Mortgage, loan and property. What is a mortgage?

A mortgage is putting a property as a guarantee to a lender as a security for a mortgage loan.

While a mortgage in itself is not a liability or a dept, it is evidence of a debt. It is a transfer of an interest in property, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the property when the terms of the mortgage have been satisfied or concluded.

In other words, the mortgage is a guarantee for the loan that the lender makes to the borrower. In all but a very few states, a mortgage creates a lien on the title to the mortgaged property.

Friday, July 11, 2008

Factors Of Mortgage Approval

When applying for a mortgage, the lender you have selected will take many factors into account. These factors not only influence what type of loans you can qualify for but also what your monthly or by-monthly payments will be and how many years you will take to pay the loan off completely.

Knowing what these factors are and doing what you can to improve them all can make a remarkable difference when you go and see your lender and start the process that will get you your new property.

Some of the fundamental factors apply for just about any loan but are particularly important if you are trying to get a mortgage. The big one is, yep, credit.

How good is your credit?

Get copies of all of your credit reports from the 3 major consumer reporting companies and check each one for possible errors.

Many times they have small errors that can be corrected in just a few weeks (after a simple phone call) and that helps boost your score. If you have many credit cards, pay them all off as well as any other outstanding bills.

If you can, make a nice large down payment, it will always improve your chances of being approved. If your credit isn’t completely top notch, the bigger the down payment, the more likely you will get approved.

If your credit is good, you can still put down as much as possible to lower the monthly payments or decrease the total loan time.

Above all else, never lie to your lender. If you tell your lender that you are a university teacher and they find out you are a shoe sales man who has only had the job for 6 months, you will be totally screwed. Be honest with your lender and your lender will do his best to work with you, not against you.

Thursday, July 10, 2008

Home selling: Resales of houses lower than expected in the U.S.

The contracts to buy existing homes in the USA have declined more than expected in May, a sign that prices are still declining (after more than two years) and have not yet reached their level.

The index of resales of homes under negotiation fell to 4.7% following a revised gain of 7.1% in April, a result better than what was indicated previously, said yesterday in Washington the National Association of Realtors.

The prospect of even higher lower prices (or should I simply say of still lower prices), this prospect is likely to discourage bids while mortgage rates are rising and it is more difficult to obtain loans, whose conditions have become more demanding.

The record number of defaults on mortgage raised concerns that Fannie Mae and Freddie Mac, the two largest U.S. mortgage financing, from being forced to increase their capital another 75 billion U.S.

"The houses are much more affordable, but they will probably even be more in six to twelve months, so that people are reluctant to plunge immediately," says Nigel Gault, chief economist at Global Insight Inc., Lexington, Massachusetts.

During an interview with Bloomberg Television, Mr. Gault said: "The message is that the big rise last month was not a sign that the market was being reversed. We had a big correction this month."

Economists had expected the index resales of houses being negotiated would decline by 3%, according to the median forecast of 38 economists surveyed by Bloomberg News.

Resales of houses under negotiation fell by 14% compared to home selling in May 2007, according to the report published yesterday.

The index was declining in all regions of the U.S., and the worst decline, or 7.1%, was in the South. Resales of houses under negotiation fell by 6% in the Midwest, 2.9% in the Northeast, by 1.3% in the West. Compared with a year earlier, the signatures of the contract were up 2% in the West when they were down in other regions.

The report on resales of houses under negotiation is considered a key indicator because it bears the signatures on the contract.

Sunday, July 6, 2008

Record Annual Foreclosure Rate Increases in Q2 in many US cities

Foreclosure rates where higher during the second quarter, so high in fact that new records were broken in many cities: Los Angeles, Seattle, Miami and New York amongst others, according to a report published by

Los Angeles led the four cities with an increase of 282.01% in the second quarter compared to last year's Q2. Los Angeles reported a record 14505 new residential foreclosures according to the report published by The estimated new trustee sales rose 63% over the previous year.

" The foreclosure chart is unfortunately starting to look like a ski jump", said property Product Foreclosures Shark team member, Adina Dumitru " with the current number of new trustee sales this quarter increasing at one of the highest rates we have seen over the last two years".

New York City reported 961 new households foreclosures in Q2 2008, an increase of 49.22% compared to Q2 2007. Single-family houses located in Queens and Brooklyn were the biggest part of the properties that were auctioned, noted the report.

Miami had 2677 new foreclosures in Q2 2008, an increase of 108.81% from the previous year. Seattle has reported 493 foreclosures in Q2 2008, an increase of 47.60% compared to Q2 2007.
Those numbers are not very reassuring!