There are literally thousands of loan programs available in the market. Every lender tries to be as different as they can to create a special niche, which they hope will increase business. It would be impossible to provide a review of every type of loan, so in this article, we’ll just stick to the main ones. Most loan programs are variations of the loans we will cover here. First of all we will go over some terminology you should understand and then we will delve into the different mortgage programs available today.

AMORTIZATION

Amortization is the paying back of the money borrowed plus interest. The actual term, or length of the mortgage along with the amortization is what determines what the payments will be and when the loan will be paid off. It is a means of paying out a predetermined sum (the principal) plus interest over a fixed period of time, so that the principal is completely eliminated by the end of the term. This would be easy if interest weren’t involved, since one could simply divide the principal amount into a certain number of payments and be done with it. The trick is to find the right payment amount,which includes some principal and some interest. The formula of amortization uses only 12 days a year to compute the interest. The interest payment on a mortgage is calculated by multiplying 1/12th (one-twelfth) of the interest rate times the loan balance of the previous month.

On a 30-year, $150,000 mortgage with a fixed interest rate of 7.5 percent,a homeowner who keeps the loan for the full term will pay $227,575.83 in interest. The lender does not expect that person to pay all that interest in just a couple of years so the interest is spread over the full 30-year term. That keeps the monthly payment at $1,048.82.

The only way to keep the payments stable is to have the majority of each month’s payment go toward interest during the early years of the loan. Of the first month’s payment, for instance, only $111.32 goes toward principal. The other $937.50 goes toward interest. That ratio gradually improves overtime, and by the second-to-last payment, $1,035.83 of the borrower’s payment will apply to principal while just $12.99 will go toward interest.

There are four types of loans when dealing with amortization and term. They are:

1. Fixed: with conventional fixed rate mortgages, the interest rate will stay the same for the life of the loan. Consequently the mortgage payment (Principal and Interest) also stays the same. Changes in the economy or the borrower’s personal life do not affect the rate of this loan.

2. Adjustable: (ARM) also called variable rate mortgages. With this loan the interest rates can fluctuate based on the changes in the rate index the loan is tied to. Common indexes are 30 year US Treasury Bills and Libor (London Interbank Offering Rate). Interest rates on ARMs vary depending on how often the rate can change. The rate itself is determined by adding a specific percentage, called margin, to the rate index. This margin allows the lender to recover their cost and make some profit.

3. Balloon: A loan that is due and payable before it is fully amortized. Say for example that a loan of $50,000 is a 30-year loan at 10% with a five-year balloon. The payments would be calculated at 10% over 30 years, but at the end of the five years the remaining balance will be due and payable. Balloon mortgages may have a feature that would allow the balloon to convert to a fixed rate at maturity. This is a conditional offer and should not be confused with an ARM. In some cases, payments of interest only have to be made, and sometimes the entire balance is due and the loan is over. Unpaid balloon payments can lead to foreclosure and such financing is not advisable to home buyers. Balloons are used mainly in commercial financing.

4. Interest only: This type of loan is not amortized. Just like the name implies the payments are of interest only. The principal is not part of the payment and so does not decline. Interest only loans are calculated using simple interest and are available in both adjustable rate loans and fixed rate loans.

Fixed rate: The fixed rate loan is the benchmark loan against which all other loans are compared to. The most common types of fixed rates loans are the 30 year and the 15 year loans. The 30 year loan is amortized over 30 years or 360 payments while the 15 year is amortized over 180 payments. For the borrower, the 15 year loan has higher payments, since the money needs to be repaid in half the time. But because of that same feature the interest paid to the bank is much lower as well.

Even though these two are the most common terms, others are gaining in popularity, such as the 10, 20, 25, and even 40 year term loans Depending on the lender, the shorter the term, the less risk, and thus the lower the rate.

Other types of fixed rate loans:

BI-WEEKLY MORTGAGE

The bi-weekly mortgage shortens the loan term of a 30 year loans to 18 or 19 years by requiring a payment for half the monthly amount every two weeks. The biweekly payments increase the annual amount paid by about 8 percent and in effect pay 13 monthly payments (26 biweekly payments) per year. The shortened loan term decreases the total interest costs substantially.

The interest costs for the biweekly mortgage are decreased even farther, however, by the application of each payment to the principal upon which the interest is calculated every 14 days. By nibbling away at the principal faster, the homeowner saves additional interest. The ability to qualify for this type of loan is based on a 30-year term, and most lenders who offer this mortgage will allow the home buyer to convert to a more traditional 30-year loan without penalty.

GRADUATED PAYMENT MORTGAGE (GPM)

This loan is a good idea for buyers who expect their income to rise in the future. A GPM will start these borrowers off at a much lower than market interest rate. This allows them to qualify for a larger loan than they would otherwise. The risk is that they assume they will have enough income to pay increased payments in the future. This is similar to an ARM but the rate increases at a set rate, not like the ARM where the rate is based on the market. For example, a GPM for 30 years might start out with an interest rate of 5% for the first 6 months, adjust to 7% for the next year, and adjust upwards .5% every 6 months thereafter.

