When it comes to fixed rate home loans, it’s obvious that the lower your interest rate, the better, but just how much of a difference can a quarter point make? How much long term savings can putting down an extra $25,000 mean? $50,000?
In California and across the country, homeowners are doing what’s called “strategic defaulting” on their homes. This means that even though they can afford their mortgage payment, the borrower is so underwater on their home that they intentionally stop making payments and ultimately give their home back to the bank. Does it make sense for folks in these situations to walk away? Another question some folks are asking… Is it morally wrong for borrowers who can afford to continue paying their mortgages to strategically default?
Mortgage insurance is an insurance policy that protects a lender if the borrower defaults on payments, passes away, or is unable to meet the contractual obligations of the mortgage. Mortgage insurance is sometimes required for certain types of mortgages.
If you’re in the market for a home, you must understand the differences between a Fixed Rate and an Adjustable Rate Mortgages and what those differences mean to you.