Lending Resource

Low Mortgage Rate Lending

The housing market may be down, but there are still benefits to buying a home. One of the silver linings in this down housing market is that the low interest rates make it attractive to buy. Interest rates on most mortgage types are at, or near, historic lows.

Best Low Mortgage Rates

The 30 year fixed loans will carry a great 4.2 percent interest rate in this current economy. Rates like these haven’t been seen in years and won’t be seen again when the economy improves. The 30 year fixed rate is generally what a home buyer will use to obtain financing for a home. There is also an option to carry a 15 year fixed, which will carry an interest rate of 3 percent annually.

Adjustable rate mortgages are also at really low interest levels. You can obtain a low rate of under 3 percent for the 5/1 ARM loan. The only downside to an adjustable rate loan is that the loan will become more expensive as the interest rates go up. However, if you are able to refinance later to a fixed loan, the ARM could be a great way to obtain an affordable loan.

Benefits of Low Mortgage Rates

Lower interest rates help first time homebuyers the most because low interest rates make payments more affordable. A 100,000 dollar loan at 4.2% would incur a total interest of about $76,000 over the life of the mortgage loan if you made only the monthly payments for a 30 year fixed. A 5% interest rate at 30 years fixed would be $93200. By having the 4.2% loan you could save yourself $17200 over the life of the loan. That kind of savings cannot be ignored by any means when you are making 30,000 dollars a year.

Interest Rate Details of a 30 Year Fixed Mortgage Loan

Mortgage Interest Rate of 4.2%

• Total payments ~ 176,045
• Total interest ~ 76,045
• Paying the monthly payment of $489
• Save $17211 having 4.2% compared to 5% interest
• Save $39793 having 4.2% compared to 6% interest

Mortgage Interest Rate of 5%

• Total payments ~ 193,256
• Total interest ~ 93,256
• Paying the monthly payment of $537
• Save $22582 having 5% compared to 6%

Mortgage Interest Rate of 6%

• Total payments ~ $215,838
• Total interest ~ $115,838
• Paying the monthly payment of $600

Another great thing about housing rates being low is that selling your current home could be a little easier. With easier access to credit, you could find someone willing to buy your home if the price is right. As long as there is equity in your home when you go to sell, there is profit to be made for sellers.

Just because the housing market is poor does not mean that there is not a deal to be had. As long as you have the credit and down payment needed, this kind of market can be a great time to buy. It is certainly a buyer’s market and the banks are making it easy to finance a loan with low interest.

Borrowing Large Sums of Money Advice

Borrowing money has consequences, especially if you are looking to borrow large sums of money. The credit market is tight these days and banks are wary about lending. However, if you need to borrow money, here are some things you should know.

Pay Attention to Interest Rates

Say you took out a 30000 dollar loan for a big ticket item. You have to be wary of the interest rate and repayment terms. If you bought a car with that money, the average payment is going to be around 600 dollars for 5 years.

A dealership might tell you that you can get a lower payment if you stretch it out to 6 years, but remember that the interest will also increase. Never go by monthly payments regardless of what loan you take out.

Finding Loan Cosigners

If you have less than perfect credit you can always get a loan cosigner. If you are the cosigner, be aware that you are responsible for the payment if the primary loan signer does not pay. This can affect your credit and will put you in the same boat as if you had actually signed the loan. Most student loans will require a cosigner.

Transfer Debt

What can you do about credit card debt? If you have $10000 in credit card debt, it can be tough to pay off. The best thing to do is to transfer that debt onto the lowest interest card you can find. Go to credit counseling if you need help with your debts. Make regular payments to keep your credit score up and to keep debt collectors from calling.

Be careful when you have to borrow large sums of money. Loans are meant to be repaid and are not free money. Only borrow what you can afford to repay and think strongly before cosigning a loan. Money management is important, so be smart with your finances.