You and your family have found the house of your dreams in Temple City, California. What do you do next?
The Loan Process
Your next step is to find a loan officer. It is important to find a loan officer you enjoy working with and who you can trust. Many questions will arise during the loan process and you will want someone who is able to answer them. You will be required to provide both personal and financial information to help determine what kind of loan you qualify for. This private information will include your employment history, pay stubs, credit history, tax records, bank statements, current housing costs, and information regarding any other assets you might have. Your loan officer will guide you through this part of the loan process. The lender will use the loan application you fill out along with the above mentioned items to determine the amount of loan you will be able to borrow.
Mortgage Types
Many mortgage types are available. Common types of mortgages include fixed rate, adjustable rate, balloon, and interest only.
A fixed rate mortgage will have the same interest rate for the duration of the loan. These loans usually have a 15 or 30 year duration. With this loan you will be assured of having the same mortgage payment every month.
An adjustable rate loan has the same interest rate for the first interval of the loan. At specified intervals, usually, 1, 3, or 5 years, the interest rate will change depending on the rate at those times. Your mortgage payment can go up or down at the end of these intervals.
Balloon mortgages have low interest rates but have to be paid in full at the end of 5 years. With the low interest rate, you will obviously have a lower mortgage payment. This mortgage will work well for you and your family if you only plan on living in your house for a short period of time.
Interest onlymortgages allow you to pay only the interest for the first 10 years of the mortgage. At that point, the principal is added in and your mortgage payment will increase. This is also a good mortgage for those who plan to live in their home for a short period of time.
Existing Homeowner’s Options
If you already own a home in Temple City, California, you can benefit from either a home equity loan or from a refinance loan. Both of these options will give you money so you that can pay your credit card bills, medical expenses, education costs, remodel, or purchase a new car.
Your current financial needs can benefit from a home equity loan. A home equity loan allows you to borrow money on the equity you have earned in your home. These loans come in two forms: a line of credit or a lump sum. You will only pay interest on the amount you actually borrow. Home equity loans usually have durations of 10-15 years.
A refinance loan obtained at a lower interest rate than your original mortgage will enable you to have extra money since your mortgage payment will decrease. Refinancing replaces your original mortgage with a new mortgage. You will choose a new mortgage type, new interest rate, and new duration. Even if you have refinanced in the past, refinancing can be an excellent way to help your present financial situation.
So, go ahead, make plans to remodel or repair your present home, help your child attend a good college, or consider purchasing a new car. Refinancing your existing home loan or obtaining a home equity loan is an excellent decision. Be aware that many of the steps in obtaining a new mortgage are necessary to qualify for these types of loan also.
Contact one of our knowledgeable loan officers today to discuss your lending needs in Temple City, California.
