In this era of cut throat competition, where banks are introducing new schemes day after day, the insurance companies are not left behind. Private sector insurance companies have come up with innovative scheme where one can have a security of repayment of a loan if the borrower expires suddenly.
People do not prefer to take a home loan because of the risks associated with it. They are more worried about the uncertainties of life that holds them back from taking such a loan. Long loan tenure and repayment are among some of the top risks that come to the mind while opting for a housing loan.
As people are becoming more conscious about the uncertainties of life it make sense to pay a little extra and be secure of unexpected risks in the future. Introduction of schemes that protects a person against such risks is now becoming common.
Now-a-day the market is concentrated with several insurance products and innovation of home loan insurance schemes is the new attraction amongst the people. These schemes provide a wide range of choice for a person who wants to protect his home loan. Majority of these products currently available in the market are flexible enough and the premiums paid against them are eligible for tax exemption under the Income Tax Act.
Insurance schemes offered in the market have multiple options and a person can choose one that suits him the best. A variety of options can be combined together so that the policies can be modified to meet the specific requirement of a person. The premiums and returns differ according to the service provided under the policy
The insurance cover can be taken for entirely insurance purposes or for insurance and investment combined.
The policies that are based on entirely insurance purpose covers only the risk of non-payment due to a sudden demise of the borrower. Once the loan is repaid the insurance cover comes to an end and the borrower does not get anything. On the term's expiry, the borrower only gets the sum assured and the cover ceases without any maturity benefits. This is because term insurance plans are pure risk covers without any investment dimensions. Therefore, premiums under these plans are the lowest.
http://www.rupeetimes.com/news/home_loans/insurance_to_cover_your_home_loan_payments_1633.html
Friday, September 19, 2008
Sunday, August 10, 2008
Credit crunch: Insurers refuse coverage of some home loans, in areas
WASHINGTON -- Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow -- even for those with good credit.
Mortgage insurers, whose backing is required for borrowers who can't afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation's ZIP codes where they refuse to insure some home loans.
That encompasses a wide variety of neighborhoods: McMansions in Scottsdale, Ariz.; luxury Miami condos; 1960 ranch houses in Flint, Mich.; and early 20th century kit homes in Metuchen, N.J. -- and houses in Utah's St. George.
The entire states of California, Florida, Arizona, Michigan, Ohio and Nevada -- which have seen the highest foreclosure rates and the worst price declines -- are blackballed on some mortgage insurers' lists. Twenty-two zip codes in the St. George area were included on lists this month from AIG United Guaranty and Radian Guaranty that flagged "declining markets."
Banks that have lost billions because of bad bets during the housing boom are now reverting to strict lending standards not seen in nearly 20 years, according to industry data and interviews with lenders.
For new homebuyers and those seeking to refinance, it can mean higher down payments and a higher bar for credit scores, among other requirements. The toughest restrictions are in markets where home prices are falling, though regions where property values are rising are not immune.
"We're in the midst of an epic, broad, sweeping change in the mortgage industry," said Chris Sipe, a loan officer with America East Mortgage in Frederick, Md.
The reluctance to extend credit comes despite a flurry of government initiatives, including steady interest rate cuts by the Federal Reserve, intended to make it easier for would-be borrowers and those facing interest-rate resets on their mortgages.
Lenders' growing leeriness threatens to dampen sellers' already soggy prospects for the spring homebuying season -- and that means more pain for the already battered housing sector and the broader economy.
In recent weeks, mortgage insurers have flagged more than 9,600 ZIP codes in at least 34 states where they won't insure certain types of home loans -- those for investment properties or second homes, those with riskier adjustable-rate or interest-only mortgages, or for buyers making down payments of less than 3 percent.
With banks and mortgage insurers pulling back, state and federal programs for first-time buyers and people with poor credit are attempting to fill the void.
Don Brekke, an equipment operator from Colorado Springs, Colo., tried to buy a bank-owned 1950s ranch home for $113,000. At first, he couldn't get a loan because the house was in a potentially declining market and lenders required a 10 percent down payment, more than he could afford.
Ultimately, he was able to qualify for a 100 percent loan from Colorado's state financing authority, and he plans to close in the coming days.
"It was a bunch of headaches -- going around and around to get this done," Brekke said.
The combination of sinking home prices and tighter lending standards has been a major aggravation for Ron Broussard, a 38-year- old sales representative for a home builder.
