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Connecticut Mortgage Loans

With all of the discussion about the recent decline in the real estate market many people in Connecticut might begin to believe that providers of mortgage loans are not financing new loans to consumers. Thankfully that is not the case. The fact is that interest rates for new mortgage loans are so low that financial institutions are practically begging for new customers interested in purchasing or refinancing real estate.

To those of us that don’t fully understand the different types of mortgage loans available in Connecticut it’s probably best to do some research before going and talking to a loan officer. It’s usually best to understand the difference between adjustable rate mortgage loans and fixed rate mortgage loans.

The category that defines fixed rate mortgage loans is generally less confusing. Fixed rate mortgage loans can vary as to the length of terms, typically from fifteen to thirty years, but the payment doesn’t change during the life of the loan. That makes it easier to keep track of your family budget and know just how much your payments are going to be for many years to come. These are the best types of mortgage loans to get when interest rates are at their lowest, because they are guaranteed not to go up when interest rates start to climb.

The other category of mortgage loans is defined as adjustable rate mortgages, or ARM’s, the payment on these typically change every one to five years. For example a 55 ARM will change every five years depending on what the interest rate is at the time the loan is reset. If the rate the loan is based on is higher when the loan is reset, the monthly payments will go up accordingly, but if the rates are lower than the monthly payments will go down.

There are many factors to consider when deciding which category of mortgage loans is best for you. One major deciding factor is how long you intend to keep the piece of property and how much of a down payment you have to invest in your real estate purchase. If you feel that you’ll be living in the house for a long period of time it’s often best to get a fixed rate mortgage loan. But, if you only planning on living there for two or three years, an adjustable rate mortgage are usually a better choice, because the down payment requirements are generally lower. As a matter of fact some adjustable rate mortgage loans don’t even require a down payment. Another thing to consider is that there are also several kinds of government assisted mortgage loans available such as VA loans, so if you are a military veteran it might be to your advantage to look into how the federal government can help you with the purchase of your new home, with down payment assistance and lower interest rates.

One thing to keep in mind is that interest rates are as low as they have been in over four decades and there are less people currently buying real estate. There has really not been a better time to invest in real estate in over forty years. Making now the perfect opportunity to buy your new dream home while the prices and interest rates are low.