| Salt Lake City Mortgage Options | | | | similar to that of a 30 year mortgage. |
| | | | However, at the end of the term, the balance |
| Looking for a mortgage for your Salt Lake | | | | of the mortgage is due. You have to sell, |
| City real estate? Whether you're moving or | | | | refinance or convert to a traditional |
| simply investing in Salt Lake real estate, | | | | mortgage if you can't pay the balance out of |
| you'll probably need a Salt Lake City | | | | pocket. Again, this can be a good option if |
| mortgage. It's important to know and | | | | you're certain you'll be able to sell your |
| understand your options in a Salt Lake City | | | | real estate before the term of the loan is |
| mortgage. Of course, professional mortgage | | | | up. |
| advisors can offer you more personalized help | | | | |
| than any other information or service. | | | | Interest-Only |
| | | | |
| Fixed Rate | | | | The name of an interest-only mortgage is |
| | | | slightly misleading. It sounds like you only |
| A fixed rate mortgage is the classic home | | | | have to pay of the interest, and none of the |
| loan. The interest rate is locked in over the | | | | principal for your real estate. During the |
| course of the loan--hence the name "fixed." | | | | loan term, you make payments in the amount of |
| The most popular fixed rate loans are for | | | | the interest on the loan, which is lower than |
| terms of 15 or 30 years, although other terms | | | | a fully amortized payment that includes |
| are sometimes offered. | | | | principal. After the first 5 to 10 years, the |
| | | | principal is due. This option can work well |
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| | | | Down Payment |
| Typically, a fixed rate loan is good if | | | | |
| you're planning on owning your Salt Lake real | | | | The down payment is the amount of money you |
| estate for a while. Advice on how long "a | | | | pay at closing. This amount goes toward the |
| while" should be ranges from 3 to 7 years at | | | | principal on your loan. While you can choose |
| a minimum. A fixed rate is also a stable and | | | | how much to pay in your down payment, until |
| attractive alternative when interest rates | | | | you have paid off 20% of your house's value |
| are low. | | | | (with monthly payments, extra prepayments and |
| | | | house value appreciation), you usually have |
| Variable or Adjustable Rate | | | | to pay a private mortgage insurance (PMI) fee |
| | | | with each payment. |
| With a variable or adjustable rate mortgage | | | | |
| (ARM), the interest rate can change with a | | | | To avoid this extra monthly cost, you can get |
| specified index, like the New York prime | | | | a second loan to cover the down payment in |
| rate. Many ARMs begin with a short, fixed | | | | conjunction with your mortgage. There are |
| rate period, ranging from 3 to 7 years. | | | | many different ways to do this. One of the |
| | | | most popular is referred to as an 80/20 loan. |
| One advantage of an ARM is that is offers a | | | | An 80/20 loan is actually two loans--one for |
| lower initial rate than a fixed rate | | | | 80% of the home's value, and the other a |
| mortgage. However, that rate can go up after | | | | "piggyback loan" for the 20% down payment. |
| the initial fixed period. If you plan on | | | | Options vary, but the piggyback loan usually |
| selling your real estate within that fixed | | | | has a higher rate. It may also be an |
| period, an ARM can offer you significant | | | | adjustable rate or interest-only loan, like |
| savings. | | | | the mortgages described above. Other |
| | | | combinations include an 80-15-5 (80% |
| Renegotiable Rate Mortgage | | | | mortgage, 15% piggyback, 5% cash down |
| | | | payment), 80-10-10 and more. Typically, these |
| A few brokers offer a renegotiable rate | | | | monthly payments are still lower than they |
| mortgage. At specific points in the life of | | | | would be if you had to pay PMI--but always |
| the loan (eg every 3 or 5 years), you can | | | | double check. |
| renegotiate the rate with your lender. This | | | | |
| is especially convenient if interest rates | | | | Your Salt Lake City mortgage can fall into |
| have fallen since the beginning of your loan. | | | | one or many of these categories. With a |
| | | | professional mortgage advisor, you can find |
| Balloon Mortgage | | | | the loan that's truly right for your |
| | | | financial situation. A mortgage advisor takes |
| A balloon mortgage offers you a shortened | | | | into account your financial situation, |
| loan term with lower payments. Typically 5 to | | | | income, budget and debt load to help you find |
| 7 years in length, during the term of a | | | | a loan that you can afford. |
| balloon mortgage, you make payments that are | | | | |