APRYL BERRY, Broker

Financing



Like many other products and services, numerous mortgage options are available for your choosing.  Fortunately, they fall into two basic categories:

Fixed-Rate Mortgage loans have an interest rate that stays the same and your monthly mortgage payment does not change, which makes budgeting easier.  The interest rate on these loans are usually a little higher than adjustable loans since the lender is establishing a set rate for many years.
 
Adjustable-Rate Mortgage (ARM) loans have an interest rate that fluctuates up and down throughout the life of the loan, depending on what's going on with the market level of interest rates.  The rate could change as often as every month, so it can be difficult to budget.  An ARM is an attractive option for many because it usually starts out at a lower interest rate, which may enable you to qualify to borrow more.
 
When it comes to ARM loans, an important point to look for is the presence or absence of interest-rate "caps".  Life-of loan caps place a ceiling on how high the rate can go over the term of the loan, often five to six points above the original rate.  They are a guarantee from the lender that you will not be required to pay more than the agreed-upon maximum interest rate.  Annual caps protect you from the extreme jumps in the interest rate in any given year and are usually in the one to two percent range.
 
  "Purchasing a home is a valued investment which can have many financial advantages.  Because homes generally increase in value throughout the years, each monthly payment you make is an investment in your future."