Federal Housing Association and Veteran Affairs Loan Rates – Your Key to Home Ownership

fha-loansFHA mortgage rates are lighter compared to conventional housing loans. Part of this is that the seller pays part of the non-allowable cost of the house. The buyer’s allotted cost of aid is included in the loan already. While this goes for ordinary aspiring homeowners, there is what is called affordable VA rates (or Veterans Affairs loan rates) for war veterans who dream of owning a house. FHA loan rates and FHA mortgage rates are very good start ups to owning a house. VA loans make owning a house even better, with the intention of helping and recompensing those who served and defended the country during the war.

Owning a piece of land is very rewarding for many people. After all, there is nothing quite as satisfying as having a patch of good soil in your name to come home to each day. It makes you have and continue your legacy as a person who lived your life. If that piece of land has a house built on it, the better. Very low FHA loan rates, FHA mortgage rates, and VA loans help you achieve this goal. They help people realize their dream. luxurysocalshortsale and freedommentor.com are good sources to know about Federal Housing Association and Veteran Affairs Loan Rates.

Fixed Rate Or Variable Rate Home Loans?

Basically, there are 3 common types of interest rate in Malaysia. They are flat rate, fixed rate and variable rate. Flat rate is where the interest rate is charged on the method of full principal while fixed rate and variable rate are where both the interest is charged on the basis of reducing balance. Flat rate is usually for personal loan or hire purchase financing for vehicles. Fixed and variable rates such as Base Lending Rate (BLR) are typically for home loan products. Besides, fixed rate is also available for credit cards.

interest-ratesFixed rate is the rate of interest that will remains the same throughout the life of a loan. It does not change under any circumstances. Thus, a rate that once established does not vary according to fluctuations; you will keep on benefit from that low interest rate that is agreed upon the time you borrowed even if it rises in the future. The main advantage for fixed rate is therefore the protection from sudden and potentially significant increase in monthly mortgage payments due to the rise in interest rates. It is best suited for conservative borrowers who do not want any surprises to their monthly housing loan payments. Additionally, it is easier and less headache for borrowers to plan their cash flow with these fixed monthly payments. Find more information about fixed or variable rate on claudiatrupp.com.

Base Lending Rate is a minimum interest rate calculated by banking institutions. It is quoted as “BLR – xx%” and is adjusted by banks but the BLR which is heavily influenced by the Overnight Policy Rate (OPR) actually is determined by Bank Negara Malaysia. The BLR will always change and it is unpredictable whether it will rise or drop in the future. Any rise in the BLR simply means that an increase in the monthly installment amount and loan repayment period will occur. Sometimes, it will experience a double-digit growth such as reaching a peak of 12.27% during June 1998 hurting the innocent borrowers. Due to high level of risk associated with uncertainties, Base Lending Rate is only recommended for borrowers with higher risk threshold.

Most people in Malaysia today are having variable interest rate home loan because the interest charged may be cheaper. The variable rate is in fact an excellent choice for borrowers who plan to involve themselves in a short-term investment where the possibility of rise in interest rates is unlikely to happen as compared to long-term investment.

Real Estate – Are Interest Rates Damping the Market?

The Federal Reserve Bank has raised interest rates more than 15 times over the past two years, and Realtors are feeling the pinch. Home sales have slumped all over the nation, and blame is being placed squarely on interest rates.

In June Ben Bernanke, Federal Reserve Chairman said that core prices had increased 2 percent. No one except the Fed seems to think that we are in any danger of runaway inflation. lower-ratesThe greater fear is that higher interest rates will lead to loan foreclosures as popular variable rate mortgages written in the past few years are repriced. Real estate agents and lenders are not the only ones affected by rising interest rates. Businesses that depend on borrowing will find their expenses climbing, which will lead to pay cuts, layoffs and pullbacks in operations if interest rates don’t level out. Many young home buyers have opted for variable rate mortgages, betting that their incomes would increase before the interest rates on their homes. Rising rates will put many young families at risk of losing their homes. Americans place a high value on home ownership, believing it leads to stability in our society.

Some have cast blame on rising rents for fueling inflation, but the truth is, rents have been stagnant for years. Young families normally rent for a few years as they save for their first home, but in the past few years they have borrowed from relatives and used every creative financing trick in order to buy their first home while rates are low. This has left many landlords wringing their hands over empty apartments and rental homes. The predictable result was a lowering of the price of rental housing. Now that home sales have slowed, rental housing is filling up again, and landlords are cautiously making long overdue adjustments to rent.

Actually, inflation is not caused by any industry or market raising its prices. Inflation is a growth of the money supply caused by increased lending. The symptom of inflation is increased prices as too many dollars chase too few goods. The Federal Reserve controls the amount of currency in circulation by raising and lowering interest rates. When interest rates are low, business and consumer demand for loans increases, and banks “create” new electronic money by making loans. The Federal Reserve attempts to grow the money supply at a rate matched to the growth of the American economy, so that prices do not increase or decrease.

The current higher interest rates are having a damping effect on real estate sales today, but the low rates of the past are also reaching forward to affect sales today. That is because many buyers bought early to take advantage of low rates while they lasted. If home sales were the only consideration, the Fed would not have raised interest rates this far, this fast.