When it comes to be time for a South Florida resident to apply for a mortgage, there are quite a few things to check off the to-do list. After all, a mortgage is probably the biggest loan that an individual or a couple will ever take on in their lifetimes. As a result, lenders require a lot of documentation that proves that the borrower can make the monthly mortgage payment without fail.
However, simply applying for a mortgage is not always easy. The applicant has to pick the right mortgage plan for their own unique financial situation. And there is no shortage of options.
For starters, most applicants try to decide whether or not an adjustable-rate mortgage might be a better choice than a conventional, fixed-rate mortgage. Picking between these two types of mortgages can make thousands of dollars' worth of a difference -- for better or worse. A fixed-rate mortgage offers the simplicity of knowing that the monthly mortgage payment won't fluctuate throughout the life of the loan, as the interest rate is set. And interest rates have been pretty low for the last seven years or so. On an adjustable-rate mortgage the monthly payment could change quite a bit. The interest rate is tied to an indicator used by the lender to adjust the interest rate on the mortgage.
Choosing the right mortgage plan is different for everyone. With hardly any two applicants alike, many lenders will offer a variety of options in an attempt to cater to the largest amount of customers. In the end, the best way to pick a mortgage plan is to make a choice that you feel most comfortable with.
Source: www.mortgagecalculator.org, "Choosing a Mortgage Plan," Accessed Feb. 15, 2015