Christian Second Home Mortgage
A Christian second home mortgage is an opportunity for a person to expand his financial status without having to use more expensive methods of borrowing, such as credit card debt. Several things need to be examined in second home mortgages. One is the interest rate carried by the loan. This type of loan may carry one of two kinds of interest rates: a fixed rate (FRM) or an adjustable rate (ARM). A FRM means that the interest percentage will not change over the life of the loan. An ARM means that the percentage can change along with the federal prime interest rate. An adjustable rate can be advantageous or a liability, depending on how the prime rate changes over the years. Most people will benefit from a fixed rate so that they can budget their monthly payments.
One important aspect for a borrower to consider when applying for a second home mortgage is what will happen to the equity on the house once the loan takes effect. Some lenders offer loans of up to 125 percent of the house's value. This type of funding can be disastrous if real estate values fall or if the homeowner needs to sell the house within a few years and doesn't have enough equity to pay off the loan. Another consideration for applicants for second home mortgages is that the use of second mortgages increases the probability that if a crisis occurs in the life of the debtor, the home may be lost to default. Some of this risk may be eased by taking out mortgage insurance, which covers the homeowner in case of illness, accident, or death.
A third consideration for the borrower is to look into the options of credit and equity lines before settling on a contract. It pays to shop around because different lenders offer much different terms and interest rates. One difference between lenders is the kinds of fees that the company might charge for lending money. The amount charged for fees is a point where a borrower can bargain with the lender. Some contracts will charge penalties for paying off the loan early. The rates for late payment fees also vary widely. Another fact to research is what the loan can be used for. Some second home mortgage loans have no restriction; others are specific about what the borrower can use the money for.
Lastly, when thinking about getting a second home mortgage, spend some time in prayer. The Lord wants His children to think hard before borrowing money and desires us to follow His principles in all we do. The apostle Paul advises us, "For our rejoicing is this, the testimony of our conscience, that in simplicity and godly sincerity, not with fleshly wisdom, but by the grace of God, we have had our conversation in the world, and more abundantly to you-ward" (2 Corinthians 1:12). The Lord does not want us to depend on ourselves when making decisions like taking out second home mortgages.
Interest only home loans can be found among most reputable lending institutions that offer many options to consumer demands. This financing arrangement requires monthly payments of the interest exclusive of the principle amount. This does not mean that a homeowner never pays the principle, but interest only home loans offer a period of time within the terms when the homeowner is required to pay off the monthly accrued interest. For many homeowners this is a viable option for many reasons, but only they are not the popular norm for the typical consumer wishing to purchase a place to live.
This specialty financing option is just one of the many types of home loans available to consumers who have a variety of personal, financial requirements when purchasing a house. There are types of financing available with varying monthly payment terms, interest rates and pay off time. An interest only home loan appeals to a niche of consumers who have particular reasons for choosing an arrangement requiring payments of only finance charges for a specified amount of time. It is not a wise move for most consumers to choose them because the principle is not paid for months or years and may not prove to be the best investment.
However, for consumers who have particular reasons for assuming an interest only home loan, this option can be very suitable for their situation. If a homeowner is only going to occupy the purchased house a few months or short years, it may prove worth their while to choose such an option because of the low, monthly payments. Such loans that are assumed for 5 years or less do not offer equity loss if the consumer does not stay in the home longer. For real estate investors who are buying homes in order to turn a quick profit with an early resale, interest only home loans are perfect investment tools.
For some home owners who believe their income will increase within a few years, this option may be wise because they can pay interest for a few years and then when the principle payments kick in, they will be ready to pay off large amounts. For the right consumer, an interest only home loan can be a great investment, too. Thoroughly investigate your loan options before choosing which home financing is best for you. It's best to seek Godly wisdom when searching for the loan to help change your situation. "Humble yourselves in the sight of the Lord, and he shall lift you up" (James 4:10)
Christian Fixed Home Equity LoanFixed home equity loans are loans that are granted to a borrower based on the equity in their existing mortgage with set interest rates, meaning that the interest rate does not fluctuate with the market. There are many reasons that homeowners seek to refinance their property, whether to take care of emergency cash needs, make large property repairs, consolidate credit card debt or many other large purchases. Getting financing based on a home's equity can be much cheaper than accruing finance charges on credit cards or the higher costing short, unsecured deals.
