When we have 30 years to pay a loan why should we take the trouble of paying it off in 15 years by increasing our monthly interest and suffering to make the ends meet every month? Well here is the reason.

One of the major advantages of opting for a 15 year mortgage is the lesser amount of total interest paid apart from its rate of interest being typically lower compared to the 30 year mortgage.Initially the money you pay is accounted only for the interest. As years go by the interest you pay on a monthly basis is allotted to compensate for the principal.

Imagine a person has taken a FRM for 15 years at the rate of 5% and another person for 30 years at the rate of 5.25% for a principal of  $200,000, lets see what happens:

15 year    30 year

Monthly Payment                     $1581        $1104

Interest Paid                               $84,686       $197,587

Total                                                $284,686     $397,587

With a 15 year mortgage you save about $112,901 which can be used for a constructive purpose.

]]> http://www.8000credit.org/940/15-year-mortgage-30-year-mortgage/feed/ 0 http://www.8000credit.org/672/do-you-need-a-mortgage-broker/ http://www.8000credit.org/672/do-you-need-a-mortgage-broker/#comments Thu, 13 Aug 2009 07:30:58 +0000 Teena http://www.8000credit.org/?p=672 Are the services of a mortgage broker essential for you? Is it impossible for you to secure a good mortgage deal on your own? These are very relevant questions as a cunning mortgage broker can actually deteriorate your financial condition rather than help you build towards attaining your goals in life. Lots of people hire a mortgage broker in the hope that the broker will be able to help them secure a good mortgage deal. The fact is that, it is better to do some research on the mortgage market and compare the features provided by various companies on your own than seek the services of a mortgage broker to get a loan that fits your requirements.

The over-dependence of people on mortgage brokers may have even contributed considerably to the ongoing economic crisis. Dispensing with a mortgage broker can help you save time and keep more bucks in your wallet. Mortgage brokers can easily trick you if you are not vigilant. They will make you think that their service is very helpful for you. You will be made to believe that they are valuable to you and they are providing you very useful financial inputs. What they are actually doing is that they are utilizing you as a money-making source with little regard given to your cause.

Home-Account.com is an online resource that will help you immensely in avoiding the services of a mortgage broker. This is an acclaimed and credible site that has been featured in the prestigious PC Magazine. It enables different consumers to choose the mortgage that best suits their preferences. This site gives guidance that accounts for the specific financial condition of different customers. In addition, it will assess your financial condition and allot you a “grade” that reflects how much qualified you are to get a good mortgage deal.

The desirable features claimed by Home-Account include,

* The commitment to work towards realizing your interests rather than trying to tempt you into buying a particular financial product.

* Absence of any sort of fees paid or received from any mortgage broker, banker or salesperson.

* Their dedication in ensuring that the consumer receives the best deal possible by giving them all the inputs to make an informed decision.

* Their non-commitment to the lead generation business.

The promise to provide individual treatment to each of its customers and its assurance of unwavering dedication to the betterment of the customers make Home-Account unparalleled in the mortgage sector. From now onwards, you can dispense with your conventional mortgage broker. You can still make a search for a mortgage on your own, which will enable you to become familiar with the various aspects of securing a mortgage.

June 4th sale of mortgage backed securities pushed mortgage rates higher. A highly eventful week witnessed MBS coupon price move 200 basis points low early last week and conversely raising the thirty year fixed rate from 4.87 percent to 5.37 percent by weekend. The thirty year fixed rates were at a 4.62 percent before May 27th Black Wednesday.

To the market, this could very well mean the onset of recovery. Stock market is witnessing a positive change in the mood of investors who were investing in low risk assets like treasury debt are now attempting to invest in assets that yield higher returns. 

Gloomy days seem to be ending unless one was expecting a mortgage rate of 5 percent.

The Fed stimulates a feeble economy by slackening its monetary policies, thereby lowering the mortgage rates which provide greater options to refinance and make homes available at lower prices.

Positive hopes of recovery in the market were further strengthened by the recent release of the employment situation study. The report gives an insight on the job cuts or job creation, salary assessment and rate of unemployment.

The report states that the job cuts were 345,000, significantly lesser than the 520,000 forecasted by the economists. The unemployment rate was higher at 9.4 percent as compared to the predicted 9.2%. Though this is a discouraging figure it is a less gloomy than what the market anticipated. Previous two months have also seen slightly encouraging figures with 652,000 job cuts in March compared to 699,000 predicted job cuts. The month of April witnessed similar figures with 504,000 job cuts compared to 539,000 predicted job cuts.

Post release, MBS went down by 100 basis points and futures at Dow shot up.  The wage constituent of the report had a positive influence on MBS. Economists had predicted wages to increase by a .2 percent, although the reported figure was a .1 percent increase.  This is a good indicator for salary based inflation as the greatest resistance to mortgage rates was inflation.

Rates on mortgages have soared since the past ten days, and this has led people to worry about housing reforms, recovery, less than 5 percent sub mortgage rates and availability of lower mortgage rates.

Analysts remarked that the par thirty year fixed mortgage rate is between 5.125 percent – 5.375 percent for the highly eligible customers.  Mortgage rates which are not fixed are a better option for people who plan to keep a house for about seven years or less.

Five year arms, which carry a fixed interest rate as well as payment for five years and a floating rate post five years, have a rate of 4 percent as of today.  Five year arms are a better option for house owners who plan to own the house for a short while. It is essential to know how the loan liquidizes gradually if one is considering ARM as a viable option.