Getting the Right Omaha Mortgage for Now and for the Future!
A vital part of buying a home is getting a mortgage. It's extremely important to find out what options are available and what best fits you and your situation since not all mortgages are the same. There are two general classes of mortgages. One is a fixed-rate mortgage which keeps the same interest rate for the life of the loan. The second is an adjustable-rate mortgage (ARM) which the initial interest rate is fixed for a period of time, after which it resets periodically, which can be every month or every year. You also choose the duration (amortization) of the loan.
That’s the easy part. When it comes to choosing those details, coming up with the right option for you can be a brain-twister (especially when you realize how big a difference each program can be and what the different future scenarios they might present). It's best to work with a local lender to find out those options but some major factors to consider include -
- Affordability. Your budget for month-to-month payments is the largest single element to gauge when getting a mortgage. If you want to ensure lower monthly payments and minimize the risk of increases, tilt toward a longer-term fixed-rate mortgage. If you can afford to risk a higher interest rate, a short-term ARM might be best.
- Future Rates. This can be a key issue when choosing between a fixed-rate mortgage and an ARM. If you suspect interest rates will decrease over time, you might tilt toward the ARM, since those mortgage payments will eventually decrease along with interest rates. If interest rates are headed up over the long haul, a fixed rate lets you lock in today’s lower rates.
- Permanence. If you plan to live in your new home for just a short period, your choice of getting a mortgage may be less complicated. ARMs usually start out at a lower rate than a fixed-rate mortgage, and if you move before the adjustment period begins, you can take advantage of the lower initial rate and avoid the future possible payment increase.
Like all financial decisions, getting a mortgage in Omaha should be carefully undertaken: always keeping in mind your long-term financial goals. We are here to help clarify the many issues that enable our clients’ success: call us today if you are thinking about a move this spring! We can connect you with a local lender to help set you up for success.