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What Should I Look For In A Mortgage?

April 3rd 2014 - There are many factors you must consider before signing the final paperwork and moving forward with a new mortgage for your property. Like manyAmericans, you might bemaking the mistake of focusing all of your energy on the interest rate and ignoring the most important aspects of selecting the right mortgage that fits your needs.

Make sure you get the best mortgage that you qualify for.  Do a lot of research about what is right for you and only work with a mortgage broker who sounds confident and knowledgeable. “Working with a knowledgeable mortgage broker means that we will fully evaluate your financial situation, give you all of the options available to you, and advise you on which option is the best for you,” says Alexander Estrin, President of Western Capital Group, a real estate investment, mortgage, and management firm in Beverly Hills, California. It is very important that you select a smart mortgage broker because it will save you a lot of money and headaches in the future.

Be mindful of the length of the term of the mortgage. The shorter the fixed term, the lower the interest rate is. On one hand, if you can afford a 15 Year Fixed Mortgage, and it won’t inconvenience you financially, then you should select this option because it has a lower interest rate than a 30 Year Fixed mortgage. On the other hand, a 30 Year Fixed Mortgage may be more suitable for your needs because lower payments add flexibility to your life.

Think 10 years into the future. Decide whether you will be selling or refinancing your home in the next 10 years. If the answer is yes, you should consider an Adjustable Rate Mortgage. “ARMs have rates that are not fixed for the entire term of the loan. For example, if you plan on selling the home within 7 years, it makes sense to get a 7/1 ARM that is fixed for the first 7 years of the loan and becomes adjustable thereafter. The interest rate of this loan will be lower than that of a 30 Year Fixed,” says Alexander Estrin. It is important to ask yourself these questions when selecting your best mortgage option.

Choose the correct loan amount. The more equity you have in the home, the lower your interest rate will be. For example, the interest rate will be lower on a home with 20% equity than a home that has 10% equity. In addition, ask your mortgage broker to tell you the thresholds of conforming loan limits, because these make a difference on the rate as well.

Get the mortgage you can afford long term.While a lower interest rate may look appealing at first, it might set you back financially in the future. You don’t want to get a 5/1 ARM while planning to stay in your property for the next 10 years, unless you project that your income is going to increase over the next 5 years as well. “An unusual event caused mortgage rates to hit rock bottom a couple of years ago. The rates we saw during those years are very unlikely to appear again. Rates are more likely to rise over the next 10 years. You don’t want to experience payment shock when your mortgage starts adjusting and your payment goes up,” says Alexander Estrin. Make sure you select a mortgage payment that you can afford for as long as you own your property.

Alexander Estrin is available to help you arrange financing for your real estate. You may reach him by calling Western Capital Group at (424)203-1181.For more details please visit  www.westerncapgroup.com