Broussard took advantage of soaring Southern California property prices three years ago to refinance a loan on a house he had owned since the late 1990s. Today he's still stuck with a $720,000 mortgage and has been renting it out since moving with his family to Texas a year ago. Once appraised for $1.1 million, Broussard's lender now says it's worth about $300,000 less.
He does not yet owe more than the property is worth, but Broussard worries that is a possibility.
"The way the market's going, you know, who knows?" he said.
Broussard has found little sympathy from his lender, Countrywide Financial Corp. While Broussard accepts responsibility for taking out a mortgage whose monthly payments are due to skyrocket once the unpaid principal exceeds the home's value by 15 percent, he feels betrayed by the lender's unwillingness to negotiate better terms.
The stinginess of banks is showing up in home loan statistics: The value of all new mortgages plummeted to $450 billion in the fourth quarter of 2007, down 38 percent from a year earlier, according to trade publication Inside Mortgage Finance.
Subprime loans, made to borrowers with poor credit, virtually disappeared from the market, plummeting 90 percent to $13.5 billion in the October-December quarter.
There is a silver lining: The Federal Reserve has repeatedly cut interest rates, helping borrowers whose mortgages were just about to reset to higher rates and people with student loans. Reflecting the Fed's efforts, rates on 30-year mortgages dropped below 6 percent this week for the first time in more than a month.
But the long-term impact of the Fed's move is far from certain, and the central bank's actions could end up feeding inflation and pushing up long-term rates.
http://findarticles.com
Mortgage insurers, whose backing is required for borrowers who can't afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation's ZIP codes where they refuse to insure some home loans.
That encompasses a wide variety of neighborhoods: McMansions in Scottsdale, Ariz.; luxury Miami condos; 1960 ranch houses in Flint, Mich.; and early 20th century kit homes in Metuchen, N.J. -- and houses in Utah's St. George.
The entire states of California, Florida, Arizona, Michigan, Ohio and Nevada -- which have seen the highest foreclosure rates and the worst price declines -- are blackballed on some mortgage insurers' lists. Twenty-two zip codes in the St. George area were included on lists this month from AIG United Guaranty and Radian Guaranty that flagged "declining markets."
Banks that have lost billions because of bad bets during the housing boom are now reverting to strict lending standards not seen in nearly 20 years, according to industry data and interviews with lenders.
For new homebuyers and those seeking to refinance, it can mean higher down payments and a higher bar for credit scores, among other requirements. The toughest restrictions are in markets where home prices are falling, though regions where property values are rising are not immune.
"We're in the midst of an epic, broad, sweeping change in the mortgage industry," said Chris Sipe, a loan officer with America East Mortgage in Frederick, Md.
The reluctance to extend credit comes despite a flurry of government initiatives, including steady interest rate cuts by the Federal Reserve, intended to make it easier for would-be borrowers and those facing interest-rate resets on their mortgages.
Lenders' growing leeriness threatens to dampen sellers' already soggy prospects for the spring homebuying season -- and that means more pain for the already battered housing sector and the broader economy.
In recent weeks, mortgage insurers have flagged more than 9,600 ZIP codes in at least 34 states where they won't insure certain types of home loans -- those for investment properties or second homes, those with riskier adjustable-rate or interest-only mortgages, or for buyers making down payments of less than 3 percent.
With banks and mortgage insurers pulling back, state and federal programs for first-time buyers and people with poor credit are attempting to fill the void.
Don Brekke, an equipment operator from Colorado Springs, Colo., tried to buy a bank-owned 1950s ranch home for $113,000. At first, he couldn't get a loan because the house was in a potentially declining market and lenders required a 10 percent down payment, more than he could afford.
Ultimately, he was able to qualify for a 100 percent loan from Colorado's state financing authority, and he plans to close in the coming days.
"It was a bunch of headaches -- going around and around to get this done," Brekke said.
The combination of sinking home prices and tighter lending standards has been a major aggravation for Ron Broussard, a 38-year- old sales representative for a home builder.
Broussard took advantage of soaring Southern California property prices three years ago to refinance a loan on a house he had owned since the late 1990s. Today he's still stuck with a $720,000 mortgage and has been renting it out since moving with his family to Texas a year ago. Once appraised for $1.1 million, Broussard's lender now says it's worth about $300,000 less.
He does not yet owe more than the property is worth, but Broussard worries that is a possibility.
"The way the market's going, you know, who knows?" he said.
Broussard has found little sympathy from his lender, Countrywide Financial Corp. While Broussard accepts responsibility for taking out a mortgage whose monthly payments are due to skyrocket once the unpaid principal exceeds the home's value by 15 percent, he feels betrayed by the lender's unwillingness to negotiate better terms.
