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Information on Mortgage Loan Categories
from: Mortage & Debt FactsAcquiring a home is probably one of the most important decisions you have to make in your life. When you decide to own a home, there are several factors that you should consider. One of these factors is getting mortgages to finance your home. In the field of real estate, mortgages are the ultimate answer to your financing worries. To understand more about mortgaging and the different mortgage loan categories that you can choose from, here is a brief overview of the mortgaging business.
A mortgage is a loan that is used to cover the difference between the amount of cash you have for the down payment of the house and the actual price of it. In simple terms, a mortgage fills in for the amount that you owe after you make the down payment. Now that you have an understanding of what a mortgage is, it is time to explore the two major types of mortgage loan categories, namely, the fixed rate loan and the adjustable rate loan. The pros and cons of these mortgage loan categories will also be discussed alongside their definitions.
Fixed Rate Loan
A fixed rate loan is simply a loan that requires fixed interest rates to be paid until the loan terms are over. This loan allows you to have predictable monthly payments, and this is one of the advantages of a fixed rate loan. You don’t have to worry about fluctuating interest rates when you make your payments. However, as compared to the other types of mortgage loan categories, the interest rate of a fixed rate loan is usually higher, as a way to buffer market changes.
But even so, you are assured that the payment that you make towards your mortgage will stay the same for the entire period of the loan. Among all the mortgage loan categories, this is the most ideal for people who want less risk and have a greater foothold on their finances, especially if they are first time homebuyers.
The downside of this loan is that interest rates may change during the duration of the loan and you can’t take advantage of low interest rates when they are available. In such a situation, you may want to consider refinancing, so that you can dig through your financial capacity once again.
Adjustable Rate Mortgage Loan
Adjustable Rate Mortgage Loan is a loan with adjustable terms. Depending on the terms you choose, you will be paying the same amount for a fixed period of time, and when this period is over, the interest rate will be adjusted accordingly. Although this type of loan offers a lower interest rate, you can’t predict if the interest rate will be higher in the future. This is one of the more risky options among the mortgage loan categories that are available to lenders.
These are the two most common mortgage loan categories, and most of the lending institutions will offer these options. It is important that you find out more about all the mortgage loan categories before you decide which to take.
Refinancing Mortgage Loans Specific links
Refinancing Mortgage Loans News
Refinance Applications Increase in U.S. for Third Consecutive Week, Driven by ... - World Property Channel
 e-wisdom.com | Refinance Applications Increase in U.S. for Third Consecutive Week, Driven by ... World Property Channel "Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market. As a result, applications for refinance loans have increased for the third straight week and are at the highest level since ... Mortgage rates drop to new record lows, mortgage activity jumps Time to Refinance While Mortgage Rates are So Low Mortgage applications up on refi demand: MBA |
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... - MarketWatch (press release)
LendingTree Analysis Indicates Greater Savings with Adjustable-Rate Mortgages ... MarketWatch (press release) With Adjustable Rate Mortgages (ARM) representing only about 7% of new loan originations in the market, many consumers are seemingly unaware that these adjustable rate loans are worth a second look. As refinance volume has increased year over year, ... |
Mortgage Rates for 30-Year US Loans Fall to a Record-Low 3.78% - Bloomberg
Mortgage Rates for 30-Year US Loans Fall to a Record-Low 3.78% Bloomberg US mortgage rates for 30-year loans fell to a record low for a fourth straight week, reducing borrowing costs as a housing recovery takes hold. The average rate for a 30-year fixed mortgage dropped to 3.78 percent in the week ended today from 3.79 ... Average US rate on 30-year mortgage dips to record low of 3.78 percent; 15 ... |
Refinancing homeowners overwhelmingly choose fixed loans - e-wisdom.com
 e-wisdom.com | Refinancing homeowners overwhelmingly choose fixed loans e-wisdom.com By Max Thompson A great majority of homeowners who opted to refinance in the first quarter (Q1) of 2012 choose fixed-rate mortgages over adjustable-rate mortgages for their new loan, Freddie Mac revealed in a recent report. According to Freddie Mac, ... Mortgage Relief – Without the Catch Freddie Mac Repurchase Policy Is MBS Investors' Latest Worry Freddie Mac reports $330M Bank of America mortgage prepayment |
US 30-year mortgage rate falls to record 3.78 pct. - Sacramento Bee
US 30-year mortgage rate falls to record 3.78 pct. Sacramento Bee Mortgage buyer Freddie Mac says the rates on the 30-year loan dipped to 3.78 percent. That's down from 3.79 percent last week and the lowest since long-term mortgages began in the 1950s. The 15-year mortgage, a popular option for refinancing, ... |