Fixed interest rate

What is the Chinese word for mortgage?

Adjustable interest rate

What does mortgage mean in Chinese?

mixture

A loan? Balloon? A loan? Interest only? What is a mortgage loan?

What's the difference between fixed-rate mortgage and adjustable rate mortgages?

……

In this article, Real Estate will show you different types of housing loans in the United States.

Many China buyers will choose mortgage when buying a house in the United States. ? What is a mortgage loan? Buying a house in America is a form of payment for a loan. The loan bank provides this loan to the buyers to fill the difference between the down payment and the actual house price. Chinese mortgage is what we often call "mortgage loan", which is a form of housing mortgage loan. ?

American home loans require buyers to repay their debts every month. Loans include interest and principal. Interest means interest in Chinese, and principal means principal in Chinese. Interest is the price that the buyer must pay to use the monetary funds borrowed by the loan bank. For lending banks, interest is a special form of profit conversion. The principal is the original amount lent to the buyer by the lending bank before calculating the interest.

sunset

At night? Is it over? That? Three? Francisco? Urban landscape? Free? Image? Download

If the buyer pays down in cash (down payment? Payment) is less than 20% of the purchase price, the loan bank can force the buyers to establish a third-party account (escape? Account number, also called impulse? Account). Buyers need to pay monthly fees through this third-party escrow account, such as property tax, local tax and various home insurance fees. The housing loan will be credited to the account to pay the expenses. With the fluctuation of tax rate and insurance premium, the money in this account will also decrease. The lender will conduct an annual audit to ensure that there are enough funds to pay the fees.

Knowing how to choose the right housing loan can help buyers become financially relaxed homeowners in the next few years. At the same time, buyers also need to know how to strive for the most favorable conditions for themselves and how to avoid paying more interest fees when doing housing loan transactions. If you don't have a clear understanding of the housing loan, when the housing loan is paid off, you will find that the total interest paid to the lender has far exceeded the principal of buying a house. This kind of example is not uncommon.

Random? dark

Three? Francisco? Street? Free? Image? Download

For example, suppose a buyer borrows a house loan of $65,438+044,000 and pays $36,000 as a down payment to buy an ideal house of $65,438+080,000. If the buyer's housing loan of $65,438+$044,000 is a 30-year fixed-rate housing loan with an interest rate of 7%, then the buyer needs to pay interest as high as $200,892 within the loan period. This is not only a huge interest expense, but also larger than the loan principal originally borrowed by the buyer!

Therefore, it is suggested that property buyers should not apply for loans excessively, and only look for housing loans that best meet their own needs. So, what kind of housing loan is suitable for you? Now it's time to start to understand the choice of housing loans.

Like other financial and investment products, buyers can choose different types of housing loans. The differences between these different types of housing loans can be large or small, and the interest rates are also high or low.

Basic housing loan type: fixed interest rate housing loan (fixed interest rate? Mortgage) adjustable rate housing loan? Mortgage loan)

Sunset? visual angle

Is it over? Three? Francisco? Skyscraper? Are you online? Finance? District? Free? Image? Download

Two different types of basic housing loans: fixed interest rate? Mortgage loan, Chinese: fixed interest rate loan, referred to as "FRMS"; And adjustable interest rate mortgage loan, Chinese: adjustable interest rate loan, referred to as "ARMs". The main difference between these two kinds of housing loans is how to determine the loan interest rate.

Before adjustable-rate loans appeared, only fixed-rate loans existed. The term of a fixed-rate loan is usually 15? -? Thirty years. Fixed interest rate loan, as the name implies, means that the interest rate of the loan is fixed within the loan term.

The interest rate of fixed-rate loans remains unchanged, and the monthly payment of buyers remains unchanged. Buyers who don't like uncertainty and are worried about higher interest rates may like this fixed interest rate? Mortgage loan, fixed interest rate loan.

On the other hand, the interest rate of adjustable-rate loans is different and adjustable. The interest rate of adjustable-rate loans is usually adjusted every 6 to 12 months, but it may also change frequently every month.

