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Home Ownership Preparation :: National Mortgage Lenders
National Mortgage Lenders:
Comparing National Mortgage Plans and Lenders
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National mortgage lenders aren’t all the same. In fact, depending on who you give your mortgage business to and the rates you negotiate, your borrowing costs and customer service experience can vary wildly.
To learn more about comparing national mortgage lenders and how different types of mortgages work, keep reading.
Understanding the Major Mortgage Types National Lenders Offer
Home buyers face a bewildering array of mortgages--from traditional 30-year fixed-rate loans to those in which the balance of the principal is due in five years.
Choosing the best one can be a daunting task. However home buyers who do their homework, and compare national mortgage lenders and smaller lenders, can get a mortgage suited to their circumstances--and save thousands of dollars in interest payments.
30-Year Fixed Rate Mortgages
This is a standard mortgage offered by all national mortgage lenders like Chase, Bank of America, USBank and other major lenders. You borrow at a fixed interest rate and pay level monthly payments for the life of the loan.
Payments are almost entirely interest at first, then shift progressively to principal.
Since interest rates are low right now, these are the best loans for home buyers who plan to be in the house more than five to seven years and who want the assurance of level payments.
Rates can vary widely though, so check with several national mortgage lenders. A one-percentage-point increase on a $100,000 mortgage will cost you roughly $26,600 over 30 years.
15-Year Fixed Rate Loans
You pay off this variation on the 30-year fixed-rate mortgage in half the time. Payments are only 15% to 25% higher than on a 30-year loan--partly because the principal decreases more quickly and partly because rates are slightly lower.
Paying off a mortgage in half the usual time may not be a good idea, even for those who can afford the higher monthly bills.
Mortgage interest is tax-deductible, making it one of your cheapest sources of borrowed money.
Ask yourself whether the extra you pay on the shorter-term mortgage could earn more than the after-tax cost of the loan if you invested elsewhere.
Bi-Weekly Fixed Payment Loans
You pay half your monthly mortgage every two weeks. Despite costing you less interest, most national mortgage lenders are offering these programs due to high demand.
Because you make the equivalent of one extra monthly payment a year, you pay the loan in 18 to 22 years instead of 30.
You can make extra payments on a standard mortgage at no extra cost--and you can do so when it's convenient, without committing to a permanent arrangement.
Biweekly mortgages often have a processing fee, which you can use to pay down the principal yourself.
Most national mortgage lenders will also offer adjustable rate mortgages. Statistically, these types of mortgages end up costing less over the life of the mortgage.
However, with interest rates low and poised to go up, most first-time home buyers would be better off with a fixed rate plan that guarantees fixed monthly payments.
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Home-Ownership-Preparation.com :: National Mortgage Lenders