The fall in real estate market had its repercussions throughout the economy but it has also given an opportunity to cling on
. The hope is in the form of reduced mortgage rates. Many individuals are able to own a home at these rates today. An individual should assess his needs carefully to decide which among all the mortgage choices best fulfils his requirements.
While earlier people used to approach banks for loans today there are better mortgage choices available with mortgage brokers. Mortgage brokers also offer various more schemes and advantages that would not be possible with bank mortgages. It is easy to locate mortgage brokers in your city with a quick search in the net. They assist you with your loan and may even offer loans at lower interests than banks.
The basic requirements before getting a mortgage are verification of income and its source, the amount of down payment, personal details of Tax Returns and Bank statements for conducting credit checks. They also calculate your GDS (Gross Debt Ratio) and TDS (Total Debt Ratio) ratios. A GDS below 32% of gross income is considered preferable for a mortgage.
The duration of your loan period is needed to ascertain your mortgage rate. You get mortgages for time periods extending from 15 to 30 years. However the down payments vary and it is always better to choose short term mortgages as they would require lesser amount than longer ones in the long run.
Another deciding factor is the rate system. The two types of rates include the Adjustable Rate Mortgages (ARM) and fixed rates. ARMs are mortgages whose rates adjust according to the terms of the contract. They have the risk factor of rate speculation and so they generally are available at a lower rate than the fixed mortgages. On the contrary fixed mortgages charge a fixed interest rate throughout the period of repayment. For people planning a long term investment with a fixed planned expenditure every month, this is the best option.
Balloon mortgage is another possibility that you can select from the mortgage choices available to you. This type of mortgage is for a short period only and you will be expected to make a full and final payment at a pre-determined time to close your loan under this category. In case you need a short term loan and are not looking for a permanent ownership of your house, go for it.
As is evident, today loan seekers have a lot of mortgage choices especially in this reign of lower interests, competitive mortgage brokers and availability of houses at economical prices.