Mortgage Rate

The answer depends on several factors including your financial situation. Lets take a look at the main differences between the two types of mortgages.
Fixed Rate Mortgage
Two major components that are needed to compare fixed rate mortgages are the interest rate and the points. Points are fees paid to the lender at the beginning of the mortgage period. They are based on a percentage of the loan. So, one point equals one percent of the loan amount. Therefore, a $100,000 mortgage with 1.5 points would cost $1,500.
One lender may offer a lower interest rate than another but the points may be higher resulting in a less attractive loan. The important consideration here is the length of time you plan to hold the mortgage. The longer you plan to keep the mortgage, a higher point with a lower interest rate makes more sense. And, the less time you plan to remain in a home you may be more likely to benefit from low or no points with a higher interest rate.
In addition, be sure to ask your lender the total of all fees involved. Lenders can tack on various fees that can add up in a hurry.
Some common fees are:
* application fee
* credit report
* property appraisal
* title insurance
* escrow fees
Request an itemized list of all fees in writing so you can compare mortgages fairly.
Adjustable Rate Mortgage
Selecting the best adjustable rate mortgage (ARM) is basically impossible because there are some unknowns. However, you can look at a few of the loan factors and depending on your situation make a decision you can live with.
The interest rate that an adjustable rate mortgage starts off with is called the start rate. This rate is the least important consideration when looking at ARM's because it will change. The start rate is often used as a teaser rate to make you think that the loan has good terms.
The more important factors to consider when deciding on an ARM is a formula of index and margin equals the interest rate. The index is what the lender uses to calculate your specific interest rate. Indexes can differ in how quickly they respond to interest rate fluctuations. Some common indexes used are Treasury bills (T-bills) and Certificates of Deposit (CD). The margin is a fixed figure which is added to the index to get the interest rate. Margins are typically about 2.5 percent.
Another important consideration is the frequency in which the mortgage rate is recalculated. Some ARMs adjust monthly, while others only adjust every 6 or 12 months.
Also, rate caps are used to limit the amount the rate can change within an adjustment period. An adjustable rate mortgage that adjusts every 12 months may be limited to a 1-2 percent change up or down. There should also be a lifetime rate cap to limit the rate change over the life of the loan which is usually around 5-6 percent higher than the start rate.
Before accepting an ARM you should figure out the payment at the highest rate allowed to see if you can handle the worst case payment.
Lastly, other lender fees should be considered with a request for a written total fees statement.
Fixed vs. ARM Payments
A fixed rate mortgage is just that, a fixed interest rate for the life of the loan. The payment will always stay the same without fluctuation, however, the risk is that if rates drop significantly you may be stuck with a higher rate.
ARM interest rates can fluctuate many times over the life of the loan, thereby, changing your monthly payment amount. ARMs offer potential interest savings because the start rate is typically lower than a fixed rate. Also, if rates drop or stay the same there will be a continued savings compared to a fixed loan. But, if rates rise an ARM will cost more than the fixed rate loan.
Choosing a Fixed-Rate vs. an Adjustable-Rate Mortgage
First, consider the risk you can take with the monthly payment amount changing. Do you have savings? Or are you budgeted to the max without any emergency savings? If you can't afford to pay your ARM at the highest payment amount you should steer clear of this type of loan.
Also, consider how long you plan to have the mortgage. Generally, ARMs are better for a mortgage of 5-7 years. If you plan to keep your mortgage for the long-term a fixed-rate mortgage may be the better, less stressful choice.
Lastly, if the thought of having an adjustable rate mortgage stresses you out...don't do it! The stress is never worth the potential savings. And, if rates drop significantly you may have the option to refinance to a lower rate anyway.
Jill Kane helps you find loans for all of your financial needs at Low Rate Loans

