What you need to know About Mortgages
Are you looking for a new Gilbert home but are worried about getting a mortgage? Before you purchase a home in Gilbert, AZ, here are seven items that might help you better understand the process, and feel more comfortable making important decisions.
- Fixed rate mortgages and adjustable rate mortgages are the two main kinds of residential mortgages. Each kind exists for a particular kind of buyer.
- Adjustable rate mortgages are best for buyers who are expecting to own the property only a short time, or have reason to believe there will be an increase in their income at a future time. Often, these loans begin with a very small payment that will increase in a matter of months or years.
- Fixed rate mortgages are usually the most stable option and are best for home buyers who plan to retain ownership for more than five years. These mortgages feature an unchanging percentage rate and monthly payment that remains the same for the entire length of the loan. The term or length of these mortgages can vary from 10 to 50 years, but the traditional 30-year term is still the most popular.
- Fixed rate mortgages come in different styles. You can get a bi-weekly loan, which means you make payments every two weeks instead of every month. In this case, your principle is paid faster and you end up paying less for the mortgage.
- Hybrid loans are a combination of fixed and adjustable mortgages. Usually, these start out as fixed rate loans that later become adjustable. Again, these are often used by people who do not plan to own the home long-term.
- Closing costs are the single most surprising part of the mortgage process. These costs are associated with the purchasing of the house and often include loan fees, home insurance, taxes and titling fees. Buyers should be prepared to pay these fees at the time they close on the house.
- Remember to read all documents very carefully and ask questions about anything you may not understand. Your loan officer should be able to clearly explain each item or fee. Double check your term and interest rate, as well as any fees for missed payments or default before you sign the papers on your new Gilbert real estate.