CHOOSING A LOAN

There are literally hundreds of lenders offering a multitude of loan options that makes determining the best loan for your situation a complex endeavor. Since you may be making payments on a loan anywhere from 15 years to 40 years depending on the term, it is imperative that you work closely with us in choosing the right lender and loan that works best for you. What follows is a breakdown of the generally available residential loan programs.

  • Fixed-rate loans
    This is a home loan with an ensured interest rate that will remain at a specific rate for the term of the loan. About 75 percent of all home mortgages have fixed rates. One reason for this is that most homes sold are to buyers who plan on living in their property for many years. When you choose the length of your repayment (usually 15, 20 or 30 years), keep in mind that while shorter term loans may have higher monthly payments, they also let you pay less interest and build equity faster.

  • 30-year fixed-rate loan
    The most popular loan is a 30-year fixed-rate loan. The reasons include:

     

    • It provides the borrower with reasonable monthly payments.

    • It’s ideal for the homebuyer who plans on remaining in the home for more than 5 years.

  • 20-year fixed-rate loan
    The 20-year mortgage often offers a lower interest rate when compared to a 30-year loan. This loan amortizes principal and interest over a 20-year period, 10 years less than the traditional 30-year mortgage. This may save you a considerable amount of total interest when paid over the life of the loan.

  • 15-year fixed-rate loan
    The advantage of a 15-year mortgage is that its interest rate is generally lower than a 30-year or 20-year loan. Such a short-term loan will save you a significant amount of interest over the life of the loan. By paying off the loan in only fifteen years, you also build up equity in your home sooner. A 15-year loan allows you to own your home clear of debt much quicker when compared to longer term loans. This may be important if you are approaching retirement or have other large expenses to cover such as financing your children’s education. However, the monthly payments you make on a 15-year loan will be significantly higher than those you make on a 30-year or a 20-year loan for the same loan amount.

  • Adjustable-rate loans
    With an adjustable-rate mortgage (ARM), the interest rate you pay is adjusted from time to time to keep it in line with changing market rates. This means that when interest rates go up, your monthly loan payment may go up as well. On the other hand, when interest rates go down, your monthly loan payment may also go down. ARMs are attractive because they may initially offer a lower interest rate than fixed-rate loans. Since the monthly payments on an ARM start out lower than those of a fixed-rate loan of the same amount, you should be able to qualify for a larger loan.

  • HELOC Loan

    • HELOC Loan: What is a Home Equity Line of Credit?
      A home equity line is a form of revolving credit in which your home serves as collateral. Because the home is likely to be a consumer’s largest asset, many homeowners use their credit lines only for major items such as education, home improvements, or medical bills and not for day-to-day expenses. With a home equity line, you will be approved for a specific amount of credit — your credit limit — meaning the maximum amount you can borrow at any one time while you have the plan. Many lenders set the credit limit on a home equity line by taking a percentage (say 75%) of the appraised value of the home and subtracting the balance owed on the existing mortgage.

    • For example:
      Appraisal of home $100,000
      Percentage x 75%
      Percentage of appraised value $75,000
      Less existing loan – $40,000
      Potential credit line = $35,000

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630 Autumn Meadow Dr, San Jose, CA 95123

236 Vista Roma Way, San Jose, CA 95136

4577 Niland St, Union City, CA 94587

350 San Domingo Way, Los Altos, CA 94022

Currently Sold

1131 Chen St

San Jose, CA 95131

167 S San Antonio Rd, Los Altos, CA 94022

Tel: (408) 674-4418
Calbre: 01371905

Email: yvonne@yvonneyanghomes.com

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400 Hacienda Ct

 Los Altos, CA 94022

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