Looking For An Interest Only Loan? It’s About To Get Tougher

Trying to acquire an interest only loan is about to get tougher. Fannie Mae is changing the rules to make qualifying for interest only loans a more stringent process. The biggest difference will be the percentage that a home buyer will have to put down on his real estate transaction. Under the new rules a borrower will have to put down 30% of the home’s value to qualify for a Fannie Mae-backed interest-only mortgage.

Fannie Mae does not issue mortgages but buys them from lenders who do. If Fannie Mae doesn’t like what it sees it will not purchase the mortgages. The goal behind the qualification changes is to make sure that borrowers can afford to pay their mortgages. The bursting of the housing bubble has created the need for security, to avoid any repeat performance in the future.

Read about Interest Only Loan

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Mortgage ABCs

Buying a home is a very big financial decision and being prepared is of the utmost importance. Before looking for a new home a potential buyer should pre-qualify for a loan as well as examine his finances to be certain exactly what he can afford. When finding the ideal house for the ideal price the next step is acquiring a mortgage. There are a few different types of mortgages and it is important to understand the differences between them and choose the one that best suits your needs.
ARM An ARM is an adjustable rate mortgage, ideal for those who are only planning to be in their house for two to three years. An ARM typically starts at a very low interest rate and keeps it low for the period of time it is set for, typically 2, 3 or 5 years. The danger of this type of loan is that it is an interest only mortgage for the specified time period and then it increases dramatically when the period is up.

FIXED RATE A fixed rate mortgage locks in a t a specified interest rate and is usually set for a period of 15 or 30 years. A 15 year loan would have higher payments than a 30 year loan, subsequently you would end up paying less interest as well but the lower payment of a 30 year loan could make more sense for your monthly expenses.

Regardless of the type of loan you decide to go with, researching your best option is very important, after-all, you are always your own best advocate.


Read on an interesting article on financing real estate!


For more information please contact me at 818.269.5550.
You may also visit my wesbite: http://www.caroledelacruzrealty.com
or email me at: carole@caroledelacruzrealty.com

When It’s Right to Buy a Bigger, Better Home

It is not uncommon for homeowners to outgrow a home, but knowing when it makes sense to trade up to a bigger home is important when making such a move. Of course the biggest questions involve finances.

Does your current home have enough equity built up in it to make sense? If you can sell your current home for a nice profit and have extra money to put down on your new home it will make your entire transition and easier one.

Can you afford the mortgage on your new home? If you can take the equity from your current home and put down a nice down-payment, your new mortgage could be similar to your current home’s mortgage which would make the entire transition more affordable. If your new mortgage is going to be a larger one make sure that your income has increased enough to afford it.

Analyze the market you are in. If your current home will sell quickly and for asking price or greater, will the new home you choose be more expensive as well? Look at the neighborhood you want to move to and know what homes are selling for.

There are a lot of factors that come into play when deciding to buy a bigger, better home but remember that the grass is not always greener. A bigger home will cost more to run and take more to upkeep. Take a good hard look and make sure that the decision is in your best interest for a solid financial future.

For more information please contact me at 818.269.5550.

You may also visit my wesbite: http://www.caroledelacruzrealty.com/

or email me at: carole@caroledelacruzrealty.com