Westfield Home Mortgage Lender

Which Home Mortgage is Best For You?


For most first time home buyers in Westfield, NJ, the financing options available can be overwhelming. By researching a reputable mortgage lender and learning the basics of property financing, potential buyers can save a substantial amount of money and time. Awareness of the current property market, interest rates, and understanding the buyer's financials and long term goals will ensure the buyer chooses a mortgage that best suits their needs.


               Adjustable-Rate Mortgage – ARM

For people who like a little bit of risk, an adjustable-rate mortgage might be the best bet. With this type of mortgage, the original interest rate is customarily fixed for a period of time (possibly 5, 7, or 10 years) after which it is then changed from time to time. The borrower will pay an interest rate based on a fixed percentage (the ARM margin). This margin is added to a variable index rate and determines how much interest a borrower will pay at different stages of the loan.


This kind of mortgage benefits first-time home buyers who anticipate an increase in their income over the loan period. Borrowers enjoy the low introductory rates and are then elligible to borrow larger loans later.


Although the advantages can be substantial, ARMs are associated with considerable risk for home buyers whose earnings do not grow in tandem with possible higher interest rates. Lastly, the interest rate change is unknown at the beginning of the mortgage and is completely dependent on the market.


               Fixed-Rate Mortgage

Fixed-rate mortgages have a fixed interest rate during the entire duration of the loan. The interest rate over every installment of the mortgage is known at the beginning of the loan. The home buyer will not struggle with erratic loan payments that fluctuate with interest rates.


Naturally, there is a compromise when it comes to deciding on a mortgage. Should it be risk or reward?

               Jumbo Loan

A jumbo loan is a mortgage that exceeds the compliant loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO). Consequently it is not eligible to be guaranteed by Fannie Mae or Freddie Mac. Because loans cannot be guaranteed, requirements are very strict. Buyers must have higher incomes, outstanding credit, and assets. Jumbo loans usually have higher interest rates.


If you're looking for a home mortgage for the first time in Westfield, take time to decide how much home you can actually afford and then finance accordingly. A good mortgage lender like Millennium Home Mortgage will guide you through all the diverse programs and options in Westfield, NJ.