Maryland Mortgage Guide and Home Buying Information
Looking for a Maryland mortgage?? Mortgage information is readily available on the internet and with a little research you can find a home loan to match your individual needs.? Navigating through the massive amount of information can be a task, explaining the Maryland mortgage process and type of programs offered in a plain simple manner is the purpose of this guide.
Here are the top 5 things to do before obtaining a Maryland mortgage: Educate yourself, some of the best Maryland mortgage information and tools are right here on our website.? Know your options, every Maryland mortgage program will offer options from getting the pre-payment penalty waived; to buying down the rate on your loan; to the term/length of your loan, choices for a fixed or variable rate loan, and the list goes on so know what options are available to you.? Determine your goals; this will help you decide if a fixed rate, variable rate (ARM) or a balloon mortgage will work best for your short or long term situation.? Do comparisons by utilizing the mortgage calculators and running various scenarios, see where your payment will be with different down payment amounts and different term lengths and rates.? Then crunch the numbers, see if you can comfortably budget for the new loan payment.? Keep in mind that not all mortgages will include the taxes and homeowner insurance in the monthly payment.? Know if your new payment will be PITI or PI only (PI is principal and interest only and you pay your property taxes and homeowners insurance separately) and (PITI is principal, interest, taxes and insurance all combined into the monthly loan payment), as this can make a big difference when calculating and preparing for your new monthly budget.
The most common Maryland mortgage programs are fixed rate, adjustable rate, balloon mortgages, and second mortgages or a home equity line of credit.? The fixed rate mortgages are often elected by first time home buyers and homeowners planning to live in their home for an indefinite period of time.? Fixed rate mortgages are a good choice for those individuals because the rate stays fixed and never changes from the first payment of the loan until the last.? Fixed rate mortgage terms (length of the loan) are usually offered in 15, 20 or 30 year terms and some programs now offer a 40 year loan.? An adjustable rate mortgage (commonly referred to as an ARM) has an initial starting rate that remains fixed and then adjusts after the initial fixed period.? Adjustable mortgage terms are amortized over 30 years to keep the payment low, the initial fixed rate period is usually 1 to 7 years, and then the rate is subject to change.? How the rate changes is dependent upon the current market conditions at the time the fixed rate period expires, the rate can move up or down.? ARM?s are usually the lowest rate of all Maryland mortgage types.? Balloon mortgages are similar to the fixed rate mortgage, meaning they have a fixed rate throughout the life of the loan.? On a balloon mortgage the rate is fixed and amortized over a 30 year period but has a due date in which the balance will need paid in full.? Balloon mortgage terms range anywhere from 10 to 20 years.? For example, if you take out a 10 year balloon mortgage, at the end of the 10 year period the remaining balance will be due; you can either pay it off in full or refinance the loan.
Another type of Maryland mortgage that?s available is a second mortgage, this is separate from the first mortgage you already have on your home.? How much of a second mortgage you will be able to secure depends on the current value of the home and the outstanding balance of the first Maryland mortgage already on the property.? Interest rates are almost always higher on a second Maryland mortgage verses the first mortgage, but the closing costs are relatively less.? The rate is higher on a second mortgage because the lender is aware they are second in line to be paid if the borrower should default.? This puts them at a greater risk; therefore you pay a higher rate on a second mortgage.? A second Maryland mortgage can be either a fixed rate home equity loan or a variable rate home equity line of credit (commonly referred to as a HELOC.)? Some of the more common uses for this type of Maryland mortgage include home improvement projects, college tuition, and debt consolidation or start up business costs.
You should also be aware of what a rate lock is.? Usually a first time homebuyer will elect a rate lock to give them peace of mind.? Because of fluctuations in the Maryland mortgage loan market; there are no guarantees where interest rates will be at any given point in time so interest rates on a loan can vary from day to day or week to week.? A rate lock is when you choose to lock in your mortgage interest rate for thirty to ninety days.? The borrower is agreeing to accept the rate they lock in regardless of what the current Maryland mortgage interest rate may be at the time of signing the loan.? The market can go up or down, so choosing to lock in a rate is really dependent on how much risk the borrowing is willing to take.? For some borrowers it assures them that regardless of whether the rate goes up or down they know they will be able to afford the rate they just locked in, for others it eliminates the possibility of getting a lower rate should the current mortgage rate drop.
Utilizing mortgage calculators that are readily available on the internet right here on this website, just makes sense.? These tools can be extremely helpful by calculating a mortgage payment based on the type of Maryland mortgage, the term and the interest rate.? This allows you to see what your payment will be as well as inputting several scenarios to determine which type/term/rate combination will work best for you.
When you?re ready, put our experience and expertise to work for you. ?Whether you are purchasing a home, refinancing or want to consolidate debt, finding a Maryland mortgage that?s right for you just got a whole lot simpler.? We?re mortgage.org and we get it done right!
