Posts tagged Home loan
What are Graduated Payment Mortgages?

Graduated payment mortgages (GPMs) are a type of home loan with payments that start smaller and get larger as time goes on. These kind of mortgages have a fixed interest rate, and the payments often increase between 7-12% each year until a maximum payment amount is reached, which will continue for the rest of the life of the loan. Most GPMs are insured by the Federal Housing Administration (FHA).

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Are mortgage closing costs negotiable?

First and foremost, it is imperative to remember that you ultimately choose your mortgage lender, which means, there are choices – and the lender has the primary impact on the charges tacked on to your closing costs. This fact is advantageous to the buyer and should be used as a tool to compare estimated closing costs that lenders detail in the Loan Estimate.

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What is a Partially Amortizing Loan?

Many of us are familiar with amortization and fully amortizing loans. But not all amortized loans are fully amortizing. There are actually a subset of loans that are partially amortizing. These loans are not especially common in the home loan market, but they do exist.

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What is the Meaning of Amortization?

Amortization refers to a type of payment schedule that some home loans utilize. The payment schedule is made up of equal payment amounts that are stretched over a designated amount of time (the loan term). For the purpose of an amortization schedule, each payment is divided into two portions. There is a portion that is made up of interest (the cost of the loan), and a portion that is made up of principal (the value of the borrowed sum).

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Amortized Loans in Relation to Home Loans

Amortized home loans have been the mainstream payment method for mortgages for a long time. They were introduced to the housing market thanks to intervention from the Federal Housing Administration (FHA), which led to the formation of a fully amortizing 30-year fixed rate home loan.

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