All About Real Estate, Finance & Mortgages

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The Adjustable Rate Mortgage is quickly becoming one of the most popular options for consumers. There is a tremendous spread between the prime interest rate and a fixed long term mortgage. This spread can be as much as 3% and with the average mortgage in Canada approaching $130,000, this difference in interest rates can be tremendous. How does an adjustable rate mortgage work? The adjustable rate mortgage is quite different than traditional mortgages in that long-term mortgages are priced according to Bond market, while the adjustable rate mortgage is priced in accordance with the prime interest rate. The longer the term, the higher the interest rate. This is not always true but generally speaking it does hold true. By selecting a longer term mortgage you are agreeing to pay a higher interest rate for the term. It is similar to paying an insurance premium to guarantee the interest rate but the insurance premium is the higher rate. An adjustable rate mortgage gives you total control.

Your credit score is an important indicator of your creditworthiness. The higher your score the better chance you have at getting credit extended you. While many lenders use bureau scores to help them make lending decisions, they also take other aspects into consideration. Lenders will use your credit score to determine if you are likely to pay your bills and also help them place you with the appropriate repayment plan. For example if you have claimed bankruptcy in the past they might place you at a significantly higher interest rate. The following is used to calculate your beacon score: Payment history- This indicates if you have made your payments on time Amount owed - Comparison of what you owe to your credit limits with various lenders Length of time - This indicates how long you have had credit accounts New Credit - Shows how often you are looking for new credit Type of credit - Considers the type of loans you have - car loans, lines of credit, credit card balances I can't str

Many people dont even consider buying a home because they believe they cant afford it. In fact most people continue to rent and pay for someone elses mortgage. Homeownership is more affordable than people think in fact in most situations it is more affordable. Some factors to consider would be that rent increases over time but a fixed term mortgage does not, mortgage payments remain more stable over time. So lets think about it, by owning instead of renting your wealth will increase as you gain more home equity. It makes more sense to stop renting and start buying. Now dont get me wrong, buying a house is a big committment. The house must be kept in good condition, renovations, repairs and insurance expenses all add up. But if we think of it as an investment into increasing our net worth we see the value of owning over renting. Another reason people are stuck renting is that the banks have turned them down. How can I qualify for a mortgage when my bank has turned me down? The answer is

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Home equity loans and home equity lines of credit continue to grow in popularity. According to the Consumer Bankers Association, during 2003 combined home equity line and loan portfolios grew 29%, following a torrid 31% growth rate in 2002. With so many people deciding to cash in on their home's equity value, it seems sensible to review the factors that should be weighed in choosing between out a home equity loan (HEL) or a home equity line of credit (HELOC). In this article we outline three principal factors to weigh to make the decision as objective and rational as possible. But first, definitions: A home equity loan (HEL) is very similar to a regular residential mortgage except that it typically has a shorter term and is in a second (or junior) position behind the first mortgage on the property - if there is a first mortgage. With a HEL, you receive a lump sum of money at closing and agree to repay it according to a fixed amortization schedule (usually 5, 10 or 15 years). Much l