The beautiful city of Albany, Oregon, sits on on the banks of the Willamette and Calapooia Rivers. The houses in Albany have been credited by historians and architects as having the most varied collection of historic buildings in Oregon. This collection includes buildings from the 1840s through the late 1920s. What should you do if you decide you want one of these stunning houses for your very own?
The first thing to consider when looking to buy a house is how much you can afford. Mortgage experts advise that when you are looking to purchase a house, you get together your monthly bills and figure out how much you can afford for a monthly payment. These same experts also recommend that you do not spend more than 28% of your monthly net income on a new home. Over-estimating your payment abilities can have disastrous consequences.
Most serious homebuyers will expedite the process by becoming pre-approved for a mortgage. Pre-approval gives you a feeling of confidence, as you are able to know immediately which homes you can afford to purchase. A good mortgage company will have a specialist evaluate your monthly bills and tell you where you may need to make adjustments to be able to afford your dream home.
There are two main types of mortgages – a fixed-rate mortgage and an adjustable-rate mortgage (or ARM). With a fixed-rate mortgage, the interest is set at whatever the rate is on the day the mortgage agreement is signed, and does not change. This type of mortgage is good for long-term loans because if the interest rate rises, the rate for the fixed-rate mortgage will not.
The adjustable-rate mortgage, also known as a variable-rate mortgage, is where the interest rate periodically fluctuates, thereby possibly changing the monthly payment each month. This type of mortgage can be a gamble, because if the rate falls, your payment will go down; however, if the rate rises the payments will go up. Some lenders will take advantage of inexperienced homebuyers by promoting the low rates and payments and not explaining about the possibility of a higher payment if the rate goes up.
If you currently have a mortgage for a home in Albany, Oregon, but are unhappy with your payments, or would like to shorten the length of your loan, then you may want to consider refinancing your home. The refinancing process is really quite simple, and is similar in ways to the original mortgage process. A mortgage specialist will evaluate the equity that is in your home and the home will be appraised to discover its true value. If you have made a large amount of improvements on your home, the value of the home will go up, thereby giving you more equity.
If the interest rate has dropped at least a half percent since you purchased your home, than refinancing may shorten the length of your loan. With refinancing, you are paying off your current loan and signing an agreement for a new one. If your current mortgage company or another agrees to waive the refinancing charges, such as application, appraisal and legal fees, you are in a much better position. These fees can add up to a total of $1,500 to $3,000.
A home equity loan allows you to borrow money against the equity that has been built up in your home. Basically you are borrowing money using your home as collateral. The two types of home equity debt are home equity loans and home equity lines of credit. Both are often referred to as second mortgages because they are secured by your property just like the original mortgage was.
Home equity loans and lines of credit usually are repaid in a shorter period of time than first mortgage was. Generally, mortgages are set up to be repaid over a period of 30 years. Equity loans and lines of credit often have a repayment period of 15 years, although it might be as short as five and as long as 30 years. The shorter period of these loans make them perfect for making home improvements or paying off other debts.
If you are looking to purchase a home in Albany, Oregon, it is useful to have a good understanding of the different types of mortgages, refinancing and home equity loan options that are before you.
