How do you choose between fixed and adjustable rates?
There is risk involved in selecting an adjustable rate mortgage, or ARMs, because rates may go up. On the other hand, a fixed-rate loan offers good protection against rising interest rates but the borrower is stuck with the initial rate if interest rates drop.
Statistics show that home buyers who have chosen ARMs since 1981 have saved thousands of dollars. For a period, the percentage of home buyers applying for ARMs rose substantially, then buyers and homeowners began flocking to fixed-rate loans.
Whether to opt for a fixed or adjustable rate mortgage is a matter of personal choice. The first route offers stable payments; the second offers lower initial payments.
Another consideration is the length of time a buyer plans to own the home. If you’re planning on moving within three or four years, an ARM makes sense even if rates do nothing but rise during that period of time.
What is the first step when looking for a Georgia Commercial home loan?
Most experts recommend that you should get prequalified for a loan first. By being prequalified, you will know exactly how much house you can afford.
Almost all mortgage lenders now prequalify and preapprove customers, and many of them can even do it on the Internet. You also can do your own affordability calculations; most recent consumer books on home buying include steps to doing so, as do various real estate Internet sites.
Are interest rates negotiable?
Some lenders are willing to negotiate on both the loan rate and the number of points but this isn’t typical among established lenders who set their rates like large corporations set the prices on their goods. Nevertheless, it pays to shop around for loan rates and know the market before you go in to talk to a lender. You should always look at the combination of interest rate and points and get the best deal possible.
The interest rate is much more open to negotiation on purchases that involve seller financing. These usually are based on market rates but some flexibility exists when negotiating such a deal.
When shopping for rates, look for published rates in local newspapers or check the growing number of Internet sites that publish such information.
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