When investing in real estate it is important to know your financial objectives and what is the best home loan program available. All of these are factors in selecting the right home loan. This is why we believe it is a disservice to you to just quote rates. Without knowing the complete picture you may end up like 83% of American home owners... with the most expensive home loan on the market!  Savarese Realty will guide you through this process and recommend the right mortgage broker.

How to buy a house? Choosing among the many houses available in Salem County is hard enough -- then you need to make a choice from the many types of mortgages offered in today's market. Some questions worth considering are: Is it a good time for real estate investing? How can I buy a house that fits my needs and the needs of my family? Which mortgage broker or bank should I use? Savarese Realty can help answer these questions and guide you through selecting the right home loan. There are literally hundreds of different mortgages available; however they all fall into only a few basic varieties. Some may fit perfectly into your situation; others may be unwise or unattainable. By narrowing your choices, the process of picking the right mortgage becomes much easier.

One of the first choices should be between a fixed rate (the interest rate remains constant through the life of the mortgage) and an adjustable rate mortgage (the interest rate is adjusted -- either up or down -- at specified times during the mortgage term). Adjustable Rate Mortgages (ARMs) will have an initial interest rate lower than fixed rates but will almost always adjust upward (unless rates really fall!) usually after the first year. An ARM may be a good choice if you are sure that you will not own the home for an extended period (more than 5-7 years) of time.

Mortgage Comparisons
Once you have a general idea of the type of mortgage that best suits your situation, the next step is to begin to make comparisons among the lenders that are available. Weekend newspapers will often have the rates of individual local lenders posted in their Real Estate section. To get the specifics of each lender's rate and term, you can contact the bank or mortgage company directly. Another source is a mortgage broker in your area, who will often represent a number of sources of mortgage funds and can assist you in your choice.

Terms: 15, 20 or 30 years
You will probably want to aim for the shortest mortgage term that is comfortable (and for which you will qualify). The interest savings are enormous as the term decreases. Always make a comparison between a 15 year term payment and a 30 year term payment. The difference is often surprisingly smaller than anticipated. The savings over the term of the loan, however, can be significant.

Common Loan Types: Conventional, FHA, VA and "No-Document"

Conventional: A "traditional" mortgage, not directly insured by the Federal Government. Most conventional loans under $275,000 are administered through Fannie Mae or Freddie Mac (private corporations but regulated by the government). Those loans over that amount are designated "jumbo loans" and are funded by the private investment market.

FHA: Insured by (but not funded by) the Federal Housing Administration (FHA) a division of the U.S. Department of Housing and Urban Development (HUD), and designed for, in general, low- and middle-income borrowers and many first-time buyers. There are, however, limits (which vary from county to county) to the maximum loan amount. On January 1, 2000 HUD began insuring home mortgage loans of up to $121,296 in communities where housing costs are relatively low, and loans ranging up to $219,849 in communities where housing costs are relatively high. FHA loans have somewhat more relaxed qualifying standards and ratios than conventional loans and have the availability of 15 and 30 year fixed as well as 1 year adjustable mortgages.

VA: For those qualified by military service, the Veterans Administration (VA) insures (but does not fund) 15 and 30 year fixed as well as 1 year adjustable mortgages with lower down payment requirements (as low as 0 down) and somewhat more lenient qualifying ratios.