Home Mortgage Rates Information

Frequently Asked Questions About Housing Loans in Malaysia

2010-10-12T17:42:00.001-07:00

Frequently Asked Questions About Housing Loans in Malaysia
What house I can afford? It depends on your income and your total financial commitment of others. In practice, most of the homes purchase price between home buyers 1.5 and 2.5 times their annual income. For example, if a buyer earning RM40, 000 per year, it would probably buy a house costing RM60, RM100, 000 to 000. In addition, the monthly payments should not exceed 1 / 3 of your gross monthly income. To assess your ability to repay, financial institutions also take into account the repayment of your debts such as car loans, personal loans and credit cards.

             How much can I borrow? It depends on the value of your home, your income and your ability to repay. Margin of financing can be as high as 95% (including MRTA). The increase in net financing, the more you make the payments. In addition, in certain interest rate, shorter term loans you need to pay higher installments.

             How long does the loan process? Usually, the time is between one to two weeks for approval of your loan from the time the documents to be submitted. You should get a list of documents to avoid unnecessary delays.

             What is the difference between conventional financing and Islamic financing? In terms of conventional financing, your outstanding loan consists of the amount of principal and interest due. Interest rates are actually costs incurred by financial institutions for funds. Islamic finance and the concept of buying and selling in any financial institution buys the property, then you sell at a price that exceeds the purchase price.

             Why an assessment needed? Evaluation is necessary if you purchase a loan. Financial institutions require the evaluation is conducted to determine if the property provides adequate security for the loan. It also gives an indication that the property you buy is a value that you paid.


Should I appoint a lawyer? Can I choose my own lawyer? Yes. You need to appoint a lawyer to prepare the documentation for your loan. Generally, financial institutions will be a group of lawyers who are familiar with documentation requirements for you to choose. If you want to choose your own lawyer, you should discuss with the financial institution.


Who will pay the legal fees? In general, legal fees are paid by the buyer. However, some developers and financial institutions that offer free legal fees as part of their marketing plans. In addition, there are also financial institutions that offer funding for fees and documentation.


What happens if I encounter financial difficulties and failed to repay the loan? If this occurs, you should contact your financial institution to discuss a repayment plan that could include measures to extend the loan period.


Can I repay the entire loan earlier than the agreed period? Generally, financial institutions charge a penalty for early settlement. The penalties are 2% - 5% of total outstanding loan balance, according to financial institutions. It also depends on the type of product you choose and if you decide to redeem your loan. Please note that there are minimum requirements that must be met before full payment.


Can exemptions to the payment of a penalty given earlier? The exceptions are at the discretion of financial institutions alone.



Why is my outstanding loan balance is still high at the initial stage, even if loan payments were made? In the early years of the loan, a significant amount disbursed for the payment of interest on the loan. So if you pay part of the loan ahead of schedule to reduce the amount of principal, interest expenses can be reduced by that amount and reduce the loan period.


Can I pay more than the number of monthly payments? It depends on the terms and conditions as stated in your loan agreement. By paying more every month, you can accelerate the process of repaying the loan. If you make several payments, make sure the payment is used to reduce the loan principal. However, if you repay the loan in full with a lump sum or pay only a portion of the loan, you must notify your financial institution. The notice period is generally between 1-3 months.


Do I need a guarantor? It depends on the discretion of financial institutions and the creditworthiness of borrowers.

             The financial institution has the right to impose charges on various accounts that my loan payment late fees, legal fees, insurance, etc.? rights institutions to impose such fees are as stated in the terms and conditions of the loan.


How long is the grace period (grace period) to make installment payments of interest? In general, financial institutions grant a period of 7-14 days for you to pay in installments. Payments received after the grace period will be charged a penalty later.


When the financial institution release the loan to the developer? For homes under construction, financial institutions will make progressive payment to the end of each stage of construction, as recognized by the certification of architects. For homes that have been completed, your loan will be issued at the end of legal documentation or approval from the competent authorities is obtained authorization from the State Government.

             Can I buy a house together, but housing loans and apply one name? Financial institutions consider such requests on the merits of each application, the following conditions:


The joint owners are husband and wife, and one of them does not work and the other fully responsible for the borrowing

Co-owners are related as father / mother and both parents are not working and children are responsible for the borrowing

              However, the above rules are at the discretion of financial institutions and may also consider circumstances other than those mentioned above.



If the developer abandoned the project to do, do I still need to pay interest and installation? Yes. You are still responsible to repay the loan according to the agreement signed between you and financial institutions. However, since financial institutions have the right to property, you should discuss the proposal of repayment to financial institutions. You must also notify the Department of Housing and Local Government.


What would happen if the loan has been fully explained? When the loan has been fully explained, financial institutions, through its lawyers, will release the burden on the property. Financial institutions will also withdraw all claims to property. With this, the title will be transferred to you.


What if the borrower is not far from insurance? immediate family of the deceased may apply to the courts on the property of the deceased. It can make the choice whether to continue to pay the loan back or redemption. However, most financial institutions require borrowers to buy mortgage life insurance (MRTA) to ensure that such situations do not occur.


What steps can be taken by the financial institution if I did not pay back? If you are unable to pay 3 times, the financial institution will take steps to cancel the loan. In the worst conditions, the financial institution to exclude goods and sell them to repay the loan. If there is not enough, the borrower must still pay the difference between the auction price and the loan balance.


What is the easiest way to make payments on my loan? Financial institutions offer a variety of network services to make your business easier. Other methods for making loan repayments are as follows:
              Open a savings / current account and proceed with standing instructions on the minimum fee (waived if you maintain deposit accounts and loans with the same) ATM transfers Internet Banking Telephone Banking Depositing a check in the machine or send your check directly to financial institutions

I think it is good to refinance if I am offered a lower interest rate?

Fixed Rate Buy to Let Mortgage in Malaysia

2010-10-05T17:34:00.000-07:00

Choose an interest rate fixed or variable is a matter of subjectivity based on individual needs. Do you know the basic elements necessary for selecting the best loan package for you. We classify the initial purchase of three groups of buyers who wish to spend their first properties, both those who make purchases for investment purposes, short and third in their final purchase for long-term investments.

1. Those wishing to occupy the property
In those who want to occupy the property purchased, the purchase using a fixed interest rate is the best way for them. That's because, with a fixed interest rate allows the buyer to allocate money income more accurately and consistently. Besides a fixed monthly budget to facilitate the buyer and not linked to market pressure is constantly changing. According to the scheme in the history of the country BLR, BLR rate will change every year at least once. But have you ever wondered why the Government Housing Loan to staff on fixed interest rate of 4%?

What you should know ...
Fixed rate loan Housing loan government employees enables them to make monthly payments for a fixed monthly cost. It allows the borrower had to provide income on a systematic basis. Household spending and other needs will not be affected by unexpected costs and everything can be done in accordance with a budget. By choosing a fixed interest rate on the purchase of property is the best way to loan a stable and secure.

2. Those who make a purchase for investment purposes, short
Home loans to those who want to invest in the short term are those that make loans in the next three to five years. In this period, the rate loans is best for them. This is because during this period will be a buyers property for a certain period and sell it at the time of maturity. More money alone produces little more profitable. In addition, if released to add a variable interest rate is more economical for short-term real estate investor.

What you should know ...
As usual, the variable rate home loans to be classified, even evolution, it is generally more effective at the regulated economy. If economic pressure more emergency loans can be useful, but they may require borrowers.

3. They buy the long-term investment
In the so-called "strategic" is based on the fixed rate of interest on the loan. They buy long-term investments required to maintain power. Those in power have always been consistent for example, rental property investors are also in line with those rates, rental rates vary depending on the current market, but with fixed rates and expect you to maximize profits . Another variable rate if, if, when the increase in rental rates, your interest rate will increase. So if you want to invest for rental property ... better with fixed rates.

Fixed rates are also suitable for those who buy goods in order to present it to family members such as parents or children. most of those who make fixed rate loans took their money out of money today and tomorrow. As an early preparation, they are usually able to provide a consistent economy.

What you should know ...
Fixed rate loans are usually misinterpreted if we see them today. Each year, the value of our currency goes down, there are many external factors which could put pressure on the economy today. repayment plan with a fixed interest rate is ideal for those who work alone or traders kesil scale because it was safer and less risky.

Therefore, you are most familiar with the true purpose of your property. Where to live there, according to a fixed interest rate is used. Make the right choice for you and your family.

There are several attractive packages for fixed-rate mortgage (fixed rate loan) on the market today. Unfortunately, each time finding a loan with a fixed rate of bank interest rates are too high and it is not relevant to the current state of the economy

Are fixed rate mortgages to buy to let still the best approach?

2010-09-21T18:26:00.000-07:00

Are fixed rate buy to let mortgage still the best approach?

What is fixed rate?
An interest rate that applies for a loan for a specified period. As the interest rate and loan repayments are fixed for the agreed period, irrespective of any change in interest rates on the mortgage market.

A fixed rate can be negotiated a predetermined rate is not appropriate. A fixed rate has the same characteristics as a predetermined rate, except that it can be adjusted for over or under recovery of indirect costs

What is buy to let mortgage?
Fixed rate buy to let mortgage are not difficult to understand. They are specially designed for rental property where the owner of the property can not be an occupier.

It can refer either to the investment strategy of buying a residential property to be let for profit or a particular category of mortgage used to purchase a property for rent.

For many years the owners have invested in residential housing to be let for profit, but since the mid-nineties, there has been rapid growth in the housing market led to a strong demand for rental property that is exploited by many mortgage providers keen to encourage new amateur landlords.

Fixed rate buy to let mortgage have been offered in the United Kingdom since the late nineties, they are specially designed for investors to borrow money to buy property in the private rental sector in order to let to tenants.

The lenders give different means. The amount of money investors can borrow is determined by evaluating the property rent. Usually the annual rental income must cover a certain percentage of the mortgage repayments, somewhere between 120% and 150%. This is to allow surplus rent to cover other costs such as property maintenance and void periods (periods when there are no tenants living in the property and therefore no income rental).

Homeowners looking to buy let packets credit home in the near future may be disappointed that an expert believes that area of the mortgage market could take another two years to return to health.

According to Lee Grandin, director of the owner, mortgage banks and building societies are unlikely to significantly increase the competitiveness of their tariffs on products such as buy to let mortgage offers tracker until "well into 2012" .

Fixed rate buy to let mortgage : Advantages and Disadvantages.
There are many buy to let fixed-rate mortgage deals available and they offer several advantages to buy to let landlords. Some buy to let owners prefer the security of a fixed rate mortgage buy to let. Indeed, a fixed-rate mortgage allows them to set their payments for a while and know exactly what they have to pay. This can be a great advantage for an owner who wants to know exactly what monthly expenses will be. Owners who wish to reduce their monthly expenses in the early stages of a mortgage may opt for a fixed rate mortgage contract with an initial reduction. The discount can take several months or years, before returning to another rate.

However, a fixed rate buy to let mortgage has also some disadvantages. If a fixed rate mortgage protects homeowners against rising interest rates, it also means that if interest rates fall, homeowners are faced with paying the higher rate. And it is not always practical to move the mortgage, because there are usually penalties for early repayment in the early stage of a fixed rate mortgage buy to let. To decide whether a fixed rate buy to let mortgage is right, it is best to consider if your primary goal is to keep your secure payment or if you prefer to live with some risk. In the latter case, a tracker rate mortgage could be a reasonable option.

Depending on your particular situation and as long as you are aware of the advantages and disadvantages, so we can help you make informed decisions. Sometimes you can buy to let fixed rate mortgage rates will be cheaper than tracker or discount offers and other times they will be more expensive.

How to compare the best fixed rate buy to let mortgage.
Usually Wil comparison taking into account characteristics such as rate, the cost APR Mortgage Type, Period, Max LVT, Redemption.
In an economic environment where uncertainty is high, obtaining a mortgage loan lowest rate fixed is often the best move to make. Caution, however, for lenders claiming to offer the best deal fixed rate mortgage encourage consumers to sign with overall incredible and read the fine print.

There are different types of mortgages best fixed rate buy to let mortgage available and the interest rate is marginal compared to others. Before opting for what appears to be more fixed-rate mortgage available, make sure that taxes do not swallow your savings as expenses can be costly and may outweigh the gains of having the best loan lowest Fixed rate mortgage, and ensuring your mortgage payments to save in the long term.

Last, Barclays and Lloyds have recently issued new business only to their own customers. In most cases, lenders will force you to become a client and wait to apply, but will you apply for a current account simultaneously.

Overall things are looking good for fixed rate buy to let mortgage - with the lenders interest rate swap market monetary financing costs down to 1.39% over two years and of 2.27% over five years old.

Low prices and rates can't slow fall in home sale

2010-08-25T18:54:00.000-07:00

Home prices in abounding genitalia of the country scream bargain, and mortgage ante haven't been this low for decades. So why are houses beyond the nation sitting on the bazaar for so long?

Sales of ahead active homes in the United States fell 27 percent in July, the weakest assuming in 15 years, the National Association of Realtors said Tuesday. It was the better account bead in the four decades that annal accept been kept.

Potential buyers are afraid because they anticipate home prices still accept added to fall. Potential sellers — those with the abdomen to put their homes on the bazaar at all, anyhow — are afraid to lower their prices.

Detail...

15 year mortgage ante added to 3.99 percent for the anniversary catastrophe August 13, 2010,

2010-08-24T23:57:00.000-07:00

Mortgage ante added hardly in the best contempo analysis appear bygone morning by the Mortgage Bankers Association. Both 30 year mortgage ante and 15 year mortgage ante are up hardly from best lows set aftermost week. 1 year adjustable amount mortgages decreased in this week’s survey.

30 year mortgage ante added to 4.60 percent for the anniversary catastrophe August 13, 2010, an access from the antecedent week’s boilerplate arrangement 30 year mortgage amount of 4.57 percent. Mortgage abatement credibility averaged 0.92 points, up from the above-mentioned week’s boilerplate of 0.89 percent.

15 year mortgage ante added to 3.99 percent for the anniversary catastrophe August 13, 2010, an access from aftermost week’s boilerplate 15 year mortgage amount of 3.95 percent. Mortgage abatement credibility on 15 year home loans decreased to 1.05 points, bottomward from the antecedent week’s boilerplate of 1.08 points.

1 year adjustable mortgage ante were lower for the anniversary catastrophe August 13, 2010. The boilerplate arrangement adjustable mortgage amount on 1 year adjustable mortgages decreased to 6.90 percent, bottomward from the antecedent week’s boilerplate 1 year adjustable amount mortgages averaged 7.00 percent. Mortgage abatement credibility averaged 0.21 points, bottomward from antecedent week’s boilerplate of 0.22 points.

You can look and analyze today’s mortgage ante in New York or any added accompaniment by application the mortgage amount tables on MonitorBankRates.com. We additionally action mortgage ante widgets and a chargeless mortgage calculator. The mortgage amount widgets are accessible for both civic boilerplate mortgage ante and accompaniment boilerplate mortgage ante for all states.

Home-Mortgage Rates Hit New Lows

2010-08-22T17:29:00.000-07:00

Rates on fixed-rate home mortgages alone this week, according to Freddie Mac's account survey— of befitting mortgage ratesthe ninth anniversary in a row that fixed-rate mortgages accept met or set a almanac low, according to Freddie Mac's agent arch economist.

The 30-year fixed-rate mortgage averaged 4.42% for the anniversary concluded Aug. 19, the everyman back Freddie started tracking the bulk in 1971.

The 30-year mortgage averaged 4.44% aftermost anniversary and 5.12% a year ago, according to the survey.

Fifteen-year fixed-rate mortgages averaged 3.9% this week, bottomward from 3.92% aftermost anniversary and 4.56% a year ago. This week's boilerplate is additionally the everyman back Freddie began tracking it in 1991.

Five-year Treasury-indexed amalgam adjustable-rate mortgages averaged 3.56%, banausic from aftermost anniversary and bottomward from 4.57% a year ago. And one-year Treasury-indexed ARMs averaged 3.53%, banausic from aftermost anniversary and bottomward from 4.69% a year ago.

To access the rates, the 30-year fixed-rate mortgage and the one-year ARM appropriate acquittal of an boilerplate 0.7 point. The 15-year fixed-rate mortgage and the five-year ARM appropriate an boilerplate 0.6 point. A point is 1% of the mortgage amount, answerable as prepaid interest.

