Mortgage Refinance | FBF Article Directory

1% refinance mortgage loans, you probably have seen 100 different advertisements, but how is that possible? There is really only one big secret to 1% mortgages: 1% minimum payments are below the interest payable on the loan. Once we?ve addressed this feature, most other facets of 1% mortgages are relatively logical. 1% mortgages, which now come in dozens of varieties with initiation rates of less than 1% (some even from 0% for a few months after the refinancing) up 4% or more, offer payouts low. Some of them offer fixed rates for 30 or even 40 years, some of them are adjustable from the day you take them out, they are all basically the 1% mortgage ?and are extremely popular among today?s homeowners. 1% of mortgages and their children are being used for debt consolidation, cash flow management, investments, and for tax purposes, and are being used much.

A full 40% of mortgage loans originated in 2005 and 2006 it is estimated that the family of the mortgage at 1%, with multiple payment options. For his supporters, the success of the mortgage to 1% has been hailed as a new era of affordability and flexibility, a strong financial tool, once available only for the very rich and is available to all families in the country . Their opponents tend to think that the 1% mortgage is a bit too strong for the average homeowner to handle, than fear ?Average Joes? could possibly be cut. Despite their split, one thing is certain, the popularity of the mortgage at 1% is due to the relentless pursuit of the American dream. More homeowners in America today than at any other time in history, and many homeowners have only been able to achieve home ownership, which was once a lifetime achievement in their early 20?s and 30, due in large part the widespread availability of these mortgages at 1% normal borrowers.

How much cheaper is a choice of mortgage payment of 1% over the comparable 30-year fixed traditional principal and interest payments?

For a mortgage of $ 500,000.00:

1% Minimum Payment: $ 1200.00
The normal payment loans: $ 3000.00
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Cash flow / savings: $ 1800.00

It is easy to see why the 1% mortgage refinance is so heavily marketed as a way to reduce your mortgage payment in half. In the above example, the 1% minimum payment option mortgage is 60% less than a typical manager, traditional and payment of loan interest. 1% of the minimum payments on the mortgage are generally 50% lower than even the highly praised mortgages with interest only payments, with most mortgage loans 1% in the family include the ability to pay more than just 1 % if necessary.

So how does it work?

In fact, mortgages are 1% more than the start rate of 1%. They have a fully indexed rate as well, which is the true amount of interest due each month. When making a mortgage payment at least 1%, the borrower does not pay all the interest due, which is seen by some as something good and something like a bad thing. Let?s examine some of the commonly perceived benefits and caveats of mortgages at 1%

Commonly perceived benefits of family 1% Mortgage:

1. Extremely low minimum monthly payment: As we saw in our example, the minimum payment option is less than half the traditional mortgage payment and typical.

2. Flexibility to control their own money: Unlike a traditional mortgage, which requires a principal payment each month, 1% mortgages allow borrowers to take power into their own hands to make principal payments when desired, by example, after a bond or a particularly good year.

3. Separate cash flow from equity: While many personal finance experts extol the benefits of building home equity, the reality is that mortgage-backed investment yields a return of 0% investment in a base month months. In the example above, the traditional payment of principal and interest payment requires the borrower to invest $ 1800 more each month on your house, the money is locked in its entirety in the equity of the house. Home Equity is not liquid, that is, all that money locked in equity can not be accessed unless the house is sold or refinanced. The bank does a check every month for the home equity of the borrower in a traditional loan. With a mortgage payment at least 1%, the difference of $ 1800 in payments is money in the pocket of the borrower to invest or spend at their discretion. By deferring interest with a 1% mortgage, the borrower has full access to the money normally locked until it sold the property. That $ 1800 per month is more than $ 100,000.00 in cash, more than 5 years in a 1% mortgage, and is available every time your salary will not be used to pay huge traditional mortgage payment each month.

4. Maximize debt consolidation: Use a 1% mortgage refinancing to pay off all your other creditors, such as credit card companies and lenders high interest rates, means you can save even more money with a 1% mortgage refinance only. Since they are not throwing money at high interest creditors each month, the money saved to make the mortgage payment at 1% is really happening in your pocket, your savings, investments, or wherever you need it most. This is the final inspection. Let?s say in our example, $ 500,000 mortgage at 1% above $ 30,000 was made in credit card and other high interest debts with a minimum monthly payment of $ 1,000. Using a 1% mortgage refinancing to pay off these debts, the total monthly savings with the previous example would be over $ 2800 per month, $ 1000 of debt consolidation, plus $ 1,800 of the difference between Traditional loan payment by 6% and 1% mortgage minimum payment.

5. Turn the equity in a tax deduction: First, the mortgage payment is 1% to 100% interest and therefore must be 100% tax deductible in most cases. Second, one of the most attractive benefits of mortgages at 1% additional tax deduction is available on the deferred interest. What this means is that borrowers can get a tax deduction on the interest you do not have to spend the money for, and choose when he realized that this deduction, which can be a great saving on the liquidity or refinancing . For real estate investors, this is a great advantage as it can be washed often capital gains implications of selling a property. Disclaimer: Do not give tax advice, and you should consider consulting an accountant.

