Need a Loan? Consider Getting a Mortgage
By Andrew Stratton
If you are currently in the market for a new home, you may be worried that you will not be able to afford it. If that's the case, you are not alone! If you want to move into your new home soon, look into getting a mortgage, a type of loan in which you use a piece of property as your security. Often, the property you use will be the new house that you just purchased. If you're not sure where to go for these types of loans, visit your banking institution. In the meantime, let's take a look at a few mortgage varieties.
Adjustable Rate
These types of loans save you money from the beginning. Basically, the interest rate on your loan is set for the first three to five years. At the conclusion of this initial period, your interest rate is adjusted based on the current market conditions, and your payment fluctuates. These loans operate on the assumption of a 30-year period, and the amount of fluctuation that can occur at each adjustment is capped off in order to ensure your financial protection and peace of mind. This is also a good way to become qualified to obtain a larger loan.
Fixed Rate
Unlike the previous type of loan, fixed-rate loans do not fluctuate. As the name suggests, they stay fixed, and your monthly payments and interest rates will never change during the term of the loan. This gives the consumer protection from market instability that may occur. Interest rates for your type of home could change drastically, but if you are already locked into your loan, you are safe from that change. You will also be able to choose the length of the loan term in this option; terms typically range from 10, 15, 25, or 30 years.
Construction and Permanent Financing
This loan option is for people who are looking to contract a company to build their home. This is the easiest way to secure construction and financing in one step. Permanent financing is a real time saver, and more importantly for someone who is building a new home, it is also a real money saver. When submitting an application for a loan of this type, you will have the choice between a fixed- or adjustable-rate mortgage, and when it finally comes time to close, you will find that your closing costs are also significantly reduced as well.
Can't Afford It?
If you qualify, you can get in on the low- and moderate-income programs designed for people who might not be able to comfortably make traditional payments. The rates in these programs are up to twenty-five percent cheaper than traditional loans. You will be able to purchase a home with as little as twenty percent down, and there will be no application fee. These programs are only available in certain areas, so find out if you qualify for one of these mortgages.
Due to the volatile nature of the housing market, mortgage rates will fluctuate from neighborhood to neighborhood, town to town, and state to state. Some places are more expensive than others to live in. Do your research, and find out where your best loan options are.
When considering options for a mortgage, New Jersey residents can find out more by visiting http://www.somersetsavings.com/home/loans/mortgage.
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