What Is An Interest Only Mortgage, And Should I Get One?
There is a non-traditional type of home mortgage loan being marketed to consumers known as an interest only home mortgage loan. Sometimes called a balloon mortgage, an interest only mortgage is exactly what the name implies. For the term of the mortgage, the borrower is paying only the interest that is due on the home mortgage loan and is not paying anything back towards the original loan amount.At the end of the mortgage term, the balance due on the loan will be equal to the full amount that was originally borrowed. This balance will be due, in full, when the mortgage loan term ends.Why an Interest Only Mortgage Loan Sounds AttractiveObviously, we would all like our monthly mortgage payments to be as low as possible. With an interest only home mortgage loan, the borrower is keeping his monthly payments to a minimal by paying only the interest that was accrued on the loan in the last thirty days since his last payment.
Therefore, this type of mortgage is often marketed to the consumer as a tool which allows the borrower to "buy more of a home" than they would be able to afford with a traditional home mortgage loan.To illustrate this let's take a look at the purchase of a $150,000 home. Buying this home with a traditional 30 year fixed rate mortgage with a seven percent interest rate would give you monthly mortgage payments of approximately $1,000. On the other hand, if the consumer chooses an interest only 30 year fixed rate mortgage at the same seven percent interest rate, monthly mortgage payments would only be $695. This type of mortgage would be attractive to the consumer who can afford $700 each month, but can not afford $1,000.For the most part; however, financial advisors will tell you it is best not to choose this type of loan except in rare circumstances. It is generally accepted that an interest only home mortgage loan is an alright choice if you don't intend to hold the loan for more than a year or two and you are being offered a great interest rate.Why An Interest Only Mortgage Is Not A Good IdeaIn general, it's best not to choose an interest only option for your home mortgage loan.
Why? The largest problem with this type of financing is that the home owner is not building any equity into his home with an interest only mortgage. The home will still be considered "fully financed" even after the mortgage term comes to an end.There are also other reasons that an interest only mortgage is not usually your best choice.If you buy the home during a high market and the value of the house drops or remains the same during the term of the mortgage, it is possible that even after selling the home, you will still have money unpaid from your interest only mortgage.Furthermore, if the homeowner does not wish to sell the home at the end of the mortgage term, then he will have to have another plan in place for paying off the balance of the mortgage due.As you can see, there are times when this type of loan would be wise?such as in investment properties?but if you are buying a home and planning on living in it for some time, it's probably not the loan for you!.
This article provided courtesy of http://www.business-loans-guide.comOnline Mortgage Lenders
There are so many mortgage lenders available online that often it becomes difficult to choose from among them. Most mortgage companies have websites that sell mortgages online. In fact, the presence of mortgage lenders online has proved to be a blessing for both mortgage shoppers as well as mortgage selling companies.
The prime advantage of online mortgage lenders to a buyer is the wide exposure to different mortgage companies. A person wishing to buy a mortgage can browse through several mortgage lender websites and then decide what is best according to his or her requirements. There are also some mortgage sites that provide online forms to be filled in.
According to the specifications filled by the person in these forms, a list of suitable mortgage companies are displayed, from which the buyer can pick and choose.
The greatest benefit to the buyer is the freedom of selection. Without having to physically visit the office of the mortgage lender, the...
Mortgage > Online Mortgage Lenders
Mortgage Cycling - A Powerful Mortgage Technique For Dramatically Paying Down Any Mortgage 10 Times Faster Without Changing Your Current Mortgage Provider
Mortgage Cycling Revealed by Craig Romero reveals how current homeowners can pay off their 30-year mortgage in as little as 10 years.Mortgage cycling is a unique way of manipulating your payments to drastically pay down any mortgage 10 times faster then conventional methods. Mortgage cycling works with any type of mortgage whether you have a ten, twenty or thirty year mortgage.After over 4 years of development and testing Craig Romero a senior mortgage analyst shows homeowners how to build up to $14,000 in equity their first year and up to $45,000 equity in only 3 years.Smart homeowners know that to make their mortgage a positive investment they need to build up their equity fast... while decreasing the amount of interest paid to the bank or mortgage holder. Mortgage Cycling allows them to do this without changing their current mortgage, refinancing, or using a bi-weekly service. Imagine what you could do with over 20 years of mortgage savings in your bank account? For once you could...
Mortgage Cycling - A Powerful Mortgage Technique For Dramatically Paying Down Any Mortgage 10 Times Faster Without Changing Your Current Mortgage Provider
Mortgage > Mortgage Cycling - A Powerful Mortgage Technique For Dramatically Paying Down Any Mortgage 10 Times Faster Without Changing Your Current Mortgage Provider
A Guide To California Home Mortgage Loan Rates
Mortgage loans used to be long-term obligations, but since the rates float with more volatility, people can use refinancing to pay many of these loans off faster than before.
