The word “candidate” derives from the word “candid”, and politicians running for office this year have learned that voters prefer frank talk, not a sales pitch. The same is true for homeowners shopping for a mortgage. As we prepare for springtime – which is historically the best time to buy a home – it is appropriate to talk about ways to weed out the hype about exotic residential mortgages in favor of old-fashioned fixed rate loans.

The most recent bull market in real estate was artificially inflated by high-risk loans that encouraged consumers to leverage themselves to the max. The old fashioned and reliable 30-year fixed rate mortgage – which helped to steadily grow this nation’s housing market for many decades – was upstaged by sexier, trendier, more exotic residential mortgages. Too many borrowers got in over their heads and are now paying a painful price, and the current mortgage crisis has left consumers shell-shocked and wary.

Many bad loans were made to good people within the past few years, and millions of borrowers got stuck with ultra fancy mortgages that were inappropriate, expensive, and downright difficult to comprehend. To avoid that trap while getting the most from your mortgage dollars, it pays to learn as much as possible about various types of loans and refinancing programs. Choose those that help you grow equity in realistic, manageable ways.

Highly leveraged loans have their place in the market, but for most homebuyers, especially those who are not professional investors, such mortgages can be a financial nightmare. Especially in 2008, it is prudent to opt for a low-risk, no-frills mortgage with user-friendly terms and conditions that will not change with the weather but will help you safely withstand any economic climate or storm.

Here is the straight sauce on three of the most exotic – but more risky – home loans.

Hybrids:

Suddenly hybrids came into fashion, playing upon the emotions of those who associate anything named “hybrid” with ecological responsibility and energy independence. And while these hybrid mortgages blended the best of several different types of loans into one convenient and user-controlled package, most were structured around a typical adjustable interest rate mortgage. In today’s climate an adjustable rate is too volatile for most homeowners, and the other hybrid features are just more high-risk bells and whistles.

No Money Down Mortgages:

Then there were those dreaded no-money-down loans. We all want to get something for nothing, and no-money-down is a phrase that usually precedes a get rich quick sales pitch. In the real estate business no down payment is another way of saying “no equity”, however, and if you buy without putting anything down and property values plummet you learn the meaning of “upside down”. Scores of homeowners are “upside down” in their loans, or in other words they now owe more on their mortgages than their homes are worth. Pay the biggest down payment you can manage, because it is money in the bank.

Negative Amortization Loans:

Another exotic loan that makes perennial comebacks is the negative amortization loan. With this kind of mortgage you can make monthly payments ad infinitum and still wind up owing more on your mortgage than you did when you first took out the loan. Negative amortization mortgages become wildly popular during every major real estate bull market and then go out of favor when homeowners experience the dark side of these equity-draining loans. Each generation of Americans learns about negative amortization by first becoming enamoured by them and then learning to hate them. But even if you tell your children and grandchildren about them they probably will have to live to learn for themselves how risky these highly leveraged and suspiciously seductive loans can be.

By now most homeowners understand that adjustable rates and no-equity loans are dangerous in a rising interest rate environment, but a few years ago the ARM was marketed as the quickest path to wealth. For many it was, because they could use a low rate to buy property that was soon sold for fast profits. But in a slower market with the potential for unexpected rate hikes, avoid the ARM. Stick with the retro reliability of a 30-year fixed rate mortgage, and enjoy an ideal combination of cheap rates, low risk, predictable payments, and easy-to-understand terms. When applying for a loan, also specify that you want mortgages that do not contain prepayment clauses that penalize you for paying them off early.

Today’s interest rates are at historically low levels, with fixed rates hovering around 5 ½ percent on 30-year fixed rate loans and at or below 5 percent on 15-year notes. Housing prices continue to be once-in-a-lifetime bargains, and 2008 will be a banner year for those who buy affordable homes with exceptionally attractive mortgage rates. Buy wisely, enjoy your home, and don’t worry about the mortgage meltdown drama.

What about 25 yr fixed rate mortgages?

Today’s interest rate fluctuations are a worry for any mortgage holder and the uncertainty of the UK economy is even more worrying. When it comes to choosing a mortgage, the interest rate, the products, the penalties to pay, the choices seem for ever endless. So making the correct decision which could lead to a 30 year fixed rate commitment is not one to be taken lightly but with a 25-year fixed rate deal, this is exactly what youll be doing. But is it wise to tie yourself in for the life of your mortgage and more?

