Articles Index - page 2

High Risk Mortgages
A quick overview of mortgages that have caused problems for borrowers. You'll find a description of each one along with links to more detailed resources. Make sure you know what you're getting into if you use one of these loans.

Discount Points
Points are dollars you pay as a percentage of your loan. A common use for points is to secure a lower interest rate on your loan. We'll cover how points work and highlight some ways to calculate whether points are worth the expense.

Bigger Down Payment vs Paying Points
Home buyers sometimes ask about the difference between discount points and a down payment. Each of these items is a cost that comes out of your pocket up front, so they seem quite similar. To your current budget, they’re identical. However, over the long term you’ll find that they do very different things.

Fixed Rate Mortgages
Fixed rate mortgages allow a borrower to know in advance what all future payments will be. The rate on a fixed rate mortgage should be competitive, and depends on what general interest rates are at the time. To learn all the details, including how to get the best fixed rate mortgage, read this article.

Debt to Income Ratios
Debt to income ratios give lenders a quick rule of thumb to determine how much you can borrow. They try to keep loans affordable by keeping payments to a modest percentage of your total income. With debt to income ratios, they can quickly figure out a reasonable monthly payment – and use that number to calculate your total loan amount.

Interest Only Loans
A quick overview of how interest only loans work. Discussion of the advantages and disadvantages of interest only loans, and resources for calculating payments on these loans.

Option ARM Loans
Option ARM loans are mortgages that give a borrower a choice on how much a given payment is. While their flexibility makes them appear attractive, option ARM loans can be quite dangerous. This page offers an overview of option ARMs.

Adjustable Rate Mortgages
Adjustable rate mortgages (ARMs) are home loans with a rate that varies. As interest rates rise and fall in general, rates on adjustable rate mortgages follow. These can be useful loans for getting into a home, but they are also risky. This page covers the basics of adjustable rate mortgages.

1 | 2