With the current U.S. mortgage situation in a state of flux and foreclosures at all-time highs, scams are rampid. And while the majority of lenders, large and small, are honest businessmen, there will always be a few who will grasp any situation to profit from dishonesty. These unscrupulous individuals frequently target the frailest members of society as their primary marks, including old people, those in terrible financial straits and those who are deeply in debt with few escape options. The current mortgage mess fallout represents a golden opportunity for the dishonest.

Rapacious lending is a word that defines unjust mortgages. They are usually targeted toward people desperate to refinance and willing to take risks in order to solve short-term crisis situations in their lives. This includes people under the yoke of crushing debt who would do virtually anything to escape from it and those seeking a foreclosure rescue siuation. In this mental and emotional state, they are ripe picking for the mortgage scam artists.

The only way to truly avoid mortgage scams is to be educated about how they work so you can recognize the signs. Or to borrow only from larger, established lenders who have well-known reputations. The latter, of course, is usually not an option when your on a sinking ship devoid of life rafts. One does not need to be an expert to understand and recognize the hallmarks of a scam; merely to be sufficiently aware of them and take adequate time to carefully consider the details of any offer. The old adage, “If it seems to good to be true, it probably is” definitely applies here. In today’s financial climate, foreclosure rescue scams are on the increase.

The most important thing to look for when searching for a mortgage, especially under difficult circumstances, is an honest, reputable lender. If you don’t know the company, a quick call to your local Better Business Bureau will alert you to any lodged complaints about the lender company. Remember that the mortgage scam artists will promise you anything to get a signature on the loan contract, but may not deliver what they promised. Read all the fine print. Ask questions. Demand answers before signing.

The actual details of mortgage foreclosure rescue scams are many and complex. In these days of the mortgage fallout mess, they are all too common. It is far better to protect yourself before hand than to try to escape from the scammer after the fact.

If you’re looking to buy a home, the most common option is to take out a mortgage loan. This is where you pay monthly instalments, much like you would if you were renting a property, with the difference being that eventually you will own the property outright.

However, there are certain criteria that you need to meet if you do wish to take out a mortgage loan – after all, with the amount being borrowed running into the hundreds of thousands, lenders need to make sure you are suitable for a loan, and not a bad risk. So what criteria do you normally need to make?

Credit History
One of the key factors that any mortgage lender uses, whether it’s your own bank or an outside source, is your credit history. Since a mortgage loan involves a high payment on a regular monthly basis, lenders need to know that you’re not likely to default on payments.

The way they find this information out is by using one of the three major credit-scoring bureaus in the US – Equifax, Experian and Trans Union. These companies have access to all loans, payment schemes and finance deals you may have had in the past, or currently pay. They also look at your credit cards and how you pay the amount on these as well.

You are then given a credit score – a high rating for payments and loans that have been settled on time, and a lower score for late or defaulted payments. The higher your score, the better your credit rating, and the more likely you are to get the mortgage loan you need to buy your home.

Debt Levels
As well as your credit score, another way lenders determine if you’re suitable for a mortgage loan is how much debt you have, compared to your income levels. The higher the debt you have, the less likely you are to be approved.

For example, if you add up all your outstanding debts, including loans, insurances, etc, and it’s close to what you make monthly, then lenders will take the view that you may struggle to meet your mortgage payment, and be less inclined to offer you one. A good ratio for debt-to-income is 28/36, so if you fall within this band, you should be able to get a mortgage loan without too much difficulty. You may still get one if you’re outside this band, but it could be with a much higher interest rate.

Current Financial Status
The third most-used method of criteria is your current standing financially. If you’re in a full-time job and you’ve been with that company for over 2 years, you’re viewed as a responsible person who doesn’t job-hop. Add to this the fact that you are receiving a steady income from that job, and you’re more likely to be approved for a mortgage loan application than if you were working part-time, or unemployed.

Self employment is a huge rage these days. Statistics show that more and more people are choosing to be self-employed in recent times. After all, who wouldn’t like to work on his or her own terms, get better pay by him or herself and have flexible work hours? Most people would rather be answerable to themselves than their bosses. Many people are beginning to consider these factors and are considering self-employment as a feasible option.

In spite of the positive factors outlined above, self-employment has its own share of disadvantages as well. To start off alone, you must be prepared to live with the insecurity of not having a fixed income. You could go without pay for an entire month and then go ahead and earn a lot the next month. There is none of the fixed monthly pay security that comes with regular jobs.

This has its own pitfalls. Suppose you are self employed and want to buy a house. Keeping in mind the fact that you do not have a fixed source of income, which lender will give you a mortgage? After all, the people who do business with you also need to be assured that you will have the money to pay your monthly installments. Look at it from the lender’s point of view – why would he risk his money to give someone who probably can’t pay every month as opposed to someone who is sure to pay every month (that is, a person with a fixed income)?

Is there a solution to this? Yes, it comes in the form of something known as a “flexible mortgage”. These are specifically for self employed people, but they do have awfully high interest rates. The upshot if this is that it doesn’t require you to pay a fixed amount per month and you can pay as little or as much as you want depending on how much you can afford that particular month. You can also borrow from the paid-up amount – it’s not called flexible for no reason! This will lead to a long duration mortgage period, but it certainly makes things simpler for a self-employed person. That way, if you are self-employed, you don’t need to worry about buying a house.

So if you are pondering about being self employed and still want to be able to buy your own house, consider getting a flexible mortgage. If you have braved risking the insecurity of not having a fixed income then you can certainly brave the higher rates of interest and longer loan duration of a flexible mortgage.

Are you shopping for a home mortgage loan and worried about finding the right one?
Today’s buyers market gives home mortgage shoppers many options. Currently there are many homes on the market; in fact many would say that there are too many on the market. Unfortunately one of the reasons there are so many home on the market today is because people did not choose the right mortgage.

Reasons why People Choose the Wrong type of Home Mortgage
There are a couple of reasons why a home owner may choose the wrong type of mortgage. The first may be because they didn’t do their homework and got suckered into the wrong type of home mortgage. The second is that they may have wanted the lowest monthly payment and thought that the value of their home would continue to rise. Many don’t shop around for a good mortgage lender, and some don’t think about the loan and how it will affect their lives. Most people spend too much time shopping for the right home and not enough time looking for the right mortgage option.

Mortgages You should Stay Away From
There is a type of home mortgage that you should steer clear of, and that is the pick a payment ARM, or the negative amortization loans (both loans are practically the same).
• Pick a payment loans – this type of loan offers the borrower different monthly payment options, and those are; full payment of principle and interest, or payment of interest only with the principle being differed.
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The problem with this type of loan lies in that the borrower generally ends up paying only the interest, because he has opted to pay the lowest monthly payment, for financial reasons or just because it is easier. This ends up making the borrower owe more on the house than what the house is worth. Worst yet! What happens when the loan interest goes up? This can happen if you choose an ARM mortgage loan. There are buyers that are now paying 8.5% interest rates when they could have chosen a 30 year fixed mortgage at 5%.

In conclusion it is best to stay away from the mortgage that will give you the least expensive monthly payment. Look for a fixed interest rate mortgage, that way you know that your interest will not fluctuate. The best kind of mortgage to get is a 15 to 30 year fixed interest rate mortgage.