Mortgage Rates

How much home can you afford?

Businessman's hands with calculator and cost at the office and F

Businessman's hands with calculator and cost at the office and FPerhaps one of the biggest downfalls associated with being an adult is the fact that as an adult, we must be responsible for our finances. No more pocket money or asking the parents for a few funds to get you through the weekend – this is the real deal. It doesn’t have to be a stressful time however, whether you are a millennial or make up the “baby boomer” generation, however.

Pushing through the financial force field can be difficult if you don’t know much about financing for home buying. On that note, let’s discover more about how a mortgage approval could steer you in the right direction for real estate success.

Financial Factors to Consider

Before you can start searching for the perfect home, the financial aspect must be put in the spotlight. Sit down (preferably with a financial advisor or lending expert) to figure out how your financial situation is looking. Take the following financial factors into account to ease the house-hunting process:

Down Payment – This is the initial payment you will put down on your property. It will depend on your credit score and ability to make regular payments. Down payments for any loan are contingent upon personal applicants qualifications.

Monthly Expenses - Do not start looking at properties until you know precisely how much money is outgoing every month. Monthly expenses include car payments, credit card payments, and alimony.

Flexible or Fixed Loans? – This is a tricky one. If you want to start off with minimal expenditure, but risk paying a higher interest rate in future, go flexible. Fixed loans are more secure, in the sense that the monthly interest rate does not change.

Reasons to Consider Financing for Home Buying

While some people are in a position to afford the cost of buying a home outright or even affording a high interest rate, others are unfortunately not. This is particularly true for millennials aged around 30. With poorer credit scores and less financing experience, securing a mortgage can be tough. Financing for home buying is beneficial, because it means you have control over your cash for the mortgage lifetime. It also makes becoming a homebuyer possible.

Finding the Best Rates in 2017

Interest rates are changing all of the time and if you are to find the best rates before someone else beats you to it, or before rate fluctuation occurs, there are a few things you need to do. Aside from shining up that unattractive credit score and thinking about how long you intend on living in/working in the property, you can do more to find the best mortgage rates in 2017. First things first, use the Internet to research mortgage rate comparisons on a daily basis or at the very least, a few times per week. This will keep you in the loop about what’s a good deal and what’s not. Your knowledge on the current rate climate will help you to determine whether or not now is the time to act.

Tips for Securing a Mortgage

Keep in mind that certain lifestyle factors will have an impact on mortgage interest rates, not to mention your chance to secure a financing deal at all. Speaking with a financial advisor will relieve you of any concerns or quandaries that might be boggling your brain ahead of purchasing a home. Consider all of your options and do not overload yourself financially.

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Guide to Understanding Fluctuation in Rates

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19554825_10158964647830013_1842381175699724183_nPeople everywhere are always asking themselves, “What is causing a fluctuation in rates?” and the answer to this question is somewhat complex. What you must understand when dipping your fingers in the financial pot is that currency rates are constantly changing. If we knew when it would happen, wouldn’t we be doing something to change it? Inflation is inevitable, from political and economic factors to the many variables that influence rate fluctuations.

Since it is hard to predict precisely when inflation or deflation will occur, you would benefit from getting one step ahead of the game. How, you ask? When you gain a broader understanding of rate fluctuation, this knowledge could aid you in getting financing.

A Brief Definition of Inflation

Before you can properly understand why rate fluctuations occur and what they mean for your borrowing ability, you ought to understand what inflation actually is. To put it simply, inflation is when the average cost of services and/or goods rise. The weighted average of a typical household’s total expenditure is usually the type of data used to determine inflation, which could be impacted by anything, such as a fluctuation in oil prices.

The Influencing Factors of Fluctuating Rates

Economic stability is dependent on numerous variables. Exactly which variable is going to cause the most damage depends on the time and situation. When the economy improves or gets worse, it will have a direct effect on consumer spending and financing lending. Here are some of the main influencing factors of fluctuating rates:

1. Interest Rates

2. Government Debt

3. Recession

4. Political Stability

Since there is such a strong correlation between inflation and the above variables, there is no wonder why homebuyers are seeking out financing options as a safeguard from rate fluctuation.

How does increasing inflation affect mortgage?

If you are a fan of fixed rates and do not want to have to worry about how much you will be forking out each month due to inflation, remortgaging is the best option. Rate fluctuation may leave you feeling uneasy about how much you are actually spending to live in and run your home; your pride and enjoy. With that being said, keep in mind that increasing inflation can impact the overall price you repay for the biggest and most important investment of your life.

Fixed or Floating Rate – Which option is less risky for rate inflation?

Choosing between the two is quite simple, if you have taken the above information into account. Anyhow, let’s go over the two general financing options:

Fixed Rate – Generally, a lender will provide the borrower with a loan that is tied to a fixed rate of x amount of years. Extensions are possible and the benefit of this option is that whoever goes down the fixed route will have the peace of mind that rates will not fluctuate.

Floating Rate - Of course, there are benefits associated with the two. For example, this option allows the borrower to lend for a longer period of time. However, interest rates will rise after a certain period of time therefore the floating rate option does not completely exclude rate fluctuation.

Whether you intend on taking out a loan to help with mortgage payments or to assist you financially for business purposes, the more well-versed you are on the subject, the easier it will be to navigate your way through the financial maze.

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How are Mortgage Rates Determined?

If you’re a first time home buyer and have never been involved with a mortgage before, you certainly want to learn all you can about financing options and the terms of your home loan. Your mortgage interest rate is one important factor that can help you decide which lender to choose to handle your loan, but you need to understand how this figure is calculated to weigh your options. Have a look at these mortgage rate basics to guide your decision making.

Your Credit Score: Your credit rating is a number that lenders look at to determine how reliable you’ll be in repaying your mortgage. In general, you can obtain a lower mortgage interest rate the higher your credit score. Potential home buyers should obtain a copy of their credit report before house hunting. You can fix any errors or repair negative credit history before the lender sees problems. (more…)

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How Interest Rates Work

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Interest rates - Paramount Equity®When obtaining a loan, the interest rate is one of the most important things that you need to consider. The rates frequently fluctuate, so it is best to apply for a loan when you can get lower interest rates. Many people think that it is difficult to understand how interest rates work; however, if you take the time to research and learn about the process of interest, it is actually very simple.

When you buy a new home, you will probably need a mortgage loan. When you obtain a mortgage, you will be required to pay interest on the loan. (more…)

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Mortgage Rates are on the Rise

Mortgage Rates are on the Rise - Paramount Equity®

You may have heard all of the sputtering talking heads going on and on about how it’s time to buy or refinance your mortgage now before rates get higher. This may be a little bit confusing to you if you’re not really sure if things will get better or worse in the housing markets. Here are a few key metrics to consider when you’re looking to buy or refinance your mortgage now before rates get higher.

Fed: One of the key metrics to deciding whether or not you should buy or refinance your mortgage now before rates get higher is the actions of the Federal Reserve. This is one of the most dull parts of watching the markets tick by but there are some changes afoot which could drastically change the dynamic. The Federal Reserve Chairman is allegedly on his way out and you never know what kind of new policies can affect interest rates which could (more…)

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