Mortgage Security not That Costly

Author: The House Team Of Mortgage Intellingence

Forget everything you thought you knew about the benefits of taking a variable-rate mortgage instead of locking in for the long term.


A new study suggests the security of a five-year mortgage costs little or nothing beyond a riskier variable-rate mortgage, providing you get a jumbo-sized rate discount.


"Interest costs on discounted closed five-year mortgages have been close to, and often lower than, those of variable-rate mortgages since late 1996," senior Canada Mortgage and Housing Corp. economist Ali Manouchehri writes in the study.
Homeowners have made variable-rate mortgages hugely popular in the past few years in the belief that you can save on interest costs by pegging your mortgage rate to your lender's prime lending rate. As the prime rises, or as has generally happened in the past few years, fallen, so goes your mortgage rate.



The prime rate at the major banks is now 4.5 per cent, while the posted five-year rate at the big banks is 6.15 per cent. In just one year, the variable-rate choice would save you about $1,700 on monthly payments toward a $150,000 mortgage amortized over 25 years (assuming a level prime rate).





Historically, you would also have saved a lot. The CMHC study shows that five-year mortgages taken out from 1993 through 1998 would have cost anywhere from $50,000 to $5,000 in additional interest paid over the term of the loan (the example is based on a $100,000 mortgage amortized over 25 years).


The flaw with this analysis is that it doesn't reflect real-world mortgage pricing. These days, very few people take out a mortgage without a sizable discount off the posted rates at major banks.



For that reason, the CMHC's Mr. Manouchehri decided to compare discounted five-year mortgages with discounted variable-rate mortgages. Incidentally, five years is the most popular term by far for fixed-rate mortgages at about 59 per cent of the total.


The size of the discounts Mr. Manouchehri applied was based on the difference between posted major bank rates and the best deals available from other lenders. For five-year mortgages, he used a discount of 1.25 of a percentage point; for variable-rate mortgages, it was 0.4 of a point off prime.

For five-year mortgages taken out between 1993 and mid-1996, the five-year mortgage was costlier in terms of interest costs. Since then, however, variable-rate mortgages have generally been a little bit more expensive.


Obviously, there's nothing in this study that decides the fixed-rate versus variable-rate debate once and for all.


In fact, the CMHC study may just confuse anyone who recalls some research done for Manulife Financial back in 2000 by York University finance professor Moshe Milevsky. His research found that the extra interest charged on a five-year mortgage would have cost $20,000 on average between 1950 and 2000 for a $100,000 mortgage amortized over 15 years.





To make some sense of the variable-rate versus five-year question, let's go back to the CMHC study.





It shows that five-year mortgages, discounted or otherwise, were especially bad choices for a three-year period starting in mid-1993. Rates were high for a while back then, but they subsequently fell.





You were a spectator to these rate declines if you were stuck in a five-year mortgage, while people in variable-rate mortgages would have benefited almost immediately.





It's a different world now, though. Five-year mortgage rates are close to a 50-year low, which suggests they're far more likely to rise over their term than fall.





So what's the best choice here, variable-rate or five-year fixed rate? People who want to pay rock-bottom mortgage rates for as long as possible will probably still want a variable-rate mortgage. Remember, you can lock this sort of mortgage into a fixed term without penalty in most cases.





The case for the five-year term looks almost as strong, though. First, the CMHC study tells us there may not be a significant cost to locking your mortgage in for five years, and you might even save a little over a variable-rate mortgage.





Second, the likelihood of higher rates in the years to come would suggest that this is a good time to lock in.





If you had a variable-rate mortgage discounted to 4 per cent, the prime would have to go up by 0.85 of a percentage point to equal the current five-year rate. That's not a lot of ground to cover in the span of 12 to 18 months when the economy is doing well.





Arguably, the variable-rate versus fixed-rate debate is all about risks and rewards. Right now, the five-year option offers much less risk, and almost as much reward.

Article Source: http://www.articlesbase.com/mortgage-articles/mortgage-security-not-that-costly-91034.html

About the Author:

The House Team is commited to providing quality information to help people make informed decisions about their mortgage financing needs.



