The Town of Los Gatos is in Santa Clara County, California and has a population nearing 30,000. It is located on the edge of Silicon Valley, in the San Francisco Bay area, and is at the foothills of the Santa Cruz Mountains. Los Gatos is noted for its many chic restaurants and downtown shopping venues, and its homes are largely upscale. Los Gatos means ‘the cats’ in Spanish, which refers to the mountain lions living in the Santa Cruz Mountains.
If you are thinking of buying a home in Los Gatos, you may need a mortgage, and there are several types available. For those of you already living in Los Gatos, find out what your current mortgage can do for you in terms of refinance and home equity loan options. Discussed below are some of the options available to you.
Fixed rate mortgage. A fixed rate mortgage has a fixed rate. Whatever the interest rate is at the time you purchase your loan will never change, and neither will your payment amount for the life of your loan. The general loan term for a fixed rate mortgage is 15 or 30 years.
Adjustable rate mortgage. An adjustable rate mortgage (ARM has an adjustable interest rate. The interest rates on ARMs will start lower than fixed rate mortgages, enabling you to save money on your monthly mortgage payments for the first few years. After those initial years, your interest rate may change, depending on the economy and current market conditions. Your monthly mortgage payment, your interest rate, and the term of your loan can all change. This can be beneficial, depending on the economic climate. You can always choose to refinance at a later time if a better interest rate comes along.
50-year mortgage. A 50-year mortgage is what you need when you are looking to purchase a home with a higher than average price. You can spread your loan over 50 years, as opposed to 15 or 30 years. This should greatly help you afford your dream house.
Interest-only loas. With interest-only loans, you only pay the interest due on your loan for the first 10 years. This will greatly help your budget for the first 10 years. After that, you still owe the principal of the loan and will need to start making payments on both the principal and the interest.
Options ARM. An options ARM loan is most helpful if you are not sure how much you can afford to pay each month for your mortgage. You are given four choices for your monthly payment: 1) a minimum payment amount; 2) an interest-only payment amount; 3) a 15-year amortized payment amount; or 4) a 30-year amortized payment amount.
Balloon loan. A balloon loan will bring you the lowest interest rate available on the market, but its loan term matures in just five years. This is ideal if you plan to sell your home in five years. You will need to plan wisely with this option.
Your lender will have to submit a number of forms to you with any of these options you choose. The Good Faith Estimate is one of the first forms you may be given. This form is generally sent by your lender, via the U.S. Postal Service, three days after you apply for your loan. This form will give you an idea of what your closing costs might be. It will also give you the terms of your loan, as both parties have agreed to.
Another form that should be given to you is the Truth in Lending Act Statement. This form should have your annual percentage rate (APR) listed, as well as your new monthly mortgage payments. You should also receive an Equal Credit Act disclosure, which assures that you will not be turned down for a loan due to race, gender, or religion.
If you have been paying on a mortgage for a few years, then you have equity built up in your home. Discover how a home equity loan can help you with your financial decisions.
If you want to learn more about your options regarding a refinance plan, starting a new mortgage, or applying for a home equity loan, simply complete the form below to get this process started.
