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Mortgage
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WHAT IT IS:

12

A mortgage is a loan in which property or real estate is used as collateral. The borrower
enters into an agreement with the lender (usually a bank) wherein the borrower
receives cash upfront then makes payments over a set time span until he pays back the
lender in full.
HOW IT WORKS (EXAMPLE):

Mortgage loans are usually entered into by home buyers without enough cash on hand to
purchase the home. They are also used to borrow cash from a bank for other projects
using their house as collateral.
There are several types of mortgage loans and buyers should assess what is best for
their own situation before entering into one. Types of loans are characterized by
their term dates (usually from 5 to 30 years, some institutions now offer loans up to
50 year terms), interest rates (these may be fixed or variable), and the amount of
payments per period.
[If you're ready to buy a home, use our Mortgage Calculator to see what
your monthly principal and interest payment will be.]
Mortgages are like any other financial product in that their supply and demand will
change dependenton the market. For that reason, sometimes banks can offer very low
interest rates and sometimes only they can only offer high rates. If a borrower agreed
upon a high interest rate and finds after a few years that rates have dropped, he can
sign a new agreement at the new lower interest rate -- after jumping though some
hoops, of course. This is called "refinancing."

WHY IT MATTERS:

Mortgages make larger purchases possible for individuals lacking enough cash to
purchase an asset, like a house, up front. Lenders take a risk making these loans as there
is no guarantee the borrower will be able to pay in the future. Borrowers take risk in
accepting these loans, as a failure to pay will result in a total loss of the asset.
Home ownership has become a cornerstone of the American Dream. For most people,
their home is their most valuable asset. Mortgages make home buying possible for
many Americans. Mortgages are not always easy to secure, however, as rates
and terms are often dependent on an individual's credit score and job status. Failure to
repay allows a bank to legally foreclose and auction off the property to cover its losses.

A loan given by a bank, mortgage company or other financial institution for the purchase of
a primary or investment residence. In a home mortgage, the owner of the property (the
borrower) transfers the title to the lender on the condition that the title will be transferred
back to the owner once the payment has been made and other terms of the mortgage have
been met.
A home mortgage will have either a fixed or floating interest rate, which is paid monthly
along with a contribution to the principal loan amount. As the homeowner pays down the
principal over time, the interest is calculated on a smaller base so that future mortgage
payments apply more towards principal reduction as opposed to just paying the interest
charges.
Read more: Home Mortgage Definition |
Investopedia http://www.investopedia.com/terms/h/home-mortgage.asp#ixzz4SbzSNgnK
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1. INTRODUCTION
1.1 Purpose of Project Management Plan
- The intended audience of the Project
The objective of this project is to develop a software product that will help the
client in making decisions regarding home mortgages for married couples.
The software product will allow the client to add, modify, and delete
information regarding the Clients investments, operating expenses, and
individual mortgage information. The product will perform the required

calculations in these areas and produce reports listing investments,

mortgages, and weekly operation expenses.
1.2 Background Information
1.3 Project Approach
2. Goals and Objectives
2.1 Business Goals and Objectives (if applicable)
2.2 Project Goals and Objectives
3. Scope and Constraints Management
3.1 Scope Definition & Work Breakdown Structure
3.2 Project Constraints
. Constraints include the following:
The deadline must be met.
The budget constraint must be met.
The product must be reliable.
The architecture must be open so that additional functionality may be added
later.
The product must be userfriendly.
3.3 Deployment Plan
3.4 Change Control Management
3.5 Related Projects (present at least 3 related projects)
4. Project Assumptions
5. Risk Assessment
5.1 Risk Log
The risk factors and the tracking mechanisms are as follows.
There is no existing product with which the new product can be compared.
Accordingly, it will not be possible to run the product in parallel with an existing one.
Therefore, the product should be subjected to extensive testing.
The client is assumed to be inexperienced with computers. Therefore, special
attention should be paid to the analysis workflow and communication with the client.

The product has to be made as userfriendly as possible.

