Low Mortgages Rates in Summervile SC with Homefront Mortgages NMLS #264907

If you are looking to relocate or buy a home, now is the time to start to lock down your mortgage. Traditionally the lowest rates are early in the year before the summer home purchasing volume increases. However, with an unpredictable federal reserve policy, the sooner you lock in the the low rates the better.

How to Find the Best Mortgage Rate

If you’re ready to get going in your search for the best mortgage rate, here are four tips that will ease your search. If you’re unsure of the type of mortgage you’ll need contact Homefront Mortgages to discuss the differnt options. Homefront will discuss with you your real estate purchase goals and explore all of the available purchase options with you.

Tip #1: Compare Rates

Homefront Mortgages can show you mortgages rates from mulpitle lenders to find the lowest available rates for you. If you walkin to a traditional lenders office, you will presented with the mortgage rates for that particular lender. As a full service mortgage broker, Homefront Mortgages can shop mulptiple lenders to compare them for you.

Tip #2: Enhance your credit score

Keeping your credit in top shape is paramount, especially if you’re applying for a conventional loan. The higher your score, the better your interest rate and the more loan choices you’ll have. However, if you have less than "Perfect" credit, you can get a home loan. If you have a lower score, you may need to shop for a less expensive house or be prepared to refinance the home once your score improves. Homefront Mortgages will discuss these strategies with you so you can make an informed decission.

Tip #3: Save for your down payment

Different loan types require different down payment amounts. Although it can be painful to save enough for a down payment, paying more up front can help you nab a better interest rate and save you money as you pay down your loan. It may also save you the cost of mortgage insurance, which many lenders will charge if you have a lower-than-normal down payment.

Conventional loans typically requires 20% down and will avoid the need to pay mortgage insurance. However, there are loans availabel for substantially lower down payments. With an FHA loan your down payment can be as low as 3%. THere are also HUD based loan programs that could be as low as $0 down or $100 down. Homefront Mortgages will discuss all of these options with you to find the option that best fits your needs.  You can use this Mortage Calulator to get an idea of payments. Click here.

Tip #4: Consider how long you’ll be in your house

If you know you’ll be in your home for a relatively short time before selling, looking at adjustable-rate mortgages can make more sense. That’s because you can take advantage of the ARM’s low initial interest rates, then sell the home before your rate begins to reset. Be absolutely sure you will only be in your home a short while. Many homeowners were banking on ARMs, but suffered rate increases when the value of their homes fell in 2008 and they were unable to sell.

If ARMs seem like too much of a risk to you, look seriously at a shorter-term fixed rate mortgage. Your monthly payments will be larger, but you will nab a much lower interest rate. Ultimately, you’ll pay much less over the life of the loan with the added bonus of building equity much faster.

Common Types of Mortgages

Obtaining a mortgage doesn’t always mean you’ll be coughing up 20% down and forking over the same payment for 30 years. Take a look at today’s most common types of mortgage so you understand what’s the best for you — and obtain the best mortgage rate in the process.

Fixed-rate mortgages

A fixed-rate mortgage is by far the most common type of home loan. It’s also the easiest to understand. Though the proportion of principal versus interest on your bill will change over the course of the loan, you still pay the same amount every month. Your interest rate is locked in when you close on the loan, so you aren’t vulnerable to sudden increases in interest rates.

Of course, while you aren’t vulnerable to interest-rate increases, you’ll lose out if rates decline — you’ll be stuck paying that higher rate. It can also be harder to qualify for a fixed-rate mortgage if your credit score is less than stellar, particularly if interest rates are high. Down payments are typically high, too, with most lenders requiring 20% of the loan to avoid pricey mortgage insurance.

Fixed-rate mortgages are most often offered for 10-, 15- or 30-year terms, with the latter being the most popular choice. Longer terms generally mean lower payments, but they also mean it will take longer to build equity in your home. You’ll also pay more interest over the life of the loan.

Adjustable-rate mortgages (ARMs)

ARMs make home-buying more accessible for more people. Typically, they offer lower down payments, lower initial interest rates, and lower initial payments, making it easier for a wider range of people to qualify for better homes. The interest rate remains constant for a certain period of time — generally, the shorter the period, the better the rate — then rises and falls periodically according to a financial index.

The main downside is obvious: If your ARM begins to adjust when interest rates are climbing, your escalating payments could start to squeeze your budget. It can also make annual budgeting tricky, and if you want to refinance with a fixed-rate loan, the cost can be quite steep. Ultimately, with an ARM, you’re accepting some of the risk that your mortgage lender would absorb with a fixed-rate loan.

There are several kinds of ARMs. One-year ARMs typically offer the best mortgage rates, but they’re also the riskiest because your interest rate adjusts every year. At slightly higher rates, hybrid ARMs offer a longer initial fixed-rate period. Common hybrid loans include 5/1 mortgages, which offer a fixed rate for five years and then and an annually adjustable rate for the next 25 years.

FHA and VA loans

FHA and VA loans are government-backed mortgages. FHA loans require much smaller down payments than their conventional counterparts. In fact, you may qualify for an FHA loan with as little as 3.5% down. They may also be available to those with less-than-perfect credit. However, you’ll likely be on the hook for mortgage insurance each month in order to help the lender blunt some of the risk. That makes FHA loans a good option for those with a steady, healthy income without enough savings for a huge down payment. My husband and I purchased our first home using an FHA loan and roughly 10% down. Though we did have to pay mortgage insurance, we received a good interest rate and could easily handle the payments with our income — and of course, we were happy to start building equity instead of paying rent month after month.

VA loans are also available with low (or even no) down-payment options, minus the mortgage insurance required on FHA loans. However, the VA typically charges a one-time funding fee that varies according to down payment. You must have a military affiliation to get a loan — active-duty members, veterans, guard members, reservists, and certain spouses may qualify.

Interest-only mortgages

Technically, interest-only mortgages are a type of ARM. These mortgages are compelling because they allow home buyers to pay only interest for a certain period at the beginning of the loan, keeping payments as low as possible. They can be a good choice for someone who expects a significant increase in income down the pike.

If this sounds like a sweet deal, it’s because interest-only mortgages come with tremendous risk. They can goad buyers to purchase much more home than they would otherwise be able to afford. Your payment is lower initially, because you are only paying interest, and not principal. Once the interest-only payment period is up, your payment will jump significantly when you begin to pay the principal of the loan, plus you can experience a rate increase. With these risks, you’ll probably want to steer clear of interest-only mortgages as your primary option.

Homefront Mortgages will help you understand all the diferent types of loans and help you choose the best one for your needs. Contact Homefront Mortgages today by clicking here or calling 843-261-6181843-261-6181. You can also email mdenton@hfmtgs.com