Christian Owner Financed Mortgage
Christian owner financed mortgages are a viable option for home sellers considering the rising percentage of people in debt and credit scores dropping every day. An owner financed mortgage is used for many reasons and by many people. Knowing the best options is the first step to deciding whether this financing option is right for one's situation.
The first thing to do is to become educated about exactly what owner financed mortgages are and what the process obligates the seller and buyer to perform. In brief, these home purchase options are financed by the seller of the property where the buyer pays the seller a mortgage instead of paying the bank. This would eliminate the need for waiting for the right person with the right credit to buy the property. This appeals to sellers that need to sell their property fast and are willing to do anything to accomplish a quick sell. This is not to say that this option is a desperate way to sell a property. On the contrary, participating in an owner financed mortgage may benefit both parties in a big way.
It is very important to speak with a financial advisor and possibly an attorney before deciding to embark on the journey of owner financed mortgages. Speaking with a financial consultant will help utilize all the options for offering an owner financed mortgage. There are many things to think about and possibly many stipulations to put into place with the new owners of the property. It is very important to treat the new owners as owners and not as tenants. Just because they are paying the seller for the property, it does not give the seller the right to tell them how to maintain the property. Likewise, they should not depend on the seller for any sort of work or information concerning the house unless otherwise stated in the contract.
Choosing the route of financing a property for a potential buyer should be done with some serious prayer and patience. As the bill collector, the seller needs to be able to put their foot down if the mortgage does not get paid. Having a lawyer involved with the planning of owner financed mortgages is definitely something to seriously consider. Imagine the worst case scenario and how the matter should be handled. Before getting involved with an owner financed mortgage, do the homework and consult knowledgeable people. "Be thou diligent to know the state of thy flocks, and look well to thy herds" (Proverbs 27:23).
Fixed mortgage rates are ideal for those homeowners than plan on either living in their home or retaining ownership of their home for an extended period of time, usually the typical 30 year loan life. Other factors affecting the mortgage decision of whether to purchase a fixed mortgage rate or an adjustable rate mortgage (ARM) are the length of the loan and the down payment required from the lender. The longer the loan term and the larger the down payment, the smaller the monthly payment will be. However, the longer the loan term, the more interest is paid overall. Ideally, the set percentage would be low enough to shorten the loan life, thus lowering the overall costs of interest paid.
Typically, rates are lower when a borrower's credit score is higher. The loan with this type of interest allows for the rate to stay at a fixed amount for the entire life of the loan. These types of loans are especially beneficial for those that plan on living in their home for a long period of time. Those that plan on selling their home within 5-7 years should consider the ARM in addition to the loans with fixed mortgage rates.
The ARM or adjustable rate mortgages offers a lower introductory interest percentage, but only for a predetermined amount of time (usually 2, 3, 5, or 7 years). After the allotted time period is up, the interest rate will fluctuate, either increasing or decreasing depending on the national market unlike the fixed mortgage rate. There is a cap (usually 3%) on how far the interest rate can actually fluctuate. This type of loan is great in a time when fixed mortgage rates are extremely high and/or the borrower does not plan on reselling the home or refinancing the home within the 2, 3, 5, or 7 year stipulation agreement.
These interest percentages are sometimes low, and can also be offered in conjunction with an interest only loan. Interest allows the borrower to make monthly payments specifically to interest only. This type of fixed mortgage rate requires self discipline because after a few years, the monthly interest will never decrease, because the principle is not being lowered. It is important to make regular monthly principle payments to an interest only loan when able. If the homeowner's plans on reselling the home within a few years, then the interest only fixed mortgage rates loans may be the best option with maximum savings redistributed into the updating or repair of the property. Overall, the homebuyer must seek God's guidance and blessing upon the house they wish to purchase. Otherwise, the home will be obtained in vain. "He shall lean upon his house, but it shall not stand: he shall hold it fast, but it shall not endure" (Job 8:15).
Christian Balloon MortgagesBalloon mortgages are sometimes the best way for a borrower to move into a home with low payments for at least the first few years after purchase, but one must be aware that at the end of five to seven years, a payoff is expected. If payoff is not possible, the homeowner must refinance, sell the home, or convert to a conventional 30-year loan at the current interest rate. For the homeowner who expects to be owning the home for a short time, balloon mortgages are a way to avoid rental property. Only home buyers who can afford the payoff in five to seven years should invest in a balloon mortgage. As in all home loans, the first payments are credited almost exclusively to interest, and very little (if any) to principal. No matter how you choose to pay for your house, put God first in the process. "In the house of the righteous is much treasure: but in the revenues of the wicked is trouble" (Proverbs 15:6).
Another type of balloon mortgage is the 5/25 type. With this type, there is a fixed rate for five years, then a new fixed rate for twenty-five years. The loan balance is due after sixty payments. These loans can be reset if the payments are current and there have been no late payments over the previous twelve months, if the borrower makes a written request within forty-five days of the last payment, and the borrower pays for a title search and processing fee. If the new interest exceeds the old one by five percent, then the borrower may not exercise the reset option. In this kind of loan, if the borrower is paying less than twenty percent down, he must buy insurance for the loan.
After checking out all the possibilities with balloon mortgages, if the borrower still thinks these loans are the most practical way to finance a home, it is important to check out the mortgage company as carefully as it will be checking out any potential borrower. For most home buyers, balloon mortgages are risky, and they will opt for the thirty-year fixed-rate monthly payment. If the homeowner actually reaches a better financial plateau, and can pay the huge chunk of money at the end of five or seven years, then the balloon mortgage may be just what he wants. However, having a predictable house note for the life of the mortgage with no further hassle is appealing to most people. For those who want it, the balloon mortgage is an option.
Mortgage services are various agencies that can help consumers get home loans, maintain a quality loan experience, and other support surrounding the real estate industry. A lender can offer a variety of services to both the buyer and seller of any property or home. The mortgage and real estate industry today is changing, and many agencies are becoming more client oriented as competition increases. The Internet has ushered in a new era in lending agencies. Now, as home loan providers scramble to get customers, consumers can pick and choose the terms that will best fit their individual needs.
Any single lender can provide a variety of mortgage services to consumers or clients. There are myriads of loans available today, and a lender generally has several different options to offer consumers to keep his firm on top of the market demands. There are standard terms available for those with good credit seeking a low, fixed interest rate for their home loans. There are adjustable rate mortgages (ARM) and second mortgages offered through a mortgage service company. There is also an assortment of support services available with lenders. Some of these may include pre-approving a homeowner to make the purchasing of a property initially easier, refinancing loan options, and consolidation loans for those wanting to consolidate their debt.
A lender of this type can supply clients buying a home with services while offering plans to the home insurance companies and real estate agents. A mortgage service agency can also conduct inspections of a home for the purpose of insurance or damages. The more types of assistance a mortgage service company offers, the more likely they are to grow and keep up with the demands of the real estate market and today's homebuyers.
For a Christian borrower, selecting the right home mortgage services for his needs is an important decision. Careful research of the companies that are licensed in the area is essential. The borrower can also seek counsel with real estate agents or other homebuyers before deciding on one specific mortgage service to work with. The Bible encourages us to seek counsel before making any decision. Proverbs 11:14 warns us, "Where there is no counsel, the people fall: but in the multitude of counsellors there is safety." This certainly applies to large financial decisions that Christians make. When we seek God's will first, He will guide us into the wisest choice for our lives.