Mortgage Rates 101
Mortgage Rates 101
Mortgage Rates 101
Free Online Articles Directory
Why Submit Articles?
Top Authors
Top Articles
FAQ
AB Answers
0 && $.browser.msie ) {
var ie_version = parseInt($.browser.version);
if(ie_version Hello Guest
Login
Register
Hello
My Home
Sign Out
Email
Password
Remember me?
Lost Password?
Home Page > Home Improvement > Remodeling > Mortgage Rates 101
Mortgage Rates 101
Posted: Mar 05, 2010 |Comments: 0
|
]]>
Mortgage Rates 101
About the Author
Mstardom is a social networking community where members submit promo articles in forums and on blogs about their products and services for free. Members can also import their promo YouTube videos about their company and add their music.
Here is Today’s Most Popular Promo Blog on Mstardom, Yours Could Be Next! http://myspacestardom.com/public/rss/act_blogs/rss_10/userid_1913/
Glenford S Robinson is a Clinical Lab Scientist, Expert Author, and President of Mstardom.com.
(ArticlesBase SC #1943151)
Article Source: http://www.articlesbase.com/ – Mortgage Rates 101
Buying a home is one of the most important investments a person will ever make in his or her lifetime, so understanding the mortgage calculation process is very important if one wants to get the best deal possible. On most real estate websites, one will find a mortgage calculator. All that is required is for an interested person to enter specific information in the form fields provided. The system will automatically calculate the monthly payment for the mortgage.
For example, a down payment of ,000 toward a 5,000 mortgage loan will equates to a total monthly payment of ,532, at an interest rate of five and a quarter percent (5.25%). This value depends entirely on the zone, zip code, or area in which the home is located. Each zone has different tax rates, which will affect the total monthly payment. A zip code with a higher tax rate than 11798 will cause the monthly mortgage to be a lot more, although the down payment, purchase price of the home, and mortgage rate is the same in both areas.
The ,532 monthly payment is the total result of the principal & interest payment (4.00) and taxes & insurance payments (8.00) combined, so without taxes and insurance, the mortgage payment would have been 4.00. This is why it is so important to make sure one knows the tax rates in a given area before deciding to buy a home in that area. This example also shows that private mortgage insurance or PMIs can increase the overall monthly mortgage. What does this mean? This means that one should avoid paying mortgage insurance at, all cost, by paying more than 20% down payment toward the purchasing price of the home one is interested in buying.
Therefore, instead of paying a down payment of ,000, which is 20%, toward a 5,000 mortgage loan, a ,000 down payment would have eliminated the mortgage insurance all together because that amount equates to 24.44% of the purchasing price of 5,000. This is if the bank or lender is reminded that more than 20% of the mortgage has been paid. It is therefore the borrower’s responsibility to see to it that the bank or lender cancel any mortgage insurance on the loan. Creditors are required by law, to cancel a PMI if more than 20% of the loan has been paid off.
The calculation above was set to a 30-year fixed rate mortgage instead of a 15-year fixed rate mortgage. The 30-year mortgage is a lot cheaper on a per-month basis; however, one ends up paying more in the long run. A 15-year home loan usually comes with a slightly lower interest rate than that of the 30-year programs. In addition, it costs more per month, but the borrower pays less interest overall.
A 0.5% maximum point was set in our calculation. This is a percent of the amount that borrowers typically choose to pay to the lender in order to lower the mortgage rate. It is sometimes referred to as a buydown. Paying more discount points at the closing lowers the mortgage rate, and paying less raises the rate. This amount is collected at the closing. One discount point is equal to one percentage point of the loan amount. Discount points are very important when trying to keep mortgage expenses to a minimum.
All calculation above was done using the fixed rate mortgage program. Therefore, the mortgage rate does not change in accordance to interest rates set by the Federal Reserve, the central banking system in the United States that regulates the financial infrastructure of the economy to maintain stability. In a fixed rate mortgage program, the borrower’s monthly mortgage payment does not change in response to the interest rate set by the Federal Reserve. In fact, lenders or banks will set their lending rates to two percent above the rate set by the Federal Reserve. So, if the rate set by the Federal Reserve is 3.25%, the rate set by creditors will normally be 5.25%.
