While there are many different sorts of one percent mortgage loans, there are actually only 2 major keys to winning with an one percent mortgage loan. The 1st key is to make sure the mortgage lead is set up correctly from the beginning. And the 2nd is to be certain you are using the loan properly to gain the most benefit. First, lets talk about the way in which the loan works. Then well get into the easy way to set the loan up correctly so that you can reap the financial rewards these mortgage loans have to offer. To start with, 1% mortgage loans have payment options. Each month when you get your mortgage statement you’ll have the option to make a thirty year fixed payment, a fifteen year fixed payment, an interest only payment and a minimum payment at one percent. Though you are given several payment options, you must only decide on the 1 percent minimum amount. Why? Because if you needed to make a 30 year fixed, fifteen year fixed, or interest only payment, you would be better off getting that sort of loan. Generally these payments are higher with a payment option mortgage. If you select the 1 percent minimum payment your first benefit will be a significant standard payment reduction. Your home loan payment will probably be cut in half. Naturally, this is a pretty attractive first benefit for most householders. To compound the effectiveness of choosing the 1 percent minimum amount you must save what you save. For instance, shall we say you refinanced your home with an one percent mortgage, paid off all of your credit cards, and reduced your regular payment by $1,000 a month. Now, if you save that $1,000 a month for yourself rather than giving it to your lender, you will have $60,000 in notes at the end of 5 years – And thats with a zero percent return. Heres the second benefit to selecting the 1 percent minimum payment option : Tax savings. If you make an interest only payment your mortgage balance will stay the same. If you make a 1% minimum payment you’re paying less than interest only. Therefore , you are creating deferred interest which makes your home loan balance increase every month. Before you go crazy, keep under consideration that deferred interest is mortgage leads and is therefore deductible against tax. Lets say your house is going up in value $2,000 a month. The 1 percent mortgage will enable you to take a little piece of that appreciation, say $500 a month, and make it into a tax deduction. So you are taking a little piece of your equity each month and turning it into a tax deduction. If you didn’t do this, all of your appreciation would be locked securely away in equity. Equity is brilliant and is undeniably one of the many advantages to home ownership. But making an investment in equity will get you a nil % return. No one is going to cut you a check every month for the equity in your home. As an interesting point, if you wanted to get the equity out of your home you would need to sell your home or qualify for a loan. And you better qualify or else you will not be in a position to qualify for a loan. So why not take a small piece of your equity each month, turn it into a tax reduction, and at the same time save $1,000 a month for your self? You’ll still have lots of equity but with an one percent mortgage loan you’ll have money AND equity. If you do this for any length of time you may come out way further ahead financially than if you did a regular 30 year fixed or an interest only mortgage loan. BTW, if the deferred interest is a concern, try making bi-weekly payments. Making a bi-weekly payment will reduce, and in a few cases get rid of the deferred interest all together. Meaning your mortgage balance wouldn’t increase. The simple way to set the loan up correctly : 1 ) The 1% payment option on these loans is only available for the 1st 5 years. But you could basically keep one of those loans for 30 or forty years. If you choose a forty year loan your regular payment will be lower but the payment options won’t last for five years. The name of the game is to keep the 1 percent payment for as long as possible . So get a thirty year amortization. 2 ) The thirty year, 15 year and interest only payments are tied to an index. Choose a slower moving index like the MTA ( Monthly Treasury Average ) rather than a quicker moving index like the Libor ( London Inter-Bank Offered Rate ). http://www.mortgageleadsource.com