Mortgages Loans, Home Equity Loans, And Refinacing
There are two types of mortgages, fixed rate mortgages and floating rate mortgages .
As is obvious from their names, the fixed rate mortgages are ones where the monthly mortgage payment amount remains the same for the entire life of the mortgage i.e .
till the end of mortgage term; whereas floating rate mortgages float/ change throughout the life of the home mortgage loan .
The mortgage interest rate on the fixed rate mortgage loan is fixed at the start of Connecticut home mortgage loan term .
Whereas, the mortgage rate on a floating rate mortgage is dependent on a pre-decided financial index .
This predecided financial index factor is on economic, financial, political and many other factors) .
So, which type of mortgage is better?
Well, the opinion seems divided and is mainly based on the preferences of the individual who is getting the home mortgage loan .
However, the general recommendation is that you should go for a floating rate mortgage loan if you plan to live in the home for a shorter duration .
For long durations, you will need to make a decision on how low the current fixed mortgage rate is and whether it’s low enough to be beneficial for locking-in for a long period.
Owning a home is a matter of great pride; and in today’s world, owning a home has been made really easy through mortgages .
However, when you buy an home through the home mortgage route, you don’t actually get the total (100%) ownership of the home till you have paid your mortgage completely .
As you make your monthly mortgage payments, your ownership level increases and when you pay back your entire mortgage loan (which might happen 20-30 years after you start your mortgage), you then become 100% the owner .
So, mortgages are long term investments where the home is the asset that you create over a long period of time .
But that does not mean that you are blocking all your money in the making of an asset that matures over very long term .
If you need money during the tenure of your mortgage loan e.g .
for home improvements, you can actually make use of your investment (your ownership in the house) in order to get the cash you need .
This happens in the form of an home equity loan.
Getting a good mortgage deal is one thing and bettering that mortgage deal is another thing .
In simple words, ‘Mortgage refinancing’ means ending your current mortgage to get into another mortgage for the same property .
Of course, you would go for mortgage refinancing only if the current mortgage interest rates are lower than the mortgage interest rates that you are paying on your mortgage which you took a few years back .
However, that doesn’t mean that you go for mortgage refinancing every time you find that the mortgage interest rates have gone down a bit .
There are costs involved with mortgage refinancing and these costs make mortgage refinancing unfeasible unless the mortgage rates have gone down significantly .
Various mortgage industry analysts suggest different figures for the gap (between current mortgage rates and the rates on your existing mortgage) that would make mortgage refinancing a practical option.
There are two types of mortgages, fixed rate mortgages and floating rate mortgages .
As is obvious from their names, the fixed rate mortgages are ones where the monthly mortgage payment amount remains the same for the entire life of the mortgage i.e .
till the end of mortgage term; whereas floating rate mortgages float/ change throughout the life of the home mortgage loan .
The mortgage interest rate on the fixed rate mortgage loan is fixed at the start of Connecticut home mortgage loan term .
Whereas, the mortgage rate on a floating rate mortgage is dependent on a pre-decided financial index .
This predecided financial index factor is on economic, financial, political and many other factors) .
So, which type of mortgage is better?
Well, the opinion seems divided and is mainly based on the preferences of the individual who is getting the home mortgage loan .
However, the general recommendation is that you should go for a floating rate mortgage loan if you plan to live in the home for a shorter duration .
For long durations, you will need to make a decision on how low the current fixed mortgage rate is and whether it’s low enough to be beneficial for locking-in for a long period.
Owning a home is a matter of great pride; and in today’s world, owning a home has been made really easy through mortgages .
However, when you buy an home through the home mortgage route, you don’t actually get the total (100%) ownership of the home till you have paid your mortgage completely .
As you make your monthly mortgage payments, your ownership level increases and when you pay back your entire mortgage loan (which might happen 20-30 years after you start your mortgage), you then become 100% the owner .
So, mortgages are long term investments where the home is the asset that you create over a long period of time .
But that does not mean that you are blocking all your money in the making of an asset that matures over very long term .
If you need money during the tenure of your mortgage loan e.g .
for home improvements, you can actually make use of your investment (your ownership in the house) in order to get the cash you need .
This happens in the form of an home equity loan.
Getting a good mortgage deal is one thing and bettering that mortgage deal is another thing .
In simple words, ‘Mortgage refinancing’ means ending your current mortgage to get into another mortgage for the same property .
Of course, you would go for mortgage refinancing only if the current mortgage interest rates are lower than the mortgage interest rates that you are paying on your mortgage which you took a few years back .
However, that doesn’t mean that you go for mortgage refinancing every time you find that the mortgage interest rates have gone down a bit .
There are costs involved with mortgage refinancing and these costs make mortgage refinancing unfeasible unless the mortgage rates have gone down significantly .
Various mortgage industry analysts suggest different figures for the gap (between current mortgage rates and the rates on your existing mortgage) that would make mortgage refinancing a practical option.
Mortgages Loans Home Equity Loans And Refinacing
![Mortgages Loans Home Equity Loans And Refinacing]()
Reviewed by Henda Yesti
on
June 24, 2018
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