Read more....

Giant banks set to cut mortgage rate deals

2010-06-29T17:23:00.000-07:00

THE above banks could cut discounts on mortgage ante offered to barter to abate the appulse of added broad allotment costs and abstain accepting to canyon on college absorption ante in an acclamation year.

Banks are adverse ascent burden from the Government not to access lending ante out of aeon with the Reserve Bank, alike admitting the European debt crisis has triggered a blast in allotment costs, The Australian reported.

ANZ's Australian arch executive, Phil Chronican, said the banks were already alpha to accomplish changes to mortgage packages, decidedly abbreviation allowance fees, to affluence the accepted allowance squeeze.

It is estimated ANZ, which has a $140 billion home accommodation book, has absent about $40 actor through the animated broad allotment prices and the accepted antagonism for retail deposits.

Westpac, Australia's additional better bank, has anticipation the 15-basis-point allowance abrasion accomplished in the aboriginal bisected of the accepted year has amount it about $120m on its $250bn mortgage book.

In an account with The Australian, Mr Chronican said it was acceptable the bounded banks would restructure the "value-based pricing" of mortgages which could accommodate abbreviation the discounts on the boilerplate accepted capricious ante offered to some new and absolute customers. "If you attending at it recently, what you accept apparent in the bazaar is bodies rejigging their allowance agency ante . . . that's the way the bazaar has moved," he said.

The bazaar is additionally affective appear banks adopting the valuation-based appraisement of mortgages.

"The banks action discounts based on the appraisal characteristics of a loan. In the approaching we may see that actuality acclimated abnormally by banks as they accomplished tune their home loans," Mr Chronican said. "At the moment, the discounts usually administer to bodies with a analytic aerial assets and they accept disinterestedness in their absolute home -- there is a lot of altered appraisement out there."

ANZ currently has the additional accomplished capricious amount at 7.41 per cent, abaft Westpac's 7.51 per cent, but advanced of the CBA's 7.36 per cent and NAB's 7.24 per cent. At atomic one added coffer -- Westpac -- is accepted to be advertent attractive at its abatement appraisement for mortgages to abate the adventitious of accepting to apparatus out of aeon amount rises.

Mr Chronican said ANZ, and its rivals, were able to ache the allowance clasp to advance bazaar share.

ANZ holds a 12.5 per cent allotment of the Australian home accommodation market, hardly abaft NAB at 13.2 per cent, and backward bazaar leaders CBA with 25.9 per and Westpac at 24.1 per cent. ANZ and NAB implemented strategies during the all-around banking crisis to apathetic mortgage lending in a bid to abate assurance on broad allotment markets.

"The amount of allotment a home accommodation portfolio is continuing to go up and retail drop ante and broad allotment spreads are high," Mr Chronican said.

"There's no agnosticism that if you're aggravating to advance margin, it's adamantine to do that.

"But what we accept approved to say is that you consistently get barter who feel the burden . . . so at times it's not in our abiding interests as an organisation to canyon all of the costs through to customers. We can't aphorism it out in the future, annihilation is certain.

"But on the balance, we are administration some of the pain."

In the accomplished six months, ANZ has developed mortgages at 1.6 times arrangement growth.

Mr Chronican said he was agog for ANZ to advance its mortgage drive but not to aggrandize the accommodation book too rapidly.

"Our home loans accept been growing at added than system. I don't demand it to get too fast," Mr Chronican said.

"I don't demand a bang and apprehension lending aeon area you accommodate too abundant this year and you accept to cut aback later.

Read the abounding account with Phil Chronican in The Australian.

Mortgage Rates Near Historic Lows: 30 Year Mortgage Rates at 4.76%, 15 Year Mortgage Rates at 4.25%

2010-06-22T17:17:00.000-07:00

Mortgage ante are aerial aloof aloft celebrated lows this accomplished week. 30 year mortgage ante accept backward beneath 5.00 percent for eight after weeks. The aftermost time 30 year mortgage ante were aloft 5.00 percent was on May 3, 2010 back ante were averaging 5.03 percent. Mortgage ante accept been boring afloat lower back May 3 but the declines accelerated back the absolute government debt crisis in Europe started a few weeks ago. Weaker U.S. application letters additionally collection mortgage ante lower.

You can search for today's lowest home mortgage rates by state and city in our . You'll have access to current 30-year fixed mortgage rates as well as mortgage interest rates for most other home loan programs.

Please compare mortgage rates by following at MorgageLoan.Com

Mortgage rates fall below 5 percent

2010-03-04T19:10:00.000-08:00

Mortgages rates accept biconcave beneath 5 percent again, four weeks afore a government affairs that is allowance accumulate ante low is appointed to run out.

The boilerplate amount on a 30-year anchored amount mortgage was 4.97 percent this week, bottomward from 5.05 percent a anniversary earlier, mortgage accounts aggregation Freddie Mac said Thursday.

Rates alone to a almanac low of 4.71 percent in December and accept hovered about 5 percent since, kept bottomward by a Federal Reserve attack to activation homebuying by blurred how abundant it costs to get a home loan.

The axial bank's $1.25 abundance affairs to buy up mortgage balance is set to expire March 31. But the Fed has captivated the aperture accessible to extending the affairs if the abridgement weakens.

Some analysts altercate that ante could acceleration already the Fed's affairs ends, affliction both the accretion in apartment and the all-embracing economy. Government admiral are optimistic that the Fed will be able to end its affairs after a above disruption. Read more...

Source : AP

Lower Your Mortgage Rate Before March for Bad Credit Home Loans

2010-02-21T16:15:00.000-08:00

If you are looking to lower the mortgage rate on your bad credit home loan before March then you will need to start your research today. There are many mortgage lenders that can help you lower your overall mortgage interest rate but you will need to understand that the rate you qualify for will be greatly dependent on your credit score and the equity in your home.

By simply doing some Google searches you are likely to find many mortgage lenders in your area who would be more than happy to help you obtain a low mortgage rate. Unfortunately, these lenders are not miracle workers and they cannot qualify you for a low mortgage interest rate if you have bad credit.

If your credit score is well below 700 then you can almost count on the fact that you are not going to qualify for a mortgage rate anywhere near 5%. The bad financial decision you made in the past are going to come back to haunt you in the form of higher interest rates. That is why it is very important to think through any financial decision.

The only option you have to lower your mortgage interest rate is to improve your credit score. If you have bad credit you need to take the steps to make certain that all your bills are paid on time and in full. After doing this for several months you should start to notice an increase in your credit score which will allow you to qualify for lower interest rates.

Author: Jeremy North

Related link : http://www.vsemvsem.net/

US home loan demand drops despite drop in rates

2010-02-10T18:26:00.000-08:00

NEW YORK, Reuters) - U.S. mortgage applications biconcave aftermost week, absorption bargain appeal for home acquirement loans alike as ante on 30-year loans fell to their everyman back December, abstracts from an industry accumulation showed on Wednesday.

A assiduity of blah appeal for home acquirement loans would not augur able-bodied for the U.S. apartment market, which charcoal awful accessible to setbacks and heavily codicillary on government intervention.

The Mortgage Bankers Association said ante on 30-year fixed-rate mortgages, the best broadly acclimated loan, fell beneath 5 percent for the aboriginal time back the anniversary concluded Dec. 18. Low mortgage ante fueled a slight uptick in appeal for home refinancing loans aftermost week, with action extensive its accomplished akin back the anniversary concluded Dec. 11.

Mortgage Rates were mixed in the latest mortgage survey released this morning. 30 year mortgage rates are at 4.94 percent in the most recent Weekly Mortgage Applications Survey released by the Mortgage Bankers Association.

mortgage-rates-30-year-mortgage-rates-decrease-to-494-and-15-year-mortgage-rates-unchanged-at-433The average contract mortgage rate for 15 year mortgages is at 4.33 percent, unchanged from the prior week’s average mortgage rate. The average contract mortgage rate for 1 year adjustable mortgages is down to 6.68 percent, a decrease from the prior week’s average adjustable mortgage rate of 6.70 percent.

Read more...

Why You Should Know About Mortgage Payment Calculator

2009-11-08T15:00:00.001-08:00

There are many mortgage calculators available online. However, some allow you to try out different scenarios more easily than others. That's important because you want to be able to see how your monthly payments will be affected by different factors: amount of down payment, interest rate, length of contract.

You must be able to calculate your future mortgage using different numbers in order to get a true sense of what you can afford. For example, how much effect will a larger down payment have on your mortgage? Or a half a percent higher percentage on the interest rate? These may have a huge effect on your monthly payment -- or they may only mean a difference of a few dollars.

But you need to know this information before you discover the house of your dreams.Using this mortgage payment calculator can help you target a loan amount that provides a comfortable monthly payment

Another benefit of using monthly payment calculator is learning how much you can save by refinancing into a shorter loan repayment term; or, if you currently have a 15 year mortgage and want to convert to a 30 year loan, you can see how much your monthly. payments will decrease. Entering different loan amounts, interest rates, and repayment terms can help you discover how to save on a mortgage loan with terms that accommodate your budget.

Home Mortgage Rate Information

2009-11-06T16:32:00.000-08:00

Home Mortgage Rate or Mortgage interest rates are determined by credit history strength, the number of points you pay, the size of your down payment and the type of loan program you choose.
* Understanding Mortgage Trends
* Home Mortgage Rate Factors
* Pay Points For Lower Rate
* Annual Percentage Rate (APR)
* Mortgage Market Information

How To Get the Best Home Mortgage Rate
Getting the best home mortgage rate is possible by visiting online sites that provide today’s trends in mortgage rates. Basically, most of them are updated daily. There are sites that have mortgage calculators that you can use to identify monthly payments for any fixed loan. You just need to input the data and a mortgage calculator will calculate how much interest you need to pay every month. If you are looking for ways how to get the best home mortgage rate, then you have come to the right place. Here are some helpful guidelines on how to do it:

1. Shop for home mortgage rates.
When purchasing your dream home, shopping is necessary for you to acquire the best deal. Of course, do not forget to compare interest rates and negotiate with the lenders. You can chase the best home loan rates online and offline. Home loans offering closing costs below $1,000 are considered to be the best deals.

2. Fix your credit card report and have a good credit history.
It is very important that you fix your credit report. If you have any unresolved issues from the past, then do your best effort to fix them. More often than not, lenders do a background check on your credit status and make use of the results to evaluate mortgage rates.

3. Minimize your debt.
Debt-to-income is another thing that lenders check. DTI helps lenders calculate the amount you can borrow.

4. Pay your bills on time.
Paying your bills on time will provide you with a good credit card score and certainly will give a good impression to the lender. Lenders like borrowers who pay on time. Why? Because it simply means they are the type of borrowers who are not hard to deal with.

5. Get all the information you need from different lenders.
Different types of lenders including mortgage brokers, mortgage firms, commercial banks and thrift organizations provide home loans. Different lenders may give you different prices, so it is very important that you talk to each of them and ask for the best price.

6. Get the cost details.
Make sure to ask the lender how much money you need to deposit for the down payment. Getting the cost details such as down payment and monthly payment is not enough. You also need to know the information about the type of loan and loan amount so that you can evaluate. Fees, Points, Rates and Mortgage Insurance are also the things you need to ask your lender about.

7. Get the best deal.
Once you have gathered all the information you need from every lender, it is time to settle on the best deal. Let the lender jot down all the costs you need to pay every month. Check the paper and ask if he can make some adjustments for you. Asking for a lower rate will cost no harm on your part. Just be brave and take the chance.

Well plan and do collection of Home Mortgage Rate information is important to get best deal before buying your house.

How Get Low Mortgage Rates

2009-11-03T07:16:00.001-08:00

If you're in the market for a mortgage, here's what you can do right now to find and qualify for the cheapest possible loan.

Smart move 1. Shop around.

Financing a home is the single biggest financial decision most of us make. You've got to shop for a loan at least as hard as you'd shop for a car or a Caribbean vacation.

Don't take whatever they offer from the bank where you have a checking account or the mortgage broker in a nearby strip mall.

Compare interest rates and fees from dozens of lenders by scouring newspaper ads and Internet sites. Loans offering the lowest rate with fees of $1,000 or less are usually the best deals.

Our extensive database of mortgage rates is a great place to start looking.

Smart move 2. Fix any mistakes on your credit reports.

Your credit score is the single most important factor in determining how much you'll pay for a loan.

That score is based on information pulled from the credit histories maintained by the three, major credit-reporting agencies -- Experian, TransUnion and Equifax.

If there are mistakes on your credit report, and those mistakes hurt your credit score, you'll pay the price in the form of a higher interest rate.

Start by obtaining a free copy of your credit reports from each agency at annualcreditreport.com.

Read the reports carefully, and look for errors. To fix them, start by noting the errors on a copy of the report. Write a letter to the credit bureau explaining the problems and asking them to investigate. Enclose any proof you have, and send the whole thing by certified mail.

Here's a form letter for correcting credit reports that tells you exactly what to say and where to send it.

Smart move 3. Pay your bills on time.

The biggest part of your credit score -- 35% of it -- is based on whether you pay your bills on time.

When you apply for a mortgage, you should have no late payments on your credit report for at least six months.

More than anything, lenders want to know you will pay your mortgage on time every month. If your credit history shows you've skipped a payment or even been a few days late, you're seen as a bigger risk. And risky borrowers pay higher rates -- or they don't get a mortgage at all.

A late payment only weeks or even a few months before applying for a mortgage will be taken particularly seriously.

Smart move 4. Pay down your credit card debt.

Almost one-third of your credit score is based on how much of the available credit you've tapped.

If you owe $6,000 on a card with a $10,000 credit limit, you've used more than half of your available credit -- and that's too much.

You're penalized anytime your debt-to-available-credit ratio climbs above 50%. Reducing your balance to less than half the credit limit on each card will have an immediate and positive impact on your credit score.

Smart move 5. Don't apply for new credit cards or other consumer loans.

Potential lenders will check your credit report when you fill out an application, and those inquiries are noted on your history. Each inquiry can lower your credit score by up to 12 points.

Mortgage rate today

2009-11-03T07:11:00.000-08:00

Mortgage Interest Rates Today Firm – Current 30-Yr Fixed Interest Rate 4.875

By Ed Ferrara on November 2, 2009

Prices of Residential Mortgage Backed Securities rose ever so slightly today and not enough to effect mortgage interest rates which move their opposite. The 10 year treasury yield, used to predict mortgage interest rates, is up today and at 3.42 as of 12:38 PM PST. The yield was as low as 3.39 today. Effecting the mortgage market today was a report that pending home sales were up an unexpected 6.1 percent, far higher than fore casted.

Current Mortgage Interest Rates

A redneck mansion.

FreeRateUpdate.com research of wholesale mortgage lender’s rate sheets shows the following mortgage interest rates as of 12:54 AM PST. The current 30 year fixed mortgage interest rate at par is 4.875 percent. It’s been pretty flat for almost 3 weeks since hitting a 5 month low at 4.625 percent. The current 15 year fixed mortgage interest rate is 4.25 percent. The current 5/1 ARM interest rate is 3.75 percent.

Today’s Mortgage Interest Rates as Reported by Zillow and Bankrate

Zillow reports a national average 30 year fixed rate of 4.78 percent as of 12:46 Pm PST. Zillow also said the following , ” National mortgage rates on 30-year fixed mortgages remained stable at 4.77% on November 2, 2009, according to Zillow Mortgage Marketplace. As a comparison, state rates ranged from a low of 4.64% (DC) to a high of 5.14% (MO)”.Bankrate.com reports mortgage interest ratesas follows, 30-year fixed-rate 5.16 percent, 15-year fixed-rate 4.6 percent, 5/1 ARM 4.26 percent. These Bankrate.com national averages tend be on the high end.

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Current Mortgage Rates Down a Tad. 30-Yr Fixed-Rate at 4.875 as Up and Down Week Continues

By Ed Ferrara on October 30, 2009

Current mortgage rates are stable.

Most major economic reports came in close to expected today yet we saw a big move in the Dow and bond yields. The Dow is down 224 points today as of 11:30 AM PST. The 10 year treasury yield, used to forecast mortgage rates, is down over 2 percent overall and at 3.42 percent as of 11:31 AM PST. Prices of RMBS, of which mortgage rates move opposite, are up today as investors seek safe havens wary of the plummeting stock market.