In an adjustable rate mortgage program, the mortgage interest rate goes up or down depending on the direction of interest rates imposed by the Federal Reserve. The advantage of adjustable rate mortgage is that interest rates are usually set lower than that of fixed rate mortgages. Another advantage in using adjustable rate mortgage is when the Federal Reserve lowers interest rates. In this scenario, the borrower pays less on the mortgage each month. The disadvantage arises when interest rate increases. This means that the borrower has to pay more on the mortgage each month.
There is important information that homebuyers should be familiar with before embarking on the home buying journey. A knowledgeable home buyer will be more capable of making the right decision when it comes time to make crucial decisions. Therefore, learning the basics of mortgage acquisition and all the important information that comes along with it is paramount in getting a mortgage at the right price.
Retrieved from “http://www.articlesbase.com/advertising-articles/mortgage-rates-101-1943151.html”
(ArticlesBase SC #1943151)
Glenford Robinson -
About the Author:
Mstardom is a social networking community where members submit promo articles in forums and on blogs about their products and services for free. Members can also import their promo YouTube videos about their company and add their music.
Here is Today’s Most Popular Promo Blog on Mstardom, Yours Could Be Next! http://myspacestardom.com/public/rss/act_blogs/rss_10/userid_1913/
Glenford S Robinson is a Clinical Lab Scientist, Expert Author, and President of Mstardom.com.
]]>
Rate this Article
vote(s)
0 vote(s)
Feedback
RSS
Print
Email
Re-Publish
Source: http://www.articlesbase.com/advertising-articles/mortgage-rates-101-1943151.html
Article Tags:
mortgage rates, adjustable rate mortgage, fixed rate mortgages, interest rates, lending rates, mortgage rates 101
Latest Remodeling Articles
More from Glenford Robinson
How to Lock Your Mortgage Rate Before Lender Hikes It
Video explains how to lock a fixed rate mortgage on a home loan currently in the application process before you are caught by surprise when a sudden home loan rate increase takes place. The video tutorial also introduces a new daily real-time mortgage rate alert service for home buyers and those refinancing their current mortgage. (01:48)
Learn about Mortgage Rates and Points
Video explains with examples why mortgage points matter. Points are what actually move each business day since the actual rate is always available. It’s just a matter of how much it will cost you to obtain the rate. The video tutorial also publicizes a new daily real-time mortgage rate alert service for home buyers and those refinancing their current mortgage. (02:19)
Home Loan Mortgage Choices for your Next Home
Know the mortgage home loan choices before you get your next mortgage loan (04:20)
Key Considerations before Applying for a Mortgage
When you consider buying a house, you need to know how much you can afford to pay and have a good idea of how much you’ll need to borrow. Pat Esswein explains what you should know before applying for a home loan. (02:13)
How Much You Should Pay for Your Home
Kevin McCormally and Pat Esswein discuss how much you should pay for your home. (02:13)
For all your informational needs on obtaining a mortgage
By:
Dave Nalinl
Finance>
Mortgagel
Oct 27, 2009
Mortgage is an age-old phenomenon. Mortgage refers to the method by which individuals or businesses can buy residential or commercial property without paying the full value upfront. The borrower or the mortgager uses a mortgage to pledge real property to the lender or mortgages as security against the debt for the rest of the value of the property.
By:
Mansi Guptal
Finance>
Mortgagel
Jul 11, 2006
lViews: 279
Home Loans 101: Buying, Refinancing & Getting Lenders to Say Yes
If you want to minimize your time spent working with home loan lenders and start enjoying your home faster, it
By:
Andrew Daiglel
Financel
Oct 12, 2007
Real Estate 101: Understanding Mortgages
If you are like most first time homebuyers, you do not already have the money saved up to purchase the home you have selected. As such, you will need to borrow money from a lending institution in order to help you finance your purchase.
