Financing a Home Archive


What determines how adjustable-rate loans change?

Thursday, December 6th, 2007
They go up and down with interest rates, based on several esoteric money market indices that cause the cost of funds for lenders to vary. The most popular indices include Treasury Securities (T-Bills), Cost of Funds (COFI), Certificates of Deposit (CDs), and the Libor, which is the London inter-bank offering ...
more


Should I avoid an adjustable rate mortgage?

Thursday, December 6th, 2007
Because adjustable rate mortgages, or ARMs, fluctuate with the market, they offer less stability than fixed-rate loans. If an ARM is adjusted upward, monthly payments will increase, and for a lot of people that can be too big a risk to take. On the other hand, should rates drop dramatically, ...
more


Why do most homebuyers prefer a fixed-rate mortgage?

Thursday, December 6th, 2007
Long-term, fixed-rate mortgages are preferred by most homebuyers because they offer security and stability. The interest rate does not fluctuate over the life of the loan, so the total amount of principal and interest always remains the same. The monthly payment can change, however, if local property taxes, which are ...
more


Are interest rates negotiable?

Thursday, December 6th, 2007
It depends who you negotiate with. Some lenders are willing to haggle on both the loan rate and the number of points, but this is not typical among more established lenders. ...
more


What is a lease option?

Thursday, December 6th, 2007
It is an agreement between a renter and a landlord in which the renter signs a lease with an option to purchase the property. The option only binds the seller; the tenant has a choice to make a purchase or not. ...
more


What is seller financing?

Thursday, December 6th, 2007
Also known as a purchase money mortgage, it is when the seller agrees to "lend" money to the buyer to purchase and close on the seller's home. Usually sellers do this when money is tight, interest rates are high or when a buyer has difficulty qualifying for a conventional loan ...
more


What is a bridge loan?

Thursday, December 6th, 2007
It is a short-term bank loan of the equity in the home you are selling. You may take out a bridge loan, or interim financing, to help with a knotty situation: closing on the home you are buying before you close on the property you are selling. This loan basically ...
more


Is a reverse mortgage good for elderly homeowners?

Thursday, December 6th, 2007
A reverse mortgage is an increasingly popular option for older Americans to convert home equity into cash. Money can then be used to cover home repairs, everyday living expenses, and medical bills. ...
more


What is a wraparound loan?

Thursday, December 6th, 2007
Also called an all-inclusive mortgage, it is where a new home loan is placed in a subordinate or secondary position to the original mortgage and the new loan includes the unpaid balance of the first. ...
more


What are jumbo loans?

Thursday, December 6th, 2007
If you borrow at or below the conventional loan limit for non-government mortgages, you have what is known as a "conforming" loan. If the amount surpasses the loan limit that is set by both Fannie Mae and Freddie Mac -now $333,700 for a single-family home - you would then have ...
more


© RISMedia 2009. All Rights Reserved