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Mortgage Rates
Understanding mortgage rates and their indexes will allow you to make an educated choice when taking on a loan. Apply online to take advantage of low mortgage rates and contact up to four lenders about your new mortgage.
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Imperfect Credit
An adjustable rate mortgage is often chosen by borrowers with damaged credit
because of the following benefits:
- Lenient qualifying standards
- Low introductory rates
- Varied options for adjustment periods, allowing your rate to remain the
same for anywhere from one year to five years.
- Rate ceilings to keep your interest rate from rising to high
- Lower initial payments generally prompt lenders to approve larger loans
- When interest rate indexes fall, an adjustable rate falls as well, unlike
a fixed rate, which does not allow the borrower to benefit from dropping rates
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Home Construction Loans
Borrowers should be careful to ensure that the repayment period does not begin until after construction has finished, and also that the loan agreement covers the entire cost of materials, labor and land.
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Rates
It can be very helpful to understand interest rates and indexes if you are interested in finding a loan, especially if you are looking in to adjustable rate loans. Apply online today and contact a lender about current interest rates and the effect they will have on your loan.
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Mortgage Calc
Primarily, a mortgage calc gives you your expected monthly payment, but it also shows you how a slight change can affect the repayment of your loan. A loan of $150,000 with a term of 30 years and an interest rate of 7% will have a monthly payment of $997. The calculator may also tell you that the total interest on such a loan would be $209,263. However, if you change the interest rate to 8%, the monthly payment increases to $1,100 and the interest increases to $246,232. This would mean that 1% made a difference of $103 every month for thirty years and a total of nearly $37,000 in payment of interest. Small changes in loan terms can add up, which is an especially important consideration for anyone looking in to refinancing.
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Mortgage Refiancing
Also, homeowners with an adjustable rate mortgage can use refinancing as an opportunity to switch to a fixed rate. If you are uncomfortable with the risk of an adjustable rate and want to get a loan with a fixed rate while interest rates are low, refinancing your mortgage now would give you a great opportunity to do so.
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Refinancing Your Home
However, if your original loan has a high rate or an unappealing term, refinancing
can be the perfect opportunity to save money and reduce monthly payments. If
you are a homeowner who:
- Plans to remain at his or her home for the next three years
- Would like to change an adjustable rate mortgage or establish a lower rate
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- Has not damaged your credit since your original loan
- Wants to take advantage of lower interest rates
- Needs money for home repairs or improvement
- Needs money for college tuition or other large purchases
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