You’ve heard it’s tough getting a mortgage loan today, and that’s true. You can get approved for financing and obtain a mortgage by using various formulas and strategies. You just have to follow the same guidelines that the mortgage brokers will use to determine your creditworthiness to decide whether it’s time to apply for a mortgage. Even if you are turned down, what you learn from the experience will eventually help you qualify later. And, as the credit market eases in panic, you may even find yourself in a great position to buy a low-priced, quality, home with just the right qualifications the lenders are looking for in a borrower.

If you haven’t checked your credit reports in years, do so before you apply for a house loan. Equifax, TransUnion, and Experian are the main credit bureaus that you need to get credit reports from. Each credit bureau will have different results, so you should get a copy of each. Before you apply for a home mortgage, check all your credit reports to make sure there is nothing that could affect your loan outcome negatively.

After you get your credit report, look at it carefully and if there are any mistakes, you should dispute them right away. You won’t get your actual FICO score when you get a free credit report, for that you have to pay. This is something that you should pay for since the FICO score the lenders require you to have is above 720. You will have a better chance of obtaining a low interest rate and good mortgage terms if this number is higher.

Low income families can look into educating agencies to help them get educated in the home buying process. You will want to check out if you are eligible to participate in any home mortgage and ownership classes to help you resolve issues way ahead of time. You can check with The Department of Housing and Urban Development (HUD) and your state’s Housing Finance Agency for easy resources to find helpful programs. Making sure not to be defrauded, always check your local yellow pages and be sure to check it is a reliable program with your state agencies. These programs also look at your particular situation including your income level, your credit score, and your reasons for wanting to own a home.

With interest rates falling, homeowners not able to sell their homes, many homeowners falling victims to Mortgage Foreclosure Questions, refinancing of current mortgages are in the forefront of everybody’s mind.

So what is refinancing and why do people refinance their current mortgages?

To refinance is to “re-do” your current mortgage. Whether or not to refinance your current mortgage is really dependent on the homeowner’s personal and/or financial situation. And, the reasons they give for refinancing are as varied as these situations. Some of the most common reasons are:

Current interest rates are too high. By refinancing you can get a better rate and by so doing you are able to lower your monthly mortgage payment. But this also depends on the terms of the loan and how long you intend to keep the property before selling it. If you are going for the long term it would be wise to refinance, otherwise be patient and wait for a time when interest rates are much lower. Remember the closing costs you have to pay when get a new loan - they play a part in the equation.

Shorten or lengthen the term of the mortgage… The most common tern for a mortgage is 30 years. However, there are also mortgages for 15, 25, 30, 40 and 50 years. By refinancing you can reduce the length of your mortgage to the time limit you think you can afford to make timely mortgage payment, e.g., from 30 years to 15 years. This way you also reduce the amount of interest you would have paid if the mortgage went to its full term of 30 years.

Take equity out of your home… Depending on your down payment, after paying mortgage for at least five years, you start to build up equity in your home. Equity is the difference between the appraised value, what your home can be sold for, and the amount you currently owe on your home. Also if property values have increased since you bought your home you could have a few thousand dollars to take out to do whatever you please - take that long overdue vacation - without worrying about taxes (please consult your tax attorney).

Convert to/from an adjustable rate mortgage… Another reason for refinancing might be to convert from your adjustable rate mortgage to a fixed rate mortgage thereby ending the uncertainty an adjustable rate mortgage carries. Or conversely to switch to combinations fixed and ARM when fixed rate mortgages are extremely high.

Improve your credit ratings or avoid Foreclosure Questions… One main reason that homeowners refinance is to achieve a better future credit score rating. If you have derogatory credit information on your credit report - delinquencies, Mortgage Foreclosure Questions, late payments, judgments and/or liens on your property - the credit reporting bureaus will give you poor credit scores. Refinancing might be the only option you may have to payoff your debts, clean up your credit ratings and start your life all over.

Mortgage insurance provides lenders a form of financial guarantee which protects the lender in cases in which the borrower defaults on a loan. For those looking to buy a home, agreeing to loan terms which include mortgage insurance, increases the purchasing power of the buyer a great deal. Agreeing to buy mortgage insurance allows individuals the opportunity to buy a home with a down payment of only 5%-10%, as opposed to the 20% that is often required when the lender does not have the guarantee of mortgage insurance.

Buyers typically purchase and pay for mortgage insurance in three different ways. These ways include paying in annuals, monthly premiums, or singles. We are going to take a closer look at the available mortgage insurance payment options below:

1.) Annuals: The annuals payment option allows the lender to collect the first year’s premium at closing and then all subsequent payments are made on a monthly basis.

2.) Monthly Premiums: This payment option requires the buyer to only pay for one month at closing and all remaining payments are then made on a monthly basis.

