Art of coupage - sorry - mortgageTopic: Mortgage
From the prehistoric age to modern times people have been asking about types of home financing. Although the practice of lending has evolved dramatically over the past years, the basics are still the same. Indeed some of the old standby loans are still offered and are usually the best option as well. This article will explore the most commonly used home loans and explore some of their merits and drawbacks.
Fixed Rate Mortgage - This is by far the most common and desirable mortgage. It is also one of the oldest types of home loan going. This is what most people are referring to when they speak of a mortgage. Fixed rate loans are usually amortized over a set period of time, 30 years for example. The fixed interest rate is what makes these loans popular. If you can find a fixed rate mortgage then you will always know what you loan payments will be for years to come. This is highly valuable in creating a realistic budget that you can stick to in the long run. This type of loan is so popular because of the wild fluctuations that home loan interest rates go through. Once the loan is signed then the interest rate is fixed for the term of the loan.
Adjustable Rate Mortgage (ARM) - This kind of loan is based on the borrower taking a chance that interest rates will decrease. ARM's are notorious as many people bought into ARM's only to see their interest rates and monthly payments go through the roof along with their blood pressure. ARM's are unpredictable and chancy and are not recommended for most buyers. Usually these loans are negotiated when interest rates are low and don't show signs of inflating in the near future but that is a huge gamble as many have found out.
Balloon Mortgages - This is another tricky type of home loan. Essentially the practice of a balloon mortgage is to enable the home owner to pay only the interest for the first term of the loan, usually 5-10 years. At that point the home owner must either pay the entire amount of the loan off or refinance for the amount remaining. These kind of loans can work if you are only going to be in a home for a short time. However, long-term they are not a wise choice.
FHA & VA Loans - These are both Government insured loans. VA loans are available to Veterans only and FHA loans are Federal Housing Administration loans and a potential borrower must qualify for either. Keep in mind that only certain homes qualify for this kind of loan program as well.
Be sure to investigate your mortgage options carefully. The kind of loan that you choose will be a major defining factor in your financial future and as such it is a decision that should be made from an educated perspective. And remember - there will be many possibilities to change your home to something better - but only if you don't loose the credit score.
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A mortgage is a loan on a house since most peolpe don't have enough cash to buy a home.Cash Advance means several things but it is borrowing. It used to always mean you went to your employer and said you were having financial problems and wanted an advance on your wages. This was usually before your first payday because you might have to work several weeks to get your first check or worse work a few days one pay period then wait until payday to get a tiny amount then wait another pay check to get a first full check. So after working a week or two and still having a week or more to wait you ask for an advance and they deduct it from your first paycheck.Then credit cards started loaning money at high rates on your credit cards and calling it cash advance.Now payday lenders are calling it cash advances and they charge you a high fee to have you give them a post dated check.
you can get a fixed rate of 1-30 years at interest only pamnyets. the loan term remains at 30 years. so you can get a 5 year interest only loan based on 30 year pay back term. what this means is that the first five years you are required to make only interest pamnyets. any amount more than that paid will get applied to principle. after the 5 year term comes up, the loan is still open but now your pamnyets either adjust to the market at the time and/or your pamnyets become principle and interest.Interest only loans are good if you get them fixed for 5 years or more. it helps make pamnyets more affordable, but you never pay down your balance. if you ever plan on moving within 10 years, dont get a loan that requires principle and interest. if you know you will never move again, then go for a principle and interest payment as long as you can afford it.
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