Posts Tagged fixed rate
Secured Line of Credit or a Mortgage Refinance? What is better for you?
Posted by Top Home Loans in General Banking, Mortgage Advice on August 10, 2010
When deciding if you want to get a secured line of credit or a mortgage, the first thing that you need to decide on is what is important to you. Do you want to have lower monthly payments, or do you want to decrease your interest and pay off your debt faster? These choices are the most important choices, and they have a huge impact on how you manage your mortgage. What is a secured line of credit?
A secured line of credit is a low interest line of credit. The only difference between a regular line of credit and a secured line of credit is that it is secured against your house, and it is a lower interest rate than a regular line of credit.
A secured line of credit is also a variable rate, whereas a mortgage can be a fixed rate or a variable rate. The secured line of credit does not have a defined repayment time, and you can keep the secured line of credit open for as long as you own a house. The minimum payments on a secured line of credit are interest only. The setup fees, on a secured line of credit, are very low in comparison to a mortgage. However, a true comparison between the two puts the secured line of credit at a clear disadvantage if you intend on using it.
What benefits does a Mortgage have over a Secured Line of Credit?
A mortgage has a higher monthly payment; however, this is a good thing because you will know when you can expect to pay off your loan. You will be provided with a certain time frame to have it paid off by, and certain fixed payments. A mortgage acts similar to a loan whereas the secured line of credit is a line of credit. The mortgage can also offer a lower variable rate on your mortgage. As of right now, the secured line of credit features a prime plus rate and the mortgage features a prime minus rate.
If you intend on holding a balance on your secured line of credit for several months, then it may be in your benefit to choose a mortgage over a secured line of credit. Even though secured line of credit may seem more advantageous with some of the features available on the secured line of credit, it is designed to put the borrower into perpetual debt. It is a good idea to not have a revolving balance on this account.
What is the Better account, a Mortgage or a Secured Line of Credit?
What is better depends on how you intend to use the account. If you goal is to pay off your outstanding balances as quickly as possible, then you may want to consider the mortgage. If you are not concerned with how long it takes you to pay off your accounts, and you would prefer the lower payments, then you would rather choose secured line of credit over the mortgage. However, many people also choose both. You do not usually need to pick either one or the other. Some borrowers with plenty of equity can choose both products.
What do you think is better, a secured line of credit or a mortgage? How did you come up with your decision? Leave your response in the comments below.
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How to make your Mortgage Disappear; 25 Simple Tricks to Pay it Off
Posted by Top Home Loans in General Banking, Mortgage Advice on June 15, 2010
This is a list of many good tricks that allow you to pay off your mortgage quickly and easy:
1. Avoid CMHC fees. Put 20% down payment when buying.
2. Reduce your amortization frequently.
3. Increase your payments whenever possible.
4. Try to avoid refinancing as much as possible.
5. Make sum payments as frequently as possible.
6. Pay weekly accelerated instead of monthly.
7. Choose a variable rate over a fixed rate.
8. Never skip a payment.
9. Always make sure your payments are on time to avoid late fees.
10. If your household income increases, then increase your mortgage payments to reflect your income increase.
11. Get a promotion at work? Then move some of the money towards your mortgage.
12. Buy a smaller property. You do not need to purchase the biggest house on the block.
13. Purchase move-in ready houses to avoid having to do renovations.
14. Limit your maximum amortization to 20 years.
15. Buy a house you can afford.
16. Get a secured line of credit if you need to consolidate debt or do renovations.
17. Work a second job and put all the money towards your mortgage.
18. Rent out free space in your house to collect extra income.
19. Refinance your mortgage rate to a lower variable rate if your rate is too high.
20. Set goals and time lines to payoff certain amounts of your mortgage.
21. Carefully monitor your mortgage to make sure you are achieving your targets.
22. Monitor the real estate market to ensure your knowledge of mortgage trends.
23. Shop different banks when your mortgage comes up for renewal.
24. Use an experienced professional mortgage broker.
25. Pay your mortgage off now; invest later.
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Mortgage Originations; How to find a Lender that Suits you
Posted by Top Home Loans in Mortgage Advice, Mortgage News on May 26, 2010
When looking for a mortgage, most people do not know what they are looking for. A tough decision can be choosing the frequency of payments or choosing either a fixed rate or a variable rate; however, there are sometimes several more difficult decisions that the mortgage broker will make for you.
Sometimes these decisions can make a difference between tens of thousands of dollars. Most people, when shopping for a mortgage, will just visit their local bank, and get their mortgage setup without too much hassle: however, by doing this, you are severely limiting the interest rates, products, underwriting guidelines, and approval rates. With such limits on what you can do, then it would come with quite a large cost.
Fortunately, mortgage brokers have the ability to compare most banks to find out what the best deal would be for you and your family. This is because a broker can choose between rates, products, mortgages and discounting from several banks. In most cases, mortgage brokers want to maintain satisfied customers, so they will find the product that best fits their clients. This can usually net the client thousands of dollars in savings over the client shopping themselves.
All brokers are not alike though, and the best way to find a good mortgage broker is through referral. The more people have positive experiences, then the greater word of mouth. Ask friends and family for referrals. A good broker can save a ton of money for you, so make sure that you do your homework.
Did you use a mortgage broker? What was your experience with your mortgage broker?