Secrets of home mortgage and refinance
din 发表于 2005/12/02 11:09 一品 美好家园 (www.ywpw.com)
Always be alert. Mortgage lenders and brokers never tell you the tricks hiding in the "Attractive" deals. Here are some secrets we all should know:
Interest rate starts as low as 1%
They never tell you this is actually not the real interest rate you will pay. This is just a payment arrangement. Your actual interest rate might be 6.5% APR. You pay 1% interest in the first three years. Then you have to pay the unpaid 5.5% plus its interests in the next 27 years. If you choose this program, you could be paying the highest interest rate in the market. There are early payment penalties in the terms. This is the worst program. Have a look at some websites providing 1% start interests. You will understand this well.
Interest only
You can pay "interest only" in the fist three or five years. You cannot pay "interest only" forever. You will have to pay back the full balance in the next 25 or 27 years. Your monthly bills will increase dramatically. Unless you plan to live in the house for 3-5 years or your income will increase dramatically within 3-5 years, do not choose "interest only".
ARM
Currently mortgage interest rates are still at the lowest level and are going higher. ARM rates are very close to fixed rates at this time. If you plan to live in the house for over 5 years, do not choose ARM.
Mortgage brokers
Mortgage brokers earn 1%-3% of your borrowed balance from lenders. Mortgage brokers can save you application fees and some loan origination fees. Some brokers even offer extra bonus, such as closing cost discount. Lenders seldom give you these discounts. Don't be afraid of using mortgage brokers. You may find a great deal from mortgage brokers.