The True Cost of your Credit
The current house price boom has perhaps passed its peak as I write this, but that doesn't stop the mortgage companies from offering yet more new and tempting products that look like good deals for a consumer. But be warned - The standard mortgage, running over 25 years is set like that for a reason! When you see companies offering '40 year mortgages' or 'low start' mortgages, or perhaps even 'interest only' mortgages, you should understand these shiny new products may have a nasty sting ion their credit tail!Perhaps the ultimate expression of lending absurdity is Japan, where at the peak of their last boom, 'Grandfather - Father - Son' mortgages were common. These committed unborn future generations to mortgage payments incurred by their predecessors (a situation thankfully illegal in most parts of the world!). Could it ever happen here? Probably not, but the extension of 'standard' mortgage terms on lower interest rates are not actually a good thing for the ordinary Joe, even though they are touted as being 'more affordable', and should be viewed with deep distrust, simply because it means YOU WILL PAY MORE over the life of the loan. Don't believe me? Try working out the math, instead of simply looking at the monthly repayment figure.Using the good old loan calculator on www.nodebtever.com we can see that a standard $100,000 loan at 5% over 25 years will cost you over $175,000.
That's a big $75k in interest. What about the same loan over 40 years at 4%? That's cheaper, right? WRONG! You'll pay over $200,000 over the period - an extra $25k or so! And if interest rates stay at 5%, add another $30k to make $55k of extra costs for you!A repayment mortgage will suffer an additional penalty on a longer loan - the amount of capital you pay off each month is adjusted to take account of the fact that it now runs over 40 years, not 25, and this means you build up equity in your property far slower than in a shorter loan. So what's the advice? If you can't afford a house on a 'traditional' setup, rent. The price will undoubtedly come back into line with wages at some point. If you already have a mortgage, overpay when you can - the difference over the years can amount to TENS of thousands of dollars!.
Aimee Phillips writes for www.NoDebtEver.com a free site offering advice on debt problemsFlorida Interest Only Mortgages
An interest-only mortgage is one in which you only pay back interest with no principal for a certain period of time.
After this time period, which is usually five to ten years, the payment increases to include repayment of both interest and principal.
Most lenders in Florida offer interest-only mortgages.
As with any other mortgage, this option works best if you understand its advantages and disadvantages.
If you need a lower payment initially and anticipate you will be able to make larger payments later, an interest-only mortgage may be the right choice for you.
Alternatively, if you want a larger mortgage to buy a more expensive house, an interest only mortgage may help because the initial payment you are required to make is smaller so you can borrow more.
Interest-only mortgages may also be convenient for people who have an irregular income.
If your cash flow is irregular and you still want to buy a house, an interest...
Mortgages > Florida Interest Only Mortgages
Atlanta Mortgage Rates
Based on interest rates, Atlanta Mortgages can be divided into two types namely fixed rate and adjustable rate loan. In the case of a fixed rate loan, a monthly payment including the principal and the interest will never change for the duration f the loan.
These types of mortgages are available for different maturity periods ranging from biweekly to 30-year. The rate of interest also increases with the increase in the maturity period of the loan.
Adjustable rate mortgages offer an introductory rate of interest in the beginning for a fixed time period and later an adjusted rate based on the market index rate. The rates of interest of these mortgages fluctuate with market rates of interest on securities like the six-month Certificate of Deposit (CD), the one-year Treasury Security or others.
Adjustable rate mortgages have a lifetime cap which protects the borrower from the monthly payment going too high too fast. The interest payments under adjustable...
Atlanta Mortgage Rates
Mortgages > Atlanta Mortgage Rates
Change in Texas Law May Make Reverse Mortgages More Popular
Texas was one of the last states to allow homeowners to take out home equity loans. Laws going back to the nineteenth century strictly prohibited home equity lending, as legislators feared that unscrupulous lenders would take advantage of homeowners for the purpose of seizing their homes through foreclosure. This made it impossible for citizens of the Lone Star State to use their equity for home improvements, debt consolidation or paying medical bills, as homeowners in other states may do.In 1997, the Texas constitution was amended to allow homeowners to borrow against their home equity. The amendment allowed for traditional term loans, lines of credit, and reverse mortgages, but did not allow a line of credit on a reverse mortgage. In a reverse mortgage, owners of homes who are at least 62 years of age may borrow against the equity in their home.
They need not pay the money back until they die, move or sell the home. Reverse mortgages have become quite popular in the last few...
