Ohio Fixed Rate Mortgages are available for
30 years, 20 years, 15 years and even 10 years. There
are also "biweekly" mortgages, which shorten the loan
by calling for half the monthly payment every two weeks.
(Since there are 52 weeks in a year, you make 26 payments,
or 13 "months" worth, every year.)
Ohio Adjusted
Rate Mortgages (ARM) generally begin with
an interest rate that is 2-3 percent below a comparable
fixed rate mortgage, and could allow you to buy a more
expensive home. However, the interest rate changes at
specified intervals (for example, every year) depending
on changing market conditions; if interest rates go
up, your monthly mortgage payment will go up, too. However,
if rates go down, your mortgage payment will drop also.
Standard
ARMS and the Differences - Many Ohio mortgage options
are available to fit your individual needs and your
risk tolerance with the various market instruments.
Ohio ARMs with different indexes are available for both purchases
and refinances. Choosing an ARM with an index that reacts
quickly lets you take full advantage of falling interest
rates. An index that lags behind the market lets you
take advantage of lower rates after Ohio market rates have
started to adjust upward. The interest rate and monthly
payment can change based on adjustments to the index
rate.
Introductory
Rate ARM's - Most adjustable rate loans
(ARMs) have a low introductory rate or start rate, some
times as much as 5.0% below the current market rate
of a fixed loan. This start rate is usually good from
1 month to as long as 10 years. As a rule the lower
the start rate the shorter the time before the loan
makes its first adjustment. Almost all ARMs have a maximum
interest rate or lifetime interest rate cap. The lifetime
cap varies from company to company and loan to loan.
Loans with low lifetime caps usually have higher margins,
and the reverse is also true. Those Ohio loans that carry
low margins often have higher lifetime caps.
Balloon
Mortgages - Ohio Balloon loans are short term
mortgages that have some features of a fixed rate mortgage.
The loans provide a level payment feature during the
term of the loan, but as opposed to the 30 year fixed
rate mortgage, balloon loans do not fully amortize over
the original term. Balloon loans can have many types
of maturities, but most balloons that are first mortgages
have a term of 5 to 7 years. At the end of the loan
term there is still a remaining principal loan balance
and the mortgage company generally requires that the
loan be paid in full, which can be accomplished by refinancing.
Interest
Rate Buydowns - The most common Ohio buy down
is the 2-1 buy down. In the past, for a buyer to secure
a 2-1 buy down they would pay 3 points above current
market points in order to pay a below market interest
rate during the first two years of the loan. At the
end of the two years they would then pay the old market
rate for the remaining term.
Graduated
Payment Method (GPM) - The GPM is another
alternative to the conventional adjustable rate mortgage,
and is making a comeback as borrowers and Ohio mortgage companies
seek alternatives to assist in qualify for home financing.
The lower qualifying rate of the GPM can help borrowers
maximize their purchasing power, and can be useful in
a market with rapid appreciation. In markets where appreciation
is moderate, and a borrower needs to move during the
scheduled negative amortization period they could create
an unpleasant situation.
