What is a mortgage? Interest rates on Jacksonville FL Fixed Rate Mortgages are still very low! If you plan to stay in your home for the long term, a consistent payment that never changes can help you prepare for your financial future. Plan your budget with a consistent mortgage payment at a low rate that will stay the same through the life of your loan with a Jacksonville FL mortgage. Reach out to us to find out the million dollar question “How much mortgage can I afford?”
Jacksonville FL Fixed Rate Mortgages and Ponte Vedra Beaches FL; We are here to guide and serve!
The 15-year mortgage (The rate is fixed for 15 years and not a variable ARM)
You will pay less in interest. If you borrow $100,000 to purchase a home at a 4% interest rate, paying over a longer period of time will mean more interest on the money borrowed. So, a 15-year mortgage can significantly cut down on the interest that you pay. Add to that the lower interest rates that are often available for 15-year mortgages and you could have some big savings available. We see 15 year mortgages in usually savvy investors with investment properties or high income borrowers in Jacksonville FL mortgage scenarios. Reach out to us to find out the million dollar question of “How much mortgage can I afford?”
Your monthly payment will likely be higher. Even with the lower interest rate, you will probably have a slightly higher payment with a 15-year mortgage. This happens because you are paying more towards principal from the beginning. But, you will be mortgage-free in half the time, which is no small feat.
The 30-year mortgage (The rate is fixed for 30 years and not a variable ARM)
You will pay more in interest. Longer mortgage means more interest charged. This is how banks and other lenders make their money. They loan you, the borrower, money and collect their interest over the 15 or 30 years it takes you to pay them back.
Your monthly payment will likely be lower. Because you are spreading out your payments over a longer period of time, they will almost always be lower with a 30-year mortgage. If your monthly budget is tight, this may be a better way to go.
How it Works: What is a Mortgage?
- Monthly payments are based on interest rate, principal loan amount, and amortized interest over 30 years. With a Fixed Rate Mortgage, your interest rate will never change, even if market rates increase!
- Your payment will not change throughout the life of the loan.
- Your actual payment will vary based on your situation and the current interest rates when you apply.
- Pay your mortgage off at any time without pre-payment penalties.
The three major items needed for approval for a refinance or purchase are as follows: CASH, CREDIT & INCOME.
- CASH – Cash means where is your down payment located and how much do you have. Do you have enough cash to buy the home such as 3.5% down for an FHA loan or 3%-5% down for a Conventional Loan. These are the lowest available besides a VA Loan which is No Money Down. Therefore, we need to trust and verify where the cash is coming from whether it be a checking account, savings account, 401K, investment account, or gift funds from a family member. This item MUST be trusted and verified through documentation.
- CREDIT – We must pull credit and verify a credit score and a debt to income ratio among that credit score and the debts tied to that credit. The minimum available is down to a 550 credit score although this is marketable it is nearly impossible. Most will need to be at least 580 credit score to have a swinging chance at clearing a DU or LP approval. In order to have the most likelihood for closing is a minimum of a 620 credit score. A 620 is normally attainable for an FHA loan as this is a government backed loan designed to approve lower credit score buyers and offer a lower down payment of just 3.5%. Therefore we need to pull credit and hopefully with will be a high 700 score and we can do a Conventional Loan is the most ideal situation unless you are a VA buyer.
- INCOME – Finally income needs to be trusted and verified with tax returns, pay stubs, and W2’s. These items detail into the most recent two pay stubs or last 30 days. If you are paid weekly we will need 4 pay stubs. If you are commission based we will need two years of tax returns and will average your commission among those two years. If you are salary we will want to see your pay stubs and W2’s.
Have questions about a Jacksonville FL mortgage? Give us a call! One of our mortgage specialists would be happy to answer all of your questions.