Participants in Mortgage

The creditor, who is better known as the mortgage lender and the borrower of the mortgage are the main participants in mortgage. Sometimes the mortgage broker acts as the middle man between the mortgage borrower and the mortgage lender.

The borrower of the mortgage is the person who borrows liquid cash against a security pledged for repayment of a loan. The security in case of home mortgage is house of the borrower, sometimes land may also be used as the collateral. The borrower is exclusively responsible to conform to the terms and conditions of the mortgage and the other
In the event the borrower fails to pay off the mortgage amount, the usual procedure followed to recover the loan amount involves foreclosure of the mortgage by the mortgage lender. The participants in mortgage, under the group of borrowers, mainly include landlords, small and medium scale business owners, who usually use their offices or manufacturing units as security for the repayment of loan, however, the most prominent mortgage borrowers are the house owners.
Mortgage fraud are common now a days which necessitate the entry of legal advisors for legal representations, to sort out complications arising out of the mortgage. The legal advisors are mainly required for dealing with cases of foreclosure of the mortgage by the lender of the mortgage. Foreclosure is the judicial procedure wherein the financial institution like the bank, cooperative societies or the secured creditors etc. who have acted as the respective mortgage lender seizes, sells or even take away the ownership of the collateral from the borrower. Foreclose are mainly are classified into two kinds, the first kind is known as foreclosure by judicial sale and the second kind is known as foreclosure by power of sale. Other kinds of foreclosure have also been incorporated but they are rarely used for legal proceedings, strict foreclosure is one such foreclosure procedure.

The participants in mortgage, mortgage broker help the borrowers of mortgage with all kind of information regarding the kinds of mortgage available in the market, names of the financial institutions as well as secured creditors, who act as mortgage lenders, rates of interest prevailing in the market, tenure of mortgages available, other terms and condition of the mortgages and the different repayment procedures. The mortgage brokers are solely responsible for their suggestions regarding the suitability of the mortgage plan to the borrower and in case any mismatch arises later the mortgage borrower will be answerable to the borrower and have to face serious financial consequences. The mortgage borrower has to secure the mortgage lenders approval for the specific mortgage, collect information of the credit history and document of the client etc. are the other functions of the mortgage broker4.

The other participant in mortgage is the mortgage lender who are mainly financial institutions like banks in the public sector and in the private sector, involved in providing loans against the property of the borrower. In India the prominent financial institutions that have gained prominence as mortgage lenders are the State government of India, Citibank, HDFC, HSBC and ICICI and so on.

Mortgage Fraud

Mortgage Fraud has become a common issue now a days and the clear evidences of mortgage fraud can be identified with the help of certain discrepancies between the actual terms offered by the mortgage lender and the ones provided by the mortgage broker such as inflated closing costs.

The mortgage fraud is often referred to as real estate fraud and to save the general public from such frauds the need of the hour is to coach them on the basic components of mortgage frauds, and the way such frauds occur will guide the general masses to identify them and nip them at the bud. Mortgage fraud can be classified into several types, to start with mortgage fraud can happen by misrepresentation of the actual information as well as data to gain the more and more mortgage contracts injudiciously. There are evidences of mortgage fraud in which the specific property for which the mortgage loan has been applied for, is acquired by any friend, family member or confederate of the mortgage broker at an economic rate and then both the mortgage broker and his confederate forge the price proofs of that particular property and inflate the prices and submit it to mortgage lender to gain more money out of mortgage scheme. After the accomplishment of the task the stock broker as well as his confederate vanish with the extra money and the mortgagee is not able to recover the complete loan amount even from the sale proceeds of the collateral. Such mortgage fraud is harmful to the mortgage lenders.

The other form of mortgage fraud concerns the mortgagor, people with good credit scores are first searched out by going through their credit history and then the documents of the that person that required for securing the mortgage loan is forged, and the collateral used here is the property of the same person. Thus the actual property owner has to suffer from heavy loses as a consequence.

