 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
| CLICK to SAVE $$$$ Money |
| Add us to your FAVORITES and Check Back Often for More Real Life Information and ESOs on Various Topics |
| Thank you for Visiting and/or Sharing! |
Overview Everyday Life Self Relationships Parenting Spirituality Making a Difference College Life Career Homes
| © Copyright 2009. All rights reserved. |
Disclaimer
All information is provided as is. Additional research, information verification, and professional consultation should be done before using any
information provided on this site or any site linked to from this site. We make no guaranties as to accuracy, content, truthfulness, quality, or
fitness for a particular purpose of any of the information presented on this site. We do not assume any legal liabi ty or responsibility for any
incorrect, misleading, outdated, or missing information. Additionally, we do not assume any legal liability or responsibility for the contents,
offers and/or actions of any off site pages and/or web sites that are referenced in this site or are linked to from this site. All web pages
presented on this site are subject to copyright law protection, whether stated or implied - all rights reserved.
All information is provided as is. Additional research, information verification, and professional consultation should be done before using any
information provided on this site or any site linked to from this site. We make no guaranties as to accuracy, content, truthfulness, quality, or
fitness for a particular purpose of any of the information presented on this site. We do not assume any legal liabi ty or responsibility for any
incorrect, misleading, outdated, or missing information. Additionally, we do not assume any legal liability or responsibility for the contents,
offers and/or actions of any off site pages and/or web sites that are referenced in this site or are linked to from this site. All web pages
presented on this site are subject to copyright law protection, whether stated or implied - all rights reserved.
| Become a fan on FACEBOOK, you'll get the RealESO updates. |
| Real Life Information... on Home Related Topics - Mortgage Information |
That's an increase of $365.76 in your monthly payment. You can see what might
happen if you choose an ARM because of a low initial rate without considering
whether you will be able to afford future payments.
Next: Adjustable Rate Mortgages Cont’d
Back to: Mortgage Overview
happen if you choose an ARM because of a low initial rate without considering
whether you will be able to afford future payments.
Next: Adjustable Rate Mortgages Cont’d
Back to: Mortgage Overview
Adjustable Rate Mortgages (ARMS)
than the sum of the index plus the margin). Such rates--called discounted rates, start
rates, or teaser rates--are often combined with large initial loan fees, sometimes
called points, and with higher rates after the initial discounted rate expires.
Your lender or broker may offer you a choice of loans that may include "discount
points" or a "discount fee." You may choose to pay these points or fees in return for a
lower interest rate. But keep in mind that the lower interest rate may only last until the
first adjustment.
rates, or teaser rates--are often combined with large initial loan fees, sometimes
called points, and with higher rates after the initial discounted rate expires.
Your lender or broker may offer you a choice of loans that may include "discount
points" or a "discount fee." You may choose to pay these points or fees in return for a
lower interest rate. But keep in mind that the lower interest rate may only last until the
first adjustment.
You should carefully consider whether you will be able to afford higher payments in
later years when the discount expires and the rate is adjusted.
Here is an example of how a discounted initial rate might work. Let's assume that the
Here is an example of how a discounted initial rate might work. Let's assume that the
monthly payment for the first year would be $1,199.10. But your lender is offering an
lender's fully indexed one-year ARM rate (index rate plus margin) is currently 6%; the
ARM with a discounted initial rate of 4% for the first year. With the 4% rate, your
first-year's monthly payment would be $954.83.
later years when the discount expires and the rate is adjusted.
Here is an example of how a discounted initial rate might work. Let's assume that the
Here is an example of how a discounted initial rate might work. Let's assume that the
monthly payment for the first year would be $1,199.10. But your lender is offering an
lender's fully indexed one-year ARM rate (index rate plus margin) is currently 6%; the
ARM with a discounted initial rate of 4% for the first year. With the 4% rate, your
first-year's monthly payment would be $954.83.
Consumer Cautions
Discounted interest rates
Many lenders offer more than one type of ARM.
Some lenders offer an ARM with an initial rate that is
lower than their fully indexed ARM rate (that is, lower
Discounted interest rates
Many lenders offer more than one type of ARM.
Some lenders offer an ARM with an initial rate that is
lower than their fully indexed ARM rate (that is, lower
With a discounted ARM, your initial payment will probably remain at $954.83 for only a
limited time--and any savings during the discount period may be offset by higher
payments over the remaining life of the mortgage. If you are considering a discount
you buy a home or refinance using a deeply discounted initial rate, you run the risk of
payment shock, negative amortization, or prepayment penalties or conversion fees.
limited time--and any savings during the discount period may be offset by higher
payments over the remaining life of the mortgage. If you are considering a discount
you buy a home or refinance using a deeply discounted initial rate, you run the risk of
payment shock, negative amortization, or prepayment penalties or conversion fees.
Let's see what would happen in the second year if the rate on your discounted 4%
ARM were to rise to the 6% fully indexed rate.
As the example shows, even if the index rate were to stay the same, your monthly
payment would go up from $954.83 to $1,192.63 in the second year.
Suppose that the index rate increases 1% in one year and the ARM rate rises to 7%.
Your payment in the second year would be $1,320.59.
ARM were to rise to the 6% fully indexed rate.
As the example shows, even if the index rate were to stay the same, your monthly
payment would go up from $954.83 to $1,192.63 in the second year.
Suppose that the index rate increases 1% in one year and the ARM rate rises to 7%.
Your payment in the second year would be $1,320.59.
Advertisements 1a |
Try a free sample Personal Astrology Profile from Astrology.com!
Browse the best in Christian products at FamilyChristian.com.
Hungry? - Order food fast and easy with Delivery.com. Earn points towards prizes and cash on every order!
Get free shipping on your first order from PhotoWorks when you use the coupon code MYFIRSTORDER! Hurry, this offer won't last forever!
Photo Gifts!
Photo Items/Gifts!
FREE STAMPS
Stamps.com: Get Up to $25 in FREE Postage!
| Buy your Unique 1-Page Photo Calendars, Perpetual Calendars & Weekly/Yearly Planners at www.JTCcreations.com Many great styles using your photos or ours. FREE U.S. S&H when you order today with Promo Code "RFS1"! |