Because of the everpresent possibility of a major design fault, extensive testing will
be performed during the design workflow. Also, each of the team members will
initially test his or her own code and then test the code of another member. Dexter
will be responsible for integration testing and in charge of product testing.
6. Cost/Budget Management
6.1 Estimated Cost
6.2 Procurement Management
7. Schedule/Time Management
6.1 Milestone
Milestones Estimated Completion Timeframe
[Insert milestone information (e.g., Project
planned and authorized to proceed)]
[Insert completion timeframe (e.g.,
Two weeks after project concept is
approved)]
6.2 Project Schedule & Dependencies
Week 1
Week 2,3

Week 4,5
Week 6,10

Met with client, and determined requirements artifacts. Inspected

requirements artifacts.
Produced analysis artifacts, and inspected analysis artifacts.
Showed
artifacts to client, who approved them. Produced software project
management plan, and inspected software project management
plan.
Product design artifacts, and inspect design artifacts
Implementation and inspection of each class, unit testing and
documentation,
integration of each class, integration testing, product testing, and
documentation
inspection.

7. Human Resource Management

7.1 Project Roles & Responsibilities
Bryan and JC will perform the design workflow. Dexter will implement the class
definitions and report artifacts, Bryan will construct the artifacts to handle investments
and operating expenses, and JC will develop the artifacts that handle mortgages. Each
member is responsible for the quality of the artifacts he or she produces. Dexter will

oversee integration and the overall quality of the software product and will liaise with the
client.
Any major changes that affect the milestones or the budget have to be approved by
Dexter and documented. No outside quality assurance personnel are involved. The
benefits of having someone other than the individual who carried out the
development do the testing will be accomplished by each person testing another
persons work products.
Dexter will be responsible for ensuring that the project is completed on time and
within budget. This will be accomplished through daily meetings with the team
members. At each meeting, Bryan and JC will present the days progress and
problems. Dexter will determine whether they are progressing as expected and
whether they are following the specification document and the project management
plan. Any major problems faced by the team members will immediately be reported
to Dexter.

8. Communications Management
8.1 Communications Matrix
Stakeholder Messages Vehicles Frequency Communicators Feedback
Mechanisms
<Project Name>
Page 3 of 4
[I
nsert appropriate disclaimer(s)]
9. Issue Management
10. Compliance Related Planning
- list of compliance related processes the project must adhere to.

Whether youre single, married, divorced, or

somewhere in between, your relationship
status impacts your financial life when you
think about applying for a mortgage.

Some of the biggest commitments we can make include agreeing to a serious,

long-term relationship be that with another person or, in the case of your
finances, a house for sale in San Francisco, CA, or Boulder, CO, and the
30-year mortgage that comes with it. And interestingly enough, there is a
relationship between money and marriage, especially when that money is
related to a mortgage payment on your home. Your relationship status can
have a direct impact on your ability to get a mortgage, whether youre single,
in a long-term relationship, or married.
Its not that a specific relationship status decides whether you can get a
mortgage. But that status can influence the financial factors a
lender does look at to determine whether you get approved for the home loan
you apply for. Here are seven ways that your relationship status can influence
your financial facts and how that, in turn, might impact your mortgageworthiness.

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1. Youre single
Being single means youre free to make your own choices and decisions, and
that includes the choice to finance a home when and where you want. If your
relationship status is single, a mortgage lender wont hold that against you.
But a single person doesnt maintain a double-income household, which
typically results in a lower total household income. So unless your income is

high enough and youve already reduced all your other debts on your own,
you may not get approved for the loan you want.
One option for single borrowers is to get a co-signer. That makes you less of a
risk to the financial institution lending you the money, since the agreement
states someone else will make mortgage payments if you fail to do so.
Explore this option with caution: Co-signing can help you, but it has its
downsides too. If you run into trouble and cant make payments, your cosigner is on the hook, and your nonpayment can tank their credit. The
financial fallout can strain or damage your relationship.

2. Youre in a committed relationship

You dont have to be married to borrow money for a home loan. Of course,
this option requires you to seriously evaluate whether youre ready to add this
complication and responsibility onto your relationship. It may be harder
to split up jointly owned property if you break up and youre not married; no
one is required to go through any legal property division to walk away or end
the relationship.
That being said, lenders dont frown upon legally single individuals taking out
a mortgage together. Applying jointly means you get to combine your incomes,
but the lender will still look at the lowest credit score on the application. And if
youre not married, your application may look a little different from that of a
married couple. Casey Fleming, author of The Loan Guide, explains that two
individual applications are used when you apply for a mortgage with another
person if youre not married. These applications are then combined. We have
to name one Borrower and the other Co-Borrower, says Fleming. The
borrower would typically be the one with the higher income, although
sometimes its better to use the one with the better credit.