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Comparing Colorado Jumbo and Conforming Mortgages

Author: 1st American Mortgage

Comparing Colorado Jumbo and Conforming Mortgages

There are differences between a jumbo Colorado mortgage and a conforming Colorado mortgage and learning what those are will inform you about which Denver mortgage is the best for you. Information about your mortgage will help you as a customer, so you will be able to work out a fair deal with a lender when you are in the market for a Denver mortgage.





Jumbo & Conforming Colorado Mortgages Defined

There are two companies, named Fannie Mae and Freddie Mac that are empowered by the government to buy mortgages. Because of how they were created, Freddie Mac and Fannie Mae make the standards for the mortgage business. So they have decided what makes a conforming loan and what makes a jumbo loan.



The difference between a conforming loan and a jumbo loan is the size of the loan you are looking for. A conforming loan is the smaller of the two. The most expensive loans are called jumbo mortgages.




The boundary between the two different kinds of loans moves from year to year and stems from the mortgage and housing market. The line now for a Denver mortgage and Colorado mortgage to be considered a conforming loan is a price of less than $417,000 for a single family house with a first mortgage and an amount of $208,500 for a second mortgage. Multi-family properties will have higher limits. Any amount above this is officially a jumbo Colorado mortgage. The limit will be different in states outside of Colorado, but these amounts cover all of the state. There will be a change to the limits to Denver and Colorado mortgages because of the stimulus package.


All About Colorado Jumbo Loans


The amount of the loan is the key factor in determining if a Denver mortgages is a jumbo loan. The jumbo mortgage products in Colorado are otherwise just the same as a conforming loan. The loan terms can be changed in many different ways, including fixed rates, adjustable rates, and interest-only programs. All of it will depend on which program you sign up for when getting a Colorado jumbo mortgage loan from a lender





Don’t forget that since the market is so small for jumbo mortgages there will be a tighter rein on the qualifications. This is true of Colorado mortgages as well. Since the borrower is taking out such a large sum, they will have to meet such strict standards such as a higher credit score and lower loan to value ratios.





When you look at the price and the loan amount of the house you are interested in, you will be able to see whether or not you need a jumbo Denver mortgage or a conforming Colorado mortgage. When you know what type of loan you need, you then find a mortgage lender in Colorado who can work with you. As always, it’s best to work with a Denver mortgage lender who has experience making customers happy with their loan selections. The lender will work with you on finding the right home loan option, whether it is a conforming mortgage or a jumbo Colorado mortgage. In the end, you will be connected with the best product for you.





This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans inColorado online mortgage quotes, and rates through his website TrueMortgageQuote.com http://www.truemortgagequote.com).

Article Source: http://www.articlesbase.com/business-articles/comparing-colorado-jumbo-and-conforming-mortgages-386046.html

About the Author:

This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans inColorado online mortgage quotes, and rates through his website TrueMortgageQuote.com http://www.truemortgagequote.com).

All About Denver Adjustable Rate Mortgages

Author: 1st American Mortgage

There has been a lot of talk about adjustable rate mortgages these days. Are they to blame for the housing crunch and the problems that people are facing? Not necessarily. There are still adjustable rate mortgages out there that can be the best options for hopeful Denver home owners. These can be goodDenver mortgage products.





How Does An Adjustable Rate Colorado Mortgage Work?





If you want to understand a Colorado mortgage with an adjustable rate, it is a mortgage which has an interest rate will change at a certain point, depending on other key interest rates rules connected to home lending. During the loan, the adjustable rate Denver mortgages will move up and down and effect the interest paid on the loan.





There will be a period in which the interest rate on a Colorado mortgage product is fixed. After that, the adjustable rate loan (also known as an Adjustable Rate Mortgage, or ARM) will change depending on the current rate (and the terms of the Colorado mortgage deal as well as current market conditions). The fixed rate the loan starts with is usually much lower than a person would have gotten if they had qualified for a fixed-rate loan. So, for a certain amount of time, the rate will be fixed and the payments will be consistent, predictable and very low, but after that period, in sometimes two to five years, the interest rate and mortgage payment will change at set periods of the loan.





