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How Big a Mortgage Can I Afford?
10 Questions to Ask Your Lender
10 Things a Lender Needs From You
Choices That Will Affect Your Loan
Choices That Will Affect Your Loan  
  • Mortgage term. Mortgages are generally available at 15-, 20-, or 30-year terms. The longer the term, the lower the monthly payment if the same amount is borrowed. However, you pay more interest overall if you borrow for a longer term.

  • Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate for as long as you hold the mortgage and is usually a good choice if interest rates are low. An adjustable-rate mortgage (ARM) is designed so that interest rates will rise as interest rates increase; however they usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. ARMs are a good choice when interest rates are high or when you expect your income to grow significantly in the coming years.

  • Balloon mortgages. Balloon mortgages offer very low interest rates for a short period of time often three to seven years. Payments usually cover only the interest, so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.

  • Government-backed loans. Government-backed loans, sponsored by agencies such as the Federal Housing Administration (www.fha.gov) or the U.S. Department of Veterans Affairs (www.va.gov), offer special terms, including lower downpayments or reduced interest rates to qualified buyers.

Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use Fannie Mae's online mortgage calculators

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2005 ©. www.REALTOR.org/realtormag

 

 


This data was last updated on Mon Dec 10 14:48:53 EST 2018. The data is subject to change or updating at any time without prior notice. The data is deemed to be reliable but no warranties of any kind, express or implied, are given. The information being provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This data is provided in part by the Internet Data Exchange (IDX) program of the Tri-County Board of Realtors┬«, Inc. The listing firm is identified in the detailed listing information. Copyright © Mon Dec 10 14:48:53 EST 2018 Tri-County Board of Realtors ®, Inc.
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Fairbury, Nebraska 68352
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