How to Shop for Low, Interest Only Mortgages
Where do you find low interest, interest only mortgages? Almost
every store on the street offers these types of mortgage
products, but who is the best, and who is the lowest? That's
going to take some work on your part, and maybe just a little
luck.
What kind of information will you need in order to shop for and
secure a great interest only mortgage, with a great low
interest? Well, you're definitely going to need a good credit
rating, proof of income, an appraisal on the property, and a
little bit of luck. There are several products out there in the
interest only mortgage segment of the market, and a few are
actually going to have a pretty low interest rate tied to them.
For example, the 3/1 ARM, or the 5/1 ARM, these mortgages should
have great interest rates, and if you have great credit, you
should be able to find financing to suit your budget, your
desire for a low interest rate, and an interest only mortgage
that you can live with. These types of adjustable rate mortgages
offer the interest only feature for a very limited time, and
this is what the average consumer should discipline him or
herself to use for financing. Extending the interest only option
out past these years, could put the consumer in a dire position,
should the real estate market take a downward turn, they're
going to be left with a huge mortgage, and property that is no
longer worth the original mortgage amount. Now, that's not
likely to happen since the value of the average home in America
has seen a steady 5 to 6% growth for the last 10 years. But, it
could happen. Take a look at the stock market after the
tremendous growth spurt of the late nineties.
Other variables in your quest for a low interest rate will be
determined by the type of lending institution you choose, the
determination of any government program eligibility, and your
geographical location.
Banks are traditionally a little higher with their down payment
requirements, but their interest rates are usually lower than
those of a mortgage company. The exception: online mortgage
lending. Thanks to the fact that this is an area of growth that
everyone and every company are promoting, they're striving to
compete with even the lowest interest rate lenders, in order to
grow their market. What kinds of government approved mortgage
loan programs are available for the low interest-only mortgage
shopper today? There are actually more programs available today
than any other time in recorded mortgage history; and the
ability to qualify for these programs is at an all-time high.
Fannie Mae, or the Federal National Mortgage Association and
Freddie Mac set guidelines and product availability for
homeowners and residents that quality for low- to moderate
income based mortgages. They also offer low-interest only
mortgages in order to accommodate an ever broadening market. The
graduated payment mortgage is an option for FHA homeowners who
currently have low to moderate incomes but expect them to
increase substantially over the next few years; this can be
compared to a balloon note or the interest only products in use
today.
Your location will play a key role in your ability to obtain the
lowest interest rate using the interest-only mortgage option,
also. Prospective homeowners looking to purchase a home in a
high end, resort area will, of course, have more choices
available, as there are more buyers and sellers competing, as
well as lenders for business. The other geographical
contributing factor is the real estate market in your area. If
the market is great, prices are not suppressed, and there is
moderate movement in the buy and sell market, it increases your
chances of obtaining the low interest rate you're seeking.
The interest only mortgage product and a low interest rate are
not mutually exclusive. They can be paired, and under the right
circumstances produce a winning mortgage product for the right
consumers. The route to achieving this goal will take education
on the part of the consumer, hard work, and a little luck in
locating the right mortgage lender.