Mortgages and Refinancing
All of Your Financing Questions, Answered
Obtaining a mortgage is a crucial step in purchasing your first home, and there are several factors for choosing the most appropriate one. Because of the expansive selection of financing options, taking the time to research the basics of property financing can take quite a bit of time and energy. We’ll walk you through some of the most common mortgages for homebuyers below, but if we missed something that you want to know about, give us a call. Our real estate brokers would be happy to answer any questions you may have. Get in touch with a real estate professional now.
Conventional Mortgages
A conventional mortgage loan is a conforming loan that is funded by private financial lenders. They are the most common type of mortgage because they don’t have strict regulations on income, home type, or home location qualifications. They do, however, have stricter regulations on your credit score and your debt-to-income (DTI) ratio.
Fixed-Rate Mortgages and Adjustable-Rate Mortgages
A fixed-rate mortgage has the exact same interest rate throughout the duration of the loan. The amount you pay per month may fluctuate due to changes in local tax and insurance rates, but for the most part, fixed-rate mortgages offer you a very predictable monthly rate. It could be a good choice for you if you are currently living in your “forever home.”
Adjustable-rate mortgages are the opposite of fixed-rate mortgages and have interest rates that change depending on how market rates move. There is an introductory period in which you pay a fixed interest rate that’s usually lower than market rates. Once this introductory period ends, your interest rate changes depending on market interest rates, and your rate will either go up or down depending on if the index’s market rates go up or down.
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Refinancing Home Loans
A mortgage refinance replaces your current home loan with a new one. People often choose to do this to reduce the interest rate, cut monthly payments, or tap into their home’s equity. Others may choose to refinance to pay off the loan faster, get rid of FHA mortgage insurance, or switch from an adjustable rate to a fixed-rate loan.
Refinancing your mortgage works by paying off the balance of your old home loan. You must still meet the requirements of the loan to qualify, but you are able to reduce the monthly payment, tap into equity, and pay off the loan faster. We recommend getting in touch with our real estate brokers, or your lender for answers to specific questions.
Mortgages and Refinancing
If you have any more questions about home financing, whether you’re a first-time homebuyer or a veteran of the game, we would love to offer our advice! Get in touch with our brokers today.