Second Mortgage

With Ohio fixed-rate loan you get a feature to prepay it.

Be prepared to have your borrowers ask whether they can prepay their Ohio home mortgage without incurring some form of prepayment penalty. The penalty is a sum of money that must be paid if the mortgage is paid off before the term or even paid down faster than the amortization schedule requires. Conforming, FHA, and VA loans generally do not carry a prepayment penalty.

This is a relatively new program that allows the borrower to make one-half of the monthly Ohio mortgage payment every two weeks, which equals one extra monthly Ohio mortgage payment a year. This is because making a Ohio home mortgage payment every other week is equal to 26 mortgage payments or 13 months, and of course there are only 12 months in a year.

There are pros and cons to this Ohio loan program. First the facts: On a $100,000 30-year mortgage at 6.50%, $127,544 is paid in interest. Add the $100,000 principal for a total of $227,554. Paying biweekly will result in interest of $97,215, a savings of $30,329! Obviously the larger the mortgage, the more dramatic the savings.

The disadvantages of an Ohio biweekly mortgages include there is a greater potential for incidence for late pay 11 K (because you now have twice as many payments); biweekly Ohio mortgages are more likely to be priced as year mortgages rather than as 15-year Ohio mortgages; most Ohio mortgage companies offering a biweekly option will require that the mortgage payment be made by direct deposit. With direct deposit every two weeks, you do have the flexibility of making the payment during the day grace period after which an Ohio mortgage is due.

In recent years, interest-only (IO) Ohio loan programs have become very popular, specifically in nonconforming loans, such as jumbo and subprime Ohio loan programs.

Interest-only programs designed to offer the lowest payment possible, because the borrowers are not paying anything toward the principal in their monthly payment. The major advantage of these programs is obviously a lower payment.

As an example, suppose you have an Ohio mortgage for $100,000 with an interest rate of 6.50%. The regular monthly payment–one that includes principal and interest—is $632.07.

To determine the interest-only payment, take the principal balance, multiply it by the annual interest rate, and divide by the number of payments in a year. For our example; we would get $100,000 X 6.5% = $6,500/12 = $541.66

Generally, these types of Ohio loans will have a fixed-rate payment for the first 3, 5, or 10 years and the remainder of the term fully amortizing.

Benefits of this type of loan include reduced payment for the first 3, 5, or 10 years and maximum tax deduction in the 3-, 5-, or 10-year period.