GROWING EQUITY MORTGAGE (GEMS)

For as long as mortgages have been around conventional fixed loans have been the standard against which creative financing has been measured. In the early 1980s the GEM was developed as a new alternative to creative financing. The GEM loan, while amortized like a conventional loan, uses a unique repayment method to save interest expense by 50% or more. Instead of paying a set amount each month, GEM loans have a graduated payment increase that can be calculated by increasing the monthly payment 2, 3, 4, or 5 percent annually during the loan. Or the monthly payments can be set to increase based on the performance of a specific market index.

So far it is sounds like a graduated payment mortgage but there is a difference. As monthly payments rise, all additional money paid by borrowers is used to reduce the principle balance. This results in a loan paid off in less than 15 years.

REVERSE MORTGAGES

While a reverse mortgage is not exactly a fixed rate mortgage (it is more of an annuity), I have included it here because the payments made to the home buyers are fixed. Reverse mortgages are designed especially for elderly people with equity in their homes but limited cash. They allow individuals to retain home ownership while providing needed cash flow. In a traditional mortgage, the homeowners repay the amount borrowed over a specified period of time. With a reverse mortgage the homeowner receives a specified amount every month.

To illustrate, say Mr. and Mrs. Smith are 70 and 65 years old respectively and retired. Their home is free from all encumbrances and worth $135,000. They would like to get the money out of their house to enjoy it, but instead of receiving it in one lump sum by refinancing it, they want to receive a little bit every month. Their lender arranges for a $100,000 reverse mortgage. They will get $500 a month from their equity and the lender will earn 9% interest.

Unlike other mortgages where the same $100,000 represents only the principle amount, with a reverse mortgage $100,000 is equal to the combined total of all principal and interest. On this particular loan, at the end of 10 years and 3 months, the Smiths will owe $100,000. The breakdown being $61,500 principle and $38,500 in interest. At this time the loan will end. So the Smiths will only receive $61,500, and they now owe the bank $100,000.

ADJUSTABLE RATE MORTGAGES

An ARM is a type of loan amortization where the most prevalent feature is that the interest rate adjusts during the course of the loan. Thanks to the adjustable rate feature, banks and lenders are better protected in case interest rates fluctuate wildly like in the 1970s when banks were lending at 8% fixed and then rates went as high as 18%. This left the banks holding loans that were losing money every month since the banks had to pay money to depositors at higher rates then they were making on their investments.

Important Tip: ARM interest rates are usually lower than fixed rates.There are multiple types of ARM loans in the market today. They all This makes it easier for borrowers to qualify for a larger loan amount with an ARM. differ from each other in minor but important ways. There are four main criteria to look at when dealing with an ARM loan: the Index used, the Margin, the Cap, and the Adjustment Frequency.

INDEX

The interest rates of an ARM loan are based on an Index, which is a published rate. The most common used indexes are:

COFI – The Cost of Funds Index. This index is related with the 11th District Federal Home Loan Bank Board in California. This index is also the most stable of all the common indexes.

The Treasury Series – This is a series of maturity lengths for Treasury Bills. These bills are used as investments by millions and are actively traded every day and so the rate varies daily.

LIBOR – The London Inter Bank Offered Rate is the rate the central bank in England uses to lend money to its banks.

Prime – This rate is the rate that banks in the US use to lend money to their best clients. This number is published daily in US newspapers, but it is important to know that each bank can set it’s own Prime rate.

CDs – This index is from the rate paid to purchased of 6 month Certificates of Deposits.

MARGIN

Margin is defined as the amount added to the index rate to determine the current rate charged on the ARM. Once you add the margin to the index rate you arrive at what is called the Fully Indexed Rate (FIR). This rate is the true rate which the borrower will pay. The interest rate quoted to a borrower at closing might be lower then the FIR.

LOAN CAPS

The Cap is a very important number because it is the maximum that a rate can change. So even if the index rises 10% in one period, the FIR will not do so if there the rate cap is reached. There are two types of caps to worry about when discussing an ARM. The Rate Adjustment Cap which is the maximum the rate can change from one period to another. And the Life of the Loan Cap which is the maximum rate that can be charged during the loan. To figure out how the rate will change, you have to know the index, the margin, the rate, and the cap. Add the index and the margin to determine the FIR. Then take the rate and add it to the cap. Whichever is the smaller change is what the new interest rate will be.

ADJUSTMENT FREQUENCY

This is how often the rate changes. Initially when the loan is closed the rate will be fixed for a certain amount of time, then it will start changing. How often it changes is the Adjustment Frequency. So you can have a 7/1 Arm which means the rate will be fixed for 7 years, and then adjust every year after. Or you can have a 3/1 ARM. Fixed for 3 years. The more frequent the adjustment and the sooner it starts, the lower the initial interest rate. So a 3/1 ARM will have a lower rate then a 10/5 will. And that is because the 10/5 has more risk for the lender. The 10/5rate will be much closer to a fixed rate loan.

