Latest information on home mortgages
Buying your first home is a huge milestone – and often a scary
one. Be sure you’re getting the best value for your money by
learning about the different types of home mortgages available
today and seeing available rates from competing mortgage
lenders.
There are three sides to a mortgage: the amount of money you
borrow, the interest rate you’ll pay on the loan, and the length
of the mortgage.
The amount you borrow depends on the cost of the home and the
size of your down payment. If you purchase a $300,000 home and
make a down payment of $60,000, you’ll need a $240,000 loan.
The interest rate is one of the great variables when looking at
mortgages and other home loans. There are two basic types of
mortgages: fixed-rate and adjustable-rate mortgages (ARMs).
Fixed-rate mortgages have just that – a fixed rate of interest
that never changes in the life of the loan, so your monthly
payment will always be the same. An ARM has interest rates that
tend to change according to the general credit market. This can
work to your advantage when rates go down, but if market rates
increase, the rates on your loan will likely increase at a
similar rate. However, most ARMs have a cap on interest rates –
this will vary from lender to lender.
Nowadays buyers have much more flexibility in terms of the
length of the loan. While most mortgages fall in the 15-30 year
range, some lenders now offer 40 and 50 year mortgages. These
longer term mortgages are ideal for people who want lower
monthly rates and don’t mind paying off their loan well into
retirement. Of course, the longer the term of your mortgage, the
more interest you’ll pay in the long run.
Expert advice on home equity loans
If you’re a homeowner in need of some extra cash, a home equity
loan may be the easiest solution. By using your home as
collateral, you can borrow money for home improvement projects,
personal expenses, auto payments, college education, and more.
Whatever your financial needs are, being a homeowner could
qualify you for a home equity loan or home equity line of
credit.
The amount of money you can borrow depends on the amount of
home equity you have. And this may be a much higher figure than
you imagined. To determine your home equity, simply deduct the
amount you owe on remaining mortgage payments from the appraised
value of your home. If you own more than one property, your home
equity is the combined equity of all of your properties.
Of course, details of a home equity loan need to be discussed
with the lender. As with any loan, there are certain fees that
apply. These vary according to the lender and need to be
factored into your decision. They make include a property
appraisal fee (to estimate your home’s value), a non-refundable
application fee, closing costs, taxes, and up-front charges.
Other factors to consider are the payment plan and how the loan
is affected if you sell your home before the end of term. You
may be required to pay loan off in full when you sell your
house. The term of home equity loans can range from 5 to 30
years.
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Source: http://www.isnare.com
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