If you've been browsing the Summit NJ listings lately, you've probably been thinking about the various types of mortgages. News headlines have been disparaging this type and touting that one for the past few years. It can get confusing, especially for a first time homebuyer. Talking to a HUD-approved mortgage counselor will help you sort out all the different options. In the meantime, here are a few pointers on the old standard fixed-rate loan.
The biggest benefit of a fixed-rate mortgage for a Summit NJ real estate buyer is right in the name. The rate is fixed; it doesn't change. Regardless of the changes in the economy or interest rates, your monthly payments will stay the same. You know exactly how much your mortgage payment will be every month over the entire course of the loan. There will be no surprises or shocks with an economic shift. Your budget will be set and you can plan accordingly.
This type of mortgage works well in certain economic condition. It is a smart option when you have a stable or fixed income. If you are planning on staying in your home for a long time, a fixed rate is a solid choice. Fixed rates are also a good choice in an unstable economy or when interest rates are on the rise. In periods of inflation, keeping your interest rate constant can help you ensure you aren't forced into an early sale. Keeping in touch with your Summit NJ realtor is a great idea, but you don't want to be in a position where you are forced by costs into making that call.
Like any mortgage, a fixed rate mortgage also has a few negative points. If you bought during a period of high interest rates, you won't have the opportunity for a lower payment without a complete refinancing. Since the first several years of a fixed rate mortgage is spent paying down the interest you should plan on staying in your home for a while. If you are working with a short timeline, another option may be a better idea. These mortgages also typically have a slightly higher interest rate than their competition, depending on the economy, so there may be periods of time where you are paying more than your neighbors.
Your Summit NJ real estate agent can also help you sort through a few options. She can also point you towards a HUD-approved mortgage counselor who can guide you through the process and help you choose the best loan for your next home.
Mailing Address: Kristin Balsley Claremont Realty Group 535 Springfield Avenue Summit, NJ 07901 908-343-2122 http://www.kristinbalsley.com