Mortgage Assistance 3 Terms Every Mortgage Holder Should Know
Getting a mortgage is not an easy task. That is why you really need mortgage assistance. There is a lot of paperwork to sign, documents to read and procedures to be followed. Although getting a mortgage can be a confusing process, there are three terms that every mortgage holder should know to better understand what he is she is getting into.
Going into a mortgage knowing just a few facts will help you immensely in understanding what type of commitment you are getting into especially if you are looking for a best fixed rate mortgage.
The first term you should understand is, amazingly, the word "term".
“Term” refers to the length of the mortgage you are taking out - or the amount of time you are making payments.
The longer the mortgage, typically the lower your monthly payment will be but the higher the interest it will cost you (and the more interest the mortgage company makes).
Generally speaking, you should go for the shortest term you can afford - you'll save potentially tens of thousands dollars in interest by keeping the length of the mortgage
Next, understand how are mortgage rates determined. The interest rate refers to the amount of interest charges you will pay for the money you are borrowing, expressed as a decimal - such as 4.1 for 4.5%. Is it fixed or adjustable? In other words, is it the same through the life of the loan or does it change at specified periods in time? Most home buyers should try and steer clear of adjustable rate mortgages even though they can look better up front. They can often reset to higher interest rates and come back to bite you if you aren't ready for a jump in your monthly payments. You can even ask for mortgage rates predictions.
Finally, understand what closing costs are and how they are going to affect your purchase price. Oftentimes, you are going to be responsible for coming up with these closing costs out of your own pocket. Closing costs consists of things such as appraisals done on the house, attorney fees, notary fee, deed fee - if there is a fee they can think of it usually falls under the term closing costs! Be a smart and savvy consumer, if you see a fee that you don't understand or doesn't seem right - speak up! Some mortgage lenders try to sneak in any fee they can think of to make a few extra dollars profit.
Understanding mortgage assistance 3 terms can help you make a well informed home buyer and help you find the best fixed rate mortgage that is right for you.
