From $0 to $100,000 of liability written $5.75
From $100,000 to $1 million, add $5.00
Over $1 million to and up to $5 million, add $2.50
Over $5 million and up to $10 million, add $2.25
Over $10 million, add $2.00
(The information presented here is generalized. Your specific mortgage situation may differ. Please consult your tax advisor or mortgage professional for more information.)
You can usually qualify for a mortgage loan of two to two and one-half times your household's income. For example, if your family has an income of $40,000 per year, you can usually qualify for a mortgage of $80,000 to $100,000. Some lenders use other factors to determine the size of a mortgage you are eligible for. In general, lenders prefer that your housing expenses (mortgage, tax payments, insurance and special assessments) do not exceed 25% of your gross monthly income. Other financial obligations (monthly payments extending more than 10 months) should not exceed more than 36% of your gross monthly income. Lenders need to research your credit history to see how well you have repaid loans in the past. Also, the lender will inquire about your employment history
Fixed Rate - With a fixed rate mortgage your monthly payment will always be the same for the life of the loan. The benefit is that you always know what your principal and interest costs are.
Adjustable Rate Mortgage- Adjustable-rate mortgages, or ARMs, differ from fixed-rate mortgages in that the interest rate and monthly payment move up and down as market interest rates fluctuate. Most have an initial fixed-rate period during which the borrower's rate doesn't change, followed by a much longer period during which the rate changes at preset intervals. The interest rate on your loan is set to reflect changes in the index interest rate. As the index interest rate changes, your payment will be adjusted annually to reflect those changes.
Both types of loans have their pros and cons. For example, a fixed rate mortgage is appealing because you always know what your payment will be. On the other hand, when interest rates are high, choosing the adjustable rate mortgage is favored because it is probable that the interest rate will drop in the future, resulting in smaller monthly payments. However, with an adjustable rate mortgage you run the risk of ending up with a higher payment should the interest rate soar during the life of the loan.
Adjustable rate mortgages can be advantageous because they generally offer a lower initial interest rate than a fixed rate loan, but an increase in the interest rate will result in a higher monthly payment, unlike the fixed rate loan.
There are several types of adjustable rate and fixed rate mortgage loans. Here are some of the more common loans:
There are several types of mortgage plans available that are appropriate for different needs. If you are more comfortable with a steady payment, then you will want to choose a fixed rate loan. You may select the common 30 year fixed rate mortgage. This type of loan is beneficial if you plan on living in your home for several years.
On the other hand, if you expect to keep the house for only a short period of time or prefer an adjustable rate mortgage, you will want to investigate other loan options. There are many mortgage programs available to fit your needs. Consult your real estate professional for more information.
*The statements made on this web page and any page that follows within the Genisy Title website are not intended, and shall not be construed to expressly or impliedly issue or deliver any form of written guaranty, affirmation, indemnification, or certification of any fact, insurance coverage or conclusion of law. Copyright © 2023 Genisy Title, Inc. - All Rights Reserved.
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