How To Choose Suitable Home Loans

When we decision to sign a contract for the sale, we should start looking for mortgage companies to get loans in accordance with contracts on time transactions, the purchase of the entire housing process to be completed. In your application for housing loans, we must first understand the current market individual banks which products to choose from, according to their own situation to determine which loans, which are a lot of knowledge. Most choose 15, 30 fixed interest rate, or five or seven years of the 30 fixed loan amount. In fact there are dozens of projects for which loans are available, more importantly, the majority of people do not understand there are more and better and the majority of mainstream American society by the project. Below me to introduce them loans:

(A) fixed-rate loans

Fixed-rate loans are locked necessarily mean life remain unchanged, there are usually 10, 15, 30 years and 40 (less), 10 and 15 years APR 20 and 30 years APR basically the same, because they bond with the same period . If higher income and stability, orientation 15, or 30 years. 15 of the 30 low interest rates than 0.5% to 0.75%, but because the relationship between the short period, the monthly payment higher.

( Adjustable rate loans

Adjustable rate loans to 30 years for the loans, the interest rate fixed a certain period of time, and then adjust according to the prevailing market. Adjustable Rate often 3 / 1 ARM, 5 / 1 ARM, 7 / 1 ARM and 10 / 1 ARM, and so on, and five years respectively for three years ? ? fixed seven years and 10 years, and then adjusted once a year. The recent: 5 / 1 ARM Interest only is a very good project, it is 5 / 1 ARM, but the main interest can be paid monthly, pay more money can be automatically reduce the principal, and interest rates than the 5 / 1 ARM, lower is recommended. As in the United States for the frequent moving, a lot of people are willing to choose five or seven years ARM. Because the many state does not allow any prepay penalty, so the money could be paid loans.

© Special loan

Housing loan applications are usually ordinary type (Conventional), there are still some special loans, as the Chinese community rarely used, it refers only to this.

1 FHA loans: Federal Housing Agency-financed loans, targeted at the low-income families apply for the loan; the federal government provides subsidies, generally reflected in the interest rate, the preferential interest rate of 1%. The high average household income, and their loans will be limited, very few people able to meet this standard.

2 VA loans: Veteran Agency subsidized housing loans for veterans, some pine for the terms and conditions, but the interest rate is not much different. 3lot and construction loans: loans for the purchase of that land and build their own house. There are many requirements of such a loan, for instance, the first phase of the requirements of more than 30%, to 2 to 3 years in building houses, or houses to be completed in two years, the interest rate is usually higher than ordinary loans 0.75% ~ 1%, and commercial loans are basically the same.

4 The average interest rates on adjustable loans: MTA (Monthly Treasury Average), also known as Option ARM. MTA loans compared with a lot of other characteristics:

1, low initial interest rates, usually 1%
2, the monthly ? ? every three months or every six months adjusted annual rate
3, the interest rate from the previous 11, the average interest rate decision.
4, have the highest interest rate adjustment restrictions (? 9.95%);
5, per month in five different form of payment options:
a. pay a minimum amount; b. pay interest only; c. 5 / 1 ARM; d. 30 fixed ; 15 years fixed.
6, next year should not exceed the minimum amount of the previous year's 7.5%
7, interest can be deferred for up to 12 months without penalty;
8, all interest can be tax-deductible;
9, as low interest rates and low monthly payments , the first phase, requires less the same circumstances can be more amount of the loan;
10, no credit demand, which poor people credit is particularly appropriate.

The aforementioned characteristics of a recent MTA is the most popular loan
product, which is why Americans more than 50% of the population use the loans
because of this. As far as the real estate broker, they are enthusiastic about MTA,
because they can sell even big house to buyer.

(D) housing loans star - MTA (Option ARM)

MTA is Monthly Treasury Average, also known as Option ARM, can be transferred, the
average rate loans. For the mainstream American society in housing loans, more than
60 percent of the population using MTA. Here to explain all this in detail.

(a) Basic terms

Deferred Interest: If you choose to meet the minimum monthly payments on the interest, the remaining interest will be added to the principal, this would lead to "Negative Amortization."

Fully Indexed Rate: ARM loans with interest rates Margin Index are calculated.