Finding a fixed home equity loan is relatively simple and depends primarily on the available value of the property versus the outstanding mortgage. Homeowners can browse the Internet where rates are advertised across the nation, and mortgage companies are usually ready to vie for borrower's business. There are hundreds of lenders advertising fixed home equity loans online, and with the mass market surfing the Internet, mortgage companies are getting very competitive.
The term for this agreement means the dollar value that is the difference between what is owed and what the property is worth on the real estate market. For example, when a property has a market value of $150,000 and the homeowner owes $100,000 on the mortgage note, the value is equal to $50,000. A homeowner can borrow up to $50,000 on the value or the maximum percentage of the total value as determined by the different lenders' standards. This type of financing is specifically a second (or possibly third) mortgage, which used the property as a means of payment should the borrower default on repayment. When a mortgage company repossesses a property, they sell it to pay off the debt, so if there is a default on a second mortgage or a fixed home equity loan, the homeowner could lose their house.
There are different types of these second mortgage arrangements and different terms available. Much of the terms extended will depend upon the amount of money borrowed. The amount of the monthly payment will stay the same throughout the life of the mortgage, which can extend to up to fifteen years. Many homeowners consider fixed home equity loans to update or remodel their homes, knowing that the remodel venture will increase the home's value and therefore increase the property value. Also, these financing arrangements have become popular with those who want to consolidate debt, because a fixed home equity loan can cost less in interest fees that credit card debt or other consolidation programs.
Pricing terms and conditions can find a borrower the best rates. Seek financial advice before choosing a fixed home equity loan mortgage group to work with. Fixed home equity loans are not for every homeowner, especially if there is any chance they will default on the payments. "Yet a little sleep, a little slumber, a little folding of the hands to sleep: So shall thy poverty come as one that travelleth, and thy want as an armed man" (Proverbs 6:10-11).
Refinancing an equity loan is defined as to finance an amount again, in this case a home equity loan which is based on the percentage of the value of real property that the owner includes in his net worth. Refinancing equity loans became popular when interest rates for mortgages dropped dramatically. Refinancing any amount is a way for a different lender to get interest from a previous balance. It is common knowledge that most mortgages require a majority of the interest to be paid earlier in the term.
It is not common knowledge that lenders can double dip from one loan by refinancing at a lower interest rate, and collecting a majority of the new interest on the new mortgage in the early part of the term. This can be done to benefit two lenders, and in the end results in the homeowner receiving a lower interest rate which, also saves them money in the long run and on their monthly payments. A lender will allow refinancing an equity loan because they would have already received a generous portion of their interest early. They are happy to be paid off after already collecting that interest. Refinancing an equity loan for the second lender is a benefit because this enables them to receive all of their interest money throughout the life of the new mortgage.
For example: Suppose Mark, a homeowner, refinanced after 5 years. This mortgage was for $50,000 at a 7% rate. His monthly payments were $388. The loan was originally for 20 years, but refinancing equity loans became the new talk at work, so Mark decided to check it out. Mark found out that after five years of making over $23k in payments toward his mortgage, only $6900 had gone towards principle. So he got a new mortgage for $43,200 to pay off the original balance at a 5% interest rate.
The refinance process would lower Mark's monthly payment by $47 per month. His total interest charges at the end of the first mortgage would have totaled $44k, but refinancing an equity loan would also save him over $8k in interest for the remaining 15 years. The first Christian lender received over a 30% return on their money the first 5 years. That is an incredible return for an investor. The second Christian lender received a 45% return on their money over 15 years. It is easy to see why lenders are in the mortgage business. It is advised to all consumers considering refinancing equity loans to check the lenders standing with the Better Business Bureau to be sure of customer satisfaction. Homeowners should also pray about this important decision. "Let my prayer come before thee: incline thine ear unto my cry" (Psalm 88:2).