Buying a home can be a very exciting and overwhelming time. You want to move you and your family into a new home, but how are you going to pay for it? Mortgage options and terms can be very confusing if you’ve never bought a home before. Let’s take a look at some helpful information about the Mortgage Reading PA has available for home buyers.
Before you buy a home, and sign that mortgage agreement given by your lender, you’ll have to decide how much you can afford to spend on your home. A lot of buyers make the mistake of thinking about the initial price of the home, and not thinking about other miscellaneous expenses (i.e. property tax, utility bills, upkeep, etc.). Some homeowners also make the mistake of agreeing to outrageous loan terms for an expensive home that they won’t be able to afford in a few years. Speak to a representative at Chester Perfetto Agency Inc about your budget before talking about any loans.
It’s important that you know what the terms “principal” and “interest” mean. Both of these terms refer to the mortgage loan you’ll be receiving. The principal is basically how much money you’ll be borrowing to purchase your home. The interest is the expense you pay to the lender for borrowing the money.
You’ll have the option of either having an adjustable or fixed-interest loan. Adjustable interest loans allow you to lock down a low interest rate for about 10 years. After that your lender is free to increase or decrease the amount of interest you have to pay each month. This type of interest agreement is great if you’d like the opportunity to have your rates lowered in the future.
A Fixed interest Mortgage Reading PA has available is attractive to some because it guarantees that they’ll have the same interest payments each month until the mortgage is paid off. However, having a fixed loan completely blocks you from lowering your interest payments, unless you decide to refinance sometime in the future. Plus, mortgage companies intentionally increase fixed interest rates in order to see the best profits over the course of the loan. Talk to your loan agent about which agreement is best for you and your family.
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