6. Rating Easy: Generally, to qualify for low down payment mortgages, borrowers are required to have an exceptional credit. However, the 1% mortgage refinance loans are routinely available to borrowers with credit scores as low as 620, and if you are borrowing less than 80% of the value of your home, the results can be even in the 500 provided that no mortgage payments reported late on your credit file. The borrower?s income can be said, sometimes, no income or employment documentation is needed at all.

7. Increased protection against foreclosure: Because the minimum payment option is so low, the savings in cash each month so high, and the loan is so flexible, the family of the 1% mortgage offers homeowners a choice of minimum payments under which are more likely to pay if they suffer an interruption of income or disabled.

8. Biweekly payment: a popular way to maximize the benefits of mortgage refinancing 1% is choose to make payments every two weeks (which are available at select mortgages at 1%). This optimizes the loan to match the borrower?s payment cycles and reduces more possible negative effects of interest deferral.

Warnings commonly perceived family 1% Mortgage:

1. Artificially low payments: Since the minimum payments are so low compared to traditional mortgages, many experts fear that people would not normally qualify for home ownership now can own a house. The fear is that the new or ?low income? homeowners could ?get inside the head? by buying more house than they can really afford. Ultimately, it is for the borrower decide how much you can afford.

2. Deferred Interest: Often referred to as negative amortization, this concern is often cited by journalists as ?negative? because the loan balance can increase over time if the minimum payment is always selected. However, this view ignores the advantages of cash flow increased dramatically in the borrower?s pocket each month and the tax benefits of deferred interest. Of course, the borrower can choose for themselves whether they want to spend their money paying interest to the bank or if you prefer to put the difference in their own pockets.

3. Depreciation: If the value of the borrower?s home drops dramatically, and other factors require the borrower to sell the house, while the value is low, the borrower can end up owing more than the house is worth. This is a valid risk for short periods of time for all types of mortgages, not just a mortgage%. Even a traditional mortgage principal and interest not paid enough capital over the first 5 years of his life to compensate for short-term dramatic drop in home values. The risk of declining property value is a real risk of owning the property, period. However, history tells us that the residential real estate appreciates steadily over a period of ten years since the last 50 years.

4. Too easy to qualify: This may not seem like a disadvantage to most borrowers looking to buy or refinance a house, but some believe that borrowers should be required to document income and assets significantly higher who qualify for this type of loans. A lot of this feeling is the result of outmoded conceptions of mortgages at 1% as a ?mortgage rich man,? which used to require significant equity to obtain, and some of that is attributable to the same old-fashioned ?one size fits all ?notions about mortgages. His view probably depends on whether or not he is able to provide extensive documentation of their income and assets to support your loan application.

Much of the criticism of mortgages at 1% revolve around a variety of adjustable-rate of these mortgages, which like all adjustable rate mortgages go up and down with the rest of the market. However, most mortgages at 1%, the minimum payment is fixed and can go up or down only 7.5% per year. So if your payment in year 1 is $ 1000.00, in year 2 you can go no more than $ 1075.00. Because the loan?s interest rate may change more or less than the minimum payment, which is extremely low, the loan may result in the deferral of interest if only the minimum payment is made. Many of the problems that are sinking by critics Mortgage 1% as its key detractor was recently solved by the introduction of fixed rate loans minimum payment to the family of the mortgage at 1%.

Fixed rate mortgages than 1% of the variations of the latest additions to the family of the mortgage at 1%, have fixed interest rates of 3 to 30 years or more. The minimum payment option is generally available for the first 5, 10, 15 or in some cases 20-year mortgage, at a consolidation mortgages 1% of adjusted payment or the payment of interest only or all of principal and interest payments. During the fixed period, the rates of loan repayment and interest of 1% fixed mortgages are totally predictable and can be set to the last penny. Many borrowers who prefer a fixed rate may benefit significantly from the 30-year fixed mortgage 1%, which actually leads to a minimum payment of 1.95% and a fixed rate in the range of 6% to 7% for 30 years.

While there are those in the journalistic community who believe that 1% mortgages have too much power for the average homeowner, ultimately the decision rests with the homeowner. Make a payment high in the bank every month, or put money in their pockets. And homeowners seem divided, as mortgage refinances in more than 1% is expected to represent over 50% of all refinancings in 2007. Traditional mortgages are not one size fits all solution, nor are the mortgages at 1%, but with low minimum payment options, excellent debt consolidation capabilities, significant cash flow and tax advantages made possible by different interests, and the flexibility to control your finances or isolate yourself from interruptions in income or disability, mortgage 1% continue to experience significant growth across the country. Whether or not a mortgage refinance 1% is suitable for you should be determined by performing a detailed analysis of your personal financial situation with a mortgage professional who has extensive experience with mortgage products to 1%. As always, we welcome your calls and emails.

Finance Article by Softweb Tech: Get more Share Market Tips and read more about NSEindia and BSEindia.

Source: http://freebookfor.com/2012/08/04/mortgage-refinance/

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