There are many mortgage products available on the market today. We can help you find out which one is right for you. Here are the most common options.
Fixed Rate Mortgages (FRM's)
* Interest rates stay constant for the life of the loan.
* Offered in 10, 15, 20, or 30 year terms.
* Payments are made up of principal and interest (P & I) portions and escrow portions. The P & I portion would not change for the life of the loan. Escrow amounts would pay for things like home owners insurance and property taxes. Escrow amounts may vary from time according to the cost of these items.
* If your loan requires that you carry Personal Mortgage Insurance (PMI), these payments would be added to your monthly payment amount until this mortgage would no longer be necessary. This is normally when you acquire 20% equity in the home.
* Fixed rate mortgages usually have low down payment requirements.
Adjustable Rate Mortgages (ARM's)
* Also called variable-rate loans.
* Starts out with a lower interest rate, and changes according to market fluctuations. How often it changes depends on the terms of the loan. The most common adjustment term is once every year.
* ARM's have limits, or caps, on the number of percentage points it can go up each year. It also has caps on how much it can go up for the life of the loan. This happens according to the terms of the loan you choose. For example- your mortgage starts at a rate of 4%. If you have a yearly cap of 2 points, and a life long cap of 6 points, this is what can happen to the percentage rate of your loan. At the end of one year your mortgage company can increase your rate by two points, to 6%. At the end of the second year, your mortgage company can increase your rate by 2 points, to 8%. (A total of 4 percentage points higher than the original term of the loan.) At the end of the third year, your mortgage company can increase your rate by 2 points, to 10%. A total of 6 percentage points higher than the original terms of the loan.) At this point you have had an increase of 6 percentage points and can no longer have your interest rate raised for the life of your loan. Of course these changes are tied to the index that your ARM is based on.
* A convertible ARM allows you to have the lower interest rates for the beginning of the loan, but the option to convert to a fixed rate loan when you choose. This usually requires a conversion fee as set up by your loan institution.
Balloon Mortgages
* These types of mortgages allow you to carry a lower interest rate than most other types of mortgages.
* Terms of these types of mortgages are usually for 5 to 7 years. At the end of this time period a payoff payment, or balloon payment, is required to pay off the remainder of the loan.
* If you plan on staying in the house at the end of your loan period, you must refinance your loan amount into a conventional mortgage plan to make your balloon payment. (A FRM or an ARM.)
Interest Only Mortgages
* An option that can be attached to any type of loan, not an actual loan type.
* You pay only the interest on your borrowed amount for the beginning terms of the loan. This is usually between 1 and 5 years in length.
* At the end of your interest- only period you begin making payments based on the interest rate of the type of mortgage you chose- a FRM or an ARM. You have conventional principal and interest payments, plus any escrow amounts due.
* You do not save any money on your principal when choosing this type of loan. It only delays you paying your principal for a preset length of time. Your P & I payments will actually be higher after your interest only period, because your payments will be amortized according to the remaining time left on the loan. Example- A 5 year interest only option on a 15 year mortgage for $100,000.00. You will pay only the interest for the first five years, then you will pay P & I for only 10 years. Therefore, you will be paying off the $100,000.00 over 10 years instead of 15 years, making your payments higher.
* This option works best for people in certain monetary situations. The most common ones are if you do not make a set amount of money every month, such as being paid on commission or bonuses. Another one would be if you are expecting a lump sum payment of money in the forseeable future. A more risky reason would be if you are sure you can invest the money saved by doing this for a secure profit at the end of your interest only period.
Jumbo Loans
* Most loan institutions follow the Fannie Mae or Freddie Mac federal guidelines for loans. They have an established maximum loan amount of $359,650.00. Any loan above this amount would be considered a Jumbo loan.
* Jumbo loans usually carry a higher interest rate.
Genesis Font is an SEO and Developer for Mortgage and Loan Officer Websites. We also offer Quality Web Hosting Services.
With escrow accounts the money for your home insurance and... Read More
With the recent sharp increase in property values your current... Read More
So, your bank had just turned you down for a... Read More
Here are some mortgage tips that can help you obtain... Read More
This is a great time to Refinance Your Home or... Read More
If you have bad credit history, no down payment or... Read More
Persistence is the key working toward getting approved for a... Read More
For many seniors one of their greatest sources of security... Read More
People with bad credit that are looking to get a... Read More
An adjustable rate loan, most simply stated, means that your... Read More
Using a home equity loan to get out of debt... Read More
A home equity loan allows you to cash-in on the... Read More
Private mortgage insurance is an excellent method for homebuyers who... Read More
A new survey reveals that in the last five years,... Read More
So, you've found the perfect home. You've already decided where... Read More
Interest-only loans are quickly becoming a mainstream loan product. Borrowers... Read More
"Own your home free and clear in 3 to 4... Read More
Buying a home is usually the largest purchase any of... Read More
What is a "Reverse Mortgage?"Also known as a Home Equity... Read More
It is a curious fact of human nature that people... Read More
Have you heard about or been interested in finding out... Read More
If you in the process of looking for your first... Read More
Most consumers are aware that a history of paying bills... Read More
Wanna know a little secret? There is an ingenious method... Read More
This is a guide on how to get the best... Read More
Home equity loans and lines of credit are useful tools... Read More
Having just settled in life, you are finding the rentals... Read More
W. Edwards Deming said "Marketing and innovation are the only... Read More
The best home improvement loans usually aren't going to be... Read More
Okay, you've decided to buy a home and are trying... Read More
You have been paying on your mortgage for quite sometime... Read More
Having poor credit alone cannot hold you back from getting... Read More
Mortgage would have never happened, had mortgages been a no... Read More
A Home equity loan has become an easy way to... Read More
Home equity loan information can sometimes be confusing and misleading.... Read More
It takes a mighty big effort to secure a home... Read More
Choosing a home loan has never been tougher. Yes, with... Read More
This is what a mortgage can do for you!AND Why... Read More
There are some definite benefits to doing a cash out... Read More
Private lenders, banks, and mortgage companies are all setting up... Read More
If you are a homebuyer, there are a few points... Read More
Your search for a mortgage isn't leading results.Check for any... Read More
1. Never discuss your household finances over the phone with... Read More
Your equity is the amount your home is worth, on... Read More
A mortgage is a loan, usually from a bank, finance... Read More
What does it mean to refinance? Why would anyone want... Read More
Give yourself time to rebound. Whether you had to turn... Read More
Here is a useful guide to the different types of... Read More
Owning your dream home need not just be a dream.... Read More
The Research Rates of Agri MortgageFirst thing, when finding an... Read More
Finding a good lender to help you with refinancing your... Read More
Have you ever heard of a mortgage broker before? If... Read More
Outlined below is a useful remortgages guide. Remortgaging has become... Read More
You've finally found that dream home that you have always... Read More
Mortgage underwriters can be a suspicious bunch. If you have... Read More
Frequent Asking Questions:What are Points? A. There are several types... Read More
There are two broad types of home equity loans:Term loans:... Read More
USA ECONOMIC CONDITIONSToday's sluggish economy has left millions of people... Read More
Self-employed mortgages, as the term implies are mortgages designed for... Read More
With escrow accounts the money for your home insurance and... Read More
The first time you purchase a home is an exciting... Read More
You've undoubtedly heard or seen ads for mortgages with very... Read More
Home loans for people with poor credit demand that you... Read More
Buying a house is a very important step in your... Read More
Buying a home, especially for the first time, can be... Read More
You have been paying on your mortgage for quite sometime... Read More
Mortgage Refinance |