Everyone from first-time Davidson or Lake Norman, North Carolina homebuyers to buyers with multiple homes at some point will likely need to consider their mortgage options. It’s expected that homebuyers have questions about some of the finer points of mortgages, such as interest rates and qualifying. In Davidson and the Lake Norman area, Whitley Mortgage is available to help you determine what your best mortgage options are and to give you the guidance you need to secure the loan for your dream home.
Home mortgages fall into two categories: conventional mortgages and government insured mortgages. Government insured mortgages are guaranteed by a governmental body such as the FHA, or Federal Housing Administration. Conventional mortgages do not come with a government guarantee. There are two primary types of interest rates that are applied to each of these kinds mortgages: fixed-rate and adjustable-rate. Each has pros and cons that are largely dependent on the loan’s recipient, but a general understanding of them is helpful in starting the mortgage application process.
A fixed-rate mortgage is one in which the interest rate remains the same regardless of the state of the market or other economic fluctuations. These are great options for people seeking a standard monthly payment. That said, sometimes the best rate when you purchase your home is not the best the market will offer. That’s why it’s important to discuss fixed-rate loans with Davidson, NC mortgage professionals, like those at Whitley Mortgage, and determine whether a fixed-rate loan is right for you.
Adjustable-rate mortgages have interest rates that rise and fall with inflation. These can either change as the market does, or change at regular intervals – typically every 3, 5, or 7 years. If you’re buying a house in an unfavorable time for the market, an adjustable-rate loan may be a way for you to avoid paying a higher interest rate for the coming decades. A Whitley Mortgage professional can help you assess market rates and determine if this type of interest rate would be beneficial in your situation.
Pre-qualification and pre-approval are the two primary ways lenders can help you determine what your loan might be – but there are distinct differences between the two that are important to note.
When you pre-qualify for a mortgage, you’re essentially getting an estimate from the lending agency of how much they might be willing to loan you. A pre-qualification is a relatively superficial look at your finances, which helps the lending agency determine what amount you may qualify for based on your income and savings alone. It is helpful to get pre-qualified as an early step in planning your home selection and budget.
Pre-approval is a more in-depth way for lenders to determine what they might loan you – and it comes with more assurances. When getting pre-approved for a loan, the lending agency will look at both your finances and your credit to give a more clear picture of what you might be able to expect. Sometimes, lending agencies are able to offer interest rate options when a pre-approval evaluation has been performed, allowing for more solid home purchase planning. That said, these evaluations do take longer and usually come with a fee.
When you need advice on your home mortgage loan in Lake Norman or Davidson, NC, call Whitley Mortgage. We have nearly 30 years of experience helping prospective homeowners in Davidson, Lake Norman, and throughout North Carolina select and secure the loan they need to purchase their dream home.