Corn_Flake asked:


I just found out that because I’ve exceeded my line of credit 2 times in 6 months, Bank of America wants to jack my APR up to 32% intrest. I’ve been with them for 4-5 years now and they are unwilling to work with me even though I’ve never had a late payment or exceeded the credit limit before.
The balance is substantial. I’m afraid that no one will extend me a line of credit large enough to cover my balance. Should I look into taking out a second mortgage on the house I’ve been in for 1.5 years? What are my other options? What’s the downside to a second mortgage?
Thanks!
Actually the reason I’ve wracked up such debt is because I go through spells of depression/spending. If it’s available when I’m down, I spend. I pay it back later. It hasn’t been a problem up until recently when a few medical bills and a fiasco or two occured.

Ella

Kirsten asked:


From the research I’ve done, the rates seem quite a bit better than most other banks. Is there a downside to getting a home mortgage from a credit union? Why wouldn’t everyone do it if the rates are so much better?

Gladys

1st American Mortgage asked:


A jumbo mortgages is a home loan that exceeds the limits set by Fannie

Mae and Freddie Mac.

How are jumbo loans different?

What differentiates jumbo mortgage loans is the loan amount. At present, loan amounts that are higher than $417,000 are usually deemed jumbo mortgages. This determination is made by comparing industry standards for average housing loans as governed by the two biggest secondary mortgage lenders, Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac set industry standards for ‘conforming loans’; Home loans beyond those maximums are regarded as jumbo mortgages. These two agencies cap the dollar figure for loans that they will buy (that’s where the $417,000 figure comes from). Larger loan amounts are funded by other investors such as banks and insurance companies. Note that the dollar figure set to qualify jumbo mortgages differs by locale, so the limit is higher in Hawaii and Alaska (and in some other states). In the majority of the U.S., jumbo mortgages are those larger than $417K.

Available Terms - 15 Year Fixed, 30 Year Fixed, or Variable 30 Year

Jumbo Mortgage

The terms for jumbo mortgages vary similarly to other types of housing loans. Buyers can choose between variable rates, like 3/1 or 5/1 ARMs, for a 15-30 year jumbo mortgage, or a 15 or 30 year fixed jumbo mortgagerate.

Whether a 15 or 30 year fixed jumbo mortgage or an adjustable rate is best for you will depend on your plans and situation.

A 30 year fixed jumbo mortgage is better for those whole plan to own the home for a very long time. With this type of mortgage, the rate will not go up but it will never go down, either - it stays the same for the life of the loan. This is good because the payment is predictable, and cannot rise sharply if interest rates do. On the downside, the 30 year fixed jumbo mortgage rate is higher since lenders know they can never charge more than the original rate.

The lowest jumbo mortgage rate is usually an adjustable 30 year jumbo mortgage rate. Lenders understand their potential to benefit from increases in rates over time, so they are willing to lend at a lower rate in the beginning. Although, the lower rate won’t last. A variable 30 year jumbo mortgage rate will be fixed for 3 to 5 years, and then will adjust annually according to an index. Even small increases could mean significantly larger monthly mortgage payments.

Going with an adjustable 30 year jumbo mortgage rate works well when a buyer plans to move within the 3 to 5 year fixed period. For a buyer more concerned with smaller initial payments, or who will likely refinance in the near future, the variable 30 year jumbo mortgage rate is better than the 30 year fixed jumbo mortgage. Why pay the higher fixed rate when the buyer knows this isn’t their long-term plan?

All jumbo mortgage products - 15 year, variable 30 year, or the 30 year fixed jumbo mortgage - have their benefits. A trustworthy mortgage lender with experience financing jumbo mortgages is a buyer’s best resource for determining which product is right for them.



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