In this follow-up post to “Finding A Mortgage That Fits Your Needs”, learn about Mortgage features that are worth comparing and view answers to some of our most frequently asked questions.
How Much To Borrow. Once you decide on home ownership, your next step is to determine how much house you can afford – and the amount you realistically want to borrow. While you may qualify for a good-sized mortgage, you don’t necessarily have to commit to the largest amount at your disposal.
Our loan officers will not only look at your income and debt ratio, they’ll talk to you about your needs and wants. Together, you can determine the type of loan and amount that best suits your needs.
Consider your lifestyle – do you like to travel or invest in a hobby? Do you have children What type of upkeep is required with the home you choose? Sometimes the prudent choice is one that keeps your financial well-being in top form, while enabling you to still enjoy a home of your own. It may be worthwhile to go for a smaller mortgage to maintain a healthy cash-flow.
How Long To Repay. Terms typically range from 10 to 30 years. The longer the term, the lower your monthly payment. In other words, you can choose to stretch the length of the loan to gain monthly cash flow. This can be wise if you’re just starting out, or if you don’t plan to stay in your home for a long time. If you’re nearing retirement, or want to pay less in total interest, a shorter term might be to your best advantage. Shorter terms also offer more favorable rates.
The Interest You Pay. If you’re new to the housing market, a 3.0% loan may not seem overly impressive. But for those who’ve seen mortgage rates vary (like 8.5% in the 90’s), a 3.0% rate is phenomenal. A lower rate can significantly impact the amount of house you can afford and your monthly payment. At Connexus, we can help you to compare rates and payment schedules, based on the loan amount and current rate environment.
Closing Costs. These are costs associated with securing your mortgage. As a borrower, you may need to pay an application fee, an appraisal fee (to see if the home is worth the selling price), as well as title insurance (to ensure the home is in true possession of the seller). Often, when you see “no closing costs” advertised, there is a catch so review carefully. Ask questions.
Your Credit Rating. As with any type of financing, your credit rating (or credit score) will affect the rate you secure for your mortgage. Your score is calculated using a standardized formula from information found in your credit report. The higher your score, the lower your interest rate. Keep your score strong by making payments on time and establishing a repayment history with reputable lenders. This will help you to save in the future on all loans, including your mortgage, with a lower rate.
Flexible Options. Be sure the mortgage lender you choose offers the options you need. Do you like making payments online? Is it important to do business directly with the lender after the paperwork is signed? Do you want someone to coordinate payment of your property taxes and homeowner’s insurance? Don’t overlook these important facets when comparing options.
Servicing For Life. It can be a major plus to work with a lender who will continue to service your mortgage after the loan is closed (disbursed). This enables you to make payments to the lender directly and ask questions as they arise. The lender can also establish and service an escrow account for you – collecting and disbursing the funds necessary to pay taxes and insurance.
At Connexus, we offer servicing for the life of your mortgage. We can also take care of your mortgage needs throughout the nation, no matter which state you reside, with in-house mortgage options or through trusted partners.
When you decide it’s time to buy a home, remember that Connexus Credit Union is your financial partner. We can help review alternatives and provide a loan that’s right for you. An array of fixed and adjustable rate mortgages is available, with terms ranging from 10 to 30 years. Rates are low and closing costs affordable. Stop in to any branch or give us a call; we’ll be happy to answer your questions or get an application started.
See the orignal blog post:
Read more of the posts I’ve authored for Connexus Credit Union: