| Adjustable Rate Mortgages (mortgage refinance)
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Adjustable Rate Mortgages
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Apartment Mortgages
Apartment Mortgage Options
Owners of apartment buildings have many options on their mortgages.
This can include getting a traditional thirty year fixed mortgage, an interest only mortgage, or a 40 year loan term.
Both the interest only option and the 40 year loan term allow a borrower to get a lower monthly payment than a regular 30 year fixed loan.
Ther... Read mortgage refinance article
Mortgage Refinancing Online
You've seen the commercials on TV: "Make Mortgage Lenders Compete and You Win." What the commercial isn't telling you is that you pay a hefty fee for getting those lenders to compete. This fee is called a "Computerized Loan Origination Fee," and will cost you a lot of money when mortgage refinancing. Here are several tips to help you avoid this hidden fee when mortgage refinancing on the Internet.... Read mortgage refinance article
Adjustable Rate Mortgages
When you go for mortgage quotes for the first time, you'll find there are generally two major options available. The first, and most commonly sought after, is a fixed rate mortgage. The second option is an adjustable rate mortgage. Both are good options to get into a home, but there are some advantages to an adjustable mortgage that many don't consider.
An adjustable rate mortgage is simply a mortgage whose interest payments adjust up and down based on the going interest rate. This means those with an adjustable rate mortgage will be able to take full advantage of dips in interest rates while their fixed rate mortgage counterparts stay at the same payment amounts. It also, however, means these same people will pay more monthly when mortgage interest rates are high. Inasmuch, many people who get into adjustable rate mortgages do so with the intention of not staying in it for the full 30 years of a mortgage term. For a short-term solution, however, adjustable rate mortgages can be worth examination.
Considering the instability of adjustable mortgages, why would anyone want to go this route? There are a number of reasons. They include:
* Adjustable rate mortgages generally are offered to those with less than perfect credit. Lending companies are generally more willing to write this type of mortgage loan for those who have past issues. It might not be the most ideal situation for the long term, but it can give you the ability to get into a home, build equity and repair credit in the process.
* Adjustable rate mortgages allow homeowners to take full advantage of dips in the interest rates. This means their payments will be lower during good interest rate periods. The savings can be quite substantial, too. Unfortunately, this is one of the down falls of an adjustable rate mortgage, too. On the converse, when interest rates are high, the payments homeowners are subjected to can be rather high.
* Adjustable mortgages are generally offered at lower than the going rates to start off with. This means someone who needs extra money at the start of a new mortgage loan will likely be able to enjoy lower payments. Since the rate is lower than going, the payments typically will be lower than average. In many cases, this type of mortgage will start out with a locked in rate for a year or two, as well, which means the homeowner can save up for future issues.
* The lock in of lower rates for a short period with an adjustable rate mortgage can sometimes 'buy' a homeowner enough time to repair credit issues. This means they might be able to refinance for a good rate before interest rises. It's important for homeowners who go this route to take full advantage of periods without high payments to improve credit ratings. If the interest rates swing up, getting 'locked in' at a decent rate on a fixed will be the way to go.
Adjustable rate mortgages aren't for everyone, but for those who want to own a home while enjoying time to fix credit issues, they can be fantastic. It's important to carefully weigh the options before going into an adjustable rate mortgage, however.
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Questions to Ask Mortgage Lenders
If you are in the process of mortgage refinancing, careful comparison shopping will help you avoid 90% of the mistakes homeowners make. Lenders have clever ways of disguising their markup and junk fees; if you learn to recognize these, you can save yourself thousands of dollars when mortgage refinancing. Here is a list of several questions you need answered when comparison shopping for the best mortgage loan.
I. What is the Guaranteed Interest Rate?
Your mortgage company guarantees an interest rate for you based on your credit and the details of your mortgage application. What your mortgage company isn't telling you is that the interest rate guarantee you receive is not the interest rate the wholesale lender qualified you for. Mortgage companies routinely mark up mortgage rates to boost their revenues. This markup of your mortgage interest rate by the retail mortgage company is called Yield Spread Premium and you can avoid paying it. Ask to see the interest rate guarantee from the wholesale lender and compare it to the written guarantee from your mortgage company.
II. Will I be required to Pay Points on the Loan?
Many lenders may require you to pay a certain number of points in order to qualify for a loan. Ask the mortgage lender if your mortgage approval depends on paying points. Points are usually paid in exchange for more favorable loan terms or a lower interest rate. If the lender does not require you to pay points to qualify for the loan, you might try negotiating for a lower interest rate by paying a point or two if you plan on staying in your home.
III. What is the Loan Processing Fee?
One of the fees you will be required to pay when mortgage refinancing is the loan processing fee. If the figure the mortgage company quotes you is greater than $400 it is considered excessive. Ask the lender why they are charging you a higher amount.
IV. Is There a Pre-Payment Penalty
Mortgage lenders often include pre-payment penalties in their loan contracts to discourage refinancing. If you have good credit there is no reason to accept a mortgage that includes this penalty. Prepayment penalties can be expensive and could become a problem when you are ready to refinance again.
You can learn more about comparison shopping for the best mortgage while avoiding costly mistakes by registering for a free mortgage tutorial.
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