Are There Any Adjustable Rate Denver Mortgage Worries?





Of course, there is a risk that goes along with an adjustable rate Denver mortgage, but this is what allows lenders to give borrowers a lower rate at the beginning of the term. This is what makes them different than fixed-rate Colorado mortgages, which may have a higher initial rate.





The risk with the loan comes because what the interest rate will eventually become is unknown at the outset of the loan. So then the mortgage payment becomes equally unpredictable. If you have an adjustable rate Colorado mortgage that goes into its adjustment period, you will see your mortgage payment fluctuate. But there is a ceiling to how much the rate can change and how often the rate can be adjusted.





In order to avoid the risks of an adjustable rate Denver mortgage, the best thing to do is refinance your loan before the end of the fixed-rate period of your loan. Now there is a risk since there is no way to predict when and if and how your loans will adjust. When you refinance your Colorado mortgage, there is a chance your fixed rate will move up.





Positive Aspects of Adjustable Rate Colorado MortgagesThere are some periods in life in which the adjustable rate Denver mortgage could be beneficial to you and your finances. It all depends on your particular situation at the time. Here are some scenarios in which an ARM might work:





• If you plan on selling your home soon





• If you won’t stay in your house for the length of the loan





• If you need to a influx of additional cash-flow





• If you have a low credit score, which won’t allow you to get the best fixed rate. However, you can use the fixed-rate period of the ARM to improve your credit and refinance for a good fixed rate.





• If you have another way out of a mortgage before the rate goes up.





• When you still have good terms and a ceiling on the interest rate.





There are good lenders out there who will be able to work with you in handling your ARM. There are Denver mortgage lenders who have built up a good reputation working with customers to deliver them good mortgage products that won’t be a financial burden.





If you want to discover the advantages of ARM products by working with a Colorado mortgage lender , you need to find someone who has an established business, rather than someone who has not been around a long time and may have more questionable Denver mortgages for sale.





This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans inColorado online mortgage quotes, and rates through his website TrueMortgageQuote.com http://www.truemortgagequote.com).

Article Source: http://www.articlesbase.com/business-articles/all-about-denver-adjustable-rate-mortgages-379365.html

About the Author:

This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans inColorado online mortgage quotes, and rates through his website TrueMortgageQuote.com http://www.truemortgagequote.com).

How to Find Honest Advice About Colorado Mortgages

Author: 1st American Mortgage

It’s safe to say there are many places to find a deal for a Denver mortgage or Colorado mortgages these days. But the mortgage crisis has made things a little more complex. It’s not just about finding the best deal, but finding someone to work with who will give you honest advice and help you get into a mortgage that you can afford. But are there experts out there you can give you that sort of Colorado mortgage advice? Is there someone who will get you into the best Denver mortgage product, while still remaining ethical? The answer is yes.

Watch Out When Colorado Mortgage Experts Offer The World

One of the problems that got so many people into a mortgage mess is that their Denver mortgage expert or Colorado mortgage expert made them an offer that would fix all of their problems. These mortgage experts put customers into deals that just didn’t work out and now people are liable to lose their homes. If you want to get into the right mortgage product now, then you need to look for someone who will look at the Colorado home loans available and tell you the ones you can’t have.

Sounds strange, doesn’t it? But that’s the way you can tell a Denver mortgage lender with credibility from one who is more unethical.

In the recent past, when it seemed like everyone was buying a home, too many Colorado mortgage professionals weren’t being honest with their clients and the result was bad loans that have turned into foreclosures. The lenders involved weren’t looking out for their clients, instead they were just interested in getting them started on a loan which may have been low at first, but now has turned into trouble. Instead, a mortgage pro has to look at what will happen to a customer now and in the future.

How do Ethical Denver Mortgage Professionals Work?

In the midst of this crisis, ethical Denver mortgage professionals are working hard to gain back the reputation lost by bad lenders. Unfortunately, the names of everyone working in the business were hurt by the people who worked on bad loans. It will take hard (and ethical) work to repair that.

