Morgage Rates, Morgage Calculators, Morgage Refinancing

Securitization

Securitization is a financial technique that pools assets together and, in effect, turns them into a tradeable security held by a bankruptcy remote special purpose vehicle (SPV). Financial institutions and businesses of all kinds use securitization to immediately realize the value of a cash-producing asset.

Securitization can also have the benefit of removing a particular group of assets from a company's balance sheet. However, this will become increasingly difficult as accounting standards evolve (e.g. from US GAAP to IFRS standards). If it can be achieved, it is particularly important when the assets are in the form of debts owed to that company and the company is a bank. Residential Morgages for example, are a debt owed to a bank, but are also an exposure for the bank. Essentially, the bank is exposed, because its money is held by other people and, if those people default, then the bank may suffer loss. This exposure may well need to be reported to appropriate regulatory authorities, who may in turn restrict the amount of money a bank can lend (to potentially more profitable and secure borrowers). Securitization thus allows a bank to, essentially, sell on this exposure, and use the money for more profitable purposes. However the bank is is not completely off the hook by "selling" off these assets because the bank often maintains what is called a first loss piece or residual interest and carries that on its balance sheet. The first loss piece is just that, it is the first piece to absorb losses when and if the assets do not perform. The kick is that the bank will often remain the agent for the transferee (e.g. the person who buys the debts owed to the bank). The bank gets a fee for managing the pool of assets. It maintains the relationship with the mortgagor (the original person who borrowed money from the bank) therefore, while having none of the lending risk.

Securitization has evolved from its beginnings in the 1970s to a total aggregate outstanding (as of the second quarter of 2003) estimated to be $6.6 trillion. This technique comes under the umbrella of structured finance.

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Morgage Refinance Rate-Term vs. Cash-Out Morgage Refinance

A rate-term morgage refinance has a home loan amount that is just enough to re-pay the balance of your existing Morgage loan. The purpose of the morgage refinance could be to reduce your Morgage interest rate, adjust your home loan term, or both. Cash-out morgage refinancing, has a home loan amount that exceeds the current Morgage balance. The higher loan amount converts some of your home equity into cash that you receive at loan closing.

Home Equity Loan and Home Equity Line of Credit
A home equity loan has a fixed interest rate and term, your payment is the same every month. A home equity line of credit has a variable interest rate with a draw period of 10 years and a repayment period of 15 or 30 years. During the draw period, your monthly payment may be as low as the interest on your outstanding balance. Home equity loans offer terms between five and 30 years. Home equity lines of credit can be drawn on for 10 years.

morgage Calculator

Morgage calculators are often one of the first steps in the morgage refinance process. Use a morgage calculator to determine the morgage amount you can afford and the monthly Morgage payment. If you'd like to qualify for a larger morgage when refinancing, then use our morgage calculator and consider an adjustable rate morgage. An adjustable rate Morgage has a lower interest rate than a fixed rate morgage. The lower interest rate will allow you to qualify to borrow more money, for the same monthly Morgage payment.

morgage Qualification

To determine the maximum Morgage amount and monthly payment that you can afford for your new home or your morgage refinance, use our morgage calculator. morgage calculators can also be used to calculate payments for home equity loans or debt consolidation loans. Each Morgage calculator makes it simple to estimate how much you can afford to borrow and your monthly payment.

morgage Loan

If you know the monthly Morgage payment that you'd like for your morgage refinance, then use the morgage calculator to simply calculate the morgage loan amount based on the term of the loan and interest rate.

Morgage Prepayment

If you're thinking of refinancing your current morgage loan for a lower monthly Morgage payment, then enter the new morgage refinancing terms, add an additional amount to the monthly principal payment and calculate the interest saved by paying your Morgage loan balance in less time.

morgage Amortization

It's easy to keep track of the principal, interest and Morgage balance of your loan with our morgage calculator.

Morgage Refinance Calculator

If you are considering refinancing your present morgage loan, then use our morgage calculator to compare your present loan with the new morgage loan. Even though the monthly payment may be lower, the total of payments may be greater for the new loan.