Certain fraud control measures should be taken to fight with this ever increasing problem of mortgage fraud and the most essential step would be examine the telephone directory to match the phone number of the mortgagor given in the mortgage application. This step is useful to in finding out that the phone number belongs to the same person. The next step in this regard would be to use the softwares especially prepared to identify frauds of all kinds, such softwares assist in substantiating the information provided by the borrower and identifies any misrepresentations that has occurred in the application form. These softwares presently have been over simplified to facilitate its operation by even the general masses.

It is always helpful to compare the balances given in the two consecutive statements and the sum on the pay check should also be compared with the sum of money deposited in the bank. Another way is to examine that the first as well as the last name of the borrower can be traced out from the signature of the borrower and in case of any mismatch the mortgage lender will be assured of mortgage fraud.

Reputed Mortgage Companies of the World

The reputed mortgage companies of the world are known for the superb service they provide to the customers and offer some of the best mortgage loan products to customers.

The mortgage market all over the world is experiencing a huge growth. The mortgage market in the world is growing due to the increased development and construction based activities. The reputed mortgage companies of the world are playing a very important role in the developing the infrastructure and in turn improving the growth rate of the economy. The reputed mortgage companies of the world consist of the several financial corporations and commercial banks. The mortgage loans are used for different purposes. The characteristics of the mortgages are different for mortgage loans of different companies. The mortgage loans come with several options to help the customers.
There are 2 major components of a mortgage loan under the reputed mortgage companies of the world. These components are principal amount and the interest charged on the principal amount. Most of the mortgage loan-providing companies offer 2 different kinds of interest rates - fixed rate of interest and fluctuating or adjusted rate of interest. In the fixed interest rate, the interest is charged on a fixed rate which is decided in the contract of the mortgage loan and the rate is not affected by the fluctuations of the financial markets. The fluctuating or adjustable rate of interest, however, alters with the changes in the financial market. The rate increases and decreases depending on the condition of the financial market.

The mortgage products offered reputed mortgage companies of the world:

• Budget loan
• Foreign national mortgage
• Negative amortization loan
• Balloon mortgage
• Repayment mortgage
• Bridge loan
• Assumed mortgage
• Buy down mortgage
• Participation mortgage
• Blanket loan
• Commercial loan
• Graduated payment mortgage loan
• Hard money loan
• Term loan or interest-only loan
• Jumbo mortgages
• Package loan
• Non-conforming mortgage
• Reverse mortgage
• Wraparound mortgage
• Seasoned mortgage
• Equity loan

Important Concepts Regarding Mortgage

Understanding the important concepts regarding mortgage is one of the major factors for customers who opt to take out loans against mortgage.

Mortgage against loans is gaining popularity in India with the development of the economic conditions and the increased activity on construction and related ventures. The Indian mortgage market is experiencing a quick growth but the contribution factor of the mortgage industry i.e., the mortgage to gross domestic product (GDP) ratio is very low in India in comparison with the other developed countries.

The major components of the concepts regarding mortgage are the principal, which is the loan borrowed against a mortgage and the interest on the principal which is the money charged as interest on the loan borrowed. The rate of interest is not stable and it is altered with the changes in the financial market. Before taking out a mortgage, the customer should go through the important concepts regarding mortgage in order to compare the schemes of the different financial institutions providing mortgage loan facilities. This way the customer can opt for the scheme which suits best suits his/her requirements.

The important concepts regarding mortgage:

• Competitive interest rate: The option of getting the interest rate lowered at the cost of number of options in the mortgage scheme
• Payment options: These are special features such as payment of principal, skip and double up offered by some financial corporations once a year pertaining to the date of the mortgage
• Rate guarantee: This scheme actually allows a fixed rate of interest for the customers

Other important concepts regarding mortgage in India:

• New concepts on home loans
• Consolidation of debt
• Concept of home equity loans
• Concept on lending to real estates
• Concept of mortgage refinancing

Refinancing under important concepts regarding mortgage:

Refinancing is a very important concept pertaining to the mortgage against loan schemes. This scheme emphasizes on the option of taking out another loan against mortgage is case there is insufficient funds to pay off the first one. The refinancing concepts also have an advantage which is the interest rates are lowered in case a customer takes out a refinance on mortgage. There are other advantages of refinancing concept of mortgages, such as:

• The total sum of monthly payments by the customer gets reduced
• The total sum of interest paid by the customer during the term period of the loan is reduced
• The loan term period is reduced so as to enable the customer to repay the loan quickly

Mortgage Brokers

In the past few years, growth in the mortgage finance market is witnessed due to the increasing demand for loans against the conditional conveyance of property as security for the repayment of a loan. This growth has increased the number of mortgage brokers on account of the high lucrative opportunities.

