When shopping for a home loan, you’re likely to encounter two interest rate structures — fixed-rate and adjustable-rate mortgages (ARMs). Understanding the similarities, differences, benefits and drawbacks between these two different types of mortgages can help you choose the best option for ...
While fixed-rate mortgages are by far the most common type of home loan. It’s also the easiest to understand. While the proportion of your loan that is amortized will increase each month (versus interest on the balance), you still pay the same amount every month. Your interest rate is ...
It’s a comparison game. Investors always search for the highest performing investment. If stocks are comparatively strong, loans must have higher interest rates to compete and attract investors on the secondary market. When bond and stock yields are low, interest rates can be low, to keep ...
lenders have to have a hook to get borrowers interested. That hook often comes in the form of a sexy teaser rate. A teaser rate is the initial interest rate you will pay for the loan. For example, right now, I was able to find a number of ARM’s with a teaser rate in the 2.7%...
An adjustable rate mortgage is thebest type of mortgage to getfor most people. Why pay more mortgage expense than you have to? Big Difference Between Neg Am Loan And ARM Please not there is a BIG difference between a negative amortization loan and a adjustable rate mortgage. A Neg...
The loan to secondary market to investor cycle has had the strongest affect onmortgage ratesin the US in the past five years. When investor demand dries up, the entire chain is affected with lower interest rates being the final result. ...
Falling Market Interest Rate→ The lender benefits because the interest rate on the loan is lower than the current market rate. Furthermore, the initial monthly payments on fixed-rate mortgages tend to be higher in comparison to mortgages with variable pricing since interest is charged based on ...