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How to choose the right mortgage for your financial situation

Posted by:  Chip Poli
2014-02-25 08:42:09

Are you currently in the market to purchase a house? If so, congratulations! Pursuing the path to homeownership can afford you a number of benefits, both financial and personal. Before submitting a purchase offer on a listed property, though, you'll need to determine the way you will finance the transaction. Unless you've amassed a sizable savings account and are planning on an all-cash sale, you will likely look for residential lending opportunities for financial assistance. 

However, it is important to note that there are a number of different home loans available to prospective borrowers, and a multitude of lenders who can provide such financing. Thus, making sure to fully assess your situation and payment abilities is an imperative step in the overall homebuying process.

Confused as to which terms and conditions would work best for you? The following products are the most popular among borrowers across the East Coast.

Fixed-rate mortgages
This type of home loan boasts a set rate of interest that does not change throughout its entire term. These mortgages typically last either 15 or 30 years, depending on the borrower's finances. Those plans that span three decades tend to require lower monthly payments than 15-year loans, but charge individuals more in interest. 

Homebuyers who lock in a low rate at the start of their loans can protect themselves against surges in inflation and rate increases. This can help make monthly budgeting easier and reduce the risk of any expensive surprises cropping up. If you have a number of other financial obligations, choosing to go with an FRM can ensure you will easily be able to make regular payments and won't fall behind.

Adjustable-rate mortgages
For those who are able to afford sizable monthly payments and aim to spend the least amount in interest over the course of a 30-year loan, this mortgage type may be their best bet. ARM interest rates fluctuate depending on changes in national averages, though some may choose to request caps that will prevent them from having to deal with substantial rate hikes.

Typically, borrowers are tasked with making small payments during the initial few months or years, but once the introductory period is over, rates tick upward for the balance of the mortgage. This can be most advantageous to those individuals who don't plan on staying in their home for too long, as they can enjoy making manageable monthly payments before listing the property for sale and moving on.

Of course, it is possible for borrowers to modify the terms of their loans after some time. Those individuals whose financial situations change, and can afford to make larger monthly payments, can choose to refinance their mortgage and reduce the amount of time and money they need to put toward paying down their outstanding balance. Again, different lenders offer varying rates, so it is very important to shop around before committing.

As a regional authority in residential lending throughout the Northeast, Poli Mortgage Group has seen to the origination of more than 40,000 home loans during its 13 years in operation. Our dedicated team of experienced Loan Officers have the knowledge and skill set needed to find you great low rates that can help save you a significant amount of money over the life of your mortgage. To date, we have written more than $11 billion in home loans. Interested in learning more and researching rates? Call us today at 866-353-7654.

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