Just as important as finding the right home, it’s important for homebuyers to also find the right mortgage. This article has some information which can help.
Finding your dream home is a hard enough task on its own, without the added pressure of finding a suitable home loan to buy it. However, the reality is that home loans have become so intricate and diverse that home-buyers need to ensure their home loan is just as suited to their needs as the home they are buying.
Speedy Title and Escrow Services know that finding the right mortgage isn’t easy and has some information below to share which can help you understand which options of a mortgage you would like from your home loan.
Redrawing against your additional mortgage payments can be a great way to lower your interest payments and also have money available. For example, if you made additional payments towards your mortgage of $1,000 each month, then each month the amount owed would lower and your interest charged for the period would lower also. However, if, in six months you experience a sudden financial emergency, the additional payments made, totaling $6,000 would be available to you as a transfer or cash withdrawal. If considering this option, be aware that it can often come with a cost or a set of terms, so make sure that it’s suitable for how you intend to use it.
In previous times, lenders could expect to receive applications from people who have worked with their company for many years and plan to retire there. However, as times have changed, more and more people are working for themselves, managing a range of ‘gigs’, or even earning interest of investments, neither of which satisfy the documentation requirements of a regular type loan. This has previously been a barrier for these people to enter the housing market via a home loan. For this reason, lenders are becoming more and more aware that applicants no longer fit the mold and have begun to offer loans which require much fewer documents than a standard loan. While these can seem appealing to people who don’t want to provide a lot of information, these loan types often come with higher interest rates and fewer options. Along with your lender requiring title insurance, title insurance in Clinton Township is the best way to obtain financial protection over the title of your new home. To find out more, speak with an expert at Speedy Title and Escrow Services by calling (586) 739-2233.
Fixed Interest As the name suggests, having a fixed interest rate home loan means that your interest rate won’t fluctuate with the market conditions as can be the case with a variable interest rate. While it can seem immediately beneficial to lock in a fixed interest rate to protect you from rate increases, it also prevents the lender from losing money should the market swing the other way. Further, lenders aren’t likely to offer this interest rate type for the entire life of the loan. Variable Interest Rate In contrast to a fixed rate home loan, a variable rate means that the amount of interest you pay will depend on the conditions of the housing and economic markets. While this may seem like a no-brainer if the market is in your favor, it also means that it can increase it the market swings the other way.
A more basic version of redraw is additional repayments. These are instances where you make voluntary and additional payments above the regular payment schedule. These payments can also help you to lower the interest payable and the duration of the loan. This option varies from redraw in two ways:
Given that lenders can often charge a fee, be sure that the benefits of making additional repayments are still valuable enough to choose a loan because of this option.
Once you have found your dream home and mortgage, remember to complete your due diligence, which includes a policy for title insurance in Clinton Township. Title insurance provides homeowners with financial security should any challenges be made against the ownership of a title. To learn more, speak with an expert at Speedy Title and Escrow Services at (586) 739-2233 before you sign any paperwork, and protect your new investment with title insurance in Clinton Township.