All About Mortgage Insurance: March 2010

Mortgage insurance is defined as a decreasing term life insurance depending to the amortization of the mortgage period while the premium remains the same over that period. You can purchase the mortgage insurance from the bank, trust or life insurance companies.
1. If you purchase your mortgage insurance from the bank or trust
a) No medical exam is required
b) The beneficiary of the policy is the bank or trust
2. if you purchase your mortgage insurance from the life insurance companies
a) medical exam is required for any sum insured over $100,000
b) The beneficiary of the policy is designated by you ( Kyle J. Norton)

Everything You Need to Know About a Negative Amortization Mortgage

By Mike Makler

Most Property Owners are conditioned to believe that a Negative Amortization Mortgage is a Bad thing. Before you get that next mortgage shouldn't you get the facts so you can decide for yourself what is best.

The First Question many people have is what is a negative Amortization Mortgage. A Negative Amortization mortgage is an Adjustable Rate Mortgage with predictable payments over the life of the mortgage. On an Adjustable rate mortgage you can have interest rate caps and/ or payment caps. A Payment Cap says your payment can never increase by some cap usually every year. So if you have a $500 Month Payment on an Adjustable Rate Mortgage with a payment cap of 7.5 Percent per year your monthly payment cannot be higher then 537.50 the following year.

Now if your interest rate were to rise enough to force the needed payment to be $540.00 a month you would be in a negative Amortization situation.
The Additional $2.50 a month would be added to your principle. You can think of a Negative Amortization as an automatic loan from your bank. Every month when you get your statement from the bank you will see at least your payment options. Option 1 is the Minimum payment. If option 1 would force a negative Amortization you will also see an Option 2 which would be the interest only payment. You may also see an Option 3 which would be the payment needed to pay off your loan in 30 Years. Some banks will give you additional options like 15 Year pay outs.

The Downside of a Negative Amortization Mortgage is that in areas where real estate values don't rise or even fall you could end up owing the bank more then your home is worth if you only make the Minimum payment each and every month.

The Pros of a Negative Amortization is that is very easy to create a annual budget since you know that your mortgage payment will never exceed the payment cap. The flexibility to pay more is should you be able to is also a nice plus

Another Pro of a Negative Amortization Mortgage is that it offers very low introductory rates with payments fixed for the first 5 or 10 years. This means anyone can buy a home and know that for the next 5 or even 10 years their monthly payment will be the same.

Here is an Example of 2 different Loans. A Negative ARM loan with a fixed payment for 5 years based on an interest rate of 1.95 Percent or a 30 year Fixed Rate of 5.5 Percent, A 250,000 Loan at 5.5 percent would run about $1420.00. A 380,000 Loan at 1.95 percent would run about $1395.00 a month. For $25 a Month lower payment you are controlling $130,000 more property. That extra $130,000 would grow by $35,000 in the first 5 year at a modest 5% appreciation Rate ($52,000 at 7 Percent, $79,000 at 10 Percent) At the end of 30 Years at 5 Percent that $130,000 would grow to over $560,000. (Over $989,000 at 7 Percent, Over 2.2 Million Dollars at 10 Percent)

When one considers the payment flexibility, the low starting introductory rates, a Negative Amortization Mortgage will allow most homeowners to control more real estate for the same or less money. The Negative Amortization Mortgage is certainly something to be considered by most homeowners or prospective homeowners.

About the Author

Mike Makler Offers Financial Services (Mortgages,Life Insurance, Annuity) in Florissant Missouri which is in North St. Louis County Missouri Just Across the Bridge from St. Charles Missouri

Call Mike at 314 398-5547

Visit Mike's Web Page:

[http://ewguru.com/finance]

For Missouri Specific Insurance and Loan Questions:

[http://ewguru.com/Mo-Finance]

Get Mike's Newsletter Here [http://ewguru.com/fin-news]

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The One Product Better Than Mortgage Insurance? Term Insurance

By B. F. Khan

Now that you have read "10 Reasons MORTGAGE INSURANCE is not a good investment" and if you missed it, check out the investigation that was done by CBC Marketplace titled "In Denial"

Lets continue on what is considered the one product to protect your family!

TERM INSURANCE! YES! TERM INSURANCE!

All the experts agree that TERM INSURANCE is a better product than mortgage insurance.

Ask Suze Ormond or check MSN money and of course check Personal Finance for Canadians.. Dummies book. Here are the reasons why:

1.You are the policy owner and choose the beneficiary. You choose who should get the money because you are in control and not the institution.

2.Death benefits go to your designated beneficiary who can use the funds as needed.Your survivor gets to choose how the money is spent. i.e. pay off the mortgage, pay off debts, invest etc.

3.Coverage amount is determined by you based on a complete needs analysis. Your coverage will take into account, mortgage, debts, survivor income, children's education etc.

4.Coverage remains the same for the duration of policy. Regardless if the mortgage goes down or you have paid off all your debts, the amount you are covered for remains the same for the same price.

5.Policy in good standing remains in force for duration of policy term chosen. Pay your premiums and you are covered for the term that you choose.

6.Policy is portable and remains with you. If you move to another home, your policy remains the same. You do not need to renegotiate for a new policy. Add a rider if you need more coverage.

7.Underwriting and evaluation of medical history is done prior to policy being issued and won't be cancelled later if health issues arise. That explains itself. At least you will know if there are any medical issues up front.

8.Monthly premiums do not start until after you have been approved for a policy.

9.Preferred rates are available for individuals with excellent health. Great health... lower premiums.

Now go back and rethink that mortgage insurance... read previous article to really understand the difference.You need to make sure you are making an informed decision about protecting your future. Now which one will you choose?

B. F. Khan is a new entrepreneur who has found out how to minimize her time and maximize her profits from using the internet to talk about her business.

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All About Mortgage Insurance

Sunday, March 28, 2010

Update Mar. 17 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

Tuesday, March 9, 2010

Update Mar. 09 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

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