Well the UK Chancellor certainly seems to think that this is just the answer to the stability that is required in the UK mortgage market and may be just the answer to the financial difficulties and the hard times that the mortgage holders are experiencing. The Chancellor has recently given his backing to plans for widening the availability of long term mortgage fixed rates but the 25 year fixed rate market remains a pretty niche market with only a few lenders getting in on the act. With interest rates currently on an upward trend, fixed-rate deals have become much more popular in the past year or so, as borrowers have sought to protect themselves, for a while at least, against further increases.

25 Yr Fixed Rate Mortgages?

Theres no doubt 25 year long-term mortgages are more expensive than many current shorter fixed-rate deals but there are some competitive deals out there if you like the idea of fixing your rate over the longer term. If you go for a long-term fixed rate, you may be paying a little over the odds right now but should interest rates rise over the term of your mortgage then you may end up with a pretty good deal overall. Whats more, your repayments will always be protected from any future rate hikes and youll never have to worry about payment shocks!

But second guessing movements in interest rates is a gamble and youll need to think twice whether a long-term fixed rate could work to your advantage before you take the plunge. So, whats on offer now? Most importantly, 25 year fixed rates should all be portable which means that when you want to move house you can take your mortgage with you and if youre thinking long term, make sure that your mortgage will go wherever you go.

Pay particular attention to the tie-in period as penalties may have to be paid on redemption of the mortgage. I discussed earlier that this type of mortgage involves a 25-year commitment but this isnt always the case. In fact, only some lenders will apply an early repayment charge (ERC) which lasts throughout the entire 25 year period. Most other lenders will allow you to switch after ten years without an ERC. Whats more, if interest rates are higher after the tie-in period has ended, youll have the option to stay put and continuing enjoying the same fixed rate.

That said, the initial ten years is a long time and its difficult to anticipate your needs, wants and changing circumstances for such an extended period. What happens if you lose your job, become ill or your relationship breaks down? But, on a more positive note, this could be offset by the thousands £££’s you could save in legal, valuation and arrangement fees, because you wont have the expense, not to mention the hassle, of continually re-mortgaging every few years to chase new competitive deals. It is true that long-term 25 year fixed rate mortgage rates wont suit everyone, especially those of us who need more flexibility but they do have their place and if you dont want to worry about interest rates and constantly re-mortgaging, the stability they offer could be right up your street.

As mentioned earlier, with interest rates currently on an upward trend, fixed-rate deals have become much more popular in the past year or so, as borrowers have sought to protect themselves, for a while at least, against further increases. Fixed deals currently account for about 89% of first-time buyers mortgages and 73% of deals for existing home owners who are moving. And of the total stock of mortgages, about half are now fixed deals of one sort or another. but most are of the two, three or four-year variety. Be wise! Be warned!

One in three of us are opting to fix our mortgage rates for five years or more and the main reason for this is certainty. More and more people are now fixing their mortgage rates for five years rather than two years, and I suppose they’re trying to make their financial stability last as long as possible…

This is quite a surprise as interest rates are expected to decrease in the New Year, however there are a few people predicting more interest rate rises instead.

For most people a mortgage is the biggest financial decision we have to make in our lives. It’s no surprise that most of us simply want to know exactly how much we have to pay out each month, which is why fixed mortgage rates are becoming so popular.

You can’t predict the future but at least if you’re on a fixed rate mortgage product you know exactly how much your mortgage will cost you every month, for the length of the fixed term period. You should try to make sure the deal is right for you and be sure to read through all the terms and conditions paying special attention to areas like Early Redemption Penalties. This is usually a fee calculated as a percentage of the total amount you’re borrowing. The percentage decreases as you move towards the end of what is called a ‘tie in period’. For example a five year fixed mortgage rate may mean you are tied into the product for five years (the term of the fixed rate offer). If you need to move or pay off the mortgage within the first five years you are usually charged a percentage of say five per cent in the first year, four per cent in the second year, three per cent in the third year, two per cent in the fourth year and one per cent in the fifth year.

There is huge consumer demand in the UK for fixed rate mortgage products and there are now plenty of ten and fifteen year fixed rate deals available. Good news for those of you who want to fix for financial security.

Nici Audhlam-Gardiner, head of Abbey mortgages, says that, “For most of us, our mortgage is the biggest financial commitment we make, so it’s understandable that we want to know just how much we’re going to have to fork out each month.” It seems that for that very reason, many borrowers and potential borrowers are planning on choosing the security of a fixed rate mortgage over the other options available.

According to the study, 14 percent of those who would choose a fixed rate mortgage said that they would opt for a 5 year fixed rate, 6 percent said they’d go for a 10 year fixed rate, and another 9 percent said that they’d want to find a 15 year fixed rate mortgage.

