James Copper asked:




It is not only important for a borrower to protect the repayment of the outstanding capital balance on their mortgage in the event of death, it is also very important to protect the payments of both the interest and capital against a breadwinner’s loss of earnings.

The loss of an individual’s earned income may typically arise through accident, sickness or redundancy. Regardless of the underlying cause however, the effect can be devastating for the family as a whole which could ultimately lead to the property either being sold or repossessed.

Statistically, the absence of work due to both unemployment and redundancy are, alongside divorce and separation, the major causes of mortgage and loan missed payments and arrears and of course subsequent property repossessions.

There are two main types of protection policies which are designed to provide assistance to a borrower who has for example fallen ill or had an accident preventing them from working. Permanent health insurance (PHI) is commonly used to protect an individual against the inability to work due to accident or sickness and thus provide an income in times of such needs. It is perhaps more common for a borrower to take out ‘ASU’ cover – Accident, sickness or unemployment. An accident, sickness or unemployment policy is generally designed to provide cover over the shorter term.

It is possible to arrange ASU polices in a number of ways. By shopping around independently, by taking out cover provided by a mortgage or secured loan lender or by taking it out through a mortgage or loan broker. Today many accident, sickness and unemployment policies are often branded as Mortgage Payment Protection insurance. This type of insurance contract will usually cover the monthly mortgage payments in full and depending on the quality of the policy, may also provide an additional level of benefit of benefit to cover essential bills.

Although uncommon, it is also possible to arrange Permanent Health Insurance and accident, sickness and unemployment cover in conjunction with one another. In this way, the deferred period of the PHI contract will usually be set at one or two years to coincide with the end of the payment on the ASU policy.

In recent times, the need for borrowers to protect themselves in this area has increased due to the government’s reduction in the level of income support for mortgage interest payments which is a state benefit. There has subsequently been strong lobbying be many within the mortgage industry to make ASU policies compulsory. At the time of writing however this is not the case and most mortgage lenders will only insist on a borrower taking out a suitable Buildings insurance policy as standard.

Stella

Ravi Verma asked:


plained in the previous post,many bonds contain a provision that allows the issuer to retire,or “call all or part of the issued before the maturity date”.This issuer usually retains this right to refinance the bond in the future if market interest rates decline below the coupon rate.

From the investor’s perspective,there are three disadvantages of the call provision.





The cash flow pattern of the callable bond is not known with certainty.





The issuer will call the bonds when interest rates have dropped.





The capital appreciation potential of a bond will reduced because the price of a callable bond may not rise much above the price at which the issuer may call the bond.





Many long treasury and agency bonds,most corporate and muncipal bonds,and almost all mortgage-backed securities have embedded in them the option on the part of the borrower to call,or terminate the bond before the ststed muturity date.Even though the invester is usually compensated for talking the risk of call means of a lower price or a higher yield,it is not eacy to determine of this compensation is sufficient.In any case,the returns from a bond with call risk can be dramatically different from those obtained from a nonmalleable bond.

The magnitude of this risk depends upon the various parameters of the call as well as on market conditions.Timing risk is so pervasive in fixed income portfolio management that many market participants concider it second only to interest arte risk in importance.

In the case of mortgage-backed securities,the cash flow depends or prepayments of principal made by the homeowners in the pool of mortgages that serves as collatevral for the security. The timing risk in this case is called prepayment risk.It includes cantraction risk-therisk that homeowners will prepay all or part of therir mortgages when mortages interest rates decline.If interest rates rise,however investors would benifit from perpayments.The risk that prepayments will fall down when mortage interest rate is called extension risk.Thus,timing risk in the case of motage backed securities is called prepayment risk,which included contraction risk and extension risk.



JOHNATHAN

Sara Vlazny asked:


The rising unemployment rate, and a shrinking U.S. economy, has struggling consumers looking for relief through Mortgage Refinance. A smaller amount of buyers seeking new loans and those seeking lower monthly payments on current Loans, are currently raising the number of applications. The percentage increase ending January 9, 2009, includes both mortgage refinance and purchase loans. This happens to be the highest combined percentage increase since 2003.

The Index hit an eight year low with a 35.9% drop, in November of 2008, and The Mortgage Bankers Association has their seasonally adjusted purchase index showing a 14.1% drop, although applications for mortgage refinance have jumped by 25.6 percent. Mortgage applications helped the four week average by rising 10.8 percent last week alone.

