Obtaining a mortgage can be a very important part of the home buying process. While some Connecticut buyers may look at it as a daunting task, with a little guidance and the right loan officer this process can be made much more understandable and stress-free. One thing to understand is that there isn’t just one type of mortgage. In this respect, mortgages are like shoes. There are many different kinds of shoes, dress shoes for work, flip-flops for the beach, boots for the snow, sneakers for running etc. In a similar way there are many, many different kinds of loans available each with a different purpose. It makes sense therefore to speak with several different lenders not only to find out which offers the product that fits you best, but also to see which loan officer you can work best with.
Even though there are many different kinds of loans they all carry a term (the lifespan of the loan) and a rate (the amount of interest charged on the principle balance you borrow).
Term – The longer the life of the loan, the more payments you have to amortize the principle balance. To say it another way, the longer the life of the loan, the smaller the payments towards principle. Most commonly buyers seek out a 30-year amortized loan, but in certain situations 15-year, 10-year and even 5-year amortizations also work. Your loan officer will help you to determine what works best for your needs and situation.
Rate – The rate on your loan could be either fixed or variable. A fixed rate loan has a rate that doesn’t change for the life of the loan. A variable rate loan has an interest rate that starts at one rate, then can fluctuate either up or down based on the index to which it is tied. Again, your loan officer will be very helpful in helping you to determine which is more appropriate and advantageous in your case.
Contact Ferrigno Realtors for more information on mortgages in Connecticut or buying CT real estate.