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SELECTING THE CORRECT MORTGAGE PRODUCT?
As with many other products and services, mortgage products too have gone beyond the “standard vanilla” option. Years ago, the 30 year fixed rate mortgage was the most popular product offered by lenders. However, does it still make sense in today volatile housing market? In recent years, more and more products are being offered. There are many reasons why but the most important is the wider variety of programs enable borrowers more options. Selecting the correct mortgage product may be the difference between qualifying and not qualifying for your new home or for your refinance.
What is critical is for you to understand the terms and the financial impact on your monthly payments. For any given scenario, there may be a wide range of monthly payments driven by the different programs. In today’s market more than 40% of the loans closed are Adjustable Rate Mortgages and Interest Only Mortgages. Adjustable Rate Mortgages and Interest Only Mortgages are more popular because the borrower can afford more house or the savings are greater in the case of a refinance. In many cases, the
Borrower’s savings over the initial term period more than justifies the cost of a future refinance. In additional to the savings, one should look at the estimated time to stay in the current home. In the case of a first time Borrower, “your first home is not your last” and in many cases first time homebuyers are looking at trading up or relocating in 3 to 5 years.
In Fairfield County, the house appreciation far exceeds the standard fixed rate mortgage monthly principle payment. Therefore, it may be more cost effective to go with an Adjustable Rate Mortgage in order to maximize your monthly cash flow. This may be helpful when determining whether or not refinancing for debt consolidation. Both credit card debt and automobile loans may be refinanced into your mortgage cost. The goal would be to reduce your monthly expenses and to create a larger tax deduction by restructuring your housing mortgage cost. Once again selecting the correct mortgage product is critical.
In today’s option filled world, it is important to have sound understanding of the mortgage products available. For a home financial evaluation and for pre approvals, let Acorn Home Mortgage be your local mortgage professional. We will perform a complete review of your key factors and assist you in selecting the correct mortgage product.
For additional information, contact either Jean Dunphy or James Lane at 203 682 0246 or through our secure interface
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