Finding affordable housing in a nice area of California may sound difficult, but East Palo Alto fits this description nicely. Residents enjoy everything from the views of the San Francisco Bay to the peaceful rural-like surroundings. If you have been considering moving to the East Palo Alto, California area, your timing couldn’t be better. If you already live in East Palo Alto, we hope you aren’t thinking of leaving. This city has so much to offer that homes in the area are rising in value.
A few questions might arise though. What first mortgage financing options are available? What will I qualify for? How do I know if a refinance or a home equity loan is better for me? Let’s focus on these and a few other questions.
Before you apply for financing of any kind, it is extremely important that you know your current financial standing. Obtaining your credit report is easy and in many cases free. Your first step should be to find out what your credit rating is. This rating will determine what kind of interest rates you qualify for. Don’t be alarmed if you spot something on your credit report that isn’t yours. Simply notify the reporting agency of the error and in time it should be removed. Your goal is to get a loan with prime interest rates so that every point on your credit score counts.
There are as many financing options as there are homes to choose from. What works for another person may not work for you. The most common terms are fixed rate mortgage loans that last from 15 to 30 years. Lenders prefer that your monthly mortgage payment not exceed 32 percent of your monthly income. They will also factor in your monthly consumer debt payments. This is known as your debt-to-income ratio and plays an important part in the loan process. If your budget will allow for it, the 15-year fixed rate loan costs less then a 30-year loan when it comes to interest.
Other options include adjustable rate, 50-year mortgage loans and balloon loans. The option ARM mortgage loan allows you to choose each month whether you can afford an interest-only loan payment, 15-year loan payment, or a 30-year loan payment. This loan offers the greatest flexibility and works great for people who aren’t able to count on a specific income each month.
The answer to this question depends a lot on how long you have owned your home. Both loans are great ways to save money on interest payments and increasing a home’s value. Mainly, it depends on how long you have been living at your residence. If you just moved into your home a few years ago, you may not have very much equity built up. A home equity loan would be costly and the loan amount would be small. If, however, you refinance at a lower interest rate, your monthly payments will decrease and your overall total loan costs will go down. This can equate to great savings. Another good time to refinance is if you are going for an adjustable rate to a fixed rate loan.
If you have been living in a home for several years, you will have much more equity built up. By tapping into your home’s equity you will potentially have access to tens of thousands of dollars. The fees and points that you pay would be comparatively small. You can also use your home equity loan for many things, including home repairs.
Choosing the right mortgage is a decision you will live with for quite some time, so making the right choice is important. If you are considering a refinance or home equity loan, you will want to make sure that it benefits you and your family. Before you decide, why not talk to a professional? Please complete the form below and you will be contacted shortly.