3. Youre married

Being married isnt automatically a marker of success to a lender. Sure,

getting a mortgage while youre married may make the process a little easier
and help you qualify for more favorable loan terms if you both work and
have income. It also helps improve your debt-to-income ratio if you can add
up two incomes and either have little debt between you or just one spouse
carries a manageable debt load. But mortgage-worthiness still depends on all
the financial facts in your life, like your income, debt, and credit score. If
your spouse doesnt make much income or has bad credit, that can make it
difficult to get approved.
As a married couple, you can choose whether to apply for a mortgage jointly
or keep the loan in one spouses name. That flexibility allows you to explore a
variety of options that another relationship status may not afford you.

4. Youre married, but your spouse has bad

credit
You may be dedicated to sharing everything within your marriage. After all,
when you said, I do you agreed that whats yours is your spouses too. So it
may feel odd to leave someone off a mortgage application, but that might be
the best thing to do if youre married and your spouse has bad credit. When
you apply for a loan as a couple, the lender uses the lower of the two credit
scores. If your spouse has bad credit, you may not be able to qualify for the
loan you want.
You may need to look at purchasing a less expensive home or saving up a
bigger down payment so you finance less of the property. Or you may have to
accept a mortgage with a higher interest rate and higher monthly payments.
Depending on the house youre hoping to purchase, you can accept these
terms or leave one spouse off the mortgage application.

5. Youre separated

Nothing says you cant get a mortgage while in the process of uncoupling from
your partner. However, if both people spouses or no are on title, warns
Casey Fleming, then both must agree to the mortgage in order to do it. One
owner may not encumber the property without the consent of the other
owner.
Fleming says that separation makes taking out a mortgage tricky because the
parties involved often dont cooperate. If two people are on the title but one
does not want to be on the loan, he explains, that is possible in California
and in most other states. The nonborrowing owner simply has to consent in
writing to the loan.
If you live in California or Arizona, Idaho, Louisiana, Nevada, New Mexico,
Texas, Washington, or Wisconsin you need to be aware of the community
property laws in your state. In these states, community property is everything
you own together. There are a few exceptions, including property you
purchased before you were married or after you obtained a legal separation.
Most community property needs to be sold if you split up unless both parties
can agree on how to distribute everything. Reaching an agreement here may
prove challenging unless the split is uncontested by either side.

6. Youre divorced
Going through or just getting out of divorce proceedings can impact your
ability to qualify for a mortgage. Splitting up jointly held property can damage
both ex-spouses credit scores, so its important to work with your attorneys
and possibly a financial adviser to create a strategy to avoid this. That strategy
may include dealing with living under the same roof for a time until a property
can be sold. You probably also need to sell your old marital home
before moving on since its difficult for many borrowers to take out a second
mortgage while still paying down the first.

7. Youre recently widowed

Lenders want to know what your income will look like in the future, including
actual Social Security payments or death benefits not what youre qualified
to receive. Lenders generally want to see that these benefits continue for at
least three years. Otherwise, they wont be used as qualified income.
For better or worse, your relationship status can play a role in your financial
life when you look to take out a mortgage. Its important to understand how
your current situation may impact your loan application before you approach a
lender.
- See more at: https://www.trulia.com/blog/6-ways-relationship-status-affectsmortgage-worthiness/#sthash.cQpZ8YlJ.dpuf

Love may be blind, but don't go into a real estate purchase with your eyes
closed.

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Serious young couples used to mark their commitment to each other