By:
Eric Bramlettl
Finance>
Real Estatel
Dec 25, 2007
Real Estate 101: Understanding Mortgages
If you are like most first time homebuyers, you do not already have the money saved up to purchase the home you have selected. As such, you will need to borrow money from a lending institution in order to help you finance your purchase.
By:
Eric Bramlettl
Finance>
Real Estatel
Dec 22, 2007
interest rates,Mortgage Interest Rates,Loan-to-Value,mortgage intrest rates
By:
Dane Pearsonl
Shopping>
Fashionl
May 13, 2010
Top 5 Benefits of Home Mortgage Refinance
Your mortgage is virtually an excellent financial tool that you can sharpen every now and then to suit your financial needs. With each new circumstance you are faced with, you can adjust accordingly through a home mortgage refinance.
By:
Alan Liml
Finance>
Mortgagel
Jan 21, 2008
Learn why Processional Carpet, House and Janitorial Cleaning are better for your health
Learn why Processional Carpet, House and Janitorial Cleaning are better for your health Zen Cleaning Solutions is a professional carpet cleaning, upholstery cleaning, janitorial service and house cleaning. Always check out our promotions: visit our website at http://zencleaningsolutions.net
By:
Kiml
Home Improvement>
Remodelingl
Nov 06, 2010
Let’s face it, there are a number of carpet cleaning companies out in the market today.
By:
Judith Brammerl
Home Improvement>
Remodelingl
Nov 06, 2010
Among the great deals that you can have for making your home more energy efficient is installing a double-paned window.
By:
Anthony Blommell
Home Improvement>
Remodelingl
Nov 06, 2010
Things to Consider for Window Replacement
If you are planning to have window replacements for your old windows, you are most probably pondering about the right price tags regarding such windows.
By:
Anthony Blommell
Home Improvement>
Remodelingl
Nov 06, 2010
A lot of homeowners are doing do-it-yourself window replacement on their outmoded single or double-pane windows with modern replacement windows made of vinyl or other strong synthetic materials.
By:
Anthony Blommell
Home Improvement>
Remodelingl
Nov 06, 2010
The gutter is an important element in a home’s visual appeal.
By:
Anthony Blommell
Home Improvement>
Remodelingl
Nov 06, 2010
Installation of Replacement Windows
Purchasing and installing modern windows can help in making a home more energy efficient, as well as in improving its overall appearance.
By:
Anthony Blommell
Home Improvement>
Remodelingl
Nov 06, 2010
Different Types of Replacement Windows
If you are looking forward to replace your old broken windows, you have to consider the type, the style, the price, and the energy efficiency of every replacement window.
By:
Anthony Blommell
Home Improvement>
Remodelingl
Nov 06, 2010
Will European Countries Get Their Debt Under Control Before Economic Stagnation?
European Countries in economic turmoil will not get their debts under control quickly enough before economic disasters. The main reason for this is that unemployment in these countries is very high. And how can the populace pay income taxes if people do not have jobs? The point is that they will not be able to pay income taxes to help their economies if jobs are not available for their citizens!
By:
Glenford Robinsonl
Finance>
Debt Consolidationl
May 18, 2010
Is it Sex Addiction or is it Men’s Desire to Display Power and Invincibility?
By nature, men love more than one woman. In the wild, male animals have more than one female partner. There is no law stating that a lion is entitled to only one lioness, but in the land of humans, there is such a law, provided that the man in question is not a Muslim who is entitled to having more than one wife if he is financially capable.
By:
Glenford Robinsonl
News and Society>
Men’s Issuesl
Apr 27, 2010
Hackers Used Google Analytics Javascript Code To Deliver Viruses! How?
How heart-wrenching is it to find out after adding Google Analytics to your website that the added code contains malicious codes, designed to download viruses on your visitors’ computers? Not very pleasing! Well, that is exactly what is happening to many website owners who have added the Google Analytics code to their websites.
