MORTGAGE RATES » Home Mortgage Loan News

Nothing says safety and security like home. Buying and owning and maintaining a home is central to the American Dream, and just about everyone wants, at some point, to own one. It's clearly the ideal place to settle down and raise a family. Given the current economic collapse, with its epicenter in the real estate industry, now is a very, very good time to buy.

If you're in the process of buying a home, or are thinking about it, then you're going to need a mortgage. One term that is critical to understanding how mortgages work is the "point." Understanding points can help you evaluate mortgages better in order to find the one that suits you best.

What Are Points?

Points are basically fees that you pay in order to get a mortgage. They are costs on top of the actual mortgage itself, and they are a reflection of the size of the mortgage. A point is 1 percent of the total loan amount. So, if you're getting a home mortgage loan for $100,000, one point is $1,000. Points are used in determining two further aspects of the loan process: loan origination points and discount points.

What Are Loan Origination Points?

Loan origination points are points charged by the bank, credit union, or other lending institution which is lending you your mortgage loan.

Again, mortgage points are distinct from the loan itself. When you pay your points you are still going to be paying interest on your mortgage loan, with interest. If you can, avoid a loan offer that has origination points attached to it.

What Are Discount Points?

Discount points are points that you can prepay. The more points you prepay, the lower your interest rate will be. So, you can pay these discount points up front in order to get a lower interest rate on your loan.

To learn more about points, origination points, discount points and other terms relating to buying a home and mortgages, be sure to speak with a financial adviser to get the best advice and the full story.

The perfect storm of economic chaos is creating the best buyer's market for home shoppers in ages. People can find exactly what they want at bargain basement prices and mortgage rates at historic lows.

Even lower than the rates for traditional fixed rate mortgages are the introductory rates that come courtesy of adjustable rate mortgages. However, before signing on the dotted line committing to an ARM it is important to understand the full breadth of adjustable rate mortgages and how getting one may be for a lot longer then you initially anticipated.

How Do Adjustable Rate Mortgages Work?

Even if you plan on taking advantage of the low interest rates provided by ARMs until the rate resets, you need to know how the mortgage is actually constructed. ARMs are set up so that a bigger portion of the payments for the first five years of the loan go toward paying off the interest and less goes toward the principal debt. With an ARM you may end up paying five timesmore toward interest than principal during the initial loan period.

After that five year period the ARM rate period expires and the interest rate must be reset. If you are lucky, the interest rates have dropped substantially and you will benefit from being able to take advantage of them. If not, the rates have gone up and you are now in the position to either keep paying off the loan in hopes that you will catch a break during the next reset period or you may choose to refinance with a fixed loan at the higher rate.

How Long Do Adjustable Rate Mortgages Last?

If you choose to to get out of your ARM and into a fixed loan most commonly people choose 30-year fixed rates. When that happens, you are actually extending the life of your mortgage on top of your initial loan, thus you will ow be paying for your home for a total of 35 years. If you decide to refinance your ARM with a similar such loan, the cycle will still be in place and the payment period can extend upwards of 45 years.

The long and short of it, is ARMs are designed to keep feeding this cycle and to make consumers pay more over the long run for the loan. There are some ways to use ARMs to your advantage, but if you plan on staying in your home for the long haul, a traditional 30-year fixed rate mortgage may be best.

Mortgages are a fantastic way for individuals to fund the purchase of the home of their dreams. When responsible individuals save up enough for a down payment and decide to take the plunge into home ownership, they will then be provided with the task of researching a selecting the best mortgage...

If after weighing all the pros and cons, you want to take the plunge and become a first time home buyer, congratulations on your decision!

After making sure you have the down payment and are pre-qualified for a mortgage, the fun process of house hunting can begin.

There are so many housing...

Buying a foreclosed property that is already bank owned is one of the easiest decisions to make. The prices are often below market, there are no truly complicated matters you will have to deal with as the original owner has already moved. However, there are many other stages of foreclosure that...

For most people, buying a home is probably the biggest financial undertaking they will ever undertake.

Before raising a finger to look for the appropriate financing, first time home buyers really need to take the time to review their finances and see how much home they can really afford.

...

People are spending less, saving more, and always on the lookout for ways to cut costs or take advantage of offers and opportunities that could help them save or earn even more money. After all, there's hardly a single American these days who can claim absolute job security.

One way that many...

Making the decision to buy a home can happen at any time. The choice can be triggered by the last fight with your landlord or it can be fueled by the desire to decorate your home without limitation.

However, the journey from Point A to Point B can be a long and winding road especially when...

Are you thinking about refinancing your mortgage loan? You are not alone -- the two most chaotic sectors of the American economy are the real estate market and the banking and financial services sector, and one point where they intersect quite prominently is the home mortgage.

That means that...

Looking for a home to buy has never been more enticing. Prices are rock bottom, mortgage rates are low, there is government incentive money for first time home buyers and modern technology can make the whole process a breeze.

Home buyers can easily research their next property by checking out...