- Posted by: steve
- Category: mortgage advice, mortgage news
Are you looking for some mortgage advice? Don’t miss out on this post. We’re giving you 5 tips for choosing a mortgage term that’s right for you.
Loans: a word that can often instill fear in many people.
The good news: loans don’t have to be scary.
In fact, they can be a liberating way to propel you forward into the life and properties you’ve been dreaming of.
You just have to know the right kinds of loan agreements. To do this, you need to take sound mortgage advice. Here are 5 tips to finding the best possible loan fit for you.
1. An ARM Can Be a Friend
While many people prefer a fixed-rate loan for the entirety of their agreement, an ARM loan is not always a bad idea.
Most people will discourage you from getting an ARM (Adjustable Rate Mortgage).
It means that the end of your initial agreement, the rate can go up depending on what the market is doing. However, ARM loans usually offer very low rates for the first five to seven years.
An ARM may be a good idea for many first time home buyers. On average, people live in their starter homes for less than five years.
By choosing an ARM loan agreement, you just might be selling the house before the ARM would expire. This means you had a great rate for the entirety of your time in the house.
2. Choose the Shorter When You Can
To build equity in your property, make a higher down payment and a shorter term loan.
See if you can afford a higher down payment. A 15-year loan would be ideal. By paying a higher amount monthly, you’ll pay a much lower total interest over the term of your loan. You’ll increase the equity in your home rapidly.
You’ll pay your house off faster if you can shorten your terms. You’ll also get more out the house should you decide to resale.
3. The Vacation Home Ten
If you’re purchasing a vacation home and you aren’t paying cash for the home, consider this mortgage advice: a ten-year loan.
If the amount of money you have is not enough to pay for the home in full, consider financing 50% or less on a ten-year loan.
A ten-year loan will give you a low rate. Since it’s an extra property, you’ll only be carrying an extra mortgage with you for ten years.
4. Mortgage Advice For The Long Haul
Lock into that low rate now.
A third-year loan ensures that you will always be paying the exact same amount every month. If you plan on staying in this house for the long haul, a thirty-year loan is the way to go.
The low rate and low monthly payment may give you the peace of mind you are looking for when it comes to taking mortgage advice.
5. Find Your Monthly Payment Paradise
By finding yourself in a comfortable position monthly when it comes to payments, you will be able to budget for other things in your life.
If cash flow is what you’re looking for, then find the optimal monthly payment through longer loans with lower rates, or ARM loans with adjustable rates that you can later switch out of.
With your finances in order and a comfortable monthly payment, there will be no reason to stress at the end of every month.
Finding the right loan can be tricky.
If you’re ready for lender who has your best interest and can help you find the lowest rate on the market, click here!