Change in Texas Law May Make Reverse Mortgages More Popular
Mortgages > Change in Texas Law May Make Reverse Mortgages More Popular
A Guide To Commercial Mortgage Lending
A commercial mortgage is a loan that uses commercial property as a guarantee. Commercial mortgages are often used to buy business property, such as offices, shops, restaurants, or pubs. However, they can also be used to buy other business assets, such as plants or machinery.
Commercial mortgaging is probably the best way to finance the purchase of buildings and land for business, because it provides a flexible and affordable solution that gives you access to capital. Commercial mortgages are specialized due to the fact that the lender has a legal claim over the property until the loan has been repaid in full.
In addition, commercial mortgages can also be an excellent way of financially supporting the expansion of an existing business.
A commercial mortgage will give you access to capital that you would not normally have, with minimal up-front payments and the flexibility to design a repayment plan that suits your organization's needs. The character...
Mortgages > A Guide To Commercial Mortgage Lending
Online Mortgage
The main advantage of applying for online mortgages is their
convenience. It is relatively easier to apply for an online mortgage than it is
for an offline mortgage. The Internet is a wonderful tool and one which you can
take full advantage of when looking for the best deals in online mortgages.
Many online mortgage lenders offer competitive packages for home buyers and
most of these offer free online mortgage quotes for your perusal. As a perk,
some of these sites also offer free online mortgage calculators to help you
calculate the costs and gains of the loan programs they have to offer.
The Benefits of Online Mortgages
Borrowers can stay involved with their mortgage dealings by applying for
a mortgage online.
With traditional mortgages, lenders may not give out enough
information, leaving the borrower practically in the dark throughout the whole
process. Online mortgages...
Mortgages > Online Mortgage
Adjustable Rate Mortgages - Understand the Benefits Compared to a Fixed Rate Mortgage
Adjustable rate mortgages can be very tempting to home buyers, yet they carry a great deal of uncertainty. Fixed rate mortgages offer rate and payment security, but they are more expensive. It is important to weigh the pros and cons of ARMs and fixed rate mortgages before you decide which is right for you.There are many benefits with an adjustable rate mortgage. One benefit is that they usually feature lower rates and payments early on in the loan term. Lenders can use the lower payment when qualifying borrowers, therefore borrowers can purchase larger homes than they could otherwise afford.
ARM's allow borrowers to take advantage of falling rates without refinancing. Instead of having to pay closing costs and fees, borrowers can just sit back and watch their rates fall without worrying about these extra costs. Adjustable rate mortgages can help borrowers save and invest more money. Someone who has a payment that is say $200 less with an ARM than with a fixed-rate mortgage for...
Adjustable Rate Mortgages - Understand the Benefits Compared to a Fixed Rate Mortgage
Mortgages > Adjustable Rate Mortgages - Understand the Benefits Compared to a Fixed Rate Mortgage
FHA Mortgage
Many people dream of owning their own homes but only very few are able
to pay cash for them. This is why FHA mortgages are one of the popular methods
to find a source for consumer credit. People who could not otherwise afford to
own a house become homeowners with the help of FHA mortgage insurance programs.
FHA is the Federal Housing Administration. As part of the U.S.
Department of Housing and Urban Development (HUD), one of the chief purposes of
the FHA is to help people obtain financing for their homes.
How FHA Mortgage Insurance Works
As stated earlier, FHA mortgage is a way for homebuyers to obtain
financing for their homes.
All home purchases require buyers to make a certain
set percentage of the total purchase price, called the down payment. What the
FHA mortgage insurance does therefore is to allow a homebuyer to make a modest
down payment and obtain...
Mortgages > FHA Mortgage
What is a Flexible Mortgage?
'Flexible mortgage' is a term that's used a lot, but what exactly does it mean? A flexible mortgage allows the borrower to make extra repayments when they have the extra money and even reduce or skip payments should the need arise. A flexible mortgage allows you to make extra payments to reduce the amount outstanding on your mortgage thereby reducing the interest you're paying or pay off your mortgage earlier than planned. Imagine being able to save money in mortgage interest, or borrowing enough money pay off your credit cards or personal loans, or buy a new car at a low rate of interest. That's exactly what flexible mortgages enable you to do. Flexible mortgages allow you to save money by cutting the length of your mortgage term.
You can also buy yourself more time when money is tight by reducing your monthly repayments or increase you mortgage if you need to borrow money. 'Flexible mortgages', also known as 'Australian mortgages' are fast becoming the most popular way of taking...
What is a Flexible Mortgage?
Mortgages > What is a Flexible Mortgage?
Mortgages
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