The interest rate of adjustable-rate loans mainly depends on the overall change of interest rates. When the interest rate generally rises, the buyer's loan interest rate will increase accordingly, thus increasing the total amount of loans that the buyer needs to pay. On the contrary, when the interest rate falls, the buyer's loan interest rate usually falls and the total amount to be paid decreases. Buyers who like frequent changes in life can consider this form of adjustable interest rate loan.

sunset

Urban landscape? With what? Scattered view? Lights? Free? Image? Download

Mixed loan (mixed? Mortgage loan)

There are not only pure fixed-rate loans and pure adjustable-rate loans. One advantage of living in a capitalist country like America is that you can have many choices. In addition to the above two kinds of loans, you can also choose to mix them? Loans, which means mixed loans in Chinese (or what lenders sometimes call "intermediate branches"). This kind of loan is like a fixed interest rate loan from the beginning-the initial interest rate can be fixed for three, five, seven or even ten years (usually called 3? /? 1、5? /? 1、7? /? 1 or 10? /? 1)。 After this period, the loan becomes an adjustable interest rate loan, and the interest rate is usually adjusted every 12 months. Some mixed loans adjust interest rates frequently, but some mixed loans only adjust interest rates once.

Balloon loan (Ballon? Loan)

Baron? Loans means "balloon loan" in Chinese, and it is also a kind of mortgage loan. At first glance, it looks a bit like a mixed loan: the interest rate of balloon loan is fixed for a certain period of time (for example, 5 years, 7 years, or 10 years). However, at the end of this period, all the loan balances will be due, and then the borrower must pay off all the loans (interest principal).

Pariz card

Street? Are you online? Prague? Czech? Republic? Free? Image? Download

Borrowers like balloon loans because the interest rate of balloon loans is lower than that of fixed-rate loans, just like mixed loans or adjustable-rate loans. In the period of high interest rate, or when the buyer is unable to pay the traditional mortgage. Buyers may be attracted by balloon loans.

However, balloon loans are more dangerous. If the buyer can't get a new mortgage to replace the old loan at the end of the loan period, the buyer may not be able to pay a large loan balance. If the buyer is eager to find a new loan at this time, but limited by his own credit conditions, the new loan may have a very high interest rate.

In the real estate industry, balloon loan is also called "bullet loan". Loan). Why? Because if the loan expires at a very high mortgage interest rate, it may have a huge property impact on buyers like being hit by a bullet.

Prague

Castle. And then what? Charles. Bridge? Where is it? At night? Free? Image? Download

You know, mortgage refinancing is never a 100% sure thing. Balloon loan can only be used as a short-term solution to the financial crisis.

It is suggested that the only situation that the buyer can consider balloon loan is that if the buyer needs to buy a specific property, balloon loan is the buyer's only mortgage loan option, and the buyer can pay the loan balance or refinance when the balloon loan expires. Or the buyer's family can help the buyer refinance the loan, then the buyer can consider balloon loan. If you must get a balloon loan, please extend the loan time as much as possible, preferably not less than 7 years (of course 10 years is the best), and start refinancing (refinancing) at least 6 to 8 months before the balloon loan expires.

Venice

A motorboat? Water bus? Open? Canal? Grand? Free? Image? Download

Interest-only mortgage? Mortgage loan)

With the rapid growth of housing prices in high-cost cities and surrounding areas, at the beginning of 2 1 century, lending institutions launched a new type of loan-interest-only loan.

Mortgage loan means "interest-only loan" in Chinese. Unlike traditional mortgage loans, interest-free mortgage loans only require borrowers to pay a very low amount in the initial stage. Because the down payment only contains interest, there is no need to repay the principal.

Only after a predetermined period (such as 3, 5, 7 or 10) will the repayment of the principal begin. After repaying the principal, the monthly repayment amount will increase significantly.

20%, 30%, 40% or more This makes this kind of loan face an important problem-some borrowers may not be financially prepared to pay a higher monthly amount. In the worst case, interest-only loans have all the disadvantages of balloon loans.

Therefore, it is suggested that property buyers should fully understand all the terms and conditions of this loan before choosing an interest-free loan.