The stinginess of banks is showing up in home loan statistics: The value of all new mortgages plummeted to $450 billion in the fourth quarter of 2007, down 38 percent from a year earlier, according to trade publication Inside Mortgage Finance.
Subprime loans, made to borrowers with poor credit, virtually disappeared from the market, plummeting 90 percent to $13.5 billion in the October-December quarter.
There is a silver lining: The Federal Reserve has repeatedly cut interest rates, helping borrowers whose mortgages were just about to reset to higher rates and people with student loans. Reflecting the Fed's efforts, rates on 30-year mortgages dropped below 6 percent this week for the first time in more than a month.
But the long-term impact of the Fed's move is far from certain, and the central bank's actions could end up feeding inflation and pushing up long-term rates.
http://findarticles.com
Friday, August 1, 2008
Tata Capital to enter home loans business
K.R.Srivats
New Delhi, Aug 1 Tata Capital Limited, a wholly-owned subsidiary of Tata Sons Limited, plans to enter the booming home loan market by March 2009, its Managing Director and CEO, Mr Praveen P Kadle, has said.
“Although we will be a late entrant in this market, we see good business opportunities in offering home loans. We hope to start this by March next year”, Mr Kadle said here.
Tata Capital, a non-banking finance company, had commenced its operations in 2007. This had marked the entry of Tata Group into a host of new financial services. Currently, the company was capitalised at about Rs 2,000 crore and offered suite of products across multiple financial domains—personal loans, car loans, distribution and broking, wealth management, SME Finance, capital markets, private equity and infrastructure finance.
PE Fund
Mr Kadle also said that Tata Capital would by end-September launch its first private equity fund targeted at opportunities in mid-sized companies. While the size of the fund was yet to be finalised, indications are that the initial fund size may be around $ 250 million. Plans are afoot to also launch a venture capital fund focusing on the technology space (information technology/telecom).
Currently, the balance sheet size of Tata Capital is around Rs 4,000 crore. On whether the company would look at inorganic growth, Mr Kadle noted that most of the opportunities here were expensive. “Indian valuations are expensive. Inorganic growth may not be attractive, but that does not mean we will not look at inorganic growth”, he said.
Insurance broking
Meanwhile, Tata Capital would soon foray into insurance broking. “A subsidiary of Tata Motors has got licence for insurance broking from IRDA. This company would eventually come under Tata Capital. We will also get into commodities broking soon”, Mr Kadle said.
http://www.thehindubusinessline.com/2008/08/02/stories/2008080252280600.htm
New Delhi, Aug 1 Tata Capital Limited, a wholly-owned subsidiary of Tata Sons Limited, plans to enter the booming home loan market by March 2009, its Managing Director and CEO, Mr Praveen P Kadle, has said.
“Although we will be a late entrant in this market, we see good business opportunities in offering home loans. We hope to start this by March next year”, Mr Kadle said here.
Tata Capital, a non-banking finance company, had commenced its operations in 2007. This had marked the entry of Tata Group into a host of new financial services. Currently, the company was capitalised at about Rs 2,000 crore and offered suite of products across multiple financial domains—personal loans, car loans, distribution and broking, wealth management, SME Finance, capital markets, private equity and infrastructure finance.
PE Fund
Mr Kadle also said that Tata Capital would by end-September launch its first private equity fund targeted at opportunities in mid-sized companies. While the size of the fund was yet to be finalised, indications are that the initial fund size may be around $ 250 million. Plans are afoot to also launch a venture capital fund focusing on the technology space (information technology/telecom).
Currently, the balance sheet size of Tata Capital is around Rs 4,000 crore. On whether the company would look at inorganic growth, Mr Kadle noted that most of the opportunities here were expensive. “Indian valuations are expensive. Inorganic growth may not be attractive, but that does not mean we will not look at inorganic growth”, he said.
Insurance broking
Meanwhile, Tata Capital would soon foray into insurance broking. “A subsidiary of Tata Motors has got licence for insurance broking from IRDA. This company would eventually come under Tata Capital. We will also get into commodities broking soon”, Mr Kadle said.
http://www.thehindubusinessline.com/2008/08/02/stories/2008080252280600.htm
Sunday, July 27, 2008
Home Insurance Guide - Secure Your Home With Home Insurance
Home insurance refers to an insurance policy that is a combination of personal insurance protections. Home insurance policy protect against certain accidents that can happen at the home. It is also known as homeowners insurance. Home is a largest investment for all thats why home insurance policy is essential to protect your home. Home insurance policies generally provide coverage against theft, fire, lightening, smoke, frozen pipes, ice and snow.