Despite changes in RMBS prices and bond yields, which have been up and down all week, it’s been a quiet week for mortgage rates which threatened to go up and down several times but remain the same. As of now following the increase in RMBS prices and decrease in the 10 year treasury yield mortgage rates are stable and more likely to go down than up.

Current Mortgage Rates

FreeRateUpdate.com research of wholesale lender’s current mortgage rates shows the following as of 11:35 AM PST. The current conforming 30 year fixed mortgage rate is 4.875 percent at par, where it’s remained for almost 3 weeks now. The current conforming 15 year fixed mortgage rate is 4.25 percent at par. 15 year fixed mortgage rates have sea sawed by an 1/8 of a point of late going from 4.25 to 4.375 percent on any given day. Current 5/1 ARM mortgage rates are as low as 3.75 percent at par. Par rates are the lowest available interest rates without the requirement by the lender for the borrower to pay additional points and fees. Typically par rates can be obtained with 1 point origination.

Mortgage Rates Forecast

The past 2 years mortgage rates have bottomed out during the holiday season. We’ll hope this trend continues this year.

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Today’s Mortgage Rates: 30-Year Fixed-Rate at 4.875 Closer to 5 Percent. Bonds Down.

By Bruno Mckenzie on October 29, 2009

Prices of Residential Mortgage Backed Securities are up today. Mortgage rates, which move the opposite RMBS, are now pressured to go up. The 10 year treasury yield, a leading indicator for conforming 30 year fixed mortgage rates is up over 2 percent overall at 3.5 as of 9:55 pm PST. When mortgage rates were near 4.5 percent fixed for 30-years just 2 1/2 weeks ago the yield was below 3.2 percent. Today’s up tic in RMBS prices has not been significant enough to move mortgage rates yet.

Today's Mortgage Rate at 4.875 Fixed for 30 Years

Yesterday RMBS prices went up on strong demand at the treasury bond auction and weak new home sales. Mortgage rates stabilized as the 30-year fixed mortgage rate moved nearer 4.75 percent than 5 percent. 30-year fixed mortgage rates have been at 4.875 percent at par for most of the past 3 weeks. The trend the past couple days has been for the stock market to go up and mortgage ratesto go up and vice versa.

Today’s Mortgage Rates

FreeRateUpdate.com research of wholesale mortgage lender’s current mortgage ratesshows the following interest rates at par. Par rates are the lowest available interest rates without the requirement by the lender for the borrower to pay additional points and fees.

Today’s 30 year fixed mortgage rate is 4.875 percent. Today’s 15 year fixed mortgage rate is 4.25 percent at par. Today’s 5/1 ARM mortgage rate is 3.75 percent. Today’s mortgage rates are virtually unchanged from the levels we’ve seen over the past 2 1/2 weeks.

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Current Mortgage Rates Unlikely to Rise: Current 30 Year Fixed Mortgage Rate 4.875.

By Sheldon Levene on October 28, 2009

Prices of Residential Mortgage Backed Securities are up slightly today. Current mortgage rates, which move opposite the price of RMBS, remain the same. Current mortgage rates are unlikely to rise given RMBS price increases the past 2 days.

Late last week it seemed foreordained conforming 30 year fixed mortgage rates would rise above 5 percent. The 10 year treasury yield, one of the leading indicators for current mortgage rates, spiked to the mid 3’s a level not seen since mid September.

Current mortgage rates have stabilized.

Current Mortgage Rates

FreeRateUpdate.com research of wholesale lender’s current mortgage rates shows little to no changes in the past 24 hours. Current 30 year fixed mortgage rates are at 4.875 percent at par. Current 15 year fixed mortgage rates are at 4.25 percent at par. Current 5/1 mortgage rates are at 3.75 percent at par. Par rates are the lowest available interest rates not requiring additional points to be paid by the borrower, also known as buy down points.

Current Mortgage Rates Forecast

Though home values are declining slower by the month today’s report which says new home sales unexpectedly were down is favorable for current mortgage rates. The Fed holds a 5 year treasury bond auction today following yesterday’s 2 year auction which was met with high demand. High demand at bond auction’s is good for mortgage rates which move the opposite bonds.

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Today’s Mortgage Rates: Today’s 30 Year Mortgage Rate Remains at 4.875. Bond Prices Up.

By Ed Ferrara on October 27, 2009

Mortgage rates todayare still at 4.875 percent fixed for 30 years according to FreeRateUpdate.com research of wholesale mortgage lender’s rate sheets.

The 10 year treasury yield, used to forecast conforming 30 year fixed mortgage rates, dipped drastically to 3.46 down 0.0920 (2.59%). The yield closed yesterday at it’s highest level in over a month. Mortgage rates closed yesterday at their highest level in a month as well and very near 5 percent. Mortgage rates have been below 5 percent for over a month.

Demand for 2 year T-Bonds today was high. Mortgage rates are stable.

Today’s Mortgage Rates Forecast

As a result of the less than impressive Consumer Confidence report and strong demand at the 2 year treasury bond auction today prices on Residential Mortgagte Backed Securities rose. Mortgage Rates which move the opposite RMBS are now stable. Mortgage rates had been likely to rise prior to today hanging in by a thread under 5 percent.

Today’s Mortgage Rates According to FreeRateUpdate.com Research

FreeRateUpdate.com research of wholesale lender’s mortgage rates today shows the following

30 year fixed mortgage rates today are at 4.875 percent. 15 year fixed mortgage rates today are at 4.375 percent. 5/1 ARM mortgage rates today are at 3.875 percent. We’ve seen these same levels for the most part over the past 2 weeks.

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Today’s Mortgage Rates Hanging In – Today’s 30 Year Fixed Rate STILL 4.875

By Ed Ferrara on October 26, 2009

Prices on Residential Mortgage Backed Securities declined today. Mortgage rates, which move the opposite RMBS prices, remained just below 5 percent. FreeRateUpdate.com research of wholesale mortgage lender’s rate sheets shows 30 year fixed mortgages available for qualified borrowers as low as 4.875 percent at par as of 4:34 pm PST. Par rates are the lowest interest rates available without the requirement by the lender for the borrower to pay additional points and fees. As a result of the decline in price of residential mortgage backed securities today it’s likely mortgage rates will go higher.

Today's mortgage rates are still under 5 percent 30-years fixed but likely to go higher.

The 10 year treasury yield, an indicator of conforming 30 year fixed mortgage rates rose 0.0790 (2.27%) overall and closed at 3.55 percent, it’s highest level in over a month. No major economic reports were released today. The Fed begins 2 year treasury auctions tomorrow of which could affect bonds and in turn mortgage rates. Also tomorrow Consumer Confidence will be released.

Today’s Mortgage Rates

Our research of today’s mortgage rates according to wholesale lender’s mortgage rate sheets shows the following:

Current 30 year fixed mortgage rates as low as 4.875 percent at par
Current 15 year fixed mortgage rates as low as 4.35 percent at par
Current 5/1 adjustable rate mortgage rates as low as 3.75 percent at par

Par rates are the lowest available interest rates offered by a lender without the requirement by the borrower to pay additional points above and beyond regular closing costs.

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30 Year Fixed Mortgage Rates Finish the Week Near 5 Percent – Likely Mortgage Rates Higher Monday

By Ed Ferrara on October 23, 2009

30-year fixed mortgage rates finished this week near 5 percent sea sawing back and forth from 4.75 to 4.875 percent Monday through Friday. Freddie Mac said Thursday afternoon in their weekly mortgage rates survey that 30 year fixed mortgage ratesaveraged 5 percent Monday through Wednesday. Freddie is always a little on the high end. Even higher than Freddie Mac is Bankrate.com. On Bankrate’s website they’ve got 30 year fixed mortgage rates averaging 5.15 percent. Zillow is displaying a 30 year fixed mortgage rate of 4.84.

So What’s Today’s 30 Year Fixed Mortgage Rate?

Higher mortgage rates will make it tougher to sell.

FreeRateUpdate.com research of wholesale mortgage lender’s rate sheets shows 30 year fixed mortgages within Fannie/Freddie loan limits as low as 4.875 percent at par. 4.875 percent has been available since 2 Friday’s ago when mortgage rates shot upward from near 4.5 percent. Wednesday afternoon brought the best rates of the week when 30 year fixed mortgages were readily available at 4.75 percent.

The Benchmark Yield and Mortgage Rates Next Week

Today saw the benchmark 10 year treasury yield, used to forecast conforming fixed mortgage rates, shoot up almost 2 percent and into the high 3.4’s. The yield was below 3.2 percent when 30 year fixed mortgage rates neared 4.5 percent. The yield has been anywhere from 3.2 to 3.5 in the past month on any given day typically moving down when the Fed holds big bond auctions. When demand for treasuries are high prices go up and yields and mortgage rates which move their opposite go down. Though the yield moved up significantly today lenders for the most part held their mortgage rates in check. That’s typical for a Friday afternoon. Expect higher mortgage rates, likely at 5 percent 30-years fixed on Monday morning unless the yield moves back down over a 1/10 of a percent.

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Current Mortgage Rates: Current 30 Year Fixed Mortgage Rate 4.875 but Likely to Rise

By Sheldon Levene on October 23, 2009

Current mortgage rates are likely to be adjusted upward by mortgage lenders as the benchmark 10 year treasury yield, the leading indicator for today’s mortgage rates, continues to rise fast. The yield is up to 3.47, 0.0480 (1.40%) overall. As mortgage rates approached 4.5 percent, 30-years fixed, just 2 weeks ago the yield was below 3.2 percent. Today’s 30 year fixed mortgage rates are likely to move above 5 percent for the first time in about a month.

Current mortgage rates are rising.

Current Mortgage Rates (we’ll update rates as soon as lenders make adjustments)

FreeRateUpdate.com research of wholesale mortgage lenders rate sheets shows current 30 year fixed mortgage rates at 4.875 percent at par, where they’ve been for the most of the past 2 weeks. 15 year fixed mortgage rates are at 4.25 percent. Current 5/1 ARM mortgage rate is 3.875 percent at par. Par rates are the lowest available interest rates by a lender without the requirement for the borrower to pay additional points and fees.

Current Average Mortgage Rates

Zillow reports current 30 year fixed national average mortgage rate at 4.84 percent as of 12:15 pm PST. Zillow reports today’s national average for 15 year fixed conforming mortgages at 4.31 percent as of 12:16 pm PST. These rates are likely to rise and we’ll let you know when they do.

Bankrate.com reports today’s national average mortgage rates higher than Zillow. Bankrate says today’s average 30 year fixed mortgage rate is 5.15 percent. Bankrate says today’s average 15 year fixed mortgage rate is 4.71 percent. Both of these rates are as of 12:17 pm PST and higher than last week.

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Current Mortgage Rates Unchanged – Current 30 Year Fixed Mortgage Rate at 4.875

By Bruno Mckenzie on October 22, 2009

Current mortgage rates are unchanged.

The 10 year yield, used to forecast current mortgage rates, was flat today closing at 3.42 percent. Current mortgage rates which tend to follow the 10 year yield were flat as a result. Freddie Mac said today in their weekly mortgage rates survey that 30 year fixed mortgage rates averaged 5 percent this Monday through Wednesday.

Current Mortgage Rates

According to FreeRateUpdate.com research of wholesale lender’s current mortgage rates30 year fixed mortgage rates are as low as 4.875 percent at par. Par rates are the lowest available interest rates without the requirement by the lender for the borrower to pay additional points. Current 15 year fixed mortgage rates are as low as 4.25 percent at par. Current 5/1 ARM mortgage rates are as low as 3.875 percent.

30-year fixed-rate = 4.875%
20-year fixed-rate= 4.75%
15-year fixed-rate= 4.25%
5/1 ARM rate= 3.875%

Current Mortgage Rates Flat Since Move Up

A week and a half ago mortgage rates seemed to be approaching 4.5 percent fixed for 30 years. Current mortgage rates are unchanged from the Friday before last when 30 year fixed mortgage rates jumped from 4.625 percent to 4.875 percent in a matter of hours. Until the price of residential mortgage backed securities changes substantially mortgage rates which move opposite mortgage backed securities will see marginal changes. It’s likely mortgage rates waiver between 4.75 and 5 percent for the rest of the week.

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30 Year Fixed Mortgage Rate Today 4.875 – Today’s Mortgage Rates Open Higher

By Ed Ferrara on October 22, 2009

The 10 year treasury yield, the best indicator of fixed conforming mortgage rates today rose significantly yesterday to 3.441 from as low as 3.315 early Tuesday. As a result mortgage rates today are up about an 1/8 percent on conforming 30 year fixed mortgages, 20 year fixed mortgages, 15 year fixed mortgages, and the 5/1 ARM.

Today's mortgage rates up but still under 5

Today’s Mortgage Rates

An increase of an 1/8 percent brought today’s 30 year fixed mortgage rateto 4.875 percent at par, according to FreeRateUpdate.com research of wholesale lender’s mortgage rates today. The 15 year fixed rose from 4.25 percent to 4.375 percent at par. The 5/1 ARM rose from 3.75 to 3.875 percent. Mortgage rates this week were almost 1/4 percent higher Monday and Wednesday then they were Tuesday.

Today’s Mortgage Rates – Freddie Mac

Freddie Mac said in their weekly mortgage rates survey today that 30 year fixed conforming mortgage rates averaged 5 percent Monday through Wednesday of this week, up from 4.92 percent last week. Freddie says 15 year fixed mortgage rates averaged 4.43 percent, up from 4.37 last week.

Today’s Zillow National Average Mortgage Rates

As of 10:31 am PST Zillow reports their national average 30 year fixed mortgage rate at 4.86 percent, up almost 1/10 percent from early this morning.

Mortgage Trends

2009-11-03T07:07:00.001-08:00

The US home mortgage trend and the fluctuation of home mortgage rates are important benchmarks of the overall economy. While there are other other economic factors interest rates are largely tied to the decisions made by the Federal Reserve Bank. Interest rates are adjusted by the Fed according to financial matters in the US such as GDP growth, export and import numbers, and the inflation rate.

Mortgage rates are used to help control the economy. If the movement of the economy is considered to be too fast, higher rates are imposed so that individuals and corporations would be less willing to apply for loans. Conversely if the economy seems to be rather slow or stagnant, rates are lowered so that people would be more enticed to engage in additional business transactions. Thus home mortgage trends will generally move up or down as the economy contracts or expands.

Trend in Home Mortgage Rates:

It is interesting to observe that mortgage rates have been lower than 8.5% since the year 1996, with the lowest rates of about 5.5% seen in the middle of 2005. While individuals might see an extremely different mortgage rate at a particular time due to other factors that affect rates (their salaries or credit histories), the lower trend has generally been observed to be generally consistent throughout the US economy.

The fall of interest rates from higher levels prior to 1996 allowed more people to buy their homes, purchase lands, or trade up to larger houses. Perhaps this reflects an effort to speed up the economy from that time until now. However this year, mortgage rates are rising probably because of some unwise lending decisions made during a time of too easy money and rates held at extremely low levels by the Federal Reserve Bank for too long of a time period. A vicious correction is now underway with mortgage markets highly unsettled.

Current Home Mortgage Rates:

Mortgage rates in the year 2008 are generally higher than that of the previous year with rates of about 6.5 percent for 30-year fixed rate mortgages (FRM). The difference between interest rates this year and last year are not really significantly high as it would entail only a few hundred dollars increase in yearly payments. This probably would not stop many people from getting mortgages, however if the rise continues, you would expect that more people would become hesitant to apply for home loans.

The problem with the current trend in home mortgage rates is not so much an increase in rates but an unwillingness of leaders to lend, even to people with good credit histories. The trauma and losses to lenders caused by the ongoing sub prime mortgage debacle starting in 2007 has left many lenders with weak balance sheets and they are operating in a panic mode. A record level of foreclosures in 2008 is causing a sharp contraction in home mortgage lending activity.

With probably a few hundred billions of mortgage and derivative instrument write downs still to take place by mortgage lenders the trend for new home mortgage lending will probably remain down for some time to come. However, that is not all bad news for those looking for a new home. People who have cash to work with and a good relationship with their bank can probably find super deals on homes by working directly with stressed out lenders who have an excessive inventory of foreclosed homes on their books.

In fact, if you have significant cash on deposit with a bank or financial institution you may not even have to use it for your home purchase. Even with the home mortgage trend down lenders that have non performing loans on their books will be eager to work with those who have capital on deposit and may make deals that will require very little if any of the cash rich home buyers cash to be used as an extra inducement to get foreclosed homes off their books.