Functions of Mortgage Broker:

The function of a mortgage broker varies widely with the regulations of the different countries, like in the United kingdom the mortgage broker is required to guide the mortgagor to acquire the mortgage of the company that is offering the appropriate rate of interest which the mortgagor will be able to pay regularly. The mortgage broker is also required to assess the suitability of the specific mortgage scheme to fulfill the purpose for which the mortgage loan is taken. In most other countries the mortgage broker is required to suggest only the name of the mortgage lender, who has proved his competency in catering to the requirements of similar mortgage loans.

Services Offered by Mortgage Brokers:

The mortgage broker are engaged in offering a number of services that are integral to the complete mortgage procurement procedure. The mortgage broker initially applies for the pre-approval of the mortgagee, the pre-approval is nothing but the lender agreement. He assists the mortgagor in filling the application form of the concerned mortgage lender and serves to inform the borrower regarding the required documents for the loan to be sanctioned. The mortgage broker then collects those documents and tries to examine the capability of the mortgagor to repay the loan with the aid of the bank statements, pay stubs and other income proofs. However, the most important service offered by the mortgage broker is providing information to the mortgagor about all the legalities involved in the specific mortgage loan scheme and the mortgage broker also serves to submit the application form and the other document to the mortgagee on behalf of the mortgagor.

Popularity of Mortgage Brokers:

The mortgage borrowers have been recently allowed to work in the wholesale capital markets on account of their increasing importance in the mortgage section. The mortgage brokers have achieved an edge the other financial institutions as the operating cost of running a small establishment of a single broker is much less than the operating costs of running a huge financial institution. Therefore, a mortgage broker is in a position to offer lower rates for the accomplishment of the mortgage procedure for the mortgagor, than the huge financial institutions.

Method of Work of Mortgage Broker:

Usually the huge financial institutions employ personal mortgage brokers for their institutions, and such mortgage brokers are required to hand over loan approval of the financial institution to the respective mortgagor. The mortgage broker then searches through the list of a number of mortgage bankers and allocates the most preferable mortgage banker with the duty of providing the loan to the mortgage applicant. The mortgage broker before allocation has to examine the mortgage loan rates of different mortgage lenders and takes into account the approximate time required by each of them to provide the loan.

Mortgage Banks

Mortgage Banks are special banking institutions established or licensed by the central government or at times by the state governments to provide loans to loan applicants or mortgagors against the conditional conveyance of property as security for the repayment of a loan.,

Facts about Mortgage Banks:

Mortgage banks are special institutions that fulfill their personal need for funds through the aid of the secondary markets as these banks are engaged solely in providing loans and do not have the facility to collect funds through different forms of deposits like fixed deposits or recurring deposits like commercial banks. Mortgage banks have lately expanded their scope of activity and they are now involved in efficiently delivering certain services related to the mortgage loans such as, identifying frauds, real time resolutions, and so on. Mortgage banks have the option to originate the as well as service those mortgage loans or simply originate the mortgage loan and make other agencies service the loans. The loan originating companies are entitled to receive an origination fees whereas those engaged in servicing loans gain a loan servicing fees.

Mortgage Banks in India:

The mortgage industry is a relatively novel component of the Indian financial sector and is popularly known as the housing finance industry. The latest reports have estimated the value of this industry as approximately US$ 18 billion. In India, the commercial banks and the other non-banking financial institutions act as mortgage banks, as they are engaged in providing mortgage loans and other mortgage related services on account of the absence of separate mortgage banks. However, the importance of the commercial banks in the mortgage industry has left the other financial institutions like the cooperative banks and a number of non-banking financial companies behind. This phenomenon can be proved from the ever-increasing share of the commercial banks in the direct housing finance industry from 27 % in the fiscal year to 57 % in the fiscal year 2003. A large number of Indian banks as well as foreign banks that have branches in India, are engaged in providing mortgage loans like the State Bank of India, the Citibank, the Housing Development Finance Corporation, the Industrial Credit and Investment Corporation of India, ABN Amro, and HSBC.

