|Mortgage Refinance Information|
The Right Home Loan - Floating or Fixed Rate Loan
Choosing a home loan has never been tougher. Yes, with all these cheap interest rates floating around, you as a customer are faced with a happy predicament. The banker finally seems to be your friend. He calls you in the morning, day and evening. He remembers your name and offers you the best deal. He meets you and tries to convince you to take a loan to buy your dream home. And in cash if you have only a vague idea of your dream home, the banker friend might also help you decide on the property.
With all these friends to help you, it is advisable that you look at the choices objectively and arm yourself with the requisite information.
Before deciding on a lender and before a lender evaluates you, one of the first things you need to grapple with this the choice between a floating and a fixed rate of interest. Floating rates swing both ways. They could rise in the long term or may fell. The rates that the lenders announce are for new borrowers. While this is grate news for new borrowers, it leaves people who took a floating rate loan a few years ago with a sinking feeling. This is due to a basic flaw in the floating rate loan arrangement on account of the respective benchmarks of interest (read: prime lending rate or PLR) not keeping pace with the fall in interest rates all across.
As a new customer you get the best deal as offers at sub - PLR interest rates. But if you are an existing borrower, you will have to take the initiative to strike a better deal. For example, take someone who took a floating rate loan one year back for 20 years at the rate of 7% and now pays 5%. As against this, a fresh loan for the same tenure is available at 4.5% (Dec' 2004). This is only because the lender didn't cut its PLR (to which the floating interest rate is pegged) to the extent of the fall in rates.
Just imagine, if the home loan market grew by $40,000 million (fresh loans disbursed) in the last fiscal and on an average, the lenders increased their spread by, say, 100 basis due to the above, then the home loan customers stand to lose $400 million! It is a serious consumer rights issue.
Lenders benefit more than the borrowers in the above situation. The anomaly in the contract is that while both the lender and the borrower take equal interest rate risks by entering into a floating rate contract, the rewards are shared unequally by the two.
What this indicates is that the timing and reduction of the PLR applicable for home loan is not all that transparent and a customer might not know when he is suppose to expect the cut. From the analysis of the trend in movement of PLR it is clear that competition has been the main driver in reduction and the timing of reduction for the PLR. The PLR is supposed to be the rate at which a lender offers loans to prime borrowers. Due to increased competition, lenders offer rates well below PLR to new customers. However, the reference point for these loans is still the PLR. So the lenders can offer the best deals to attract new customers but when it comes to changing the rates, it depends upon the change in PLR.The banks have a system of reset dates. These are the dates when existing floating interest loans can be repriced in cash the PLR changes. But the important thing is that if a lender does not reduce its PLR, it is hard to get a reduction in the rate.
You might argue that you could transfer your loan to another lender in case the existing lender dose not reduce rates in the future while it offers lower rates to newer customer. Loan transfer is something that is best avoided. There might be a penalty on it. (The fact the new lender will finance your penalty charges also is no consolation.) So the penalty cancels out the lower interest rate that the new lender might offer you. Also, the existing lender will insist that you clear up the loan first and then only will the property documents be released. And the new lender will refuse to release the loan without the property documents! I am sure bankers fix up a date on which the documents are exchanged and loan is transferred but the loan transfer process takes time and effort. So choose the lender and the loan option sensibly.
Author: Aron Dsouza
NOTE: This article can be re-printed and/or published online or offline for free, provided the website, http://www.RefinanceMortgagesLoans.com/, is posted along with it. The article must remain intact without any alteration.
Mortgage Pre Approval - Getting Pre Approved For a Home Loan Online
A pre-approved mortgage is a must in a competitive housing market. It also gives you an idea of what you can afford to buy as you look at houses. Online home loan lenders allow you to compare rates and quickly complete the process.
Adverse Credit Mortgage Loan - Persistence is the Key to Getting Approved
People with bad credit that are looking to get a home mortgage loan or to refinance their existing home mortgage loan, know how difficult of a job it can be to try and get approved. Adverse credit history can mean a little more legwork to get an approval for a mortgage loan, and especially to get a decent interest rate.
Using a Mortgage Refinance Company Online
Online mortgage companies make refinancing convenient and competitive. By researching mortgage rates and lenders online, you can be assured that you have the best refinancing rates.
Refinancing After Bankruptcy
Refinancing after a bankruptcy can seem like an especially difficult challenge, but it doesn't have to be. Six months after your bankruptcy has been finalized, you can find lenders willing to refinance your mortgage. In fact, refinancing your mortgage can help rebuild your credit to good standing in two year's time. The following steps will help you find the best refinance lender while helping your rebuild your credit record.
