Posts Tagged ‘mortgage life insurance’

Find Out The Story About ARMs

September 24th, 2018 Comments off

You have a lot of choices to make in buying a house and deciding upon a home loan, and in today’s confusing loan world, you now also have to choose the index that you want for your Adjustable Rate Mortgage (ARM).

The index of an ARM (Adjustable Rate Mortgage) is the financial standard upon which the adjustments will be made. Various indices are employed, including government treasury instruments, the Fed Fund rate or LIBOR.

The rate on an ARM is adjusted periodically upwards, or downwards, based upon the movement in the general interest rate environment, but tied to a specific instrument. If your index is CDs, and CDs go up, your mortgage rate increases. ARMS also contain adjustment caps, so that you can limit the exposure as to how high your mortgage rate can go, even if your index rate continues to go up, which is good if you just had a change, and the rates go up again. Of course, the reverse can happen, and if your rate has just been readjusted at a high rate, and then the index moves down, you cannot take advantage of that until your next readjustment period.

ARMs can be tied to any number underlying instruments, such as the 90 day U.S. Treasury Bill. Another basis that is frequently used is the Federal Funds Rate. Many of the international banks will use the LIBOR as the index rate for loans.

Deciding upon which index is best for you will depend on your own situation as well as your view of interest rate movements. Adjustable rate mortgages that use CDs as the reference rate tend to change more quickly. Adjustable rate mortgages that use T Bills will change more slowly. LIBOR is one of the quickest moving indices, so if you want to take advantage of rapidly falling interest rates, this is the one to use.

An option ARM is one in which the interest rate adjusts monthly and the payment adjusts every year, and the borrower is offered an “option” on how large a payment he wants to make. The options that are offered represent interest-only payments, and a lowest possible payment that can’t be less than the interest-only payment. Those using this option should be aware of negative amortization, because they may never repay any of the principal if they always choose the lowest amount.

There are so many choices in the home loan market today that the new home buyer should not try to cover this field by himself but should instead call a certified mortgage expert.

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Mortgage Insurance Quote In Alberta: The News in the Interest Rate World

July 18th, 2017 Comments off

The real estae world has been sent completely on its ear this year, with bailouts, credit problems, foreclosures and more. What will happen? It is important to make an intelligent guess about how interest rates will go.

Tight conditions in the lending world should normally mean lower rates, since lenders would have to lower rates in order to attract customers with good credit ratings. But it appears that banks are actually raising rates, in the hope that will improve their revenue.

It seems almost short sighted, but to make up for plunging revenues, banks are increasing rates across the board, instead of giving attractive rates for their most credit worthy borrowers. Matters in the financial industry are far from normal, however, and credit card companies are also using this strategy of higher rates to boost revenue in this tight market.

It used to be that when the economy slowed down, banks would lower their interest rates and this would give an incentive to borrowers. Things are not like they were before, however, and new rules seem to be the rule.

How should a homeowner view this crisis, and what steps should he take? Is it better right now to wait out this unusual phase, in the hopes rates will fall back down, or take advantage of whatever credit is there before the economy gets worse?

Not only is there a current, there are many who even believe there is a depression coming, which will surely lead to deflation. Deflation would mean even lower interest rates so anyone who is considering a purchase or refinancing at this stage would probably be better off to wait for conditions to improve in the world of interest rates.

Some lenders are still actively seeking borrowers. There are quite a few small banks that never got caught up in the credit crunch like the larger banks. In this case, being small was an advantage, since many of them were insulated from the issues now haunting most of the credit industry.

A second good argument for waiting is that home prices continue to fall, with predictions of futher price cuts of as much as 35%, even after the 20 to 25% decreases already seen. Case-Schiller, a research organization that leads such studies, reports that in some regions prices have plummeted 25%, with national averages at 17%. If a combination of lower interest rates and lower home prices are in store for the future, it may be wise to delay a home buying decision.

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What If I Passed Tomorrow: Discover Term Life Insurance Quotes

December 6th, 2012 Comments off

The best option to protect their family at a low, affordable premiumis term life insurance. A buyer is able to obtain coverage for fixed period of time for one, five or even ten years with term life insurance. After the term, the insured can go without coverage or obtain further coverage with different conditions and/or rates.

In case of the death of the individual, family and loved ones, also known as beneficiaries, are insured with term life insurance. It is most often the most cost effective choice. Getting term life insurance quotes is easy and can help you make that decision.

The original type of life insurance, term life insurance is contrasted to permanent life that includes universal life, whole life, and variable universal life. Permanent life often has variable premiums with guaranteed maximums while term life rates are fixed for the life of the coverage. The opportunity to accumulate cash value of the insurance and withdrawal it at the choice of the insured is possible with permanent life insurance. Term life does not offer that.

There are different levels of risk for every person and because of that, premiums will vary. There are many elements that contribute to the premiums of term life insurance quotes that include the insured health history, the house the live in, the kind of car they drive, and many other factors. This is strictly for protection of risk.

In the majority of term life insurance situations, the insured are most often younger people with families. To look out for the future of their young children, many have a weighty debt load and are looking to for coverage through term life insurance coverage.

Like most insurances, the claims with term life insurance will be covered once the claim is submitted and reviewed in order to be covered. The agreement and rates must be up to date.

The process of getting term life insurance can be tedious. But to decide which plan is best to protect your family, getting a term life insurance quote can be easy. Go to today to get the best protection for your family, affordable premiums , and expert advice.

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Term Life Insurance Alberta: Why Does Your Mortgage Insurance Cost What it Does?

July 8th, 2012 Comments off

You can count on three main factors affecting the premium of your mortgage insurance. Given the same policy, the premiums can be different based on how big the mortgage is, how old the insured is, and whether it is a smoker.

Both mortgage life (to guarantee payment of the home loan at the death of the insured) and disability (to provide income for paying the mortgage in case of the disability of the insured) use the same factors to price the premiums.

The age and health of the insured is of the utmost importance to the insurance company, since they will determine for its actuaries what the chances of paying out are. Many mortgage life and disability policies do not require a physical, merely a statement of health condition. This can be chancy, since any statement that would infer good physical can be used negatively if the claim is processed and it turns out a health condition (or smoking) was kept from the insurer. Don’t think you can claim that you are a non smoker and then collect on the insurance because the insurance company didn’t know. They will know, and if you have made incorrect statements on the application, you can jeopardize the entire policy.

There are two typical policies, regular, which includes smokers and non smokers, which does not (and also includes those who have not smoked over the last 12 months.) Of course, a smoker’s risk is already priced into that policy.

Bear in mind that insurance policies that are writable without a physical have already priced the additional risks into the premium. So those who are in very good health should consider going for the physical to see if lower premiums are available for him.

These factors can greatly affect premiums, and the premiums for a 50 year old, with the same amount of mortgage, can be more than twice as much as that of a 38 year old. Reducing the principal on the mortgage adjusts the premium by a few dollars, so it is easy to see that the actuarial tables are what drives this pricing. It is not a surprise since, in addition to the risks of age and health, the chances of the premium being paid longer are much greater.

The amount to be be insured is, of course the next main concern of the policy. Prior to the $250,000 threshold, however, there is not a great impact on prices. Larger mortgages need a higher premium and the insurance company will also require an assessment to prove the worth of the property.

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