The decision to purchase a home is probably one of the biggest commitments in life that a person will make. It entails taking on a large amount of debt over a long number of years. Because it is such a large financial responsibility, it just makes sense for an individual to compare mortgage rates before they go through with the process. A small change in the interest rate can save a person in Camas Valley, OR thousands of dollars. Wirefly simplifies the process of discovering which home loans are best by comparing different scenarios and mortgage options so that individuals who are purchasing or refinancing a home get the best deal.
Buying a home is not cheap. Even the least expensive homes in Camas Valley, OR cost a significant amount of money. A mortgage will probably be the most expensive bill that individuals will pay. It will be very difficult to pay for a home loan with cash, so most people will need to secure a loan to finance the purchase. The interest rate is how much money in interest a borrower will pay, and it is important for individuals to get the lowest rate. One factor that influences the rate is a person’s credit score. If a borrower has good credit, he is more likely to get a lower rate. It is important for people to get a reliable lender who will make sure you get a good rate on the loan. In some cases, a person’s real estate agent will recommend a lender they he would like you to use. It is not a good idea to just go with that lender. Keep in mind that the realtor wants to get paid, and the quicker the deal is closed, the faster he will get his money. It is important for borrowers to be patient. A lot of money is at stake, and individuals will probably be paying on the mortgage for years; therefore, do not rush the home loan process. People need to make sure they are not paying too much for the loan. Borrowers want to compare their options. They can look at their local bank in Camas Valley, OR, or they can look at a nationwide company online. This is where Wirefly can be very helpful. We can help borrowers compare rates to ensure that they can see what rates are offered. If a person’s credit score is low, he might consider raising it before he applies for a home loan.
A conventional home loan is a popular option with many people. If a person puts down a 20 percent down payment with this type of loan, they are not required to pay any mortgage insurance. Conventional home loans come in a few different types. They include fixed and variable rate options.
Fixed rate mortgage loans are ideal for many homebuyers in Camas Valley, OR. They allow a person to have a long-term interest rate and payment that is fixed. It allows a person to budget far off into the future as they know that their monthly payments will not change. Two types of conventional loans are typically available for both individuals. These include the 30 year fixed-rate and 15 year fixed-rate home mortgage loans. While very similar, they do have a few differences. A 30 year fixed-rate conventional home loan is ideal for individuals who may already have some other debt. They can create a lower payment by choosing a 30 year option. The disadvantage is that they will have to carry the debt for 15 more years than they would with a 15 year fixed-rate home loan.
Individuals who may be relocated in Camas Valley, OR due to a job change or other reason and know that they will only be living in the area for less than five years, may want to look at the option of obtaining a mortgage with an adjustable rate. The advantage of using an adjustable rate mortgage (ARM) is that it offers a much lower interest rate for the first few years. 3/1 and 5/1 ARMs are a few of the recognized adjustable rate mortgages that people usually choose. In the case of the 5/1 ARM, a person would pay a fixed rate for the first five years that they have the loan, and they would pay a variable rate every year after. In an environment where interest rates are rising, this would not be suitable for someone wanting to stay in their home for a long time as payments would increase each year once the fixed-rate time is over.
There are other choices that you need to make rather than just a fixed-rate or an adjustable-rate. Government-backed loans, such as FHA, USDA or VA loans, are available, or you can obtain a conventional loan. A conventional loan is not backed by the federal government. The requirements for a conventional loan are different than those for FHA, VA, or USDA loans.
The Federal Housing Administration, or FHA, insures loans that are run by the Department of Housing and Urban Development, or HUD. This is a section of the federal government. All types of borrowers are eligible to apply for FHA loans in Camas Valley, OR, not just first-time homebuyers. These loans are less risky for lenders because the government insures them if you default on the loan. Normally, the down payment amount only needs to be 3.5% of the cost of the loan. With this type of loan, you do need to pay mortgage insurance, so your monthly payment will be higher.
If you are trying to refinance a mortgage on your Camas Valley, OR home, you are actually applying for a new home loan. If your application is approved, you will be required to pay any necessary closing costs and fees. Keep this in mind if you are looking to refinance to get lower interest rates. The price of the fees may outweigh any savings you might see with a lower interest rate. The exception to this would be if you are looking to refinance to trade an adjustable rate loan for a fixed rate one. Interest rates are likely to increase in the future, so having a fixed rate loan may end up saving you some money.
If you are trying to refinance a mortgage, the most important thing you can do is pay close attention to your credit score. With a higher credit score, you present yourself as a lower risk to lenders. Try to keep your score in the 700 range and maintain a low debt to income ratio. This will help you put the right foot forward when applying for refinancing.