If you are a potential customer, then you need to be looking out for the professionals who are out there, coming up Colorado mortgages while fighting to be ethical. They have good products that will help a homeowner and they are working in that person’s best interest. Seek out the Colorado mortgage experts who are client-focused and who have been in business for a long time thanks to that philosophy. You want an expert whose business focuses on:



• Selling reasonably priced Denver mortgage products

• Finding many good options in Colorado mortgages for customers that will last throughout the years

• Making sure the clients remain credit-worthy homeowners

• Putting customer service first, so their business grows thanks to referred and repeat customers

The mortgage crisis may have knocked some bad mortgage providers out of the business, but that doesn’t mean there aren’t still traps for customers. They need to keep looking for reliable home loan experts. The key is the kind of Denver mortgage advice you get and whether it’s honest enough to really tell you what kind of program you can get into. If an offer is too good to be true, it probably is.

This article is written by J.B. of 1st American Mortgage and Loan, LLC, a Colorado mortgage lender who offers access to information on obtaining a Colorado mortgage loan as well as other information on loans in Colorado online mortgage quotes, and rates through his website TrueMortgageQuote.com http://www.truemortgagequote.com).
Article Source: http://www.articlesbase.com/finance-articles/how-to-find-honest-advice-about-colorado-mortgages-374786.html

Affordable Home, Get It From A Best Mortgage Loan

Affordable Home, Get It From A Best Mortgage Loan
By: Eliza Maledevic Ayson

If you are renting a home to live in, you are paying rental fee monthly in order to repeatedly have a place to live in. Are you beginning to feel tired of paying rents? If yes, why don't you stop renting and just pay your own mortgageIndeed, it can be exhausting at time knowing that you are paying with a home that will never be yours whatever you do. If this is your case, it is high time for you to consider getting your own home that you can liberally enhance, improve and beautify unlike with renting, you have to think about your landlord and you must ask for permission first if you wish to enhance the home you are renting.But of course, before fulfilling your dream to have your own home, you have to ensure your credit score first. If you are planning to have your own home, you need to check out your credit report before hand, besides; you can get a free copy once a year. Verify that you have a good credit score, if you have, you can shop around and look for a mortgage.In order for you to get the right mortgage broker, you can go to your family and friends and ask for recommendations; they might have worked with a good mortgage broker. Make sure to perform interview in order to be familiar with the broker better and be assured that you are comfortable working with the person. You can go straight to a lender if you wish to apply for a mortgage, but it is better to go with a mortgage broker since the broker can help you out in getting the best loan you need. Since the mortgage broker has lots of contact to different lenders, he/she can supply you with many options that you can weigh out and you can prefer the one that can suit your needs and position. As the broker offered you with many options, you have to check them all out and ponder them out. If you do not understand something, feel free to ask your broker about it, since a good mortgage broker will see to it that you understand the whole thing and that you'll come up with the right option. Take few of your time weighing them all up; make sure that the one you will choose can suit your needs and you can afford to pay it monthly for quite a few years. Of course, you need to consider your salary and all the expenses that you have, in order for you to detect how much money left that you can afford to pay for a mortgage. Be wish and careful in picking an option, make sure that you can live with it. As soon as you have the option, the mortgage broker will represent you and will be the one who will deal with the lender; the broker will not leave you until the process is done. The broker will answer all the queries of the lender and will help you get the best mortgage loan that you need in getting a home.
Eliza Maledevic Ayson writes for http://Jump2top.com - SEO Company
Article Source: http://www.ArticleBiz.com

