Understanding Different Types of Mortgages: Fixed-Rate, Adjustable-Rate, and Other Options, Slides of Fundamentals of E-Commerce

Download Understanding Different Types of Mortgages: Fixed-Rate, Adjustable-Rate, and Other Options and more Slides Fundamentals of E-Commerce in PDF only on Docsity! Types of Mortgages • Fixed-rate mortgage loans • Adjustable-rate mortgage (ARM) loans • Other mortgage loan options Docsity.com Fixed-Rate Mortgage Loans • Assumable loans -- allow for transfer of the mortgage with the home. • Prepayment privilege -- allows the payee to increase the monthly payment without a fee. Docsity.com ARM Innovations • Convertible • Reduction-option • Two-step • Price level adjusted Docsity.com Other Mortgage Loan Options • Balloon payment mortgage • Graduated payment mortgage • Growing equity mortgage • Shared appreciation mortgage Docsity.com Adjustable-Rate Versus Fixed-Rate Mortgages • Fixed-rate issues to consider: – fixed payments – lower interest rate risk – no risk of negative amortization • Adjustable-rate issues to consider: – lower initial interest rate – may qualify for a larger loan due to lower monthly payments – with rising rates, rising payments Docsity.com Housing Step 4: Postpurchase Activities • Time and money for upkeep and maintenance. • Refinancing your mortgage – 2% rule – closing costs Docsity.com Summary • Smart buying – Step 1: Do your homework to narrow your car choice. – Step 2: Make your selection. – Step 3: Make your purchase. – Step 4: Maintain your purchase – Step 5: Consider consumer protection and your car. Docsity.com