Tag Archives: mortgages
Interest Only Loan Rate
Interest only (IO) loans are loans that provide the option to pay just the interest on a loan for an initial period of repayment, say 5 years or 10 years. It also gives the choice of paying the interest plus as much principal as you want. The main advantage of this loan is the low interest you pay each month even though the interest rate is the same as that on conventional loans. IO loans also help to control the monthly payment and cash flow each month. After the initial period, the repayments are raised to fully amortized levels. These loans allow for a large principle prepayment if desired.
Interest only loans can be fixed-rate mortgages (FRM) or adjustable-rate mortgages (ARM). Though it is generally felt that interest only loans have lower interest rates, this is not true. In fact, they may have higher rates, because the risk is greater in IO loans. While going for an interest only loan with adjustable rates, it is very important to consider what the future interest rates are likely to be. This is because repayment in the future will consist of both interest as well as the principle.
For interest only loans based on the adjustable mortgage rates, the interest rate is calculated and changed based on the index rate. The Index rate depends on the average of Interbank offered rates for one year US dollar denominated deposits in the LIBOR (London Interbank Offered Rate). This Index is published in the Wall Street Journal. The interest rate is adjusted according to the index plus the margin (rounded to the nearest 1/8 percentage point). The interest rate cannot change by more than 5.00 percentage points than the initial interest rate over the whole term of the loan. Similarly, it cannot decrease less than the margin on the loan. Interest only loan products can be 30, 20, 15 or 10 year fixed mortgage with varying adjustable rates.
With increasing real estate prices, interest-only loans are becoming a preferred option for many. There are also many lending companies that are giving attractive options on interest-only loans. Information about interest-only loans is available on the Internet. They also contain easy-to-use interest only calculators that tell you the kind of repayments you will have to make. The current interest rates on interest only loans are also available on the Internet.
Payday Loans A Helping Hand in Financial Crisis!!
As its name indicates Payday loan is connected to your pay and payday. With your payday some seven to fourteen days away, you may need cash to pay off your immediate requirements. Payday loan companies, seeing this as a business opportunity, gives out a cash advance to be reimburse on your payday.
With payday still a couple of weeks away, you may require cash to meet your urgent requirements. Whatever your urgent need is, a payday loan is very useful. The good thing about payday loans is that in most cases the payday mortgages are credited to your account the day after you apply for it. The paperwork is almost negligible and the formalities are restricted to providing your Bank statement, salary stump and identification proof. You have no need even go to lenders office.
Once you make up your mind to get payday finance you fill in the prescribed form giving your personal details such as name of your banker, name or address of your employer. Before signing the payday loan agreement, spend a good amount of time studying the terms and conditions of the payday mortgage. Make sure that you are familiar with the rate of interest and annual percentage rate. Do not hesitate to ask for any clarification about how payday loans work and when you can anticipate getting your cash in advance. The payday loans lenders are far more flexible than banks and payday mortgages or cash advance providers can even ignore your bad credit rating. Dealing with payday loans lenders need a lot of attention to avoid feeling deceived later.
Getting payday loans habitually is surely not a good sign and it reflects your poor financial management skills or your extravagant lifestyle. Payday loans are meant for emergencies and not as a way of life. Before getting payday loans, do proper study all other options available to you for the cash advance. Many employers offer a cash advance to their employees to meet their critical obligations. Even though a loan is a credit and controlling your expenses is the best alternative.