When a borrower considers an ARM, it is usually because the rate is lower then the fixed rate loan. And thus it is easier to qualify for. But the borrower is then betting against the bank. The ARM loan might turn out to be more expensive then the fixed rate loan in the long run, if rate rise during the term of the loan.

You must have an idea of how long you are going to live in the house you are borrowing to buy. If you are going to stay there long-term, a fixed-rate may make more sense. ARM’s are better for military and other people who buy and sell within shorter time periods.

CONVENTIONAL MORTGAGE

A conventional mortgage is a non-government loan financed with a value less than or equal to a specific amount established each year by major secondary lenders. As of 2008, financing for less than $417,000 was regarded as conventional financing. A conventional loan is the most popular loan today, as so it has become the benchmark against all the other mortgages. It has 4 special features:

1. Set monthly payments

2. Set interest rates

3. Fixed loan term

4. Self amortization

A conventional loan is one that is secured by government sponsored entities such as Fannie Mae and Freddie Mac. Since they are secured, the lender is assured that they can easily sell the loan on the secondary market.

And because of that assurance, these loans have the lowest rates.

In order to qualify as a conventional loan, the home and borrowers must fall into the guidelines set by the secondary lenders.

HOME EQUITY LOANS

Real estate has traditionally been considered a non-liquid asset. Property can be converted to cash only by either selling or refinancing. Both are very expensive and time-consuming ways to raise money. Today’s borrowers can convert their house to cash immediately by using the equity in their home.

These loans take much less time to approve and fund then regular home loans. And the fees are generally less than a normal loan as well. But home equity loans are usually placed in a second lien position after the original mortgage, at a higher interest rate. If the borrower does not pay, the house could be foreclosed upon.

The Equity Loan is an open ended mortgage similar to a credit card. Borrowers can take the money out, use it, and pay back the money when they choose. Recently, home equity loans have brought about new government regulations in some states since people were getting these loans without really understanding the consequences and thus being taken advantage of by less than honest lenders.

SECOND MORTGAGES

A second mortgage is a loan against a property in second or “junior” position. In case of foreclosure, the creditor in first position gets first dibs on any monies. In many cases, there is not enough equity in a house to pay off both the first and second mortgage. So the second mortgage holder can get nothing. Therefore, being in second position can be a very risky place to be.

That is why second mortgages come with higher rates then first mortgages. Second mortgages come in two main forms – a fixed mortgage and a home equity mortgage. The fixed mortgage follows the same format as a regular fixed loan. The equity mortgage is based on equity in the home.

Second mortgages are used by loan officers to either help the borrower avoid paying PMI, or to avoid a jumbo loan. A jumbo loan would be a non-conforming loan and thus would have a higher rate for the entire loan. If a borrower wanted to avoid this, he could get a first mortgage at the max conventional loans allow, and a second for the balance. The rate on the second would be high, but blended together, the rate would be less than on the jumbo.

GOVERNMENT LOANS

There are two governmental agencies that guarantee loans: The Department of Veterans Affairs (VA), and the Federal Housing Administration (FHA).

VA LOANS

VA loans are one of two types of government loans and are guaranteed by The Department of Veterans Affairs under the Serviceman’s Readjustment Act. Lenders rely on this guarantee to reduce their risk. The best thing about VA loans is that for veterans is allows them to get into a house with zero or very little down. The amount of down payment required depends on the entitlement and the amount of the loan. Military service requirements vary. These loans are available to active-duty as well as separated military veterans and their spouses.

These loans are self-amortizing if held for the complete term of the loan, yet it may be paid off without penalty. These loans are only available through approved lenders. The amount of entitlement a veteran has is reported in a Certificate of Eligibility which must be obtained from the VA office in your area.

Veterans who had a VA loan before may still have “remaining entitlement” to use for another VA loan. The current amount of entitlement was much lower previously and has been increased by changes in the law. For example, a veteran who obtained a $25,000 loan in 1974 would have used$12,500 guaranty entitlement, the maximum then available. Even if that loan is not paid off, the veteran could use the difference between the $12,500 entitlement originally used and the current maximum to buy another home with VA financing.

Most lenders require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property- whichever is less. Thus, in the example, the veteran’s $23,500 remaining entitlement would meet a lender’s minimum guaranty requirement for a no down payment loan to buy a property valued at and selling for $94,000. The veteran could also combine a down payment with the remaining entitlement for a larger loan amount.

FHA LOANS

The Federal Housing Administration is one of the oldest and largest sources of mortgage assistance available to the general public. The Department of Housing and Urban Development (HUD) run this program.

FHA backed mortgages are the other type of government loans and are an outgrowth of policy in the interest of the public, with the view that the government should stimulate the economy in general and the housing industry in particular. FHA loans like VA loans can only be obtained through approved lenders.

Why are FHA loans so popular? Because they have liberal qualifying standards, low or even no down payments and even closing costs can be financed and added to the loan. There is no prepayment penalty. FHA loans made prior to February 4, 1988 are freely assumable by a new buyer when the house is sold. Loans made after December 15, 1989 may only be assumed by qualified owner-occupants and cannot be assumed by investors.

