Christian Interest Only Mortgage Refinance
A Christian interest only mortgage refinance may be the answer for those who want to remain in their same residence but need to lower their monthly mortgage payments for the foreseeable future. An interest only mortgage refinance allows a homeowner who has been paying both the mortgage costs (interest) and the loan principle to just pay the cost of the loan for at least a ten year period of time. Paying just the mortgage costs frees up money each month for other expenses that may have been choking the budget before. Of course during good months when the cash flow is more plentiful, the homeowner may pay as much on the principle of the lending agreement as desired. This type of lending agreement may be perfect for the person engaged in a sales job where money is really good for a few months and then really awful for the next few.
In most cases however, a mortgage cost only lending agreement may not have the low rate of a fixed rate lending agreement may have. As a matter of fact, a home loan crafted to allow the homeowner only to pay the cost of the home loan will be a variable interest rate lending agreement. But in today's very tight economy, some homeowners are looking for the ability to free up much needed income for other purposes and an interest only mortgage refinance is the answer for them. Some homeowner might use the extra monthly cash to make home improvements, others want to be able to save for a child's college expenses, and others may just want to add to their retirement account. But there is a downside to this kind of lending agreement.
Financial experts are quick to point out that often a homeowner who chooses to move from a fixed rate loan to an interest only mortgage refinance may not be building any equity in their house. And in many parts of the country, this may be true because housing values have actually been falling. Consequently, paying just the cost of a home loan for a piece of property that is declining in value can be a shock later on when the need to sell the house comes into play. If on the other hand a homeowner is fortunate enough to live in an area of continuing growth in the real estate market, paying only the cost of the home loan can actually be a good move, depending on the owner's circumstances. There may be another reason why some homeowners opt for a principle-excluded refinance loan.
Many Americans have bought very expensive houses in recent years and have gone through job loss or medical issues that have affected earning income. Maybe it appeared to be a good decision at the time, choosing a very safe fixed rate thirty year home loan, but times changed. Now a fixed rate home loan may be draining a family dry financially. If there is the belief that another good job will be found in the next few years, or a recovery from a medical setback is made, an interest only mortgage refinance might make some sense. The Bible warns all people to guard against thinking that we are going to live indefinitely. "Whereas ye know not that shall be on the morrow. For what is your life? It is even a vapor that appeareth for a little time and then vanisheth away." (James 4:14)
A typical interest only mortgage refinance lending agreement does have a huge "Gotcha!" on the other end of the cost only portion of the home loan. If the cost only payment period is five or ten years, the entire lending agreement will still be for thirty years. That means that at the end of the five or ten year period, the principle payments are squeezed into twenty five or twenty years instead of thirty. That means much higher payments when they begin. So if the better job doesn't come along, and if the house actually goes down in value, the owner could be left with a very difficult situation.
The interest only mortgage refinance loan may be one of the only ways to keep a house out of foreclosure however. Taking steps to avoiding foreclosure must be made months before it might actually happen. While a person's credit is still reasonably good and this type of lending agreement is available and if a fixed rate mortgage is just weighing the homeowner down, action needs to be taken. The principle-excluded refinance loan may not be for this homeowner, but the option needs to be discussed with a qualified mortgage expert. Do not wait until it is too late and the house is gone. Move early and decisively.
An interest only mortgage refinance loan is really a very risky option. In only a few instances can it ever really be a good idea and in those cases the homeowner must be a very disciplined and focused individual. After all, consider the temptations that await the one who chooses such a lending agreement so that more money can be freed up for "investing." Where would a person be now if they had followed this logic two years ago before the stock market had lost thirty percent of its value? What if investing ideas turned into expensive vacations or a more luxurious car than really needed? Making the decision to truly use the extra money each month for a retirement account for ten years takes fortitude and a sense of direction.
Christian Interest Only Libor MortgagesAn interest only LIBOR mortgage allows consumers, or homebuyers, to purchase a home loan and pay only the interest on the note for an extended period of time, making monthly payments, initially, smaller. This may be a great way to purchase a home if the homebuyer wants to use the savings in monthly payments for other financial investments. Interest only LIBOR mortgages are also an option for those who may be in a work environment where pay increases with time, such as a territorial sales position. This type of mortgage is attracting the attention of many homebuyers looking for good deals in home loans with options that meet their personal financial needs.
This program is based on the London Interbank Offered Rate and is the British counterpart to the United States' federal banking rates. Rates can be based on either rate, and the home loan that is purchased will reflect what the perspective market is doing. Rates or pricing indexes can react to either market, and fluctuate accordingly. With an interest only LIBOR mortgage, the homebuyer will pay the interest only in the initial years of the home loan, paying on the principal in the latter years.
With these loans, the interest only payment can last for a specified time, and this time can reach from five to fifteen years. Once the payment comes to an end, the rate that is current, based on the LIBOR index, will be attached to the home loan note. Rates can rise and fall, according to the economy. With an interest only LIBOR mortgage, the rate may increase with time, as with an adjustable rate mortgage or ARM. The lower payment can offer those with interest only LIBOR mortgages a great savings in the beginning years of the loan, allowing for financial investments, or time to build a business.
The Internet can give consumers facts and figures about this and other loan options and programs that are available. Interest only LIBOR mortgages are advertised online through a variety of lenders and mortgage companies. Consumers should carefully consider all of the financial options available to them before deciding upon a loan and gather as much information about the LIBOR index. Though the initial house payments will be quite lower with an interest only LIBOR mortgage, the principal payment will eventually be due. Gathering as much information on this topic will allow the consumer to make an educated and wise decision. "The heart of the prudent getteth knowledge; and the ear of the wise seeketh knowledge" (Proverbs 18:15).
The lowest mortgage interest rate is always changing because the real estate market is always changing. However, with proper information, consumers can still determine the best deal on a home loan. Carefully choosing the right option can save homebuyers thousands of dollars. A homeowner can pay nearly three times the value of their home through a typical 30-year home loan because of interest. This is why it's extremely important for consumers to take advantage of the buyer's market and get low rates while they last.
In order to find a low-interest home loan, homebuyers must first do the long, tedious homework of finding out which home mortgage is best for them. Whether the consumer is applying for an initial home mortgage or refinancing makes no difference when looking to find the lowest mortgage interest rates. Ultimately, the decision to take out or refinance a home mortgage will benefit the homeowner in the long run when they find the lowest mortgage interest rate possible. Brokers will be able to help with this but consumers need to find their own options as well.
Homeowners may wish to look in the local newspaper's real estate section for brokers, to help find lenders, who will help find low interest loans. Brokers have a plethora of information readily available to help make a decision and find the lowest mortgage interest rates. Another great resource is the real estate agents themselves. Those who are looking to buy a home or have already purchased a home may have met with a real estate agent or two before. Build and keep these relationships; real estate agents have heard thousands of success or horror stories with certain lenders or situations and are more than equipped to help make a decision about who will fight for a loan the most. Many lenders can be found on the Internet and consumers can do quick quote comparisons before ever talking to a person on the phone or in person. It is good to keep all options open and stay knowledgeable about what one is entitled to for the lowest mortgage interest rates.
When the Christian homeowner is up to date on the lowest rates available, there will be in more power with their finances. It is important to find the lowest mortgage interest rate because homeowners will either be paying less per month or less over the course of the monthly payments. With a locked percentage, the borrower will have greater flexibility and be able to see the principle disappear. The choice is the borrower's to secure the lowest mortgage interest rate; they should plan not only for themselves but for their family and be responsible with all finances. Information and assistance can help but people are expected to be Biblically responsible with money. "For where your treasure is, there will your heart be also" (Luke 12:34).