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There Can Be a Cost By Waiting to Purchase

In many instances, prospective buyers believe that the longer they wait to purchase a home or property, the better off they are, but the opposite is actually usually true. The reason for this is because instead of home prices and interest rates going down, in these tough economic times, they end up usually going up. Home prices rose in 41 states and D.C. in the 1st quarter of 2013. Many prospective home buyers are finding themselves in quit a predicament simply because they chose to wait on their purchase. It seems like more often than not, interest rates are going higher and higher and this is very bad for prospective home buyers because they end up spending much more money in the long run. Obviously, when a home price goes up, the prospective buyer will have to pay more for the home initially, but if the interest rate goes up, which it often does, the prospective home buyer will need to pay the higher interest rate and then some. The interest rate can impact the prospective home buyer for years to come since the actual rate of the home increases just because the interest rate increases. For instance, if the term is 30 years and the total monthly payment is $1,500, then just a small increase can raise the home price significantly. If the home price is at a certain point, then if the interest rate increases, they will not be able to purchase the same home since the price of the home will have raised and they would not be accepted into that category. So, as you can see, waiting on a home purchase can not only cause the prospective home buyer to pay out more money initially, but it can impact their opportunity of getting their dream home overall. The best bet for any prospective home buyer is to purchase as soon as possible before the price of the home, or worse, before the interest rate increases. READ MORE

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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