Important Mortgage Considerations

July 4, 2014 admin

When seeking a mortgage, there are many factors to consider, and having a trusted loan originator can help you to choose a loan program that is suited to your needs. Let’s take a look at some of the primary considerations.

1. The type of loan. It is my opinion that fixed rate loans are best loan choice for most borrowers. With today’s historically low interest rates, you can obtain a loan now, and be confident that the monthly principal and interest payments will never change. While adjustable rate mortgages are currently available at attractive start rates, it is likely that the rates will adjust upward in the coming years and you may be facing increased payments. I would only recommend adjustable rate loan programs to borrowers that do not intend to live in their current residence beyond the initial fixed-rate period of the adjustable rate loan.

2. The term of the loan. The most common loans have repayment terms ranging from 15- to 30-years. Certain loan programs do offer longer terms, but I would steer clear of those because the monthly savings versus a shorter term loan are offset by the increased interest expense that you will incur over the life of the loan. In a refinance situation, it is advisable to limit the term of the new loan to the remaining term of the loan being refinanced, again to reduce the overall interest expense incurred during the life of the loan.

3. The costs associated with the loan. Borrowers are responsible for paying certain closing costs when they obtain a new loan; these include underwriting and lender fees, title insurance and closing fees, appraisal fees, and loan originator fees. A good measure of whether a new loan would make sense in your own situation is to evaluate the monthly savings, and project how long it would take you to recover your out of packet expenses through the reduced payments. If the closing costs on your loan ar $2,500 and you save $250 per month, your loan will have paid for itself after only 10 months.

It is always my recommendation to try to structure your loan so that you can obtain the lowest rates with minimal out-of-pocket costs at a term that you are comfortable with. Loan originators are compensated by lenders based upon the loan amount, and you can often negotiate reduced fee loans, and no fee loans with your broker. In today’s competitive marketplace, it pays to shop around and compare loan options offered by two or three reputable lending resources.

I am passionate about customer service and obtaining the best loan for my clients, and I have many clients that have been referred to me by others because of the fair and comptent services that I provide.

Through my affiliation with Kertin Mortgage group, I have access to dozens of lenders in multiple states, and I can help you through the maze of obtaining a loan. Please feel free to contact me with any comments or questions. I can be reached at 888/627-2002 or at kristi@kertinmortgage.com