Selection

Choose a Mortgage Company. Securing finances requires a decision that you may have to live with for many years, so spend time comparing the terms and conditions of different Mortgage Companies before making your choice. There are a number of ways to find the right Mortgage Company, whether through traditional print ads, REALTOR® referrals or Internet sources. There are also several considerations to keep in mind when shopping for the right loan provider and program:

• Price: Consider the competitiveness of a Company’s terms with that of others, especially for interest rates, closing costs and down payment requirements.
• Diversity of products: Price is important, but by no means should it be your only determining factor. How extensive is the Company’s range of offered loan programs? Check the availability of the loan program most appropriate to your credit profile and property.
• Rapport: Does your lender and broker communicate effectively and thoroughly? Are they attentive and prompt? You aren't looking for just a guide, but a partner - someone you can work with and trust every step of the way.

Choose a loan. Though there are many different kinds of loans available today, these three are the most commonly used:

• Fixed-rate mortgage: This long-term option requires monthly payments that will remain the same (fixed) throughout the duration of the loan. The loan term usually varies from ten to thirty years.
• Adjustable-rate mortgage (ARM): The loan rate here will be determined by factors such as a financial market index, a margin, and predetermined readjustment intervals. The initial interest rate can be lower than a comparable fixed-rate mortgage, but this is not always the case. An ARM can make homeownership more affordable. However, you should first examine all factors and consider the downside risks before selecting this option.
• Hybrid loan: This type of loan offers a fixed interest rate for a specified initial period before it 'switches' to an ARM and adjusts with the market at regular intervals thereafter.

Consult with your Mortgage Company to determine which loan type and program would best correspond with your resources and needs.

For more information on any of these issues, contact a local HomeSense® Realty Agent.