The definition "mortgage" means some kind of a juridical mechanism which allows customer`s secured property to be possessed or sold. Steps to decide: Several types of mortgages, which are used worldwide and in West Virginia, in particular, exist nowadays. Every customer can find several factors which are deeply highlight the peculiarities of the mortgage.
The main 4 of them are: interest, term, frequency with payment amount, and cash-out.
To decide about a refinance, customer should calculate some steps: • The interest rate may be high or low, may be fixed for the full life of the loan or may be varied and may be changed at settled pre-defining periods.
• The mortgage loan, as a rule, has maximum term and amortization is absent, in general. Under the requirement of paying the mortgage loan it is necessary to make full repayment of remained balance at a certain date, and also a negative amortization.
• Frequency with payment amount may be changed for a period or may be increased or decreased in some cases. Some types of mortgage loans may be limited or restricted in prepayment of the whole sum or a portion of the loan, or may require customer`s payment of a penalty for prepaid operations.
• The cash-out usually has it`s own advantages and disadvantages. But is used when it is about paying out debt. When interest rate is reducing on the credit card debt it is an advantage. Contrary, as disadvantage, customer has a risk to pay thousands more in interest because of many-years balance while customer paying transfer from credit card to mortgage.
To decide between two major types of mortgage refinances (fixed-rate and adjustable-rate), careful calculation should be done. Fixed-rate lasts years and generally higher. Adjustable-rate lowers person’s interest rate and reduces payment at the end of each month. Customer from West Virginia can replace an adjustable-rate mortgage with a fixed-rate loan, to settle a divorce or to eliminate FHA mortgage insurance