Buying a new home is a big deal for most people. This process basically involves you putting down thousands of dollars and agreeing to pay thousands more over the next 15 years or so. That being said, you have to think long and hard about every step in this process. One of the biggest steps in this process is getting a mortgage from a company like Village Mortgage. The kind of mortgage you get will determine how your financial future fairs.
One of the biggest problems with mortgages is that new homeowners aren’t sure where they can save money. One of the best ways to save money is to consider a short-term loan. Yes, most lenders will offer you a long-term loan, with lower interest rates, but a long-term loan isn’t always what it seems. With a 30-year mortgage you will likely pay thousands of dollars more than you originally borrowed. Short-term VA Home Loans come with higher interests rates, but borrowers will be done paying sooner than later.
You can also save money by locking in a good fixed-rate mortgage. Often times new homeowners will get tempted to sign up for an adjustable-rate mortgage (ARM). An ARM normally comes with lower rates, but these rates will begin to fluctuate after a while. The condition of the market will usually determine how your ARM will benefit or hurt you. Fixed-rate VA Home Loans are normally higher than ARMs; however, if you lock in a fair rate, you don’t have to worry about it unexpectedly increasing.
Lastly, you should consider your financial situation. Can you actually afford to buy a home right now? Is your credit score in good standing? The interest rates on your mortgage will depend heavily on your credit score. In most cases, a credit score of 720 or higher will guarantee you access to lower interest rates. However, if your credit score is at 640 or below, you can expect to deal with interest rates that are much higher. Try working on your credit before entering the home-buying process.
These are just a few tips new homebuyers can use in order to save money. Again, a short-term loan is great if you can afford to make the payments. You can also save money by agreeing to a fixed-rate mortgage instead of an adjustable-rate mortgage. Also, remember to work on your financial situation before buying a home.
©2014 Village Mortgage Company, NMLS #6331 , CT #6331, RI #6331, Mortgage licensed lender in MA ML6331. This is not an offer to extend credit to any individual who may be entitled to a more complete disclosure per RESPA, TILA, HOEPA or any other more applicable federal, state or local law or regulation. Rates, terms, fees, products, programs and equity requirements are subject to change without notice. Village Mortgage, Equal Housing Lender.
