| |
| |
|
|
|
Save This Page Links 
allspectrum.info Link exchange submission form: The World's Most Dangerous Mortgage
Home prices have reached record levels, and in many parts of the country, homes have become nearly unaffordable. Real estate has replaced the tech stocks of the late 1990's as the hot investment, and everyone has sold their stocks and jumped into investment property. Real estate prices have increased at a far greater rate than salaries, and the lending industry has attempted to solve this problem by introducing a tremendous number of mortgage options for borrowers who barely capable of purchasing a home. Most of these loan types feature adjustable interest rates and minimum down payments. One of these, the option ARM, is the most dangerous type of loan ever introduced. Borrowers who are considering an option ARM should be aware that this loan could leave them with a loan that is worth far more than the home it's used to buy and with a loan that he or she cannot afford to pay. The option ARM is not for the squeamish. So what, exactly, is an option ARM? An option ARM is a mortgage with an adjustable interest rate that typically gives the borrower four different payment choices each month. The first choice is based on a 30-year amortization table; the second on a 15-year amortization table. These would correspond to payments for adjustable-rate 30 and 15 year mortgages, respectively. The third choice is an interest-only payment, which pays the interest that accrues during the month but pays nothing towards reducing the loan amount. The fourth choice, the one that makes this loan so dangerous, is called the "minimum payment." The minimum payment is calculated upon the first month's interest rate, which is usually a very low "teaser" rate that can be as low as 1-2%. Most borrowers with an option ARM opt to pay the minimum payment each month, and that's where the trouble comes in. The loan carries and adjustable interest rate, and this rate can adjust as often as every month. If the borrower is paying only the minimum payment, then he or she isn't even paying enough to cover that month's interest on the loan. What happens then? The unpaid interest that has accrued is added to the loan principal. The principal can actually grow larger, and as interest due is calculated on the loan principal, the interest due will increase, as well. Interest rates are currently near all-time lows and are sure to increase. A buyer who continues to make minimum payments on an option ARM will find that the principal on the loan is actually increasing over time! This is known as negative amortization. In a negative amortization situation, only bad things can happen. The lender can require refinancing under certain conditions stated in the loan agreement. The buyer may find himself unable to pay the loan and may have to default. And the lender could find himself holding a note that is worth far more than the house that it represents. The option ARM is a loan that is best suited to investors and homeowners who only intend to keep the home for a short time. It is not a good choice for anyone who may be using it to buy more home than he or she can afford. Unfortunately, that describes a lot of buyers who are taking out this type of loan. Anyone who is considering a home purchase should be very careful if this type of loan is offered, as it could leave you both bankrupt and homeless. ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to personal bankruptcy, debt consolidation and credit counseling, and HomeEquityHelp.com, a site devoted to information regarding mortgages and home equity loans.
