Mortgages and Home Loans

Confused about different types of mortgages and home loans? We can help you learn about the variety of home loans for the different types of borrowing. Here’s a brief summary of the different types of home loans:

Purchase Home Loans:

Buying a home typically involves borrowing money from a lender. The first position home loan taken out on a property is called the first mortgage. When you take out a home loan on a property, you agree to pay the lender back over a certain period of time and pay interest charges on the loan over that period of time.

There are several types of first mortgage home loans, including:

• Fixed Rate - The interest rate you pay is fixed for the life of the loan.
• Adjustable Rate - The interest rate you pay is variable. This means that the interest rate changes – usually after a set period time – with a rate cap on how many points it can increase above the original amount over the term of the loan.
• Combination Rate (Fixed Period Adjustable Rate Mortgage) – The interest rate is fixed for an initial period of time. After the fixed rate period, the rate becomes adjustable. This allows homeowners to enjoy the stability of a fixed principal and interest payment for the first 3, 5, 7 or 10 years.

Second Mortgage Home Loans:

The second mortgage, also referred to as a home equity loan, is usually a second loan taken out on a property. This loan option allows homeowners to use the available equity in their home as collateral to guarantee the loan will be repaid. The home equity is the difference between the current market value of the home and the amount still owed on it.

There are several types of second mortgages, including:

• Fixed Rate Second Mortgage - The interest rate is fixed and usually linked to long-term interest rates. These loans are usually 15 years in length.
• Home Equity Line of Credit (HELOC) - The interest rate is variable and usually connected to the prime rate. Usually, borrowers access HELOC funds as needed and borrowing can usually last up to five years.

Refinancing:

Many homeowners refinance to lock in lower interest rates, change the terms of the loan (from one type of mortgage to another), to get cash to consolidate debt, pay for a home remodel and more. ** With a cash out refinance loan, you can refinance your mortgage for more than you currently owe (up to the available equity you have in your home) and get cash back for the difference.

** Refinancing or taking out a home equity loan or line of credit may increase the total number of monthly payments and/or the total amount paid when compared to your current situation.

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Learn about choosing the right lender, ways to improve your credit and credit scores and more.

What are Podcasts?

Podcasts are much like a short radio show but instead of using airwaves to reach the audience, podcasts use the Internet. The term podcast is a combination of the word “iPod” – Apple’s popular music player – and the word “broadcast.”

Do I need an MP3 player to listen to podcasts?

The great thing about podcasts is that you can listen online. You don’t need an iPod or an MP3 player. All you need is a computer with audio playing software (such as Windows Media or Quicktime).

How to Listen to Podcasts:

• Click on the Play Icon to listen online
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Learn How Credit Impacts Home Loans

If you want to find out how a consumer’s credit profile impacts their ability to obtain a home loan, you’ve come to the right place. If you’re looking for a home loan – whether to purchase, refinance or borrow from home equity – lenders will analyze your credit history before they make a decision. Your credit report and your credit score play an important role in the decision-making process. Before you start the home loan process, it’s a good idea to learn what’s in your credit history and maybe even get your credit score.

So get the scoop on how credit impacts home loans and go on to learn about:

• Types of Home Loans
• How You Can Control Your Mortgage Payment
• Keys to a Successful Loan Process
• Refinance Loans
• Reasons to Consider a Debt Consolidation Loan
• A Combo Loan from Countrywide

How Credit Impacts Home Loans: Interest Rates

The interest rate you’ll pay on your home loan is largely determined by your credit profile. When lenders evaluate your credit report they’re looking to asses the degree of risk – that is the likelihood that you will repay your obligations as agreed. Your credit score is one of the key factors used in evaluating risk – a high score translates to lower risk and a low score translates to higher risk. Financial institutions often price their loan products according to many factors including a borrower’s credit score. So if your credit score is on the low range of the spectrum and you qualify for a loan, lenders are likely to charge higher interest rates on your home loan.

1. What if you have good credit and your home loan rate seems too high?
   • Negotiate with your current lender and ask for a lower rate
   • Consider whether a refinance loan may help you to lower your rate
2. What if your credit is not perfect and your home loan rate seems too high?
   • Try to negotiate with your current lender for a lower rate
   • Shop for other lenders who may offer loan products for a wide range of credit grades

Credit Learning Center from Countrywide Credit

Looking for credit answers? You’ve come to the right place. Countrywide Credit is dedicated to providing basic information on credit-related topics. This section will help you gain insights to consumer credit, home loans, and real estate lending to educate and empower you.

Types of Credit:

Credit is another word for borrowing power. There are different types of credit such as home loans, educational loan, auto loans and more. This section of Countrywide Credit will provide you with some basic information about:

• Mortgages and Home Loans
• Get the Most out of a Personal Loan
• An Overview of Student Loans
• Types of Business Loans

Understanding Credit Cards:

Credit cards can be easy. Easy to get. Easy to use. Easy to abuse. That’s why credit cards are a good thing to understand. The more you know about credit cards, the more you can use them to achieve your goals. Learn about the ins and outs of credit by understanding credit cards.

Credit Reports:

Credit reports provide a detailed record of an individual’s borrowing and repaying history. Lending institutions use these credit reports to determine an individual’s interest rate and borrowing capabilities. Read more about credit reports.

Credit Scores:

From credit bureaus to credit scores to payment history, credit and credit scores can be a confusing subject. Read on and learn all about the mysteries of credit scores.

Identity Theft:

Identity theft is one of the fastest growing crimes in the nation. Learn about identity theft prevention and steps to take if you have been a victim of identity theft.

Credit & Divorce

Deciding to part ways can be overwhelming – not just emotionally but also financially. Learn about credit and divorce.

Credit & Bankruptcy

Bankruptcy is usually “the option of last resort” for people in a financial crisis. Bankruptcy alternatives include credit counseling and debt consolidation. Learn about credit and bankruptcy.