What is the Ideal Mortgage Loan?
While we all have different preferences, there are some things we all probably want in a SO (significant other). In an ideal world, they would probably be smart, funny, supportive, and got a killer credit score.
But in reality, people and loans won’t meet your ideal specifications. Otherwise, we’d just call it “free love/money.” Which we don’t.
Nothing in life is free, including people and loans, but that doesn’t mean that they’re not worth the investment.
Here are some redeeming qualities that loans can have:
- A low interest rate
- No prepayment penalty (or prepay), meaning you won’t be faulted if you refinance, sell your house, or pay back your loan earlier than expected
- However, on the bright side, loans with prepays usually have lower interest rates
- A cap for how much your interest rate can increase if you have an adjustable rate mortgage (ARMs) or variable rate mortgage
- Some ARMs, known as hybrid ARMs, have fixed interest rates for the first few years that’s lower than that of fixed loans
At the same time, every person has different needs. Therefore, make sure that your loan is sufficient for you and can help you cover all the costs associated with homeownership.
Homeownership costs include:
- a small down-payment (as low as 3%)
- private mortgage insurance (PMI)
- closing costs, mortgage points, origination fees and other transaction fees
- an earnest money, escrow deposit, or good faith deposit (they all mean the same thing)
- home inspection and appraisal cost
- title insurance cost
- maintenance and repair costs
- According to Bankrate.com analyst Deborah Kearns, “Consumers should expect to set aside one percent of their home’s purchase price each year to keep in a savings account to cover [maintenance and other unforeseen] expenses.”
This should give you an idea of what to look for in your mortgage. The best way to see if you have a good rate, however, is to explore different options.
Comparing rates from different lenders can be accomplished one of two ways:
- Go to multiple different lenders in person, and ask for their terms, or
- Download our app (Android or Apple iOS) and compare rates from over 25 different lenders through one convenient platform!
Whichever way you choose to compare rates, more power to you.
Just don’t forget to read the fine print and don’t be afraid to negotiate! Not all loans are created equal and you’ll need to pay attention to the details to get yourself the best mortgage possible.
While no loan will meet all the criteria listed above (thus the word “ideal”), as long as yours meets your financial requirements, you and your loan will be a match made in heaven. #bae #invitemetothewedding