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home loan interest rate |
An insurance policy (such as life, disability, or unemployment) that pays the lender the balance of the loan if something happens to the borrower before the loan is paid off. Sometimes the lender adds the entire price of the policy to the total amount you are borrowing but this is very expensive because you pay interest on that amount over the life of the mortgage. Charging for single premium credit insurance is illegal in some states. Interest: The percentage rate lenders charge you for using their money. The higher the percentage, the more you pay. Adjustable Rate Mortgage (ARM): A home loan where the interest rate can go up or down at certain periods stated in the loan document during the time you are repaying the loan. Home loans are available from several types of lenders—thrift institutions, commercial banks, mortgage companies, and credit unions. Different lenders may quote you different prices, so you should contact several lenders to make sure you're getting the best price. You can also get a home loan through a mortgage broker. Brokers arrange transactions rather than lending money directly; in other words, they find a lender for you. A broker's access to several lenders can mean a wider selection of loan products and terms from which you can choose. Brokers will generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act as your agent. Consequently, you should consider contacting more than one broker, just as you should with banks or thrift institutions. Be sure to get information about equity loans from several lenders or brokers. Know how much of a payment you can afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate is not enough. Ask for information about the same loan amount, loan term, and type of loan so that you can compare the information. |
