From the monthly archives:

February 2008

February 29, 2008

Balloon Payment Mortgage

 The payment calculation of a balloon mortgage is identical to a fixed-rate mortgage, usually a 30-year Fixed Rate Mortgage. However, this is all they have in common. If a conventional Fixed Rate Mortgage is expected to be repaid in 30 years, the completely amortizing final payment on a balloon mortgage is due at the end [...]

February 22, 2008

Piggyback Mortgage (80/20 Mortgage)

Piggyback mortgages were quite popular before the year of 2007 as a tax deductible alternative for conventional PMI premiums. 2007 broke this subtle balance as Congress made PMI premiums tax deductible, too, but for that one year only. Being limited to certain restrictions and so far unpredictable future, PMI still leaves some room for the [...]

February 20, 2008

Lender-Paid Mortgage Insurance (LPMI)

Lender-Paid Mortgage Insurance (LPMI) is one of the ways, along with the Piggyback loan, to avoid the notorious conventional Private Mortgage Insurance (PMI) if you borrow more than 80% of the purchase price while buying yourself a home. To be perfectly honest, you, as the borrower, are the one to pay this insurance anyway. The [...]

February 19, 2008

Private Mortgage Insurance (PMI)

If you are sure, that you will be able to put down at least 20% of the property purchase price, don’t bother to read this article – there is no way any lender should make you pay this insurance. Mortgage insurance is something that happens to you only if you cannot make a 20% down [...]

February 14, 2008

Interest-Only Mortgage

 First of all, Interest-Only is not a separate mortgage type. It is an option that can be attached to virtually any mortgage repayment plan enriching it with its benefits or disadvantages (or both). Interest-Only has different effect on different plans, but it practically always makes the overall cost of a mortgage higher, as well as [...]