FHA loans have limits too. Recent housing appreciation has pushed up the limits on this year’s loan program by nearly 16 percent in the continental U.S.

If you want to find out what the loan limit is where you live you can call the consumer hotline for the Housing and Urban Development Department . Their toll-free number is available on their site. The FHA is a division of HUD.

As always, consult a mortgage professional. A Certified Mortgage Planner will work with your own financial planner, Realtor, CPA and other advisers to find a mortgage loan product that is right for you.

Pre-qualifying for home mortgages is a very good idea for many people. It allows you to determine how much money you can get before you go out shopping for a home. In simple terms, it allows the lender to tell you how much money they are willing to give you for home mortgages based on the information that you provide to them prior to the actual bid on a particular house.

Consumers should understand that there is a difference between pre-qualifying and pre-approval. In pre-qualification you submit the important details of your past and current credit history, along with your employment history, to the lender and the mortgage lender will determine how much money you can afford for your loan. This amount is not set in stone but will give you an estimate of the price range that you should stay within when shopping for your home. Because there is less verification, pre-qualification can take place quickly and in many cases there is no charge for it.

While this service is helpful for determining the amount of money you can spend on your mortgages it is not a binding contract on the lender. The reason it is not binding is because in this type of program you only give as much information as is needed to determine price ranges. Once you find the house that you want, you will still need to submit the usual documents. If in the course of that process it is determined that you are not as credit worthy as earlier supposed, you may not get the loan.

Pre-approval of mortgages, on the other hand, is different. With pre-approval, the lender will verify all of your submitted information. They may contact your employer, your credit union or bank, as well as other sources in order to verify your income, credit history, financial assets, and current liabilities and debts. Once this process has been successfully completed, the lender will give you a document stating that your mortgage is approved for a certain amount of money within a certain amount of time.

The major benefit of pre-approval over pre-qualifying is that you know for certain that you will get a certain amount of money for the mortgages that you are interested in. It should be kept in mind that this type of arrangement is time sensitive. The agreement may be for thirty days or it may be for a bit longer. Having your mortgages pre-approved, however, does also give you a lot of leverage with the seller. They know that you have the money available to buy their property and in most cases this allows you more negotiating power.

Pre-approval is not always free. With some lenders you may have to pay a fee for the service. This is only fair as it does take time for the lender to move through all of your documents and to verify your information. In addition, you may have to pay for your credit reports.

In both pre-qualifying and pre-approval of mortgages, if your circumstances change before closing make sure you tell the lender. Some changes, such as losing a job, may invalidate the pre-qualification or pre-approval results.

There are at last signs that the mortgage market is beginning to ease its grip on its very restrictive lending criteria. There are now 7% more mortgage deals than in the previous month and there are now just under 100 deals that require a 10% deposit. The number of mortgages that require a 15% deposit has risen from 209 in December 2008 to 272 in May 2009 and there is similar jump for 20% deposit loans. Figures from the Bank of England show that mortgage approvals rose by 4% in March 2009.

These are small changes in a slumped market and in a time of recession, but at least these changes are moving in the right direction. They show that the banks are gradually beginning to lend again, and to lower the demands on their borrowers. As this continues and more buyers are able to enter the market house prices will begin to bottom out which will bring at least some stability to the market.

However, with continued rising unemployment, the news is not all good. House prices are still expected to fall this year, with some economists predicting a fall of another 6%. Having said this, estate agents have seen a continued increase of interest from potential buyers and sales levels have risen through February, March and April this year. This is somewhat unsurprising with house prices haven fallen so far and low mortgage rates together with it being Spring time, traditionally the busiest time for estate agents.

If you are considering getting a mortgage now, you would be wise to consider getting a fixed rate. The Bank of England is expected to keep interest rates at a record low 0.5% for some time to come. However, once the rates start to rise again they could rise quite quickly and those stuck on variable rates could see a sharp increase in their monthly payments.

Borrowers already show that they have this in mind: five-year deals are now more popular than two-year deals. Though when choosing your mortgage remember to compare the redemption penalty period as well as the mortgage length and rate. Often, with the longer fixed periods you have a longer fixed redemption period. So you need to consider and plan how long you expect to stay in your property. It is sometimes possible to move your mortgage with you if you do move within your fixed period but not always, and you may still have to pay a hefty fee.

The housing market is still in the doldrums and will be for sometime. However, with price falls slowing, record low interest rates and mortgages beginning to ease, buying property is becoming more attractive to mid to long term investors and to individuals whose employment prospects are safe.

