Home  Mortgages Making Sense of Homeloans
|
|
Making Sense of Homeloans |
|
|
|
Written by TomMartens
|
|
Monday, 25 January 2010 |
|
Home loans are more commonly referred to as a mortgage and they are utilized to purchase a home or property. Home loans are paid over a set period of time in monthly installments.
by TomMartens
Home loans are more commonly referred to as a mortgage and they are utilized to purchase a home or property. Home loans are paid over a set period of time in monthly installments.
Essentially home loans are offered in four major types. The most popular, especially among home owners is a fixed rate home loan. A fixed rate loan, like it sounds, retains the same interest over the term of the loan. Fixed rate loans usually last between 15-30 years, are low risk, protected under inflation, and easier to budget.
Adjustable rate home loans, unlike fixed rate home loans, adjust the interest rate over an initial period (between a few months and few years). Adjustable interest rates begin high during the initial period and slowly reduce in rate.
Balloon home loans differ from the two, as the monthly payments are based on a 30 year amortization schedule, however the entire home loan balance is due at the end of the loan?s term (between five and seven years).
Reverse mortgage loans are a new type of loan appealing to older homeowner especially those nearing retirement. In a reverse mortgage loan, money is paid to the owner instead of charged. The owner repays the mortgage when he or she decides to sell the home or passes away.
A down payment is required when getting a home loan. Depending on the type of home loan, the required down payment is usually between three percent and 20 percent of the home?s total cost. The buyer?s credit history, income and the home?s cost can also influence the amount of down payment required. Anyone who puts down less than 20 percent is required to carry private mortgage insurance (PMI) on their home loan. This protects the bank if the home owner defaults on the home loan.
The buyer will also have to pay closing costs on their home loan. These are usually three to seven percent of the home?s cost and include points, taxes, title insurance, financing and other settlement costs. You can negotiate with your lender to try and keep your closing costs down. Some sellers also pay the closing costs for the buyer as part of the home loan deal. Ask your home loan provider for details.
About the Author:
Tom Martens is the content coordinator for South Arica?s leading Homeloans portal which amongst others offers Bond origination services for all major banks.
From the Webmaster:
"Having the opportunity to share my hobbies and interests with so many people around the world gives me great satisfaction. As a bonus, I blog and produce websites about topics that interest me and receive ad revenue from the websites and Blogs."
You can live like this too. Get your domain name and set up a blog on your favorite place or topic. No come-ons. No "Get-Rich-Quick" promises. The results are worth the time and effort needed to build a REAL business.You can start your first or your fiftieth Blog or website to build long- term, ever-growing profits that can take you where you want to go.
For less than $10 dollars a year for a domain name and $3.95 a month for basic blog hosting you can start to earn from your hobby or interest.
To begin, Click here to sign up for a domain name and Blog hosting .
Or, Click here to learn more about starting a blog or website for profit.
|
|
