Welcome to Mortgage Guide
Mortgage Brokers Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
The Mortgage Loan Basics
from: Mortage & Debt FactsThere are a number of different mortgage loan products out there, but they all have one thing in common: they have either a fixed or variable rate of interest tied to them.
The subprime loans that have been implicated in the housing bust were variable rate loans that adjusted at set intervals and were sold to mostly people with poor credit or who sought out jumbo loans.
So, even though a loan has a variable rate, it doesn’t necessarily make it a subprime loan and sometimes people get confused about that. They think that the reason people are in trouble are because they had Adjustable Rate Mortgages (ARMs). While that is one of the factors involved in people whose payments rise, subprime loans were targeted to people who couldn’t get a fixed rate mortgage because of either poor credit or a lack of income.
Otherwise, an ARM is just another type of mortgage loan that uses a variable rate. If you understand how it adjusts and you don’t buy too much house, even this type of loan can still be attractive to some.
A Fixed Rate Mortgage Loan
A fixed rate mortgage loan has an interest rate assigned either when it was locked in or at closing that remains the same for the life of the mortgage loan. If mortgage rates are rising, it is a good idea to lock in a rate when you are approved for a mortgage. Otherwise, by the time you get to closing the rates may have climbed significantly. However, it is difficult to time mortgage rates as they can fluctuate due to various factors.
The advantage of a fixed rate mortgage is that you always know what your payments will be, within a certain range. You may have adjustments for insurance or property taxes, but for the most part the payments will be pretty constant throughout the life of the loan.
Since the fixed mortgage rate is at historically low levels right now, many people like the idea of buying in with a fixed rate and not worrying about what might happen to the index later that can drastically change their payments.
A Variable Rate Mortgage Loan
A variable rate loan is one in which the interest rate is tied to a particular index and adjusts on a set schedule. There are a variety of mortgage loans with variable rates, not just ARMs. You can have a hybrid loan or even two-step mortgages that adjust after a specified period of time.
Be sure to read the terms of your loan to ascertain when the rate is due to change and how it will impact your monthly payments so there are no surprises in the future for you.
Mortgage Brokers Specific links
Mortgage Brokers News
Federal government to subsidise MFAA mortgage broker training - Property Observer
Federal government to subsidise MFAA mortgage broker training Property Observer By Larry Schlesinger The federal government will fund two-thirds of the cost of mortgage brokers obtaining a diploma-level qualification, the Mortgage & Finance Association of Australia (MFAA) has announced at its annual conference currently underway ... |
Commercial Real Estate Brokers: Now Is Best Time to Start Your Career - MarketWatch (press release)
Commercial Real Estate Brokers: Now Is Best Time to Start Your Career MarketWatch (press release) NEW YORK, May 22, 2012 /PRNewswire via COMTEX/ -- Now is the best time for new commercial mortgage brokers to begin their careers, says Commercial Mortgage Broker Training Expert Adam Petriella, Managing Partner of The Real Estate Finance Group, ... |
Mortgage brokers warn about new refinancing rules - Globe and Mail
 Globe and Mail | Mortgage brokers warn about new refinancing rules Globe and Mail Canada's mortgage brokers are warning the banking regulator that its proposed mortgage underwriting rules could result in people losing their homes. The brokers are concerned about a number of the potential rules, but the one that worries them most ... |
Mortgage brokers positive over BTL sector - Compliancy Services
 Mortgage Introducer | Mortgage brokers positive over BTL sector Compliancy Services Individuals operating in mortgage compliance positions may be interested to learn that brokers across the UK expect to see an upturn in the buy-to-let (BTL) market over the coming months. According to the results of a new Nationwide Building Society ... Brokers focused on buy-to-let Buy-to-let sector 'will remain strong' |
Mortgage Brokers Face New Rules - Wall Street Journal
 eCreditDaily.com | Mortgage Brokers Face New Rules Wall Street Journal By MAYA JACKSON RANDALL Federal regulators this summer might propose new rules for mortgage-lending fees that would require mortgage lenders to charge a flat fee for processing a loan, and limit the amount by which borrowers can reduce their interest ... New Rules May Curtail Some Fees in Mortgage Would New Mortgage Rules Help Homebuyers? CFPB Director Cordray stresses importance of non-bank regulation |