Thailand was my first tourist destination outside Europe and North America. Based on the sage advice of my Thailand-experienced friends, I was sure that this paradise vacation would be carried out on ridiculous costs. However, back home, I have found out too late, that during my little Thailand adventure I have spent almost the same amount of money as one of my regular surges to Europe. If only I knew that carefully planning your trip to Thailand can manifest itself in huge savings. The following list includes some solid advice that can help those novice Thailand visitors to save significant amounts of cash and still enjoy their vacation:

1. Season choice. Traveling in Thailand Islands during the low season can save you up to 25% of the accommodation costs (up to 25$ per bungalow per night if you choose high standard – not luxury – accommodation). Similar to many other world locations that are based operate seasonally; there is a significant price fluctuation across seasons. Not less important is that fact that the weather in Thailand is quite pleasant even during the low season. The temperatures’ difference between the “hot season” and the “peak season” is miniscule, and during the “wet season” one can experience only a mild occasional rain. Therefore, in Thailand one can lower accommodation costs by avoiding the peak season without paying the price of suffering from unbearable cold or coping with endless monsoon.
2. Transportation. Getting from Bangkok to your final destination in one of the Southern Islands by train or bus instead of by plane can save you up to 80$ each way. You can save a bundle if you arrive to Bangkok International Airport in the evening. In this case you save, besides the gap between relatively expensive airfare and train or bus ticket, the first night’s accommodation cost as well (40$ – 100$ per bungalow per night in high standard – not luxury – accommodation).
3. Food. In Western style countries, the more you pay for your dinner the better it is, so everyone can make a personal decision about getting an appropriate cost – benefit balance. In Thailand, and especially in the Southern Islands it is much simpler: in most cases, the cheaper the better. Expensive restaurants in Thailand Islands usually specialize on Western food that is neither authentic nor of superior taste; a standard dinner will cost you 10$ – 30$ in a restaurant of this kind. Alternatively, the dinner in a cheap restaurant with plastic chairs will cost you 3$ – 8$ and it is usually both tasty and authentic. My most disappointing Thai dinner was served in a fancy restaurant in Bangkok and had cost 120$ for a couple, whereas my best dinner was served in a cheap family restaurant in Koh Phangan. The owner – young mom named Mam – prepared the meal for us exactly as we wished it would be and charged us with measly 5-6$ per person.
4. Air Conditioning. The presence of air conditioning in your room can make a huge difference in accommodation rates. For example, the same room rates in the same resort can vary from 15$-30$ for a bungalow with a fan to 40$ – 100$ for an air-conditioned bungalow. Although choosing an air-conditioned room during the hot season (such as March – April) is crucial, if you visit Southern Thailand during the rainy season – a bungalow with a fan can both satisfy your needs and cut your expenses in more than a half.
5. Location choice. Similar to the principle held in most places in the world, the accommodation rates in Thailand Islands depend on your location choice. The bungalow in the central beach, close to the airport or seaport full of thriving nightlife will probably be twice as expensive as the same bungalow in a remote quiet beach. However, accessibility is an issue in the Thailand Islands, and the taxi fares and taxi boat fares operate under the same principal as the accommodation rates. So there is a rule you may adopt: if you are looking for social activities and busy nightlife– stay close to the airport or seaport; otherwise make a little effort and move after your arrival to a remote beach. You will save up to 60% on the accommodation rates this way.
6. Communication. It will probably not come as a complete shock, but the use of cellular phone from outside of Thailand could be extremely expensive. To save on communication costs you can either buy a local cellular phone with prepaid SIM card or use the Telephone & Internet centers services. Mind you that the cost of these services may vary. As usual, if you’re calling overseas from your resort’s office – it will be more expensive than using a call center in the town. The cheapest solution is probably giving your phone number to your friends or relatives overseas since every call center has a phone number that can be used for calling back.
7. Price negotiation. In tourist locations in Thailand negotiation is a necessity or a way of life. Likewise, in the less touristy islands and areas price bargaining is accepted as well. Just try it – in Thailand price negotiation isn’t considered an embarrassing behavior, so you have nothing to lose.
8. Psychology. Although, in Thailand everything is perceived to be cheaper than in your home country, don’t be fooled by the seemingly low prices and control your expenses. Buying an enormous amount of inexpensive things can really add up to a surprisingly large sum of money.


During my last visit to Thailand, I followed these guidelines with persistence and I was happy to disclose, that budget travel in Thailand can be more than just an economical issue, it can also be enjoyable. Interestingly enough, in Thailand, the less you spend – the closer you get to the local authentic experience.

A balloon mortgage is a loan that is provided for a short period of time for a set amount of money. Balloon mortgages will often involve periodic payments that are made at a fixed interest rate. During this period, the loan may not be amortized. The balance of the loan has to be paid in full at a specific time.

Another feature of balloon mortgages is that they will combine many of the features seen in adjustable rate mortgages and fixed mortgages. The interest rate will remain fixed for a certain period of time, which may be from 5 to 7 years. The payments will be based on an amortization cycle that lasts 30 years. If homeowners can’t pay the balance by the end of the term, the lender will decide how the payments will be made. The sum is usually converted into a fixed rate mortgage.

Advantages?

