Monday, January 17, 2011


One thing  always right that is "NEED NEVER END".So human being always have need of money and thats why they get help in term of  mortgage loan.
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan.So a mortgage loan totally depend upon the interest rate because all payments are calculated by these interest rate. Every borrower always try to get lower interest rate but he doesn't have not enough knowledge how to get interest rate in a particular area.
Today its not a big deal to find the lowest mortgage rate because every thing is in front of you and you have to choose the best one which is a good deal for you.
Finding the best mortgage rate may not be as easy as simply identifying the lowest interest rate (30 year mortgage rates) available.   The criteria a mortgage shopper should apply must begin with the question of how long they plan to hold onto the mortgage and retain ownership of the property.  There is no reason to consider the option of paying points and fees to buy down the interest rate when a borrower does not plan to own the property long enough to re-coup (or at least break even) on the closing costs.  The second criteria that should be used in determining whether to buy the interest rate down by paying point and fees, is whether a borrower is refinancing (refinance mortgage rates) or purchasing the property in question.
An adjustable-rate mortgage (ARM) is a loan with an interest rate that changes. ARMs may start with lower monthly payments than fixed-rate mortgages.ARM. A mortgage with an interest rate that may change, usually in response to changes in the Treasury Bill rate or the prime rate. The purpose of the interest rate adjustment is primarily to bring the interest rate on the mortgage in line with market rates.Adjustable Rate Mortgage involves a repayment mode where the borrower is subject to variations in the amount of money he has to pay to the lender. This is because in Adjustable Rate Mortgage the interest rate that is charged on the loaned amount is not fixed and is subject to variations that result from changes in the money market.
For a borrower it is rather difficult to fully understand what an Adjustable Rate Mortgage is or for that matter how it impacts his repayment. A number of aspects have to be considered, for instance, indexes, margins, caps on interest rates, caps on interest payments, negative amortizations, payment options and recalculation of the loan amount. Adjustable Rate Mortgage packages are not standard at all and are heavily customized to suit select borrower preferences. The lender on the other hand has to consider the competitiveness of the market and design his package. 
To compare two ARMs, or to compare an ARM with a fixed-rate mortgage, you need to know about indexes, margins, discounts, caps on rates and payments, negative amortization, payment options, and recasting (recalculating) your loan. You need to consider the maximum amount your monthly payment could increase. Most importantly, you need to know what might happen to your monthly mortgage payment in relation to your future ability to afford higher payments.
  • Your monthly payments could change. They could go up--sometimes by a lot--even if interest rates don't go up.
  • Your payments may not go down much, or at all--even if interest rates go down.
  • You could end up owing more money than you borrowed--even if you make all your payments on time.
  • If you want to pay off your ARM early to avoid higher payments, you might pay a penalty.