CHOOSING A MORTGAGE COMPANY
Securing finances requires a decision that you may have to live with for a long time, so spend enough time comparing the terms and conditions of different lenders before making your decision. We have several lenders that we vetted and work with on a daily basis so we can make recommendations based on your individual circumstances. Please keep the items listed below in mind if you decide to shop for a lender and program on your own. If you want to go even further, do some personal research on “how to choose a lender”, you’ll be glad you did.
Consider the competitiveness of a lender’s terms with that of others, especially for mortgage rates, interest rates, and additional closing costs to include points.
Do your lenders and brokers communicate effectively and thoroughly? Are they attentive to client needs and prompt in their dealing with clients? Ideally you’re looking for someone that you can work with and trust every step of the way.
Check whether the lender underwrites their own loans. This could save you from last minute surprises before closing.
CHOOSING A LOAN
Though there are many different kinds of loans available today, these three are the most commonly used:
Fixed Loan – This long-term option requires monthly payments that will remain the same (fixed) throughout the duration of the loan. The loan term may vary from fifteen to thirty years.
Adjustable Rate Mortgage (ARM) – The loan rate here will be determined by factors such as the Federal Funds rate index, readjustment intervals, and capitalization rate. The initial interest rate can be as much as 2 to 3 percent lower than a comparable fixed rate mortgage. This can make home-ownership more affordable. However you should first examine all factors and consider the risks involved before selecting this option. These loans are less common these days.
Hybrid Loan – Also known as an intermediate or convertible ARM, it offers a fixed interest rate for a specified initial period before it ‘switches’ to an ARM and adjusts with the market every six months or every year thereafter. Consult with your lender to determine which loan type and program best could correspond with your resources and needs.