A balloon mortgage can be good because it offers an interest rate that is much lower than standard 30-year mortgages. If you are buying a larger home, a balloon mortgage can help you. Larger homes tend to have interest rates that are high, and this can make them difficult to pay off if you don’t have a large income. Balloon mortgages can make things easier. They are also good for people who plan on refinancing the home before the term ends.

Despite this, balloon mortgages can be much more complex than standard mortgages. Some homeowners who use them end up running into problems. You will need to make sure you have solid documents before signing up for a balloon mortgage. You will want to make sure you choose the right lender and read all contracts carefully for hidden fees or other terms. Balloon mortgages can be risky for people who don’t understand them.

Extra Charges For Balloon Mortgages

One problem that customers run into with these mortgages is prepayment penalties. These penalties will often be placed on people who choose to pay off the mortgage early. If you refinance your existing mortgage or sell the home, this can lead to prepayment penalties. The problem with these penalties is that they greatly increase the chances that your home could become foreclosed. Mortgages that have balloon payments are highly susceptible to foreclosure.

Pre Payment Penalties

The cost of prepayment penalties can be large. They are usually calculated as a percentage of the total balance owed. This could be as high as 12% and many homeowners have found themselves paying thousands of dollars more than they expected. If you choose to get a balloon mortgage you should make sure there are no prepayment penalties. If you get into a situation where you can’t afford the home, prepayment penalties can keep you from being able to refinance the home in order to get out of debt. These mortgages can be risky, and should only be used by those who fully understand the risks involved.

Short Term Mortgage – Long Term Problems

A mortgage is a serious financial endeavor that you should take seriously. They involve large amounts of money that most people simply don’t have on hand. If you get into a situation where you can’t make your payments, you could end up losing your home and your credit could be ruined. Many people have made the mistake of getting involved with balloon mortgage without doing their research. They chose not to read the fine print on the applications. They often end up in situations that can haunt them for the rest of their lives.

While balloon mortgages may have low interest rates at first, you should have a plan to make your monthly payments after the first term ends. This can keep you from defaulting on your payments.

Virginia has a booming economy thanks in part to being home to the worlds largest naval base. The Federal Government is a major employer in the state of Virginia giving it a stable economy that weather the ups and downs or recessions better then many other states. Virginia is home to the Central Intelligence Agency, the Department of Defense, and the National Science Foundation. The technology industry is the second largest employer and they rely on Virginias many colleges and universities to supply their well educated workforce. If you are looking to relocate to Virginia there re many options available to you in terms of Virginia condos.

History buffs love Virginia’s Historic Triangle, composed of Jamestown, Yorktown and Colonial Williamsburg. Travelers come from all over the country to visit the birthplace of America. Virginia was the site of the first European colony in the United States and its historic sites are a big draw to tourists. This influx of tourists make Virginia condos a great investment opportunity.

Virginia has a wildly diverse population. In recent years it has see enormous influxes of both Asians and Hispanics. Northern Virginia currently has the largest Vietnamese population on the East Coast and this influence can be seen in many of Virginias great restaurants. Virginia is known for its festivals and state fairs, and in recent years has seen many new annual traditional pop up that celebrate the heritage of it’s diverse population.

Farming is still an important industry in Virginia. Cattle, tobacco, peanuts and tomatoes are some of the states largest exports. The state has started to revitalize its poverty stricken Blue Ridge Mountain area with vineyards. Wine tastings in this part of the state are big draws and the area has seen in influx of tourists, many looking for Virginia condos to rent while in the area, who come to sample the still relative novelty of a Blue Ridge Mountain wine.

Virginia condos can put you in the heart of this diverse state. Whether you are looking to live near the military naval bases along the eastern shore, in the scenic Blue Ridge Mountains, or in one of Virginias booming cities there is a Virginia condo that’s right for you.

There are many condominiums and vacation rentals available in the Myrtle Beach area, which is the central portion of the greater Grand Strand. Myrtle beach condos for sale – Oceanfront Condominiums… a fun way to retire, an affordable 2nd home and an unbelievable investment.

Condos in Myrtle Beach vary greatly and range from discounted bargain oceanfront condos to super fancy luxury condos and golf course resorts. Condos in Myrtle Beach are the hottest selling real estate properties, and vacationers are flocking to the newest oceanfront condos even more than the older established resorts. golf packages are designed to offer the best Myrtle Beach golf vacations for any budget; whether it’s a twosome of husband and wife, or a large group of 48 men and women who require larger homes or multiple condos.

North Myrtle Beach can offer some of the best and most affordable Myrtle Beach golf packages on the Grand Strand. Reasonably priced and graciously appointed, our 1, 2, 3 and 4 bedroom Ocean Front Condos and resort vacation rentals offer a choice selection of exceptional amenities; which include indoor & outdoor swimming pools, spacious sun-decks, saunas, Jacuzzis or hot tubs, private ocean-front balconies, and game rooms furnished with the latest in indoor recreation and exercise equipment.

