Financing Usa Is Back Online
Well after some time of wrangling with lawyers and technicians, Financing Usa is up and running again. We were down for quite awhile sorting out who actually owns FUSA, but that has been all sorted out amiably and we’re back in the web game.
We’ll be sure to update soon this week and keep on going. We aim to create a solid resource for people trying to get a loan in the United States of America.
We thought we would start off with defining some of the more commonly used terminology that can be found in the financial world as it relates to loans and mortgages. Consumers sometimes are confused by these terms and are afraid to clarify what they mean in the context of arranging for a loan or mortgage.
Loan Interest Rate – this is the rate of interest that you will pay on your loan. Lenders will vary the rate of interest based on the term of the loan, the prevailing bank interest rates and your credit rating. The interest rate is also different for unsecured loans and secured loans with secured loans generally being lower than unsecured loans. Next to mortgage loan interest rates, loan interest rates are the lowest of all of the loan rates.
Mortgage Interest Rate – pretty much the same as loan interest rate except that a mortgage is always registered against a property, usually your home and enjoys a very low interest rate as a result. A mortgage is really a form of secured loan that is specifically for people planning to purchase a home.
Credit Card Interest Rate – these interest rates are all over the map and usually the highest of all interest rates. Depending on your plan, whether you pay an annual fee or not, these interest rates can be from 0% for people transferring balances from other accounts to as high as 29% for store type credit cards. Even the temporary low interest rate for transfers will revert to higher rates, usually 18% on regular credit cards after an initial period.
Term – the term is the time that the interest rate will be fixed. For loans the term is usually equivalent to the amortization schedule. Most loans will vary from several months to a maximum of 5 years. Mortgage terms can be from 6 months to 10 years with the payments amortized over a longer period of time. At the end of the term a new interest rate will be applied depending on market conditions at that time.
Amortization Schedule – this is the length of time that the payments are spread over. In Canada mortgages have a maximum amortization of 25 years while in the US they can be longer up to 35 years in some cases. A longer amortization has the impact of making the monthly payments smaller, however the amount of interest paid over the life of the mortgage goes up due to the longer period of time.
Maturity – usually means the date that the loan or mortgage matures in terms of either interest rate term or the final date when the mortgage or loan is fully paid off. Maturity dates can be stressful for some if interest rates are on the rise and monthly payments are increasing accordingly.
Monthly Payment – Monthly payments are calculated based on the interest rate and amortization of the loan or mortgage.
Secured loan – is secured with an asset such as a home or car. A lien is placed against the asset preventing the owner from selling the property without repaying the loan.
Unsecured loan – a loan were no security is provided
Mortgage Loan – a loan which is usually used to purchase a home
Credit Ratings – are an indicator of risk associated with lending money to a consumer. They are determined by your payment history, number of loans outstanding, number of credit cards and the balances on these credit cards.