When making investments you have a plethora of options to choose from; stocks, precious metals, start ups, the options are vast. The most reliable investment an individual can make is in real estate. Property is the smartest investment to make with your hard earned money. When you invest into property of your own you will enjoy the following benefits.
When you invest in real estate you can count on the value of your investment to continuously rise. At any given year since the mid twentieth century, real estate values have been on a gradual rise. The growth in value has averaged right around five percent increase in value every year. If you purchase a $200,000 home with an appreciation rate of just 3%, after 30 years your home will be worth more than double the original amount; $485,452.49. So theoretically if you bought a home with a high enough appreciation rate you could live off of the appreciation of your home. Remember that this is only theoretical and not a viable way to make a your living. So don’t go out and start buying random properties for no specific reason.
When you buy a home, as apposed to renting it, you will enjoy knowing that you are better off than someone who is leasing their home. When you purchase a home, you are investing into something that, in the long run, is going to be able to give you a return on your investment. When you rent a home you will be paying for something with a zero percent chance of getting a return on. Your hard earned money is just being funneled into the pockets of the property’s owner. When you think about it, you might as well just be driving up to the owner and putting your paychecks into his pockets every month. As apposed to purchasing your own home, where your money is being put toward the overall value of your property. Then the appreciation of the home comes into play, and your investments grow along with the value of the property you are paying for. It is similar to a savings account with an outrageously high interest rate.
Banks that offer home mortgage loans can be global as well as unique to the town you live in. Unless the person buying the home is filthy rich, a bank mortgage loan will be involved in the purchase of a home. The most common mortgage is a fixed rate mortgage. This means that your mortgage payments to the bank you borrowed from will never change. As opposed to rent which can rise at any given time depending on how the owner of the property wants to charge you. It is always nice to know exactly how much money is going where, without any guesswork. You can read more about fixed rate mortgages below.
Applying for a Home Loan in Bryson City, North Carolina
When one begins the process of applying for home loans in Bryson City, North Carolina, it is vital to consider your options. You must answer a few questions before you make any decisions. Are you purchasing a second home? Or are you taking that exciting step of buying your first home? You will also want to take into consideration which type of mortgage loan you are interested in.
When it comes to applying for a mortgage loan you have three major options: fixed-rate, adjustable-rate, and jumbo – interest only loans. Each variety of mortgage has its pros and cons. In this article we will discuss how each of these mortgages work and when each of the three is appropriate for a potential home purchase.
Fixed Rate Mortgage Bryson City, North Carolina
Fixed rate mortgages are the most common mortgage loan. When you apply for a fixed rate mortgage you will be given a set payment that will not change over the entire payment of the loan. The payment is a combination of a portion of the principle cost of the loan as well as the interest. The payment will be set so that, by the end of the payment of the loan, you will have the principle amount as well as the interest payed off. Fixed rate mortgages in Bryson City, NC can range anywhere from a 15-year mortgage, all the way up to a 60- year mortgage. The longer the period of time payments are made the cheaper the monthly payment is. On the flip other hand, the longer the loan remains unpaid the more interest the borrower is paying on the loan. The most common fixed rate loans are 15 year fixed rate loans and 30 year fixed rate loans because they can have reasonable monthly payments and also get the loan payed off faster; leaving the borrower with less interest to pay. When compared with an adjustable rate mortgage, a fixed rate mortgage will seem more expensive. This is because the interest rate is fixed, meaning that if the interest rate rises above the fixed rate then the bank is still only charging you the lower interest rate. The bank is taking a risk offering the borrower a fixed interest rate because they could miss out on some extra money. To compensate for the risk they offer an interest rate that is a little higher than the actual interest rate to give them a little breathing room. Fixed rate mortgages are for borrowers who want predictable payments on their mortgage loan without the inherited risk of the interest rates rising or falling throughout the payment of the loan.
Adjustable Rate Mortgage Bryson City, North Carolina
Adjustable rate mortgages are mortgages in which the payments can fluctuate up or down, depending on interest rates at the bank the loan was borrowed from. For some this option may seem more attractive than a fixed rate mortgage loan because the initial payments are generally lower. Don’t be fooled by this. Although the initial payments are lower they could get much higher as interest rates fluctuate and payments rise and fall to keep up. Say you are offered an initial interest rate of 3.4%. It fits perfectly into your budget. You are happy with the payments you are making but the next year it rises to over 4% and the payments are suddenly sucking out more of your paycheck than you would like. This is the risk associated with adjustable rate mortgages. On the other hand the interest rate for your loan could drop even lower than it was before. This type of loan is a risk.
There are two terms you should be familiar with when dealing with an adjustable rate mortgage loan in Bryson City, NC. The first term refers to the period of time that an interest rate and monthly payment may be adjusted. This is called the Adjustment Period. The adjustment period can be different depending on which bank you take the loan from. After this period of time your interest rate and corresponding monthly payment will be recalculated for the payment period. The next term is a “Cap”. A cap is what keeps banks from increasing your monthly payments too much at one time. Caps for most banks usually prevent changes of more than 1% or 2% depending on the length of the payment period. Sometimes caps limit the change over an entire year as well. These usually allow 5% of change over the course of a year. Adjustable rate mortgage loans are for those who are willing to take on the risk associated with ever changing interest rates and payments.
Jumbo Interest Only Loans Bryson City, North Carolina
Jumbo- Interest only loans are technically just adjustable rate mortgage loans. Both forms of mortgage loans have interest rates and payments that can change during adjustment periods. They both have caps that prevent the lender from raising the interest rates too drastically. So what draws the line between jumbo mortgage loans and adjustable rate mortgage loans? It all has to do with the loan amount and the manner in which the payments are made. The size of a jumbo loan is, as the name implies, a large loan. Jumbo loans in Bryson City, NC are typically $650,000 or more. For most, this is a loan that is ridiculously large and payments would be out of range. However, some can afford a loan this size and they need a different way to pay off the loan. This is because the interest on a loan of $650,000 or more will be a ridiculous amount to pay off if the interest rate goes up during the payment of the loan. This is where the second difference between a jumbo loan and an adjustable rate mortgage loan comes in. In a jumbo loan the payments for the first ten years will go toward paying off the interest of the loan. After the first ten years or so the payments will start going toward paying off the principle amount of the loan as well as any more interest that wasn’t accounted for in the beginning. By the end of the payments you will have all of the principle amount and the interest payed off.
Applying for a Mortgage In Bryson City, North Carolina
Whichever loan you are looking to apply for, Bryson City has a variety of banks to apply for your desired mortgage. Below you will find a list of major banks that are located in Bryson City that can help attain your goal of purchasing property in Bryson City, North Carolina. These banks each offer different interest rates and monthly payments on your mortgage. Check some of them out and find the mortgage that best fits you.
- First Citizens Bank
- State Employee Credit Union
- United Community Bank
- Jackson Saving Bank
Before you apply for a mortgage it is important to make sure you have a good credit score. Your credit score will affect whether or not you qualify for the mortgage you desire. You should also check the local mortgage rates. Be sure that you look around and make sure that you find the right mortgage for you and your needs. Find one that you are sure you will be able to make payments on for the foreseeable future. You are going to be tied to your mortgage for quite some time; so make sure you make the smart choice.