Myrtle Beach condos provide the easiest access to the festivities and relaxation of the Myrtle Beach world, whether it’s fishing, golf, shopping, beaching, or just living day-to-day and getting your groceries bought. Visitors to some of our Myrtle Beach condos can enjoy the ocean & beach by their rental, and also the fishing off the multiple public piers, playing the many miniature golf courses, or choosing from over 1700 restaurants, dining on fresh seafood, or just taking a relaxing walk on the beach.

I devised this exercise some years ago when I needed to find a new home. I’d just attended a workshop on creating your own reality and was greatly taken with what I’d learned so I carefully noted down everything I wanted in my dream home and then set about trying to find it.

No one was more astonished than I when a few weeks later I was offered a house to rent that not only ticked every box — when I checked my blueprint I saw I had inadvertently written down ‘telephone line’ twice, and the house had two telephone lines running to it. This is a powerful exercise!

The technique can be used for a range of possibilities but, for the purposes of the illustration, I’ve chosen a dream home.

You will need some paper and a pen or pencil and, initially, an hour or so of uninterrupted time. But this is an on-going exercise, something you can keep adding to until you’re completely satisfied with the end result.

What’s crucial to success is identifying the limiting beliefs most of us hold that we can’t have what we want, that we don’t deserve it, that it’s not possible. That’s the hard part — but help is at hand.

Start by writing ‘My Dream Home’ in the centre of the page and drawing around it a circle, a heart, whatever takes your fancy. Now you’re going to sketch in lines leading out from the centre, like a star burst, and write down all the things you want in your dream home.

You can start by writing down basics like electricity and gas supply, mains sewerage, telephone line, or you can assume those are going to be there anyway. Are you going to own this home or rent it? Write down things like ‘freehold’ or ‘good landlord’ and ‘affordable rent’. Do you like sleek and modern or something more traditional? Is it important that your home is well insulated, has central heating, double glazed windows? Write that down.

How many bedrooms will it have? And why do you want that number? If you want one as an office or a workroom, could you as easily have a dining room that doubles up? Are you trying to fill your needs for both now and in the longer term? Is this home going to last you forever or are you creating something for now, knowing that as your needs change you’ll be able to create another dream home? (You’re going to have to answer an awful lot of questions to get clear about what you want, but it’s going to be worth it. You can’t get what you want until you get clear about what you want.) When you’re quite clear about how many bedrooms write it down.

Do you want a separate dining room and kitchen or would you prefer them combined? Write it down. What kind of kitchen do you want? What will it have in it? Washing machine? Tumble dryer? Would you prefer a separate utility room? Write it down. Do you love cooking or are you someone who does the absolute minimum on that front? Will you need lots of equipment or very little? A breakfast bar or the kind of large kitchen table that everyone can sit around?

This is your dream you’re creating here and you make up the rules as you go along. If you find yourself thinking ‘I’ll never be able to afford that,’ keep reminding yourself this is a game, this is a dream you’re creating … for now! This is what I mean by letting down your walls of belief. Doing this exercise not only helps you get clear about what you like and what you want, it also helps you get in touch with those beliefs that stop you being who you really are and getting what you really want. The more work you do on this the greater are your chances of success because you’re also working on your subconscious, giving it encouraging affirmations, wiping the old negative tapes and replacing them with new, positive ones.

When you get to the point where you’ve had enough for now, stop. You’re doing some really hard work here and you need to acknowledge that. We’re generally much better at quantifying physical work than mental effort and it’s important not to overdo things at this stage otherwise you’ll end up exhausted, especially at the beginning. Put it to one side and come back to it later but try and set aside a brief time each day, or perhaps three times a week, to keep working on your blueprint.

As your vision grows start imagining yourself in your dream home, walking around it, looking at each room. How do you feel? Are you comfortable? Does it reflect who you are, who you’d like to be? What colours predominate? Lush, rich colours or something more subtle? Are there carpets, wooden floors, rugs and runners? Is it full of things, a cosy, family home or is it elegant and minimalist? What do the doors look like, the walls, the lights? If you change your mind about something as your vision develops that’s fine. Just change it on your blueprint. It doesn’t matter how messy it gets. You can always do a neater version as you get more clarity.

Are there any absolute essentials you couldn’t live without? Do you need to be near public transport, within easy reach of the shops, close to people you care for or care about? Would you prefer to be out in the countryside or in the middle of a town? Are you passionate about the sea and dream of living within sight of it? Don’t listen to the voice that says ‘in your dreams’. Write it down. Is your dream home somewhere hot and sunny, a retirement home abroad, perhaps? Just put yourself in that place, imagine it, smell the scents, see the colours and create your home in the local style.

Is there anyone else to take into consideration, other members of the family, family pets? It’s probably easier to do this exercise if you’re doing it just for you but I’m assuming your dream home will accommodate what family you have so I guess you might have to make a few compromises. If a husband needs a garden shed to take refuge in, a garage to store assorted paraphernalia, build it into your blueprint. If the kids need somewhere to store their bikes, if the rabbit needs some grass, put it all down. Is there a dog that needs exercising — do you need to be near to a common area?

