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FACT:
Home mortgage loans are cool right now. Home mortgage
loans, in the past, have been fueled by a shortage
of existing homes on the market and cheap mortgage
money. In 2004, value in homes climbed across the
nation with loans getting cheaper and more competitive.
The National Association of Realtors states that existing-home
prices rose 8.8 percent from the fourth quarter of
2003 to the fourth quarter of 2004. Market conditions
have since cooled (ie, mortgage meltdown).
Home mortgage
loans are generally the tool most used for those who
do not possess cash to buy a house outright. One the
other hand, home mortgage loans may be misused getting
the buyer even further into debt.
Home mortgage
loans are generally secured loans. This is good news because
this means the interest rate is lower than on other kinds
of loans such as via credit cards. The interest on home
mortgage loans is also tax deductible, which adds to the
attraction.
If you're taking
out a home mortgage loan in order to go deeper in debt,
by say, buying a second home, this is a very risky proposition.
By defaulting on the primary loan, you may lose all of your
homes at one time. For many, this is unacceptable risk.
Home mortgage
loans have been loosened over the past few years and now
you may get up to 125-percent of the value of your home.
This can be extremely risky since a job transfer or loss
of a job can be devastating in this scenario. On the other
hand, 100-percent loans are also available, which hold considerably
less risk.
Points and closing
costs also apply to home mortgage loans just as the do on
many other types of loans. If you're investigating home
equity loans then at avoid ones that requires a balloon
payment at the end or penalize early payments.
Adverse remortgages
is a term used in the U. K. to mean bad credit loans.
More and more lenders have been vying for these adverse
remortgages and offering rates below prime because
of this competition.
Payday
loans deliver some of the riskiest ways of receiving
quick cash. Usually in much smaller amounts than home
loans, payday loans can keep borrower in a vicious
cycle of borrowing and paying as the interest on these
types of loans can be over 100-percent APR. Payday
loans can be valuable when one is in a crisis and
needs cash fast or for an occasional event, so it
is up to each individual to assess his or her individual
situation and needs. The problem is for some people,
is that they are not very good at making this assessment
and get in over their heads very quickly.
In regard to home mortgage loans, remember, that
there are other ways to secure loans that do not use
your home as collateral. A home is a terrible thing
to lose, so move cautiously when exploring mortgage
loans and know that more options may be available
than you had previously thought.
Also when evaluating homes, be sure to consider the
cost of fire insurance, earthquake or flood insurance
and other services that will protect your number one
asset. Figuring in these expenses upfront will enable
you to more thoughtfully consider the true amount
needed for your home mortgage loan.
With the state of the housing market as it is today,
many homes are underwater on their loans. This means
that the loans are worth more than the homes. Many
are having a tough time refinancing there houses under
these conditions.
In addition, specialty buyers of specialty houses
are also finding it rough. Underground
home loans are based upon what? There are so few
of them in the U. S. and odds are none in your neighborhood
that getting an appraisal can be a nightmare. The
same goes for other specialty houses with unique architecture
such as shoe homes, upside down homes, large tree
houses, abandoned silo homes to name a few. That said,
loans officers can at times be creative.
Check
out some of the unusual loan ideas such as church
and religious loans that you may not have thought
about before. Creative loans and creative financing
give the flexibility that some people need in order
to make their goals come true. Excersize caution while
using creativity and good things will generally happen.
Sometimes, if you're careful enough and creative enough,
you can have it both ways. And, that's a win-win my
friend.
FICTION:
Home mortgage loans are for wussies. In the olden
days, you just stored your cash under your mattress
until you had enough money to buy or build a home.
We should go back to that. No more "Too Big to
Fail" banks and other financial institutions.
Your mattress is never too big to fail. Even if you
own a Tempurpedic mattress, the temperature is just
right for saving money until you can pay cash-ola
for your home. Let's go back to the old days and the
old ways before stated income loans, fancy schmancy
derivatives and other such wallet bombs. The time
is now for "mattress economics".
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