Guide to Refinance, Mortgage,
& Home Equity Loans in
Chester, Pennsylvania (PA)

Known as the oldest city in Pennsylvania, Chester, is a prime location to live, work, and raise a family. With Chester's location and accessibility being second to none, they are proud to be the home of many nationally recognized companies. Officials of Chester are proud to say that for ten consecutive years there has been no real estate tax increase in the city and that they have reduced the resident and non-resident wage taxes significantly. Over the same period there has been an influx of new and diverse businesses that proudly call Chester their home.

It is a prime time to move to Chester and if you are interested in doing so, you may need a mortgage to allow you to own the right home for you. If you are interested in getting a mortgage, there are some basics that you should know:

Mortgage Basics

• A mortgage is a loan that is obtained to pay for a home and any land it sits upon. The home and land is used for collateral on the loan, which means that if you do not make your monthly payments, the lender can repossess your home. The loan principal is the amount you actually borrow to purchase the home.
• Interest is the amount the bank charges you to borrow their money and it is a percentage based on current economic indicators.
• Because the loan is for such a large amount, it is usually financed for between fifteen and thirty years. The amount of time is called the loan's term. Principal and interest together will make up most of your payment.
• The total is then divided into equal payments over the life of the loan using a process called amortization. With amortization your payments mostly go toward interest early in the loan and then more goes toward the principal of the loan as the loan goes on.

Because the cost of homes keeps rising, a mortgage is usually the only way to purchase one. Getting pre-approved is an excellent way to start your home-buying quest. Pre-approval requires going to bank or mortgage company and having all of your previous bills, as well as work history, looked into. This will allow the lender to be able to see exactly how much you can afford to spend on your new home.

Refinancing Basics

Refinancing is when your existing mortgage is paid off and a new mortgage is signed. Refinancing is a great way to change your mortgage, as long as you know why you want to do it. Here are some of the basic reasons to refinance:

• To obtain a lower fixed rate – if the interest rate has dropped at least a half a point from your original rate, refinancing can drop your monthly payments.
• To switch your mortgage – if you received an adjustable-rate mortgage or a fixed-rate mortgage and wish to switch, then refinancing is the only way to do it.
• To build your home equity faster – If you are making more money now than you were when you first got your mortgage, refinancing with a higher amount will allow you pay off your home much more quickly.

Home Equity Loan Basics

A home equity loan allows you to take out money from a lender using the equity you have built in your home as collateral. There are two ways to do this:

• A home equity loan – a home equity loan allows you to take out one lump sum of money. This money will be added to your mortgage possibly increasing the length of the mortgage and you will pay interest on the amount borrowed immediately.
• A home equity credit – this is similar to a home equity loan in that you are borrowing money against your equity, but with this option you can only borrow as much money as you want, and you will only pay interest on the money that you borrowed.

If you would like more information on any of the topics discussed: mortgages, refinancing or home equity loans, then please fill out the form below so that a mortgage expert can contact you.