Need a morgage lender for a home refinance in Old Bridge, NJ?
Are you excited ? You have an adventure ahead of you.You need to prepare yourself to navigate today's complex real estate market easily. With so many of home mortgages available, what should you pick? Do you need a home refinance loan?
First, examine your finances to make sure you are receiving the mortgage that best suits your needs. Among the options available, you can choose from a fixed-rate mortgage, jumbo adjustable rate mortgage, or adjustable-rate mortgage.
Fixed-Rate Mortgage (FIXED)
This type of loan is the most favorite among many first time home buyers because it usually charges a fixed interest rate during the entire duration of the loan. It also allows you to budget with certainty as you know the exact number on your loans monthly payments. There will be no worries about fluctuating mortgage interest rates.
Jumbo Adjustable Rate Mortgage (Jumbo ARM)
Jumbo adjustable rate mortgages have a loan amount that exceeds the compliant loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO). These loans are never guaranteed, securitized or purchased by Fannie Mae or Freddie Mac.
Jumbo Adjustable Rate Mortgages are, however, regularly securitized by other financial institutions at slightly higher interest rates. This loan might be a great choice if:
- You are in a position to finance 20% of the down payment for a purchase.
- Your mortgage payment is at most 38% of your gross income.
Adjustable-Rate Mortgage (ARM)
With this type of mortgage , the interest rates paid on the outstanding balance fluctuates on a regualr basis (mostly monthly) according to a specific benchmark. The original mortgage interest rate will be fixed for a period of time, after which you pay back the loan at an interest rate based on the benchmark plus an added spread, called the ARM margin.
You should pick an adjustable-rate mortgage (ARM) if youknow that your earnings will rise considerably over the loan period. An ARM loan allows you to acquire lower introductory rates in the course of the initial few years of the loan.
Note that the mortgage/loan includes considerable risk if your earnings fail to increase in tandem with with interest rate adjustments. Unfortunately, the interest rate change is also unknown at the start of the mortgage.
FHA Mortgage
FHA Loans are most popular loans available to many first time home buyers. It is backed by the federal government. Buyers can pay as little as 3.5% towards a mortgage and have a lower credit score as the requirements are not as strict as with many other loans.
In the future, buyers always the option to do an FHA streamline refinance. It is one of the fastest ways to refinance a mortgage using today's interest rates. This is great because of the recent drop in interest rates.
FHA mortgages typically have a higher insurance premium than other types of loans. Sometimes this premium makes the loan less affordable. FHA mortgage insurance premiums on 30-year Fixed FHA loans have been reduced in recent months. This is exciting for many home buyers.
We'll help you get into the home of your dreams. First, take the time to decide how much home you can actually afford and then finance accordingly. Call Millenium Home Mortgage Lender today!