Which Mortgage?

Which Mortgage is right for you?


With so many mortgage options on the board now days, how do you know which one is right for you?

There are literally thousands of loan options out there and most mortgage brokers can get you any one of them. But how suitable are they really for your situation? So many mortgage lenders are not putting the right buyers with the right type of loan anymore and you need to be more aware of the situations and costs involved; not only in the short run for for the long run as well.

  • Buyers are often steered to the wrong mortgage, to a mortgage that is unaffordable, to a refinance that provides them with no net benefit, or to a high-price-loan provider.

Many times lenders put buyers into a program because it fits for the lender but bad mortgage selection in many cases means placing borrowers in mortgages that are too risky for them.

Make sure you know what you are getting into and how long certain perks last before signing anything.  This is a common problem:  "I took this loan because the monthly payment was much lower than any of the alternatives. The interest rate was only 1 percent because I qualified for a special program. I was led to believe that it would last for five years. I realize now that it didn't and that my loan balance has been going up every month. I am afraid that next year my payment is going to increase so much I won't be able to afford it. How do I get out of this mess? Do I have recourse against the loan officer (broker) who talked me into it?"

Don't be stuck like this person. know what you are getting into and verify it with a few lenders before signing. Shopping your mortgage broker is not only ok but good business sense especially when you are making one of the biggest purchases of your life.  In all too many cases, however, they don't understand why the payments are lower, and are not prepared for the risks of higher payments in the future. The marketing, furthermore, is often based on deception.

If lenders were held liable for making unsuitable mortgages, they would have to delegate operating responsibility to those who deal directly with borrowers: loan officers and mortgage brokers.  Loan providers have a financial interest in the outcome. Their business is selling loans. Finding an honest and forth-coming broker is the key to knowing which loan is best for you and your family.

There are Adjustable rate mortgages, fixed rate, some that start low but rise, interest only, loans with pre-payment penalties and those without. Talk to your lender and your Crescent Realty agent about anything that doesn't seem to compute. Make sure you know what you are signing and that you feel comfortable with the consequences now and in the future.

 


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