Secured Loan Calculator

Kocim news - The largest purchase many families will make during their lifetime is the purchase of a home and to refinance it when the interest rates drop. Home loans are secured which means they are secured by the title to your home. By being an informed consumer, you can actually save money over the life of your loan.

There are two types of loans, secured and unsecured. Credit cards are unsecured, meaning the banks will give you a small line of credit based on your promise to pay it back. Home loans on the other hand are secured by the title to your home.

Seems like these days, options for refinancing and securing home loans are endless. Looking at loan rates from multiple banks and mortgage companies there are different amounts that the loan could end up costing. Even though the payment my be lower from one loan company or bank, the points and closing fees one pays up front can vary greatly from loan to loan. Another company may offer higher payments with lower points. This could well end up saving you many thousands of dollars over the life of the loan.

Shopping for loans to refinance your home, can often be a confusing and challenging. That's why it is so important to use a secured loan calculator when you need to decipher between different types of loans and save money when purchasing a loan.

When refinancing your home, plan on living in your home for three to five years. It takes at least this many years to pay for the upfront financing fees and points. Even if these lower interest rates and payments seem attractive, one may still be better off by keeping a current loan if they plan on selling their home soon.

Points and loan fees are what banks charge for servicing their loan. Banks and loan institutions charge different rates that's why it is important to comparison shop as many lending institutions as possible. Often banks will post this information directly on their websites.

When banks once again start to compete for your money, it may be possible to find no points no fee loans. Currently banks are holding tight to their money and these type of deals are are not found much these days.

Let's assume one bank offers no points or loan fees, the next thing to consider when shopping for a home loan is the interest rates. These will vary by the length of the loan, typically 15 and 30 year loans are the norm and this will determine monthly payments. In some cases it may actually be better to get a 30 year loan to keep payments lower. This is not necessarily the best deal since a home will cost much more to pay off over 30 years than if it were paid off sooner. The shorter the length of the loan, the less the interest rates will usually be.

Pre-Payment penalties are what banks charge if a loan is paid too soon. For example, if you were to get a better job and wanted to pay loan loan off to save on the interest and your loan had a pre-payment penalty claus, you would be charged extra to pay off the loan. Look for loans that do not have a prepayment claus.

The final step in finding the best loan to refinance a home is to have an excellent credit score. Banks determine your credit worthiness by looking at your FICO score. There are many places online that will give you your FICO score for Free. To get the lowest interest rates, your FICO score will need to be in the mid 700s or higher.

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