Everyone is hoping the low mortgage rates will spike demand for new Mortgage applications, even though the purchase market shows slower growth than the refinance market. The Mortgage Refinance sector will show an increase in applications due to the weakening economy as consumers continue looking for ways to reduce their expenditures.

Mortgage Refinance jumped from 79.8 to 85.3 last week, which is the highest increase for the Refinance sector, solely, since 1990. Several factors including the climbing unemployment rate and its role in slowing the economy have contributed to shaky financial markets, keeping buyers from applying for mortgage finance.

The World is watching and waiting for positive change in a situation some have called, the worst housing downturn since the Great Depression. There seems to be little sign of recovery even with a significant rise in applications for Mortgage Refinance so it is hard to tell what is going to happen over the next 6 months to a year. We have to rely on Government proposals and plans for right now.

People will not be comfortable with the way the housing market shows instability, no matter how low the interest rates are, if job security is in question, it will directly affect income and individual ideas about spending. In order to benefit from low mortgage rates or a Mortgage Refinance, these factors have to be.

The 30 year mortgage rates in this Nation dramatically declined in November of 2008, when the Federal Reserve announced its plan to buy approximately $500 billion worth of mortgage securities that were backed by Fannie, Ginnie and Freddie. The Federal Government, prompted by the dive of the finance market, has made a commitment to keep consumers borrowing costs down through the purchase of mortgage-backed securities. As for Mortgage Refinance, now is a great time to lock in at a low rate since we know rates will not stay down forever.

Requests for loans are up 200 percent from two months ago according to one online real estate service company. Companies offering mortgage services say they are working hard to handle the increase in work load from the dramatic increase in applications for Mortgage Refinance. Some mortgage companies happily predict a continuation over the next few months, on average, given the mortgage rates will remain low for at least 6 more month.



JOHNNIE

Jerry Cannon asked:


As I made my morning coffee,viewing out of my kitchen window at the rual road 1/2 mile from my front gate, a car passed at 5.58am.

Well you say, that is no big deal, yep everyone sees cars every day. Not here, the world must be growing beyond our bounds.

I then ,after viewing the rising sun and the cool morning,very unusual this september in Texas, I drove to nearby big city to see how other’s pursued their day.

What a mess, bumper to bumper traffic,women putting on makeup, men reading the morning paper,kids crying and young adults just going home after an all nighter with foggy eye’s.

I could already feel my blood pressure rising. After five miles of this I turned around and drove the twenty five miles back to my home and ordered the carpet cleaner my wife wanted from petsmart on my computer,having it shipped UPS for $6.95. Much less than the price of my presious diesel fuel at $4.39 a gallon for the one ton truck which is so necessary on our Ranch. Some how I just cannot grasp pulling a 12,000 pound trailer of hay for cattle with a golf cart sized truck powered by bass boat batteries like the one’s member’s of congress want us to drive. I guess they really do just flyover.

I know,what does your morning have to do with Residual Income you ask? I suppose nothing and everything. As much as I view this as aggrevation ,life in a big city must seem like an unscratchable itch, and I thank God every day I found the secret of Residual Income = Financial Freedom many years ago.

We retired and sold our Business 8 Years back ,believing I had made good investments and sufficient income to provide for my wife and I with the business we had built on the kitchen table back in the 70′s. Six years into our golden years my misfiguring revealed itself, first in the form of 2% interest rates so people could buy homes they could not afford, and business could borrow cheaply money to grow their business and keep alive the American dream,and of course keep paying foreign countries for oil.

As I returned to a monthly budget the need for outside income slapped me squarely in the face. If I don’t do something we might outlive our money, now that is a scary thought.

Today the U.S.Government has Nationalised the largest lenders for homes and the largest insurance company in the world,and talkes about buying the bad loans from mortage companies,that loaned on houses that people wanted but could not afford because congress wanted everyone to own a home,and mandated rules for lenders to lend money to people who could not pay it back.

Did common sense take a vacation?

Well any way, that’s the U.S. today,and you had better get on with learning how to create wealth or you will be in a boat smaller than mine and yours is going to have two big holes in it and sinking fast .