Advantage of Mortgage Banks:

The mortgage banks have grown in importance due to the simple loan repayment procedures. The most commonly available repayment option is the repayment of the principal amount together with the interest. The other variant to this plan is the repayment where neither the principal nor the interest amount is required to be paid. The third plan requires only the payment of interest, whereas the fourth plan requires the repayment of the total interest but partial payment of the principal amount. Mortgage banks have especially proved useful for the elderly with loans such as reverse mortgage loans. The most significant advantage of this loan is that the spouse of the mortgagor will continue to enjoy the mortgaged property till the time of death of the said person. After the death of the said person, the bank takes over the property to recover the loan.

Types of Mortgages provided by Mortgage Banks:

The mortgage banks are engaged in providing various kinds of mortgage loans like:

• Participation Mortgage
• Bridge Loan
• Assumed Mortgage
• Blanket loans
• Non-Conforming Mortgage
• Commercial Loan
• Fixed rate mortgage loan
• Adjustable rate mortgage loans
• Seasoned Mortgage
• Budget Loan
• Blanket loans
• Budget Loan Jumbo Mortgages
• Budget Loan

Mortgage Banking

Mortgage Banking is better known as the housing finance sector and according to the latest reports the present worth of the mortgage banking sector is nearly US $ 18 billion. Mortgage banking in India is done with the help of the private sector as well as the public sector.

The significant aspect of mortgage banking in India has been the initiation and attraction of investments from the private sector in order to carry on the process of social up gradation. The concept of mortgage banking is comparatively novel in India but has been able to grab the attention of the Indian citizens.

Facts about Mortgage Banking:

The public sector has been able to grab only 25 % of the share of investment made towards housing finance. The importance of commercial banks have been grown immensely now a days, on account of its increased participation in the direct housing finance sector.

The percentage of participation in the direct housing finance sector has jumped from approximately 27 % in the financial year 2000 to nearly 57 % in the financial year 2003. Mortgage banking is presently being done by a large number of cooperative banks, private companies dealing with housing finance, non-banking financial companies and so on. The companies providing housing finance have gained immensely from the mortgage banking sector.

Foreign Banks in Mortgage Banking:

The phenomenon of economic liberalization and globalization have aided the foreign banks to enter the banking sector in India and presently various foreign banks have started their mortgage finance segments in India. The most prominent banks dealing with mortgage banking in India are:

• Standard Chartered Bank
• The Hong Kong and Shanghai Banking Corporation
• ABN Amro Bank

Some of the significant financial companies of the United States have also entered into the banking sector in India and are involved in asset securitization.

Indian Banks Mortgage Banking:

According to the recent survey the commercial banks are going to further push back the other financial institutions in the race for grabbing more housing finance investments. The prominent commercial banks dealing with mortgage banking in India includes:

• The Industrial Credit and Investment Corporation of India (ICICI) Bank
• Housing Development Finance Corporation (HDFC)
• Life Insurance Corporation (LIC) Housing Finance Limited
• State Bank of India (SBI)

Latest developments in Mortgage banking:

The main cause behind the rise in investments in housing finance, that has grown rapidly at a compound rate of growth of 78 % per annum from the previous figure of 45.6 %, is the increase in the quantity of loan takeovers. The major development in the mortgage banking sector is the financing package of $ 200 million which is granted by the International Finance Corporation to Housing Development Finance Corporation. This loan has been granted to upgrade the financial sector in India like supplying funds to people who fall within the middle class income segment of India.

