Monmouth Mortgage Rates

Mortgages in Monmouth County

Going mortgage shopping can be a daunting process, but before you talk to any banks you need to know the different types of mortgages out there. The safest and most common mortgage type is a 30-year fixed rate mortgage. This means that your rate will never change, your payments will stay the same, and you will have the mortgage fully paid-off in 30 years. Fixed rate mortgages also come in shorter and, in some cases, longer terms to fit your needs. Next is the variable rate mortgage. Depending on the bank, variable rate mortgages can change every year or every month with the market fluctuations. This mortgage is a dangerous one because it is hard to predict how high your payments may get depending on the interest rate.

A new mortgage product that has recently gained popularity is the adjustable rate mortgage (ARM). This mortgage has a 1, 3, or 5-year lock-in period for your original rate and then adjusts from there. There are literally hundreds of variations on this product so be sure to ask your lender a few important things. The first thing you need to understand is exactly how long your original rate is locked in. If you plan on staying in the home less than that lock-in period, then choosing this type of mortgage is a no-brainer. If you plan on staying in the home longer than your rate is locked in, then there are a few more things you need to understand. Once your rate expires, how do you lock in a new one? Does it cost anything to lock in a new rate and how long is that rate good for? How does the lender determine what rate your mortgage will adjust to? These are all important questions you need to ask before committing to this type of loan product.

FHA Mortgage Loans in Monmouth County

One of the great FHA mortgage programs is the down payment assistance initiative. The really nice thing about FHA mortgages is that they require as little as 3% down payments. Even so, there are still some consumers who do not have the wherewithal to save that much money. The FHA offers a type of mortgage that requires as little as 1.5%. To qualify the seller must agree to the FHA terms and pay the closing costs. Then the sale price of the house must be at most 97% of the appraised value to give the buyer a small equity cushion. If you have enough money to pay for a mortgage, but have not had the time or extra cash to save for a down payment, be sure to ask your lender about this valuable program.

Monmouth County Loan Modifications

Since the mortgage collapse, loan modification has been a buzz-word in the industry. Unfortunately, most consumers that need a modification do not even know what it is. A loan modification is for the consumer that is having trouble making their monthly mortgage payments. Typically these homeowners are in other financial trouble as well and do not qualify for a refinance. A loan modification begins when a borrower in trouble contacts the lender. A homeowner must prove to the lender that they are hardship. This can include a death of a co-owner, job loss, divorce, or any other life change that affects your income. The lender then tries their best to negotiate terms in which the borrower will be able to make their payments in the future. This can include lowering the interest rate, lowering the principle amount, or extending the term of the loan.