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Mortgage Terms Demystified And Explained
By Peter Kenny
If you are looking for a property but are confused about all the jargon involved in lending, then this guide could help you. If you are confused between caps, bridges and balloon payments, then here are some useful tips about how to understand various terms.
ARM and FRM
ARM stands for Adjustable rate mortgage, and FRM stands for fixed rate mortgage. An adjustable of variable rate is one that has a changeable interest rate, which is usually linked to the performance of a particular financial index. A fixed rate is the most common type of mortgage, and has a non changing rate of interest over the entire term
Balloon payments
Balloon payments are the final lump sum payments that you make on a mortgage. If you have an interest only or one that includes you paying a large percentage of the capital at the end of the mortgage, then you should make sure you know the exact amount you need to pay. If you cannot make a balloon payment then there is the possibility that you could lose your home.
Caps and bridges
A cap is a limit on the amount of interest you can pay on an ARM. For example, if you have a cap of 1% then and you currently pay 5.5%, then you can only be charged between 4.5% and 6.5% if things change. A bridge refers to a loan you can receive in order to buy a new home before your current one is sold. The loan ‘bridges’ the gap of finance that you
Builder Avoids Foreclosure Using Real Estate Auction
In this increasingly competitive housing market brought on by current economic conditions, builders are turning to real estate auctions to liquidate new home inventories. Charlotte-based builder, Southampton Homes has recently engaged Tranzon/Metrolina to auction six custom homes to bidders searching for good values. (PRWEB Jan 9, 2009)
Read the full story at http://www.emediawire.com/releases/2009/01/prweb1835834.htm ]]>
The Highlands of Golden Oaks Village, a Leading 55+ Community, Continues Upward Trend in the Western Poconos
Free 2009 guide helps better understand retirement in the Western Poconos. (PRWEB Jan 9, 2009)
Read the full story at http://www.emediawire.com/releases/55/communities/prweb1837584.htm ]]>
are suffering. You can use your current home as the collateral for the loan and pay the money back once you have sold the property.
Amortization
Amortization is a term that confuses many people, as it is not obvious from the word what it is referring to. Amortization simply means the process of paying both the capital and interest back on your in monthly payments. If you have an interest only then you won’t be subject to amortization.
Compound interest
Compound interest is something that you should be aware of, as it can cost you a lot of money. When calculating your repayments, you are sometimes the subject of compound interest. This means you are paying interest on the amount capital amount of the loan, as well as interest on the unpaid interest of the loan. In effect you are paying two types of interest, hence the interest is compounded. If you are looking for mortgages then get the lender to explain the level of compound interest that you will pay.
If you don’t understand, ask
These are some of the terms that are often used when talking about mortgages, although there are many others as well. Getting a is a big step, so if you are unsure about what something means or do not understand, then ask the lender to explain it to you. If you choose the right lender then they will be happy to explain the terms and processes of mortgages to you so that you know what you are signing for.
For additional articles and an extensive resource for everything about credit cards and finance, please visit us at Credit Cards and Best Mortgages
Visit www.creditcards-gb.co.uk
Additional
Resources
Mortgage Adviser Training
By Joe Kocsis
Mortgage Adviser TrainingMany people aspire to become high earners but lack that extra bit of guidance required to nudge them in the right direction. Without realising it, they could Read more...
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Additional
Resources
Fixed Rate Mortgages For Home Buyers
By Ian Major
Fixed Rate Mortgages For Home BuyersWhat Are Fixed Rate Mortgages?Fixed rate mortgages are the most common type of house-buying loan, where the payments and interest Read more...
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- Builder Avoids Foreclosure Using Real Estate Auction
In this increasingly competitive housing market brought on by current economic conditions, builders are turning to real estate auctions to liquidate new home inventories. Charlotte-based builder, Southampton Homes has recently engaged Tranzon/Metrolina to auction six custom homes to bidders searching for good values. (PRWeb Jan 9, 2009)
Read the full story at http://www.prweb.com/releases/2009/01/prweb1835834.htm ]]>
The Highlands of Golden Oaks Village, a Leading 55+ Community, Continues Upward Trend in the Western Poconos
Free 2009 guide helps better understand retirement in the Western Poconos. (PRWeb Jan 9, 2009)
Read the full story at http://www.prweb.com/releases/55/communities/prweb1837584.htm ]]>
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