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| Which Mortgage Do I Choose? |
So, you want to shop for a mortgage. But there are so many. How do you know which one is best for you? Ah, therein lies the rub! It is only after you have taken the time and made an effort to research it that you will come to an appropriate answer. But effort and research are what you must put in if you wish to save yourself future heartburn and your bank balance!
So what do you ask yourself and your lenders? Let experienced and very successful realtor Jeff Melancon guide you. Read on.....
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First of all, what are the different types of mortgages? |
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There are the Traditional Fixed Rate Mortgage, the Graduated-Payment Mortgage, The Adjustable Rate Mortgage , the FHA Mortgage and the Two-Step Mortgage, each one of them varying in term lengths, mode of payment and interest rates. |
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Which mortgage is right, for what length of time? |
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If you do not plan to live in this particular home for longer than six or seven years, an Adjustable Rate Loan should suit you. If you plan on staying for a longer period, say 25 years or more, a fixed rate mortgage may be best. |
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How much risk should I be prepared for? |
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If you don't mind taking chances and are willing to overlook the risk of fluctuations in the interest rate you may consider a Variable Rate Mortgage . This offers you a lower interest rate.
If, however, you are particular about exactly how much you will have to pay each month, you should settle for a Fixed Rate Mortgage . |
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How do you envision your future? |
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If you expect to dramatically increase your income in the near future, a Graduated-Payment Mortgage should appeal to you. If not, this may not be the right choice for you. |
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How much cash can you lay your hands upon? |
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A larger down payment will allow you to lower your monthly payment. So, if you have it, put it down. Alternatively, should you pay a higher installment each month you could shorten the term of your loan, thus paying it off in a shorter period of time. However, don"t forget the closing costs and fees to be paid along with your down payment. Even though you may not have recourse to a nest egg an adjustable rate mortgage could lower your monthly payments on your newly acquired home.
And now that you have chosen the type of loan that suits you best you have another decision to make-the lender you will use. |
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How do you decide which lender is best for you? |
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Jeff Melancon, realtor , tells you how you can be very, very sure about this decision. |
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Once again, research is everything. Compare lenders. The best way to do this is to consider the Annual Percentage Rate (APR). The annual cost of credit and any other fees besides the interest rate are included in this. |
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What rate of interest does the lender offer and for how long will he/she guarantee it? Be very sure about this and make all transactions in writing. |
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Points and fees vary greatly from lender to lender. Be sure to ferret out any hidden fees and be very clear about what is included in their charges. |
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How quickly can a lender fund a loan? Choose a lender that will be able to provide the money at the right time. |
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What type of reputation does the lender have? If you are able to trust him you can depend on him to advise you as to which type of mortgage will work best for you. |
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| Perhaps this will help you decide the type of mortgage you should opt for and the type of lender who will help you with it. Jeff Melancon, realtor, Destrehan, Kenner, LaPlace, Metairie and New Orleans in Louisiana , believes it will. |
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