Are Student Loans Better Than Credit Cards?
When applying for student loans, it's so important for
prospective college students to calculate their finances as best
they can to receive the appropriate funding. From tuition and
books to room and board, living expenses and food,...
Home Equity Loans - Are They Right For You?
Copyright 2005 Dean Shainin The bills are out of control and you need a new car. “Maybe we can get a new carpet and paint the house”, you say to yourself. These are just a few reasons why home equity loans can seem like the solution to all your...
Homeowner loans commensurate with the special status of homeowners in the UK
Presuming that there are a number of children in your home, you
often have to wait for getting your needs fixed. But the single
child knows how to get his demands fulfilled. His denial to eat
once has his parents going down on his knees....
Should You Consolidate Your Student Loans?
Spending time in college means going to classes, writing papers, studying for exams, and enjoying the college experience of fun, food, and frolic. Oh, if it only were that easy! Chances are you are racking up some serious debt in the form of...
Student Loans 101
When it comes to furthering your education, you must have
student loans to do it. It is rather simple to get extra funding
to cover your school costs when scholarships and grants do not
add up to enough funding. There are student loans out there...
Option One Mortgage Loans – Getting an Option ARM or Option One Mortgage Loan
Have you heard about or been interested in finding out more about option one mortgage loans? They are becoming very popular, but its important to understand how they work before you apply for one. I will describe, in this article, an overview of the most common type of option ARM mortgage loan or option one mortgage loan.
How do they work? Option one mortgage loans are basically interest only mortgage loans, except that the first year, you pay only 1.25% of the interest on the loan. The remainder of the interest that is accruing is being added to the loan amount. The second year of the loan you pay more interest until gradually you are paying either full interest only payments or fully amortized payments (interest & principle). The reason the loans are called option loans is because every time you have a payment due, you have the option of paying the less than interest only portion, interest only or a fully amortized payment. This option would be good in a situation where your income is sporadic.
This mortgage loan type typically gives you 4 payment options in every bill.
Option #3 – Pay the interest-only portion of the loan (Interest Only)
Option #4 – Make a partial interest payment (1.25% - 1.95% depending on your loan type) and defer paying the additional interest to the total loan amount. (Deferred interest can be counteracted by making bi-monthly payments and by property appreciation)
This type of loan is good if you want to:
Wait a while to refinance again – If interest rates drop again, so does your payment. If you want to accelerate your payments and increase equity quick, pay more on your loan and it will be applied to future payments & will be directly applied to the principle balance. Will you want a 30-year loan? Keep the option to pay your loan as a 30-year, 15-year, or interest only payments.
Have an adjustable rate mortgage but want stability – This loan has a payment cap. The interest rate on this loan is based on the 12 month-MTA index, the most stable index of the 4 main indexes (COFI, LIBOR, MTA & CMT). This index
is always below prime. The interest rate is based on the world economic markets which have been steadily coming down over the last 3 years. This loan has a 5-year fixed payment option as well.
Invest your payment savings in something else – This could open up opportunities for you if you could invest in real estate, the stock market or another investment when you use the extra $500-1000+ a month you free up from your property payment. Pay off debt with your payment savings – You can use the payment savings to pay off other debt.
Have security and options in your mortgage loan – The main benefit to this type of loan is the security of a mortgage payment that you control. You decide at any time what kind of a mortgage you want. If all goes well in your future, you have the freedom to pay your 30 year loan into a 15 year loan without even consulting another mortgage broker. Get more home for your money – You can qualify for more home with these low payment options.
Who Can Qualify? Qualifying for this loan is basically the same as any other loan, it is based on credit, equity & assets, if you are strong in 1 of these or 2 of these, you could probably qualify and with lowest rate possible.
What if I want to take out a stated income loan? “Stated Income” or “No income/assets” loans are possible with this Option One Loan.
These are just general guidelines and information about this type of loan. You will want to discuss all of these details with your broker or lender before you actually complete the loan. These factors may vary with each individual lender. Many lenders do not offer their customers this type of loan. If you are seeking an option one or option ARM loan, you will need to talk to your broker about it or find a broker that can do this type of loan. To see our recommended lenders for this type of loan. Visit here: Option One Mortgage Lenders.
About the Author
Written by Carrie Reeder, Owner of ABC Loan Guide. Carrie's website is an informational mortgage loan website. Her website has articles and a list of recommended mortgage lenders for many different types of mortgage loans.
