In the world of investments there are many options; stocks, precious metals, start ups, the options are vast. The most stable investment an individual can make is in a home. Property is one of the best, if not the best, investment to make with your money. When you invest in property you will enjoy the following side affects
History shows that property value, in general, is constantly rising. At any given year in since the mid twentieth century, property values have been on the rise. The growth in value has averaged right around five percent gains a 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.
When you own a home you will be in a much better situation than someone who is renting a home or apartment. 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 housing you will be paying for something that there is no chance of getting a return on. Your money is being sent right into the owner’s bank account. When you think about it, renting a house long term is literally throwing your money away. As apposed to investing in some real-estate of your own, where your money is being put toward the value of the home. Then the appreciation of the home comes into play, and your investments grow with the value of your home. It is similar to a savings account with a ridiculously high interest rate.
When most people purchase a home they apply for a mortgage through a bank. Whether the bank be local or global a bank will be involved in most peoples purchase of real-estate. 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.
Applying for a Home Loan in Murphy North Carolina
When you begin the process of applying for home loans in Murphy, North Carolina, it is important to weigh your options. Think about what the purpose of your home loan is. Are you purchasing a second property? Or are you buying your first home? Along with these questions you need to consider what kind of home loan you are looking for.
There are three major types of Mortgage loans to choose from: fixed-rate, adjustable-rate, and jumbo loans. Each type of mortgage has its positives and its negatives. Let’s go over the details of each type of mortgage and examine when each type is a reasonable option.
Fixed Rate Mortgage
A fixed rate mortgage is the most common mortgage applied for. A fixed rate mortgage sets a rate at which you will pay off the loan. The rate is set so that by the end of the period the loan will be payed off in full along with the interest that the loan has accumulated, leaving you with no debt. During the first couple of years your mortgage payments will primarily be going toward covering interest. Then your later payments will cover the principle cost of the loan. In general fixed rate mortgage loans in Murphy, NC could end up being more expensive than an adjustable rate mortgage. Or will it? An adjustable rate mortgage has a lower initial interest rate than a fixed rate mortgage. This is because the loaner, in this case the bank, is taking a risk offering you a loan at that set rate. If the rate goes down in the future the bank is stuck with that rate. On the flip side, an adjustable rate mortgage the bank has the option to change the interest rate at any point during the payment of the loan.
Adjustable Rate Mortgage
An adjustable rate mortgage is the less popular sibling to the fixed rate mortgage. Adjustable rate mortgages are loans that do not have a fixed interest rate and payments, instead the payments and interest rates can be changed. That is the only real difference between the two. Once the payments are made all of the interest will be accounted for just as it was with the fixed rate loan. This type of loan has a lower initial interest rate than a fixed rate mortgage because the interest rate of the loan can fluctuate to match interest rates. Adjustable Rate Mortgages in Murphy, NC should be applied for if you want to inherit the risk of dynamic interest rates. You could end up paying less or more than a fixed rate mortgage depending on how the interest rate is adjusted. Adjustable rate mortgages have an adjustment period that states when the interest rate can be adjusted. During this length of time is when any adjustments to interest rates will be made. After adjustments are made to the interest rate, the new monthly payment is calculated. During the adjustment period there what is called a cap. The cap limits how much the interest rate can change in a single adjustment period. There are also caps on how much the interest rate can change over the course of a year.
Jumbo Interest Only Loans
Interest only loans are similar to adjustable rate mortgage loans. There are only two major differences between these two loans. The differences are the size of the loan and the manner in which it is payed off. First of all the size of the loan is, in most cases, larger than adjustable rate mortgages. On average an interest only loan is $650,000 or more. These are usually used for expensive homes or large tracts of land. The other difference between interest only and adjustable rate mortgages is where the money goes when you make your payments. The payments for the first ten years will be solely for the purpose of paying off the interest from your loan. This allows you to get most of the interest payed off in the first stages of payments. Then the payments will start paying off the principle amount of the loan along with the little bit of interest that remains. Again this type of loan is great for getting the massive pile of interest out of the way when paying off a large loan.
Applying for a Mortgage In Murphy, North Carolina
When applying for a mortgage loan in Murphy, North Carolina you have many options when it comes to loaners. You can choose between local trusts or large ,nation wide, banks to apply for a mortgage. Below you will find a list of places to apply for a mortgage in Murphy.
- BB&T Bank
- PNC Bank
- First Citizens Bank
- State Employees’ Credit Union
- State Farm
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. The current mortgage rates in Murphy, North Carolina are as follows:
30-year fixed rate mortgage in Murphy – 3.79% National Average – 4.o6%
15-year fixed rate mortgage in Murphy – 2.59% National Average- 3.27%
5/1 Adjustable rate mortgage in Murphy- 2.98% National Average- 3.40%
As you can see, the average mortgage rate in Murphy is nearly 3/4 of a percent lower than the national average. This data was recorded in 2015 but you will notice that trend continuing as time goes by. The mortgage rates in Murphy are, on average, lower then the rest of the country.
Be sure that you look around and make sure that you find the right mortgage for you and your needs. You are going to be tied to your mortgage for quite some time; so make sure you make the smart choice.