When a person considers purchasing a new home in New York, finding the most competitive rates should always be one of the highest priorities if not the highest priority. Even a few tenths of a percentage can mean thousands of dollars worth of savings, especially with the current property values. There are multiple lending options available, which are well suited for specific purposes. There’s the adjustable rate home loan, fixed rate home loan, and the jumbo home loan.
Differences Between Home Loans
Adjustable rate New York Home Loans are mortgage loans that adjust periodically over time. There is an initial interest rate which is typically lower than what a traditional 30 year fixed rate mortgage is. After a set period of time such as two years or five years, the rate is then adjusted to a higher interest rate. There are then additional periods during the lifetime of the mortgage where the interest rate will adjust again. These can depend on the current market conditions but overall a borrower will have to pay more in interest over the lifetime of the loan.
Fixed rate New York home loans, which are sometime referred to as conventional loans, are mortgage loans that are set at a fixed rate over the lifetime of the mortgage. These are typically offered as a 15-year or 30-year mortgage, though other options can or may be available in certain financial situations. The benefit of having a fixed rate mortgage is that the borrower or borrowers do not have to worry about the payments adjusting. Of course, the downside is that if interest rates go down, the borrower will still have to pay the same fixed rate in mortgage payments.
A jumbo loan is a mortgage loan that is higher than the average. It can vary from state to state, but it is typically for any loan that is well over $400,000. There is even the super jumbo loan, which is classified for loans that are over $650,000. Jumbo loans and super jumbo loans often have interest rates that are higher than the traditional or conventional loans because there is obviously more risk involved. These risks are factored into the overall cost of the mortgage.
Knowing the thresholds for different types of loans can save the borrower or borrowers a lot of money. For adjustable rate mortgages, it is important to understand and know the dates in which the rates will adjust. There might be opportunities to refinance the mortgage into another package before the rate adjusts, thus saving the borrower money. For jumbo or super jumbo loans, getting under the limits can mean saving a lot of money, as well.
Members Mortgage Corp. is a registered mortgage broker in the state of New York. The company was first founded in 1999 and offers no fee, New York home loans to police and firefighter union members and their families.
