may include early repayment charges and deeds that release payments. Different lenders charge diverse fees for early repayment of a mortgage.

Q. What does APR indicate?

A. APR is the short form for Annual Percentage Rate. It is the actual cost of borrowing. It takes into account the interest rate, the mortgage product fees and the term of the mortgage. The APR allows you to contrast various deals offered by lenders.

Q. What is the maximum age at which a borrower may apply for a mortgage?

A. Every lender specifies a precise upper limit on the age of the borrower seeking a mortgage. If an individual intends to take out a mortgage past his age of retirement, he needs to provide evidence that his income is sufficient to sustain the monthly payments of the mortgage.

Q. If two or more individuals wish to buy a house, can they all acquire a mortgage on the property?

A. The applicants may get a mortgage on the property. If there are two individuals, the lender takes into account the incomes of both. If there are more than two applicants, the lender considers the income of any two of the borrowers. However, some lenders add up the potential of all of the borrowers for making the monthly repayments. The lender holds each borrower responsible for the whole mortgage payment. If one borrower is unable to make the repayment, the others on the mortgage have to accomplish the payments on behalf of the defaulter. Non-payment would adversely affect the credit rating of all of the borrowers.

Q. How can an individual notify a lender about a change in name?

A. A borrower wishing to change name after marriage needs to produce a certified copy of the original marriage certificate and a copy of Civil Partnership Certificate. For a change in name due to divorce, the lender requires certified copies of Decree Absolute and the birth certificate, indicating the maiden name of the borrower.

Deciding on an Escrow Account after a Refinance

The monthly mortgage dues of a borrower consist of homeowner’s insurance, private mortgage insurance and property taxes apart from the mortgage principal and interest payments. Lenders require that you pay the insurance amounts and the property taxes in an escrow account held by a third party called escrow services....

visit the full blog »
HUD Guidelines for Manufactured Homes

A set of directives prepared by the Department of Housing and Urban Development (HUD) may have served to enhance the quality of manufactured homes. Homebuyers are quite willing to apply for mortgages for this highly affordable quality of housing. Here are the key guiding principles put forward by the...

visit the full blog »