Why is mortgage pre-approval important?

Mortgage pre-approval determines the maximum mortgage loan for which you qualify.  It allows your realtor to show you a range of properties in your price range and to make a realistic offer on your purchase; therefore, saving time in the negotiation process.  It also holds the interest rate for a period of 60 days (90 days for new construction), guarding you against rate fluctuations.

What is the difference between a fixed-rate loan and an adjustable-rate loan?

With a fixed-rate mortgage, the interest rate stays the same during the life of the loan.  On the other hand, with an adjustable rate-mortgage (ARM), the interest rate changes periodically typically in relation to an index (an index is an economic indicator that lenders use to set the interest rate for an ARM.  Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin).  While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will change as the rate of the index changes.  There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.

How do I know which type of mortgage is best for me?

There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, please call us and let our experienced loan officers find the best option available to you

 

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