Securing a mortgage is one of the most daunting aspects of buying a home, especially if it is your first one. With a seemingly endless contract populated by nearly impenetrable lingo, it can be difficult to tell what you're signing, let alone what your payments will be like in five years. Fortunately, Steve Butcher Sr., Esq., a real estate attorney providing legal services to residents throughout the Rochester area, is here to explain a few mortgage basics many people find confusing.
Fixed Vs. Variable Rates
A fixed-rate loan is among the simplest financial products available, offering predictable payments with no unpleasant surprises. Variable rate mortgages, on the other hand, have interest rates that change periodically, with some schedules that can be extremely complicated. Which is right for you will depend on a variety of factors, including interest rates, the housing market where you are, and your risk tolerance.
The Amortization Schedule
This often-misunderstood document shows the full cost of the house, including your closing costs and interest, so it pays to compare these figures when you've got multiple options. Over time, the interest can actually double the real cost of your home, so consult with an attorney who provides legal services in real estate to make sure you're getting the best deal.
The terms of your mortgage have a big impact on how long it will take you to start building equity in your house. In the beginning, the bulk of your payments will go toward interest, so you may pay for several years before significantly reducing the amount of principal you owe.
If you're buying or selling a home, you need an attorney with the knowledge and legal services to help you avoid mistakes you might regret. Visit Steve Butcher Sr., Esq. online to learn more about his legal services, or call (585) 263-2444 to schedule a consultation today.