AEM Mortgage Minute with Deanna Daughhetee

A home loan is likely to be a long-term commitment, so there’s a lot to consider when choosing the type that best meets your needs. For instance, how long do you expect to keep your home? Will you be able to meet your commitments if you change jobs or lose your job? Are you planning on starting a family and, if so, how will the financial impact affect your choice? Will your household income stay the same or will one spouse reduce working hours or leave the workforce altogether? Once you’ve answered these questions, the next consideration is the features you will want in the loan.

Some features you may want to consider in your loan include your ability to make additional repayments at no extra charge, whether or not you can restructure the loan in the future, and your ability to redraw funds at any time. Do you want a fixed payment or a fixed rate that doesn’t change? What about your payments being reduced if rates improve? You may want your closing costs financed in your loan as well. Once you have an idea of what features you’re looking for, the next step is determining what type of loan you want and talking to a mortgage specialist who can help you find the loan that’s right for you.

Other items you may want to consider when choosing a loan are the loan amount, down payment, closing costs, credit score, and repayment schedule. Having a high loan amount can increase your interest rate if the amount you’re financing exceeds the Fannie Mae and Freddie Mac conforming loam limits. There’s also the amount of down payment: The larger the amount up front, the more willing a lender will be to give you a lower interest rate. Your debt-to-income ratio and your credit score will also affect your loan rate. If your income exceeds your monthly debt obligations you’ll receive a lower interest rate – and if it doesn’t, you will not get your loan.

So whether you have a low down payment, you want the lowest payment possible, or your goal is to pay off your loan quickly, there are options to discuss with an American Equity Mortgage loan representative.