Home Mortgage Loan Information - Which Type Of Home Loan Is Best For You?Written by Carrie Reeder
If you are considering buying a home, then you may be more than a little confused by all of terms you hear about home loans. After all, lenders throw around words like fixed rate, balloon mortgages and adjustable rate mortgages without a thought. But if you arenít at least familiar with basicsóthose terms can be pretty confusing!
Hereís a basic guide to three most common types of home loans. Study it, and determine which one is right for you.
Fixed Rate Home Loan
If you are thinking about buying a home and staying in it until you pay it off, then you will probably want a fixed rate home loan. With this type of loan, you will be assigned a fixed interest rate, and then that rate will not change for life of loan. If interest rates skyrocket, yours will remain same. On other hand, if they plummet, you will likely be paying a higher rate. (You can always refinance in order to get a lower rate.)
Adjustable Rate Mortgage (ARM)
The interest rate with this type of loan goes up and down with market. In other words, if interest rate is low, rate on your home mortgage will be low, but if itís high, your loan interest rate will reflect it. And because interest rate on a home mortgage loan affects payments, you will never know from reporting period to reporting period what your monthly mortgage payments will be. This type of loan obviously isnít for everyone.
Home Loan Lenders - Finding The Best Home Mortgage LenderWritten by Carrie Reeder
The process of obtaining a mortgage or home loan can be very stressful and quite time consuming. Finding best lender for your situation requires research and comparisons between lenders and loan packages. You may be searching for a first time home loan or to refinance your existing mortgage. Compare lenders carefully and find best possible terms available to you.
If you have poor credit, you will pay a higher rate of interest than those with good credit. The amount of your down payment will also affect interest rate you receive. The larger down payment, lower interest rate. A small down payment will mean you pay more interest and your payments will be higher. You can get either a variable interest rate that changes over length of your mortgage, or a fixed rate that never changes. Do not hesitate to ask questions of your lender and make certain you clearly understand terms offered to you.
The amount of interest you will pay on your home loan not only depends on your credit score, but your debt-to-income ratio as well. This is amount of money you make each month as compared to amount of your monthly debt. Car payments, student loans, and credit card balances are all considered in determining your debt-to-income ratio. If your monthly income barely pays your monthly expenses, you will pay a higher interest rate than someone who's income surpasses their monthly obligations. Mortgage lending is a highly competitive industry and lenders are offering a variety of loan packages to fit almost any income level and credit rating.