50-Year Home Mortgage - The Methuselah of Mortgages

Many people are struggling to afford a home. But with the new offering available from a few lenders, these people now have a better chance of owning a home. The new offering is called the 50-year adjustable rate home mortgage and it’s bound to benefit a lot of consumers.

The arrival of the 50-year home mortgage is seen as a viable solution for a lot of homeowners who are cash-squeezed and looking for loan options more suitable for them. This home mortgage likewise offers homeowners a way to consolidate high interest loans. This type of home mortgage is also beneficial for borrowers who are searching for alternatives that offer them a way to afford more house for their money.

There are three different types of 50-year mortgages. They are:

· The fixed rate

· The adjustable rate, which may or may not come with a fixed rate for the first few years of the loan

· A loan that extends the principal payments for a period of 50 years, but obliges borrowers to come up with a balloon payment after a certain number of years

The 50-year home mortgage is also a good option for buyers who need to keep their payments low in spite of record home prices and rising rates. The most obvious advantage of the 50-year home mortgage is the lower payments as a result of the loan being stretched out for fifty years. Because the amortization is longer, the monthly payment is reduced, saving homeowners money every month. The monthly payments for a 50-year home mortgage can be as low as those for a 1-year mortgage. And, compared to a 30-year loan, the five-decades-long home mortgage normally costs around a quarter of a percentage point higher in interest.

The 50-year home mortgage is typically set up as a 5/1 adjustable rate mortgage. This means that for the first five years, the rate will be fixed, but will adjust with the market for the next 45 years. Because of this feature, the 50-year home mortgage becomes suitable for a buyer who needs assistance for the first five years of the loan. During this period, the buyer may opt to refinance into a more conventional mortgage with a shorter term.

Other benefits of the 50-year home mortgage include:

· Monthly payments are lower compared to more conventional mortgages like the 15- or 30-year mortgages

· Helps offset record-high home prices since the lower house payment boosts your purchasing power, allowing you to buy more of a house in a high-cost housing market

· An excellent option for those who are capable of making only small payments at first, but plan to refinance or sell the home in the future

· The minimum payments required will reduce the balance gradually

· The lower monthly payments enable you to buy a more expensive house, which you would find improbable otherwise

· An excellent way to enhance monthly cash flow for those considering purchasing or refinancing a rental property

With all the benefits the 50-year home mortgage offers, you might want to consider checking it with your mortgage lender. The important thing to remember is that not all 50-year loans are the same. There are lenders that offer a fixed rate for the entire life of the loan, while others offer options like a fixed rate for a number of years and a variable rate for the rest. Be sure to be fully informed first before making a decision.

Get more of Matt Peters' FREE tips and information on Mortgage Refinancing at http://www.homemortgageonline.org

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The Bare Bones of a Mortgage Loan

With the numerous mortgage options being offered by mortgage lenders today, newcomers to the arena may find the scenery just plain confusing. If you’re planning to get a mortgage loan, and you don’t know where to start, here is a list of the basics that you need to know about.

Mortgage Defined

A lot of people tend to use mortgage to mean a mortgage loan. A mortgage refers to the document that you, as a borrower, sign and entrust to a mortgage lender in return for a mortgage loan. If you default on your mortgage payments, the mortgage lender, through the document called mortgage, has the right to take possession of your property. The borrower, the one who applies for a mortgage loan, is referred to as the mortgagor since it is the borrower who hands the mortgage over to the mortgage lender.

Mortgage Loan

The basic premise of a mortgage loan is that it is a type of loan used to pay the difference between the purchase price and the cash available for a down payment. When mortgage lenders let you use their money, they will charge you a fee for it. The biggest fee is called the interest, which is expressed as an annual percentage of the loan. Usually, it is in the range of a low 5% and a high 12%. When you apply for a mortgage loan at one of these financial institutions, they will also charge you with an origination fee, which may include application fees, credit report fees and appraisal fees. The annual percentage rate (APR) consists of the base interest rate with points and other fees.

Mortgage Loan Rates

The mortgage loan comes in a fixed rate and adjustable rate. A fixed rate mortgage loan refers to a loan that features a fixed interest rate and fixed monthly payments for the entire life of a loan. Mortgage lenders typically offer 15- and 30-year fixed rate mortgage loans. An adjustable rate mortgage loan features lower initial rates, which may change as frequently as every six months. Borrowers who prefer going the least expensive way can opt for the 15-year mortgage loan. However, this type of loan is suitable for those who can afford the higher monthly mortgage payments. For people who plan on moving to another home in less than eight years, may find it more appropriate to settle for a 30-year mortgage loan, with its lower monthly mortgage payments.

Mortgage Loan and Down Payment

The down payment made on a house is usually in the range of five to 20 percent. The down payment precedes the mortgage loan, or the amount borrowed on the residual cost of the house. Thus a house that’s worth $450,000, you will require a down payment of $90,000 and a mortgage of $360,000.

Basic Mortgage Interest

Interest rates are prone to fluctuations, which make them highly unpredictable. There are two popular indices of short-term interest rates. The first one is the rate banks offer for six-month certificates of deposits (CDs). The second one is the interest on Treasury Bills, or T-bills. Mortgage lenders operate by charging around 2.5% over the publicly quoted interest rate. Compared to short-term rates, long-term rates are higher since they expose lenders to greater risk when lending money for a long time.

Get more of Matt Peters' FREE tips and information on Bad Credit Mortgage at http://www.homemortgageonline.org

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