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Home Equity Loans Categories
Fixed Rate Mortgages: These loans have a fixed rate of
interest over the entire term for which the loan has been
disbursed. The term for these mortgages is typically between 10
to 30 years. The monthly interest payment on these loans is fixed
and hence there exists a certainty about the repayment of the
debt over the entire term of the debt. Another advantage of fixed
rate mortgages is that the initial down payment required is very
low, generally around 5% of the loan amount to be disbursed.
The disadvantage of this type of loan is that the rate of
interest may be higher than that of a variable rate mortgage. If
predictability of the interest payments is important, then it is
advisable to consider securing a fixed rate mortgage.
Adjustable Rate Mortgages (ARM): As the name indicates, the
interest rate on this type of mortgage fluctuates throughout the
term of the loan depending on the interest rate scenario in the
economy. The rate for an ARM is usually adjusted annually.
An ARM usually has caps, which restrict the rise in the rate
to a certain level, both on an annual basis as well as over the
entire term of the loan. For example, an ARM may have a cap of 1%
every year and 5% over the term of the loan. This type of loan is
best if the term of the loan is short, as the longer the term,
the more the exposure to fluctuations in the interest rate. The
index to which the variable rate is pegged should also be
carefully considered.
Thus a variable rate mortgage can work out to be a cheaper
option than a fixed rate mortgage, provided the borrower has
given due attention to the risks involved.
Jumbo Loans: If the equity loan to be raised exceeds the
federal guidelines set by Fannie Mae/Freddie Mac, then the loan
is referred to as a jumbo loan. The limit set by the guidelines
is different from state to state. The rates for jumbo loans are
typically higher than those for other types of mortgages, as the
lender has a higher risk due to the larger amount of the loan.
The borrower should try not to exceed the guidelines, as this
could mean a considerable savings in terms of interest
outflows.
Home Equity Loans - Rates, in depth articles and
professional second mortgage advice. Find the lowest home equity
loans rates and lenders.
MORE RESOURCES updated Thu. June / 08 / 2023
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RELATED MORTGAGE AND REFINANCING ARTICLES:
Get the Best Rate on
Your Home Mortgage Loan
Home mortgage interest rates hit record lows in 2004 and
have remained at record lows as we go through 2005. It is
possible today to get a thirty-year fixed rate home
mortgage loan for under five percent, and an adjustable
rate mortgage can be found for under four percent if you
look hard enough! However, record low mortgage rates do not
mean that you should take the first mortgage offer made to
you, even if it sounds low.
Before You
Buy
Before you start looking for a home, figure out what you
can realistically afford to pay per month. Check out the
market in the area you want to buy.
Secured Homeowners Loans
- In Case You Thought a Home is Worth Few
Dollars
Money is like music, if managed well, produces a good
symphony. One wrong note - one wrong decision - it produces
a jarring sound.
Adjustable Rate
Mortgages Offer Alternatives For Home Buyers
When looking for a mortgage to meet your needs, consider
these key questions: Is your income expected to increase in
the coming years? How long do you plan to live in your new
home? And, which mortgage will provide the lowest interest
rate?While 15 or 30 year fixed-rate mortgages are the most
popular, and Adjustable Rate Mortgage (ARM) offers some
interesting alternatives for home shoppers who plan to move
again within four or five years. Although interest rates
are the lowest they've been in 20 years, an ARM provides
even lower interest rates during its introductory period.
Should You Refinance
Your Mortgage if Interest Rates Drop?
Mortgage refinancing is when you take a mortgage of a
certain interest rate and term length, and change it for a
different interest rate and term. If you are looking to
refinance your home loan it is usually done when rates have
dropped considerably therefore making it advantageous to do
so.
Refinancing Your Home
Mortgage Loan
You're considering refinancing your home mortgage loan to
save money. Interest rates are the lowest they have been in
decades.
Homebuyers Loan
Guide
If you are a homebuyer, there are a few points on a
homebuyer's loan that you should keep in mind. These
pointers simply ensure that you don't burden yourself with
a loan or repayment and that you can get a justified return
on your investment.
Essence of Self
Certified Mortgages
Your search for a mortgage isn't leading results. Check for
any impediments.
What Length Mortgage Is
Right For You?
You've found the home that is right for you, and now you
need to do the same thing for a mortgage. There are several
options for people out there, each one designed for a
different type of buyer.
Home Equity Loan - Good
Choice for Luxury Purchases?
Home equity loans or lines of credit have increased
dramatically in popularity in recent years. One of the
reasons is that interest rates are at or near historic
lows; borrowing money has rarely been more affordable.
Alternative Options For
Rising Interest Rates
As interest rates have risen in the last six weeks from
record lows, homeowners are once again face with finding
viable options to reduce the amount of interest paid on
their home loans. The rush to refinance provided borrowers
with good to excellent credit the opportunity to take
advantage of low interest rates, that helped to reduce
their monthly mortgage payments, which was the only benefit
provided by the lowered rates.
Avoiding Foreclosure
Scams
If your mortgage company is threatening foreclosure, there
are things you can do to avoid it (see my article titled
"How to Avoid Foreclosure"). However, you should be aware
of scams.
Stop Foreclosure - 7
Tips to Save Your Home
Faced with the threat of a foreclosure on their home, with
all the weight of the mortgage industry and its army of
attorneys against them, the average homeowner might feel
like David facing Goliath. But David defeated Goliath !David
had a sling and some pebbles.
Housing Bill - Changes in
the Right To Buy Scheme
Presently council tenants are able to purchase their rented
property after 2 years of tenancy. However, this is about
to change.
Private Mortgage
Insurance (PMI)
If your down payment on a home is less than 20 percent of
the appraised value or sale price, you must obtain private
mortgage insurance, known as PMI, with your lender. This
will enable you to obtain a mortgage with a lower down
payment because your lender is now protected against any
default on the loan.
Shopping for A Mortgage?
Do Your Homework First
If you happen to be shopping around for a mortgage, it is
very important that you first take the necessary time to do
your homework. When I say homework, I am talking about
research.
Home Equity Loans
Popular Scams
Most borrowers fail to realize that when trading their much
beloved home for cash, lenders can foreclose on their
property in the case of default. Moreover, because of
fly-by-night operators who are ready to strip unsuspecting
borrowers of their most prized asset, it is doubly
necessary that borrowers be familiar with some frauds that
could be perpetrated on them.
What is a Repayment
Mortgage?
A repayment mortgage is the type of mortgage that most
people think about. The idea behind a repayment mortgage is
that you pay monthly for a set period and each payment
consists of an element of capital and interest.
Refinance Your
House
If you have seen all the advertisements regarding
refinancing your house you may be wondering if refinancing
can actually save you money. The answer is yes! Interest
rates are at the lowest levels in decades and there has
never been a better time to refinance your home.
Getting The Best Home
Equity Loan
Owing to the popularity of home equity loans, there are
numerous lending agencies offering a variety of mortgage
products. A bad choice of mortgage can lead to disastrous
effects, as there is a risk involved of foreclosure and
losing one's home.
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