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Webster Bank is a great credit union that has never failed me. As soon as I walked in, they welcomed me, and instantly sent someone to help me with whatever I needed. I was there to get a credit card and the process was very fast and easy. They were very professional and polite and made sure I didn't leave until I was 100% satisfied! They're even willing to send you emails and phone calls when your next payment is due! They did not hesitate to answer all my questions and make sure I knew exactly what I was getting myself into as this was the first credit card I had gotten. I would certainly recommend Webster to anyone in the New England area looking for a credit card.
Midflorida is a great place for all your banking needs. The tellers are extremely helpful and supportive, and are very professional. As soon as I walk in, I am greeted warmly and offered help. It is extremely easy to set up a checking or savings account, and a debit card is provided instantly. It is also very easy and fast to get a credit card, and the interest rates are great! Whenever a seemingly suspicious transaction is made from your account, a Midflorida representative will call you and let you know, to make sure you have not had your information stolen. All in all, Midflorida is a very pleasant place to bank with many polite and courteous employees.
Magnify Credit Union has provided me nothing but positive experiences since I first joined them. The tellers are all very polite and very helpful. Any time I have questions, they have answers. Whether I need money for student loans, a quick cash loan, or something bigger, Magnify Credit Union has not failed me yet. It's quick and easy to get a personalized credit card, and the interest rates on credit cards and loans are both great. I'm thoroughly convinced I couldn't find a more satisfying credit union to deal with in my area. I would recommend Magnify to anyone new to credit unions and looking to find one.
Banks and similar financial institutions make money in a variety of different ways. Though they are doing you a service by allowing you to store your money for seemingly little to no cost, and even offering compensation for storing your money with them, they are indeed still profiting.
The biggest sources of income for banks are loans. Loans are exactly what they sound like: an advance on a predetermined amount of money. However, loans don’t come free. With every loan comes an “interest rate”, also called an “APR,” (Annual Percentage Rate) which is the percentage of the total borrowed amount you would pay yearly. The interest rates on these loans are always much higher than the interest rates an individual is offered for storing their money with the bank.
The important thing to understand about interest rates is that though they seem marginal, they certainly add up. For example, the typical 30-year fixed mortgage rate is about 4.33%. For a house that costs $250,000, the amount of interest a borrower would pay yearly would be almost $11,000. This amount is in addition to the gradual repayment of the amount borrowed. After the 30 year period is up, the bank has profited almost $330,000 on one single loan, which is more than the amount of money originally borrowed. From an alternate perspective, take the $11,000 yearly and multiply that by say 100 people. That’s about $1,100,000 in profit per year that the bank is making from just their 100 mortgage loans. Many larger banks have thousands of clients with similar loans which only makes these figures that much bigger.
In addition to mortgage loans, banks also offer many other types of loans including automobile loans, student loans, and personal loans (including credit cards). Each and every one of those comes with their own individual APR’s which produce varying amounts of profit. These profits are in addition to monthly checking account fees, overdraft fees, and different optional services such as additional account security.
A mortgage is a special type of loan used in buying houses. Like any loan, a mortgage is expected to be paid back over a predetermined period of time with interest. These loans are typically issued by banks. As a mortgage results in a large sum of a house's value being borrowed, (often up to 80%), it is important to understand exactly how they work to avoid taking uninformed risks.
First, it is important to know that if the terms of the mortgage are not met, the issuer of the mortgage has every right to take your home from you using a process called foreclosure.The legal definition for mortgage is "the pledging of property to a creditor as security for the payment of a debt", which means your house is essentially considered collateral for your loan. This means if payments are consistently missed or late, the house will be taken away.
Now that you understand the risks of a mortgage, it is time to look at the finer details. With any mortgage there is a payment required up front, called a down payment, which is required to cover a portion of the initial cost of the house. This amount is usually around 20%, but can sometimes be much lower under certain circumstances. One important thing to remember is that the larger the initial down payment is, the smaller the monthly payments on the mortgage will ultimately be.
Next, we will look at the breakdown of a monthly mortgage payment. Generally speaking, your total expenses in a mortgage will consist of 4 things known by the acronym “PITI”. They are the following:
The principal is the total amount of money borrowed after the down payment is taken into consideration.
The interest is the amount of money charged for borrowed money. This is a percentage of the total principal amount that accumulates gradually over the time that it takes to repay the loan.
The taxes are the set rate of property tax charged on your property.
The insurance is a common cost required by issuers of mortgages to cover potential losses or damages to the house.
When making payments on a loan it is important to understand the concept of amortization which basically means that each payment you make is going to cover part of the principal cost of the loan as well as part of the accumulated interest on the principal cost.
The final thing to know about mortgages is that there are many different kinds and each has its own terms of repayment and other variable details such as interest rates.The two most common types of mortgages and how they work will be described below:
The fixed-rate mortgage is a loan whose interest rate stays the same for the entire life of the mortgage. This means that every monthly payment you make will be roughly the same exact amount until the loan is paid off.
The adjustable-rate mortgage is much different. In an adjustable-rate mortgage, the interest rate changes at a regular interval that is predetermined. This interval is usually 1 year but can be 6 months or several years as well. The appeal in an adjustable-rate mortgage is that the starting interest rate is usually much lower than that of a fixed-rate mortgage.