Kinds of Mortgage Banking:

Mortgage Banking can be of several kinds, though it is new in India, yet it is the best option to finance private projects the world over. To understand the mortgage banking schemes thorough research about the schemes is essential. The list of common mortgage banking kinds include:

• Participation Mortgage
• Assumed Mortgage
• Bridge Loan
• Blanket loans
• Commercial Loan
• Non-Conforming Mortgage
• Fixed rate mortgage loan
• Reverse Mortgage
• Adjustable rate mortgage loans
• Budget Loan
• Seasoned Mortgage
• Blanket loans
• Equity Loan
• Jumbo Mortgages

These loans are generally stretched over a period of 15 years and in special cases they might stretch to even 30 years and there are two accomplished ways to calculate the rate of interest like the fixed rate interest and adjustable rate interest. The repayment of the mortgage loans has been classified into a number of types, the first type is the procedure in which the capital amount and the amount of interest has to be paid off completely, the second procedure involves the repayment of the amount of interest only, the third liberates the borrower from the payment of the principal amount or the interest amount. The fourth one necessitates the partial payment of the principal amount and the complete payment of the interest amount, the fifth type occurs when the borrower fails to repay the loan then the mortgage lender seizes the collateral and sells it to recover the loan amount from the sale proceeds.

Mortgage Backed Securities

Mortgage Backed Securities can be referred to as asset backed securities, where the flow of funds is supported by the regular payments towards the principal amount and payments of interests for a number of mortgage loans.

Advantages of Mortgage Backed Securities:

The need of mortgage backed securities has been felt in the past few years by the mortgage originators to refill their investments. The mortgage backed securities aid in the development of new instruments to collect funds from the market, as the mortgage backed securities are usually very economic and more effective than the other financing instruments offered by the banks and the other forms of financing issued by the central government. The mortgage backed securities mainly aid the companies dealing in these securities, to posses a better alternative than the assets owned by them. The financing companies will now be relieved of the costs of maintenance of the assets and other costs related to assets, which will reduce their overheads immensely and increase the profit ratio.

Special Feature of Mortgage Backed Securities:

The commercial mortgage-backed securities are bought in exchange of offices, manufacturing units, land, multi-story buildings, and hotels, which means that they are gained against the personal or commercial holdings. The loans provided in lieu of the above mentioned collaterals can be extended beyond 5 years at fixed interest rates and may not provide the facility of paying off the loans before the specified tenure. These loans are also stretched over shorter periods like a maximum of 3 years with the facility of payment before time and are mostly accompanied by adjustable interest rates.

Exceptions to Mortgage Backed Securities:

The mortgage-backed securities can, however, prove problematic in case of the home mortgage lenders of the United States of America, as home loan applicants there are provided with the facility to make the loan payment before time to cover up a part of the next month's interest amount. Such activities have a deep impact on the loan amount and the inconsistencies in payment make it difficult to have an idea about the exact amount of funds to be obtained at every month from the mortgage-backed securities.

Kinds of Mortgage Backed Securities:

The mortgage backed securities can be divided into various kinds, but the most prominent mortgage backed securities are:

• Commercial mortgage backed securities
• Collateralized mortgage obligation
• Stripped mortgage backed securities
• Residential mortgage backed securities

The residential mortgage backed securities (RMBS) are special bonds found in the security market in the US and are the kind of securities which are supported by private property especially the house of the mortgagor, this private property here serves as the collateral. The stripped mortgage backed securities (SBMS) can be further classified into two kinds- the interest only stripped mortgage backed securities and the principal only stripped mortgage backed securities. The interest only stripped mortgage backed securities are supported by the interest payments towards the collateral of the mortgagor, whereas the amount that is paid towards the principal amount of the collateral of the mortgagor supports the principal only stripped mortgage backed securities. The commercial mortgage backed securities are supported by the properties used for business purposes.

LIC Housing Finance

Corporate Details :

This site provides comprehensive information on LIC Housing Finance, one of the premier and largest Housing Finance companies in India. LIC Housing Finance was incorporated on 19th June 1989.

LIC Housing Finance was promoted by LIC of India and went public in the year 1994. The Authorized Capital of the Company is Rs.1000 Million (Rs.100 Crores) and the Company is recognized by National Housing Bank and listed in the NSE & BSE and its shares are traded only in Demat format. There are over 8,00,000 prudent house owners who have enjoyed the Company's financial assistance.

