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PO Box 950031
Oklahoma City, OK. 73195-0031
phone 405 370 0696
fax 1 888 370 8551
Mortgages
Mortgages:
ARM, or Adjustable Rate Mortgage will soon be just matter for the history books. It was, however a product that had a place. The initial artificially low rate for those with credit challenges was set to raise in 2 to 3 years, allowing those folks to combine a period of mortgage payments raising their credit scores with appreciation of the value of the property to make refinancing an arm into a fixed rate mortgage workable in a couple of years. Well, that was the plan anyway. Too many folks didn't refinance because their credit took a few more dings, or they forgot about the adjustment. Maybe they just didn't realize just how many dollars a "quarter point" of interest really was. it could be that when they compared rates, wanting to re-finance, they found that their current rate was lower that the rate they were quoted, and decided to stay where they were. It happened a lot!
Interest Only Mortgage another one for the history books. In this scenario, you pay only the interest on the mortgage, never the principal. You never pay off the property, just pay to borrow the money. As long as property values rise, you are in an OK position, but if they fall, you could be called on the pay down the principal on the mortgage to what the property is actually worth.
First Mortgage this lender has the primary loan for the property. In the case of an 80/20 loan, used to avoid PMI. (private mortgage insurance)
PMI insures the lender against default by the borrower, and usually applies on any loan over 80% of the purchase price. In an 80/20 Loan the 80% mortgage has a much better interest rate the the 20% mortgage, or Second Mortgage.
Balloon Mortgage You borrow a portion of the purchase price, leaving a large amount, or balloon outside the mortgage, usually as an interest only loan to be dealt with later, at a specified date.
PMI Private Mortgage Insurance. A policy that the borrower pays for until the loan drops to 80% of the value of the property. This insurance policy covers the lender in case the borrower defaults on the loan. PMI is charged on any single mortgage loan when the loan is over 80% of value of the property. AIG was very big in PMI Insurance.
Risk is a factor in every loan. If you borrrow 100% of the purchase price of an item, the lender has all the risk. You can walk away and lose nothing. Therefre the interest rates are higher on these loans to compensate for the risk factor. If you borrow, say $80k on a $100k house, the lander feels that you are likely not to walk away from your $20k investment, so the rates are a bit lower.
Credit Scores play a major factor in any loan decision. it has been calculated that someone with a 700 score has less than a 5% chance of defaulting on the loan. Therefore, the lower risk, allows a lower interest rate, and lower interest means lower payments for you! Raise your credit score with CCFG today!
ARM, or Adjustable Rate Mortgage will soon be just matter for the history books. It was, however a product that had a place. The initial artificially low rate for those with credit challenges was set to raise in 2 to 3 years, allowing those folks to combine a period of mortgage payments raising their credit scores with appreciation of the value of the property to make refinancing an arm into a fixed rate mortgage workable in a couple of years. Well, that was the plan anyway. Too many folks didn't refinance because their credit took a few more dings, or they forgot about the adjustment. Maybe they just didn't realize just how many dollars a "quarter point" of interest really was. it could be that when they compared rates, wanting to re-finance, they found that their current rate was lower that the rate they were quoted, and decided to stay where they were. It happened a lot!
Interest Only Mortgage another one for the history books. In this scenario, you pay only the interest on the mortgage, never the principal. You never pay off the property, just pay to borrow the money. As long as property values rise, you are in an OK position, but if they fall, you could be called on the pay down the principal on the mortgage to what the property is actually worth.
First Mortgage this lender has the primary loan for the property. In the case of an 80/20 loan, used to avoid PMI. (private mortgage insurance)
PMI insures the lender against default by the borrower, and usually applies on any loan over 80% of the purchase price. In an 80/20 Loan the 80% mortgage has a much better interest rate the the 20% mortgage, or Second Mortgage.
Balloon Mortgage You borrow a portion of the purchase price, leaving a large amount, or balloon outside the mortgage, usually as an interest only loan to be dealt with later, at a specified date.
PMI Private Mortgage Insurance. A policy that the borrower pays for until the loan drops to 80% of the value of the property. This insurance policy covers the lender in case the borrower defaults on the loan. PMI is charged on any single mortgage loan when the loan is over 80% of value of the property. AIG was very big in PMI Insurance.
Risk is a factor in every loan. If you borrrow 100% of the purchase price of an item, the lender has all the risk. You can walk away and lose nothing. Therefre the interest rates are higher on these loans to compensate for the risk factor. If you borrow, say $80k on a $100k house, the lander feels that you are likely not to walk away from your $20k investment, so the rates are a bit lower.
Credit Scores play a major factor in any loan decision. it has been calculated that someone with a 700 score has less than a 5% chance of defaulting on the loan. Therefore, the lower risk, allows a lower interest rate, and lower interest means lower payments for you! Raise your credit score with CCFG today!
CCFG's Current Fast Track
3 Bureau Plan Price:
$595.00
$95 Enrollment, $500 on Installments!
Flat Fee, No Endless Monthly Payments!
No Interest Charges or Carrying Fees!
That's CCFG's Total Fee! Limited Time Offer!
In 2008 this was a deal at $795,
and we still have no per item charges!
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Fixed Rate Mortgage can be for many terms ( length of loan), but is usually a 30 or 15 year loan. The interest rate is fixed for the term of the loan, the payment is locked for the life of the loan. Neither will change. You can re-finance out of a loan like this, but there are often pre-payment penalties for the first 2 or 3 years as an incentive not to do so. The longer the term, the lower the payment, but the more you pay out in real dollars in interest on the loan. You can pay extra on the principal each month to lower the interest charges over time. Many lenders offer a Bi-Weekly plan that lets you make payments every 2 weeks, this means that you lower the real dollars charged in interest, since you are paying more frequently.
This will be the mortgage of choice until they come up with something new and creative someday. Then we can re-write this page again!
LTV Ratio Loan to Value Ratio. If you are borrowing $80k on a $100K house, it is an 80% LTV Ratio. If you had a 125% LTV on your last home, you are probably reading this from your new apartment.
DTI Ratio Debt to Income Ratio. The total of all your debts, from your monthly auto loans, to the old collections on your credit report is your debt. Let's say your monthly income is $10k, and let's say your monthly expenses are $6k, your DTI Ratio is 60% Clearing up those old collections from your credit reports not only raises your Credit Score, it lowers your DTI. Join up with CCFG today!