Adjustable mortgage rates

2009-11-03T07:00:00.000-08:00

An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on a variety of indices.^[1] Among the most common indices are the rates on 1-year constant-maturity Treasury (CMT) securities, the Cost of Funds Index (COFI), and the London Interbank Offered Rate (LIBOR). A few lenders use their own cost of funds as an index, rather than using other indices. This is done to ensure a steady margin for the lender, whose own cost of funding will usually be related to the index. Consequently, payments made by the borrower may change over time with the changing interest rate (alternatively, the term of the loan may change). This is not to be confused with the graduated payment mortgage, which offers changing payment amounts but a fixed interest rate. Other forms of mortgage loan include the interest only mortgage, the fixed rate mortgage, the negative amortization mortgage, and the balloon payment mortgage. Adjustable rates transfer part of the interest rate risk from the lender to the borrower. They can be used where unpredictable interest rates make fixed rate loans difficult to obtain. The borrower benefits if the interest rate falls and loses out if interest rates rise.

Adjustable rate mortgages are characterized by their index and limitations on charges (caps). In many countries, adjustable rate mortgages are the norm, and in such places, may simply be referred to as mortgages.

All adjustable rate mortgages have an adjusting interest rate tied to an index.^[1]

In Western Europe, the index may be the ECB Refi rate (where the mortgage is called a tracker mortgage), TIBOR or Euro Interbank Offered Rate (EURIBOR).

Six common indices in the United States are:

11th District Cost of Funds Index (COFI)
London Interbank Offered Rate (LIBOR)
12-month Treasury Average Index (MTA)
Constant Maturity Treasury (CMT)
National Average Contract Mortgage Rate
Bank Bill Swap Rate (BBSW)

In some countries, banks may publish a prime lending rate which is used as the index. The index may be applied in one of three ways: directly, on a rate plus margin basis, or based on index movement.

A directly applied index means that the interest rate changes exactly with the index. In other words, the interest rate on the note exactly equals the index. Of the above indices, only the contract rate index is applied directly.^[1]

To apply an index on a rate plus margin basis means that the interest rate will equal the underlying index plus a margin. The margin is specified in the note and remains fixed over the life of the loan.^[1] For example, a mortgage interest rate may be specified in the note as being LIBOR plus 2%, 2% being the margin and LIBOR being the index.

The final way to apply an index is on a movement basis. In this scheme, the mortgage is originated at an agreed upon rate, then adjusted based on the movement of the index.^[1] Unlike direct or index plus margin, the initial rate is not explicitly tied to any index; the adjustments are tied to an index.

Basic features of ARMs

The most important basic features of ARMs are:^[2]

Initial interest rate. This is the beginning interest rate on an ARM.
The adjustment period. This is the length of time that the interest rate or loan period on an ARM is scheduled to remain unchanged. The rate is reset at the end of this period, and the monthly loan payment is recalculated.
The index rate. Most lenders tie ARM interest rates changes to changes in an index rate. Lenders base ARM rates on a variety of indices, the most common being rates on one-, three-, or five-year Treasury securities. Another common index is the national or regional average cost of funds to savings and loan associations.
The margin. This is the percentage points that lenders add to the index rate to determine the ARM's interest rate.
Interest rate caps. These are the limits on how much the interest rate or the monthly payment can be changed at the end of each adjustment period or over the life of the loan.
Initial discounts. These are interest rate concessions, often used as promotional aids, offered the first year or more of a loan. They reduce the interest rate below the prevailing rate (the index plus the margin).
Negative amortization. This means the mortgage balance is increasing. This occurs whenever the monthly mortgage payments are not large enough to pay all the interest due on the mortgage. This may be caused by the payment cap contained in the ARM when are high enough that the principal plus interest payment is greater than the payment cap.
Conversion. The agreement with the lender may have a clause that allows the buyer to convert the ARM to a fixed-rate mortgage at designated times.
Prepayment. Some agreements may require the buyer to pay special fees or penalties if the ARM is paid off early. Prepayment terms are sometimes negotiable.

It should be obvious that the choice of a home mortgage loan is complicated and time consuming. As a help to the buyer, the Federal Reserve Board and the Federal Home Loan Bank Board have prepared a mortgage checklist.

Limitations on charges (caps)

Any mortgage where payments made by the borrower may increase over time brings with it the risk of financial hardship to the borrower. To limit this risk, limitations on charges—known as caps in the industry—are a common feature of adjustable rate mortgages.^[1] Caps typically apply to three characteristics of the mortgage:

frequency of the interest rate change
periodic change in interest rate
total change in interest rate over the life of the loan, sometimes called life cap

For example, a given ARM might have the following types of caps:

Interest rate adjustment caps:

interest adjustments made every 6 months, typically 1% per adjustment, 2% total per year
interest adjustments made only once a year, typically 2% maximum
interest rate may adjust no more than 1% in a year

Mortgage payment adjustment caps:

maximum mortgage payment adjustments, usually 7.5% annually on pay-option/negative amortization loans

Life of loan interest rate adjustment caps:

total interest rate adjustment limited to 5% or 6% for the life of the loan.

Caps on the periodic change in interest rate may be broken up into one limit on the first periodic change and a separate limit on subsequent periodic change, for example 5% on the initial adjustment and 2% on subsequent adjustments.

Although uncommon, a cap may limit the maximum monthly payment in absolute terms (for example, $1000 a month), rather than in relative terms.

ARMs that allow negative amortization will typically have payment adjustments that occur less frequently than the interest rate adjustment. For example, the interest rate may be adjusted every month, but the payment amount only once every 12 months.

Cap structure is sometimes expressed as initial adjustment cap / subsequent adjustment cap / life cap, for example 2/2/5 for a loan with a 2% cap on the initial adjustment, a 2% cap on subsequent adjustments, and a 5% cap on total interest rate adjustments. When only two values are given, this indicates that the initial change cap and periodic cap are the same. For example, a 2/2/5 cap structure may sometimes be written simply 2/5.

Reasons for ARMs

ARMs generally permit borrowers to lower their initial payments if they are willing to assume the risk of interest rate changes. In many countries, banks or similar financial institutions are the primary originators of mortgages. For banks that are funded from customer deposits, the customer deposits will typically have much shorter terms than residential mortgages. If a bank were to offer large volumes of mortgages at fixed rates but to derive most of its funding from deposits (or other short-term sources of funds), the bank would have an asset-liability mismatch: in this case, it would be running the risk that the interest income from its mortgage portfolio would be less than it needed to pay its depositors. In the United States, some argue that the savings and loan crisis was in part caused by this problem, that the savings and loans companies had short-term deposits and long-term, fixed rate mortgages, and were caught when Paul Volcker raised interest rates in the early 1980s. Therefore, banks and other financial institutions offer adjustable rate mortgages because it reduces risk and matches their sources of funding.

Banking regulators pay close attention to asset-liability mismatches to avoid such problems, and place tight restrictions on the amount of long-term fixed-rate mortgages that banks may hold (in relation to their other assets). To reduce this risk, many mortgage originators will sell many of their mortgages, particularly the mortgages with fixed rates.

For the borrower, adjustable rate mortgages may be less expensive, but at the price of bearing higher risk. Many ARMs have "teaser periods," which are relatively short initial fixed-rate periods (typically one month to one year) when the ARM bears an interest rate that is substantially below the "fully indexed" rate. The teaser period may induce some borrowers to view an ARM as more of a bargain than it really represents. A low teaser rate predisposes an ARM to sustain above-average payment increases.

ARM Variants

Hybrid ARMs

A hybrid ARM features an interest rate that is fixed for an initial period of time, then floats thereafter. The "hybrid" refers to the ARM's blend of fixed-rate and adjustable-rate characteristics. Hybrid ARMs are referred to by their initial fixed-rate and adjustable-rate periods, for example 3/1 for an ARM with a 3-year fixed interest-rate period and subsequent 1-year interest-rate adjustment periods. The date that a hybrid ARM shifts from a fixed-rate payment schedule to an adjusting payment schedule is known as the reset date. After the reset date, a hybrid ARM floats at a margin over a specified index just like any ordinary ARM.^[3]

The popularity of hybrid ARMs has significantly increased in recent years. In 1998, the percentage of hybrids relative to 30-year fixed-rate mortgages was less than 2%; within 6 years, this increased to 27.5%.^[3]

Like other ARMs, hybrid ARMs transfer some interest-rate risk from the lender to the borrower, thus allowing the lender to offer a lower note rate in many interest-rate environments.

[edit] Option ARMs

An "option ARM" is typically a 30-year ARM that initially offers the borrower four monthly payment options: a specified minimum payment, an interest-only payment, a 15-year fully amortizing payment, and a 30-year fully amortizing payment.^[4]

These types of loans are also called "pick-a-payment" or "pay-option" ARMs.

When a borrower makes a Pay-Option ARM payment that is less than the accruing interest, there is "negative amortization", which means that the unpaid portion of the accruing interest is added to the outstanding principal balance. For example, if the borrower makes a minimum payment of $1,000 and the ARM has accrued monthly interest in arrears of $1,500, $500 will be added to the borrower's loan balance. Moreover, the next month's interest-only payment will be calculated using the new, higher principal balance.

Option ARMs are often offered with a very low teaser rate (often as low as 1%) which translates into very low minimum payments for the first year of the ARM. During boom times, lenders often underwrite borrowers based on mortgage payments that are below the fully amortizing payment level. This enables borrowers to qualify for a much larger loan (i.e., take on more debt) than would otherwise be possible. When evaluating an Option ARM, prudent borrowers will not focus on the teaser rate or initial payment level, but will consider the characteristics of the index, the size of the "mortgage margin" that is added to the index value, and the other terms of the ARM. Specifically, they need to consider the possibilities that (1) long-term interest rates go up; (2) their home may not appreciate or may even lose value or even (3) that both risks may materialize.

Option ARMs are best suited to sophisticated borrowers with growing incomes, particularly if their incomes fluctuate seasonally and they need the payment flexibility that such an ARM may provide. Sophisticated borrowers will carefully manage the level of negative amortization that they allow to accrue.

In this way, a borrower can control the main risk of an Option ARM, which is "payment shock", when the negative amortization and other features of this product can trigger substantial payment increases in short periods of time.^[5]

For example, the minimum payment on an Option ARM can jump dramatically if its unpaid principal balance hits the maximum limit on negative amortization (typically 110% to 125% of the original loan amount). If that happens, the next minimum monthly payment will be at a level that would fully amortize the ARM over its remaining term. In addition, Option ARMs typically have automatic "recast" dates (often every fifth year) when the payment is adjusted to get the ARM back on pace to amortize the ARM in full over its remaining term.

For example, a $200,000 ARM with a 110% "neg am" cap will typically adjust to a fully amortizing payment, based on the current fully-indexed interest rate and the remaining term of the loan, if negative amortization causes the loan balance to exceed $220,000. For a 125% recast, this will happen if the loan balance reaches $250,000.

Any loan that is allowed to generate negative amortization means that the borrower is reducing his equity in his home, which increases the chance that he won't be able to sell it for enough to repay the loan. Declining property values would exacerbate this risk.

Option ARMs may also be available as "hybrids," with longer fixed-rate periods. These products would not be likely to have low teaser rates. As a result, such ARMs mitigate the possibility of negative amortization, and would likely not appeal to borrowers seeking an "affordability" product.

Cash flow ARMs

A cash flow ARM is a minimum payment option mortgage loan. This is a fancy term for a loan that allows a borrower to choose their monthly payment from several options. These payment options usually include the option to pay at the 30 year level, 15 year level, interest only level, and a minimum payment level. The minimum payment level is usually lower than the interest only payment. This type of loan can result in negative amortization. The option to make a minimum payment is usually available only for the first several years of the loan.

Cash flow ARM mortgages are synonymous with option ARM or payment option ARM mortgages, however it should be noted that not all loans with cash flow options are adjustable. In fact, fixed rate cash flow option loans retain the same cash flow options as cash flow ARMs and option ARMs, but remain fixed for up to 30 years.^{[citation needed]}

Terminology

X/Y - Hybrid ARMs are often referred to in this format, where X is the number of years during which the initial interest rate applies prior to first adjustment (common terms are 3, 5, 7, and 10 years), and Y is the interval between adjustments (common terms are 1 for one year and 6 for six months). As an example, a 5/1 ARM means that the initial interest rate applies for five years (or 60 months, in terms of payments), after which the interest rate is adjusted annually. (Adjustments for escrow accounts, however, do not follow the 5/1 schedule; these are done annually.)

Fully Indexed Rate - The price of the ARM as calculated by adding Index + Margin = Fully Indexed Rate. This is the interest rate your loan would be at without a Start Rate (the introductory special rate for the initial fixed period). This means the loan would be higher if adjusting, typically, 1-3% higher than the fixed rate. Calculating this is important for ARM buyers, since it helps predict the future interest rate of the loan.

Margin - For ARMs where the index is applied to the interest rate of the note on an "index plus margin" basis, the margin is the difference between the note rate and the index on which the note rate is based expressed in percentage terms.^[1] This is not to be confused with profit margin. The lower the margin the better the loan is to the borrower as the maximum rate will increase less at each adjustment. Margins will vary between 2%-7%.

Index - A published financial index such as LIBOR used to periodically adjust the interest rate of the ARM.

Start Rate - The introductory rate provided to purchasers of ARM loans for the initial fixed interest period.

Period - The length of time between interest rate adjustments. In times of falling interest rates, a shorter period benefits the borrower. On the other hand, in times of rising interest rates, a shorter period benefits the lender.

Floor - A clause that sets the minimum rate for the interest rate of an ARM loan. Loans may come with a Start Rate = Floor feature, but this is primarily for Non-Conforming (aka Sub-Prime or Program Lending) loan products. This prevents an ARM loan from ever adjusting lower than the Start Rate. An "A Paper" loan typically has either no Floor or 2% below start.

Payment Shock - Industry term to describe the severe (unexpected or planned for by borrower) upward movement of mortgage loan interest rates and its effect on borrowers. This is the major risk of an ARM, as this can lead to severe financial hardship for the borrower.

Cap - Any clause that sets a limitation on the amount or frequency of rate changes.

Loan caps

Loan caps provide payment protection against payment shock, and allow a measure of interest rate certainty to those who gamble with initial fixed rates on ARM loans. There are three types of Caps on a typical First Lien Adjustable Rate Mortgage or First Lien Hybrid Adjustable Rate Mortgage.

Initial Adjustment Rate Cap: The majority of loans have a higher cap for initial adjustments that's indexed to the initial fixed period. In other words, the longer the initial fixed term, the more the bank would like to potentially adjust your loan. Typically, this cap is 2-3% above the Start Rate on a loan with an initial fixed rate term of 3 years or lower and 5-6% above the Start Rate on a loan with an initial fixed rate term of 5 years or greater.

Rate Adjustment Cap: This is the maximum amount by which an Adjustable Rate Mortgage may increase on each successive adjustment. Similar to the initial cap, this cap is usually 1% above the Start Rate for loans with an initial fixed term of 3 years or greater and usually 2% above the Start Rate for loans that have an initial fixed term of 5 years or greater

Lifetime Cap: Most First Mortgage loans have a 5% or 6% Life Cap above the Start Rate (this ultimately varies by the lender and credit grade).

Industry Shorthand for ARM Caps

Inside the business caps are expressed most often by simply the 3 numbers involved that signify each cap. For example, a 5/1 Hybrid ARM may have a cap structure of 5/2/5 (5% initial cap, 2% adjustment cap and 5% lifetime cap) and insiders would call this a 5-2-5 cap. Alternately a 1 year arm might have a 1/1/6 cap (1% initial cap, 1% adjustment cap and 6% lifetime cap) known as a 1-1-6, or alternately expressed as a 1/6 cap (leaving out one digit signifies that the initial and adjustment caps are identical).

Negative amortization ARM caps

See the complete article for the type of ARM that Negative amortization loans are by nature. Higher risk products, such as First Lien Monthly Adjustable loans with Negative amortization and Home Equity Lines of Credit aka HELOC have different ways of structuring the Cap than a typical First Lien Mortgage. The typical First Lien Monthly Adjustable loans with Negative amortization loan has a life cap for the underlying rate (aka "Fully Indexed Rate") between 9.95% and 12% (maximum assessed interest rate). Some of these loans can have much higher rate ceilings. The fully indexed rate is always listed on the statement, but borrowers are shielded from the full effect of rate increases by the minimum payment, until the loan is recast, which is when principal and interest payments are due that will fully amortize the loan at the fully indexed rate.