LIC Housing Finance has many awards and accolades to its name for its excellent performance and one noteworthy being - AAA' credit rating from CRISIL, indicating the highest level of safety, 2005-06, for the fifth year in a row.

Activities:

The main activity of LIC Housing Finance Company is providing long term finance to -

Individuals for purchase / construction / repair and renovation of new / existing flats / houses.

Existing property for business / personal needs and gives loans to professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic Centers / Office Space.

Corporate Bodies and Companies under different schemes for purchase / construction of office premises for their own use, construction of staff quarters and also for onward lending to meet the requirements of employees, and also to Builders and Developers for residential and commercial projects.

LIC Housing Finance has one of the most extensive marketing network in India. It has -

6 regional offices and 115 area offices backed by chain of camp offices nationwide.

16 Back Offices spread across the country conduct the credit appraisal and administrative functions.

One international office in Dubai.

Performance:

LIC Housing Finance has registered a turnover (disbursements) of Rs 9697 crore for the year ended 31st March 2006-07. LIC Housing Finance has posted Net Profit to the tune of Rs 278.55 crore for the year ended 31st March 2006-07.

Organization:

LIC Housing Finance is headed by Mr. T. S. Vijayan, Chairman. LIC Housing Finance employs around 875 personnel into its operational services and has over 5500 Direct Sales Agents and Home Loan Agents. LIC Housing Finance Registered & Corporate offices is located at:

Home Loans in India

Home Loans in India implies ownership of a house on payment of monthly installments with an interest rate, in fixed or floating rate. Factors like the salary of the client, the desired loan term and other related parameters of the customers profile determine the home loans in India.

The home loan rates in India varies with the nature of the loan, with the choice of fixed rate loan or a floating rate loan. From April 2007, Home Loans in India vary widely from 13% to 14% (fixed) and 10.75% to 12% (floating) depending on the profile of the customer. There is no standard rate which can be applicable to all, hence the most convenient way to get a better loan rate is to either negotiate for it or to apply at an online marketplace like the APNALOAN. Home loans in India are also available for renovation or extension against the existing house.

There are many nationalized banks as well as housing companies who offer finance at affordable interest rates. Some of the leading sources of Home Loans in India are:

Citibank

Dewan Housing Finance

GIC Housing Fin.

HDFC

Hudco

HSBC

ICICI

IDBI

Kotak Bank

LIC Housing Finance Ltd.

PNB Home Loans

SBI Home Loans

Standard Chartered Bank

Tata Housing Finance

India Mortgage Rates

The mortgage industry, also known as the housing finance industry is one of the most promising sectors of India of the past decade. Before viewing India Mortgage Rates , it would be worthwhile to have a brief introduction to the word “ mortgage ”.

Mortgage is a conditional conveyance of property as security for repayment of loan. Such a property is put up as a collateral security which is liable to confiscation in the event of failure of repayment of the loan and the mortgage rate associated with it.

Hence, Mortgage Rate is a rate of

Indian Mortgage Rates can be classified into two types:

• Fixed Mortgage Rate
• Flexible Mortgage Rate

Fixed Mortgage Rate is one in which the rate of interest remains fixed throughout the period for which the loan is taken irrespective of the other parameters like the principle paid, actual rate of interest and the time allotted for repayment. Interest rate is fixed to a previously notified rate which usually comes in increments of 12.5 % or 25 %.

On the contrary, flexible mortgage rate is one in which the interest rate may “adjust” or “float” in coarse of time in accordance with the above mentioned parameters. For this reason, flexible mortgage rate is also known as “ adjustable mortgage rate ” or “ floating mortgage rate ”. Interest rate is not tied to any index.

A basic understanding of the mortgage rates in India and th economic influences that determine the future course of mortgage rates can help consumers in making financially sound mortgage decisions. Such decision may be whether to choose fixed or flexible mortgage rate or to refinance out of the latter.

India Mortgage

India Mortgage industry until recently was an unorganized sector. But today organized mortgage sector is witnessing steady growth. It is estimated to be US $ 18 billion industry. Huge real estate requirements and its subsequent development has fueled its growth.

