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5 Myths About Mortgage Points
Mortgage points are one of the most misunderstood concepts in
the mortgage world. On the surface, points are scary, and many
consumers equate points with mortgage scams and unnecessary junk
fees. However, nothing could be further from the...
Home Mortgage Refinancing - should I refinance?
Why should I refinance and when does it pay to do so?
Refinancing can be worthwhile, but it does not make good financial sense for everyone. A general role of thumb is that refinancing becomes worth your while if the current interest rate on your...
Home Mortgage Refinancing - Things To Consider When Looking To Get Cash Out On A Refinance
When you refinance your home mortgage, lenders often tempt you with the option of cashing out part of your home’s equity. Cash at a comparably low interest rate may seem like a good option, but make sure you will financially benefit from it first. ...
Refinancing After Bankruptcy - Tips On Refinancing Your Home Mortgage After A Bankruptcy
Have you filed bankruptcy since you bought your home? Are you
now looking to take advantage of lower interest rates by
refinancing your home? You will probably soon realize how much
more difficult it is to finance or refinance a home after...
WEALTH CREATION AND MORTGAGE PLANNING
by Jeff Blovits , Franklin Bank SSB p. 898-5656 copyright, Franklin Bank 2004 for more click here What if I were to tell you that almost everything you have been told about what to do with your home has been absolutely wrong and that one of the...
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Do You Know the Pros and Cons of Interest Only Mortgage?
Has any lender ever told you the Interest Only Mortgage was like a double-edged sword? It can help you achieve your dream of owning a home more easily, but it also can create a financial hardship for those who don’t fully understand what’s involved.
In the attempt to lure potential homebuyers, the lenders have come up with various creative mortgage options. One of the more popular offers is the Interest Only Mortgage. As the name implies, with Interest Only Mortgage, the monthly payment will be applied to the interest portion only. In a traditional mortgage option, the monthly payment applies to both interest and principal, even though, in the early years, interest portion is much more than the amount paid to the principal.
Interest Only Mortgage has become more popular to new homebuyers for the following reasons:
· Since the monthly payment is low, the savings can be used for personal spending, paying off higher
interest debts, buying furniture for the new house, or even investing.
· The interest paid to the Interest Only Mortgage is still eligible for tax write-off at the end of the year.
· Some Interest Only Mortgages allow you to make a principal payment during the interest only period. This helps reduce your balance the following month which lowers your payment further.
However, Interest Only Mortgage is not for everyone.
· Beware a potential prepayment penalty for the first 1-3 years imposed by some lenders.
· You have to play the “catch up game” once you begin to pay the principal. The amount is much more since you didn’t pay during the interest only payment years.
· Think twice before committing to an Interest Only Mortgage if it’s the only way for you to afford a house.
About the Author
How to pay off your mortgage in 10 years or less and build lots of equity from your home?
www.1a-refinance-home.com
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