It’s rare in a study to find that the desire for a longer term fixed rate loan is greater than for a shorter term loan. Audhlam-Gardiner justifies this finding by saying that, “You never know what’s going to happen in the future, but at least if you’ve committed to a long term fixed deal, you know where you are going to stand with your repayments.”

Of those who responded to the study, 65 percent said that regardless of the BoE’s base rate, they’d prefer to know what their payments are with a fixed rate loan instead of having that uncertainty looming as they would with a variable or tracker mortgage. Aside from the payment uncertainty, other reasons for borrowers’ desire for fixed rate loans include predictions of interest rate increases in the future, as well as general confusion about how tracker mortgages work and how a tracker mortgage could benefit them.

http://www.simplyfinance.co.uk

•Thirty year fixed rate mortgage

•Fifteen year fixed rate mortgage

Best fixed rate mortgage loan can be obtained from the Unique Mortgage Group. The main goal of the unique mortgage group is to provide service to the customers with integrity, stability and honesty. This mortgage company is mainly enhanced with providing of best fixed rate mortgage to the clients with the lowest interest rates and with the minimum closing costs. The company provides a helping hand to the borrowers to overcome the milestones in the process of securing a long. The Unique Mortgage group provides best fixed rate mortgage to the customers with no hidden costs, false interest rates and improper promises. Unique Mortgage group is considered as the best company for offering loans and does not pressure for sale techniques.

Important reasons for choosing unique mortgage group is because of the lower interest rates, processing of best fixed rate mortgages in a faster manner, offers reliable service, considered as the best for customer rewards program, best fixed rate mortgage can be processed through easy online application and no hidden fees are charged on the customers. Unique mortgage group offers thirty year best fixed mortgage rates at 5.3% and is considered as the lowest rates with the other mortgage companies.

Some of the advantages offered by the best fixed rate mortgage are it offers lesser monthly payments since it is a fixed rate mortgage, the interest rate does not raise up and the monthly payment does not exceed and stays the same amount for the period of loan taken. The disadvantages in the fixed rate mortgage are payments should be made at a higher interest rates and the interest rate remains the same even if the interest rates reduces.

Best fixed rate mortgage loans are offered at the unique mortgage group for a lesser price and the lenders of this mortgage company occupy an important role in the business sector. The main goal of the unique mortgage group is to offer customer satisfaction to the highest level and offers the best fixed rate mortgage finance to the clients at a lesser interest rate when compared with the other finance companies. The easy online application helps the clients to get immediate cash to their needs and makes the form filling process easy. Monthly payments are offered at a lesser amount according to the customers earning capacity and no hidden costs are charged by the unique mortgage group. Hence the best fixed rate mortgage finance can be availed with the Unique Mortgage Group at a lesser enhanced rate.

Its report added to reports that record numbers of first-time buyers were taking up fixed-rate mortgages amid fears that interest rates will continue to rise. But how safe is a fix-rate mortgage?

Fixed-rates at least offer some protection if interest rates do rise. However, buyers shouldn’t be easily persuaded by the low rates of interest alone and should consider all the other costs of a new mortgage.

The CML said: “With the chance of at least one more interest rate rise this year, first-time buyers are taking the sensible option in taking out fixed rate deals, and locking into the payment security they provide.”

Soaring house prices, especially in London, mean first-time buyers are having to save even harder for a deposit. Nationwide said last week that the average price paid by first-time buyers in the UK had increased from £131,903 in April 2006 to £145,801 in 2007.

That means a first-time buyer today would have had to find almost £700 extra for a 5 per cent deposit as the house prices have increased by a massive 10 per cent.

New homeowners need to know exactly how much their monthly repayments will be so they can budget, which is why fixed rates are becoming increasingly popular.

Borrowers should look out for higher lending charges. These are fees imposed by a lender when the amount borrowed exceeds a given percentage of the value of the property.

Those with a small deposit are often affected the most as the charge usually applies when borrowing more than 90 per cent of a property’s value. The fees can also be as high as 7.5 per cent of the amount borrowed.

However, not all fixed-rate mortgages come with high fees and there are other issues to be addressed such as the guarantee that interest rates elsewhere won’t lower. Also borrowers should know if they will actually be able to commit to paying off the mortgage for the fixed term.

It is not only first time buyers who may be considering a fixed mortgage rate and some of those looking at a remortgages may also be interested.

For example, The Nationwide Building Society recently became the UK’s first mortgage lender to launch a 25-year fixed-rate mortgage deal at the 5.49 per cent rate. The deal comes with a low arrangement fee of just £599 but will not charge a redemption fee after the first 10 years.

