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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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Why Credit Scores Are Important When Buying a House

One of the easiest and quickest ways to secure a great mortgage rate is by having a good credit score. The truth is that the majority of companies will first check your credit score to decide the rate that you will receive. If you have little to no credit or if you have a low credit score, then this will hinder or almost entirely null your chances of getting a good percentage rate or any loan for your mortgage whatsoever. Your credit score is important, but what is just as or even more important than your actual score are the other things that are indicated on your credit score. It is frowned upon greatly if you have, for instance, repossession on your credit score, credit card debts or even an eviction that is noted. Many companies will demand that you fix these issues on your credit score before you are ever given a good mortgage rate. A credit score is your calling card in the real estate world and aside from anything else, it is the most important piece of paper that you will have to show in order to get a loan or good mortgage rate. Credit scores are very helpful in also securing a better price on real estate as well. When a company sees that you have a high credit rating, then you appear much more trustworthy and reliable than an individual with a less than desirable credit rating. A high credit rating might be able to get you money off your entire property purchase, special perks such as lower monthly payments and also a smaller down payment, etc. If you do currently have a low credit score, then there are ways that you can repair it and make it high once again. Simply contact the companies that have written marks on your credit report and do what you can to remedy the situations, either by paying the debt or asking them to remove the mark from your credit score. READ MORE