Buying a home is much more than just finding your dream home with a beautiful kitchen, plenty of storage, and a spectacular outdoor space. Buying a home is a huge financial commitment, a 30-year one to be exact.
When you are in the mindset that it’s time to purchase a new home, whether for the first time or not, you want to shop around lenders for the best interest rates and mortgage loans.
Doing your financial homework ahead of signing a contract can guarantee you will put the best foot forward in being able to afford your new home.
Your real estate agent will be an incredible source when it comes time to choose a lender and especially with understanding the mortgage commitment of the transaction.
To help ease a little bit of the confusion or anxiousness you might feel about taking on a mortgage or at least a larger one, here are some tips.
First to consider is how long you plan on living in the home.
If you are someone who moves around a lot, an adjustable rate mortgage might be more beneficial for you.
Someone who plans on retiring in his or her home would want to consider a 30-year fixed rate mortgage.
What are the differences?
Adjustable Rate:
These are hybrid loans in the sense that they are fixed for a period of time before becoming adjustable. The most common type of adjustable rate is the 5/1 ARM. This loan is fixed for the first five years of the loan and becomes adjustable for the remaining 25 years. The benefit to the adjustable rate is that it presents the lowest possible rate of 2.99%, which will drastically reduce your mortgage payment.
Fixed Rate:
There is a sense of security with a fixed rate mortgage. Your interest rate is locked in for the duration of the home, but this type of loan costs more. Average percentage rate for a fixed rate mortgage is 4% or higher. Some people like the security that comes with this loan.
One last point to make is to ensure you are asking the questions and having potential lenders give you a breakdown on mortgage rates and loan types before you decide. It is best to be completely informed before locking in a lender.
If you need assistance with understanding mortgage financing for homes in the Palm Beach Gardens, Florida area, contact Leibowitz Realty Group at 561.262.0721 or 561.262.0722 today.