Jan
31
Know Your Home Financing Rates
You decide it’s time to go shopping for a home mortgage. The instant this decision is made, a feeling of dread washes over you. The same old questions thump inside your brain. How do I compare home financing interest rates? How will I know a decent rate when I see one? The where, what, how and why of home financing will have you so mind boggled you will soon be tearing your hair out in despair.
Even more so because you are smart enough to know, you just don’t know enough. Hopefully, the article will help you understand what you need to know about mortgage interest rates, the different types of rates, and how to select wisely.
The different types of mortgage rates that can affect your mortgage loan are detailed below:
The Fixed Rate
The fixed rate mortgage is the most common and the easiest to understand in that the rate simply never changes or to put it another way, the interest on your loan remains fixed. The repayment periods for fixed interest rate mortgages range from 10 to 30 years. If you are fortunate enough to lock in your interest rate at a time when rates are low, no matter what changes takes place with the interest rates, your rate will be fixed.
As fixed rates go, the longer the term (Re. duration) the higher the rate. Usually 10 and 15 year terms are about .25-.50% lower than 20-30 year terms.
Most fixed rate mortgage loans due to a fixed rate also have the added predictability of having a fixed monthly payment as well. This seems pretty easy to understand for the average mortgage shopper, so it is no wonder that most American pick a fixed rate, fixed payment mortgage. They get it, so they choose it most often.
Adjustable rate mortgage or ARM
With this type of interest rate the lender guarantees a fixed rate of interest for a specific period of time, usually 3, 5 or 7 years. Once that period is over, the interest rate changes to the current mortgage interest rate. Therefore ARM is exactly that, adjustable. You would be wise to negotiate a cap on the interest rate at the time of taking the loan. This cap or ceiling should be mentioned in your agreement.
Two step mortgages are pretty much similar to the adjustable rate mortgage whereby you lock in the interest rate at slightly lower than the going rate of interest for a set tim
1000
e period. When the period expires, step two is for your mortgage interest rate to switch to the current rate of interest.
Balloon rate – with this rate of interest, your monthly payment and mortgage rate remain fixed for a specific period of years, usually 5-7 years, at the end of which the remainder of your loan or the entire balance of your loan comes due. Choosing this option means you either refinance to pay off the loan or sell your house to pay off the loan.
In order to choose right you need to know the product you want and to do this you have to research thoroughly and find a broker who can guide you towards making the right choice. Another major consideration would be the length of your loan, a longer term of repayment will mean smaller monthly payments but a bigger bill at the end of it all, because the longer you have the loan the more it will cost you.
Your mortgage rate will fall into any one of the above categories based on your choosing. What you need to do is get hold of the proper mortgage broker, someone qualified with all the available home financing choices and a solid lender group to assist you in choosing the right mortgage and mortgage rate to match your needs and repayment ability.
By: Rob K. Blake
Article Directory: http://www.articledashboard.com
Rob K. Blake, mortgage expert and author, educates mortgage shoppers on finding local providers by state like Connecticut Mortgage Brokers and Lenders and provides reviews of national companies like Accredited Home Lenders.
Truth About Refinancing
by: Brian ONeal
Let’s face it, not everybody needs to refinance. With all the hoopla about Low Rates and the Refinance Boom, you want to know the facts. You want to know when refinancing is right or wrong and why? Okay, I’ll tell you.
It is actually quite simple. You should refinance when you have credit card debt exceeding $10-15,000, depending on your situation. Because you will receive a tax credit at the end of the year on your mortgage. Also, there are programs designed to keep your rate low for one, two, or three years until you’ve saved money on your credit card debt.
You should also look into refinancing if you’ve been in your home for over one year and your interest rate is above 6.5% or if your loan-to-value ratio is at 80% or less. Call a mortgage professional about this. If you do not fit into either of those situations, they you shouldn’t refinance!
So call a mortgage professional now and see if you can save a buck or two! I promise it won’t cost you a penny to call and ask. Happy Hunting!
About The Author
Brian ONeal is a senior Mortgage Broker with http://www.scapmortgage.com/ . If you need a home loan or just need to speak with a specialist to make sure your getting the best deal please visit www.scapmortgage.com.
Ok so you might find the next few links interesting. These are from around the web, just random snippets that I’ve picked up in my reading, but I found some very cool information in them. You might too. Here goes…
Mortgage Rates Current: 30 Year Mortgage Rates at 5.17% and 15 …
Current mortgage rates are mixed for the week ending January 11, 2009. 30 year mortgage rates were up slightly to 5.17 percent while 15 year mortgage rates were down to 4.55 percent. After several consecutive weeks of mortgage rates …
Finding Out The Most Satisfactory Current Home Mortgage Rates …
For the best home mortgage rate, you will need to go to credit unions, mortgage agencies in addition to thrift institutions. Sometimes getting a mortgage broker – Baltimorehudhomes.com.
Finding Out The Most Satisfactory And Current Home Mortgage Rates …
You need to control the factors that will pick out for you the most beneficial home mortgage rate. Mortgage or occasionally recognizen as home loan is possibly – Baltimorehudhomes.com.
Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.
Have a great day!
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