Stratford, Connecticut is a town full of history. It was named after Shakespeare’s hometown, Stratford- upon- Avon. Stratford has a beautiful countryside, and those living there know what a gem it is. If you already live in Stratford, you may own a home, or you may be searching the market for your family’s home. A mortgage professional can help you decide which mortgage options are best for. Below is a brief background that can help answer a few questions you might have before speaking with a mortgage professional.
There are two common types of mortgages, fixed rate and adjustable rate. A fixed rate mortgage is a loan with a fixed interest rate and steady monthly payments. An adjustable rate mortgage has a variable interest rate, and therefore, the monthly payments change. Each mortgage has its benefits and downsides. For instance, an adjustable rate mortgage has an initial low interest rate around 2% or lower. This interest rate is lower than fixed rate mortgages. The downside is that the interest rate will increase or decrease as you have the loan, but never go below your initial interest rate. This type of loan is good for those needing to improve their credit or who will refinance before the loans interest rate exceeds the average rate. With a fixed rate mortgage, you will always have the same interest rate, so you could potentially miss out on some great interest rates over the years, unless you refinance for a significantly lower interest rate when the opportunity presents itself. A fixed rate mortgage is typically 30 years, but varies between 15 and 40. The length of the loan determines your monthly payments as well as the interest, so having a longer loan term can make your payments more affordable over the years.
When you refinance, you are paying off your existing loan with a new loan. This is usually done to lower your monthly payments. With the ever-changing economy, it is nice to know there are options available when we are struggling with debt. Refinancing is an option when the interest rate is significantly lower than the one you currently have, and to change from one type of loan to the other. You can also increase the life span of the loan or consolidate other expenses into the new loan. When consolidating, you want to include only the higher interest rate debts. Things like student loans that may have a lower interest rate will be paid off easier and with less expense if they are not included in your mortgage.
If refinancing does not sound like the option for you, look into home equity loans. It is possible to consolidate, remodel, or have a little cash for emergencies if you procure a home equity loan. This type of loan obtains the equity from your house by the lender subtracting the amount owed on the existing loan from the value of your home. When you have a home equity loan, you have a second mortgage with a better interest rate and low monthly payments. You can take the entire equity out or just a line of credit to cover the expenses.
Home equity loans and refinancing are two options for those who already have homes. If you are looking to buy a new home or you are new to buying a home, you will have questions regarding the types of mortgages that best fit you. Fill out the form below to speak with a mortgage professional about your options in Stratford, Connecticut.