Home Equity Lines of Credit HELOC

Since HELOCs are intended by banks to primarily sit in second lien position, they normally are only capped by the maximum interest rate allowed by law in the state wherein they are issued. For example, Florida currently has an 18% cap on interest rate charges. These loans are risky in the sense that to lenders, they are practically a credit card issued to the borrower, with minimal security in the event of default. They are risky to the borrower in the sense that they are mostly indexed to the Wall Street Journal Prime Rate, which is considered a Spot Index, or a financial indicator that is subject to immediate change (as are the loans based upon the Prime Rate). The risk to borrower being that a financial situation causing the Federal Reserve to raise rates dramatically (see 1980, 2006) would effect an immediate rise in obligation to the borrower, up to the capped rate.

Popularity

Variable rate mortgages are the most common form of loan for house purchase in the United Kingdom, Ireland and Canada but are unpopular in some other countries. Variable rate mortgages are very common in Australia and New Zealand. In some countries, true fixed-rate mortgages are not available except for shorter-term loans; in Canada, the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years.

In many countries, it is not feasible for banks to borrow at fixed rates for very long terms; in these cases, the only feasible type of mortgage for banks to offer may be adjustable rate mortgages (barring some form of government intervention).

For those who plan to move within a relatively short period of time (three to seven years), they are attractive because they often include a lower, fixed rate of interest for the first three, five, or seven years of the loan, after which the interest rate fluctuates.

Pricing

Adjustable rate mortgages are typically, but not always, less expensive than fixed-rate mortgages. Due to the inherent interest rate risk, long-term fixed rates will tend to be higher than short-term rates (which are the basis for variable-rate loans and mortgages). The difference in interest rates between short and long-term loans is known as the yield curve, which generally slopes upward (longer terms are more expensive). The opposite circumstance is known as an inverted yield curve and is relatively infrequent.

The fact that an adjustable rate mortgage has a lower starting interest rate does not indicate what the future cost of borrowing will be (when rates change). If rates rise, the cost will be higher; if rates go down, the rate will be lower. In effect, the borrower has agreed to take the interest rate risk. Some studies have shown that on average, the majority of borrowers with adjustable rate mortgages save money in the long term; .^[6]

The actual pricing and rate analysis of adjustable rate mortgage in the finance industry is done through various computer simulation methodologies like Monte Carlo method or Sobol sequences. In these analytical techniques, by using an assumed probability distribution of future interest rates, numerous (10,000 - 100,000 or even 1,000,000) possible interest rate scenarios are explored, mortgage cash flows calculated under each, and aggregate parameters like fair value and effective interest rate over the life of the mortgage are estimated. Having these at hand, lending analysts determine whether offering a particular mortgage would be profitable, and if it would represent tolerable risk to the bank.

Prepayment

Adjustable rate mortgages, like other types of mortgage, usually allow the borrower to prepay principal (or capital) early without penalty. Early payments of part of the principal will reduce the total cost of the loan (total interest paid), but will not shorten the amount of time needed to pay off the loan like other loan types. Upon each recasting, the new fully indexed interest rate is applied to the remaining principal to end within the remaining term schedule.

If a mortgage is refinanced, the borrower simultaneously takes out a new mortgage and pays off the old mortgage; the latter counts as a prepayment.

Some ARMs charge prepayment penalties of several thousand dollars if the borrower refinances the loan or pays it off early, especially within the first 3 or 5 years of the loan.[1]

Criticism

Adjustable rate mortgages are sometimes sold to consumers who are unlikely to be able to repay the loan should interest rates rise.^[7] In the United States, extreme cases are characterized by the Consumer Federation of America as predatory loans. Protections against interest rate rises include (a) a possible initial period with a fixed rate (which gives the borrower a chance to increase his/her annual earnings before payments rise); (b) a maximum (cap) that interest rates can rise in any year (if there is a cap, it must be specified in the loan document); and (c) a maximum (cap) that interest rates can rise over the life of the mortgage (this also must be specified in the loan document).

What is Mortgage rates

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A mortgage is the transfer of an interest in property (or the equivalent in law - a charge) to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.

This comes from the Old French "dead pledge," apparently meaning that the pledge ends (dies) either when the obligation is fulfilled or the property is taken through foreclosure.^[1]

In most jurisdictions mortgages are strongly associated with loans secured on real estate rather than on other property (such as ships) and in some jurisdictions only land may be mortgaged. A mortgage is the standard method by which individuals and businesses can purchase real estate without the need to pay the full value immediately from their own resources. See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property.

Mortgage lender

A mortgage lender is an investor that lends money secured by a mortgage on real estate. Typically, the purpose of the loan is for the borrower to purchase that same real estate. The borrower, known as the mortgagor, gives the mortgage to the lender, known as the mortgagee. As the mortgagee, the lender has the right to sell the property to pay off the loan if the borrower fails to pay.

The mortgage runs with the land, so even if the borrower transfers the property to someone else, the mortgagee still has the right to sell it if the borrower fails to pay off the loan.

So that a buyer cannot unwittingly buy property subject to a mortgage, mortgages are registered or recorded against the title with a government office, as a public record. The borrower has the right to have the mortgage discharged from the title once the debt is paid.

Borrower

A mortgagor is the borrower in a mortgage—they owe the obligation secured by the mortgage. Generally, the debtor must meet the conditions of the underlying loan or other obligation and the conditions of the mortgage. Otherwise, the debtor usually runs the risk of foreclosure of the mortgage by the creditor to recover the debt. Typically the debtors will be the individual home-owners, landlords or businesses who are purchasing their property by way of a loan.

Other participants

Because of the complicated legal exchange, or conveyance, of the property, one or both of the main participants are likely to require legal representation. The terminology varies with legal jurisdiction; see lawyer, solicitor and conveyancer.

Because of the complex nature of many markets the debtor may approach a mortgage broker or financial adviser to help them source an appropriate creditor, typically by finding the most competitive loan.

The debt is, in civil law jurisdictions, referred to as hypothecation, which may make use of the services of a hypothecary to assist in the hypothecation.

Default on divided property

When a tract of land is purchased with a mortgage and then split up and sold, the "inverse order of alienation rule" applies to decide parties liable for the unpaid debt.

When a mortgaged tract of land is split up and sold, upon default, the mortgagee first forecloses on lands still owned by the mortgagor and proceeds against other owners in an 'inverse order' in which they were sold. For example, A acquires a 3-acre (12,000 m²) lot by mortgage then splits up the lot into three 1-acre (4,000 m²) lots (A, B, and C), and sells lot B to X, and then lot C to Y, retaining lot A for himself. Upon default, the mortgagee proceeds against lot A first, the mortgagor. If foreclosure or repossession of lot A does not fully satisfy the debt, the mortgagee proceeds against lot B, then lot C. The rationale is that the first purchaser should have more equity and subsequent purchasers receive a diluted share.

Legal aspects

Mortgages may be legal or equitable. Furthermore, a mortgage may take one of a number of different legal structures, the availability of which will depend on the jurisdiction under which the mortgage is made. Common law jurisdictions have evolved two main forms of mortgage: the mortgage by demise and the mortgage by legal charge.

Mortgage by demise

In a mortgage by demise, the mortgagee (the lender) becomes the owner of the mortgaged property until the loan is repaid or other mortgage obligation fulfilled in full, a process known as "redemption". This kind of mortgage takes the form of a conveyance of the property to the creditor, with a condition that the property will be returned on redemption.

Mortgages by demise were the original form of mortgage, and continue to be used in many jurisdictions, and in a small minority of states in the United States. Many other common law jurisdictions have either abolished or minimised the use of the mortgage by demise. For example, in England and Wales this type of mortgage is no longer available, by virtue of the Land Registration Act 2002.

Mortgage by legal charge

In a mortgage by legal charge or technically "a charge by deed expressed to be by way of legal mortgage",^[2] the debtor remains the legal owner of the property, but the creditor gains sufficient rights over it to enable them to enforce their security, such as a right to take possession of the property or sell it.

To protect the lender, a mortgage by legal charge is usually recorded in a public register. Since mortgage debt is often the largest debt owed by the debtor, banks and other mortgage lenders run title searches of the real estate property to make certain that there are no mortgages already registered on the debtor's property which might have higher priority. Tax liens, in some cases, will come ahead of mortgages. For this reason, if a borrower has delinquent property taxes, the bank will often pay them to prevent the lienholder from foreclosing and wiping out the mortgage.

This type of mortgage is most common in the United States and, since the Law of Property Act 1925,^[2] it has been the usual form of mortgage in England and Wales (it is now the only form – see above).

In Scotland, the mortgage by legal charge is also known as Standard Security.^[3]

In Pakistan, the mortgage by legal charge is most common way used by banks to secure the financing.^{[citation needed]} It is also known as registered mortgage. After registration of legal charge, the bank's lien is recorded in the land register stating that the property is under mortgage and cannot be sold without obtaining an NOC (No Objection Certificate) from the bank.

Equitable mortgage

Equitable mortgages don't fit the criteria for a legal mortgage, but are considered mortgages under equity (in the interests of justice) because money was lent and security was promised. This could arise because of procedural or paperwork issues. Based on this definition, there are numerous situations which could lead to an equitable mortgage.^[4] As of 1961, English law required the consent of the court before the equitable mortgagee was allowed to sell.^[5] When the borrower deposits a title deed with the lender, it has historically created an equitable mortgage in England, but the creation of an equitable mortgage by such a process has been less certain in the United States.^[6]

In an equitable mortgage the lender is secured by taking possession of all the original title documents of the property and by borrower's signing a Memorandum of Deposit of Title Deed (MODTD). This document is an undertaking by the borrower that he/she has deposited the title documents with the bank with his own wish and will, in order to secure the financing obtained from the bank.

History

At common law, a mortgage was a conveyance of land that on its face was absolute and conveyed a fee simple estate, but which was in fact conditional, and would be of no effect if certain conditions were met – usually, but not necessarily, the repayment of a debt to the original landowner. Hence the word "mortgage" (a legal term in French meaning "dead pledge"). The debt was absolute in form, and unlike a "live pledge" was not conditionally dependent on its repayment solely from raising and selling crops or livestock or simply giving the crops and livestock raised on the mortgaged land. The mortgage debt remained in effect whether or not the land could successfully produce enough income to repay the debt. In theory, a mortgage required no further steps to be taken by the creditor, such as acceptance of crops and livestock in repayment.

The difficulty with this arrangement was that the lender was absolute owner of the property and could sell it or refuse to reconvey it to the borrower, who was in a weak position. Increasingly the courts of equity began to protect the borrower's interests, so that a borrower came to have an absolute right to insist on reconveyance on redemption. This right of the borrower is known as the "equity of redemption".

This arrangement, whereby the lender was in theory the absolute owner, but in practice had few of the practical rights of ownership, was seen in many jurisdictions as being awkwardly artificial. By statute the common law's position was altered so that the mortgagor would retain ownership, but the mortgagee's rights, such as foreclosure, the power of sale, and the right to take possession, would be protected.

In the United States, those states that have reformed the nature of mortgages in this way are known as lien states. A similar effect was achieved in England and Wales by the Law of Property Act 1925, which abolished mortgages by the conveyance of a fee simple.

Foreclosure and non-recourse lending

Mortgages in the United States

Types of mortgage instruments

Two types of mortgage instruments are commonly used in the United States: the mortgage (sometimes called a mortgage deed) and the deed of trust.^[7]

The mortgage

In all but a few states, a mortgage creates a lien on the title to the mortgaged property. Foreclosure of that lien almost always requires a judicial proceeding declaring the debt to be due and in default and ordering a sale of the property to pay the debt.^{[citation needed]}

Security deed

The deed to secure debt is a mortgage instrument used in the state of Georgia. Unlike a mortgage, a security deed is an actual conveyance of real property in security of a debt. Upon the execution of such a deed, title passes to the grantee or beneficiary (usually lender), however the grantor (debtor) maintains equitable title to use and enjoy the conveyed land subject to compliance with debt obligations.

Security deeds must be recorded in the county where the land is located. Although there is no specific time within which such deeds must be filed, the failure to timely record the deed to secure debt may affect priority and therefore the ability to enforce the debt against the subject property.^[8]

The deed of trust

The deed of trust is a deed by the borrower to a trustee for the purposes of securing a debt. In most states, it also merely creates a lien on the title and not a title transfer, regardless of its terms. It differs from a mortgage in that, in many states, it can be foreclosed by a non-judicial sale held by the trustee.^[9] It is also possible to foreclose them through a judicial proceeding.^{[citation needed]}

Most "mortgages" in California are actually deeds of trust.^[10] The effective difference is that the foreclosure process can be much faster for a deed of trust than for a mortgage, on the order of 3 months rather than a year. Because the foreclosure does not require actions by the court the transaction costs can be quite a bit less.^{[citation needed]}

Deeds of trust to secure repayments of debts should not be confused with trust instruments that are sometimes called deeds of trust but that are used to create trusts for other purposes, such as estate planning. Though there are superficial similarities in the form, many states hold deeds of trust to secure repayment of debts do not create true trust arrangements.^{[citation needed]}

Mortgage lien priority: "title theory" and "lien theory"

Except in those few states in the United States that adhere to the title theory of mortgages,^[11] either a mortgage or a deed of trust will create a mortgage lien upon the title to the real property being mortgaged. The lien is said to "attach" to the title when the mortgage is signed by the mortgagor and delivered to the mortgagee and the mortgagor receives the funds whose repayment the mortgage secures. Subject to the requirements of the recording laws of the state in which the land is located, this attachment establishes the priority of the mortgage lien with respect to most other liens^[12] on the property's title.^[13] Liens that have attached to the title before the mortgage lien are said to be senior to, or prior to, the mortgage lien. Those attaching afterward are said to be junior or subordinate.^[14] The purpose of this priority is to establish the order in which lien holders are entitled to foreclose their liens in an attempt to recover their debts. If there are multiple mortgage liens on the title to a property and the loan secured by a first mortgage is paid off, the second mortgage lien will move up in priority and become the new first mortgage lien on the title. Documenting this new priority arrangement will require the release of the mortgage securing the paid off loan.

Mortgage rate quote

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Requesting Mortgage Quotes and Mortgage Closing Cost Information - 3 Easy Options

Call AAXA toll-free at 877-RATE-LOW (877-728-3569) for a mortgage quote. Speaking with a live Loan Advisor is easily the best way to obtain an accurate rate quote and estimate of settlement expenses.
Complete the AAXA Rate Quote Form on this page (on the right). This option allows Loan Advisors the opportunity to research current rates and programs from our various lenders so that they can present you with some great solutions.
Apply using our Secure Online Mortgage Application. AAXA does not charge an application fee to apply for a loan nor are you obligated to move forward once the application is complete. This option may be ideal for those looking for information during non-business hours.

Conducting Your Mortgage Rate Seach with AAXA

Shopping for a home loan has never been this easy. To obtain the most accurate and up-to-date mortgage quote for your loan scenario, call us toll free at 877-RATE-LOW (877-728-3569). If you are simply shopping for a mortgage, you can fill-out our easy Rate Quote Form and someone will contact you within minutes with that information. You can also initiate the application process by completing our Secure Online Application. AAXA advertises in hundreds of venues and we are committed to honoring the displayed rates and mortgage closing costs as defined by the various publishers' guidelines. You can always count on AAXA for great rates and low mortgage closing costs. Please do not hesitate to contact us with any questions. We are always here to address your concerns and offer you up-to-the minute mortgage quotes and home loan advice.

Thank you for considering AAXA Discount Mortgage for your home loan needs. Our staff of Loan Advisors are thankful for the opportunity to provide you with comprehensive mortgage quotes and mortgage closing cost information. Your Loan Advisor will be happy to provide you with a Good Faith Estimate and Truth-In-Lending Statement so that you can better compare AAXA to other industry professionals. We at AAXA wish you the best during your mortgage rate search.

Second mortgage

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What is second mortgage?

It is a loan taken against your home on which there exists a primary mortgage. The home equity is used as collateral for the second loan.