By:
Glenford Robinsonl
Internet>
Internet Marketingl
Apr 26, 2010
lViews: 170
New York Mets Pitching Staff Not Bad At All After 20-Inning Marathon Win!
So, here we Mets Fans are again, waiting and hoping that the Mets start winning some games, so Jerry Manuel and Omar Minaya can keep their jobs. In fact, changing to a new regime by firing the General Manager and the Manager is not the answer to solving the Mets problems. The answer is putting the best baseball players on the field.
By:
Glenford Robinsonl
Sports and Fitness>
Baseballl
Apr 18, 2010
There Was No Single Big Bang That Created The Universe!
If there was ever a big bang that caused our existence, there has to have been some kind of matter or material in the environment, which was used as fuel to facilitate the big bang in the first place. There was indeed a world or a universe before any possible collision or big bang. Many scientists seem to believe whole heartedly in the big bang theory. However, there are some that do not and are advocating their own version of how the world was created.
By:
Glenford Robinsonl
News and Society>
Philosophyl
Apr 16, 2010
Human Immunodeficiency Virus Positive Man Cured By Bone Marrow Stem Cell Transplant! How?
Who would have thought 10 years ago that there would be a cure for AIDS? Well, according to the Journal Watch: HIV/AIDS Clinical Care, February 13, 2009, a 40-year-old HIV positive male German patient with Leukemia underwent bone marrow stem cell transplantation, which completely eradicated the virus from his body, 2 years later. Removing HIV was not the main reason why the patient underwent the risky procedure, doctors at the Berlin Charité Hospital said.
By:
Glenford Robinsonl
Health>
Diseases and Conditionsl
Apr 15, 2010
The EPA has established guidelines to follow when installing on-site septic tank systems. These guidelines are set forth to protect the health of the public by ensuring that water supplies don’t become contaminated with sewage as a result of defective septic tank systems. This is why trained professionals are the only people allowed to service or install septic tanks. The goal is therefore to maintain the long term integrity of septic systems, so they won’t affect our health and safety.
By:
Glenford Robinsonl
Home Improvement>
Constructionl
Apr 07, 2010
6 Reasons Why Your Credit Score Change
Many consumers do not realize what cause a change to occur on their credit report. It is paramount to having good credit. Good credit can be the difference between owning a home and not owning one. Some jobs will not hire people with delinquencies on their credit reports; the FDA is a prime example. The agency screens potential employees for many criteria and one of those requirements is delinquencies on credit reports…
By:
Glenford Robinsonl
Self Improvement>
Self Helpl
Apr 04, 2010
Add new Comment
Your Name: *
Your Email:
Comment Body: *
Verification code:*
* Required fields
Submit
Your Articles Here
It’s Free and easy
Sign Up Today
Author Navigation
My Home
Publish Article
View/Edit Articles
View/Edit Q&A
Edit your Account
Manage Authors
Statistics Page
Personal RSS Builder
My Home
Edit your Account
Update Profile
View/Edit Q&A
Publish Article
Author Box
Glenford Robinson has 51 articles online
Articles Categories
All Categories
Advertising
Arts & Entertainment
Automotive
Beauty
Business
Careers
Computers
Education
Finance
Food and Beverage
Health
Hobbies
Home and Family
Home Improvement
Internet
Judaism
Law
Marketing
News and Society
Relationships
Self Improvement
Shopping
Spirituality
Sports and Fitness
Technology
Travel
Writing
Bath Showers
Construction
DIY
Furniture
Gardening
Home Security
Interior Design
Kitchens
Landscaping
Moving and Relocating
Pest Control
Remodeling
Tools and Equipment
]]>
Need Help?
Contact Us
FAQ
Submit Articles
Editorial Guidelines
Blog
Site Links
Recent Articles
Top Authors
Top Articles
Find Articles
Site Map
Webmasters
RSS Builder
RSS
Link to Us
Business Info
Advertising
Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2010 Free Articles by ArticlesBase.com, All rights reserved.
Five Ways To Benefit From Free Mortgage Loan Calculators
Category: Rates
