Up To 80% OFF on fashion designs from both well-established favorites and emerging edgy fashion designers. YLLI, the fashion boutique run by Fetije Meduric, formerly of Bergdorf Goodman and a fashion coordinator for Bloomingdale's, offers a big range of women's, men's and children's designer fashion clothing and denim as well as shoes, handbags and jewelry and starting Thursday, January 31st is

You should only choose the interest-only option on your mortgage loan if you need some flexibility in your payment amount from month to month.

It’s becoming increasingly popular for lenders and mortgage brokers to advertise an interest-only option as way for you to get “more house for less money.” Unfortunately, that kind of thinking can get you into some serious financial trouble. If you exercise the interest-only option, you’ll eventually have to make up for all the months/years you weren’t paying on the principle, and your payments will increase - sometimes significantly.

See, what most people don’t realize is that using an interest only option doesn’t increase the length of the loan. If you have a 30-year mortgage, and exercise an interest only option for 5 years, you then have only 25 years to pay off the principle instead of 30, which means your payments increase for the remainder of your loan.

An interest-only option is great for someone who works mainly on commission, like a salesperson. The option allows him or her to pay just the interest on a mortgage if he or she has a slower month, but not be charged a penalty or late-fee for not paying the principle. You should only choose the interest-only option if you need some flexibility like this in your payment amount from month to month.

Paying points only makes sense when:

• You have the funds available to pay them
• You plan to stay in the loan longer than the breakeven period

Here’s how it works. Points are an upfront payment to the lender (one point equals one percent of the loan). In exchange, the lender lowers the rate and thus your monthly payment. At some point, your cumulative monthly savings exceed the points you paid upfront. At that point you have reached breakeven and begin coming out ahead.

As a general rule of thumb, you need to stay in a new loan for three or four years to breakeven– after that, you’re ahead.

To put it bluntly, an overage is an excess amount that you’ve paid on your mortgage, which is likely being pocketed by the loan officer.

Rates and points change daily for various types of loans. The changes are also posted daily, so loan officers are aware of them. An overage happens when a borrower agrees to a loan whose terms are higher than the posted terms for that loan on that day.

Say, for example, that a certain loan is posted at 6.5% and 1 point, but the loan officer gets you to agree to 6.5% and 2 points. That extra point (which is an up-front payment calculated as a percent of the loan amount) is typically split between the lender and the loan officer. So if you pay an extra point on a $100,000 loan, that means the lender and the loan officer get an extra $500 a piece.

Overages most often occur because borrowers are unaware of posted changes. While most loan officers are ethical enough to tell you if rates have changed, some are not.

You can protect yourself by telling your loan officer that you know mortgage rates are not set in stone. Ask him or her point blank if they would charge you an overage if rates changed. If your loan officer seems offended or upset by your asking, we’d recommend going elsewhere.

Be sure to read the Loan.com Borrower’s Bill of Rights to learn more about what you should demand from a lender.

Fixed-rate mortgages are very popular because the interest rate and monthly payments are constant. Fixed loans are generally amortized over ten, fifteen, twenty or thirty years. In recent years, lenders have started offering 40 year mortgages in response to higher home prices.

A fixed-rate mortgage is generally preferred when the interest rate is relatively low and you intend to keep the property for more than five to seven years. When rates are relatively high, or if you intend to sell the property in fewer than five to seven years, adjustable rate loans are generally preferred.

The most common fixed rate mortgage is the thirty-year fixed. Borrowers who want to pay off their loan sooner may opt for a fifteen-year mortgage. If you are trying to decide between a thirty-year and a fifteen-year loan, consider the following:

• Paying your loan over fifteen years can save you thousands of dollars in interest. Paying less interest results in less of a tax deduction. Determine in advance if a larger tax deduction (with a thirty-year loan) will offset the benefits derived from paying less interest (with a fifteen-year loan).
• The payment on a thirty-year loan can be substantially less than the payment on a fifteen-year loan of the same amount. You could obtain a thirty-year loan and invest the difference in mutual funds, stocks, CDs, etc. If you could earn a higher, after-tax rate on your investment than the rate you pay on your mortgage, it may be advantageous to invest the difference.

The final decision you make will depend on your preferences. If your goal is to live debt free, then a fifteen year mortgage may be right for you. If your goal is to keep your monthly payments low, a thirty year loan may be best for you.