The second mortgage has less priority compared to the first on the same property. So, if you default, you need to clear your first loan prior to paying off the outstanding balance on the second loan.

When do you choose a second mortgage?

There are situations when you may cash out on your home equity by taking out a second mortgage.

You may have accumulated a large amount of debt through auto loans, balances on high interest credit cards and other bills (medical costs, kid's tuition fees etc) and need to pay them off.

There may be an opportunity for you to invest cash in a business. You can then use a second loan to go for it. But check out if the rate of return on your investment is higher than the second mortgage rate. Only then it will turn out to be a profitable venture.

You may plan to avoid paying private mortgage insurance. But this is possible only when you get a second loan that makes up for 20% of the home purchase price.

You may wish to repay debts and eliminate judgments, pay for your car, purchase a vacation property or plan for a vacation. You can obtain the required cash by taking out a second loan.

How much can you borrow?

A second home loan allows you to borrow on the basis of your home equity. The equity is the difference between the current appraised value of your home and the amount you have paid towards the first mortgage.

With most lenders, you can take a second loan such that the total loan-to-value ratio of your first and second loan is equal to 85% of the home's appraised value. However, there are lenders in almost all states excepting Texas and West Virginia who allow you to take out second mortgages equal to 125% of the appraised value.

What are the possible rates, terms and options?

The interest rates on a second loan are higher to that of the first loan. This is primarily because if you default, you will be paying off the first loan prior to that of the second and as such there is a risk involved in offering second mortgages.

However, you may choose either a fixed rate home equity loan or an adjustable rate home equity line of credit as your second home loan option. The lender will quote you a rate depending upon your credit score, total loan to value ratio and the current market trends. The loan term will vary from 15 to 30 years depending upon the option you choose. But in general, a second loan is offered over a shorter time period compared to a first loan.

How do you get a second mortgage loan?

Getting a second mortgage is similar to taking out a first mortgage on your home. You need to shop for a suitable loan offer by approaching different lenders and getting quotes from them. You can simply fill out a no-obligation free short form to get quotes from the community ranked lenders. Then you should compare the quotes, find out the offer that can cost you less in comparison and provide all necessary paperwork while you apply for the loan. The lender will conduct an appraisal on your home in order to determine its current value and complete all the steps that are necessary to complete the loan processing so that he can arrange for the closing. At closing, you will be signing the note and other documents as required by your lender. You will have to pay closing costs similar to that of your primary loan.

What happens to the second mortgage if you refinance the first?

When you refinance the first loan after getting the second mortgage loan, you should request your lender for a subordination of the second loan. This implies that your second home loan will be considered as a junior lien compared to that of the refinance loan. Otherwise, if you do not subordinate it, the second mortgage will be taken as the first lien and the refinance loan will take over the second lien position. In this case, there will be less risk with the second loan but higher risk involved with the refinance as a result of which the first mortgage refinance will cost you more in interest charges.

With a second home loan, you get the chance to tap a large sum of money. Moreover, you can deduct the interest on your taxes up to a certain limit. But you cannot overlook the costs and the high interest rate associated with a second loan. Besides, if you default on the second loan, you may lose your home. Therefore, prior to going for a second mortgage, it is best to prepare a budget and find out how much you can afford to pay in addition to the first loan.

Home Mortgage Rates

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Compare Refinance Rates! and the mortgage lender that funds your loan is called the originator. A loan originator may be a bank, credit union, or other type of financial institution. On the date of funding, the money flows out of the originator's hands and into yours. You then turn that money over to the seller of the home.

Once the loan is funded, the originator has the option of keeping that loan in its portfolio or selling it on the secondary market. If the originator keeps the loan, it makes money by way of the interest you pay each month. If the loan is sold, the originator replenishes its funds and can make more loans to other homebuyers. Basically, the secondary market investors keep funds circulating so that loan originators don't run out of money for new mortgages.

Among the most all important factors of a individuals decision to get a home is how the mortgage rates fare for a specific time. Seldom people can afford to buy houses on a cash basis thus acquiring a home loan has been the norm for several decades already. But there are a different types of mortgages and to get the best deals with home loans, it important to compare home mortgage rates.

Mortgage Rates

Mortgage rates are just the payment people pay to lenders, such as depository financial institution and other financial institutions, for allowing them borrow money. Mortgage rates are impacted by a lot of factors that commonly impact the total economy. And the variable rates make it possible for people to get the best deals at a specific time if they know how to make comparison.

Mortgage rates are mostly grounded on certain conclusions of the Federal Reserve in New York. The Federal Reserve analyses the current economical trends such as exportation and inflation to assure how fast or slow the economic system are running.

If the economy is rather slow or inactive, mortgage rates are lowered so that people would be more encouraged to apply for loans and build business dealings. On the additional hand, if the economy is running rather too fast, mortgage rates are raised so that people and businesses would be discouraged to investings or do transactions.

To obtain a good deal when purchasing a house, it’s important for people to compare the mortgage rates across different times and different types. One may benefit from considering the trends of the mortgage rates to assure whether rates at a specific time are higher or lower once compared to rates in the past.

Current Home Mortgage Rates

The mortgage rates of this year is slightly higher when compared to the year 2005. As of September 21, 2006, the average mortgage rate for 30-year fixed rate mortgages is 6.40 percent while for the 15-year fixed-rate mortgage it is 6.06 percent. For the 5/1-year adjustable-rate mortgage it is 6.08 percent and for the 1-year adjustable-rate mortgage it is 5.54 percent.

Aside of comparing home mortgage rates according to different periods, it’s also important to compare interest rates according to person lenders. These can easily be done through the internet by going to online mortgage and economic internet site such as www.bizrate.com, www.bankrate.com, www.mortgagenews.com, www.mortgageloan.com, among many others.

Home mortgage rates are manageable if right comparisons are made. To better deals are those made with the finest comparisons.

Mortgage Calculator : Click here

Refinance mortgage rate

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Refinancing is when you apply for a secured loan in order to pay off another different loan secured against the same assets, property etc. If this original loan had a fixed interest rate mortgage which has now declined considerably, then you would like to avail of a new loan at a more favorable interest rate.

When is Refinancing an Option

Typically home refinancing is done when you have a mortgage on your home and apply for a second loan to pay off the first one. While taking the decision to go for the home refinancing option, it is important to first determine whether the amount you save on interests balances the amount of fees payable during refinancing.

Refinance Guide

Guide to Mortgage Refinancing »

Home Refinancing Benefits

Imagine a scenario where you can have access to extra cash, while simultaneously lowering your monthly mortgage payment. This dream can become a reality through mortgage refinancing.

A house is the largest asset you may ever own. Likewise, your mortgage payment may be the largest expense you'll have in your monthly budget. Wouldn't it be great to use this asset to reduce your monthly payment and put extra cash in your pocket? When you refinance your mortgage, you can take advantage of the equity in your home and enable this to take place.

Lower Refinance Rate, Lower Payments

When you purchased your dream home, the financial environment dictated interest rates. While certain factors, like your credit rating and the amount of the down payment that you were able to afford, influenced your interest rate, the single most important factor was the prevailing rates at that moment. However, interest rates fluctuate. When the Federal Reserve enters a rate-cutting period, the prevailing rates may become significantly lower than when you originally purchased your home.

By refinancing your mortgage when interest rates are lower, you can exchange a higher interest rate for a lower one, which, in turn, will lower your monthly payment.

Shorten the Length of Your Mortgage when Refinancing

Another advantage of home refinancing is that you can shorten the term of your mortgage. Let's say, for example, that you originally had a 30-year mortgage and have been paying it for eight years. Thanks to mortgage refinancing, you can switch to a shorter term of either 10, 15 or 20 years. This can save you thousands of dollars of interest. Also, if the refinance rate is lower, but you maintain the same monthly payment, you will build up equity in your home more quickly, because more of your payment will be going towards principal.

Exchange an Adjustable Rate (ARM) for a Fixed Refinance Rate (FRM)

When interest rates are low, adjustable rate mortgages (ARMs) are the housing market's darlings. However, as interest rates increase, that adjustable rate may not look as sweet. It's also possible that you opted for an ARM because your financial future was less secure, or you weren't sure how long you'd stay in your home. If, however, you've become financially stable and know that you'll be staying in your home for several years, it may be beneficial to swap that fluctuating adjustable rate for a fixed one. You'll have more security knowing that your monthly payment will remain steady, regardless of the current market environment.

Cash-out refinancing

One way to put more money in your pocket is to tap into the equity you've built in your home and do a "cash-out" refinancing. In this scenario, you can refinance for an amount higher than your current principal balance and take the extra funds as cash. This can provide money for remodeling your home, paying off high-interest rate bills, or sending your kids to college.

PMI (Private Mortgage Insurance)

If you were unable to make a down payment of 20 percent when you purchased your home, you may have been required to purchase Private Mortgage Insurance or PMI. If your house has appreciated since then, and you've steadily paid down your mortgage, your equity may now be more than 20 percent. If you refinance, you will no longer need PMI.

In many ways, your house is like a cash cow. If you have discipline and knowledge of the benefits of refinancing, you can tap into its milk for years to come.

To find the best refinance loan offers complete our short form. You will find lenders and brokers that offer home refinance loans in California, Florida and all other states.

Sources

U.S. Department of Housing and Urban Development (external)
U.S. Department of Treasury (external)

Refinance Resources

Start here to compare refinance rates from top lenders in our network

Pros and cons of a fixed rate mortgage

2009-11-03T06:45:00.000-08:00

Long-term mortgages

The most common mortgage is the 30-year fixed-rate loan.

Pros. Predictability is the big plus. You know exactly how much interest you will pay over the term of the loan. Total monthly payment of principal and interest is fixed, and in early years it consists primarily of tax-deductible interest.

Mortgages without prepayment penalties permit you to shorten the term of the loan at will -- and lower ultimate interest cost -- by making periodic payments against principal.

Cons. Stability comes at a price. Interest rates on fixed-rate loans are usually higher than starting rates on adjustable-rate loans. If you choose a low-down-payment loan, you may have to pay for mortgage insurance -- an added monthly expense that protects the lender from risk of loss.

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15-year, fixed-rate, fixed-payment mortgage

Pros. Principal balance is reduced relatively rapidly compared to longer-term loans. The 15-year fixed-rate loan permits you to own your home debt-free in half the time, and for less than half the total interest cost, of a 30-year fixed-rate loan. It offers some individuals a useful financial planning tool. Interest rates may be lower than those offered on 30-year fixed-rate loans.

Cons. Higher monthly payments make these loans more difficult to qualify for than longer-term mortgages. A 15-year mortgage reduces the number of homes you can afford to buy and locks you into making monthly payments roughly 15% to 30% higher than you'd make with a comparable 30-year loan.

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Biweekly fixed-rate mortgage

Pros. The biweekly payment schedule of this kind of loan speeds up amortization, reduces total interest costs and shortens the loan term -- usually from 30 years to between 18 and 22 years. You make 26 biweekly payments -- which amounts to 13 annual payments -- instead of 12 monthly payments. Conversion to a 30-year fixed-rate loan is usually permitted. Payments are deducted automatically from your savings or checking accounts.

Cons. Private companies and lenders usually charge for this service. Registration fees and biweekly debit charges can make this a costly way to shorten the life of a loan and lower interest expense. The same objectives can be accomplished more flexibly with a 30-year mortgage by making an extra payment or two each year or by applying an additional sum to principal repayment when you make a monthly payment. As with other kinds of rapid-payoff mortgages, you trade total interest-cost reductions for reduced tax-shelter benefits.

How do I get the lowest mortgage rate

2009-11-03T06:44:00.001-08:00

You need a mortgage and you want to get the best mortage rates, here are some tips and advise that will allow you to do exactly that.

No matter what kind of mortgage you are looking for if you follow our advice you have a good chance to find the best mortage rates deals.

The most important factor in your ability to get good mortgage rates lies in your credit rating, meaning your past behavior as a borrower. If your credit history is good, which means you�ve borrowed money and have paid it back in a timely manner, then you�ll be considered a low risk borrower. Thus, lenders will be eager to give you a mortgage loan with the lowest possible mortgage rate.

Anyway, in order to get the best mortage rates possible you need to wear your walking shoes and shop around, your willingness to contact more brokers and lenders, to get more offers, to negotiate and so on, the better your chances to get a better deal. this is a numbers game. While comparing offers presented by various lenders you need to be familiar with the various fees and expenses that are part of the mortgage. You need to be familiar with the various terms and what the exact meaning of each. Interest rates, Fees, points etc. etc.

To Best Mortage Rates - Top

Chasing the good mortgage rate is a worthy cause but at the same token please be advised that not all low morgage loans rates were created the same. There is a lot more to the cost of a loan than the interest rate. Many brokers and landing institutions will set the interest rate as low as possible and then hike up the number of points and/or fees attached to the loan once you have applied. Most online mortgage lenders will post the number of points next to the interest rate for your consideration. One point is equal to one percent of the total loan amount.

Here is what you should do. To ensure the best deal, while comparing several lenders you should compare the Annual Percentage Rate (APR) of the loan. Why? because the APR includes all the costs associated with a loan, meaning the interest rate, the points or fees and the closing costs. If you compare loan lenders using this percentage, you will find that a lot of the low rate lenders are not the best deal in town.

A crucial mistake you should avoid while seeking the best rate is working with a broker that represent only one landing institution. Not all lenders have a range of options when it comes to investors. What if that investor doesn�t offer the type of mortgage you need? Or worse yet, what if you need to change loan products after you�ve started the process? Working with a mortgage broker who represent many landing institutions allows you to address these issues without starting the process over again.

To Best Mortage Rates - Top

While searching the internet for best mortage rates be sure to add to your search string the name of your state and city so that you get local suppliers. For your convenient here is a list of US states and biggest cities: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming. New York, Los Angeles, Chicago, Houston, Philadelphia, Phoenix, San Antonio, San Diego, Dallas, San Jose, Detroit, Indianapolis, Jacksonville, San Francisco, Columbus, Ohio, Austin, Memphis, Baltimore, Fort Worth, Charlotte, El Paso, Milwaukee, Seattle, Boston, Denver, Louisville- Jefferson County, Washington, Nashville-Davidson, Las Vegas, Portland, Oklahoma City, Tucson, Albuquerque, Long Beach, Atlanta, Fresno, Sacramento, New Orleans, Cleveland, Kansas City, Mesa, Virginia Beach, Omaha, Oakland, Miami, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington.

How and Where to Get The Best Mortag Rates - A guide to getting the best morgage rates.

Get Best Mortage Rates - Here's some tips and advice to help you the best mortage rates.

Self Empowerment Tip

BE FLEXIBLE AND ADAPTABLE
Self-confident people can adapt to change quickly for the good of the organization. Low-confidence people, in contrast, want to preserve the status quo. Often they lack the mental flexibility and adaptability to cope with change. If you show a willingness to accept change readily, you will project an image of self-confidence. Of greater significance, adapting to change will enhance your self-confidence.
Margot Camille is a case in point about projecting self-confidence by being flexible and adaptable. She was a newly appointed regional manager in a retail chain, with jurisdiction over ten department stores. Margot enjoyed her new position. She also liked the condominium in Atlanta she had just purchased as part of her relocation. Five weeks into her new position, she received an urgent call from the home office. The store in Charlotte, North Carolina, was in trouble, and the company wanted Margot to manage the store for the intermediate future. With a sinking feeling in her stomach, Margot said yes. Her action plan for her second relocation in several months involved renting out her new home and finding an apartment in Charlotte.
Sudden changes in positions and cities created some temporary chaos for Margot. Nevertheless, she further cemented her claim to big things with her company. Top management admired her willingness to relocate twice for the good of the organization. Margot also projected the image of a retailing executive with a can-do, flexible, confident attitude.

Where can I find the lowest mortgage rate

2009-11-03T06:40:00.001-08:00

New and existing homeowners are often faced with various challenges when trying to gain access to home loans and favorable mortgage rates. There are several decisions to be made before you can choose the best home loan for you. As a borrower, it is beneficial to understand some basic issues associated with acquiring and maintaining home loans in order to obtain the best mortgage rates.

Understand Your Options

With the recent increase in foreclosure rates, there is confusion among homeowners as to whether their mortgage is at risk. The reality for many of these homeowners is that the responsibility to understand the terms and conditions of a mortgage belongs to the borrower. Before signing a contract that will affect your future, some basic knowledge of the mortgage you are committing to is important! If you are worried that you may be in trouble, read over your mortgage plan a few times and consult with a knowledgeable mortgage broker.

