Mortgage and Refinancing Information Channel:
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What Is The Best Deal For A Mortgage?
Few of us invest the time and effort into researching and securing the best deal for a mortgage to purchase our home.
For most of us, our house is the single most important and expensive purchase we ever make!
We invest a lot of time and effort into finding the perfect property in the best location and with as many of the features from our wish list as possible, yet, when it comes to finding the best deal for a mortgage, we take what is offered rather than researching and securing the best mortgage for our situation.
When you consider that the average homeowner will pay out more in interest over the lifetime of their mortgage than the home originally cost, you can see why getting yourself the best deal for a mortgage now, could save you tens of thousands of dollars in interest over the 20 30 year term of your home loan.
Your research for the best mortgages or loans and repayment options currently available can be carried out on the internet, thus making the whole process that much more convenient and time efficient for you.
Mortgages are not a "One Size Fits All!"
Mortgages come in many different forms and you need to be aware of the various forms in order to determine which one is the best deal for a mortgage to your unique circumstances.
Basically, mortgages fall into one of the following categories. Lenders will have variations of these basic categories, but armed with this information, you will be able to sort through the choices for just the right package.
Fixed Rate Mortgages:
Loan with an interest rate that remains at a specific rate for the entire term of the mortgage/loan. Approximately 75 per cent of home mortgages are this type. A fixed rate mortgage is often considered the best deal for a mortgage for first time buyers as you can establish a consistent relatively fixed budget of household operating expenses.
ARM's or Adjustable Rate Mortgages or Variable Rate Mortgages:
A mortgage/loan with an interest rate that adjusts or varies with the changes in rates paid on Treasury Bills or bank Certificates of Deposit. In Canada, the rates vary according to the posted weekly Bank of Canada rates.
To offset the risk associated with an adjustable rate mortgage, some lenders offer various 'capping' options. Often, they fix or limit the maximum level to which the interest rate you are subject to can rise for a given period of time. Sometimes they fix the cap per year and sometimes for the lifetime of the mortgage.
Adjustable or variable rate mortgages can be very attractive as usually the rates are considerably lower than for fixed rate mortgages. They are an excellent vehicle for borrowers who are attentive to the rate fluctuations and prepared to 'lock in' their mortgage when interest rates start climbing. If you're constantly watching the money markets, this may be the best deal for a mortgage for you.
A mortgage in which the monthly payment is not intended to repay the entire loan. The final payment is a large lump sum of the remaining principal. Balloon mortgages are often only partially amortized and requiring a lump sum repayment at maturity.
It's popular mortgage in the US for homeowners who aren't planning to stay in their new home for more than 5 or 7 years. The advantage is that the interest rate is lower than a fixed rate mortgage however, the disadvantage is that if you remain in the home beyond the 5 to 7 year term, you would have to secure a new loan or mortgage to pay off the balloon mortgage.
Jumbo Mortgages or 'Non-Conforming' Mortgages:
In the US, Congress has legislated a conforming limit to the amount a mortgage is allowable for funding by Federal National Mortgage Association (a.k.a: Fannie Mae) and the Federal Home Loan Mortgage Corporation (a.k.a: Freddie Mac). The 2005 limit is $359,650; $539,475 in Alaska, Hawaii and the U.S. Virgin Islands.
Any loan or mortgage above that conforming limit is considered a Jumbo Mortgage. A Jumbo mortgage/loan allows you to borrow over the conforming limit, but for that privilege, you will incur higher interest rates. There are variations to the Jumbo Mortgage such as the Super Jumbo Mortgage, but I'm sure you get the basic picture.
Canadians have an equivalent referred to as a "High Ratio Mortgage" guaranteed/funded through Canada Mortgage And Housing Corporation (CMHC).
Now that you have identified which type of mortgage might suit you best, you need to consider repayment methods and you basically have two options:
An interest only payment method can be combined with any type
of traditional mortgage. Interest only payment periods almost
never run for the entire term of the loan, so prepare to have
your payment rise to include both principal and interest once the
interest only period ends.
Principal and Interest or Capital &
Your monthly repayments are divided into an interest payment and a principal or capital repayment. In the early years of the mortgage period most of the monthly payment is swallowed up in interest but over time the balance reverses and you start to pay off more of the capital or principal borrowed.
So Many Mortgage Lenders ... So Many Choices!
There are so many mortgage lenders offering such a variety of loan options that at first it can seem a daunting task trying to determine which lender most suits you and your circumstances and which Lender is offering you the best deal on a mortgage!
It is important to note that as you shop for a mortgage, each lender will perform a credit check prior to committing to the mortgage or loan. Each credit check remains on your credit record and could potentially reduce your credit score and eligibility for a mortgage or loan.
