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Fixed Rate Home Mortgage Loan Options

January 11th, 2008    Subscribe To Our Feed

Fixed Rate Mortgage Loans

Fixed rate mortgage loans are for consumers who want financial consistency and stability. Your interest rate will not change over the life of the loan, unlike other adjustable mortgage loans that change in accordance with a market index. There are many fixed rate mortgage options available and several of the most common ones are listed below:

1. New Home Loan

Your family has found the perfect home and now it is time to finder a lender. LCD will help you figure out how much you can afford by calculating your debt and other monthly expenses and subtracting them from your gross income. By submitting our quick and easy application, one of our mortgage specialists will be in contact with you to discuss which option is best for you.

2. Refinance Your Current Mortgage

Refinancing allows homeowners to pay off an existing home loan with the proceeds of another loan using the same property as collateral. These loans are often easy to obtain and offer substantial savings to most homeowners by offering a lower rate that will in turn lead to lower monthly payments. Also, if you include debt consolidation, you can save even more money on your monthly bills by disposing of those high interest credit cards, student loans and/or car loans. To find out if you qualify for fixed rate refinancing, simply fill out our online mortgage application or give us a call.

3. Second Mortgage Loans / Home Equity Loans

Second Mortgages (also known as home equity loans) are secured against the same property as your primary mortgage and are based on the amount of equity (the difference between the market value of the property and any outstanding loan balance) you have. For example, if you own a home worth $100,000, and it does not have a lien (a form of security interest placed over real estate to secure the payment of a loan) on it, you may be eligible to take an equity loan at an 80% loan to value ratio (LTV), or $80,000 in cash in exchange for a lien on your home. If you have two properties, you can try to use the equity in both. Your household income could also determine how much money you will qualify for in comparison to the amount of equity you have on your home.

Fixed rate mortgages can be beneficial in many ways and are great for consumers who rely on a fixed income because there are no surprises with the monthly payments. Locking in a fixed rate can offer substantial savings over an adjustable rate mortgage, especially in times when the market index is high. LCD offers a variety of programs for our customers looking for a fixed rate and we offer a variety of loan terms to fit your needs.

We highly suggest you seek the advice of a qualified financial consultant before deciding on a fixed rate mortgage loan. A professional consultant is always available at Loan Choice Direct, so please call us (1-888-523-8523) today to find the best solution for your needs.

You can also apply with our quick and easy application and one of our financial consultants will get in touch with you shortly.

Martin Hayes is a Customer Service Specialist with Loan Choice Direct.

For mortgage refinance help including many more articles like this one, please head over to http://www.loanchoicedirect.com to receive your free mortgage refinance quote.

What is a Home Equity Loan?

October 6th, 2007    Subscribe To Our Feed

What is a home equity loan? A home equity loan is the one time lump sum you borrowed and intend to pay each month for over a set amount of time, using your home as collateral.

Let me explain in detail. First let me identify the considerable factors involve in home equity loans. Foremost is the collateral. The property you set as a guarantee that you will pay you debt or loan is referred as collateral. The dictionary defines collateral as an acceptable property guaranteed as a security pledge against the performance of an obligation. If you fail to repay the debt, the equity lender can take your collateral and sell it to regain its money back. One example of such is through public auction, where the homeowner has the right to acquire it back first among other bidders. If the last bid can’t sustain to the standing balance of the existing payable, still the creditor has the rights to decline as it would then be a loss on the part of the creditor.

Second significant factor is the equity. Equity is defined as the residual value of a property beyond any mortgage. So exactly, the value is given on how much you have paid for and how much is left standing on mortgage, plus how much is the present value of the house (could be a lot if included in the terms). The difference total would define as the home’s equity.

Rudimentary speaking, as you apply for a home equity loan the bank rate surveyor checks your property (existing market rates). The property would then stand as the collateral. When the worth of the collateral is identified, the existing mortgage balance is then subtracted from the collateral value. The difference would then be the actual home equity loan.

Going back to our first definition, home equity loan is a one time lump sum you borrowed and pay each month. It has fixed interest rates and you pay fixed sum every month. For the duration of the contract, you are not allowed to make another loan until the balance is repaid.

For illustration, let us say that I bought a property worth $500,000 by the seaside. The area was quite uninhabited the time of my purchase in 1995. I made a down payment of $100,000 and left $400,000 on mortgage. Over the next five years, with the monthly payments I made, I already got $250,000 paid but the house worth had risen to $600,000. Still I have the remaining mortgage debt of $250,000, but when I checked the Home Equity Loan Status I found it I have a $350,000 credit value. It’s $600,000 minus the standing $250,000.

 

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