40-Year Mortgages: An Alternative to Interest-only Loans?
Interest-only loans are quickly becoming a mainstream loan product. Borrowers who were initially turned-off by the perceived risk associated with an "interest-only" loan are now starting to see the benefits: Lower payments, less money tied up in equity, more flexibility, etc. For the savvy borrower, an "interest-only" loan can be an important component to an overall financial plan -- allowing them to divert principal payments to other financial goals. "Interest-only" is typically an option only available on adjustable rate mortgages (although some lenders are now offering this option on 30-Year Fixed Loans). Borrowers who plan on keeping the loan for a long period of time and are uncomfortable with a loan product that has an adjustable rate component, may be interested in the 40-Year Fixed Rate Mortgage.
(Note: Some lenders do offer a 40-Year term on their adjustable rate mortgages)The more flexible underwriting guidelines of a 40-Year mortgage may also attract some borrowers who are interested but do not qualify for an interest-only loan. A 40-Year Mortgage is exactly as it sounds ? a mortgage that is re-paid over a 40-year term. Due to a longer repayment period, 10 years more than the standard 30-Year Mortgage, the monthly payments are lower. Until recently, these loans were difficult to find. Fannie Mae has now announced they will begin purchasing these loans from lenders which should increase their availability.
Let's look at the numbers: For a $250,000 loan with a fixed interest rate of 5.75% and a term of 30 years, the monthly payments would be $1,458.93; but a borrower could save $83.40 a month by taking out a Fixed 40-year mortgage. Even at a higher interest rate of 6.00%, the monthly payments would be just $1,375.53.The monthly savings comes with an increase in overall interest:If a borrower were to keep the Fixed 40-Year Mortgage for the entire term and make the minimum monthly payments, they would pay approximately $135,000 more in interest. 40-Year Mortgages may be attractive to those borrowers uncomfortable with adjustable rate periods or who have difficulty qualifying under the stricter guidelines of an interest-only loan, however, it is important to understand the impact a 40-Year term will have on the overall cost of your loan. As always, it's best to consult with your trusted loan professional. They can help you understand your options and determine which loan product is best for you..
Chris Rocks is a successful Mortgage Consultant and writer based out of Chicago, IL. Website URL: http://www.loansbyrocks.comContact Email Address: chris@loansbyrocks.comMortgages ? Get Fixed Up Before The Crash
They say trends will always come back around. What was fashionable in the 70s will always seem to pop up on the shelves 30
odd years later. Unfortunately, there are some trends we wish would never show their faces again ? the 1980's property crash for one. Yet there has been some warning that we may be heading for another one.
It has been recorded that house prices have been dropping drastically over the last three years. With the effects being disastrous, more and more people are finding themselves in negative equity.
The nightmare that happened during the 1980s seems to be resurfacing in the present day.
So what is negative equity? Negative equity is when the value of your house is less than your mortgage. Each month you will be paying interest on a loan that is more than the value of your house. This will make it impossible to sell, as you will owe the building society more money than what the house is worth.
The causes...
Mortgages > Mortgages ? Get Fixed Up Before The Crash
Florida's Mortgage Resource (FMR) launches new website (www.mortgages-refi.com)
Florida's Mortgage Resource (FMR) website (www.mortgages-refi.com) is dedicated not just to facilitating mortgages for consumers but also educating them in mortgages.Our user friendly site is not only easy to navigate but also contains informative, educational articles on such topics as; An ARM vs. A Fixed rate, Selecting the right loan, understanding your credit, why
http://www.mortgagesrefi.com/wfr_rates_change.html [mortgage rates] change, a http://www.mortgages-refi.com/wfr_document_checklist.html [mortgage document checklist], and many more.
There is also a complete glossary of http://www.mortgages-refi.com/wfr_glossary.html [mortgage terms] commonly...
Mortgages > Florida's Mortgage Resource (FMR) launches new website (www.mortgages-refi.com)
California Mortgage Loans
A Mortgage is a long-term loan for a large amount, commonly taken for a property or a house. It is a kind of home loan except that it is termed for longer. Mortgages are available through a bank, private lenders, or property sellers. Unlike personal and home loans provided by banks and financial institutes, long-term mortgages stretch for up to 50 years at a time, while the usual mortgages last for as long as 30 years. The minimum duration for a Mortgage is 15 years.
California mortgages are similar to mortgages anywhere else in the country, except that they need to be insured against earthquake and floods. This is an extra liability that needs to be considered before mortgaging any property in California.
Mortgage rates change frequently, more so in California, depending on the real estate market value. Loan rates at that moment also make a difference in the Mortgage rates in California. If the Mortgage offered is very low then it would be a big advantage...
Mortgages > California Mortgage Loans