Scotch Plains Home Mortgage Lender

Fixed-Rate Mortgage

Buying your first home in Scotch Plains, NJ can be an exciting but anxious time. Educating and preparing yourself is important. With many mortgage products available, how do you know what to choose?

Fixed-rate mortgages are a favorite among many first-time buyers because they allow them to budget with certainty. A fixed-rate mortgage means that the interest rate is fixed during the entire duration of the loan.

Benefits of a fixed-rate mortgage include:

  • Knowing the exact loan payment amount each month.
  • Ability to budget with certainty over the life of the loan.
  • Suitable option for people looking to stay in their homes for a the duration of their loan.
  • Rates can vary from lender to lender but are easy to understand.
  • 30 year fixed-rate option to make monthly payments very low.

Cons of the fixed-rate mortgage:

  • The longer the loan and lower the monthly payment, the longer it will take to pay off the mortgage.

               Adjustable-Rate Mortgage – ARM

With adjustable-rate mortgages, the interest paid on the loan fluctuates regularly after an initial loan period (one month to 10 years).

Benefits of an adjustable-rate mortgage:

  • Borrowers enjoy low introductory rates. If the borrower makes significantly more money in the future, they will have taken advantage of the low rate and then be able to easily pay higher interest rates later.
  • There are caps on how high the interest rate can rise.
  • Perfect for buyers who do not plan to stay in their homes for a long amount of time.


  • These loans can be unpredictable because they depend on the market.

Larger Purchases Might Require a Jumbo Home Mortgage

If luxury homes and high price tags are what you are after, a jumbo home loan might be for you. A jumbo loan is a mortgage that exceeds the compliant loan limits set by the Office of Federal Housing Enterprise Oversight. Because the loan is so large, it is not eligible to be guaranteed through Fannie Mae or Freddie Mac. Buyers must have higher incomes, outstanding credit, and assets. Jumbo loans usually have higher interest rates.

To be eligible for a Jumbo loan:

  • Be in a position to finance a down payment of at least 20% of the purchase price

·       Your monthly mortgage payment is at most 38% of your gross income.

Whether you have a big deposit or small, want a fixed or a variable rate loan, or you are looking for a home mortgage for the first time in Scotch Plains, NJ, take the time to decide how much home you can actually afford and then finance accordingly.