Our Home Loan Services
Premiere Home Mortgage offers a variety of loans in assisting you with that next big purchase. Please review this area to learn more or contact us directly by calling (919) 778-4856 or e-mail stevengrant@gmacm.com.
Fixed-Rate Mortgage
The fixed-rate mortgage has long been the most popular home financing product. With an interest rate that never changes, it provides stable, predictable monthly payments throughout the life of the loan. Your monthly payments won’t decrease if market rates go down, but you’ll have the comfort of knowing you are protected if rates go up.
If you plan to stay in your home for more than seven years, and prefer the security of stable payments to being at the mercy of the market, a fixed-rate mortgage may be the best option for you.
Adjustable-rate mortgage (ARM)
An adjustable-rate mortgage has a low starting rate, so your initial monthly payments on an ARM will be lower than on a fixed-rate loan for the same amount. And because the amount you can borrow is based partly on how much you can pay each month, your maximum loan amount will probably be higher with an ARM.
Here's how it works:
* The interest rate starts out lower than the rate on a fixed-rate mortgage, then adjusts regularly based on market indicators.
* The starting rate stays fixed for between three months and 10 years, depending on the ARM product.
* Most ARMs adjust annually, but some adjust on a semi-annual or monthly basis.
* Individual adjustments are capped at a certain amount, and the rate can never exceed the lifetime cap.
Keep in mind that the interest rate and monthly payments can increase during the loan term. You may get the most value from an ARM if you plan to move before the end of the fixed-rate period, or if you’re buying at a time when rates are relatively high.
Balloon mortgage
A balloon mortgage has a lower rate and lower monthly payments than a fixed-rate mortgage. Like an ARM, a balloon loan can help you either save money each month or get a larger loan.
Monthly payments on a balloon loan are fixed for the five- or seven-year loan term. A final “balloon” payment for the entire remaining balance is due at the end of the term.
A balloon mortgage is a good option if you:
* Only plan to stay in your home for five to seven years
* Don’t expect rates to rise significantly before the loan matures
* Expect to have the money to make the final payment at the balloon date
* Want predictable monthly payments
Home equity financing
As you repay your mortgage, you will gradually build up equity in your home. You can borrow against that equity when you need cash, using either a loan or a line of credit.
* Home equity loans give you the cash you need as a single up-front payment, which you can repay at a fixed rate. If you know exactly how much you need to borrow, a home equity loan may be the best option.
* Home equity credit lines give you a revolving source of cash that you can draw from as you need to, up to a maximum amount. The line carries a variable rate with an interest-only option, and you pay interest only on what you actually use — not the total amount of the credit line.
VA mortgage
VA mortgages, which are insured by the Department of Veterans Affairs, make home financing easier and more affordable for veterans, reservists, and active-duty service members. They offer some of the easiest approval requirements of any mortgage, including:
* Flexible credit guidelines
* Expanded qualifying ratios
* The option to use gift money or secondary financing
Interest-only loan
Instead of paying principal and interest on your mortgage every month, an interest-only loan lets you defer principal payments during a specified period early in the loan term. That means your monthly payments will be lower during the interest-only period.*
Key benefits:
* More borrowing power. Lower payments may help you qualify for a larger loan.
* Flexibility. You can make principal payments when you want to build equity, or choose to put money into other investments instead.
Risks you should consider:
* Higher financing cost overall. The loan amount on which you pay interest won’t decrease until you begin paying down the principal.
* Negative equity. Even without principal payments, you can still build equity if the value of your home increases. If the value decreases, however, you could owe more than your home is worth, which is problematic if you intend to sell.
So do the benefits of interest-only loans outweigh the risks? It all depends on your financial situation and how you want to manage the investment in your home. Individual needs vary, so you should discuss your options with your financial advisor.
Consolidating Debt
If you are overextended with credit and living month-to-month, debt consolidation might make your payments more manageable.
By using a home equity loan to pay off multiple credit accounts, you can take advantage of three valuable benefits:
* Simplicity. Instead of a steady stream of bills in the mail — each with a different payment amount and due-date — you receive a single statement each month.
* Lower payments. Because they are secured by your home, home loans generally carry lower rates than most other types of credit. That means you'll have lower monthly payments and a chance to put money into savings.
* Improving credit. Simplifying your debt situation and reducing your monthly obligations can make it easier to keep up with payments. A solid payment record on your home equity account is a great way to give your credit a boost.
Financing Major Expenses
f you’re making a major purchase, home equity financing may be a more practical way to pay for it than using cash, credit cards, or other types of financing. Consider a home equity loan or line of credit for:
* Improving your home. Not only can improving your home make it more appealing for you to live in, but it may make it more valuable as well. The increased value of your home after renovation may be enough to offset the cost of the project.
* A second home. If you’re in the market for a vacation or investment home, the equity in your current home can be a good source of down payment and closing funds for your purchase.
* Education. A home equity line of credit gives you the flexibility to pay for tuition, room and board, books, and all the other costs of putting your kids through school.
* Big events. Life is full of big events with big price tags. Whether you’re looking forward to a wedding, a new baby, or a family trip to Hawaii, home equity financing can make paying for them easier.
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