The Zero Down 80/20 Mortgage

This is an excellent mortgage refinancing for those that are lacking the down payment required for other types of mortgages.

The 80 20 mortgage is simply two loans for 100% of the purchase price. It is a first mortgage at 80% of the purchase price with a 20% second mortgage.

If you are a conforming borrower, doing your loan in this manner will save you from having to pay mortgage insurance. Mortgage insurance is almost always required when you have less refinancing mortgage 20% down. But with the 80 20 loan you avoid this necessary evil.

If you are a sub-prime borrower, doing you loan in this manner will typically keep your interest rates % to 2.5% lower than doing a 100% one loan. A 100% one loan is simply one loan for the entire purchase price.

Many times you will have two choices when it comes to the second mortgage portion of the 80 20 mortgage. The second mortgage can either be a fixed second mortgage or it can be a line of credit.

If it is a fixed second mortgage. The interest rate is fixed for the entire length of the mortgage. Most fixed second mortgages are a 30 due in 15. Meaning that the second mortgage is amortized over 30 years, but is due in 15 years. Basically it is a balloon payment. Dont let this scare you. Statistically people refinance or sell their home every 7 to 9 years any ways.

If it is a line of credit as the second mortgage. The interest rate will fluctuate as the Federal Reserve adjusts the prime interest rate up or down. The benefit of going with the line of credit as the second mortgage is that the interest rate is normally much lower than the fixed second mortgages rate. It can be 2% to 5% lower.

If you are considering doing the 80 20 loan have your loan officer compare the two different options if you have both available to you.

You may also want to consider an 80 20 interest only loan. The interest only loan could save you hundreds of dollars in mortgage payments every month. This can help you purchase a more expensive home or keep the payments down on the home you want to buy.

About The Author

Matthew Allen is a mortgage consutlant with Action Brokerage Services, Inc. in Medford Oregon. He is also the author of "How To Buy A Home With Zero Down, Even If You Have Damaged Or No Credit" You can visit his website at http://www.realmortgageadvice.com.

Adjustable Rate Mortgage Loan - How to Avoid Scams

If you are availing an adjustable rate mortgage loan, be informed about the various scams and frauds of ARM. Such scams can cost a homeowner his equities if borrowers do not avoid certain common mistakes.

How do scammers get borrowers' information?

To prevent yourself from getting in any adjustable rate mortgage loan scams, it is most important that you know the scammer's source of information. The scammers usually gather information from companies that keep personal records of individuals. They target people who have bad credit report or financial crisis.

What are the tips to avoid ARM scams?

To avoid scams of adjustable rate mortgage loan, borrowers need to be careful and informed about the consumer laws. Given below are 4 tips to help you stay away from scams.

Beware of lenders who refuse to disclose payment details: Before applying for ARM loans, do some thorough research about lenders and their payment details. Use internet to have a quick check on various lenders' profile. The most common loan scam that lenders carry out is not providing detailed information initially but charging higher rates later. As per the laws, a mortgage lender is bound to provide you detail information about rates, fees and closing costs to the borrowers. If a lender is not ready to provide details of rates, fees and closing costs, don't opt for loan from that lender.

Do not sign on any blank or incomplete document: If your lender wants you to sign on any documentation that is incomplete or false, be sure that he is up to some foul play. The lender can fill out the blank document as he wishes with higher interest rates and fees that can cost you the home. Providing false information can also land you in legal problems.

Beware of mortgage lenders who are too pushy: If a mortgage lender is trying hard to sell you their loan, be careful and never agree to the unfavorable terms of these "hard selling" lenders. Honest lenders will never try to up-sell a mortgage.

Beware of negative amortization: Negative amortization happens in ARM loans when the monthly payment does not include full due interest. The interest that is not paid is added to the principal balance which in turn increases your loan balance. ARM with negative amortization is known as Option ARM which is very risky as the monthly payments increase with the rise in interest rate as per market index. Dishonest lenders take advantage of this increase in rate to defraud borrowers.

Before taking out an ARM loan, it is important that the borrower should understand the terms and conditions and have clear knowledge about the loan. He should be well aware of the consumer laws to fight back in case of scams. Only then he can avoid falling into ARM scams/frauds.

Cachet Gomes is a contributing Financial Writer of Mortgagecases. With her knowledge on mortgage cases, laws and ARM loan scam related issues, she provides information on consumer rights, how to fight out cases and avoid being a victim of frauds.

Is the Time Right for You to Re-mortgage?

At certain times and in certain circumstances it actually makes more sense for someone to re-mortgage than to stay with their current lender and ride the waves of ever changing interest rates.

This article looks at five specific reasons to re-mortgage but first things first I must just point out that the information contained in this article does not constitute personal advice and because your circumstances and financial position are as unique as you are, you should seek professional, regulated and specific advice before re-mortgaging to ensure that this is the best decision for you right now

1) If your mortgage introductory or fixed rate period is about to expire you can save substantial money over the period of your loan if you re-mortgage. You avoid having to start paying your mortgage lenders variable rate of interest which is highly likely to begin at least one percentage point above that which you have already been paying and which could increase your monthly outgoings significantly. Over the lifetime of your loan just a one percent increase will result in you paying back thousands in extra interest payments money you could save towards retirement, put in a fund for your kids college education or use to actually pay off your mortgage fasterwhich leads me neatly to my next point!

2) Many lenders are trying to attract your new business and will offer you attractive re-mortgage rates now which will reduce the amount youre already paying. If you can currently afford what youre paying why not forego the reduction and instead continue paying the same amount with the new lender and pay back your mortgage quicker. The years or even months you can shave off the term of your loan are years or months without interest payments which are years or months youll be significantly wealthier.

3) If youre not wholly comfortable with your current monthly repayments then ignore point 2 and look at re-mortgaging to a cheaper lender and taking the discount.

4) Make life simpler by considering a fixed rate mortgage so you refinancing mortgage have to worry about interest rate fluctuations and can budget more effectively.

5) If you have accrued equity on your property you could consider re-mortgaging up to the new value of your property and using the additional funds to buy an investment property from which you could either draw down a regular income in the form of rent or which you could use for capital appreciation purposes.

With this extra money you could consider buying an overseas investment property in a country with an emerging property sector which will initially cost you less, let you and your family have a refinancing mortgage home and remove expensive annual holiday costs, you could also rent it out when youre not using it to generate an income to afford to pay for the property and over the long term this propertys value could rise significantly. Later in life you might choose to retire to this property or sell it for a nice lump sum that you can take into retirement.

Examine your options carefully and remember to look at the bigger picture! If you can profit from a re-mortgage then take the deal, but get expert advice and assistance before entering into any investment decision.

Rhiannon Williamson is a freelance writer whose many articles about property investing and finance have appeared in publications around the world. Visit this link to read her latest articles about investment property abroad.