| Eleanor Valliere, GRI Direct: 239-671-1021 Sand Castle Realty Group, Inc. 2220 Venetian Court Naples, FL 34109 Office: 239-594-2170 Direct: 239-671-1021 |
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| *This site is for general information only. Buyers and sellers are urged to consult with their personal accountant, financial planner, and lawyer with regards to their transactions. |
Answering the following questions could help you choose the right home loan:
- How long do you plan to live in this home?
- Do you expect your income to increase during the coming years?
- Do you have a budget for unexpected major expenses?
- Do you anticipate making major improvements in your home?
- Is it important for you to build equity rapidly?
- How much will you benefit from home ownership's tax advantages?
- Is your home strictly an investment, either for rental or resale?
- What is the likelihood of a career change requiring you move and resell?
- Have you adequate resources for home repairs and upkeep?
Loan Types to Consider
Brush up on these mortgage basics to help you determine the loan that will best suit your needs.
• Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower
the monthly payment. However, you pay more interest overall if you borrow for a longer term.
• Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in
general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s
interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage.
ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised.
These types of mortgages are a good choice when fixed interest rates are high or when you expect your income to grow
significantly in the coming years.
• Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years.
Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good
choice if you think you will sell your home in a few years.
• Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration
(www.fha.gov) or the Department of Veterans Affairs (www.va.gov) and offer special terms, including lower down
payments or reduced interest rates to qualified buyers.
Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining
how much your monthly payment will be for various loan amounts, use Fannie Mae’s online mortgage calculators.
Brush up on these mortgage basics to help you determine the loan that will best suit your needs.
• Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower
the monthly payment. However, you pay more interest overall if you borrow for a longer term.
• Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in
general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s
interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage.
ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised.
These types of mortgages are a good choice when fixed interest rates are high or when you expect your income to grow
significantly in the coming years.
• Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years.
Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good
choice if you think you will sell your home in a few years.
• Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration
(www.fha.gov) or the Department of Veterans Affairs (www.va.gov) and offer special terms, including lower down
payments or reduced interest rates to qualified buyers.
Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining
how much your monthly payment will be for various loan amounts, use Fannie Mae’s online mortgage calculators.
Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®.
Copyright 2008. All rights reserved.
Copyright 2008. All rights reserved.
Before You Chose a Loan
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| How much will your payment be? |
| Monthly fees, taxes and insurance should be added to your monthly cost. Call me for an estimate on these costs. |