How Do You Know Which Mortgage is Right For You?

When it comes to buying Las Cruces real estate how do you know which mortgage to choose? If you are lucky enough to have several hundred thousand dollars lying around you don't have to wonder. Cash out sales are easy and close quickly but the majority of home buyers need a loan to purchase a home. This is an excellent investment though because overall, the property increases in value earning you better return than just about any stock you will find.

But there are so many programs and options out there for mortgages, how do you know where to start?

There are several avenues for obtaining a loan:

• Banks
• Credit Unions
• Private Lenders or Investors
• Mortgage Brokers

Each of these has pros and cons but are all good choices for a mortgage. The bank or credit union will have low rates and typically better fees but are limited to their own programs.

Private lenders or investors typically have more lienant terms but higher interest rates.

Mortgage brokers are usually a good choice because they have access to hundreds of mortgage options but typically can run more expensive because of it.

Once you choose whom you are going with, there are several types of mortgages to choose from:

• VA Loan
• FHA Loan
• USDA Loan
• Conventional Loan

Again, each of these can fit a specific situation and individual.

VA loans are designed for veterans and help with closing costs and low rates, FHA are low money down loans but carry mortgage insurance for a couple years. USDA are zero down loans but only a few homes may apply for this. Conventional is the best way to go if you can't go VA because even though you have to come up with money down, the rates are usually the lowest and there is no mortgage insurance.

Each loan has different options and fees such as 10, 15, 20, 30  or 40 year loan. Of course the farther out you have to pay the lower the payment but much more in interest charges. The lower the time is to pay off the loan the bigger the payment will be but a much faster equity return.

The best thing to do is to sit down with a lender you trust and feel comfortable with and go over all your options for loans. They can work with you and your financial situation to come up with a program that fits your lifestyle perfectly.

For more information on Las Cruses homes and loans please contact our office.

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