Residual Income, income that comes in every month for the rest of your life, is the best way to build wealth and financial freedom.

The pursuit of residual income comes in many flavor’s and is availabe in many businesses, but the one with the most promise for the average John Doe American is the Internet.

Why You say? It is the largest marketplace in the World, that’s why, it crosses all borderlines and culture’s,and is growing expotentially. How do I do it?

Learn and Learn fast, pick a good product that has long term growth projected and is reasonable in cost’s, learn how to market that product, then learn how to build a website, and most of all learn how to develop and generate leads to market your business .

All of these have been combined into one program and can be found on website’s operated by ethical internet marketer’s.



CARY

Gbeminyi asked:


When the easy money was flowing, you could get a great deal on a mortgage from just about anyone. But in today’s credit-challenged world, all the avenues for finding a mortgage come with their own set of problems.

Many banks have tightened lending standards and scaled back offerings. Some banks are no longer working with mortgage brokers, who are under fire for pushing bad loans during the boom.

And while online lending sites hold the promise of one-stop shopping, some have developed a reputation for playing bait-and-switch on rates and not fully disclosing fees.

All this adds up to a major shopping hassle. If you want to get the best rate, you’ll need to tap at least two of the sources below.

Scour the Web Shopping

for a mortgage online has come a long way from the days of one-size-fits-all rate listings. At some sites, including Bankrate.com, Mortage marvel.com, Zillow.com,you can now shop anonymously and get accurate rates. Keep in mind that all these sites act as referral services, so eventually you’ll have to close the deal with a bank or mortgage broker.

Best for: If you know what kind of loan you’re looking for, the Web should be your starting point; getting a handle on the current rates and fees will help you know whether you’re getting a good rate when you sit down with a broker or bank officer later on.

If you’re not sure what kind of mortgage you need, however, you’ll want to seek counsel from a real person right away.

What to watch out for: Sites that ask for your Social Security number and address upfront. They might pull your credit report, which could hurt your score if you don’t end up getting a mortgage.

Also make sure that all the fees are clearly disclosed on a site’s rate quote. Otherwise you may get a sorry surprise when you receive the paperwork from a lender.

How to get the best deal: When inputting data into the online mortgage tool, don’t guesstimate your income, your credit score, or other key stats. If you submit incorrect information, you probably won’t get the rate that you’ve been quoted.

Go directly to a bank

At the height of the credit crisis, there seemed to be little point in asking a bank for a mortgage. But banks are lending these days, albeit with some caution.

Best for: Borrowers who are looking for a conforming loan (less than $417,000 in most areas), since some lenders have stopped underwriting jumbos. Also, if you’re refinancing, call your current lender first: To keep you as a customer, it may be willing to undercut the competition.

What to watch out for: Novice loan officers. “In the heyday, underwriting was a matter of pushing a button,” says Steve Curnutte, a former mortgage broker. “Now you have to know what you’re doing.” To prevent your financing plan from fizzling out midway, ask to work with a loan officer who has been in the business for five-plus years, or since before the credit boom took off.

How to get the best deal: Shop locally. A loan officer who’s familiar with the housing stock and the players in your area may have greater latitude to offer you a lower rate than one based elsewhere. Try the local branches of big-name banks as well as community banks and credit unions, which may be using the crisis as an opportunity to snag business from their larger brethren.

Call on a broker

Mortgage brokers doled out plenty of bad loans during the boom. But a good broker can give you more hand-holding than you’ll get online and will scour the market more thoroughly than you’re likely to do on your own.

When it makes sense: If you’re in the market for a jumbo mortgage or financing for investment property, or you just don’t fit the conforming mold, a broker will identify lenders who underwrite unconventional loans. “The more exotic your needs, the harder it is to find a loan right now,” says

Keith Gumbinger, vice president of mortgage information site HSH. “Finding that little niche is what a broker does best.”

What to watch out for: Fees. Most brokers make money on the difference between the rate you could get and the rate you actually pay, and they aren’t required to disclose their cut. One way around it: Work with a fee-only broker (you can find one in your area at upfrontmortagebrokers.org

How to get the best deal: Obtain rate and fee info from banks and Web sites before you talk to a broker. After all, a good broker can more than make up for his cost if he finds you a better rate than you’d get on your own. But if he can’t, there are plenty of others who would love to have your business



DALE