When you buy a home, chances are you are going to need a mortgage. The price of your new home and your initial down payment are among the factors that determine what your mortgage value and monthly payments will be. But, there are many other factors and deciding on the right type of mortgage can get confusing.
Here are some tips to help you.
This mortgage has terms that last for 1-10 years. Your monthly rates and your interest rates will remain the same throughout the entire term. If you are planning on staying in your new home for over 5 years, then this could be the option for you. You should also choose this if you think your income will remain the same or increase, and if you don’t like the thought of your monthly payments fluctuating.
Adjustable rate mortgages last for 3-5 years. However, the interest rate can fluctuate, meaning you could pay less or more every month. If you are staying in your new home for less than 5 years, this is the ideal option for you. Additionally, if you know your income will increase, you won’t need to worry about the fluctuations as much.
This is a combination of both fixed- and adjustable-rates. You may have a fixed rate for a certain amount of time, while it fluctuates higher or lower for the remaining time. If you don’t mind the fluctuations or imbalance, then this could be the option for you.
Line Of Credit
Another way to pay your mortgage is to take out a line of credit. You can take however much money you need from your line of credit, and pay it back over time, in any amount. You can use any extra money on other expenses, such as home renovations and other debts.
If you liked this blog, check out this one on, “Why Staging A Home Is Important.”