American Loan Guide


Refinance Mortgage Loan,Commercial Mortgage Loan,Debt Consolidation Mortgage Loan,Home Mortgage Loan Quote

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.




Mortgage Loan

Mortgage loan is not as easy as simply finding the lowest interest rate. There are many other factors that will determine which mortgage is right for you. The One Account is such a product, which allows an offset, or netting out of cash balances against the mortgage loan therefore allowing overpayments and an average lower outstanding loan balance leading to real interest cost savings. Your financial picture, including your income, savings, cash reserves, and debt-to-cash ratio will determine how much you can afford to pay in monthly mortgage payments. Finding the "best" mortgage means balancing your mortgage options with your financial situation and your housing needs, now and in the future.

The world of mortgage loans can be confusing, with all kinds of jargon. Variable rate loans tend to be the cheapest, but fixed rate loans offer more security. Capped loans and tracker loans are somewhere between the two, while offset loans can save you a fortune in interest. Of course, not all of these decisions will be in your hands. First you will need to get a lender to approve your application. Depending on your credit rating and other factors, they will offer you loans that they feel are within their level of risk -- loans they believe you will able to repay.
Interest can be variable, fixed, or capped with the latter two rates fixed or guaranteed not to increase over a certain rate for a specific period. There are many different variations and schemes now available but one of the most flexible and cost effective products is a current account mortgage.

Your house is a massive purchase, and wading through mortgage loans is likely to give you a massive headache. Making sense of the different products can be a nightmare, but it's much easier if you know what you're looking for.

If you want the lowest possible interest rate, then variable rate mortgage loans are for you. However, if rates rise, so will your payments. It may be worth considering fixed rate mortgage loans instead. Fixed rate mortgage loans are slightly more expensive but the payments won't increase if interest rates rise. Capped mortgages are again like variable rate mortgages, but the lender promises that if interest rates rise, your payments will only rise by a certain amount. Again, capped mortgage loans usually have higher interest rates than variable rate ones.

Offset mortgage loans combine your current account, savings account and mortgage in a single account. If you're careful with your money, an offset mortgage can dramatically reduce the amount of interest you pay and it could enable you to pay your mortgage off early.
 




 
 
 
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