Buying a home is a big, exciting step in your life. Paying a mortgage every month may seem daunting at first, but owning real estate is a great path to building equity and more financial stability. Your new home becomes a reflection of you and has a significant impact on your quality of life. The Deb Klein Team can help get you there with knowledgeable and timely support with your home loan in Chandler, Mesa, Gilbert or wherever else you’re looking to buy in Arizona.
How Home Loans Work
Home loans are given by financial institutions, banks or mortgage companies to people buying a home. These lenders offer loans with terms specifying how long and how much you pay for the loan. In their assessment, they also check your financial situation: your annual salary, assets, debts and credit score.
Typically, financial institutions want collateral to ensure the borrower repays the loan. Once the home is financed in your name, the home loan is referred to as a mortgage. In home mortgages, the title and deed become the collateral for your loan. Until you repay what you owe, the financial institution owns your home.
Choosing the right terms and lender for your home loan is a crucial decision; this is where the Reliability In Lending team of financial professionals come in.
Mortgage Rate Options
Traditional fixed mortgages are the most common loan program for home buyers. Monthly principal and interest payments associated with fixed rate mortgages never change during the lifespan of the loan. Fixed-rate mortgages are available in terms ranging from 10 to 30 years. In most cases, the homeowner can pay off fixed-rate mortgages anytime during the life of the loan without penalty. The structure of these loans allows homeowners to pay them off by the end of the loan term.
Adjustable-Rate Mortgages interest rates can vary during the life of the loan. ARM loans typically have fixed interest rates for an initial period and then adjust according to market conditions. Initial rates are lower than a fixed-rate mortgage, allowing homebuyers to afford and purchase a more expensive home. Homeowners pay off adjustable-rate mortgages over a 30-year period with the fixed initial rate from 1 month to 10 years.
All adjustable-rate mortgages have a margin and an index. Margins can range from 1.75 percent to 3.5 percent depending on the index. The index is the instrument the adjustable-rate mortgage associates with such as LIBOR, 1-Year Treasury Security, Prime, and 6-Month Certificate of Deposit.
Interest-only mortgages monthly payments do not include the repayment of principal for a certain period. Interest-only mortgage loans are set at a fixed rate or an adjustable rate. When the interest-only period ends, the loan is fully paid off, resulting in increased monthly payments. The new payment is larger than if it had been fully paid off from the beginning. The longer the interest-only timeframe, the larger the new payment when the period ends.
Better Home Loans
The Deb Klein Team can provide you with easy home financing solutions you can afford. We specialize in every mortgage type — from a standard fixed-rate mortgage to government-backed loans. Our team makes your home loan transaction more streamlined and hassle-free.
As local mortgage specialists, we take into consideration your needs, goals and financial capabilities. We bring reliability to lending by helping you find the best home loan products and lenders for you.
Choose the Reliability In Lending team for a fair, personal and trustworthy home loan experience. Being based based in Chandler we help borrowers in the greater Phoenix area and throughout the state. To schedule a free consultation with one of our mortgage bankers and discuss your options, call 480-550-0211.