David Lerner Associates News

Choosing the Best Mortgage Option

Core Facts


Wednesday, October 3, 2018

If you’re buying a home for the first time, or you’re are moving on up or even downsizing, you’ll probably be thinking about some sort of mortgage. Although cash deals on homes are not uncommon, they’re not the norm. Most of us have to take out a mortgage of some kind to be able to purchase our homes. [2] To learn more about the various types of loans, it’s always a good idea to get advice from the experts.

The Consumer Financial Protection Bureau (CFPB) has a large amount of information available on their website www.consumerfinance.gov. It is an official United States Government website, so you can trust that nobody is trying to sell you anything. It’s a tool to get as much information and advice as possible.

If you’re going to be applying for a mortgage loan, then researching what type of loan is best for you, and how each one works is very important. Don’t end up caught in a situation you did not fully understand. It could have disastrous results. The CFPB has information on the different loan terms like a 30-year loan or a 15-year loan.

Each different type of loan is a different commitment. The term of your loan is how long you have to repay the loan. There are factors that will affect your payments over your loan period. The mortgage you choose and how much of a down payment or deposit you have to put down will be put across your lender’s desk, and they will work out what your principal and what your interest payment will be. Your interest rate will determine how much interest you will pay over the life of the loan.

Figuring out how much you will be paying each month and how long you will have to be paying it, is the only way to work out which loan is the best for you. On top of that, doing the math to figure out exactly how much interest you will pay over time will give you an idea of how much you are really spending. According to the American Housing Survey from the U.S. Census Bureau, the average mortgage payment for homeowners is $1,030 every month.

Working out who to get the loan from can also be complicated. Nowadays you do not have to borrow money from a bank to buy your home. In fact, according to statistics, all banks put together originated just 44 percent of all loans in 2016. More and more folks are taking advantage of “non-bank” lending. This is where both credit unions and non-depository lenders are muscling in on the market. They accounted for a little over 47% of all mortgage loans in the United States in 2016.

No matter which mortgage you opt for, whether it is a bank or a “non-bank” make sure you are aware of all the terms and conditions and how much you are expected to pay monthly and over time. That way there will be no nasty surprises along the way, and you can watch your equity grow over time.

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.

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Author: Sally Falkow

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Jake Mendlinger
Account Manager
Zimmerman/Edelson
516.829.8374 X 232
jmendlinger@zimmed.com

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