Most of the time, our dream home is just beyond our reach cost-wise. First-time home buyer in Phoenix? A good way to be able to afford the cost is to take out a mortgage. Lenders will cover the cost of the sale after you make a down payment, with a contract that you’ll pay them back-with interest-over a set term. However, a mortgage plan is not, and should not be, entirely inflexible.
It’s essentially a reflection of what your financial status is like; the amount indicates just how much you are able to put into this lifelong investment, shown through regular payments sustained for years to come. The amount of the payments is calculated based on two things: current and projected finances, alongside your credit card history. This plan is meant to help you have a loan that is sustainable, which will leave you stress-free and comfortable in your home.
Within the mortgage period, you could make the decision to upgrade to go from a starter home to a much larger one so you can adjust as your family grows. This will also come in handy if you have a job that requires you to relocate. To put it simply, a good mortgage plan can move and adjust according to your financial situation. Lenders can offer options with regards to the mortgage: refinance and renewal.
To make the most of your mortgage, choose whichever of the two works best for you:
This option is quite straightforward. As the word itself suggests, it signifies renewing the mortgage plan with new terms and an interest rate if, at the end of the term, the full amount is paid off. This is designed to help you be able to pay off the remaining amount in your loan.
There are several benefits to using this method:
- Depending on the financial situation, based on the acquired property and all finances available and the initial loan amount, your loan could be unpaid as the original loan term ends. You can reset the terms (principal, interest, frequency, and the length).
- You will be better able to reduce your monthly payments as needed as well as the borrowing cost. If you are able, arrangements can be made to pay off the mortgage sooner, which will have no impact on your present situation.
- The savings that come with a closed mortgage because of the lower interest rates are invalidated when your circumstances change and want an early full mortgage payment. This results in interest-based penalties. An open mortgage no longer bears the possibility of prepayment penalties.
A lot of renegotiation is involved in this, since you are essentially adjusting the terms of an existing mortgage plan. It allows for the consolidation of other debts that exist so large expenses like home renovations can be paid for.
Going with this route lets you get a lower interest rate throughout a new term, especially if your mortgage is a closed one. This allows for lower payments for the term’s remainder, especially if making early payments doesn’t seem feasible in the first place.
Desert Springs Mortgage for Phoenix Home Loans
Whether you choose mortgage renewal or mortgage refinancing, you will be able to better manage your loan. You can adjust according to your changing needs until the mortgage is fully paid.
Get in touch with a well-trained professional team that can help you make the best choice. Contact Desert Spring Mortgage at (623) 432-1309 today! The best mortgage rates in Phoenix are one call away.