Are you prepared to finally become a homeowner and stop renting? Great news for you, since mortgage payments are more affordable than renting, due in part to skyrocketing rental fees and low mortgage interest rates. But picking out the best mortgage option could be quite complicated.
To help make the entire process easier for you, the following are the most common questions prospective buyers ask themselves when looking at different mortgage options.
What mortgage option is ideal for me if I could only afford low monthly payments?
The conventional fixed rate loan, with a loan term of 30 years and 20% down payment would ensure that you pay off your monthly payments on time. For instance, if you put down $50,000 on a home worth $250,000, you would only be paying about $990 per month.
I need a mortgage, but I have two kids and would like to pay off my home loan before they go to college. Which mortgage type is best for the situation?
Consider a 15-year fixed rate mortgage. With this, you would be gaining home equity faster and repaying your mortgage more quickly. However, do note that your monthly payments might be higher, so just make certain that you could afford them.
Am I going to be renting forever because I can’t afford a 20% home deposit?
A mortgage with a 10% down payment along with PMI or private mortgage insurance or an FHA home loan might be a viable option. However, you’d have a higher balance and higher monthly payments. You’d also have less home equity when you want to sell you home because of your PMI premiums.
Is it smart to get a mortgage if I’m not planning on living in my current location for long?
According to an experienced mortgage broker in Tempe, know that it might take several years before you could completely recover the costs of your home purchase. If you are sure that you’ll be leaving in five years or so, you could opt for a 30-year or 15-year fixed rate home loan so that you could obtain more home equity.
Keep these common scenarios in mind before you even look for a new home because choosing the ideal mortgage type for you is crucial to you and your family’s future. When in doubt, consult an experienced mortgage broker so that you could make certain that you’re getting the best option that’s perfect for your financial circumstances.