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Monday, July 21, 2014

4 Important Qualities When It Comes to Choosing Your Right Mortgage

When it comes to getting a home, choosing the right mortgage for you is one of the most important decisions that you can make. That's why it's important to understand what qualities are important to you in regards to your mortgage loan. We've observed many of our past home buyers and have taken the top four characteristics that are usually a concern when it comes time to deciding on a mortgage program. It's important to ask yourself, which of these matter to me most?

Lower Down Payment

Your down payment is essentially how much of the loan amount you are required to put towards the home in order to satisfy the loan requirements. To many first time home buyers without a huge budget, a lower down payment option is more ideal. For someone who has the cash, they might want a program with higher down payment requirements as this may lead to lower mortgage or homeowners insurance. From the beginning you will need to consider how much money you have to use as a down payment on the home and what you feel most comfortable using. 

Rate Security

The interest rate you receive on your loan can make a huge difference in the overall amount you end up paying amortized over 30 years or however long your loan term is. For some a fixed rate that they know will not change is more ideal and for others an Adjustable Rate Mortgage with some flexibility is more of a preference. Shorter loan terms like a 15-Year Fixed Mortgage offers much lower rates than a 30-year Fixed Mortgage. 

Loan Flexibility

Loan Flexibility is essentially how tight or loose the loan requirements are. Some loan programs have high pre-payment penalties meaning you would be charged if you paid off your loan early while other loan programs have no fees at all. Also, some loan programs will allow you to pay your mortgage insurance upfront in one lump some while others require you to pay it monthly over the life of the loan. Your lender should be able to help you decide if loan flexibility is a vital factor for your personal situation or not. 

Easier Qualification

Are you haunted by bad credit? That's okay. Some loan programs allow qualifications with credit ficos as low as 620. Or if you don't have a lot of money in reserves you might want to consider a program that doesn't require a lot of money upfront. Easier qualification usually means you'll get stuck with a higher rate or mortgage insurance, so those are also factors that you will want to consider. 

What other qualities matter to you when it comes to choosing a mortgage? We would love to hear your feedback! Please comment below or share this article with your friends or family using the Social Media share buttons below.

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