Bountiful is a bedroom community north of Salt Lake City. East of Bountiful are the Wasatch Mountains and a huge area of National Forest Service land, and to the west is Salt Lake. It is a lovely, family-oriented community with one of the best school districts in the country and an exceptionally low crime rate.
Bountiful enjoys a four-season climate and great outdoor recreation, with some of the best skiing in the world in the nearby Wasatch Mountains. There are plenty of cultural activities, too, at the Bountiful/Davis Arts Center and the Bountiful Performing Arts Center. Summerfest International is an ethnic folk dance festival, complete with ethnic food and art displays. There are free summer concerts in the parks, theater, musicals and many other special events.
In recent years, home loans in Bountiful and other cities have gotten more complicated. Creative mortgage options, such as interest-only payments and option ARM’s, have made it possible for first time buyers to purchase a home in an escalating market. Homeowners are taking advantage of low interest rates to refinance with an adjustable rate or fixed rate mortgage. Others use the increasing equity in their homes to secure a home equity loan or line of credit. Despite all of the different permutations of home loans, however, they all have the same basic components: principle, interest and term.
Principle: The principle is the amount of money you are borrowing. This is a fixed amount; you can only decrease the initial principle of a loan by making a bigger down payment or by negotiating a lower selling price.
The principle is amortized over the life of the loan, which means that you gradually pay it off. Your initial payments will be mostly interest, with only a few dollars being applied to the principle. As time passes, however, a greater portion of your house payment goes toward the principle.
After your home loan has closed, you can pay the principle down more quickly by making larger house payments or by making extra payments. You can easily pay your principle down and increase you equity more quickly by adding even $10 a month to your house payment, or by making an extra house payment a year.
Interest: This is the most complicated, variable and costly part of your loan. You will almost certainly pay more interest over the life of your loan than you pay in principle, so it clearly pays to make sure you get the lowest possible interest rate.
The easiest way to get a favorable interest rate is to have a great credit history. If you have poor credit, you will pay a higher interest rate and, if you are a sub-prime borrower with a FICO credit score under 620, you may pay additional fees or be required to carry mortgage insurance even if you have a substantial down payment.
You cannot do anything about your past credit history, but you can make sure your credit report is accurate and you can begin today to establish a good credit history. Credit reports often have errors that affect your FICO score, so check yours and make sure it is correct before you apply for a home loan.
Interest rates can be fixed or variable, and which is best depends on your situation and what is happening with the real estate market.
Term: The term is the life or length of the loan. Traditionally, most home loans, including refinance loans, have 20 or 30 year terms. Home equity loans usually have 10 or 15 year terms. You can save a great deal of money over the life of your loan by choosing a shorter term.
Home prices have escalated so much in recent years that home ownership is nearly impossible for a lot of working families. Lenders have come up with a lot of mortgage options to make it possible for more people to buy a home. These options include low introductory payments and combo loans (combining a 1 st and 2 nd mortgage so that a smaller down payment is needed). The latest way to make home ownership affordable is the 50 year mortgage, which allows the homeowner to make lower monthly payments. All of these options benefit the lenders because homeowners wind up paying more in interest over the life of the loan, but they also benefit people who would not be able to purchase a home otherwise.
We can help you find a lender for your refinance, mortgage or home equity loan in Bountiful. Complete the form at the bottom of this page and one of our representatives will contact you.
