Loan Basics At its most basic a loan has: a length in years
an interest rate
whether it is fixed or adjustable
Loan Length The loan length in years can be 15, 20, 40, 45, or 50 years. There can also be additional loan terms. The longer a loan term is in years the lower the monthly payment will be. A 15 year loan will have a much higher payment than a 50 year loan. The longer it takes to pay off a loan the less you need to pay each month. Interest Rate Generally the longer your loan is fixed for the higher the interest rate is. A mortgage that is fixed for 2 years will likely have a lower mortgage rate than a loan that is fixed for 30 years. Being "fixed" means that the loan will not change its interest rate for the period where the loan is fixed. If the loan is fixed for 30 years at a 6.5% mortgage rate then the rate will not change at all for 30 years. Fixed Or Adjustable Rate Mortgage On paper a fixed loan seems the better choice for stability. Although the interest rate on a 30 year fixed mortgage may be higher (and the monthly payment higher) the borrower may have the peace of mind that their interest rate will not change for 30 years. People usually don't stay in the same property for 30 years. If you sell your property in 5 years an buy another one, you will be shopping for a loan at that time at whatever rates and available then. If the rates are higher at that time you will end up with a higher rate. Borrowers make a trade off between the number of years a loan is fixed and the number of years they plan to have a property. If you plan on being in a property for only 2 years, then getting a loan that is fixed for 2, 3, 5 or 10 years may be the smart choice. You run the risk of having your mortgage adjust at the end of that period if you still haven't moved. You can accept that risk in exchange for a lower rate now and a lower monthly payment. Here are our loan programs Loans For You No Point Loans: Fast Track Refi
1% Loan
Bad Credit
100% Cashout
125% Cashout
Debt Consolidation
First Time Buyer
Self Employed
15, 20, 30 Fixed
Foreign nationals
No Documents
100% Rental
40 Year Loan
Self employed
45 Year Loan |
