Financing A Home
Coldwell Banker Hedges Realty has partnered with University of Iowa Community Credit Union (UICCU) to provide a convenient financing option for our clients. UICCU offers competitive rates, great service, and does not charge a 1% origination fee. You can even submit your application online!
Curious about financing a home purchase? Want to calculate your monthly payments? Need to know how much money you must earn to purchase the house of your dreams? These mortage calculators can help you figure it all out!
Pre-approval vs. Pre-qualification
You will greatly improved negotiating position when you are preapproved for a mortgage. Sellers are more apt to negotiate with someone who already has a mortgage approved. The pre-approval letter lets the seller know they are working with a serious buyer. A pre-qualification is not a full mortgage, but an estimate of what the buyer can afford.
Pre-approval uses basic information as well as electronic credit reporting. It is a true mortgage commitment. A preapproved buyer can also close on a property more quickly which is another major consideration for a motivated seller. You can receive a free pre-approval through Cedar Rapids Mortgage Company and they can help you through the pre-approval process. Ask your Coldwell Banker Realtor for more information.
Pre-qualification on the other hand, is not a full mortgage approval, but an estimate of what you can afford. When you prequalify for a mortgage, the lender collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount. You can also receive a free pre-qualification through Cedar Rapids Mortgage Company. Ask your Coldwell Banker Realtor for more information.
Fixed Rate vs. Adjustable Rate Mortgage (ARM)
There are many different mortgage types available with the two largest categories being fixed and adjustable rate mortgages, each with consideration.
Fixed Rate Mortgage
The fixed rate mortgage is a traditional method of financing a home. The interest rate stays the same for the entire term of the loan; terms are usually 15, 20 or 30 years. The interest and principal portions of your monthly payment remain the same throughout the term of the loan. Interest rates tend to be higher on a fixed rate mortgage than on adjustable rate loans. Historically, fixed-mortgage rates today have never been this low and more clients opt for this method of mortgage.
Adjustable Rate Mortgage (ARM)
The interest on an adjustable rate mortgage (ARM) is linked to a financial index, so your monthly payments can vary over the life of the loan. Terms are usually 25 to 30 years. Most adjustable rate mortgages have a lifetime cap on the interest rate increase to protect the borrower. The lower initial payments on ARMs make it easier for buyers to qualify. Some ARMs may be converted to fixed rate mortgages at specified times, within the first five years.
Our Realtors can help answer any questions you may have! Contact Us Online or Give Us a Call at 319.378.8760