Which mortgage is good for me?
There are as many types of mortgages to choose from as
there are types of houses to buy. Our agents can
how to choose the mortgage that is right for you -- and
what kind of lender to get it from.
Lenders offer several types of mortgages, but
the most common are fixed-rate mortgages. These
loans feature fixed rates and monthly payments,
generally for 15-year and 30-year periods.
These loans are popular because:
Consumers balk at the thought of their house
payment rising and falling with interest
Whenever rates are low, fixed-rate mortgages
are very affordable.
Depending on how long you plan to own your home,
fix-rate mortgage may be your safest bet.
There are unique benefits between a 15-year
versus a 30-year loan. Do you know the
difference - pros and/or cons - between the two?
Adjustable-rate mortgages (ARMs)
Adjustable-rate mortgages, or ARMs, differ from
fixed-rate mortgages in that the interest rate
and monthly payment move up and down as market
interest rates fluctuate.
Most have an initial fixed-rate
period during which the borrower's rate doesn't
change, followed by a much longer period during
which the rate changes at preset intervals.
The initial fixed-rate period can
be as short as a month or as long as 10 years.
One-year ARMs, which have their first adjustment
after one year, used to be the most popular
adjustable, and were the benchmark. Recently the
standard has become the 5/1 ARM, which has an
initial fixed-rate period that lasts five years;
the rate is adjusted annually thereafter. That
type of mortgage, which mixes a lengthy fixed
period with an even lengthier adjustable period,
is known as a hybrid. Other popular hybrid ARMs
are the 3/1, the 7/1 and the 10/1.
While there are risks when
considering an adjustable-rate mortgage, there
are situations where you may be better off with
an ARM. For example, if you are planning to owe
for less than five years, you may be better off
with an ARM.
Depending on your goal, we can
offer you many different types of mortgages to
meet your needs. Call us today!
Buyers with some credit flaws can
still qualify for a loan. Recently there has
been a rise in subprime mortgage lenders to meet
the demands of homebuyers with credit problems.
Generally, subprime mortgages are for borrowers
with credit scores under 620. Credit scores
range from about 300 to about 900, with most
consumers landing in the 600s and 700s. Someone
who is habitually late in paying bills, and
especially someone who falls behind on debts by
30 or 60 or 90 days or more, will suffer from a
plummeting credit score. If it falls below 620,
that consumer is in subprime territory.
How does subprime mortgages
differ from others? Subprime loans have higher
rates than equivalent prime loans. Lenders
consider many factors in a process called
"risk-based pricing" when they come up with
mortgage rates and terms. This makes it
impossible to generalize about subprime rates.
They are higher, but how much higher depends on
factors such as credit score, size of down
payment, and what types of delinquencies the
borrower has in the recent past (from a mortgage
lender's standpoint, late mortgage or rent
payments are worse than late credit card
Do you know your credit score?
Or are you concern about your qualifications?
If so, please call one of our agents, who can
walk you through the entire process of obtaining
a mortgage that you qualify for and will be
Other Types of Mortgages
The mortgage market is much more diverse
than some borrowers think. Besides the
standard fixed-rate and adjustable-rate
mortgages, there are other types of
mortgages and ways to finance a home.
Other types of mortgages include:
• Jumbo mortgages
• Two-step mortgages
• Balloon mortgages
• Assumable mortgages
• Construction mortgages
• Seller financing
information on these types of mortgages,
please contact us today.