Cost of home insurance depends on the cost that is required to replace the house. It is a contract including all items that should be covered or not. Home insurance policy normally doesn’t include claims against earthquakes, floods, war or ‘Acts of God’. Sometimes homeowners can purchase special insurance that provide protection against flood and earthquake.
Home insurance policy is a contract that works for a limited period of time. Insured party has to pay an amount of premium to the insurer for each term. Sometimes insurer charges a lower premium. Another type of home insurance is perpetual insurance that is not fixed for a fixed term and can be acquired in some areas.
Buyers should read all contents of the policy at the time of purchase. They should maintain a list of personal property and review their insurance policy annually. They should read all terms & conditions before signing any type of contract.
About Author: The author owns a website on Home Insurance. Website provides information about home insurance, homeowners insurance, and some tips to buy home insurance policy at cheap rates. To get more information click: Homeowners Insurance
Article Source: http://EzineArticles.com/?expert=Gagandeep_Dhaliwal
Cost of home insurance depends on the cost that is required to replace the house. It is a contract including all items that should be covered or not. Home insurance policy normally doesn’t include claims against earthquakes, floods, war or ‘Acts of God’. Sometimes homeowners can purchase special insurance that provide protection against flood and earthquake.
Home insurance policy is a contract that works for a limited period of time. Insured party has to pay an amount of premium to the insurer for each term. Sometimes insurer charges a lower premium. Another type of home insurance is perpetual insurance that is not fixed for a fixed term and can be acquired in some areas.
Buyers should read all contents of the policy at the time of purchase. They should maintain a list of personal property and review their insurance policy annually. They should read all terms & conditions before signing any type of contract.
About Author: The author owns a website on Home Insurance. Website provides information about home insurance, homeowners insurance, and some tips to buy home insurance policy at cheap rates. To get more information click: Homeowners Insurance
Article Source: http://EzineArticles.com/?expert=Gagandeep_Dhaliwal
Saturday, July 19, 2008
Home Improvements Could Leave Prospective Sellers Under-Insured
With a sluggish housing market, homeowners thinking of upgrading or extending their homes to increase saleability should be careful not to become under-insured, warns Confused.com.
Cardiff (PRWEB) July 19, 2008 -- Homeowners turning to DIY and home improvements in order to give their property a boost need to be aware that neglecting to inform their home insurance provider of any additions to the house's build/value will mean that these additions will not be covered by their policy.
For example, an extension adding £20,000 of value to a property will go uninsured unless buildings insurance is upgraded to specifically cover it. Failure to cover the extension means that the homeowner could be liable for any repair bill should something go wrong. Therefore, anyone making such improvements should be mindful of keeping their buildings insurance policy up to date, as the rebuild cost will rise accordingly.
Confused.com Product Director Simon Lamble said: "Additions to the home such as conservatories or extensions are costly, and while they tend to increase the value of the property, this is money thrown away if home insurers are not informed and the improvement is subsequently, say, damaged in a fire."
"Likewise, if homeowners realise that they are staying put, and decide to indulge in a little luxury - such as upgrading their old TV to an expensive plasma or LCD screen - it's also sensible to check that these will be covered under their existing contents insurance. If their price exceeds the valuable items limit, remember to declare them separately."
Note also that some home insurance providers request to be informed when building contractors are working on a property. To this end, homeowners are advised to check their policies.
About Confused.com:
Confused.com is one of the UK's biggest and most popular price comparison services. Launched in 2002, it dominates the car insurance aggregator market with a massive 70% market share and generates over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgages and life insurance.
Confused.com has 62 motor insurance partners, and customers can save up to on average £208. It also has a panel of 43 for home insurance, and customers who use Confused.com for home insurance can expect to save up to £193.
Confused.com is not a supplier, insurance company or broker. It provides a free, objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com's service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the FSA.
http://www.prweb.com/releases/2008/7/prweb1121704.htm
Cardiff (PRWEB) July 19, 2008 -- Homeowners turning to DIY and home improvements in order to give their property a boost need to be aware that neglecting to inform their home insurance provider of any additions to the house's build/value will mean that these additions will not be covered by their policy.
For example, an extension adding £20,000 of value to a property will go uninsured unless buildings insurance is upgraded to specifically cover it. Failure to cover the extension means that the homeowner could be liable for any repair bill should something go wrong. Therefore, anyone making such improvements should be mindful of keeping their buildings insurance policy up to date, as the rebuild cost will rise accordingly.
