Financing a Home Archive


How do growing equity mortgages work?

Thursday, December 6th, 2007
Also called GEMs, these fixed-rate mortgages have monthly payments that increase in increments of 3 percent or more to reduce the principal loan amount. They are often written by the lender at a below market interest rate and have shorter terms. ...
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What is a balloon mortgage?

Thursday, December 6th, 2007
It is a mortgage in which the entire unpaid principal becomes due and payable on a given date, five, ten, or any number of years in the future. The borrower must pay up, refinance, or lose the property. ...
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Should I consider a “B,” “C,” or “D” paper loan if I have bad credit?

Thursday, December 6th, 2007
These loans do not meet the borrower credit requirements of "A" or "A-" category conforming loans, so if they are your only option for obtaining a home, then go for it. ...
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Are shared equity and shared appreciation mortgages the same?

Thursday, December 6th, 2007
No. With a shared appreciation mortgage, or SAM, a borrower receives a below-market interest rate in return for the lender receiving a share, usually 30 to 50 percent, in the future appreciation of the property upon its sale. ...
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Is equity sharing a good idea?

Thursday, December 6th, 2007
A shared equity mortgage, or partnership mortgage, can be a good way to purchase a home with little or no money down. In such an arrangement, the borrower/homebuyer has an absentee partner who, as the investor, provides all or some of the down payment. ...
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What about a hybrid loan?

Thursday, December 6th, 2007
Also called a fixed-period ARM, these crossbreed loans combine features of fixed-rate and adjustable-rate mortgages. ...
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What is a two step mortgage?

Thursday, December 6th, 2007
Not to be confused with a biweekly mortgage, this type of home loan is also known as 5/25s and 7/23s. It has one interest rate for part of the life of the mortgage and a different rate for the remainder of the loan. ...
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Can I split my mortgage in two and pay biweekly?

Thursday, December 6th, 2007
The biweekly mortgage has become increasingly popular as more people favor paying off their home loan early and reducing interest charges. ...
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What is an assumable mortgage?

Thursday, December 6th, 2007
It is a mortgage held by the seller that can be taken over by the buyer when a home is sold. Such loans are hard to find because most lenders stopped voluntarily writing them many years ago. Most new assumable loans today are adjustable rate mortgages. ...
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Are there such things as no-cost and no-fee loans?

Thursday, December 6th, 2007
You see promotions for them all the time. But banking regulators have gone after lenders who misrepresent these loans. The reality is that no-cost and no-fee loans may actually cost the borrower more over the long term because costs are often hidden by rolling them into the new loan through ...
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