Before we tackle the points and features of various mortgage loans we need to take some time to discuss the one key factor that affects all of these transactions…..Rates. It doesn’t matter whether you are looking for a VA, CA or a PA mortgage loan, all of them will be strongly impacted by what the rates are doing.

A Quick Look at Fixed Rates

30 year fixed rate mortgages have remained fairly consistent over the past few years which is good news for people looking for a PA mortgage that they can afford. Most borrowers still prefer the safety of one of these housing loans when they are considering how to finance their new home. A fixed rate mortgage is just what it says it is, you are given specific monthly payments that will remain unchanged over the life of the loan. There is some effect on the mortgage rates of these loans because the yield on long-term government bonds is closely allied, but once you have locked in a rate and payments you will have no unpleasant surprises ahead in your future regarding your house payments.

While the interest on a fixed rate PA mortgage might be substantially higher than one quoted on an ARM many people opt for caution and go with the fixed rate program. At one point in the recent past a fixed rate mortgage was carrying a 6.34 % interest and an ARM for one year was as low as 5.73. This is why there were buyers anxious to take the chance on an adjusted rate contract, but now those same ARM holders may be looking at interest rates almost that have drastically increased. The fixed rate mortgage holders can sit back and watch the drama however because their rates remain constant. The interest rate on an ARM could go down if short interest rates are lowered but this is not very a very likely scenario.

Just What Are those ARMS (Adjustable Rate Mortgages) Anyway?

ARMs have rates that are dependent upon what the Federal Reserve sets as the latest short-term interest rates. These interest rates have been on the rise lately as a way to try to forestall additional inflation. Already, many homeowners who chose an adjustable rate mortgage have seen their monthly payments increase substantially and there could be some more upward adjustments still coming in the near future. At present, a common index used for ARMs is the one-year Treasury, which is already volatile and reacts swiftly to any type of economic change. Some ARM holders have seen their original interest rate spiral upward rapidly. For some people this has added hundreds of dollars to their monthly mortgage payment.

Purchase Loan Programs and You

Purchase loans are one of a PA mortgage company’s options that many first time homebuyers use to make their dream home a reality. A purchase loan is used to acquire a new property and it usually is structured with terms of 30 years. Applicants can choose one of these mortgage loans and select either an adjustable or fixed rate for it.

Looking for a Refinance Loan?

If you just need to pay off an existing mortgage then you can apply for a refinance loan with a PA mortgage company. During the years 03-05, homeowners were eager to refinance their existing loans because they could lock into lower interest rates and get some much-needed cash. Currently, there are some people who are not quite so enthusiastic about refinancing, even though the rates are very low indeed. This failure to capitalize on a refinancing gold mine is actually costing them money. If you can exchange your higher rate contract for a lower rate that can save you thousands you owe it to yourself to at least investigate the option. Some of the people who have been the quickest to take advantage of the savings and reduced costs of these loans are homeowners who had ARMs. There were able to switch to a fixed rate mortgage with set payments and lower rates. Even though refinancing is considered a new loan and does involve some additional charges and fees, you will be able to recoup this outlay back in just a number of months.

Home Equity Loans and the PA Mortgage Industry

Consumers should understand that a home equity loan is a second mortgage that is attached to your home not a refinancing option of the original loan balance. There are some who get these concepts confused. With the home equity loans, there are interest rates involved that are higher because of how these are structured and how they are secured. A PA mortgage broker can tell you that when you have a second mortgage it is also second to be paid off in the event of a foreclosure which means that lenders are assuming higher risks for these transactions. On the positive side, these second mortgages make money available to you that can be paid back over a preset period of time and usually at a fixed rate.

Using PA Mortgage Experts for a top Home Equity Line of Credit (HELOC)

Why do people need PA mortgage experts? One reason is because these professionals can help you obtain a home equity line of credit against the equity in their home. These lines of credit are extraordinarily flexible including all of the interest rates. PA mortgage companies can provide you with assistance in understanding what a HELOC is and help you get one with a very low rate and generous terms. With a HELOC, or home equity line of credit, you are given a certain amount of money to during a particular draw period. This gives you control over how much to use and when to use it. If you are able to handle variances in your monthly house note and need access to money over a longer period of time, this might be a good option for you to use.

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