Posts Tagged ‘Adjustable Rate Mortgages’

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Basics Of Adjustable Rate Mortgage Loans

December 28th, 2010

Adjustable rate mortgages (ARM), developed when mortgage interest rates were high, can help you finance the purchase of a home with low interest rates. An ideal choice for those expecting an income raise and decide to move in a couple of years, an ARM also increases your risk for higher payments. Fortunately, lenders also offer safeguards to limit some of your risk to excessively high interest rates.

ARM Features

An ARM starts with a low interest rate, up to 3% lower than a fixed rate mortgage. With lower rates, you usually qualify to borrow more than with a fixed rate home loan.

ARMs start with a fixed rate period and end with fluctuating interest rates as the years go by, increasing or decreasing your monthly payment. So a 3:1 ARM means three years of fixed rates with interest rates changing every year after that. Interest rates are based on an economic index, usually the rate on the T-bill or LIBOR, and the margin the lender adds to the index.

In order to protect borrowers from increasing monthly payments, mortgage lenders put in place safeguards. A point cap limits how much interest rates can rise monthly over the life of the loan. There are also maximum limits on how low rates can go to protect the lender.

Another safeguard is the dollar cap on monthly repayments. If for whatever reason, interest rates rise higher than the dollar cap allows, you may end up with a longer loan. Most financing companies also allow you to convert your ARM to a fixed rate mortgage after a predetermined period.

While an ARM has many benefits. For instance, interest rates can rise 4% or more over the course of your home loan. If you decide to stay in your home for several years, a fixed rate may offer lower interest costs in the longer term. ARMs is not predictable, which makes planning long term financing goals difficult.

Before you apply for an ARM, make sure you are comfortable with the level of risk involve. However, if you expect your income to rise or to move, then you may be saving yourself a lot of money in interest payments with an ARM.

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Washington Mutual Refinance Mortgage

December 26th, 2010

If youre thinking about applying for a second mortgage, theres probably no better lender than Washington Mutual. They offer various refinance mortgage options as well as excellent customer service and support to make your financial obligations less burdensome.

Types of Washington Mutual Refinance Mortgage
There are basically two types of refinance mortgage offered by Washington Mutual: fixed and adjustable rate mortgages. Other preferences you may have can easily be negotiated for either type.

Fixed Rate Mortgage
This type of refinance mortgage is best if you wish for a simple payment structure; you wont have to compute for next months loan payment because the value will remain the same up to the final payment deadline for your loan. Fixed rate mortgages usually last from fifteen to thirty years, but Washington Mutual also offers a forty-year amortization period for those interested.

Adjustable Rate Mortgages
These are generally short-term in nature, lasting only from one to five years. Their interest rates fluctuate according to various factors but rest assured that Washington Mutual is always ready to consult with you for any adjustment or conversion you wish to make. Different types of adjustable rate mortgages are available and some may even allow you to make interest-only payments for a specified time period, consequently leaving you free to settle more pressing obligations you have.

If youre interested in a long-term ARM, Washington has that, too. A 10/1 ARM, for instance, will only have the interest rate adjust after the first ten years of the loan.

5 Benefits of Getting a Washington Mutual Refinance Mortgage
Applying for a Washington Mutual refinance mortgage allows you to enjoy various benefits, in which many of them other lenders would be hard pressed to match, much less surpass.

Two Week Processing Guarantee
No matter what your financial needs are and regardless of the type of refinance mortgage youre after, Washington Mutual can guarantee that your loan application shall be processed not later than two weeks.

Systematic Loan Process
Unlike other loan procedures, Washington Mutual offers a step-by-step procedure for loan application. Youll be given clear and specific instructions as to what you have to do in order to qualify. Once your loan application has been approved, youll be able to acquire your funds immediately and without further trouble.

Manage Your Account Online
Unlike other lenders, Washington Mutual doesnt make it hard for you to acquire any information you need regarding your loan. To manage and access your account online, proceed to the companys official website and submit your email address, social security number, and loan number at their My Home Loan page.

Your online account will be activated shortly and youll be given your login details. Afterwards, you can then find out all the information you need from payoff to escrow accounts. You can even get a tax deduction certificate or use your account to take advantage of other add-on products available on the website.

Documentation at Your Fingertips
If you have a need to print any document related to your Washington Mutual refinance mortgage, the company has facilities ready to meet your printing needs any time of the day.

Immediate Fund Transfer
You dont need to look for a Washington Mutual branch just to procure your funds. If you have an account in any major financial institution, your loan funds can be sent there immediately through electronic fund transfer.

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