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Types of Mortgages

In regards to home ownership, there are two main different mortgages that are available. The first type is the fixed mortgage and the second type is the adjustable rate mortgage. A fixed mortgage is defined as a mortgage rate that stays the same for the duration of the mortgage length. That means, if you have a fixed mortgage, your monthly payments will not go up or down, they will stay static at one rate. A fixed mortgage is usually preferable to an adjustable rate loan because there is no chance of the rate going any higher, but there are some benefits to an adjustable mortgage rate as well. An adjustable rate mortgage, or ARM for short means that interest rates will change over time. The good thing about an adjustable rate mortgage is that the rate could go down, but it could conversely also go up. The deciding factor on if the rate in an adjustable mortgage goes up or down is dependent on the market at that time, so there is really no predicting or knowing if the market will stay steady, go higher or go lower, some might say they know, but the reality is that it is usually a luck of the draw. Overall, it has been shown that adjustable rate mortgages usually end up raising causing the home owner to pay more than they would have with a fixed mortgage rate. Another types of adjustable rate mortgage is the hybrid adjustable rate mortgage. This hybrid mortgage type is different than the usual adjustable rate mortgage because the home owner pays a fixed amount for a certain number of years and then starts to pay an adjustable amount for the remaining amount of years left on their mortgage. A hybrid adjustable rate mortgage is gaining popularity with many different individuals because unlike a fixed mortgage rate, a hybrid adjustable rate mortgage starts off at a lower rate saving people money in the beginning stages of their mortgage period. READ MORE

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Maine Home Buyer Tax Credits

These days, there are amazing tax credits for a lot concerning the real estate industry. Namely, the first-time home buyer tax credit as an exceptional tax credit for first-time home buyers. The first-time home buyer tax credit for 2012 includes getting 20% of the interest that you pay back every year for the next 30 years. The 2012 home buyer tax credit is actually better than the home buyer tax credit that has been offered in previous years. And, it is important to have the knowledge of any tax credits because this will weigh in on how much buyers are willing to spend on a home taking the tax credit into consideration. There are many benefits for the tax credits offered and they include reducing the liability of federal income tax for the homebuyer, giving the homebuyer more money to use on the purchase of a home. The other benefits include giving a Maine homebuyer access to more money each month, thus lessening debt and other issues that may arise from a larger purchase, and the tax credit can be utilized with any type of mortgage that also includes adjustable rate mortgages. But, this tax credit cannot be used with tax-exempt bond programs. The tax credit can be claimed for as long as the buyer lives in their home, given that they pay interest on the mortgage loan and that they purchased it as their primary residence. There are certain qualifications and specifications that must be met in order for homebuyers to receive this great tax credit. Certain regulations include buying a home within a certain specified area of Maine, be an eligible borrower as showcased by the MCC program fact sheet, not be using the home as a business or a place for trade, the buyer must purchase the home as their primary residence, the price of the home purchase must not exceed certain limits, as well as many more. All in all, this specific tax credit will save a first-time homebuyer a wealth of money over the years and is very beneficial for all parties involved. READ MORE