Fixed Rate Mortgage Loans - Understand The Pros And Cons Of The Fixed Rate MortgageWritten by Carrie Reeder
There are many benefits and drawbacks to consider when deciding if a fixed rate mortgage is right for you. It is important to look at all options when it comes to something as important as getting a mortgage for your new home.
There are a few benefits to fixed rate mortgages. One benefit is that rates and payments remain constant. There won’t be any surprises even if inflation surges out of control and mortgage rates head to 20%. This kind of stability makes budgeting easier. People can manage their money with more certainty because their housing expenses won’t change. Fixed rate mortgages are simple to understand making them appealing and good for first time buyers. Also longer term fixed rate mortgages are very affordable.
There are also a few drawbacks to fixed rate mortgages. To take advantage of falling rates, mortgage holders would have to refinance. That can mean a few thousand dollars in closing costs, another trip to title company’s office and several hours spent digging up tax forms, bank statements etc. Fixed rate mortgages can be too expensive for some borrowers, especially in high rate environments, because there is no early on payment and rate break like there is with adjustable rate mortgages. Fixed rate mortgages are practically identical from lender to lender. While lenders keep many adjustable rate mortgages on their books, most financial institutions sell their fixed rate mortgages.
Home Equity Line Of Credit - Finding The Best Home Equity LenderWritten by Carrie Reeder
Borrowing against value of your home using a revolving credit account is known as a home equity line of credit. Lenders offer home equity lines of credit in several ways with either fixed or variable interest rates. Information on obtaining a home equity line of credit is available to you from many sources, including online lenders. Make sure you compare loan products and lenders, and review terms of your loan contract carefully before signing.
Lending institutions offer loan products that vary in terms and cost. Ask your lender about upfront costs involved in obtaining a home equity line of credit. Are there annual costs? Balloon payments? Make certain you receive that lowest interest rate possible for your individual situation. Even with adverse credit, if you have built equity in your home by making payments over a number of years, you can apply for a home equity line of credit.
A home equity line of credit requires you to use your home as security for loan, so make sure you can afford to make your monthly payments according to terms of your contract. The amount you can borrow against equity in your home will depend on particular lender, value of your home and your credit score. If you have bad credit you will pay a higher interest rate.