Getting More from your Mortgage
Mortgage rates change on a daily basis, which makes it difficult to know when you should pull the trigger. With mortgage rates currently down, now is the time to start planning and buying your dream home. For most home buyers, the kinds of mortgages available is one significant question they ask, the rate and the effect of the rate on the monthly payment is another.
Letâ€™s take a look at a few examples:
As you can tell from the chart, when comparing each monthly payment to the interest rate, the monthly payment is much lower and more affordable. We are going from a monthly payment of $898.09 with 3.5% to $843.21 with 3% on a $250,000 homeâ€¦ thatâ€™s $54.88 in savings a month! There are plenty of options for the money that you will be saving monthly. One option is making some upgrades to your new home, such as; adding SMART technology or shelving on either side of your T.V.
In addition to rates, there are different types of mortgages to consider, and choosing the right mortgage is important. There are four mortgage types for home buyers:
- Fixed Rate
- The most common type of mortgage to choose from.
- The homeowner pays off the loan over a fixed period of time.
- Homeowners can choose from 10, 15, 20, 30 or even 50 years.
- Insured by the government through the Federal Housing Administration.
- It is a great choice for first time home buyers.
- Benefits including:
- Low or no down payments.
- Lowered or no credit score requirements.
- If you are a veteran, you might consider the VA mortgage. These are also insured by the government, through the Department of Veteran Affairs.
- Â Interest only
- These mortgages never reduce the principal balance. These are not for everyone because, it means you will owe the same amount of money regardless of how many payments because you only are paying the interest.
With interest rates as low as they are, now is a great time to take advantage of the market situation and purchase a home. If you have been on the fence or considering a new home, the time has come to buy. If you are interested in learning more about Gerstad Buildersâ€™ many communities, click here to contact us or call at (815) 385-4495. We would be happy to help you find your next home.