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A Guide to Mortgages

With just a little bit of research and some foresight, however, getting a mortgage that will work now and into the future can be easier than you think. First, you need to review your finances and decide what sort of monthly payment you can afford today. Be realistic. It`s easy when you have a house in mind to tell yourself that you can afford something that you can`t. Think about it from all angles. You don`t want to end up “house poor” with no money left over after paying all of your bills.

Once you have this figured out, it is time to think about mortgage terms. The most common mortgage type is a 30-year note with a fixed interest rate. Rates are still near multi-year lows, so be sure to shop around to find the best rate for your mortgage. If paying your house off as quickly as possible is your goal, consider a 15-year fixed rate mortgage. With a shorter term, banks will generally offer a more desirable interest rate. If you go the 15 year route, be sure that you aren`t overextending yourself, as these notes will result in much higher monthly payments than their 30-year counterpart.

More exotic options can be found in loans called adjustable rate mortgages (ARMs). ARMs can give you a lower rate on the front end, but this rate can generally adjust every year, creating a significant difference in your monthly payments. A lot of folks choose ARMs due to the lower up-front costs under the pretense that they will either earn more money in the future to be able to afford a higher payment, refinance the mortgage into a fixed-rate loan before the rate adjusts, or only live at this residence for a short period of time. Be extremely cautious when going in this direction, however. Plans change and banking on never having to deal with an increasing interest rate can be a dangerous game. A lot of recent foreclosures have come as the result of homeowners not being able to afford their monthly mortgage payment after their ARM was adjusted higher.

After you go through the process of deciding on the best mortgage to fit your needs and the ink is dry on the loan papers, all that`s left to do is move into your new residence. The last thing you want to worry about is moving all of your furniture, so definitely consider looking at some moving companies to help you with the heavy lifting associated with a move.

Benefits of the VA Home Loan Program

The Benefits of VA Loans

The U.S. Department of Veteran Affairs insures the VA loan. That means lower initial and monthly rates for buyers. On interest rates alone, veterans could save an additional $50 to $75 per month.

On top of that, there is a NO down payment option. Coming up with the starting funds for a home is usually the hardest part of the experience, and conventional programs can sometimes request up to 25% down payment. With the VA loan, taking such a large payment out of the equation can relieve some of the weight off a potential homebuyer

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Disclaimer

This site is intended for clients that are not currently registered with a Broker. If you have a current Buyers Representation Agreement signed with another Texas real estate Broker, please contact your Agent or Broker. Texas Real Estate Commission Consumer Protection Notice