Index: ARM is used to calculate the interest rate adjustment of the economic indicators, usually with the Federal Rate equal to or close.

Introductory Period: Option ARM and Home Equity loans, the lending bank to customer

concessionary period, during this period of time the interest rate will be very low (like when you apply for new credit card ).

Lifetime Interest Rate Cap: ARM loans in the entire course of the loan ceiling for the maximum, usually the existing interest rates +5%.

Margin: lending rate minus the margin Index (Spread), Margin of them is fixed, usually at 2.75 percent.

Negative Amortization: As Deferred Interest, the loan repayment period to table shows the principal will continue to grow.

Payment Change Cap: Monthly loans to the largest percentage of the annual, for example, in 2008 $ 1,000 / month, if the 7% Cap, 2008 should be ? (1000 × N $ 1070/ month).

Recast: Option ARM loans based on interest rates and the remaining unpaid principal amount of years to re-calculate the minimum monthly payments, generally every five years, or more than the initial loan principal amount of 125% (110% NY) will be recast.

Stact Rate: Introductory Period interest rates.

( the basic characteristics of MTA

Option ARM compared with other loans, there are many features:
1, the only super-low interest rates, usually 1% -1.75%;
2, every 12 months adjusted interest rates;
3, and its interest rates from the first 11 months of 20 points in 10 Margin to decide, is always lower than the Prime Rate;
4, the highest interest rate adjustment restrictions (? 9.95%);
5, a monthly five different payment methods available (see below);
6, next year's minimum monthly payments should not exceed the previous year's 7.5%;
7, deferred interest (Interest Deferred) can be up to 12 months without penalty;
8, check-free income, free check deposits as the interest rate of loan applications;
9, all the interest may be tax deductible;
10, no credit requirements;
11, and requires minimal down payment, monthly payments low, under the same conditions can be more amount of the loan.

© The MTA monthly payment option
MTA As mentioned above, there are many advantages, there are different monthlypayment methods to choose from:

1, the minimum amount of pay;
2, interest only;
3 by 5 / 1 ARM pay;
4, the interest rate on 30-year fixed pay;
5, by 15 to pay a fixed rate of interest.

(E) How to apply for refinance loans

When you do refinance, the existing loan is usually paid (Payoff) and the re-signing of a new loan, the new loan may or may not from original bank (Lender).

(a) The purpose of refinancing Refinance said there are three objectives:
1, lower loan rates and / or change the loan period (Rate / Term);
2, cash for its use (Cash Out);
3, removed Loan Insurance (Mortgage insurance).

( The timing of new loans
When the home loan interest rates for low-level, there will be the wave of refinancing, many people for the purpose of lowering interest rates to reduce the monthly payment, or to change from the 30 years of loans to 15 or 10 loans, or adjustable interest rates loans into fixed interest rate, or vice versa. If it is cash out for business investment, or for their children's education or other paid high interest debt such as credit cards, and so on, select the time not so calmly.
To know that the interest rate of housing loans to the general difficult, but in order to know that short period of time (1-2 days) direction, it is necessary to analyze the market dynamics.

© To reconsider the choice of loans
When you re-apply for loans, we must first decide whether or not to pay Closing Cost, if you think that interest rates really low, and your will continue to live a fairly long period of time (3-4 years), then choose to pay the Cost cost-effective, because you will henceforth save the contrary, if you think that interest rates will decline, and also re-No Cost lending opportunities, or will be moving within three years, you will have to calculate how much use the money saved time you pay to offset the Cost. Calculation methods can refer to the table below.

Generally speaking, the Closing Cost broadly equivalent to 1% of the loan amount,large loans <1%, while loans for small> 1%. Of course, when re-choice No Cost loans, the interest rates it should pay Cost higher than 0.25%, equivalent to selling point (1% loan to buy a 0.25% interest rate).

(d) The application procedures for the refinance
Refinance loans VS the purchase of home loans much simpler, but also on loan applications is FullDoc, or NoDoc LowDoc.

1, 2-Pay Checks
2, 2-years W-2
3, 2-monthy Bank Statement
4, Deed (& HUD-1)
5, Drive License

If it is in the same bank (Lender) , for refinance there is no need to provide documents.