Louise Cuming, head of mortgages at price comparison website moneysupermarket.com, said: “The Nationwide offering is an interesting variation on the fixed rate mortgage – but can it conquer where others failed? It’s very risky for people to commit to a single product with one lender for such a long time when nothing in the future is guaranteed.

“Unless you have a crystal ball to foresee your own situation and future interest rates, it is ludicrous to allow yourself to be tied into a contract for this length of time – even though the product boasts no early redemption fees after 10 years. Not only this, but interest rates are expected to start reducing next year, so it makes no sense to commit now to what is potentially a high rate of interest.

“It strikes me as a clever marketing ploy to maximise customer retention by taking advantage of people’s desire for ‘security’. I would urge people to look elsewhere for peace of mind – there are plenty two and three year deals on good rates. But, if a longer term fix is required with a ‘get out’ clause after 10 years, better options are available.”

While fixed-rate mortgages may seem to be borrower’s way around forking out hundreds of pounds with rate rises, it is an agreement that must be entered into with caution and you must be very positive that your financial situation will either stay the same or improve. These comments may also be on interest to those looking at remortgages.

This article explains what adjustable and fixed rate mortgages are, and what factors you should consider when choosing between them.

Adjustable (or variable) mortgages:

With adjustable mortgages, the interest rate may vary over the course of the mortgage, although the rate may be capped so that it can’t go above a maximum level. Adjustable mortgages are sometimes referred to as variable rate mortgages. Whether the rate of interest goes up or down is generally tied to a base rate. (Note: In the US, there are a number of base indices used. An example is the 12 month Treasury Average Index.)

Put simply, the base rate will be determined by the state of the economy. For example, in times of inflation the base rate index is likely to be increased in an attempt to cool the economy. Once the base rate is raised, lenders will soon follow suit with mortgage rates. Conversely in low inflation periods the base rate will tend to fall, leading to lower mortgages rates for borrowers.

Fixed rate mortgages:

A fixed rate mortgage, as you’d expect from the name, has an interest rate that’s fixed, either for the duration of the mortgage or, more commonly, for a set period. For example, you frequently see mortgage deals such as 5 Year Fixed rate mortgage at 6%’ Once the fixed period has ended, the mortgage will typically revert to a standard variable rate.

Fixed or Variable which is best?

Which type of mortgage is best for you depends on your individual circumstances and on the prevailing economic predictions. A fixed rate is good if you think that rates are likely to go up, and has the added benefit of meaning that you know exactly how much you are going to need to pay for the duration of the fixed rate.

Of course the downside to fixed rates is that you’re stuck with that rate, no matter what the base rate does. So, for example, you could take out a 6% fixed rate, and consider it a good deal, but if rates have fallen to an average of 4% after two years, then you will be paying much more than someone who gambled on a variable rate mortgage.

Fixed rates have proved popular recently, as concerns over the mortgage market have caused borrowers to look for the peace of mind of knowing that their payments won’t go up. This may be a good call, but make sure that you shop around and make sure that you’re getting a market leading deal. And remember that price isn’t the only consideration. You may also want the flexibility of being able to overpay or make lump sum additional payments, and you should check to make sure there aren’t punitive charges should you choose to switch to another provider.

EmploymentCrossing.com The Federal Reserve, in coordination with foreign central banks, has reduced its key interest rate from 2 percent to 1.5 percent. The Bank of England followed suit, cutting its rate by half a point to 4.5 percent, while the European Central Bank lowered its rate to 3.75 percent. The central banks of China, Canada, Sweden, and Switzerland are cutting their rates as well. In addition, the Fed reduced its emergency lending rate to banks by half a percentage point to 1.75 percent. In response, the prime lending rate for millions of borrowers will drop by a corresponding amount. The prime rate applies to certain credit cards, home equity lines of credit and other loans. The Feds action revives the central bank’s rate-cutting campaign, which was halted in June out of concerns that low rates would worsen inflation. Since then financial conditions have dangerously deteriorated, forcing the Fed to reverse course. The cuts come as markets in Asia and Europe sink amid waning confidence, the UK steps in to support banks, and Russia closes its main stock market for two days.

From www.canadianfundingcorporation.com All types of short-term financing can be accessed for complex or challenging situations in terms of both timing and product. Bridge loans are designed to be paid back relatively quickly, such as by a subsequent longer-term loan. Bridge loans can be a key component in a long-term strategy for real estate borrowers. Canadian Funding Corporation can create the loan that you need and can help borrowers understand all the nuances and conditions so that they can better plan for the future.

It does seem logical to me that higher unemployment rates would decrease mortgage rates. However, mortgage behavior is extremely complex, and rates are influenced by any factors. Other factors could be moving to increase interest rates at the same time unemployment is moving to reduce rates.