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Loan Comparison: Interest Only Home Equity Loans Versus Balloon 2nd Mortgage
Posted by nick_niesen on October 29th Pablo Maffeo Manchester City Jersey , 2010
What is an interest only home equity loan? This is a loan where the principal borrowed is not paid back each month only the interest is repaid. The principal borrowed may be due in 10, 15 or 20 years. A borrower may decrease the amount of principal due in the future by making payments on the principal.
Interest only mortgages may be adjustable rate mortgages (ARM) or fixed rate mortgages. A fixed rate mortgage will have a set payment for the period of the loan. ARM mortgages will have a fixed rate initially for a six-month period, and then the rate will increase or decrease based on an index Oleksandr Zinchenko Manchester City Jersey , prime rate or five-year treasury rate.
A balloon second mortgage is a short-term mortgage with a fixed rate of interest. Balloon mortgages require repayment of principal and interest. The monthly payments of principal are not based on the five-year term of the mortgage but a longer amortization period of 30 years. Balloon mortgages must be refinanced every five years at the expense of the borrower and subject to any dramatic increase in interest rates.
One of the advantages of the balloon second mortgage is the lower monthly payments could yield additional funds for debt consolidation and home improvements. With lower monthly payments the homeowner has more money to budget towards other expenses.
If the balloon mortgage is repayable in five years and the ARM is a 520 loan, both loans must be refinanced in five years. The balloon second mortgage must be refinanced with a new second mortgage, a line of credit or a home equity line at the expense of the borrower. ARM mortgage rates reset using a mechanical rate adjustment procedure set in the original contract and have a cap on the amount the rate of interest may be increased.
Currently the rates on balloon mortgages are generally lower then the rates on ARM mortgages. If one were sure that rates would be lower in five years Nolito Manchester City Jersey , the balloon mortgage would be a wise choice. If one is unsure of future interest rates the security of knowing the maximum rate the interest can be five years in the future would be worth the slightly higher cost of the ARM mortgage.
Both of these second mortgage loans can co behind a negative amortization loan in 1st position, as long as the broker or lender allows the deferred interest loan. Check with your home equity lenders to make sure that they will allow you to get a home line of credit or second mortgage behind a payment option ARM.
If we had a crystal ball to look into the future the comparison would be simple. In a scenario with 15% interest rates the ARM would be the wise choice while in a scenario with 5% interest rates the balloon mortgage would be the wise choice. Unfortunately the uncertainty of the future of interest rates makes it clear there is some risk involved in making this decision.
Buying fabrics from Fabric Wholesalers
Posted On : Feb-19-2010 | seen (26674) times | Article Word Count : 523 |
Purchasing fabrics from any well known fabric wholesaler is very money saving, you can get better quality products at very cheap rate. Most people try to save as much money as they can on the things they buy or sell; may that be a car Nicolas Otamendi Manchester City Jersey , a house or even clothing. Most of them have a tendency to shop their items from discounts and sales. In the present condition of our society, living has become very tough. The expense of our daily usable items has reached a great height. People have to spend a lot of money for all the important work they need to do. Decorating and rearranging a person鈥檚 house costs one a huge amount of money. This cost can be very easily minimized by purchasing all the fabrics from any discounted fabric wholesaler. In United States, people can find a lot of discounted fabric stores.
Most people buy their required fabrics at the retail prices Marlos Moreno Manchester City Jersey , which costs them quite a lot. If you want to save your money you should go for the fabric wholesalers. But there are some limitations in such cases. Most of the wholesalers have a minimum cut off amount, below which you won get any discount. If you want to buy good fabrics at lower price, you have to spend much more than this initial amount. This amount is quite large and it is not helpful for people who want to buy very few amounts of fabrics. These wholesale rates are good only for those people who have to buy a lot of fabrics. If a person buys one or two types of fabrics Leroy Sane Manchester City Jersey , he won get the discount from the fabric wholesalers. For receiving a huge amount of discount from the fabric wholesalers, people have to buy a lot of fabrics.
However, it is often very hard to find a good fabric wholesaler. The dealers and distributors Kyle Walker Manchester City Jersey , who are supplied with different types of fabrics from these wholesalers, often do not disclose the wholesaler鈥檚 name. They keep it a real secret so that no one else can get fabrics at s. Cheap Authentic Jerseys Cheap NBA Jerseys From China Wholesale Jerseys From China Cheap College Jerseys Online Cheap Authentic NHL Jerseys Cheap Football Jerseys Cheap Baseball Jerseys Cheap College Baseball Jerseys Wholesale Jerseys China Wholesale Football Jerseys |
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