When it comes to a home loan, the interest rate is a very important factor. It can make all the difference between being able to afford the home of your dreams and having to settle for something less. On a large mortgage, even a slight increase in the interest rate can make a big difference in the monthly payments. Thus, getting the best interest rate possible is the goal of every home buyer. Your Credit Is Key The number one factor in determining what kind of interest rate you will get on your home loan is your credit rating. Keeping tabs on your credit is important for anyone, but especially for those hoping to own a home. Before you apply, you should check your credit report for any errors that you can correct ahead of time. You should also look for anything you can do to improve your credit. If you have a high debt to income ratio it will hurt your credit. Try to pay off things like high interest credit cards before you apply for a home loan, or at least pay them down to a place where that ratio is improved. You should also avoid applying for […]
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With mortgage rates on the lower side, the choice to cash in and refinance your mortgage may be tempting, but before you make that decision here are a few facts to help you decide if it is the best financial choice for you and your family. Whether it is just to reduce the amount of interest you pay, or freeing up some income for other items or debts, there are several considerations to take into account. Here are the more popular options for refinancing your mortgage. Fixed Rate Mortgages If you like the stability of a fixed rate loan because of your budget can’t handle unexpected fluctuation, then now might be a great time to choose this option. With fixed rates lower than they have been in some time, this may save you money by either reducing your monthly payments or, if you keep your payment the same, reducing the principal on your loan. Adjustable Rate Mortgages (ARMs) If you’re planning to stay in a home for only a few years, or your income can handle changing monthly payments, then you can get an ARM for significantly less than a fixed rate mortgage. Adjustable rate mortgages are also popular with […]
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If you’re facing an upcoming rate change on your adjustable rate mortgage, you may be a bit worried. The Federal Reserve’s recent credit tightening in the last period has meant that interest rates, especially short-term rates, have risen dramatically. This may mean that your new monthly payments will be much higher than you may have expected or budgeted for. So what can you do if you find yourself in this situation, and what can you do to prevent yourself from losing your home if you do? Time To Consider A New Loan Option Given the unstable financial climate, and to protect yourself in general from huge fluctuations in your mortgage payments, choosing a fixed rate loan may be the best option for you. This means that your monthly payments are fixed at a certain amount for the period you negotiate and, if your budget can’t handle the wild swings in the market, this may be a better choice. While historically fixed rates are higher than a mortgage with a fluctuating rate, given the instability of the current markets and the overall low rates, this may be the time to make the switch. Combining The Benefits Of A Fixed And Adjustable […]
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