MORE RESOURCES:
|
|
|
|
RELATED ARTICLES
RobSells4You.comSan Francisco Bay Area Foreclosure Bank REO property links Fremont Bank Owned Real Estate for sale East Palo Alto Bank owned properties for sale Hayward Bank owned properties for sale Mortgage Broker Can Help You Save Thousands Mortgage Loan Most Bankers Wont Give Free Home Equity Loan Information Understanding UK Bridging Finance Mortgage Basics for First Time Home Buyers How To Get a Mortgage If You're Self-Employed Home Mortgage Interest Rates- How to Compare Bad Credit? Qualify Yourself For A Zero Down Mortgage Loan - Mortgage-Refinance The Power of a Home Equity Loan to Pay Down Debt - Mortgage-Refinance Bad Credit? Qualify Yourself For A Zero Down Mortgage Loan - Mortgage-Refinance Top 10 Things to Consider on Home Loans - Mortgage-Refinance Online Mortgages in 5 Easy Steps! Mortgage- For Those Twilight Years - Mortgage-Refinance Biweekly Equity Acceleration Options For Rising Interest Rates Debt Elimination in 5 to 7 years Use of Your Home Equity Line of Credit Home Equity Loan or Home Equity Line of Credit? Gearing Up for Bad Credit Mortgages 101 Your Home Equity Loan Checklist Home Loans 30-year, Fixed-rate Mortgage Thieves Use Identity Theft to Steal Your Equity Reasonable Capital Growth with Financial Obligation What is a Buy To Let Mortgage? What is a Self-Certification Mortgage? Refinancing Your Home Mortgage Loan With Bad Credit Things to Watch Out for When Choosing a Mortgage Company Refinance Your Second Mortgage - Save Money Preventing Foreclosure Proceedings and Understanding Your Options Obtaining a Home Equity Loan Online Comparing The True Cost Of Obtaining A Home Loan
Making Sense of Mortgage Speak VA Loans, A Gift from Uncle Sam Uncle Sam has a gift for the men and women who serve our country. It is the VA loan. Find the Best Mortgage Company If you do not wish to commit to living in one place for at least a few years, then owning a house is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner. Home Loans and Mortgages - Tips to Avoid Foreclosure Today's real estate market is a volatile one; prices are at record levels and Interest rates are favorable, but foreclosures are increasing. Wages haven't kept up with home prices and some buyers who had to stretch to find a way to obtain a mortgage in the first place are having trouble making their payments. Home Loans - Lenders Continue to Offer High-Risk Loans Home prices in the Untied States continue to soar, and the remarkable run of real estate as the "must have" investment continues. The median price of a new home, which only recently crossed the $200,000 barrier, is now $215,000. Consolidate Debt With A Home Equity Loan If you are a home owner who is having to borrow from Peter to pay Paul due to a mounting debt load, a debt consolidation home equity loan may be the answer. A debt consolidation loan will allow you to consolidate your high interest credit card and consumer loans into one low rate, affordable monthly payment. Should You Choose to Refinance? Refinancing has become a valid option for many individuals with high interest rates on their mortgage. Refinancing is essentially a replacement loan, with a different lender and (hopefully) a lower interest rate. How To Save Thousands in Interest on Your Home Mortgage! So you have a mortgage on your home or planning to get one? Here's something to consider if you want to reduce your interest payment and save on thousands of dollars. Consider going in for a bi-weekly mortgage payment plan. How to Get the Best Mortgage This is a guide on how to get the best mortgage deal. Do not rush into the first offer that is made to you even if you are in a hurry for a mortgage. How to Secure the Best Mortgage Deal and Save Yourself Thousands in Interest When you consider that the average home owner will pay out far more in interest over the lifetime of their mortgage than their home actually cost in the first place, you can see why working to secure yourself the best possible mortgage deal now could save you tens of thousands of dollars in interest over the 25 - 30 year lifetime of your home loan.For the majority of us our house is the single most important and expensive purchase we ever make! Because this is the case we invest a lot of time and effort into finding the perfect property in the most ideal location, however few of us invest the time and effort we should into researching and securing the best possible finance method for purchasing our home. Thinking About Refinancing Your Loan? Refinancing your home or property is a big decision that could drastically affect your financial future, for the good or the bad, depending on how smart you go about the process. Take the time to explore all of the different refinancing options you have available to you. This Secret Weapon Will Eanble You To Close Up To 200% more Home Remodel Sales Many Homeowners are not aware of all the options that are available to them when it comes to Home Loans. As a Home Remodeling Specialist you have a very powerful sales tool that most of your competitors don't even know exists. Home Equity Lines of Credit - the Basics A Home equity line of credit is a loan which is similar to a credit card. These often have a very low interest rate (In most cases even lower than home equity loans). Flexible Mortgages - Offering Relief from the Fixed Mortgage A pension mortgage may seem lucrative at the first sight. However, they seldom are, if the customers who took pension mortgage are to be believed. Why Refinance Back into a 30-Year Loan? One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. 10 Things to Look for in a Home-Equity Line of Credit If you are a homeowner, you've probably received offers to apply for a home equity line of credit (HELOC). Handled with care, home equity credit lines can be an excellent way to improve financial flexibility, provide readily available cash reserves for emergencies, or pay for large expenses (like college tuition or home improvements) that have irregular payment schedules. Buying A Home After Bankruptcy - Get A Mortgage Loan After Bankruptcy If you have a recent bankruptcy on your credit and are looking to get financing for a home, there is hope. Buying a home with bad credit will just put more emphasis on the other two factors needed to get a mortgage loan, which are; income verification and a down payment. Home Equity Loans Can Provide Cash in a Hurry Think About the Long Term. Estimate how long you expect to stay in your current house. Guide to Flexible Mortgages Outlined below is a useful guide to flexible mortgages. Flexible mortgages are also known as Australian Mortgages because they usually feature something which is common in Australia - interest recalculation on a daily basis. Home Equity Loans - There's Gold In That There House To paraphrase an old familiar quote that goes "there's gold in them there hills, you could say, there's gold in that house. As Martha Stewart would say, "it's a good thing".
