|Mortgage Refinance Information|
Interest-only Mortgages Have Their Pitfalls
Rising home prices, particularly on the East and West coasts have put the costs of home ownership seemingly beyond the reach of many. And yet, home ownership is up nationwide, and the percentage of Americans who own their homes is the highest it has ever been. How is this possible?
There are more different types of mortgages available to home buyers than ever before, and one that is growing in popularity is the interest-only mortgage. With an interest-only mortgage, the buyer pays no principal for the first few years of payments. The period of time varies, and is typically anywhere from one to five years. At that time, the principal is added to the mortgage payments and the amount of the payment increases. By keeping the payments lower for the first few years of the mortgage, the interest-only mortgage allows buyers to obtain a more expensive home than they otherwise might. The buyer's income will probably increase over time, making it possible to afford the higher payments that will come when the principal is finally added to the payments.
The downside to an interest-only mortgage is that no equity accrues in the home if the buyer isn't paying any principal. For many Americans, the equity in their home is their single largest financial asset, so taking out a mortgage that doesn't build equity would seem to be a bad idea. Equity has long been used as a last resort source of funding for emergencies. And yet, with the price of homes rising so quickly these days, many buyers don't seem to care. Equity can be built two ways ? either through paying down the principal or by an increase in the market value of the home. If the value of your home increases, so does your equity, even if you are only paying interest on the mortgage. This is great, so long as home prices continue to increase. But what if prices fall?
There are potential problems with interest-only financing. Interest-only mortgages have variable interest rates. If interest rates rise, mortgage payments will increase. If payments increase beyond the level of affordability, homeowners could be forced to sell their homes. This could lead to a glut in the housing market, causing prices to fall. Owners wishing to sell could find that they owe more money than their home is worth and that they have no equity.
The interest-only mortgage is a useful tool to help people buy a home they otherwise might not be able to afford. Prospective home buyers should consider whether taking out such a mortgage is a good idea, or whether they might be better off buying a less expensive home.
ęCopyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.
Kings Bay Georgia Mortgage Information
When choosing the right mortgage company for your home purchase or refinancing, there are a few things to consider.
Buying a House? How Much Home Can You Afford?
Maybe you've heard the expert advice that your debt to income ratio shouldn't be more than 36 percent of your total income. But do you truly know what that means, and how lenders will look at your financial history in order to decide whether or not to extend you a mortgage? If you need help figuring out your debt to income ratio, simply follow the guidelines below and soon you'll know whether or not you're in a position to apply for a mortgage loan.
Home Loans: To Substantiate Financial Possibilities On Your Land
Availability of Home loans is in full bloom. They are uncomplicated, tenable, easily available, very flexible and tailor-made for homeowners. They are offered by almost every loan lending or financial institution. Home loans are like omnipresent and yet encountering the requisite home loan is like a Gordian knot. Sometimes innumerable alternatives have the obvious effect of leaving you irresolute of which home loan to settle for.
What Are Mortgage Brokers And Why To Use One
"Mortgage" is formed from two words: the French word "mort" meaning "dead" and the word "gage" from Old English meaning "pledge". Sir Edward Coke (who lived from 1552 to 1634) explained the term: the land as considered "dead" to the mortgagor, as if the person never had it.
Reverse Mortgages: Information You Need to Know
Reverse Mortgages are exploding in popularity and as the baby boomers reach age 62 and beyond they will become eligible to cash in on their home equity with a reverse mortgage.
What Is The Best Deal For A Mortgage?
Few of us invest the time and effort into researching and securing the best deal for a mortgage to purchase our home.
Guide to Interest Only Mortgages
Here is a useful guide to interest only mortgages. An interest only mortgage is one where your regular payments only go to pay off the interest on the money you borrow. You will invest to pay off the capital sum at the end of the mortgage term.
Interest Only Home Loan ? Is It Right For You?
There are many benefits to interest-only mortgage loans. There are many situations where an interest-only mortgage loan could be best for you.
PayDay Loan Online - Quick Cash Advance Loans Online Are Very Convenient
Getting a quick cash loan, cash advance or payday loan has never been easier than it is today, thanks to the internet. Today you can apply and be approved for a payday loan or cash advance fast, in the comfort of your own home. There isn't even a check to deposit to receive your money. The money goes directly into your bank account without you even having to drive to the bank and deposit a check. There is usually no credit check involved in quick cash loans or payday loans. If you are in a temporary bind for fast cash, getting a payday loan online is a very convenient way to go. Visiting a payday loan store at their physical location can sometimes be a hassle and can be embarrassing. Getting your payday or cash advance loan online is very discreet.
Mortgage: Rehabilitation Of Financial Helplessness
The term 'mortgage' is assumed really controversial by people when they are contemplating the idea of taking a loan. It is definitely a very simple procedure which is presumed complicated because your home is attached to the term mortgage. In the layman language it is the conditional conveyance of property as a security for the repayment of the loan.
Why Choose a Home Improvement Loan?
Many people choose to take out home improvement loans so they can give their house a new look before selling.
Zero Down Mortgage Loans - Is 100% Financing a Good Idea and Can You Get Approved?
Are you wondering if you can get approved for a home loan with 100% financing? Are you also wondering if its a good idea to get a mortgage loan with no money down? Here are some points to keep in mind as you apply and consider your different mortgage loan options.
What is a Fixed Rate Mortgage?
As the term implies, with a fixed rate mortgage the mortgage rate is fixed for a set period of time, so no matter what movements occur in the lender's standard variable mortgage rate, the borrower's arrangement is fixed and, therefore, so are the monthly fixed rate mortgage payments.
Save Yourself from Homebuying Disasters
Whether you are a first time home buyer or a happy home owner who wants to refinance an existing home loan, there are some cardinal "dos" and "don'ts" to follow. For many, home ownership is the biggest investment in their lives and that could be the reason why some people act irrationally, as if they purposely want to sabotage the deal. Follow these simple rules and you will be sure to make your experience difficult and unpleasant, if not a complete disaster.
Are You Ready for a Home Mortgage Loan?
Buying a Home and committing to a Mortgage can be very scary! A home mortgage loan is the largest debt that most Americans will take on in their lifetime. As such, making the decision to take out a mortgage is not one that most first time homebuyers take lightly. Not only will your monthly mortgage payments probably be the largest bill that you face each month, but the total amount of debt realized with a home mortgage loan can have a staggering, and sobering effect on the first time home buyer.
Looking for a Bad Credit Home Improvement Loan
To make needed repairs to your home without the advantage of a good credit history often requires a bad credit home improvement loan.
Essence of Self Certified Mortgages
Your search for a mortgage isn't leading results.
Bad Credit Mortgage Loans - Are You Killing Your Chances of Getting Approved?
When you have poor credit, your list of lenders that will approve you for a home loan can shrink down very small. You want to make sure that you are doing everything in your power to keep your credit rating as high as you can.
Save Money on Your Mortgage
You should say goodbye to PMI. You may not notice it in the crush of your monthly mortgage statement, but many Americans pay for a line item called PMI. PMI stands for "personal mortgage insurance," and lenders impose it on customers who have less than twenty percent equity in their homes.
Shopping for A Mortgage? Do Your Homework First
If you happen to be shopping around for a mortgage, it is very important that you first take the necessary time to do your homework.
home | site map
|Copyright © 2008 www.info-web-online.com|