with an engagement ring, but now theyre in the market for a bigger
asset: a set of shiny new house keys.
One in four couples between the ages of 18 and 34 bought a house
together before they were married, according to a study by Coldwell
Banker Real Estate. MONEY found in our own poll of 500 millennials
financial attitudes that 40% think its a good idea for a couple to buy a
home together before marriage, while 37% think the
purchase should take place prior to the wedding.
Low-rate mortgages, rising rental costs, and the ability to deduct
mortgage interest from income taxes all make being a homeowner now
rather than later seem like an attractive option. And while making that
move first can work out well, as it did for Seattle couple Katy Klein and
Charles Hagman, not every story has that same happy ending.
In fact, many financial planners advise against it. Thats because buying
a home is often the biggest and most financially complicated move a
couple makes, and unwinding it can be especially difficult for unmarried
partners if the relationship ends. So if youre buying a home with your
beloved before getting hitched, spare yourself any potential financial
heartbreak by following these tips.
Compare Credit Scores
You and your partner have probably already shared details about your
income and savings when determining if you could afford to buy. But
another piece of information youll need to share well in advance of
closing is your credit report.
If a couple is entering into a business deal, which is what a home
purchase between two nonmarried people is, they should know the
creditworthiness of their business partner. A persons credit score will
impact your ability to obtain a mortgage and the interest rate you will
pay, says Pewaukee, Wisc.-based financial adviser Kevin Reardon.

If you or your mate has a poor score, it could influence how you decide to
title the property and who takes responsibility for the loan. Married
couples are generally viewed by creditors as a single unit, but unmarried
couples are assessed as individuals, even if applying for the loan
together.
This can work to your advantage if you have the person with stronger
credit purchase the home, says Sandra OConnor, regional vice
president with the National Association of Realtors. By eliminating the
poorer score from consideration, you can secure better rates. On the flip
side, with only one person applying for the loan, and thus one income on
record, the amount you qualify for could be lower than what you could
get with two incomes. And, of course, only one persons name will be on
the loan and deed, leaving the other partner vulnerable in the event of a
breakup.
Open a Joint Account
Consider setting up a joint bank account, if you dont already have one,
that can be used to pay the mortgage, property taxes, insurance, and
maintenance, Reardon suggests. Each of you can set up automatic
monthly deposits into the account from individual bank accounts; this
way neither party can forget. You can further simplify bill paying and
budget tracking by having home expenses automatically deducted from
the account each month.
Decide How to Manage Costs
When you cosign on a mortgage, you are 100% liable for the debt, which
means if the relationship turns sour and your partner stops paying, you
must assume the entire obligation. For this reason, financial planner
Alan Moore, co-founder of the XY Planning Network, recommends
choosing a home with a mortgage you can swing on one income. That
can also be a huge help down the road in the event of unexpected illness
or injury, since youll still be able to afford the monthly payments.

Before setting a housing budget, both partners need to have an honest

conversation about the amount of debt theyre comfortable living with.
Just because you can borrow the maximum amount doesnt mean its a
good idea. Stretch your combined budget too far, and any unexpected
expensewill likely have one of you coming up short when the monthly
payments are due.
Put Your Agreement in Writing
Contact a real estate lawyer to prepare a written document, such as a
property, partnership, or cohabitation agreement, that clearly outlines
the full details of your arrangement, including what percentage of the
homes equity each partner is entitled to, especially if you contributed
different sums to the down payment or mortgage balance, and what will
happen to the property if you split up.
The contract should specify whose name will be on the deed or lease,
one or both, who will pay for whatI pay the utility bill, you pay the
cable billetc., says Reardon. It would be productive to note what
happens if one party cant pay. Will both parties move out? Will one
party take over the payments for the other, if they are able to, then create
a note receivable from the partner who cant pay to the partner who can?
Will this note be collateralized? Its great to iron out these details in
advance because it removes any doubt or emotions in the event things
turn out badly.
Title It Right
You and your partner must decide how you will own the home or take
title. You have three options: One person can hold the title as sole owner,
both of you can hold title as joint tenants, or you can share title as
tenants in common.
Typically, you would want both parties to hold title, as putting the
property in only one partners name leaves the other partner without
equity in his own investment. (Youll certainly want that separate written
contract mentioned above if you go this route.)

If both partners sign the title as tenants in common, then each owns a
specified percentage of the property. One person may own a 60%
interest, while the other owns 40%, for example. This split is specified in
the deed. If one partner dies, ownership will not automatically transfer to
the other homeowner unless that person is named in the will; instead the
deceased owners heirs will inherit his or her share.
When you hold title as joint tenants with right of survivorship, you are
considered equal owners, and if one of you were to die, the other would
automatically inherit the others stake and own the entire property.
Bottom line: No matter how you hold title, it is important that you and
your partner enter this agreement with a complete picture of each others
finances and a written contract outlining your desires for the propertys
division should the relationship end.