In spite of this long-term financial commitment, multitudes of Californians are applying for these loans. These loan rates are variable and one must study the options at various banks before deciding on a mortgage loan rate.
California home mortgage loan rates have provisions for adjustable rates. This typically refers to a mortgage loan that has a different interest rate from time to time based upon the changes in a specific index. One may avail of an annual percentage rate wherein the loan charges are confirmed as a yearly rate.
This includes the interest, loan insurance and loan origination fee.
One may avail of a bi-weekly payment term loan, wherein payments are made biweekly to reduce the debt. This results in a substantial savings in interest. A temporary buy-down...
Mortgage > A Guide To California Home Mortgage Loan Rates
First Mortgage Services
Before getting a mortgage, it is essential to understand the different types of services that are offered by mortgage firms.
Services in this sector can essentially be divided into two categories: pre-first mortgage and post-first mortgage. Various services like mortgage advice and brokerage come under the first category. Refinancing is the most important component of the second category.
Generally, mortgage loans cover purchase or construction of homes and/or property. Lenders also provide loans for purchase of building sites, automobiles and refinance.
Some mortgage firms have networking links with lenders and sometimes offer loans to people who have been turned away elsewhere. Some act without mortgage brokers and deal with customers directly.
On approaching a typical lender, the customer is first briefed on the price of purchase, interest rates and down payment. If the rates offered are competitive, the customer is shown the current...
Mortgage > First Mortgage Services
JSSmith Mortgage to Launch JV Mortgage Offices With West USA Realty
Scottsdale, AZ (ContentDesk) July 17, 2006 -- JSSmith Mortgage, a new mortgage company in Scottsdale, Arizona has landed a prestigious mortgage joint venture with the West USA offices located in the greater Phoenix area. JSSmith Mortgage will create an in-house mortgage company for West USA Realty and it will be operated as a joint venture company called TLC Mortgage, LLC.
Both JSSmith Mortgage and West USA Realty will be partners in the new venture.With over 2000 agents in Arizona, West USA Realty is considered the states largest real estate brokerage and it is ranked sixth nationally. TLC Mortgage, LLC will be offered on-site in each of the five branch offices of West USA Realty offices in the greater Phoenix area. We chose to team up with JSSmith Mortgage because of that companys deep expertise in creating mortgage joint ventures. We value their integrity and business acumen, said Clay Fouts, President and Founder of West USA Realty.
JSSmith Mortgage founder, Jeffrey...
JSSmith Mortgage to Launch JV Mortgage Offices With West USA Realty
Mortgage > JSSmith Mortgage to Launch JV Mortgage Offices With West USA Realty
2nd Mortgage
A 2nd mortgage may be one of the best financial moves you will ever make. If you know what it is and how it works, you can use it to generate money for profitable investments, simplify your debts and beef up your credit score. The key to taking advantage of a 2nd mortgage is understanding how it works.
A 2nd mortgage is a loan that uses the equity in your home as collateral. When you avail of a 2nd mortgage loan, you are technically putting a second mortgage lien on your title without refinancing or changing the terms of your first mortgage.
A 2nd mortgage is considered a "simple interest loan" because unlike other major loan vehicles, it has a fixed interest rate. This fixed interest rate is based on a number of factors such as the current market rate of your home, the prevailing interest rates and your personal credit history. You can choose terms that vary from five years to 25 years, depending on your capacity to pay and other cash flow considerations.
Mortgage > 2nd Mortgage
Fixed Rate Mortgage Loans - Understand the Pros and Cons of the Fixed Rate Mortgage
There are many benefits and drawbacks to consider when deciding if a fixed rate mortgage is right for you. It is important to look at all options when it comes to something as important as getting a mortgage for your new home.There are a few benefits to fixed rate mortgages. One benefit is that the rates and payments remain constant. There won't be any surprises even if inflation surges out of control and mortgage rates head to 20%. This kind of stability makes budgeting easier.
People can manage their money with more certainty because their housing expenses won't change. Fixed rate mortgages are simple to understand making them appealing and good for first time buyers. Also longer term fixed rate mortgages are very affordable. There are also a few drawbacks to fixed rate mortgages. To take advantage of falling rates, mortgage holders would have to refinance.
That can mean a few thousand dollars in closing costs, another trip to the title company's office and several hours...
Fixed Rate Mortgage Loans - Understand the Pros and Cons of the Fixed Rate Mortgage
Mortgage > Fixed Rate Mortgage Loans - Understand the Pros and Cons of the Fixed Rate Mortgage
Mortgage
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