Tag Archive | “type of mortgage”

Avoid Three Types of High Risk Mortgages

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There is availability of many of the high risk mortgages in the market that you must shun by all means. A high risk mortgage offers you a prospect that seems quite alluring initially. However, when you scrutinize its nitty gritty, you won’t find it as attractive as it seems.

Just out of the blue, you will find yourself in a very high risk situation. In that case, you should adopt every known strategy to avoid a high risk mortgage. Below are given few kinds of high risk mortgage that you should avoid at all costs

Interest-Only Loans

Undoubtedly, one of the most risky types of loans is the interest-only loan. With the availability of this type of arrangement, you will often be lured by the more reasonably priced mortgage payment every month. Since you will pay loan only on the mortgage, hence the payment is reduced every month throughout the life span of loan.

Though it seems a nice prospect to make a lower payment, but you will be baffled at the end of the mortgage term. You will then be liable to pay the entire loan amount. For instance, if you got a mortgage for the amount of $200,000; you can easily pay the mortgage devotedly for 30 years. At the end of mortgage; you have to pay the sum of $200,000 all at once. If you fail to do so, then the house belongs to the bank.

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Four Types Of Home Loan & How to Apply

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There are four types of home loans that are available for borrowers. The lenders matches the borrower’s profile to one type of the loan that best suits him. This matching is processed according to the borrower’s credibility to pay , rates and terms. Below are some details mentioned:ist2_4152871-home-loan

1: Complete Documentation Loan:

This is the basic of all kinds of loans. This loan is specifically designed for high credit score consumers who are employed and consists full income and asset documentation. Strong income level provides support to the current debts and the new loans. For strong and established borrowers, lenders offers attractive interest rates. Rates are set quite low to attract borrower .

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September 2011
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