Ten Things Commonly Unknown about Home Mortgage Loans
When you buy a home for the first time there are a lot of things that
the average person does not know about home mortgage loans. Through the home
buying process most of us learn a great deal, but had we known these
things before hand the process might have been a bit easier, and there
are even ways that you can save money! Knowledge is key when dealing
with home mortgages, and here you will find ten things that you may not have
thought of before.
Zero Down Payment Really Can Happen
You truly can
buy a home with no money down. No, this isn't
available to everyone, but for first time homebuyers and those with
limited income they may find that zero down is a real option for them.
In fact, not only do you not have to put any money down you'll also find
that there are government agencies that will pay your closing costs for
you. Even for those that don't qualify for the zero down loans there are
some great mortgage rates that will allow you to get into a home with
relatively little down.
Interest Rates Can Save You a Bundle
If your home mortgage currently has an interest rate of 7.5% and you've
seen that current interest rates are less than 6.5% it may not sound
like a lot, but it can save you more than $100 a month if you
refinance your home mortgage at the lower cost. Of course, you still have closing costs when you
refinance, but if you are going to live in the house for at least two or
three years you'll find that you will break even quite quickly and then
continue to save money over the long run. One interest point can make a
lot of difference over the course of a year, and certainly over the
course of a 30-year mortgage.
You Might Want To Consider an Adjustable Rate Mortgage
In the past
adjustable rate mortgages or ARM's have gotten a bad name
because they are associated with interest rates that fluctuate each
year. The thing is that ARM loans come in many varieties such as a 5-1
arm, which will be fixed for the first five years and then resets each
year after that. This can be an ideal way to save money because ARM
loans have interest levels in the 5.8% range while a traditional
mortgage is in the 6.3% range.
Adjustable Rates Can't Fluctuate All That Much
As mentioned above, ARM loans have gotten a bad reputation in the past
because the interest fluctuates over time. What most people don't know
is that the rates cannot simply go through the roof, as they typically
have a cap on how high they can go. This makes an ARM loan a great
choice for a lot of people because the rate can't go all that high and
you can often start out with a much lower interest rate for the first
one to five years.
Paying Points on Your Mortgage Can Work Both Ways
For some people paying points makes sense, and for others it does not.
If you pay points up front you can often get a lower interest rate. The
lower interest makes senses if you plan to live in the house for an
extended period of time, but if you don't you're probably better off
skipping the points.
Mortgage Brokers May Be Worth Your Time
If you don't know a lot about home mortgage loans and you need a bit of guidance,
you may find that a mortgage broker can help you decide what type of
mortgage is perfect for you and your circumstances. Mortgage brokers can
help do a lot of the leg work researching the products and loans offered
by certain institutions or lenders and then help you decide which the
best is for you.
You Don't Have To Use a Mortgage Broker
A mortgage broker can be really helpful if you don't know any thing
about home mortgages or if you have a troubled credit history. But, if you
are one of the lucky home buyers that has perfect credit and is able to
put 20% down on the purchase price you'll find that your lender and your
realtor can often get all of the work done, so there is no need for a
broker.
Your Credit Union is a Great Resource
When you check with your credit union or bank you may find that they
simply are able to offer you the best interest rate you can find. A
credit union can often offer mortgage rates for up to 1% less than
financial lenders. The Internet is also a great mortgage resource, as it
is a very competitive market and you can find many lenders that are
willing to work with you no matter the situation.
The Internet Has Great Tools
There are a lot of tools on the Internet that will offer to do your
math, such as calculate mortgage payments, how much of your payment will
go toward the principal, and more. These tools are often helpful in
deciding how much you can afford to pay each month.
You Can Take Your Home Mortgage Loans with You
Starting in 2003 you could get a home mortgage loan that was as portable as you
are! These mortgages can be transferred from home to home when you move,
paying only a small interest fee each time it is transferred to a new home.
As you can see, these ten things can help you get the home mortgage loans that's
right for you. Armed with the right information home mortgages aren't so confusing!
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