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FIRST TIME BUYERS
Many home loan programs have been specifically created for first time home buyers. These loans feature low down payments and approval guidelines that make it easier to qualify. Some of the more popular first time homebuyer programs are listed hereafter: # What is a First Time Buyer Loan? # FHA and VA Loans for First Time Buyers # Who is Eligible for a 1st Time Buyer Loan? # Community Home Buyer Programs # What is Escrow? # Mortgage Credit Certificates Getting your first home is easy.
 FINANCIAL CALCULATORS
Provided below is a list of calculators to assist you with your financial matters: # Loan Calculator Quickly calculate the monthly payment, total amount of interest paid, total paid and cost of points for a fixed rate mortgage loan. # Refinancing Calculator Helps you determine if you will benefit by refinancing. # APR Calculator Find out how much your mortgage loan is really costing you. # Closing Costs Calculator Simultaneously compare four different loans and compute the closing costs required at closing for each of the mortgage loans. # Rent versus Buy Calculator Allows you to compare the costs of renting a residence versus buying a home. # Seller's Proceeds Calculator Calculate your new gain after your current mortgage(s) have been repayed and taxes, sales commissions and other closing costs. # Loan Spread Calculator Find out everything about your loan with this calculator. # Cashflows Calculator Determine the present value of an investment property's cash flows and sale proceeds for periods of up to 20 years. # Future Values of Savings Annuity calculator which determines future values. # Pay off or Invest Calculate the expected annual return on an investment to see if it is better to pay off or invest. # Loan Comparison Compare multiple loans quickly seeing the impact on interest rates and points on their monthly payments and total paid.  |
INTRODUCTARY ADJUSTABLE RATE MORTGAGES (ARM's)
Introductory Rate ARMs
Several adjustable rate mortgages are available to homeowners and they include 6-Month Certificate of Deposit ARM, 1-Year Treasury Spot ARM, 6-Month Treasury Average ARM, and the 12-Month Treasury Average ARM. An ARM that reacts quickly to the market will allow the borrower to benefit from falling interest rates. An ARM that lags the market will allow the borrower to take advantage of lower rates when rates being to increase. There are several aspects of ARMs that impact interest rates including the index, margin, interim caps, and payment caps. The index of an ARM is the financial instrument that the loan is linked to and indexes move up and down with the market. The margin is added to the index to determine the interest that the borrower will pay. Caps, such as the interim cap, protect borrowers against rising interest rates. Payment caps, on the other hand, place a maximum on the amount a borrower must pay. This type of cap also protects against payment shock associated with rising interest rates. Index The index of an ARM is the financial instrument that the loan is "tied" to, or adjusted to. The most common indices, or, indexes are the 1-Year Treasury Security, LIBOR (London Interbank Offered Rate), Prime, 6-Month Certificate of Deposit (CD) and the 11th District Cost of Funds (COFI). Each of these indices move up or down based on conditions of the financial markets. Margin The margin is one of the most important aspects of ARMs because it is added to the index to determine the interest rate that you pay. The margin added to the index is known as the fully indexed rate. As an example if the current index value is 5.50% and your loan has a margin of 2.5%, your fully indexed rate is 8.00%. Margins on loans range from 1.75% to 3.5% depending on the index and the amount financed in relation to the property value. Interim Caps All adjustable rate loans carry interim caps. Many ARMs have interest rate caps of six-months or a year. There are loans that have interest rate caps of three years. Interest rate caps are beneficial in rising interest rate markets, but can also keep your interest rate higher than the fully indexed rate if rates are falling rapidly. Payment Caps Some loans have payment caps instead of interest rate caps. These loans reduce payment shock in a rising interest rate market, but can also lead to deferred interest or "negative amortization". These loans generally cap your annual payment increases to 7.5% of the previous payment. Lifetime Caps Almost all ARMs have a maximum interest rate or lifetime interest rate cap. The lifetime cap varies from company to company and loan to loan. Loans with low lifetime caps usually have higher margins, and the reverse is also true. Those loans that carry low margins often have higher lifetime caps. |
