Tribal Loans Home Loan And Mortgage RateA home loan is usually obtained from a bank but can be received from any institution willing to loan the money. Lenders normally require an initial payment from the borrower, typically 20 percent of the purchase price of the house; this is called a down payment. If the house is selling for $200,000, for example, the borrower must make a down payment of $40,000 and can then take out a $160,000 loan to cover the rest. Lenders require a down payment as a way to ensure that they can recover the money they have loaned in case the borrower defaults on it (that is, fails to repay it). In the case of default, the lender has the right to repossess the property and sell it to pay off the loan. The process of a lender taking possession of a property as a result of a defaulted loan is called foreclosure. Lenders evaluate potential borrowers to make sure they are reliable enough to pay back the tribal same day loans. Among the factors they review are the borrower's income and ability to make the down payment. The U.S. government provides various forms of assistance to people who would not normally qualify for home loans. For instance, the Federal Housing Administration insures tribal loans same day for low-income citizens in order to encourage banks to lend to them. It also runs programs that offer grants (money that does not have to be repaid) to cover down payments. One such program is the American Dream Down Payment Initiative. The Department of Veterans Affairs provides similar assistance for people who have served in the U.S. military. The calculation banks use to determine monthly loan payments is complicated and often not understood by borrowers. Banks charge an annual percentage rate (APR) on the loan amount, or principal, in order to be compensated for the service of lending money (as well as to pay for their own expenses, such as hiring employees and maintaining buildings). Although the interest rate is quoted as an annual rate, in actuality the interest on a home loan is usually charged monthly. For example, if the APR were 8 percent, the monthly interest rate would be 0.6667 percent (8 percent divided by 12 months). The interest also compounds monthly, meaning that each month the interest fee is added to the original loan amount, and this sum is used as the basis for the next month's interest. The borrower ends up paying interest on the accumulated interest as well as on the original loan amount. To understand how this works, imagine that you had to pay an 8 percent annual fee on $100. The first month you would pay an interest fee of roughly 0.6667 percent of $100, or a little more than 66 cents, raising the total amount due to just over $100.66. The second month you would pay 0.6667 percent on the new native american installment loans for bad credit amount ($100.66), or 67 cents, bringing the total due to almost $101.34. After 12 months of applying a compounding monthly interest rate of 0.6667, the total amount owed would be $108.30, or 8 percent more than the original loan amount plus 30 cents, the amount of interest that accumulated through compounding. Mortgage payments are even more complicated because two things happen each month: in the example of an 8 percent APR, a fee of 0.6667 percent is charged to the total amount of the loan, but the total amount of the loan is reduced because the borrower has made a payment. Because the payment by the borrower is more than the fee of the monthly interest rate, the total amount owed gradually goes down. This method of calculation requires that borrowers pay more in interest each month at the beginning of the loan than at the end. This can be seen in the example of a $160,000 loan paid over a 30-year period with an APR of 8 percent. After the first month of the loan, the bank charges a monthly interest rate of 0.6667 percent (really two-thirds of a percent, which would be a 0 with an infinite number of 6s after the decimal point, but it is rounded up at the fourth decimal point) on the $160,000 loan amount, for a fee of $1,066.67. At the same time, the borrower sends the bank a mortgage payment of $1,174.02; of this amount, $1,066.67 goes toward paying off the interest charge, and the remainder, $107.35, is subtracted from the $160,000 loan, bring the total amount due down to $159,892.65. The next month the bank charges the same monthly interest rate of 0.6667 on this new amount, $159,892.65, resulting in an interest charge of $1,065.95, just slightly less than the month before. When the borrower sends in his $1,174.02 payment, $1,065.95 goes toward paying off the new interest charge and the rest, $108.07, is subtracted from the loan amount ($159,892.65Go To My Blog:ejurnal.stie-atmabhakti.ac.idejurnal.stie-atmabhakti.ac.idportal.thomas-hardye.netsodis.frnszashtita.comejurnal.stie-atmabhakti.ac.idsign-ific-ance.co.uk

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