|
|
 SIGN
UP FOR FREE |
|
|
|
Sign Up for a free account or
learn more. |
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
Most Recent Articles
|
- Typical Mortgage Interest Rates
Taking the decision whether to take a mortgage loan or not one is, first of all, interested in the interests rates he or she will have to pay monthly. - The {pros and cons|benefits and drawbacks|advantages and disadvantages|positives and negatives|pluses and minuses} of {interest only|interest-only} {mortgage deals|mortgages}
An unbiased guide to helping you find the best mortgage. This articles shows you the pros and cons of picking an interest only mortgage. - How does a Reverse Mortgage Work?
A reverse mortgage also referred to as a 'lifetime mortgage' is a type of mortgage available for persons over the age of 62 that own their home but would like to gain equity from their property as one big payment or multiple payments. The terms and conditions of a reverse mortgage does not ask the homeowner to pay for the loan during their lifetime or until, the home is sold or the owner leaves. - Did Lenders Cause Their Own Credit Crunch?
It seems lenders forget basic facts about lending every so often and create a new financial bubble. Perhaps they succumb to the pressure of the investment community or their own shareholders, or perhaps they just start believing their own "innovation" marketing pitch and forget the basics of sound lending practices. - Home Mortgage Borrowers Are Not That Sophisticated
When lenders develop new loan programs, they assume borrowers are sophisticated enough to understand the product and disciplined enough to use them properly. Both assumptions are bad, and these bad assumptions caused lenders and investors to lose a great deal of money during the Great Housing Bubble. - Predatory Lending in the Housing Bubble - Were You a Victim?
The most egregious examples of predatory lending occurred when interest-only loan products where offered to subprime borrowers whose income only qualified them to make the initial minimum payment (assuming the borrower actually had this income). This loan program was commonly known as the two-twenty-eight (2/28). It has a low fixed payment for the first two years, then the interest rate and payment would reset to a much higher value on a fully amortized schedule for the remaining 28 years. - Conservative House Financing Is Making a Comeback!
Exotic loan financing terms took over mortgage finance in the Great Housing Bubble. As people using these loan programs began to default in large numbers, exotic loan programs all but disappeared. This left the 30-year, fixed-rate, conventionally amortized loan as the only game in town. - Mortgage Interest Rates - How Are They Determined?
Mortgage interest rates are the single-most important factor determining the borrowing power of a potential house buyer. When rates are very low, a borrower can service a large amount of debt with a relatively small payment, and when interest rates are very high, a borrower can service a small amount of debt with a relatively large payment. - Prime, Alt-A and Subprime - The Three Categories of Borrowers
Borrowers are broadly categorized by the characteristics of their payment history as reflected in their FICO score. FICO risk scores are developed and maintained by the Fair Isaac Corporation utilizing a proprietary predictive model based on an analysis of consumer profiles and credit histories. These models are updated frequently to reflect changes in consumer credit behavior and lending practices. The FICO score is reported by the three major credit reporting agencies, Experian, Equifax and TransUnion. - What is the Option ARM Payment Rate?
A negative amortization loan is any loan where the monthly payment does not cover the monthly interest expense. Interest-only or conventionally amortizing loans do not have this feature, and the monthly payments are based on the interest rate charged and/or the duration of the amortization schedule. Since the negative amortization loan breaks down this traditional relationship, there is a completely separate rate calculated for the minimum payment amount. - Do You Understand the Three Types Of Loans - Conventional, Interest-Only, and Negative Amortization?
There are 3 main categories of loans: Conventional, Interest-Only, and Negative Amortization. The distinction between these loans is how the amount of principal is impacted by monthly payments. Conventional loans pay off the debt, interest only loans neither increases or decreases the debt, and negative amortization loans add to the debt. - People Will Not Want Mortgage Debt in the Future
The next big psychological change to impact housing will be a change in homebuyer's relationship with debt. When prices were going up, and nobody thought they were going to have to pay the debt off themselves, people borrowed all they could. Once prices stopped going up, and people were faced with paying off these enormous debts, the appetite for borrowing cooled significantly. - The Key to Housing Affordability Is Not Mortgage Finance
The difficult problem with affordable housing is how to provide it without making it unaffordable. Finance is not the answer. We all want affordable housing. There are numerous government programs designed to provide low-cost rental and ownership properties to people in all walks of life. Lenders, builders, realtors and buyers all benefit from affordable housing because affordability means an increase in transaction volumes and more money into the pockets of those dependant on the real estate market. - Exotic Loan Programs Always Fail
Over the last 60 years since World War II ended, a number of experimental loan programs have been attempted. These include interest-only loans, adjustable rate loans, and negative amortization loans among others. It is this group of loans that has consistently failed in the past for one simple reason: if payments can adjust higher, people will default. High default rates doom mortgage programs because these high default rates will eventually cause large default losses for the holders of these loans. - Adjustable Rate Mortgage Payment Recast - What is It?
Interest-only and negative amortization payments cannot go on forever. At some point, the loan balance must be paid in full. For all adjustable rate mortgages, there is a mandatory recast after a fixed period of time where the loan reverts to a conventionally amortizing loan to be paid over the remaining portion of a 30 year term.
|
|
|
