Educate Yourself

FAQ: Reverse Mortgage

Reverse mortgage is a loan for older people so that they receive monthly, tax free payments without selling the house.

• What is the qualification?

You must be 62 and must have equity built in your home.

• What if the house is mortgaged?

You may qualify even then. The money received should be used to pay off the initial mortgage.

• How much money is paid to me?

It depends on factors like the home age, the valuation, your age at the time of taking the loan, and current interest rates.

• Are they monthly payments?

No. Money can be got in form of lump sum, lines of credit, and monthly payments.

COMMON SENSE MORTGAGE: Significance

Common-Sense Mortgage is a book that is important to borrowers since it empowers them to take advantage of new opportunities to save money. Since it is a compilation of about 15-year worth of mortgage and financing experience it is a full-proof guide that enable borrowers to get the best possible mortgage loans as well as other information and strategies for various financial transactions. To get more info, click here.

COMMON SENSE MORTGAGE: Lender Link

One way or another, in mortgage and other financing relationships, one needs to make contact with a lender. The Common-Sense Mortgage provides tips in getting along with the lenders as well as pointers in negotiating mutually attractive mortgage and financial deals. The book’s most important lesson center on the fact that mortgage financing is not a once in a lifetime event. Borrowers can finance and refinance at any time and the choices that they make can either put thousands of dollars in their pocket or put a hole in it.

Common Home Loan Types

There are various types of home loan for the property owners. Some common loans are:

• Adjustable Rate Mortgage:

The interest rate of these loans depend upon the financial index it is dependent upon and so after a fixed rate of interest for few years it starts to vary for the rest of the term.

• Fixed Rate Mortgage:

These loans have a fixed interest rate for a particular period of time. So your budget can be calculated as the monthly installments remain constant.

• Balloon Home Loan:

This type of loan is repayable in the full amount when the term gets over. Generally a loan with the term of 5 to 10 years with a low rate of interest as found in ARMs loans.

• Home Equity Loan:

These fixed rate loans are taken on the equity that your property is valued at. They provide you with liquid cash so as to invest, renovate, education purposes. They have a fixed monthly payment and are basically safe.

• Line of Credit:

A line of credit loan allows you to take cash on the mortgage. You can cash on the equity of the house. The monthly installments are of low interest. The advantage is that you can pay it back when you want.

Things To Remember Before You Refinance Your Home

Refinancing a mortgage can really be taxing. Keeping abreast of the intricacies of refinancing will be beneficial. You need to know the basic things about the deal, make a checklist before signing.

• Interest Rate

The interest rate will depend on the type of refinance mortgage you have chosen and on that basis monthly payments will be made. Taking an ARM will have an interest rate that will be fluctuating as it’s based on the market index. While a fixed rate of interest will give you security of a fixed monthly payments.

• Prepayment fines

Mortgage lenders put prepayment penalties because it is in their favor. If you will have a prepayment fine in your mortgage, you will have to give the lender the penalty for refinancing. Be aware of these clauses.

• Term of refinance

Term of the loan means the total time you have to repay the loan. Longer the term of the loan, lower monthly payments are there. With a shorter loan of 10 to 15 years gives you ownership faster, with lower interest monthly.

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