Do You Know What You Want from a Home Loan?

When it comes to taking on a loan, it’s important to make sure the loan you choose suits your needs. However, what if you aren’t sure what your needs are?

It can be challenging enough finding the right home, let alone finding the right home loan. While there was once a time when loans were simple and their additional offerings were few, nowadays, choosing your loan can be just as important as choosing the right property.

What Are You Looking for in a Mortgage?

Advanced Title Company knows just how challenging the task can be, and has some information about the most common loan benefits and additions for you to consider when searching for a home loan.

Redraw

One of the most popular options which homeowner look for is the option to redraw. A redraw facility is simple; Any additional payments you make are available to you as a cash withdrawal or transfer. As an example, if you made an additional payment of $1,000 each month towards your home loan, then this money would be available to you throughout the life of the loan. So in six months, if you needed to complete emergency repairs, you could withdraw $6,000 to cover your expenses. While it can seem like a no-brainer to take up this option, it can often come with associated fees, so make sure to do your research and be certain that it will be beneficial.

Early Repayments

If you regularly receive bonus income payments then the ability to make early repayments may be of great appeal. This benefit is pretty self-explanatory, in that it allows you to make additional repayments towards your mortgage without fees. This can be a great way to use any incidental income you receive throughout the year. However, the option isn't always as prevalent as you may think. While it may seem strange, not all loans provide this option or will charge a fee for each repayment. This is because extra payments are effectively reducing the income the lender receives, and in turn, their incentive to offer you the option. If you are taking on a mortgage then your lender will want title insurance, as will you, to protect your investment. Title insurance in Grand Junction, CO provides homeowners with financial peace of mind. To find out more, speak with an expert on the subject at Advanced Title Company by calling (970) 255-7677.

Interest Type

When it comes to interest types, there are two:

• Fixed Interest Rate

This is as the name suggests, in that the interest rate which you will pay for a set period of your loan, or the loan in its entirety, is fixed at a rate agreed at the time of the loan. While it can seem immediately appealing, it’s worth noting lenders don't often offer these rate types for the life of the loan.

• Variable Interest Rate

The other option is a variable rate. As the name also suggests, choosing this option means that the applicable interest rate can vary on market conditions, both upward and downward. Having a variable rate loan can be great when the market swings and you are paying a rate lower than you would have been paying on a fixed interest type loan. However, if the market swings the other way, you will be paying more interest than you would have been on a fixed interest type loan.

Low Document

It’s all about a gig economy in today's world, which leaves many soon-to-be homeowners looking to obtain finance to buy a home without a large amount of paperwork or security. Whether you are a new business owner, self-employed, or even living on investment income, there’s a good chance that you won’t be able to provide the amount of paperwork required by most lenders. A low document home loan provides an option for those who may struggle to satisfy the paperwork requirements of other lenders. While there is no denying that this can be a great benefit to many, because these loans come with more risk to the lender, the loan terms aren’t always borrower favorable. It’s worth deciding if the higher interest is worth it or if you can spend more time or energy satisfying regular loan requirements.

Title Insurance in Grand Junction, CO

When it comes time to buy your home, be sure to complete your due diligence, which includes taking out a policy for title insurance in Grand Junction, CO. To find out more or to get the process started, speak with Advanced Title Company today at (970) 255-7677.