Welcome to Mortgage And Real Estate Tips Revealed
Connecticut Home Mortgage Article
This is a selection made from among articles on Connecticut Home Mortgage. For a permanent link to this article, or to bookmark it for future reading, click here.
Home Loans -- The Hot New Product? The 30-year Mortgage
from: Charles EssmeierIn recent years, the mortgage industry has introduced dozens of new types of loans. The needs of every borrower are different, so the mortgage companies have tried to come up with an answer for every problem. They’ve introduced 40-year mortgages, promoted 15-year mortgages, and introduced the wildest array of variable-rate mortgages imaginable. There are mortgages that have interest rates that adjust every few months, every few years, or just once. A recently popular product that thrives on the East and West coasts is the interest-only mortgage, which reduces payments by not requiring payment on the loan’s principal for the first few years of the loan. The prospective homebuyer could have as many as one hundred possible types of loans to choose from when searching for a mortgage. Amidst this huge array of loan types, one type is growing in popularity faster than all the rest, and it may surprise you. The fastest-growing type of mortgage in America right now is the traditional 30-year, fixed-rate loan. Last year, only about 35% of all borrowers took out a 30 year, fixed-rate loan, but so far this year, the rate has increased to nearly 50%.
This may seem odd, as most everyone has been opting for adjustable-rate mortgages for the last few years. Adjustable rate mortgages tend to offer lower interest rates, and lower interest rates mean lower payments. These loans have been popular with buyers who move often, have lower incomes or buyers who simply want to invest their money elsewhere. So why is the 30-year fixed-rate mortgage back in style? Because interest rates have dropped to their lowest point in fourteen months, and they are nearly as low as they were in the summer of 2003, when they reached the lowest point on record. In short, the 30-year fixed-rate mortgage is not only seen as competitive with other types of loans, but it is actually seen as safer. Borrowers who have adjustable-rate mortgages enjoy their biggest advantage when rates are high, knowing that their interest rate is lower than a fixed-rate mortgage. But when interest rates for the market as a whole reach historic lows, the borrower with an adjustable-rate mortgage knows that their rate can only go up. At times like the present, when rates are only likely to go up, converting an adjustable rate loan to a fixed-rate loan is a smart move. First-time buyers can safely take on a 30-year fixed-rate loan and be comfortable in the fact that their rate will stay fairly low for the duration of their loan.
Sometimes, the way things have always been done turns out to be the best. While there are still some buyers who will benefit from adjustable-rate loans, most borrowers would do well to lock in their loan at a fixed rate now. Historically, fixed-rate mortgages have rarely been under six percent, so obtaining such a loan while they are available is one of the smartest moves a homeowner can make.
About the Author
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.
 |
 |
Connecticut Home Mortgage News
SEC, FASB Resist Calls to Suspend Fair-Value Rules (Update2) - Bloomberg
Sept. 30 (Bloomberg) -- The U.S. Securities and Exchange Commission probably will resist calls to suspend the fair-value accounting rules that some members of Congress blame for exacerbating the global financial crisis, people familiar with the ...
Read more...Fed Funds Rate Declines as Central Bank Adds Reserves (Update2) - Bloomberg
Sept. 16 (Bloomberg) -- The Federal Reserve added $70 billion in temporary reserves to the banking system, pushing down the rate for overnight loans between banks to spur lending and ease a crisis of confidence in financial markets. The fed funds ...
Read more...Democrats call for foreclosure freeze - Miami Herald
WASHINGTON -- Four Democratic senators urged the mortgage companies Fannie Mae and Freddie Mac on Thursday to temporarily freeze foreclosures on loans they hold. The troubled companies, seized by the government Sunday, should help struggling ...
Read more...HOME WRECK - New York Post
Home prices are skidding at their fastest rate in 37 years as the housing recession scattered more industry leaders into retreat and possible bankruptcy. The big discount mortgage broker, Foxtons, said it will pull out of the U.S. market, close its ...
Read more...Foreclosures In Connecticut, Nation At Record Rate - Hartford Courant
As the subprime lending crisis continues to unfold, the rate of foreclosures and seriously delinquent home loans has reached its highest level on record for Connecticut and the nation as a whole. A report Friday from the Mortgage Bankers Association ...
Read more...