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The Price of Mortgage Fraud? 30 Years
Atlanta and the surrounding suburbs lead the nation in mortgage fraud. Anyone can be involved in the scam, from the lender to the closing attorney, but tough sentences are in store for anyone willing to defraud the public.
Chalana McFarland, 37, was sentenced recently to 30 years in federal prison after a day-long hearing in U.S. District Court in Atlanta, attended by some of her hundreds of victims.
McFarlands gang stole identities and falsified Social Security numbers, employment and income documents to qualify for loans.
Mortgage fraud is not a victimless crime... Whole neighborhoods are affected, the Judge said before sentencing McFarland 30 years in prison followed by five years supervised release. The Judge also ordered McFarland to repay $11,588,465.45 lost by her victims.
There are 100 people willing to steal your money for every one that is put in jail. So how do you protect yourself from these predators?
Well, the fact is since you do not handle real estate transactions every day, you cannot be expected to recognize every possible pitfall or scam that comes your way.
The key to protecting yourself is to find a knowledable real estate agent who can direct you to honest lenders, appraisers and attorneys. Your representative should also critique all of the settlement papers prepared before closing to make certain that you are not a victim of?or an unknowing participant in?fraud!
Mortgage Rate Arrangement Simplified?
When looking for a mortgage, it?s essential to understand the different products that are available so you can be sure you get the right one for you. Lenders offer different interest rate options and this will affect your monthly payments. So choosing the right deal could save you money.
With so many product choices available it is essential you get professional indepenedent advice.
Types of mortgage products available:
Standard Variable Rate Mortgage
With this mortgage, your payments will go up and down as the lender?s standard variable rate goes up or down. Usually any changes in the lenders variable rate will be in line with movements in the Bank of England base rate. The Bank of England Monetary Policy Committee reviews this rate on a monthly basis.
Is it right for me?
Yes - if you can afford to pay more when mortgage interest rates go up and want to take advantage of lower payments if rates fall.
No ? if during the early years you would be unable to cope if repayments increased because of rising interest rates.
Base Rate Tracker Mortgage
This is similar to a variable rate mortgage. But the interest rate will go up and down exactly in line with any changes in the Bank of England base rate. Your mortgage payments will go up and down too as the interest rate changes. The tracker period is usually for a specified time, which can be from one year up to the lifetime of the mortgage loan. At the end of the tracker period, your mortgage interest rate will change to the lenders standard variable rate. This product may carry an early repayment charge.
Is it right for me?
Yes ? if you want to be sure your mortgage rate falls by the same amount as the Bank of England base rate falls, but the drawback is the mortgage rate also rises in step when the base rate increases.
No ? if you find yourself locked into a rate above the base rate, which may be higher than the standard variable rate.
Fixed Rate Mortgage
Your mortgage interest rate is fixed for a set period only, during which your mortgage payments will stay the same. At the end of the fixed rate period, your mortgage interest rate will change to the lender?s standard variable rate. Fixed rate mortgages are usually available for between one and ten years, however they can be available for longer periods depending on market conditions. This product may carry an early repayment charge.
Is it right for me?
Yes ? if you need to budget with certainty for the next few years, or you think mortgage interest rates will rise, or both.
No ? probably not if you think mortgage interest rates will fall.
Discounted Rate Mortgage
The lender offers a discount off their standard variable rate for a set period, normally one or two years. Your mortgage payments will still vary in line with changes in the standard variable rate. At the end of the discount period, your mortgage interest rate will be the same as the lender?s standard variable rate. This product may carry an early repayment charge.
Is it right for me?
Yes ? if money is tight when you first take out the mortgage, but you?re confident your income will increase.
No ? if you won?t be able to cope if interest rates rise later on, increasing your payments.
Capped & Collar Rate Mortgages
With a capped rate mortgage the interest rate can go up or down in line with movements in the lender?s standard variable rate, but cannot go above a set upper limit, known as the ?cap? or ?ceiling?. This type of mortgage can also have a set lower limit, known as the ?collar?. For these mortgages the interest rate can move between these limits but cannot fall below the collar or go above the cap. This product may carry an early repayment charge.
Is it right for me?
Yes ? if you like to budget with some certainty, think mortgage interest rates might rise above the cap, or you want the security of knowing your payments cannot rise above a set level and would like to benefit from any fall in interest rates.
No ? if your mortgage adviser can find a fixed rate set at a lower rate than the capped rate, and you think rates are unlikely to fall below the level of the fixed rate deal.
Cashback Mortgage
The lender pays you a cash lump sum after completion, which you can use for any purpose. This product may carry an early repayment charge.
Is it right for me?
Yes ? if you need a cash lump sum, for example to do up your home, or you expect the cashback to more than compensate for any rises in interest rates during the period when an early repayment charge may apply.
No ? if you can manage without a cashback now and can get an alternative deal.
Remember your home may be repossessed if you do not keep up repayments on your mortgage.
Buy a House With Poor Credit - 3 Tips on Getting Approved for a Bad Credit Mortgage
Buying a house is in reach for those with poor credit histories. Even with bad credit, you can secure a mortgage with reasonable rates and terms. Before you assume you have a low credit score, check your credit report. If you do have adverse credit, plan on getting the best rates possible by following these three tips.
1. Up Your Down Payment
Besides your credit report, your down payment will greatly affect the rates you qualify for. In some cases, it?s possible to qualify for conventional rates with a large enough down payment.
If you have an especially low score due to a recent bankruptcy or foreclosure in the last year, you may be required to put down 50% of the home?s value. It is possible to get a mortgage with no cash down, but your rates will be much higher.
2. Be Flexible With Your Terms
Your loan?s terms can also vary rates within a point or two. Adjustable rate mortgages will start out about a point less than fixed rate mortgages. This will also help you qualify for a larger mortgage. But you may find your rates and payments increase in the future with an ARM.
The shorter your home loan, the lower your rates. You will also save thousands in interest cost simply by having a shorter loan.
Some lenders have additional discounts for automatic payments. You also have the option of buying down rates, which can be a real savings if you keep your loan for several years.
3. Take Time To Compare Lending Offers
Taking the time to compare lending offers is the surest way to save money on your mortgage. A difference as little as an eighth of a point will save you thousands on interest. So just like you spend hours searching for just the right house, so you should spend time researching lenders.
With online financing companies, you can quickly gather information to make your mortgage decision. Mortgage broker sites can get you multiple loan estimates in minutes. You can also get loan quotes through individual lender sites without hurting your credit score.
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