But if you’ve never had a mortgage before, there are a few things you need to know. Even if you have had a mortgage, these common mortgage questions and answers can be a good refresher for you.
3 Common Mortgage Questions, Answered
Everyone has questions when they’re buying a home – it’s a big investment, and that’s why you work with a Realtor® who’s an expert in buying and selling. These are three of the most common, but if you have more, call us to ask. That’s why we’re here!
#1. Do you really need a 20 percent down payment?
The higher your down payment is, the lower your mortgage payments will be. However, there are several programs that allow you to buy a home with less than 20 percent down. (The most notable is a VA loan, which doesn’t require anything down.)
The catch: If you come up with less than 20 percent of a home’s purchase price as a down payment, your lender will most likely make you pay for private mortgage insurance, or PMI. You’ll have to pay for it until you’ve built 20 percent equity in your home, and it can raise your monthly payments significantly.
#2. How do you qualify for the best mortgage rates?
When you see mortgage rates advertised, they’re usually the lowest possible rates. Not everyone qualifies for those rates; in fact, what your lender quotes you might be a lot higher than what you saw advertised.
You can qualify for the best mortgage rates by having a good credit score, making all your payments on time, and putting down a hefty down payment.
#3. What’s the difference between a fixed-rate and adjustable-rate mortgage?
A fixed-rate mortgage is a mortgage loan in which your interest rate stays the same for the entire life of the loan. If you sign the dotted line for an interest rate of 3.5 percent, that’s what you’ll pay for the next 15 or 30 years (or however long your mortgage will last).
An adjustable-rate mortgage, which is sometimes called an ARM, is one in which your interest rate can fluctuate. Usually, there’s an initial fixed-rate period that lasts 5, 7 or 10 years. After that, your interest rate can go up or down based on current mortgage interest rates.
Are You Buying a Home for Sale in Bryn Mawr or Another Main Line Community?
Call us at 610-608-3119 or get in touch with us online to talk about what you need – we’ll help you find it.
While you’re here, check out our:
- Gladwyne homes for sale
- Lower Merion homes for sale
- Radnor homes for sale
- St. Davids homes for sale
- Tredyffrin homes for sale