Home Mortgage

If you happen to be shopping around for a mortgage, it is very important that you first take the necessary time to do your homework.
When I say homework, I am talking about research. There are so many loan programs out there that it is easy to get lost in all of the mortgage jargon that people in the industry love to use on you. Not to mention of all of the paperwork.
By the time you get to the table, you will have a mound of paperwork approximately six inches high filled with words and terms that most people in the business don’t even understand.
The mortgage industry is filled with all kinds of pitfalls that you can find yourself sitting in. This is why taking your time and doing research is key to purchasing a home. Research can literally save you thousands of dollars in closing costs and interest charges. So don’t rush into it!
For starters you will want to contact a realtor and a lender.
When choosing a realtor, ask a family member or friends to refer one to you, one they know well and can be trusted. Or better yet, one they have used personally.
There are many ways to choose a lender, but for starters, here are just a few ideas to get you started.
The traditional way would be to walk into your neighborhood bank and speak with a loan officer. If you don’t like that idea, you might consider filling out an on-line application, and let the lenders choose you. Or you could contact a broker.
A broker will evaluate your situation for you, and then shop around for a lender with the best program or rate, or both.
Remember, just because you have a realtor and a loan officer doesn’t mean you should stop doing your research. At this point in the game, you should be doing even more research. This way you will have an understanding as to what your realtor and loan officer are talking about when they start speaking their language.
You will also want to find out what your credit score is. Most likely your loan officer will do this for you. Your credit history plays a large role in the loan approval process, and it will also affect your interest rate.
If you already know that your credit is a little bit challenged, than you might want to start out using a broker. Most brokers work with about two hundred lenders, so they would be your best bet as far as finding a bank that deals with challenged credit.
When you are purchasing a home, you will hear things such as debt to income, appraisal, and loan to value. I’m sure you may have heard these terms in the past, but do you know what they mean, I mean, do you really know what they mean? Inside and out.
I cannot stress enough the importance of doing research before buying a home. It is such a vital component when it comes to saving money. Use the internet, use the library, and most of all, use your realtor and loan officer. Ask them as many questions as you possibly can, learn from them, after all, you are paying them!
Your home will most likely be the largest financial transaction you will ever make, so when you come to making your decision, make sure it is an educated one. Good luck!
This article may be reproduced by anyone at any time, as long as the authors name and reference links are kept in tact and active.
Jay Conners has more than fifteen years of experience in the banking and Mortgage Industry, He is the owner of http://www.jconners.com, a mortgage resource site, he is also the owner of http://www.callprospect.com, a mortgage lead company.

Mortgage Refinance

Refinance home loan lenders are eager to lend money to any individual regardless of credit as long as the homeowner has a fair amount of equity in the home and the home itself is in a condition that can be resold. Refinance home loans are different than a second mortgage or line of credit in that the proceeds from the loan disbursement first pay off the original mortgage loan. The remainder of the refinance home loan proceeds leaves the homeowner to spend the money as they wish. Typically, refinance home loans carry lower interest rates than purchase mortgages.

For a homeowner to obtain a refinance home loan, it is in their best interest to get a loan with an interest rate lower than the loan they already posses. Some borrowers prefer to re-extend their payment length back to 30 years, others prefer to use refinance home loans for the existing time left on their original loan. In order to determine the best deal throughout the life of both loans, in depth calculations will have to be done. Many Internet websites have interest calculators to make it easier for homeowners to determine how much interest is going to the lender before deciding if a refinance home loan is the most beneficial option.

Once a decision has been made to apply for a refinance home loan, the borrower must provide the lender with their social security number for a credit check. A credit report score directly determines the interest rate. It is recommended that before applying for various refinance home loans, the borrower receives a copy of his/her credit report from each of the three credit reporting agencies. If the credit score is low, then expect the interest rate on the refinance home loan to be high. If the credit score is high, then expect the interest rate on the refinance home loan to be low. Sometimes, easy measures can be taken to lift the credit scores. A credit report can look drastically different in only 30 days.

Refinance home loans gain extreme popularity when the interest rates drop nationally. It is an opportunity for a homeowner to save thousands of dollars in interest over the life of the loan, and to save hundreds of dollars in interest every month. Some homeowners use the refinance home loan to pay off their existing loan, and pocket the money for college, home improvement, or that vacation they have always wanted to take. The option to refinance a home loan is a great idea if a homeowner can lower an interest rate on such a large loan that extends for such a long period of time. It is no wonder there are many lenders out there that are advertising for individuals to consider getting a refinance home loan.

For more information about refinance home loan and refinance home loans, visit:http://refinance.christianet.comhttp://refinance.christianet.com/articles.htmhttp://www.christianet.com

Calculator Mortgage

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APR CalculatorTo find the annual percentage rate of your loan, enter the loan amount, interest rate, points, other costs and year-length term.

ARM APR Calculator: To find the annual percentage rate of your ARM loan, enter the loan amount, interest rate, index value, margin, points, other costs and year-length term.

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