Home loan seekers usually face a dilemma whether to choose to keep rates or floating rates. This is mainly because many of them do not know the nature of the distinction between fixed rates and floating rates. There are some fundamental differences between the various rates offered by that individual must be appreciated before choosing to home loans.
To begin with, there are two basic types of home loans based on interest rate - fixed interest and floating rates. In two major categories there are sub-categories. The distinction between the sub-categories that have been outlined below:
1. Fixed price
Fixed rate mortgage loans are available with fixed interest for a certain period. There are two basic types of loans with fixed interest rate:
a) Fixed rate (fixed for 3 years)
Here, the interest rate is fixed for three years early after it is reviewed. At the end of the 3-year period, the interest rate can be adjusted with a common interest at this point in time.
b) Fixed rate (fixed for 5 years)
Different types of interest rates with a 3 year stay only in one aspect, the period after the interest rate is reviewed. Here, for the review period is five years. 5 year fixed rate is 'expensive' compared with the 3-year fixed rate of 0.25% -0.50%.
2. 'Pure' fixed rates
Interest rates under a fixed rate loan is fixed throughout the pure term. In other words, interest rates do not fluctuate with changes in market prices. This is not the usual flat rate (fixed for 3-5 years) or floating rates in which the level was raised to be reviewed periodically. This is also for this reason that the fixed rate loans are expensive pure compared with their peers. For example, the cost of certain HFC 10.50% interest rate on fixed rate loans pure, which is 0.25% higher than the usual fixed rate loan.
However, given the fluctuations in interest rates in the present, not many housing finance companies (HFCs) offer pure fixed rate home loans.
3. Floating exchange
Floating rate home loans associated with the prevailing market rates. Floating rate loans that can be changed at regular intervals. Typically, a floating interest rate was raised to be reviewed once every quarter. However, different periods of time can be in HFC. For example, a certain HFC has a rate review every year (depending on changes in the primary lending rate).
www.sify.com
To begin with, there are two basic types of home loans based on interest rate - fixed interest and floating rates. In two major categories there are sub-categories. The distinction between the sub-categories that have been outlined below:
1. Fixed price
Fixed rate mortgage loans are available with fixed interest for a certain period. There are two basic types of loans with fixed interest rate:
a) Fixed rate (fixed for 3 years)
Here, the interest rate is fixed for three years early after it is reviewed. At the end of the 3-year period, the interest rate can be adjusted with a common interest at this point in time.
b) Fixed rate (fixed for 5 years)
Different types of interest rates with a 3 year stay only in one aspect, the period after the interest rate is reviewed. Here, for the review period is five years. 5 year fixed rate is 'expensive' compared with the 3-year fixed rate of 0.25% -0.50%.
2. 'Pure' fixed rates
Interest rates under a fixed rate loan is fixed throughout the pure term. In other words, interest rates do not fluctuate with changes in market prices. This is not the usual flat rate (fixed for 3-5 years) or floating rates in which the level was raised to be reviewed periodically. This is also for this reason that the fixed rate loans are expensive pure compared with their peers. For example, the cost of certain HFC 10.50% interest rate on fixed rate loans pure, which is 0.25% higher than the usual fixed rate loan.
However, given the fluctuations in interest rates in the present, not many housing finance companies (HFCs) offer pure fixed rate home loans.
3. Floating exchange
Floating rate home loans associated with the prevailing market rates. Floating rate loans that can be changed at regular intervals. Typically, a floating interest rate was raised to be reviewed once every quarter. However, different periods of time can be in HFC. For example, a certain HFC has a rate review every year (depending on changes in the primary lending rate).
www.sify.com
No comments:
Post a Comment