the loans issue
DESCRIPTION
The Loans Issue. Principles Discussed. Debt Consolidation Loans Mortgage Loans Home Equity Loans Auto Loans Education Loans. Debt Consolidation Loans. Combine most or all current debt into a single new loan Goals Lower overall interest rate Lower overall payment(s) - PowerPoint PPT PresentationTRANSCRIPT
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The Loans IssueThe Loans Issue
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Principles DiscussedPrinciples Discussed
Debt Consolidation Loans Mortgage Loans Home Equity Loans Auto Loans Education Loans
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Debt Consolidation LoansDebt Consolidation Loans
Combine most or all current debt into a single new loan
Goals• Lower overall interest rate• Lower overall payment(s)
To be successful, consumer must change spending and saving habits
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Mortgage LoansMortgage Loans
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Understanding Mortgage LoansUnderstanding Mortgage Loans Long-term loan for purchase of a
property and/or house
The property or the house and land on which it is located serves as collateral for the loan
Foreclosure possible if payments are not made
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Understanding Mortgage PaymentsUnderstanding Mortgage PaymentsPrincipal
The loan balance
Interest Interest owed on that balance
Real Estate Taxes Taxes assessed by different government
agencies to pay for school construction, fire departments, etc.
Property Insurance Insurance coverage against theft, fire, disasters,
etc.
Principal The loan balance
Interest Interest owed on that balance
Real Estate Taxes Taxes assessed by different government
agencies to pay for school construction, fire departments, etc.
Property Insurance Insurance coverage against theft, fire, disasters,
etc.
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Fixed Rate MortgageFixed Rate Mortgage
Interest rate and payments remain essentially the same for the life of the loan
Very affordable when interest rates are low
Usually 15- or 30-year loan terms
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Adjustable Rate MortgageAdjustable Rate Mortgage
Interest rate and payments fixed for an initial period, then may be changed
Interest rates typically start low, but usually rise significantly
Can be useful if the borrower plans to sell early
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Kinds of MortgagesKinds of Mortgages
Interest-only Loans
Jumbo Loans
Assumable Mortgage
Construction Mortgage
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Home Equity LoansHome Equity Loans
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Home Equity LoansHome Equity Loans
A home’s equity is the collateral Home equity loan• One-time lump sum loan
Home equity line of credit (HELOC)• Revolving credit like a credit card• Amount and time limit set by lender• Interest rates and payment amounts vary
during life of loan Balance is payable when house is sold
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Auto LoansAuto Loans
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Understanding Auto LoansUnderstanding Auto Loans
Decide on the car you want Research on the internet Make sure your credit report is accurate Shop loan rates in a limited period of
time
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Shop for FinancingShop for Financing
Bank Internet Credit union Dealer Home equity loan
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Education Education LoansLoans
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Understanding Education LoansUnderstanding Education Loans
Apply for scholarships and grants before turning to loans
Loans must be repaid with interest Loans for consideration: • Student loans• Parent loans• Private education loans
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Education LoansEducation Loans
Stafford Loan
Perkins Loan
PLUS Loan
Private Education Loans
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Applying For LoansApplying For Loans
Free Application for Federal Student Aid (FAFSA)
Procedure Deadlines Expected Family Contribution www.fafsa.ed.gov
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QuestionsQuestions
First Command Educational Foundation1 FirstComm Plaza
Fort Worth, TX 76109-4999Toll Free: 1-877-872-8289
www.fcef.com