Do you want a garden? How big will it be? Who’s going to maintain it? Will there be hedges, fences, walls? Are you bothered about being overlooked, about privacy or would you be happy having neighbours you can chat to over the fence? Will there be a vegetable plot or just flowers and shrubs — what kind? Put it all down.

Something that needs to emerge through doing this exercise is a sense of responsibility for what you’re creating — and that’s a tricky one. On the one hand I’m saying ‘go for whatever your want’ while on the other I’m saying ‘you have to take responsibility for what you create’. But there’s no point in dreaming up a home like something out of Footballers’ Wives if you’ve got small children which means you’ll have to cover up the swimming pool and spend all your time picking up their toys in a vast garden.

It doesn’t make sense to want a large garden with a vegetable patch if no one in the family has ever picked up a trowel, or to want an elegant, minimalist home you’ve seen in a classy magazine when you know you’re really untidy and perfectly happy with that. You need to be realistic. This dream home has to be in line with your values and what you want out of life.

Keep working on your blueprint until you’re confident you’ve covered every possible detail. Then start putting energy into moving towards that dream. What are you going to need to do to move you closer? What are you going to have to let go of?

The most important consequence of doing this exercise is gaining clarity about who you are and what you want. We so often spend our lives vaguely dissatisfied, not sure what we want but quite sure that we don’t want what we’ve got. Ultimately you may end up taking a few tiny steps to bring your dream into reality — clearing out stuff you no longer need, changing the use of a room from, say, a bedroom into a workroom or office. Or you might move on in huge leaps and acquire exactly what you wished for (even down to that second telephone line!)

You may decide you’re not quite ready for such major change, that there are other issues to resolve first. That’s also fine. You might want to put your blueprint away for a while and come back to it in six months, a year. It just might astonish you to look at it after that time and see that some of the things you wrote down have appeared, as though by magic. You see, once you get really clear about what you want, what you want tends to find you!

Arrange your living room furniture in a “U” shape for great conversations.

Birdhouses painted to match your home are wonderful.

Cats in a windowsill are “very cottage.”

Dogs curled up in front of the fireplace say “cottage cozy.”

Entertain your friends around a round table with good food and wine.

French touches in furniture say “sophisticated cottage.”

Gates with clever signs hung on them say “instant cottage.”

Hatboxes covered with vintage wallpaper are great for storage.

Ingenious cottage touches are a claw-foot bathtub and thick fluffy towels.

Junk from flea markets can be repurposed into creative plant containers.

Knickknacks from family or collected from your travels add personality.

Lattice lining patio walls creates charm.

Mementos framed in shadow boxes add personality to your cottage.

Nurture yourself with a four poster bed and sumptuous linens.

Ottomans can be used in place of a coffee table or at the end of a bed.

Pictures of florals, botanicals, or your travels say “instant cottage.”

Quilts on the end of a bed or draped over a chair are pure cottage style.

Rugs in sisal, jute, or colorful cotton add a cottage touch.

Sink-down-in-and-rest-awhile white slipcovered sofas are very cottage.

Texture in rugs, fabrics, and pillows creates interesting dimension.

Upholster your furniture in coordinated florals, plaids, and stripes.

Vintage trunks make great coffee tables and linens storage.

Welcome signs are charming near your front door.

Xtraordinary touches include floral painted mailboxes and fountains.

Yellow in a bright canary shade is a great color for a cottage front door.

Zest for living always accompanies the cottage style spirit!

c2006 Kathryn Bechen and Kathryn Bechen Designs.
All rights reserved worldwide.

In January 2008, downtown San Diego will have a new building claiming the status of being the tallest residential tower in downtown, called The Electra. The Electra condos will be 43 stories high with 248 condos. One of The Electra condos most distinguishing features aside from its height will be its 60 foot atrium styles “social lounge”/lobby, a first for San Diego. Other amenities include: business center, private meeting room, gym, 24-hour concierge pool, spa, sauna, steam room barbeque, 5th floor roof deck outdoor fireplace lounge & garden.

The Electra condos got their name from the site they are built on which used to be a San Diego Gas and Electric (SDG&E) power plant facility dating back to 1911. All of the units offered by the developer for sale in 2005 were sold out with in a week’s time. Demand has been and continues to be very strong for the high quality view condos downtown. Prices ranged from $500,000 to $2,500,000 when sold by the developer, with floor plans ranging from approximately 700 – 1,800 square feet. There are six units per floor up to about the 30th floor, than only five up to the 40th floor and then the top three floors only have three units per floor.

Electra is located in downtown “Columbia” neighborhood at the intersection of Broadway and Kettner Boulevard. Its easy to pick this building out on the skyline because of its height and also from up close you will notice the original façade of the SDG&E building was preserved and its original windows are now the windows of the lower floor condos, often two story town home floor plans.

The is a great building for people seeking the highest quality of finishes, because this building really does raise bar and set a new standard by which all others will be measured. Not to be overlooked are the magnificent city and bay views available from these condos, expect the premium view units to have a market value almost twice that of their similar sized floor plans and the lowest floors with out the special and panoramic views.