Consult a Springfield, MO real estate professional.
A mortgage is a special type of loan used in real estate during which a lien is placed on the property being purchased to secure the finances while they are being paid off. Mortgages can be customized to suit the lender and borrower based on a number of variables. This is why many new homebuyers will shop around to get the best deal before signing on the dotted line.
Here at Southwest Missouri Realty, our goal is to help you secure a home with as little hardship and headache as possible. That’s why we’ve compiled this helpful guide on mortgages, direct from Springfield, MO real estate professionals.
Most of the variables surrounding a mortgage are based on the amount of time and money that will be spent in order to pay back the loan. This includes factors such as the interest rate, which may be fixed or variable; it also includes the term of the loan, which outlines the number of years before the loan is paid back. Other variables such as prepayment options and payment schedules may also be detailed in the loan. These are definite considerations for Springfield, MO real estate.
FRM vs. ARM
Although there are many variables to consider, there are generally just two types to think about in the long run: fixed-rate mortgages or adjustable rate mortgages. Just as the titles suggest, these loans differ by the way that rates are calculated.
Throughout an FRM, the interest rate will remain the same. It is calculated at the beginning of the loan based on the market at the time. This can be both a positive and negative financial factor depending on how the market turns during the repayment period.
An ARM differs from the FRM because the interest rate fluctuates as the market rises and falls. This means that you could save money on payments at some points during your repayment but pay more at other times. Your Springfield, MO real estate broker can walk you through these loan types before you settle on one.
Obtaining Your Loan for Springfield, MO Real Estate
In order to qualify for a mortgage in the United States, you must first submit a credit check along with other pertinent financial information. Your broker may request to see proof of employment such as income statements or pay stubs. You will also be asked to list previous addresses that you have lived for the past two to five years.
Most mortgages require a down payment; this amount will be calculated based on the price of the home being purchased. Usually, a down payment of 20% is sufficient, although some brokers require more depending on your credit history and income. This payment will reduce the amount of your mortgage, offering some reprieve from ongoing payments. The more you can pay at this time, the better.
For more information on mortgages and Springfield, MO real estate, call us here at Southwest Missouri Realty today!