Confused.com Product Director Simon Lamble said: "Additions to the home such as conservatories or extensions are costly, and while they tend to increase the value of the property, this is money thrown away if home insurers are not informed and the improvement is subsequently, say, damaged in a fire."
"Likewise, if homeowners realise that they are staying put, and decide to indulge in a little luxury - such as upgrading their old TV to an expensive plasma or LCD screen - it's also sensible to check that these will be covered under their existing contents insurance. If their price exceeds the valuable items limit, remember to declare them separately."
Note also that some home insurance providers request to be informed when building contractors are working on a property. To this end, homeowners are advised to check their policies.
About Confused.com:
Confused.com is one of the UK's biggest and most popular price comparison services. Launched in 2002, it dominates the car insurance aggregator market with a massive 70% market share and generates over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgages and life insurance.
Confused.com has 62 motor insurance partners, and customers can save up to on average £208. It also has a panel of 43 for home insurance, and customers who use Confused.com for home insurance can expect to save up to £193.
Confused.com is not a supplier, insurance company or broker. It provides a free, objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com's service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the FSA.
http://www.prweb.com/releases/2008/7/prweb1121704.htm
Sunday, July 13, 2008
From May to May, home loan approvals down 44 per cent
The home loan market continues in its state of torpor, according to the latest survey from the Council of Mortgage Lenders (CML).
The CML has found that just 52,000 new home loans were approved in May. That represents a small rise of 4 per cent from the previous month, but it is still a whopping 44 per cent lower than the same month in 2007.
"Lending levels continue to be lower than last year and any recovery is still some way away," said the CML's director-general, Michael Coogan.
He added that the number of loans approved for house purchases could decline further over the coming months, with property prices falling in many parts of the country.
The number of people choosing to remortgage in May was down 14 per cent on the previous month and 22 per cent year on year – even though an estimated 116,000 homeowners a month are now coming off comparatively cheap fixed-rate deals and, in most cases, seeing their mortgage costs go up. Normally, this would provide a spur to remortgaging but, because of the credit crunch, large numbers of homeowners are finding it difficult to find a deal competitive enough to switch to. In other cases, they are simply being prevented from changing provider as a result of the tighter criteria now imposed by lenders.
http://www.independent.co.uk/money/mortgages/from-may-to-may-home-loan-approvals-down-44-per-cent-866269.html
Sunday, June 29, 2008
Home Equity Loans Are Great Tools for 100% Home Financing
Are you considering buying a new home, but do not have the funds for the required down payment? Or maybe you save the money for the down-payment, but are not sure if you want to use it for another type of purchase? If either situation fits you, then 100% home equity loans, also called a zero down home financing, might be the solution for you.
The first step to understanding 100% financing is to be aware of something called Private Mortgage Insurance (PMI). According to All-Options, “PMI insures the lender against loss if the borrower defaults on the mortgage loan. PMI is usually required when the borrower’s down payment or equity is less than 20% of the loan value.” Although not every mortgage lender insists on mortgage insurance, those who adhere to the Fannie Mae and Freddie Mac loan approval guidelines will require it.
PMI is added into the cost of your mortgage, so your monthly payments are higher than if you had put 20% down on the loan. Therefore, many people who are looking for a no money down home loan and want to avoid PMI, turn to something called an 80-20 loan. An 80-20 home loan takes the cost of the home and divides it into two mortgages. The first mortgage is for 80% of the home’s value. Depending on the specific needs and wants of the borrower, the first mortgage can be a fixed rate, adjustable rate, or interest only loan. The second mortgage is for 20% of the cost of the home. This second mortgage, also called a “piggyback loan,” is usually a fixed mortgage or a home equity line of credit. With the two mortgages, you are financing 100% of the cost of your home AND avoiding the additional monthly cost of PMI.
Zero down home loans can be a great option for those who don’t have the ability, or the desire, to put down a large down payment. With an 80-20 mortgage, you are able to avoid PMI and the required 5% down payment that many conventional mortgage products require. Before you begin shopping for an 80-20 loan, it is important to know and understand your credit score, as many lenders require a strong credit history for this particular mortgage option.
Jennifer is an author who has produced many helpful home loan related articles: 100% Home Equity Loan Financing & Bad Credit Home Equity Loans. If you need more information for 80-20 home loan rates, or HELOC Refinancing, check out Second Mortgage to 125%.
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