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Mortgage Loans: The Basics
from:Most Americans have a few key points in their life that they work toward and look forward to. They can't way to graduate school, get a good job, get married, and get a family. They also can't wait to get their own home; something that works well for their new family. If you want your own new home, you'll first need to get a mortgage loan. Mortgage loans can be a bit complicated at first, especially when so many aspects of them vary between the different lenders. Still, there are basics that are universal with nearly all of them.
A mortgage loan is a loan that you get from a bank or lending company. The money for this loan goes toward the purchase of property, either commercial or residential. Since most houses can cost anywhere from $100,000 to $1,000,000, most people won't be able to buy it up front. Instead, they have to use mortgage loans in order to pay for it. Once you do, you are then indebted to the bank that gave you that loan. You are then required to pay it off over a certain period of time, including the interest you'll own on the home.
All mortgage loans have four things in common: interest, terms, payment amount and frequency, and prepayment. Prepayment is the amount of money that you have to pay as a down payment on the home. This usually consists of a percentage of the full loan payment, usually around 5%. Therefore, if you purchased a $150,000 house, you would need to pay $7,500 up front.
Then there's the interest. The amount of interest you pay on your home varies quite a bit depending on the bank, your own credit, and the type of loan you choose. This is essentially your fee for taking out the loan, and you pay it over time. Mortgage loans also have a term when it comes to how long the loan is for. Generally, you can repay the loan for thirty years. This is how they determine your monthly payments. On a $150,000, you would pay around $417 each month for 30 years in order to pay it off.
Although there are aspects that most mortgage loans have in common, it really depends on which bank or mortgage company you work with. For best results, you should visit and compare at least five different banks. Then, compare their interest rates, terms, payment amount and frequency, and prepayment. This will help you find the best bank and loan product, which can potentially save you a lot of money over the years.
Interest Only Mortgage Loans News
Banks get strict on interest-only loans - Financial Times
 Telegraph.co.uk | Banks get strict on interest-only loans Financial Times By Tanya Powley Mortgage lenders are making it harder for homeowners to take out an interest-only mortgage, with one major high street bank now insisting that borrowers need a deposit of at least 50 per cent to get a loan. Santander, one of the UK's ... Santander cracks down on interest-only mortgages |
Santander overhauls interest-only loans - Financial Times
 Financial Times | Santander overhauls interest-only loans Financial Times Any borrowing above this loan-to-value will have to be taken on a capital and repayment basis. Existing interest-only borrowers that are moving home will also be impacted as they will have to meet the new criteria, or switch to a repayment mortgage. Santander sounds death knell for interest-only mortgages Mortgage bulletin – Santander withdraws interest-only mortgages over 50% LTV Is this the end for interest-only mortgages? |
Simon Read: Pets and sweethearts are this week's payday loan targets - The Independent
Simon Read: Pets and sweethearts are this week's payday loan targets The Independent Santander this week made it harder for borrowers to qualify for an interest-only mortgage. The Spanish-owned bank has doubled the amount of deposit needed to get a loan, increasing it from 25 per cent of the value of a property to 50 per cent. |
Lenders should stop viewing interest-only as the devil's spawn - Mortgage Strategy (blog)
 Mortgage Strategy (blog) | Lenders should stop viewing interest-only as the devil's spawn Mortgage Strategy (blog) Since the height of the market when almost half of all loans were being written on an interest-only basis, we have seen many different approaches canvassed. Initially the Financial Services Authority, in the Mortgage Market Review, indicated that this ... Tougher Mortgage Lending Criteria For Homebuyers Under New Reforms, Says Mis ... |
Bernanke: Weak housing has hurt consumer spending - Fox News
 USA TODAY | Bernanke: Weak housing has hurt consumer spending Fox News Homebuilders are more optimistic after seeing more people express interest in buying this year. And home construction picked up in the final quarter of last year, which helped housing contribute to broader economic growth. Bernanke: Weak housing to hurt consumer spending for years |
$18 Billion California Commitment for Struggling Homeowners, Can Benefit ... - San Francisco Chronicle (press release)
$18 Billion California Commitment for Struggling Homeowners, Can Benefit ... San Francisco Chronicle (press release) Banks processed loans to borrower with poor or no credit history, uncertain income and questionable debt servicing capability. Frequently, no down payments were required and fixed interest only loans were offered at low "teaser" rates. |
Mortgage Rates This Weekend: Current Mortgage Rates on 30 Year Home Loans at 3.98% - MonitorBankRates.com
 News Sizzle | Mortgage Rates This Weekend: Current Mortgage Rates on 30 Year Home Loans at 3.98% MonitorBankRates.com 10 year jumbo loan rates and refi rates are averaging 3.67%, down from the prior week's average 10 year jumbo home mortgage loan rate of 3.78%. 3 year interest only adjustable mortgage loan rates and refinancing rates are averaging 3.11%, ... Refinancing: Time to Act? Mortgage Rates Today: The Only Way is Down at Chase Bank With Rates This Low, Should You Refinance Again? |
As Mortgage Refinancings Surge, Banks Struggle - CNBC.com
 Bloomberg | As Mortgage Refinancings Surge, Banks Struggle CNBC.com Applications to refinance jumped 9.4 percent last week, seasonally adjusted, according to the Mortgage Bankers Association. Record low interest rates on the thirty-year fixed, averaging 4.05 percent, are only adding fuel to the fire. Feds Expand Mortgage Loan Modification Eligibility Under HARP HARP Refi May Delay PMI Cancellation New HARP Could Help Up to 6.7 Million |