Mortgage Brokers Find Alternative Ways to Generate Leads

Mortgage Brokers Find Alternative Ways to Generate Leads
By: Chris Hurney
With all the problems surrounding the mortgage and housing industry those employed in the mortgage industry are now having to fight for a small pool of individuals who are actually taking advantage of the buyers market. Buying a house now is a lot cheaper than it was 2 years ago but getting a good mortgage is a lot harder even if you have perfect credit.The mortgage industry was booming a couple years ago. Everyone was re financing. Leads were abundant and mortgage brokers were living the high life. " I was closing a deal a day," says Randy Gardner. "I was living it up and only calling back the leads who I viewed as worthwhile. Now I am lucky to get a few leads a day. And the quality is very poor."Many direct sales professionals are turning to alternative ways to create leads. Some are even going door to door. Many though now are using voice broadcasting software to create high quality leads on demand. Voice broadcasting has gotten extremely cheap as improvements in communication and technology have improved.James Traina says, " The cost of doing a minute call to someone who might be looking for a mortgage used to be 12 cents, now it is down to 3.9 cent per minute. I can contact 1000 people in ten minutes for about 30 bucks and have 10-15 fresh leads wanting to know more about my offer. It is a must have sales tool for all sales pros."One company that offers this software is Ibuzz Pro. With there software they offer a free do not call list scrubber, 15 million leads to call, and the lowest broadcasting rates in the industry. " Top notch sales pros such as Realtors, mortgage brokers, car salesman, and other leaders are seeing their leads costs decrease by as much as 60%, and their sales increase," says Ibuzz Pro user Chris Hurney.Those struggling to make it in their sales business know that their success is fully dependent on having a constant flow of leads coming in. Organic high quality leads on demand is the way to explode sales. To learn more about how you can do that no matter what sales field you are in go to the website in the resource boxYou can watch a webinar located on the webpage in the resource box right on your computer that will show you how easy the software is to use and how effective it can be to keep you afloat until the next boom comes around.
Learn more about Ibuzz Pro at http://www.qualityleadsasap.com Or contact Chris at 877-776-7503 Refer him a sale and get it free!
Article Source: http://www.ArticleBiz.com

Home Mortgage Loan - Tips for Reviewing Loans

By: Alan Lim
Once your have begun the process of obtaining a home mortgage loan, here are some essential things to watch or watch out for in reviewing loan proposals and documents. When you are in the process of obtaining a home mortgage loan, there are undoubtedly many aspects of the process that are new to you. The language that applies to loans, for instance can be different from the meaning applied to the same term in everyday life. It is far better to review each clause of the prospective loan document as soon as you have access to it and make certain that you understand the terms that are used and how they apply to your own financial situation. Here are some concepts regarding your loan that will be important in ensuring your loan package is acceptable in the long run. Overall cost of the loanThere are many aspects that go into determining the loan cost on your home mortgage loan. The interest rate, mortgage type, loan fees, and term of the loan are just a few of these. You may understand the words, but it is important to take a look at what the words will cost you in dollars and cents. Even a few dollars less in the early stages of a loan can save you thousands of dollars over the entire loan period. It's important to take advantage of such savings. Mortgage typeThe basic mortgage types that are common when you apply for a home mortgage loan include the fixed rate mortgage, the adjustable rate mortgage, reverse or negative equity mortgages and interest only mortgages. Each of these has advantages and disadvantages and you are the best equipped to determine whether the type of mortgage will work for you. The important factor is that you review the documents and proposals so that you know precisely which type of loan you are getting. Being surprised in a few months by a two to five hundred dollar increase in your monthly payment due to an adjustable rate mortgage can result in the loss of your home. Interest rateWhen reviewing the loan documents for a home mortgage loan, one of the important factors that you should check and understand is that of interest rate on the loan. Mortgage interest rates can vary from low to high, depending upon such other factors as the type of loan, applicable usury laws, credit rating, term of the loan and others. Review the stated rate and make certain it is what was agreed upon. If you are expecting a fixed interest rate and the documents provide for an adjustment in 24 months, chances are good that the mortgage has been prepared with a variable interest rate.Broker's reputationActually, checking the broker's reputation should come well before preparing or reviewing the documents for your home mortgage loan. Sometimes though, you won't see a problem until you actually get the documents in writing before you. If there is anything that is unclear or incorrect, the time to get the problem corrected is before signing. A reputable broker should be willing to work with you to correct problems or clear up any communication issues.
Comprehensive information on everything related to Home Mortgage or Home Mortgage Loan can be located on the single website at http://www.homemortgageloan-refinance.com/First-Time-Home-Loan-Borrower-Tips.php .
Article Source: http://www.ArticleBiz.com