Buying a home is the most important purchase many people ever make. Choosing the correct way to finance is almost as important as the purchase itself. It's vital for borrowers to understand interest rates, terms, monthly payments and other variables before committing to a loan.
There are a variety of options available, therefore it’s important that borrowers fully understand all aspects of a mortgage. To do so, Kearny Bank's loan counselors work with buyers to explain the differences and help them choose a loan that best fits their needs.
For example, a Fixed Rate Mortgage is Kearny Bank's most popular type of home loan. It offers the security of a consistent interest rate and monthly payments over the entire life of the loan. However, in some cases, an Adjustable Rate Mortgage is a better option, especially if buyers do not expect to live in a home long term. In these loans, owners receive an initial lower interest rate and reduced monthly payment in exchange for the possibility of a rate increase in the future.
The term of the loan also determines the monthly payment. Shorter terms, such as 15 years as opposed to the normal Fixed Rate terms of 30 years, increase the monthly payments but greatly reduce the interest paid and the overall costs of the loan. For an Adjustable Mortgage, upping the term to 7 or 10 years rather than one, three or five years extends the period of rate stability.
For buyers who have never owned real estate before and are purchasing property, Kearny Bank’s First Time Home Buyers Program offers special incentives for those who qualify. The program is specially designed for young families beginning home ownership. With rates expected to rise in the coming year, current homeowners are also encouraged to explore refinancing older loans to receive more favorable interest rates.
Regardless of whether a buyer is moving up, downsizing or buying their first house, the Mortgage Application Kits available at every Kearny Bank branch provide important information and easy to follow instructions for those going through the lending process.
For further information on home financing at Kearny Bank, click here.