The predominant market leaders in organized 'India Mortgage' sector are housing finance companies like LIC Housing Finance, HDFC, ICICI Home Finance etc. Although, size of organized sector account only for 25% of the total housing investment in India (Source: LIC Housing finance). But commercial banks both National and Foreign Banks along with Cooperative banks and other non-banking financial companies (NBFCs) are also catching them up at a very fast pace. Mortgage rates in India industry is consistently registering 20-50 % growth (YoY) from the year 2000 onwards. Low income groups communities are still ignorant and skeptical of about it, the bottlenecks are -

Affordability and

Accessibility.

'India Mortgage' industry is heating up and there is a mad rush for credit. The 'Mortgage India' market is estimated to grow at a lightening pace in few years to come. Although, investment in housing has grown steadily over the past years as the proportion of outstanding housing loans as percentage of GDP increased from 3.4 per cent in 2001 to 7.25 per cent by 2005. Housing finance gives a measure of the socio–economic status of people. It is regarded as a critical sector in terms of policy initiatives and interventions. Financial allocations in the 5 Year Plans and fiscal measures related to housing has been taken and implemented successfully.

To help it grow and fulfill its huge requirements India Mortgage industry needs indirect government participation, as a guardian and facilitator. Private funds and even FDI should be encouraged to see 'India Mortgage' industry grow further. Overall revamping of land laws, rental laws, fast mutation and registration process along with setting up of credit rating organization and mortgage insurance will only help India in realizing its housing dreams. This will accelerate organized growth of 'India Mortgage' market and at the same time will help reach all sections of Indian society.

how to buy a mortage

How to Buy a Mortgage

NOTE: Carve out some time to call all of these brokers on the same day.
Steps:
1. Ask friend near your home or office if they know a decent mortgage broker. Get 3 names.
2. Call broker.
3. Be pleasant and professional. These are generally nice hardworking people and deserve respect.
4. Tell him/her the amount of the mortgage, downpayment if purchase, estimated value of home and term you want (1, 3, 5, 7, 10, 15, 20, 30, 40 years) . Be prepared to give him/her recent credit scores for the borrower/co-borrower.
5. Once that information has been delivered simply ask “From all of your wholesale sources please tell me the lowest par rate you can lock my loan at today?” Also mention that you want to be fair and let them know you are calling 2 other brokers but you are asking the same question.
(At this point they may feel compelled to ask you what rates you have so far and may attempt to sell against the others – cut them off and tell them you are keeping all rates confidential and will do the same with their rate.)

6. Ask broker if there are any discount points priced into the rate.
If answer is yes then go back to Step 5 and stress PAR RATE.
If answer is no then ask to confirm the wholesaler lender’s name. Write it down and the rate quoted next to the broker’s name.

Step 7. Go back to Step 2 and repeat until you have 3 par rates.

Step 8. When you are done you should have 3 VERY similar rates. Wholesale loan rates reflect a commodity – the time value of money on a certain day. If 2 of the rates are close and 1 is much higher – throw that rate out.

Step 9. Now take the lowest 2 rates and call each back to confirm the rate. Also ask them to email or fax you the rate and the wholesale lender name confirming this is “the lowest par rate you can lock my loan at today”. If they refuse to do this then scratch them from the list.

Step 10. Once you have a winner (lowest rate or person you prefer if rates are same) then call them tell them you would like to buy a mortgage for ___ rate for a term of _____ and there will not be any origination fees or junk fees but you would be willing to pay them a flat fee of $1,500 for their time and expertise. Also promise them you will not further shop the loan and you will not respond to all the phone solicitations you will receive once they run your credit (these phone calls are from unethical loan officers that buy trigger leads from the unethical credit bureaus that sell them – you become a trigger lead when you have your credit pulled by a mortgage broker or bank. (Make sure your loan officer DOES NOT provide your email or phone number when they pull your credit.)

If they agree then you buy the mortgage if not go back to Step 1. They won’t like this method as mortgage brokers love to control the information flow. Some may even tell you this is not legal. Hogwash. Again move on you will eventually find someone honest enough that would rather make $1,500 for performing a service than play games in an attempt to make $4,500.