Helen March offers simple House And Home Sense solutions for buying or selling real estate as well as informative articles for home improvement and lifestyle alternatives. Visit her at: http://www.HouseAndHomeSense.com
MORE RESOURCES updated Sun. September / 27 / 2020
Mortgage and refinance rates today, September 25, 2020 | Mortgage Rates, Mortgage News and Strategy - The Mortgage Reports
Mortgage and refinance rates today, September 25, 2020 | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports
Refinancing Your Mortgage Is About to Get More Expensive The Wall Street Journal
How to refinance your mortgage fox29.com
How to refinance your mortgage without closing costs Fox Business
How often can you refinance your mortgage? Fox Business
What is a conforming mortgage loan? Bankrate.com
Mortgage and refinance rates today, September 24, 2020 | Mortgage Rates, Mortgage News and Strategy - The Mortgage Reports
Mortgage and refinance rates today, September 24, 2020 | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports
Sovereign Lending Group, Mortgage Refinance Company, Hires Curt Rosequist As They Expand To Texas. - globenewswire.com
Sovereign Lending Group, Mortgage Refinance Company, Hires Curt Rosequist As They Expand To Texas. globenewswire.com
A record number of borrowers can now save on a mortgage refinance, as rates set another historic low - CNBC
A record number of borrowers can now save on a mortgage refinance, as rates set another historic low CNBC
Mortgage lenders are adding the refinancing fee. You can still avoid it if you act now. - Bankrate.com
Mortgage lenders are adding the refinancing fee. You can still avoid it if you act now. Bankrate.com
Now Is A Great Time To Refinance Your Mortgage - New Refinance Fees Delayed Until December 1 - Forbes
Mortgage and refinance rates today, September 15, 2020 | Mortgage Rates, Mortgage News and Strategy - The Mortgage Reports
Mortgage and refinance rates today, September 15, 2020 | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports
Mortgage Refinance Calculator Clark.com
Should I refinance my mortgage? A financial planner explains Business Insider
How and Why to Refinance Your Mortgage: A Step-By-Step Guide Clark.com - Clark Howard
Refinance your home before December 1 to avoid paying a new fee Business Insider
Historic mortgage rates spark a resurgence of Dayton homebuyers —and a refinancing boom - Dayton Business Journal
Historic mortgage rates spark a resurgence of Dayton homebuyers —and a refinancing boom Dayton Business Journal
The refinancing boom is just getting started HousingWire
Refinance soon to avoid the FHFA adverse market refinance fee | Mortgage Rates, Mortgage News and Strategy - The Mortgage Reports
Refinance soon to avoid the FHFA adverse market refinance fee | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports
Clark Howard’s Special Rule for Refinancing Your Mortgage Clark.com - Clark Howard
When Should I Refinance With a No Closing Cost Mortgage? Clark.com - Clark Howard
REAL ESTATE MATTERS: Reader insight on couple near retirement refinancing their home - Sarasota Herald-Tribune
REAL ESTATE MATTERS: Reader insight on couple near retirement refinancing their home Sarasota Herald-Tribune
15-year mortgage rate hits new record low Bankrate.com
New Fed policy could mean years of low mortgage rates | Mortgage Rates, Mortgage News and Strategy - The Mortgage Reports
New Fed policy could mean years of low mortgage rates | Mortgage Rates, Mortgage News and Strategy The Mortgage Reports
The Uncommonly Strong Case For Locking a Mortgage Rate Mortgage News Daily
Refresher on The New Refi Fee and Its Effect on Mortgage Rates Mortgage News Daily
Millennials drive huge VA home loan refinance boost in Hampton Roads - The Virginian-Pilot - Virginian-Pilot
Millennials drive huge VA home loan refinance boost in Hampton Roads - The Virginian-Pilot Virginian-Pilot
The Best Way to Pay for Home Renovations This Fall The Motley Fool
Seven Out of 10 Homeowners Who Research Refinancing Get Unwanted Sales Pitches: Survey - Credible News
Seven Out of 10 Homeowners Who Research Refinancing Get Unwanted Sales Pitches: Survey Credible News
Mortgage refinance: Everything you need to know Fox Business
FHFA's Official Report on Q2 Mortgage Relief Numbers Mortgage News Daily
United Shore seeks to outpace Rocket in mortgage war The Detroit News
Record number of banks offering cashback of up to $4000 for moving your mortgage, but is it worth it? - 9News
Record number of banks offering cashback of up to $4000 for moving your mortgage, but is it worth it? 9News
How to get the best mortgage refinance rates Fox Business
When should you refinance your mortgage? Fox Business
10 things to know before refinancing your mortgage Fox Business
Warren Buffett Has This Advice for Homebuyers The Motley Fool
Compare Today's Mortgage Refinance Rates: Sep 26 Credible News
How to get a low-cost mortgage refinance Bankrate.com
These 2 Stocks Are the Real (Estate) Deal Motley Fool
Mortgage refinancing is about to get more expensive Pittsburgh Post-Gazette
Mortgage refinancing will be 0.5% more expensive, Fannie Mae and Freddie Mac to raise fees - USA TODAY
Mortgage refinancing will be 0.5% more expensive, Fannie Mae and Freddie Mac to raise fees USA TODAY
How does mortgage refinancing work? Bankrate.com
Refinancing Your Mortgage? Those Rock-Bottom Interest Rates Aren’t for You - The Wall Street Journal
Refinancing Your Mortgage? Those Rock-Bottom Interest Rates Aren’t for You The Wall Street Journal
Mortgage refinance applications spike 79% as homeowners rush to take advantage of lower rates - CNBC