When it is time to buy a home it is almost a certainty that you will be applying for financial assistance in the way of a mortgage or loan. There are always new luxury homes for sale in Bergen County. That dream home that appears to be beyond your financial reach might just be closer than you think, especially when you realize the sheer number of financing options available to the new home buyer.
The most popular financing option is the mortgage. A mortgage is a type of loan used to purchase real estate property or a home that uses the home and property as collateral. There are three popular types of mortgage available to home buyers, each with its own method of repayment and interest rate.
The most popular financing option is the mortgage. A mortgage is a type of loan used to purchase real estate property or a home that uses the home and property as collateral. There are three popular types of mortgage available to home buyers, each with its own method of repayment and interest rate.
A fixed-rate mortgage is a loan in which the interest rate is given at the date or origination and does not change. This is a "comfortable" loan in that you know the interest rate will not fluctuate with the market. Fixed rate loans usually come in periods of 15 or 30 years.
An adjustable-rate mortgage, also known as an ARM, is a loan in which the interest rate adjusts over time. Initial payments might be lower than with a fixed-rate, but they can go up at any time in relation to the market index. There are three general types of ARMS:
- Hybrid ARMs are a mix between a fixed rate and adjustable rate loan. They might be advertised as 3/1 or 5/1 ARMs. The first number refers to how many years you will pay a fixed interest, and the second number indicates that the rate will be adjusted annually every year after.
- Interest-only (IO) ARMs allow you to pay only the interest for a period of time before you start paying the principal.
- Payment-option ARMs allow you to choose your payment options. Payment-option ARMs allow you to choose your payment options.
Balloon mortgages are short-term loans that usually offer a lower interest rate and payment than traditional fixed-rate mortgages. They are generally 5 or 7 year loans that have been amortized over a longer period of time so that you do not completely pay off your mortgage by the end of the loan term. At this time you must either pay off the remaining balance or refinance your loan.
A two-step mortgage will start out at one interest rate and change to a different rate at some point during the term of the loan, usually at the five-year or seven-year mark. Two-step mortgages typically originate with an interest rate that is below the market rate and inflates to a rate that is above the market rate after the initial period.
If you are looking for a home in the beautiful Bergen County, NJ area, The Donohue|Christian Group can help you get into one of the many luxury homes for sale in Bergen County. Al Donohue and Pam Christian - Realtor Associate, have more than 16 years of experience between them. They are familiar with the trends and quirks of the real estate market and have a history of closing on homes within two weeks. Contact the Donohue|Christian Group at 917-751-3234 or visit www.EbergenCountyHomes.com for more information. Let them help you find the house of your dreams!
Comments(1)