Home Equity Increases $1 Trillion in Five Years ? Is the Market Peaking?
A new survey reveals that in the last five years, the equity in the California real estate market has increased by more than one trillion dollars. A trillion dollars is a large number to ponder, but put in concrete terms, it can be represented by a stack of one hundred dollar bills that is six hundred thirty one miles high! This astronomical increase in California home values isn't all that unique, however. Prices on the East Coast, particularly in the Washington, D.C. area, are increasing just as rapidly. There are areas on both coasts where home prices have tripled during the last five years. This, along with the dramatic increase in interest-only mortgages among homebuyers, suggests that home prices may be peaking.
Top 10 Things to Consider on Home Loans
Here are our Top 10 most important things to consider when shopping for a Home Loan, Equity Line of Credit, or Refinance, courtesy of Loans-Directory.Org:
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.
What to Really Expect for Closing Costs
Closing on a property is a very challenging time for a would-be homeowner. Being informed, either through your mortgage broker, your real estate agent, or through self knowledge is the best thing you can be when going through this procedure.
New York Refinance - Refinancing in New York
If you are looking to refinance in New York, it helps to get the facts before you begin the refinancing process. If you have an existing high interest mortgage, refinancing now could be the best choice for you. You can choose to refinance with cash out to make home improvements or to consolidate bills, or to simply refinance your existing mortgage to a lower interest rate that will save you a lot of money over time. New York real estate is always a booming business. Mortgage lenders in New York and throughout the country are competing for your business. You can get quotes from several lenders with one quick online application. Online lenders are offering the same great terms as traditional lenders and will give you the professional service and attention that you expect.
Desperately Seeking Good Leads, The Adventure Driven Loan Officer
As loan officers, the word "lead" is by far one of the most common words we use during the day, it is the topic of many of our conversations, it is praised and cursed, it is good and it is bad, it is loved and it is hated, on bad days it is hard to find, and on good days it falls right into our lap.
Home Equity Loan Considerations
In other words, the benefit of the loan must outlast the loan period. Taking a loan for financing that elusive vacation is a strict no-no. Moreover, home equity loans must also never be taken for day-to-day expenditures. This option should be saved for emergency needs only.
Home Mortgages: Does a No-closing-cost Loan Make Sense for You?
I have heard a number of radio ads and have seen many newspaper ads offering "no closing cost" home mortgages. These ads will tell you that you can get a new mortgage or refinance your existing mortgage at absolutely with absolutely no closing costs.. There are no points, no charges for an appraisal, no charge for title insurance, no costs, period.
The Worst Way to Shop for a Home Mortgage
You've found a house that is perfect for you. It is so appealing that you're willing to endure the hassle of obtaining a mortgage.
What is a Mortgage?
A mortgage is a loan, usually from a bank, finance company or building society to help you buy your home.
Know Your Mortgage Fees, and Youll Never Pay Too Much for Your Loan
If you buy new windows, you'll not only pay for the windows, you will also pay an installation fee. When you purchase a car, you pay tax, title, assumption fee, etc. Just about every major purchase comes with extra costs or fees, and home loans are no different. Most people think they don't have to pay costs on a loan, because they are paying interest on the loan (they figure this is their fee ? a premium on the money). A mortgage, however, does not come free.
Getting the Best Homeowner Loan for Your Money
With so many lenders out there, it can be hard to tell if you're getting the best homeowner loan for your money. Banks, finance companies, and online lending services all offer competing loans, but determining which offers you the best homeowner loan can be tricky.
Real Estate Lender - Get Approved For a Mortgage Loan Online
Real estate lenders now offer mortgage loan quotes and application online. You can be approved for a mortgage loan online in a matter of a few weeks. With online real estate lenders you can also be sure you are getting the best mortgage loan rate by requesting quotes.
Bad Credit Mortgage Loans ? How To Get Approved
Persistence is the key working toward getting approved for a bad credit mortgage loan. There are many factors that you, as a borrower have control over that can help you get approved faster and easier. There are guidelines that most sub-prime lenders go by that, if you know them, can help you move through the process without getting stuck, unable to get financing.
Thought Fixed Rate Will Give You a Respite from the Perils of Variable Rates! Think Again
Slight increases in the interest rates raise your hackles. Tension grips your mind as to how you are going to make the extra payment. Preparations begin right then to provide for the repayment, though it requires a huge cut in the monthly expenses.
What is an Interest Only Mortgage?
An Interest Only Mortgage is one where the repayments are made up entirely of the interest on the loan. When the mortgage term is complete, the capital originally borrowed is still outstanding.
home | site map
|Copyright © 2008 www.info-web-online.com|