Browse our in-depth guide on various mortgage terms and products to help you choose the most suitable loan option for you.

What Mortgage is Best for me

Fixed Rate Mortgages

Fixed Rate Mortgages are home loans with steady interest rates and monthly payments that do not change throughout the life of the loan. The major benefit to having a fixed rate mortgage is that they are structured in a way that payments are the same every month.

Common Fixed Rate Mortgages Include:

30-Year Fixed Rate Mortgage
Biweekly Mortgage
Convertible Mortgages
Balloon Mortgages
Interest-Only Mortgage Loan

Adjustable Rate Mortgage

Adjustable rate or variable rate mortgage loans have interest rates and monthly payments that fluctuate. With Adjustable Rate Mortgages (ARMs), periodic changes relating to a defined index are made to the interest rate.

Common Adjustable Rate Mortgages include:

Negatively Amortizing Loans
Option ARMs
Hybrid Loans
Fixed-Period ARMs
Two-Step Mortgage
Convertible ARMs
Graduated Payment Mortgages (GPMs)
Buydown Mortgage

Interest Only Mortgage Loans (Non-Conforming)

Interest Only Mortgage Loans (Non-Conforming) are loans that require the borrower to pay only interest on the principle in monthly installments for a fixed period. This period usually lasts for a limited time, after which the borrower has a few options. They can either start paying installments that include both interest and principle, refinance or pay off the entire balance of the mortgage.

Common Interest Only Mortgage Loans (Non-Conforming) include:

ARMs
Fixed Rate Mortgage

Conforming Loans

A conforming loan is a home mortgage loan that matches the dollar values established by the OFHEO, the Office of Federal Housing Enterprise Oversight, using the average housing prices on an annual October to October percentage change. These loans must meet the lending criteria of Freddie Mac and Fannie Mae.

Jumbo Loans

Jumbo loans, also known as non-conforming loans, are loans that exceed the maximum loan amount established by the Federal National Mortgage Association (Fannie Mae and Freddie Mac). They often have higher interest rates than conforming loans, but the difference may vary depending on the economy.

Second Mortgage

A second mortgage is a loan taken after the first mortgage and is secured against the same assets as the first, the value of the property and home. Based on the amount of equity, interest or ownership for a property; the loan amount is the difference between the current value of a property and the amount that is owed on it.

Second Mortgages are a great way for homeowners to use their homes as collateral and borrow the money they need. These loans were once very restricted and viewed as proof of financial woes. This is no longer the case and there is a wide selection of loans available to fit your specific needs.

Common Reasons for a Second Mortgage:

Home Improvement Financing
Tuition Fees
Debt Consolidation
Emergencies

Second mortgages normally carry a higher interest rate than a first mortgage. If interest rates are low, then refinancing may be the better option. Still, despite higher interest rates, second mortgages may save money in the long run compared to refinancing because of low transaction costs.

Types of Second Mortgages:

Traditional Mortgage
Home Equity Loan
Home Equity Line of Credit

Subprime Mortgage

Subprime mortgage loans are for borrowers with bad credit and usually carry higher interest rates. Subprime loans also come with prepayment penalties and/or balloon payments. It is important to educate yourself when it comes to subprime mortgages, especially if you have shaky credit. Be sure to investigate your interest rates and determine what you can afford. Certain subprime lenders thrive on na�ve borrowers, so it is important that you are not one of them.

Hybrid Loans

Hybrid, or combined loans, consists of a combination of fixed and ARM loans to varying degrees. They begin with an initial fixed rate period and adjust to ARM after the set fixed payment period expires.
Common Hybrid Loans include:

Fixed Period ARMs
Two-Step Mortgage
Convertible ARMs
Graduated Payment Mortgages (GPMs)
Buydown Mortgage

100% Financing

100% financing mortgage loans allow you to buy a home with almost no money down. This is an excellent plan if you have great credit but limited amounts of funds to commit to a down payment. The mortgage will usually come in 2 parts. First, a mortgage for 80% of the home's cost followed by a piggyback loan, or second mortgage, for the remaining 20%. The first mortgage can either best fixed or adjustable. The second mortgage is typically a home equity line of credit.

Conventional and Government Loans

Government loans are all insured at a federal level. There are two types of loans: conventional and government. All loans except FHA, VA and RHS loan programs are considered government loans.
Common Conventional and Government Loans include:

State and Local Housing Programs
FHA Loans
VA Loans
RHS Loan Programs

What is the best way to get a good mortgage rate

2009-11-03T06:36:00.001-08:00

Obtain Information from Several Lenders

Home loans are available from several types of lenders--thrift institutions, commercial banks, mortgage companies, and credit unions. Different lenders may quote you different prices, so you should contact several lenders to make sure you’re getting the best price. You can also get a home loan through a mortgage broker. Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you. A broker’s access to several lenders can mean a wider selection of loan products and terms from which you can choose. Brokers will generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act as your agent. Consequently, you should consider contacting more than one broker, just as you should with banks or thrift institutions.

Whether you are dealing with a lender or a broker may not always be clear. Some financial institutions operate as both lenders and brokers. And most brokers’ advertisements do not use the word "broker." Therefore, be sure to ask whether a broker is involved. This information is important because brokers are usually paid a fee for their services that may be separate from and in addition to the lender’s origination or other fees. A broker’s compensation may be in the form of "points" paid at closing or as an add-on to your interest rate, or both. You should ask each broker you work with how he or she will be compensated so that you can compare the different fees. Be prepared to negotiate with the brokers as well as the lenders.

Obtain All Important Cost Information

Be sure to get information about mortgages from several lenders or brokers. Know how much of a down payment you can afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate is not enough. Ask for information about the same loan amount, loan term, and type of loan so that you can compare the information. The following information is important to get from each lender and broker:

Rates

Ask each lender and broker for a list of its current mortgage interest rates and whether the rates being quoted are the lowest for that day or week.
Ask whether the rate is fixed or adjustable. Keep in mind that when interest rates for adjustable-rate loans go up, generally so does the monthly payment.
If the rate quoted is for an adjustable-rate loan, ask how your rate and loan payment will vary, including whether your loan payment will be reduced when rates go down.
Ask about the loan’s annual percentage rate (APR). The APR takes into account not only the interest rate but also points, broker fees, and certain other credit charges that you may be required to pay, expressed as a yearly rate.

Points

Points are fees paid to the lender or broker for the loan and are often linked to the interest rate; usually the more points you pay, the lower the rate.

Check your local newspaper for information about rates and points currently being offered.
Ask for points to be quoted to you as a dollar amount--rather than just as the number of points--so that you will actually know how much you will have to pay.

Fees

A home loan often involves many fees, such as loan origination or underwriting fees, broker fees, and transaction, settlement, and closing costs. Every lender or broker should be able to give you an estimate of its fees. Many of these fees are negotiable. Some fees are paid when you apply for a loan (such as application and appraisal fees), and others are paid at closing. In some cases, you can borrow the money needed to pay these fees, but doing so will increase your loan amount and total costs. "No cost" loans are sometimes available, but they usually involve higher rates.

Ask what each fee includes. Several items may be lumped into one fee.
Ask for an explanation of any fee you do not understand. Some common fees associated with a home loan closing are listed on the Mortgage Shopping Worksheet in this brochure.

Down Payments and Private Mortgage Insurance

Some lenders require 20 percent of the home’s purchase price as a down payment. However, many lenders now offer loans that require less than 20 percent down--sometimes as little as 5 percent on conventional loans. If a 20 percent down payment is not made, lenders usually require the home buyer to purchase private mortgage insurance (PMI) to protect the lender in case the home buyer fails to pay. When government-assisted programs such as FHA (Federal Housing Administration), VA (Veterans Administration), or Rural Development Services are available, the down payment requirements may be substantially smaller.

Ask about the lender’s requirements for a down payment, including what you need to do to verify that funds for your down payment are available.
Ask your lender about special programs it may offer.

If PMI is required for your loan

Ask what the total cost of the insurance will be.
Ask how much your monthly payment will be when the PMI premium is included.

Obtain the Best Deal That You Can

Once you know what each lender has to offer, negotiate for the best deal that you can. On any given day, lenders and brokers may offer different prices for the same loan terms to different consumers, even if those consumers have the same loan qualifications. The most likely reason for this difference in price is that loan officers and brokers are often allowed to keep some or all of this difference as extra compensation. Generally, the difference between the lowest available price for a loan product and any higher price that the borrower agrees to pay is an overage. When overages occur, they are built into the prices quoted to consumers. They can occur in both fixed-rate and variable-rate loans and can be in the form of points, fees, or the interest rate. Whether quoted to you by a loan officer or a broker, the price of any loan may contain overages.

Have the lender or broker write down all the costs associated with the loan. Then ask if the lender or broker will waive or reduce one or more of its fees or agree to a lower rate or fewer points. You’ll want to make sure that the lender or broker is not agreeing to lower one fee while raising another or to lower the rate while raising points. There’s no harm in asking lenders or brokers if they can give better terms than the original ones they quoted or than those you have found elsewhere.

Once you are satisfied with the terms you have negotiated, you may want to obtain a written lock-in from the lender or broker. The lock-in should include the rate that you have agreed upon, the period the lock-in lasts, and the number of points to be paid. A fee may be charged for locking in the loan rate. This fee may be refundable at closing. Lock-ins can protect you from rate increases while your loan is being processed; if rates fall, however, you could end up with a less favorable rate. If that happens, try to negotiate a compromise with the lender or broker.

Remember: Shop, Compare, Negotiate

When buying a home, remember to shop around, to compare costs and terms, and to negotiate for the best deal. Your local newspaper and the Internet are good places to start shopping for a loan. You can usually find information both on interest rates and on points for several lenders. Since rates and points can change daily, you’ll want to check your newspaper often when shopping for a home loan. But the newspaper does not list the fees, so be sure to ask the lenders about them.

The Mortgage Shopping Worksheet that follows may also help you. Take it with you when you speak to each lender or broker and write down the information you obtain. Don’t be afraid to make lenders and brokers compete with each other for your business by letting them know that you are shopping for the best deal.

Fair Lending Is Required by Law

The Equal Credit Opportunity Act prohibits lenders from discriminating against credit applicants in any aspect of a credit transaction on the basis of race, color, religion, national origin, sex, marital status, age, whether all or part of the applicant’s income comes from a public assistance program, or whether the applicant has in good faith exercised a right under the Consumer Credit Protection Act.

The Fair Housing Act prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status, or national origin.

Under these laws, a consumer cannot be refused a loan based on these characteristics nor be charged more for a loan or offered less favorable terms based on such characteristics.

Credit Problems? Still Shop, Compare, and Negotiate

Don’t assume that minor credit problems or difficulties stemming from unique circumstances, such as illness or temporary loss of income, will limit your loan choices to only high-cost lenders.

If your credit report contains negative information that is accurate, but there are good reasons for trusting you to repay a loan, be sure to explain your situation to the lender or broker. If your credit problems cannot be explained, you will probably have to pay more than borrowers who have good credit histories. But don’t assume that the only way to get credit is to pay a high price. Ask how your past credit history affects the price of your loan and what you would need to do to get a better price. Take the time to shop around and negotiate the best deal that you can.

Whether you have credit problems or not, it’s a good idea to review your credit report for accuracy and completeness before you apply for a loan. To order a copy of your credit report, visit www.annualcreditreport.com , call 877-322-8228, or contact:

Equifax: (800) 685-1111
TransUnion: (800) 916-8800
Experian: (888) 397-3742

Glossary

Adjustable-rate loans, also known as variable-rate loans, usually offer a lower initial interest rate than fixed-rate loans. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. When interest rates rise, generally so do your loan payments; and when interest rates fall, your monthly payments may be lowered.

Annual percentage rate (APR) is the cost of credit expressed as a yearly rate. The APR includes the interest rate, points, broker fees, and certain other credit charges that the borrower is required to pay.

Conventional loans are mortgage loans other than those insured or guaranteed by a government agency such as the FHA (Federal Housing Administration), the VA (Veterans Administration), or the Rural Development Services (formerly know as Farmers Home Administration, or FmHA).

Escrow is the holding of money or documents by a neutral third party prior to closing. It can also be an account held by the lender (or servicer) into which a homeowner pays money for taxes and insurance.

Fixed-rate loans generally have repayment terms of 15, 20, or 30 years. Both the interest rate and the monthly payments (for principal and interest) stay the same during the life of the loan.

The interest rate is the cost of borrowing money expressed as a percentage rate. Interest rates can change because of market conditions.

Loan origination fees are fees charged by the lender for processing the loan and are often expressed as a percentage of the loan amount.

Lock-in refers to a written agreement guaranteeing a home buyer a specific interest rate on a home loan provided that the loan is closed within a certain period of time, such as 60 or 90 days. Often the agreement also specifies the number of points to be paid at closing.

A mortgage is a document signed by a borrower when a home loan is made that gives the lender a right to take possession of the property if the borrower fails to pay off the loan.

Overages are the difference between the lowest available price and any higher price that the home buyer agrees to pay for the loan. Loan officers and brokers are often allowed to keep some or all of this difference as extra compensation.

Points are fees paid to the lender for the loan. One point equals 1 percent of the loan amount. Points are usually paid in cash at closing. In some cases, the money needed to pay points can be borrowed, but doing so will increase the loan amount and the total costs.

Private mortgage insurance (PMI) protects the lender against a loss if a borrower defaults on the loan. It is usually required for loans in which the down payment is less than 20 percent of the sales price or, in a refinancing, when the amount financed is greater than 80 percent of the appraised value.

Thrift institution is a general term for savings banks and savings and loan associations.

Transaction, settlement, or closing costs may include application fees; title examination, abstract of title, title insurance, and property survey fees; fees for preparing deeds, mortgages, and settlement documents; attorneys’ fees; recording fees; and notary, appraisal, and credit report fees. Under the Real Estate Settlement Procedures Act, the borrower receives a good faith estimate of closing costs at the time of application or within three days of application. The good faith estimate lists each expected cost either as an amount or a range.

Mortgage Shopping Worksheet

File for Printing Worksheet (12 KB PDF)

	Lender 1	Lender 2
Name of Lender:
Name of Contact:
Date of Contact:
Mortgage Amount:

	mortgage 1	mortgage 2	mortgage 1	mortgage 2
Basic Information on the Loans Type of Mortgage: fixed-rate, adjustable-rate, conventional, FHA, other? If adjustable, see below.
Minimum down payment required
Loan term (length of loan)
Contract interest rate
Annual percentage rate (APR)
Points (may be called loan discount points)
Monthly private mortgage insurance (PMI) premiums
How long must you keep PMI?
Estimated monthly escrow for taxes and hazard insurance
Estimated monthly payment (principal, interest, taxes, insurance, PMI)
Fees Different institutions may have different names for some fees and may charge different fees. We have listed some typical fees you may see on loan documents. Application fee or Loan processing fee
Origination fee or Underwriting fee
Lender fee or Funding fee
Appraisal fee
Attorney fees
Document preparation and recording fees
Broker fees (may be quoted as points, origination fees, or interest rate add-on)				___
Credit report fee
Other fees
Other Costs at Closing/Settlement Title search/Title insurance For lender
For you
Estimated prepaid amounts for interest, taxes, hazard insurance, payments to escrow
State and local taxes, stamp taxes, transfer taxes
Flood determination
Prepaid private mortgage insurance (PMI)
Surveys and home inspections
Total Fees and Other Closing/Settlement Cost Estimates

	Lender 1	Lender 2
Name of Lender:

	mortgage 1	mortgage 2	mortgage 1	mortgage 2
Other Questions and Considerations about the Loan Are any of the fees or costs waivable?
Prepayment penalties Is there a prepayment penalty?
If so, how much is it?
How long does the penalty period last? (for example, 3 years? 5 years?)
Are extra principal payments allowed?
Lock-ins Is the lock-in agreement in writing?
Is there a fee to lock in?
When does the lock-in occur--at application, approval, or another time?
How long will the lock-in last?
If the rate drops before closing, can you lock in at a lower rate?
If the loan is an adjustable rate mortgage: What is the initial rate?
What is the maximum the rate could be next year?
What are the rate and payment caps each year and over the life of the loan?
What is the frequency of rate change and of any changes to the monthly payment?
What is the index that the lender will use?
What margin will the lender add to the index?
Credit life insurance Does the monthly amount quoted to you include a charge for credit life insurance?
If so, does the lender require credit life insurance as a condition of the loan?
How much does the credit life insurance cost?
How much lower would your monthly payment be without the credit life insurance?
If the lender does not require credit life insurance, and you still want to buy it, what rates can you get from other insurance providers?

