Getting Mortgage Loans – How to Pick a Mortgage Loan

The number of types of mortgage loan is in the hundreds and these loans are available for almost every scenario you can ever think of. Therefore there are important things you need to consider first in order to choose the right mortgage loan that is right fit for you.Firstly, you will need to determine whether do you have that ability to meet all your financial obligations and will  still maintain the same desired quality of life you had prior to picking and get your mortgage plan.Secondly, you need to determine how long you plan to keep the ownership of the house when you are going to refinance or purchase a home. Since fixed rate loans are the safest loans, you may want to look for a fixed rate loan product.Thirdly, trying getting a Hybrid Arm Loan if you plan to sell your home within the next two years because of the fact that this kind of loan has a fixed rate loan which changes to an adjustable rate loan after the fixed rate period expires. I will give you an example here, let’s say there is a 3/1 Hybrid Arm loan, that means it is perfect for someone who is positive they will have their home sold in less than three years. As you can see, the 3/1 actually means the loan will be fixed for 3 years and adjusts every year based upon the index the loan is priced. There is also a 5/1, 7/1 and 10/1 Hybrid Arm loan as well. They are all amortized over 30 years. If mortgage interest rates are good, go with a standard 30 year fixed rate loan.Fourthly, if you are going to finance over 80% of your home’s value then I would advise you to consider these three options because mortgage insurance is required on prime loans over 80% of the value of the home. You can either get one loan and pay the mortgage insurance or you get one loan at 80% and a second mortgage for the amount over 80%. The main objective here is that you won’t have to pay the mortgage insurance.Lastly, you can also get one loan at 80% and plus a Home Equity Line of Credit for the remaining value of your home. This option allows you to not only avoid mortgage insurance but it also gives you access to the equity in your home whenever you need it without having to apply for a new mortgage loan.Warning: If you do not understand ARM loans, Do Not apply for it until you fully understand it or you are not prepared during a time when the rate adjusts upward otherwise it will cost you your home. Also do make sure you really understand every paper or contract that you signed on. Do not obtain a home loan that is greater than the home value. Do not get a mortgage loan until your loan officer has answered every question you have to your satisfaction and can give you what you want in writing.

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