|
Send me One Million FREE Guaranteed Visitors
| http://www.eastbaydish.com/ |
http://searchenginez.com/submit.html http://www.babies-toddler.acneadvocate.com/index.php More Articles from Babies & Toddlers Information: http://beauty.acneadvocate.com/index.php More Articles from Beauty Information: http://www.blogging-rss.acneadvocate.com/index.php More Articles from Blogging & RSS Information: http://www.book-marketing.acneadvocate.com/index.php More Articles from Book Marketing Information: http://www.book-reviews.acneadvocate.com/index.phpMore More Articles from Book Marketing Information: http://www.branding.acneadvocate.com/ More Articles from Branding Information: http://allspectrum.info/babies_.htm http://www.babies-toddler.acneadvocate.com/ http://www.breast-cancer.acneadvocate.com/ More Articles from Breast Cancer Information: http://www.broadband-internet.acneadvocate.com/ More Articles from Broadband Internet Information: http://www.build-muscle.acneadvocate.com/ More Articles from Muscle Building Information: http://allspectrum.info/mangosteen__manggesten.htm http://www.e-books.acneadvocate.com/ More Articles from E-Book Information: http://www.ecommerce.acneadvocate.com/site-map.php More Articles from E-Book Information: http://www.elder-care.acneadvocate.com/ More Articles from Elder Care Information: Allspectrum Elder Care Information -- http://www.email-marketing.acneadvocate.com/site-map.php More Articles from Email Marketing Information: http://www.entrepreneurialism.acneadvocate.com/ More Articles from Entrepreneurialism Information: http://www.entrepreneurialism.acneadvocate.com/site-map.php http://www.ethics.acneadvocate.com/site-map.php More Articles from Ethics Information: http://www.exercise.acneadvocate.com/ More Articles from Exercise Information: http://www.exercise.acneadvocate.com/site-map.php http://www.ezine-publishing.acneadvocate.com/ More Articles from Ezine Publishing Information: http://www.fashion-style.acneadvocate.com/ More Articles from Fashion & Style Information: http://www.fitness-equipment.acneadvocate.com/index.php More Articles from Fitness Equipment Information: http://www.forums.acneadvocate.com/ More Articles from Forum Information: http://www.games.acneadvocate.com/ More Articles from Game Information: http://www.goal-setting.acneadvocate.com/ More Articles from Goal Setting Information: http://www.golf.acneadvocate.com/ More Articles from Golf Information: http://www.grief-loss.acneadvocate.com/ More Articles from Grief & Loss Information: http://www.hair-loss.acneadvocate.com/ More Articles from Hair Loss Information: http://www.happiness.acneadvocate.com/index.php More Articles from Happiness Information: http://www.hardware.acneadvocate.com/index.php More Articles from Hardware Information: http://www.holidays.acneadvocate.com/index.php More Articles from Holidays Information: http://www.home-improvement.acneadvocate.com/ More Articles from Home Improvement Information: |
