Today’s mortgage environment
A solid home loan rate for your situation is waiting for you. The past has been dealt with, for the most part, and the future looks ok. Actually, now is one of the better times to look for a home loan rate that fits your needs. Home prices have come down a bit and there is a good supply of housing on the market. Having a good home loan rate in place will let you move on a property when you find it. Deciding upon which loan type is right for you is the question you need to have figured out before the opportunity presents itself.
Rate types
The two main types of loan rates to choose from are fixed and variable. Within each type there are a few items that vary but they generally describe themselves. A fixed rate loan means you’ll pay the same amount for the term of the loan regardless of what the economy does. Many people like a home loan rate of this type because they will know how much to budget each month. There is a security factor in knowing the amount.
A variable rate loan can change through the term of the loan. If the economy changes, your rate can change in either the up or down directions. There is also a large payment at some point called a “balloon” payment where you will need to come up with a good size piece of change. A lot of people like a variable home loan rate because the initial loan rate is lower. A lower variable home loan rate can be a good thing if the economy is rock solid or you plan to stay in the home for a fairly short period.
Other loans
In today’s finance world there appears to be an available home loan rate for any particular circumstance. There are equity loans, refinance loans and second mortgages just to name a few. Each does have a particular advantage over a simple home loan rate in specific ways. You’ll just need to make sure you understand what the advantage is before you get yourself into it. In any event, these home loan rate quotes will generally fall under the variable rate heading. You can get a loan written for a fixed rate but it will likely entail a higher rate then a normal fixed rate might be.
Your situation
The thing to remember about rates is that they depend upon your personal conditions. What may sound right for one person may not be right for you. Be realistic about what you need.
By : Alan Lim
