May 2007
Monthly Archive
31 May 2007 06:55 am
The 10 must-know ARM terms explained for you.
| Adjustable rate mortgages (ARMs) can be difficult to understand with a language of their own. So learn your cap, index and reset terms. Here are 10 of the most important terms. The first is “Cap” which is the top limit on the amount the interest rate can increase during a certain period of an adjustable-rate mortgage, or ARM. Every ARM has two caps: a periodic cap, which limits the periodic changes to the interest allowed in the loan agreement, and a lifetime cap, which governs the total increase that can be imposed during the life of the loan. |
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search for : adjustable-rate mortgage
30 May 2007 06:30 am
Explaining your adjustable-rate mortgage indexes
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These days, approximately one in five mortgage applicants opts for an adjustable-rate mortgage (ARM). The element of an ARM least easily understood is the index. With an ARM, two main factors determine the rate you pay: the index and the margin. The index is a rate set by market forces and published by a neutral third party. The margin is an agreed-upon number of percentage points that is added to the index to determine your rate. A thorough mortgage shopper will run across a bunch of acronyms to denote various ARM indexes, such as COFI, LIBOR, MAT and CMT. Each index responds at its own peculiar pace to the economy’s ups and downs. |
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search for : adjustable-rate mortgage, ARM
29 May 2007 06:26 am
Considering cash-out refinancing?
| Homeowners today treat their houses like piggy banks, readily transforming their equity into cash and credit. You have home equity loans (still sometimes called second mortgages), home equity lines of credit and reverse mortgages. Then there’s cash-out refinancing. It usually doesn’t make sense to refinance a higher amount at a higher rate. If your current mortgage is at a lower interest rate than you could get now by refinancing, it’s probably better to get a home equity loan. |
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search for : piggy bank, home equity loans, second mortgages
28 May 2007 06:24 am
Understanding Title Insurance
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Title insurance — for a lot of homebuyers — is a mystery. You go to settlement, and among the many items you have to pay is a large sum of money for Owners and Lenders Title Insurance. You pay it, primarily because the title attorney tells you that you will not get your loan unless the lender has adequate insurance. Several months later, your insurance policy is mailed to you by the settlement company. You tuck it away with the rest of your home-purchase documents, and then forget about it. |
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search for : Title insurance, Owners and Lenders Title Insurance, settlement company
27 May 2007 07:53 am
Understanding why interest rates are going up
| Two weeks ago, the 10-year T-note traded under 4.65 percent; yesterday it touched 4.9 percent. Mortgages — as always, following the 10-year in lockstep — were trying to break 6.25 percent going down; now they are trying to hold 6.5 percent while going up. The case for holding is poor. Rates are rising because the global economy is taking off. Forget all the thoughts of drag from concerted tightening by central banks, Europe to top out, America to slide near recession on weak housing and manufacturing, Asian exports to be undercut by American weakness. |
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search for : 10-year T-note
26 May 2007 06:14 am
Understanding why new homes are better than 30 years ago
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New houses are much more durable. Modern copper water pipes, for example, will easily last the life of the structure, which certainly can’t be said for the rust-prone galvanized steel pipe found in most older homes. And the “engineered lumber” used in today’s houses — much of it made from mill waste that used to be thrown out or burned — is stronger pound for pound than the solid-sawn lumber used by builders of yore. Even modern glass is better: While the French doors in old houses contain plain glass that shatters into dagger-like shards, the tempered glass required in modern doors crumbles into harmless little granules when broken. |
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search for : engineered lumber, French doors
25 May 2007 07:12 am
Be Wary Of Foreclosure Rescues
| Nationwide, the number of foreclosures is up more than 60 percent compared to this same time last year. It’s not quite a crisis in our area, but there are many folks facing the possibility of losing their home. That can leave them vulnerable and promises of foreclosure rescue often wind up leaving them in ruins. For a family that doesn’t want to be named, though the answer came with a knock at the door and a company willing to step in. They claim the company offered to talk to the mortgage company for them, take over ownership of the home and leave the mortgage in their name — then rent the home back to them at a price that was lower than their mortgage. The homeowners would also have the chance to re-buy the home after a couple of years. |
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search for : foreclosures, foreclosure rescue
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