3.) Singles: The singles payment option requires the buyer to make a one-time single payment that is typically financed as part of the mortgage amount.

Mortgage insurance ensures the lender is covered in cases in which the borrower can no longer pay the loan and defaults on it. It is also a powerful bargaining tool for potential borrowers who are unable to come up with a large down payment. Offering to pay mortgage insurance can decrease the amount of ones’ down payment by 10% to 15%. But it is important to note that mortgage insurance does not have to be paid forever. After a certain period of time and when certain conditions are met, mortgage insurance is no longer required to be carried on the mortgage.

Your house is a big investment - probably one of the
biggest you’re every likely to make. It is also the place
that you and your loved ones call home; a shelter and haven
from the outside world. That’s why it is so important to
ensure that your home and family are protected in the event
of your death. It’s not a topic that any of us like to
dwell on, but the sad fact is that should you die and the
family are no longer able to afford repayments on the
house, they will lose the property and the roof from over
their heads.

Having a good life insurance policy in place to protect
your property in the event of your death is vital. When you
die, your family will have enough to worry about without
the added stress of how they are going to hold on to the
family home. Your life insurance policy will ensure that
this problem is eliminated, with the mortgage balance being
paid in full upon your death.

The main types of mortgage life cover

The type of mortgage life insurance cover that you require
will depend upon what type of mortgage you have, a
repayment or an interest only mortgage. There are two main
types of mortgage life insurance cover, which are:

§ Decreasing Term Insurance
§ Level Term Insurance

Decreasing term insurance

This type of mortgage life insurance is designed for those
with a repayment mortgage. With a repayment mortgage, the
balance of the loan decreases over the term of the
mortgage. Therefore, the sum of cover with a decreasing
term insurance policy will also go down in line with the
mortgage balance. So, the amount for which your life is
insured should match the balance outstanding on your
mortgage, which means that if you die your policy will hold
sufficient funds to pay off the remainder of the mortgage
and alleviate any additional worry to your family.

With the decreasing term insurance, the cover is usually
taken out over the term of the mortgage, and payment is
made should you die during the term of the policy. Once the
policy has expired, it becomes null and void, so you will
receive nothing at the end of your policy if you are still
living. There is no surrender value on this type of cover,
but it does provide a cost effective means of protecting
your home and family during the life of your mortgage.

Level term insurance

This type of mortgage life insurance cover is for those
that have a repayment mortgage, where the principle balance
remains the same throughout the term of the mortgage and
the repayments made by the property owner cover the
interest payments on the mortgage only.

The sum for which the insured is covered remains the same
throughout the term of this policy, and this is because the
principle balance on the mortgage also remains the same.
Therefore the sum assured is a fixed amount, which is paid
should the insured party die within the term of the policy.
As with decreasing term insurance, there is no surrender
value, and should the policy end before the insured dies no
payout will be awarded and the policy becomes null and void.

Terminal illness benefit

Both of the above types of cover normally include terminal
illness cover, which means that the mortgage is cleared
should you be diagnosed with a terminal illness rather than
waiting until you actually die. This helps to ensure that
you do not have the additional worry of trying to meet
repayments when a terminal illness takes away your ability
to work and earn money, and at a time when the whole family
has enough to worry about without having to stress about
meeting mortgage repayments.

Critical illness cover

Critical illness cover is another type of insurance policy
that can be added on to either of the above mortgage life
insurance polices and provides an extra element of
protection and peace of mind. This type of cover can also
be taken out as a stand-alone policy, but usually proves
much better value if simply added on to a main insurance
policy.

With critical illness cover you will be eligible for a
payout in the event that you are diagnosed with a critical
illness. If you then go on to recover from the critical
illness, the payout is yours to keep but the policy becomes
null and void following your claim. The illnesses that are
covered by this type of policy are defined by the insurer
so you should ensure that you check the terms when taking
out critical illness cover.

Adding critical illness cover to your policy will only
increase your repayments by a small amount, but can provide
valuable protection if you are diagnosed as critically ill
and are therefore unable to work. With your mortgage repaid
from the payout of this policy, you will not have the
additional worry of trying to keep a roof over your head at
a time when you should be concentrating on trying to make a
recovery.

Summary

As indicated by the features of the two main types of
mortgage life insurance cover, the policy you go for will
depend largely upon the type of mortgage you have. Both
types of cover offer value for money, with some really low
cost deals available. Of course, the amount that you pay
will ultimately depend upon the level of cover you require.
For total peace of mind it is always advisable to go for a
policy with critical illness cover incorporated into it.

Having some form of mortgage life cover is essential to
protect your home and your family. After working hard to
buy your own property, the prospect of it being repossessed
in the event of your death can be worrying both for you and
for your family. A mortgage life cover policy will ensure
that this does not happen, and will give your family the
security of knowing that whatever happens they will still
have a roof over their heads.