Spring is just around the corner, and that is the time when houses go up for sale all over the Coastal Empire. You may have been checking out the properties and you really like one particular house. Now is a good time to think about the financing and the type of mortgage that best suits your needs. There is more than one type of mortgage arrangement and you may want to consider all of your financing options.

Traditional Is One Way but Not the Only One.

When folks think about mortgages the traditional 30 year mortgage comes to mind. It means that you are locked into a fixed interest rate for the life of the mortgage unless you decide to refinance later on. There is also the possibility of a 15 year mortgage, which has a fixed rate but larger monthly payments. Some people really like this because it assures a fixed cost every month. However, it also means that money which could be used for other investments will not be available. It is something to consider.

An adjustable rate mortgage, known as an ARM, is a possibility for somebody who is willing to take a risk. The interest rates on these mortgages are fixed to an index such as the ten year bond yield and the rate is adjusted later on In other words the mortgage rate can go up after a few years. There are caps usually placed on the amount of adjustment in any given time period. The benefit is that if the adjustable rate is low you will have some extra cash every month.

The Length of Ownership Is Important

The traditional mortgages assume you're going to be living in the house for a long period of time. That might not be the case, and you may be planning on living in the area only for a few years. There are some financing options that are more sensitive to short-term ownership.

Balloon mortgages are short-term affairs that ordinarily last no more than seven years. At the end of the time period the outstanding balance has to be paid, which can be done by refinancing the home or paying what is owed. It is also possible to have an option ARM. Interest rates are subject to change every month and there is no upper limit. Either one of these alternatives to the traditional mortgage does carry some risk. The option ARM will become more expensive as time goes on, so it is better suited for someone who will only be leaving the home for a while. If the market should ever tank as it did in 2008, people with balloon mortgages are going to be in a very desperate situation.

Good Advice Is Needed in Deciding on the Mortgage

Whether it is a traditional mortgage, or one of the alternatives being considered there ultimately will be a meeting with a bank or other lending institution. A real estate agent may be able to help. Any one of them can give you insights they have about dealing with lending institutions in Savannah. A meeting with a real estate agent can help a person prepare for pre-approval and other meetings about mortgages.

We Provide a Helping Hand

Live Love Savannah specializes in helping people make the right decisions about financing. We are a boutique real estate agency in Savannah, and we are very familiar with financing a home purchase. Although we are not financial advisors nor do we claim to be, we can share our experiences with anyone. That is in addition to the marketing and sales promotion work we perform on behalf of the client. We want to help you find that charming home for you and your family. Please do feel free to give us a call at (912) 341-6601 or email us at [email protected]


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