 Q: What are points? A: Points are what is paid to a lender at time of closing in exchange for a lower interest rate on a loan. This is considered a pre-paid finance charge,This charge will be tax deductible. For confirmation, please check with your financial advisor or accountant.
Q: What is an ARM or Adjustable Rate Mortgage?A: An ARM loan is a mortgage that has a Fixed Rate for a pre-determined period of time, then adjusts according to market conditions.The rate will then adjusts periodically,usually every 12 months. These loans do have a 30 year payback period and you always get lower rate with ARM than FIX.
Q: What is the advantage of a longer-term fixed rate loan?A: The obvious advantage is that by stretching out the payback period over a longer time period, your
monthly payments will be lower. For example: a loan on a 30 year term will have a lower monthly payment than the same loan amount on a 15 year term.
Q: What is the advantage of a shorter-term fixed rate?A: The shorter you payback period, the less the loan will cost you. By paying a higher monthly note for a
shorter time, you may save a substantial amount of interest paid on the loan. Also, you will develop equity in
your home faster this way.
Q: What is the advantage of an ARM loan?A: An ARM loan may be a good option for someone who wants to refinance the current mortgage on the
home but is planning to move in a few years. You may get a lower initial interest rate than if you were to
select a fixed term and pay less interest in the meantime.
Q: How do I "Lock-In" my rate?A: Please call your Mortgage professional to request your rate to be locked. Lock terms available are for
15, 30, 45, 60 days. In some cases you may qualify for a rate lock period of up to 270 days.
(*Please note that the longer lock periods may require price adjustments on your loan.)
|
