Home Loans and Mortgages – The Selection Can Be Bewildering

Written by Charles Essmeier


For years, when someone wanted to purchase or refinance a home,repparttar choices were simple. The buyer chose either a 15-year fixed-rate mortgage or a 30 year fixed-rate mortgage. That was it. Of course, those were alsorepparttar 142518 days of twenty percent down payments, which seriously hinderedrepparttar 142519 ability of many Americans to obtainrepparttar 142520 loan necessary to buy their own home. In recent years, more flexible loan types have become available and down payment requirements have been relaxed. There are now far more choices of loan types available forrepparttar 142521 borrower than ever before. That can be a mixed blessing, however, as prospective borrowers now have to do a tremendous amount of homework in order to determine which type of loan might berepparttar 142522 best choice. The selection of loan types that are currently available can be quite bewildering, andrepparttar 142523 wrong choice could costrepparttar 142524 prospective borrower thousands of dollars overrepparttar 142525 term ofrepparttar 142526 loan.

The standard 15-year and 30-year mortgages are still quite popular. Each providesrepparttar 142527 stability of a fixed interest rate and a payment that will remainrepparttar 142528 same throughoutrepparttar 142529 duration ofrepparttar 142530 life ofrepparttar 142531 mortgage. When interest rates are near historic lows, as they are today, these traditional choices work well for most buyers. Buyers who find a 15-year or 30-year mortgage to be within their means would probably benefit from obtaining such a mortgage now.

In recent years, as home prices have increased faster than wages,repparttar 142532 lending industry has created more flexible types of mortgages designed to help buyers who may have trouble with traditional loans obtain financing. These types of loans tend to have adjustable interest rates:

  • The Adjustable Rate Mortgage, or ARM, has a rate that adjusts over time as spelled out inrepparttar 142533 mortgage agreement. Typically,repparttar 142534 rate atrepparttar 142535 time of singingrepparttar 142536 loan is lower than that of a traditional mortgage, perhaps by one percent or so. The difference is thatrepparttar 142537 rate can adjust over time asrepparttar 142538 market changes. The loan agreement will spell out how oftenrepparttar 142539 rate may change and how muchrepparttar 142540 rate may change at one time. The agreement may also indicate a maximum interest rate that may be charged overrepparttar 142541 life ofrepparttar 142542 loan. These types of loans are ideal for buyers who do not intend to stay in their home for more than a few years, or buyers who are purchasing in times of high interest rates, when there is an expectation that rates will drop over time.


  • Fix and Flip: What To Fix

    Written by Steve Gillman


    You've bought a house, a fixer-upper you can make some money on. What improvements and repairs should you make? First of all, you need to know this before you buy, as I explained in another article. Before and after you buy, though, you need to have some simple rules with which to start analyzing possible fixes.

    Return On Investment

    A young couple was very disappointed when I told them there house was worth $110,000. "We just put $40,000 into remodelingrepparttar kitchen!" they told me. I looked atrepparttar 142517 kitchen. It was nice. They had added $10,000 in value torepparttar 142518 house by spending $40,000. This is a classic example of a bad return on investment.

    With fixer-uppers, you have do things which giverepparttar 142519 most "bang forrepparttar 142520 buck." Aim for a three-to-one return on improvements. If you're going to resurfacerepparttar 142521 driveway for $1000, it better raiserepparttar 142522 value ofrepparttar 142523 home by $3,000. Even when you're just guessing, keep this three-to-one formula in your head, if you want to invest safely.

    How To Fix A Fixer-Upper

    With things like new curtains, you can't really estimaterepparttar 142524 increase in value. What you can do, though, is group togetherrepparttar 142525 many small repairs and improvements you are considering, and imagine howrepparttar 142526 house will look when you are done. Then you can estimate whether you will have increasedrepparttar 142527 value enough to justifyrepparttar 142528 cost.

    It often is inrepparttar 142529 small details that you'll getrepparttar 142530 best return on investment, so look at these first. A new mailbox, flowers onrepparttar 142531 porch, a raked yard and trimmed trees - $30 total if you dorepparttar 142532 work yourself - can make a big difference inrepparttar 142533 first impression potential buyers have. First impressions are important.

    Cont'd on page 2 ==>
     
    ImproveHomeLife.com © 2005
    Terms of Use