Mortgage

Mortgage Rates: What the Banks AREN'T Telling You | Jabar Post Indonesia

Mortgage Rates: What the Banks AREN'T Telling You | Jabar Post Indonesia/a> – This time JabarPost.Net will discuss about Mortgage.

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Mortgage Rates: What the Banks AREN'T Telling You | Jabar Post Indonesia

A mortgage loan or, simply, mortgage (/ˈmɔːrɡɪdʒ/) is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged. The loan is “secured” on the borrower’s property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property (“foreclosure” or “repossession”) to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning “death pledge” and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure.[1] A mortgage can also be described as “a borrower giving consideration in the form of a collateral for a benefit (loan)”.

Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property (for example, their own business premises, residential property let to tenants, or an investment portfolio). The lender will typically be a financial institution, such as a bank, credit union or building society, depending on the country concerned, and the loan arrangements can be made either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably. The lender’s rights over the secured property take priority over the borrower’s other creditors, which means that if the borrower becomes bankrupt or insolvent, the other creditors will only be repaid the debts owed to them from a sale of the secured property if the mortgage lender is repaid in full first.

In many jurisdictions, it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to enable them to purchase property outright. In countries where the demand for home ownership is highest, strong domestic markets for mortgages have developed. Mortgages can either be funded through the banking sector (that is, through short-term deposits) or through the capital markets through a process called “securitization”, which converts pools of mortgages into fungible bonds that can be sold to investors in small denominations.



Shopping For Mortgage Rates??? Looking To Refinance?? Or are you looking at different mortgages to buy a house?? Let’s shed some light and the truth about what the banks are NOT Telling You. I’m going to expose some truth as to why mortgage rates alone don’t save you money and there are tricks that the banks and mortgage lenders use to make a TON of money off of you! Don’t let this happen! Here we go… Mortgage Rates: What the Banks AREN’T Telling You

Pay Off Your Mortgage In 5 to 7 Years (On Average): https://www.youtube.com/watch?v=3f-ebCjeH8o

Now, chances are… You’re either:

1. Looking to Buy a New House
2. Refinancing an Existing Mortgage
3. or… You’re just curious about mortgage rates.

In any of these cases, your mortgage rate doesn’t REALLY matter. Unfortunately, the banks and the mortgage lenders may have misled the general public to think ONLY mortgage rates. The banks don’t really care about your general well-being. They want to make money off of you and your lack of understanding of how mortgages REALLY work regardless of the mortgage rates.

You may believe that our mortgage rates currently are SUPER low. Which historically, they are low when comparing it to the 1970s and 1980s. However, there’s this one thing that we’re NOT comparing to: The Amortization Period.

Okay… Here’s where we Expose The Banks…

Today, more and more borrowers are using LONGER amortization period (30 years or more) which has some negative downside when it comes to the accumulative interest that you will end up paying. Even with a low-interest rate of 3-5%, you can expect to pay a high cost for interest on a 30 year amortized loans. This is where the banks make you think that you’re getting a “good deal” when you walk out of the bank with a 3% interest rate when in fact, you may not.

The next thing that the banks DON’T want you to know is the front-loaded interest payments. When you take a look at a 30-year amortization chart, you’ll notice that vast majority of your monthly payments, in the beginning, is going to pay the interest of the mortgage. Now the problem here is not this arrangement but the fact that most Americans today are refinancing or obtaining a new mortgage every 8-10 years. Whenever you refinance or establish a new 30-year mortgage loan, you’re resetting the entire amortization schedule where you would be forced to go back to making big interest payments. The banks and mortgage lenders will try to persuade you that you’re saving “extra money” by refinancing into a lower interest rate and/or by saving money through lowered monthly payments. But as you can see, this is simply untrue with the fact that you’re resetting the clock back to the beginning of the amortization chart and big portion of your monthly payment goes straight to paying the banks. This perpetually leaves you in debt that you can never get out of.

Luckily, we developed a tactic and a strategy that doesn’t involve in either of the scenarios.

Pay Off Your Mortgage In 5 to 7 Years (On Average): https://www.youtube.com/watch?v=3f-ebCjeH8o

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16 Comments

  1. Can you do a video on getting commercial financing or refinancing for multifamily 10 unit. I’m about to refinance my 10 unit

    They’re only 5-7 years and amortized over 30 years. So you just have to keep refinancing every 3-7 years

  2. As you said, it is just math. The banks are not being dishonest. The reason banks offer 30 year amortized loans is to lower the payments. Most borrowers can't afford a 7 year amortized loan. The monthly payments would be too high. Also, there is nothing wrong with refinancing a loan as long as the interest rate on the new loan is lower than on your old loan and you make at least the monthly payment you were making on the old loan. Please don't give bad info to your viewers.

  3. With interest rates at historic lows, it does not make any sense to pay-off mortgages early. Nobody knows where interest rates will be after 7 to 10 years but they will certainly not be lower.

  4. Your presentation is correct. But you did not take into consideration that most people can only afford the payments on a 30 yr loan. So what’s the point of telling us about the Ammortization when there really isn’t another choice? Not everyone is an investor.

  5. If interest rates go down, you can also refinance with a lender that lets you pick the number of years over which you want the loan amortized between 15-30 years. If you have 22 years left when you refinance, the lender can charge a reduced interest rate to reflect the shorter term and your payment will be slightly higher than a new 30 year term loan because more will be going to principal.

    9:38 This statement is incorrect.. The lender does not make a greater % when the balance is higher, nor a lower % on the outstanding balance when it is lower. The lender is ambivalent if you make extra payments, they just keep track of them against the principal balance. Most loans are conventional conforming agency loans (Fannie / Freddy) or an FHA loan. The entity you are paying is getting paid by the actual lender to service your loan. They get paid for the services they provide to the actual note holder. The servicing company has the potential to make more if you go into default because they get to charge the note holder for the legal services to evict you and dispose of the property (that is one big reason it was so hard in 2008 to get relief on upside down loans). You are not taking into account the time value of money and opportunity cost (what else you could do with that money) of paying off the mortgage early. As a homeowner with two additional rental properties, I have one property free and clear (0% leveraged) , one 75% leveraged, and one 33% leveraged. It is very satisfying to own a property without a mortgage (but you never really pay it off because of property taxes and insurance into perpetuity), but I also value the financing that allows me to build equity.

  6. Homes in my neighborhood are selling for around 300K, updated of course. I owe around 190K but my home needs work. I am in the process of refinancing to pull money out so I can update my house. Am I making a mistake??????

  7. Let's say you refinance 5yrs into the loan at a lower rate. You won't pay more intrest than previous month. You would actually pay less interest, were they get you is by extending the loan they extend the yrs/months your paying interest.

    If you refi and your new payment is lower, but you keep paying the same amount as before you would pay your loan faster. This is not considering closing cost.

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