If you’ve been thinking of purchasing a new home, it’s likely you’re considering applying for a mortgage. To get the best deal, you’ll need to know a few secrets about mortgages that lenders know but are not always willing to share.
A shorter-term loan saves you big money
Most mortgages have fixed rates and terms. Many Utah mortgage companies fix the terms between 15 and 30 years. Recent interest rates are at the level of three and four percent. By taking a longer-term mortgage, you pay lower installments per month. However, by the time you’re through with paying the mortgage, you’ll have paid tens thousands of dollars more than you would have had you taken a shorter-term mortgage.
Opt for a bi-weekly payment schedule
Some lenders will allow you to pay on a bi-weekly basis instead of the conventional monthly payment scheme. This means you pay half of the required monthly installment every two weeks. By the end of the year, you’ll have paid an extra month, hence shortening the loan term and saving significantly.
Save more with adjustable rate mortgages
Typically, adjustable rate mortgages begin with lower interest rates fixed for a certain period. Often, this period is five to seven years. Afterwards, the rates are adjusted to a higher percentage, meaning you pay more every month, but for a shorter period. This could save you a lot of money, provided the bank doesn’t penalize you for early payment.
It’s wise to have a middleman
There are reliable mortgage brokers that can offer assistance in finding the best mortgage for you. Such agencies provide crucial information about the best current rates of the many types of loans available and can help you fill out the forms and assemble the necessary documents you need.
Purchasing a home is an exciting venture for most people. Given the complex financial undertaking of taking a mortgage to finance the home purchase, it’s critical to do your homework and get the best deals.