With the many mortgage products on the market today, how do you select the right one for you? One of our experienced loan officers can help guide you through the selection process and then on through the loan process.
Mortgage Types
Selecting the mortgage type in Centereach, New York to help you purchase your dream home begins with a review of these types with your loan officer. The most common mortgage types include fixed rate, adjustable rate, interest only, and balloon.
Fixed rate loans will have the same mortgage payment every month until the loan is paid off. The interest rate will never change. This is an excellent choice for those who are on a budget and need a stable payment.
Adjustable rate loans have adjustment periods built in to them. These periods are typically 1, 3, or 5 years. The interest rate can change at these times depending on the current interest rate. This will determine if your mortgage payment will rise or fall. Since this type of loan usually has a low interest rate it is a great way for you to get into the housing market.
Interest-only loans have mortgage payments in the beginning that only go toward the interest. After a set amount of time, typically 10 years, the principal is added in and your mortgage payment will increase. This type of mortgage works well for those who expect their income to increase in the coming years.
Balloon loans will have the same mortgage payment for the duration of the loan. The loan will need to be paid in full in 5 years. At that time, you can either make a lump sum payment or possibly use the money from the sale of the house to pay off the mortgage. This type of loan will work well for those who plan to live in their house for a short period of time.
The Loan Process
After you have determined which mortgage type will work best for you, your loan officer will ask you to fill out a loan application. This form will ask for both personal and financial information. It is important that you feel comfortable giving this sensitive information to your loan officer. Documents that you will need to provide will include pay stubs, bank statements, employment history, credit history, tax records, and housing expenses. All of this information needs to be verified in written form, so the loan process could take up to 4 weeks to be completed.
The final step in the loan process is closing. Before this meeting you will need to find out the amount of your down payment and any closing costs you are responsible for so that you can get a certified check to make this payment. This meeting will probably last at least an hour. You will be presented with multiple documents to sign. If you do not understand a document, make sure you ask questions before signing it. With your final signature, you will be a new homeowner.
Refinance and Home Equity Loans
Options for existing homeowners in Centereach, New York include refinance and home equity loans. Both of these loans will enable you to have money to pay off your medical bills, credit card bills, education expenses, car payments, remodel, or even purchase a vacation home.
Refinance loans are loans that you use to pay off your existing mortgage. The goal of refinancing is to lower your mortgage payment. Three ways to accomplish this are to refinance at a lower interest rate, change the term of your mortgage, or switch to an interest only mortgage. With lower mortgage payments, you will have money free every month to spend on other things.
Home equity loans are great for those homeowners who have lived in their homes for a while. The equity you have earned in your home by living in it and paying for it can be used to borrow money. Equity is the difference between your house’s value and the amount left on your mortgage. Home equity loans usually have shorter terms of 10 or 15 years. You have the choice of either a line of credit or a lump sum payment. You can use this money for whatever you deem necessary.
Fill out the form below to get help with your lending needs in Centereach, New York. One of our knowledgeable loan officers will contact you.