This information was prepared by the following agencies:

Board of Governors of the Federal Reserve System
Department of Housing and Urban Development
Department of Justice
Department of the Treasury
Federal Deposit Insurance Corporation
Federal Housing Finance Board
Federal Trade Commission
National Credit Union Administration
Office of Federal Housing Enterprise Oversight
Office of the Comptroller of the Currency
Office of Thrift Supervision

These agencies (except the Department of the Treasury) enforce compliance with laws that prohibit discrimination in lending. If you feel that you have been discriminated against in the home financing process, you may want to contact one of the agencies listed above about your rights under these laws.

Can I change a Mortgage Broker after a rate lock

2009-11-03T06:33:00.001-08:00

Locking the price of a mortgage is full of potential problems for the unwary borrower. Locking is especially problematic in today's market because prices can jump around from day to day, and lenders take much longer than in pre-crisis years to approve an application, and often can't.

Locking means that the lender commits that the price at closing will be the lock price, even if the market price is higher at closing than it was on the lock date. The price commitment holds for a specified period, usually 30 to 90 days, with longer periods priced higher. Whether the borrower is equally committed if the price at closing is lower depends on the lender's policy, see below.

Last year I wrote an article on one approach a borrower could take to avoid lock problems, which is to entrust the process to a mortgage broker who knows exactly what the problems are. The drawback is the difficulty of assuring that the broker will use his knowledge for the benefit of the borrower rather than himself.

This article is about how borrowers can protect themselves when they deal directly with lenders. The key is in knowing the lender's locking rules and procedures beforehand. This is not easy because very few volunteer the information; the borrower must ask.

Upfront Mortgage Lenders (UMLs) are an exception because one of my requirements for certification is that they show their lock policies on their Web sites. In reviewing these policies recently, however, I found wide discrepancies in completeness, which is my fault; my disclosure rules were too vague. This is being remedied, and very shortly the UMLs will have revised lock statements that are responsive to the questions listed below.

What Must Happen Before the Price Can Be Locked? In most cases, the lender will require that a purchaser have a contract of sale, and that the loan application has been approved. Because approvals now often take longer than before the crisis, this immediately raises the two questions that follow.

What Happens If The Market Price Rises Before The Application Can Be Approved and the Loan Locked? Generally, the lender will be willing to lock only at the new higher price. (If there are any lenders who will lock at the price prevailing at the time of the lock request, I don't know who they are.) This is a common occurrence, and a major source of frustration for borrowers, some of whom think they have been victimized by a "bait and switch." Actually, they have been victimized by price volatility and delays in getting loans approved, but because lenders seldom warn borrowers that this can happen, the borrower's misinterpretation is natural.

What Happens If The Market Price Falls Before The Application Can Be Approved and the Loan Locked? A lender who locks at the current price when that price is higher than the one prevailing on the lock request date should do the same when the current price is lower. My guess, however, is that in many cases, lenders lock at the higher price on the lock request date, just because they can. Borrowers are unlikely to object if they are locked at the price they requested. It is ironic that borrowers perceive themselves as victimized most often when prices rise after the lock request, but probably they are victimized most often when prices decline.

What is covered by a lock? Many lenders lock only the interest rate and points. Locks should cover the rate, points and all other lender fees, avoiding the possibility of fee escalation after the lock. This is the case with UMLs. A few lenders will not only lock all lender fees but also some third-party fees.

What fees must a borrower pay to lock? Lenders usually charge from $300 to $600 to lock, which they may call an application fee, appraisal fee or something else.

Under what circumstances are fees refunded? Refund policies vary widely. If the lender is unable to lock the requested price, either because the borrower can't be approved or because the market has changed, any fees not paid to third parties in connection with the application should be refunded.

What happens if the market price drops after the loan is locked? In most cases, nothing happens because the lender presumes that both parties are committed by the lock. Some lenders, recognizing that some borrowers may cancel the deal to begin again within another lender, offer a "float-down." This allows for a drop in the rate, but not all the way to the new market rate. Lenders offering float-downs should spell out in their lock policies exactly how they work.

What happens if the borrower wants to change the type of mortgage (or the rate/point combination) after the price is locked? Most lenders will allow such changes, but only at the higher of the lock prices or the current prices. That makes it important for borrowers to know exactly what they want before they request a lock.

What happensif the loan cannot be closed within the lock period? If the delay is the lender's fault, the lock period should be extended at no cost to the borrower. If the delay is the borrower's fault, the lender will charge the borrower for a lock extension. These charges should be spelled out in the lender's lock policy.

In the event of delay, what would constitute borrower fault? This would include not providing requested documentation promptly, delaying appraisal inspections, and not obtaining a subordination agreement from the second mortgage lender if there is one. Lenders can minimize this obvious source of conflict by spelling out the borrower's obligation in detail in the lock agreement.

Reverse mortgage

2009-11-03T06:29:00.000-08:00

Reverse mortgages are becoming popular in America. HUD's Federal Housing Administration (FHA) created one of the first. The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program which enables you to withdraw some of the equity in your home. The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements and more. You can receive free information about reverse mortgages in general by calling AARP toll free at (800) 209-8085. Since your home is probably your largest single investment, it's smart to know more about reverse mortgages, and decide if one is right for you!

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. FHA's HECM provides these benefits. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

2. Can I qualify for FHA's HECM reverse mortgage?

To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home. You are further required to receive consumer information from an approved HECM counselor prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on (800) 569-4287 for the name and telephone number of a HUD-approved counseling agency and a list of FHA-approved lenders within your area.

3. Can I apply if I didn't buy my present house with FHA mortgage insurance?

Yes. It doesn't matter if you didn't buy it with an FHA-insured mortgage. Your new FHA HECM will be FHA-insured.

4. What types of homes are eligible?

To be eligible for the FHA HECM, your home must be a single family home or a 1-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.

5. What's the difference between a reverse mortgage and a bank home equity loan?

With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

You don't make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes, insurance and other conventional payments like utilities. With an FHA HECM you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."

6. Can the lender take my home away if I outlive the loan?

No. You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than the value of your home at the time you or your heirs sell the home.

7. Will I still have an estate that I can leave to my heirs?

When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs.

8. How much money can I get from my home?

The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You can use an online calculator like the one on the AARP website to get an idea of what you may be able to borrow.

9. Should I use an estate planning service to find a reverse mortgage?

FHA does NOT recommend using any service that charges a fee for referring a borrower to an FHA lender. FHA provides this information free, and HUD-approved housing counseling agencies are available for free or at very low cost, to provide information, counseling, and a free referral to a list of FHA-approved lenders. Search online or call (800) 569-4287 toll-free, for the name and location of a HUD-approved housing counseling agency near you.

10. How do I receive my payments?

You have five options:

Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term - equal monthly payments for a fixed period of months selected.
Line of Credit - unscheduled payments or installments, at times and in amounts of your choosing until the line of credit is exhausted.
Modified Tenure - combination of line of credit with monthly payments for as long as you remain in the home.
Modified Term - combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

Historical mortgage rates

2009-11-03T06:27:00.001-08:00

Historical Mortgage Rates
Click here for a complete list of HSH statistics

As the nation's largest publisher of mortgage information, HSH Associates has compiled mortgage rate statistics for over 25 years.

Here we present over two decades of HSH's Fixed-Rate Mortgage Indicator (FRMI). The FRMI -- the longest series of street-level pricing available -- captures mortgages of all sizes, including conforming, the new "expanded conforming," and jumbo. The FRMI has been published as a continuous series since the early 1980s. Separate statistical series for conforming and jumbo loans have long been available to HSH clients.

If you need conforming mortgage statistics or jumbo mortgage statistics, please click here for more information. Our line of consumer loan statistics includes:

Hybrid ARM statistics, conforming (more info)
Hybrid ARM statistics, jumbo
FRM first-mortgage statistics, conforming
FRM first-mortgage statistics, jumbo
Agency jumbo (also known as expanded conforming and jumbo conforming) statistics
Home Equity Line-of-credit statistics (fully indexed)
Home Equity Loan (single disbursement) statistics
New Auto Loan statistics
Used Auto Loan statistics

If you'd like to know more, just ask what we have available. We offer statistics that simply are no available elsewhere, such as our hybrid ARM stats.

Unlike other sources, these statistics derive from our objective, editorial survey of between 2,000 and 3,000 lenders in all 50 states and elsewhere. We've been doing this for 20 years -- we know what we're doing, and we just keep doing it, every week. Would you like to know more?

HSH's statistics have long been used by top Wall Street firms; by lenders coast to coast; by the media; by government agencies; by Freddie Mac and Fannie Mae; and many others.

These histories are copyright © 1983-2009 by HSH® Associates, but may be copied and distributed provided you credit us as Source: HSHAssociates.com and, if used on a Web site, providing that you link to our Web site. Failure to do this is copyright infringement.

HSH FRMI: National Monthly Average Mortgage Rates
from the HSH Associates survey

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Learn the methodology behind our statistics.

Need jumbo-only or conforming-only stats?
We have them -- both current and historic -- at reasonable cost. Weekly and/or monthly. With points, or without.

Order customized statistics for any need.
Feel free to ask us for a price quote for the precise statistics you need.

Click here for a complete list of HSH statistics

View graphs of fixed rate mortgages (FRM), adjustable rate mortgages (ARM), or Hybrid ARM mortgages.

HSH compiles statistics on a wide variety of mortgage products. The 30-year Fixed Rate Mortgage, the 15-year Fixed Rate Mortgage, and the 1-Year Adjustable Rate Mortgage are the most popular, but that's not all we survey. Click here to see what we offer.

About our Statistics:

The statistical mortgage rate histories listed here are derived from HSH's database of 2,000 to 3,000 lenders -- the largest database available from any source.
HSH statistics come from the objective, editorial survey we've conducted for 20 years. Lenders do not pay to be included in our surveys -- never have, and never will.
The free statistics we offer include both conforming and jumbo loans; this gives an accurate view of the nation's overall mortgage market (particularly in high-cost areas). We also offer jumbo-only and conforming-only statistics -- ask for a price quote.
'Points' are not included in these free averages -- they are calculated separately, but not listed here (i.e., do not assume these stats represent "zero-point" loans). Other statistical series do list average points; please ask us for a price quote.
Read our Frequently Asked Questions about our statistics, too.

HSH calculates a wide variety of mortgage statistics which list both average rate and average points, including:

statistics for other loan types
statistics by metropolitan area
statistics by loan size -- i.e. conforming -vs- jumbo loans
statistics by type of lender (thrifts -vs- mortgage banker -vs- bank)

And by still other criteria. Statistical series can be combined, too -- i.e., for average jumbo loans in specific metro areas.

Mortage payment calculator

2009-11-03T05:05:00.000-08:00

A mortgage payment calculator is a program used to help home buyers establish their monthly payment on their mortgage using variables such as principal, interest rate, and term. Mortgage calculators are, thus, essential tools for home buyers. Here are their different uses and their various types.

During the early process of applying for a mortgage, you will find that a mortgage calculator is a very valuable tool you can use to:

- Determine the amount of mortgage and the price of a house you can afford based on your income and debt information

- Calculate your monthly mortgage payments based on loan amount, interest rates and other loan terms

- Compare the costs or real interest rates between several different mortgage loans

- Compute extra payments on your monthly mortgage that enable you to pay off your mortgage faster

- Calculate your payments on debt consolidation mortgage loans to get an idea of your monthly savings

- Check how you can refinance the loans you have by working out the amount you can afford to borrow and exactly how much your repayments are going to be using time scales and interest rates

- Make comparisons with other mortgage products, both fixed and adjustable

- Make amortization schedules and tables using the amount and interest as basis

- Calculate when it is sensible to refinance your home

Selected URL for mortgage payment calculator : http://www.mortgagecalculator.org

Bankrate.com

Mortgage Interest Rate Forecast

2009-11-03T04:51:00.001-08:00

Source :
http://forecasts.org/prime.htm

The Financial Forecast Center is a site that specializes in the generation and publication of forecasts related to money: savings, investments, finance, economics, employment and loans.

The Financial Forecast Center has been producing and publishing economic and financial market forecasts since 1997. These forecasts have been and will continue to be published exclusively on the internet.

All forecasts are generated in-house using artificial intelligence. The forecast models are 100% quantitative and use a global, long-range economic dataset. Thus, the forecasts are very objective. And because the Financial Forecast Center has no ties to other companies or institutions, our products and services are completely independent.

The Financial Forecast Center is a service of Financial Forecast Center, LLC. FFC LLC is a small, privately owned Texas corporation located in Houston, Texas, USA.

Prior to 2005, The Financial Forecast Center was a service of Market Research International and Applied Reasoning, Inc. Financial Forecast Center, LLC was split off from Applied Reasoning, Inc. in 2005 to focus on the creation and publishing of market forecasts while Applied Reasoning, Inc. focuses on the development of artificial intelligence software.

Mortage rate calculator tips

2009-11-03T04:39:00.001-08:00

A mortgage calculator gives you the freedom to enter the mortgage terms of your choice. You may want to have a rough idea of what you pre qualify for. You also need to decide whether you are going with an ARM or fixed rates, as both of these will be an option. Your Down Payment will significantly lower your monthly payment, so the more you put down the better. It helps your credibility with the bank and even lowers your debt ratio.

Before you use a calculator to determine mortgage, you may want to figure out what your expenses are. If you do this without putting some thought into it, you are likely to forget some expenses that can make a difference. If you have all of your expenses and income ready before you begin, you will get more accurate results.

You may also want to explore an amortization schedule more closely to see if this is something you need to help lower your payment. You may also want to find out more about loan modification, if you are having problems paying your mortgage, and need a smaller monthly payment.

It is very easy to use a Debt To Income Ratio calculator. You simply put in some numbers and you will be able to view results immediately. You may also have a choice of lenders that will show their rates and compete for your business. This can be a great way to do some comparison shopping all in one place.

A Mortgage Calculator, that also includes debt to income ratio, can provide you with many details about your spending habits. This may be a great time to revise the spending you are doing and you may be shocked by the outcome. If you change your spending, you may qualify for a much better mortgage rate with better interest rates also.

Home Mortgage Rate Information

2009-11-02T15:17:00.000-08:00

You need to look into the factors that will decide for you the best home mortgage rate. Mortgage or occasionally known as home loan is perhaps the best way to help you obtain your dream home. In order to rein in your expenses in addition to keep your financial position strong, it is mandatory to contrast the many choices out there as well as recognizing what are the costs that you have to foot so that you can obtain the best home mortgage rate.

Don’t abstain from the little effort you put in to verify the different costs and picking the right one as that can be the different between assisting you to save a lot of your hard earned income. Through comparing smartly the different types of home mortgage rate, you can then pick the best for your needs.

For the best home mortgage rate, you will need to go into the finer points of all costs with such information as different type of lenders, the rival banks, credit unions, mortgage companies in addition to thrift institutions. At times getting a mortgage broker could be the ideal option as the broker is the right person to offer all the essential information that can means the difference between the best mortgage rate and one that is costly.

By gathering a list of the current mortgage rate, you will be in a healthier position to get the best home mortgage rate. That can help you to eliminate those high interest rates. As well find out about the fixed on top of the adjustable interest rates to get an idea of the expected trends of the market.

It is relevant to get to know the yearly percentage charges that you need to pay the lenders plus the requisite points to obtain the low interest rates. Other essential factors are the underwriting fees, brokers’ fees, transaction settlement and the closing costs. Armed with all these information, you can then bargain for the best mortgage rate with the lender.

The fact is that different borrowers will offer dissimilar interest rates for the same category of mortgages so to obtain the best mortgage rate; you have to search for reductions on top of waiver. Consequently comparison shopping is very essential in this aspect.

Always use a home mortgage rate calculator as it is a great tool to help you with all the complex calculations as well as saving you from all the headaches. Once you have discovered the best home mortgage rate, go into the agreement and get the contract signed. To shop around doing comparison shopping on top of hard-nosed negotiations are part and parcel to obtain the best home mortgage rate.