Jimmy Jenkins Ray asked:




A mortgage loan means a lending which is secured by mortgaging a property of the borrower. The borrower’s right to the property is pledged as a security to the loan. In day to day life the term ‘mortgage’ is used to refer to a loan secured by a property. The properties mortgaged can be personal properties or commercial properties. A conditional right is maintained by the lender on the property until the borrowed amount including the interest is repaid. The repayment amount is amortized.

The rate of interest on mortgage loan is comparatively less. This is because the property in hands of the lender reduces the risk of uncertainty of repayment. People generally opt for mortgage loan while procuring residential or commercial properties. The same property which is being purchased is pledged for the loan.

There are different types of mortgage loans available. They vary in terms of risk, rate and cost. Some of these are:
FRM Loans-These are fixed rate mortgage loans. The rate of interest remains the same during the lending period. ARM-The rate of interest fluctuates during the loan period. There are various factors that determine the change in the interest rate. Blanket Loans-These are loans which are secured by pledging more than one property. This type is mostly considered by real estate developers. Buy down Loans-The borrower can pay a part of the lending in lump sum in order to reduce the rate of interest of the loan. Convertible loans-The terms of the lending change after the passage of a predetermined period. Balloon loans-The lending period is short and the monthly payments are also low. The rate of interest is fixed. At the end of the period the borrower will have to pay a huge amount.

Jessica

dwanal asked:


I’ve been approved for a 1st mortgage at a fixed rate of 7.38 and a 2n mortgage interest only at 10.425. This loan is for an investment property. I’ve been told that the 2nd loan is Home equity line of credit. How much will my payments go up on the 2nd mortgage and should I look for another loan. Thank You.

Marilyn

Spaghetti asked:


I have a mortgage of 200K.I have a first mortgage of 160K at a fixed rate of 5.785% over 30yrs. and the 2nd one’s 40K at 9.00% fixed.Now,the value of my place went up to about 350K in the last 4 years.Should I stay with my current plan or should I re-finance? And if I do,which way should I go? Home Equity loan or Home Equity line?

Phyllis