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Tips for Choosing the Right Home Loan


Learn how you can choose the best home loan for your needs.

Securing the right home loan can be a confusing and overwhelming process.  With all the mortgage options available, it can seem like choosing the right one is an impossible feat.  However, it’s important that you stay calm and look at your different options practically and objectively.  Here are a few of your options broken down and explained for you.

Loan Terms

While many decide on a 30-year mortgage, 15-year loans are also something to consider, especially when mortgage rates are low.  When choosing your loan term length, it’s important to think about both your short term and long-term financial goals.  For instance, if you are planning on retiring within the next 2o years, choosing a shorter loan term length will ensure that you retire mortgage-free.  A short loan term might also be helpful for parents who want to pay off their home before starting to pay their children’s tuition.  Additionally, shorter-term loans can also save you a considerable amount of money on interest payments.  Obviously, a shorter-term length means a more aggressive payment schedule and higher monthly payments.  So, it’s important to make sure that you have the finances to afford a short-term loan.

Mortgage Options

While they haven’t been as popular lately, adjustable-rate mortgages (ARMs) can actually save you money in the long run.  ARMs offer a fixed-rate period of one, five, seven, or ten years, followed by a period of adjustable interest rates.  ARMs are a good choice for people who plan to pay off their loan quickly, sell the property, or who can afford to pay the max rate adjustment.  Before you agree to an ARM, it’s important to make sure that you can afford to pay the maximum rate to avoid defaulting on your loan payments.  Borrowers who intend to stay in a home for an extended period of time should choose a loan with a low interest rate on 15 to 30-year fixed loans.

Use this information to help you select the right home loan for your needs.  If you are looking to buy a home in beautiful Hermosa Beach, or anywhere in Southern California, then make sure your escrow process goes off without a hitch.  Trust the expert team at Brighton Escrow to provide unparalleled service.  Contact us to get started today!