How to Choose a Mortgage
Mortgages are like your favorite pair of jeans: only one fits just right. We here at MBNG Mortgage are here to help you every step of the way, but in case you’d like to do some pre-planning on your own, we’ve compiled this list of mortgage basics just for you.
Compile these documents in one place
- One month’s worth of recent pay stubs from each earner
- Tax returns and W-2 forms from the past two years
- Three months’ worth of statements from your bank, 401(k), IRA, mutual funds and stocks
- Three months’ worth of student loan statements or past mortgage payments
- Letter of employment verification
- Letter from any financial gift givers
Be sure to:
- Brush up on your mortgage terminology
- Make an appointment with MBNG Mortgage
- Get a Good Faith Estimate (GFE) with terms and fees explained in detail
- Do some math
- Sign a mortgage agreement
- Send thank-you notes to anyone who helped you out for free
Different types of mortgages
15-year Fixed Rate
- Monthly payment: higher
- Interest rate: lower
- Rate changes: never
- Total interest: lower
- Best for: couples who can afford higher monthly payments, want to save money in the long run, and plan to stay in their home for a long time
30-year Fixed Rate
- Monthly payment: lower
- Interest rate: higher
- Rate changes: never
- Total interest: higher
- Best for: couples who prefer lower monthly payments, may need more time to pay for their dream house, and plan to stay for a long time
3/1 Adjustable Rate
- Monthly payment: lower for three years, then may change after that
- Interest rate: lower
- Rate changes: fixed for three years, then may change
- Total interest: depends on the current interest rates
- Best for: couples who prefer lower initial monthly payments, are confident that they can handle future market fluctuations and plan to move after a few years
5/1 Initial Interest Only Payment
- Monthly payment: much lower for five years, because only interest payments are required
- Interest rate: lower
- Rate changes: fixed for five years, then may change
- Total interest: depends on the interest rates
- Best for: couples who prefer very low initial monthly payments, are confident that they can handle much higher payments in the future, and plan to move after a few years
7-year Balloon
- Monthly payment: lower, then…the ENTIRE balance of the loan must be repaid or refinanced
- Interest rate: lower
- Rate change: fixed for seven years
- Total interest: depends on rates at the time the balance is due
- Best for: couples who plan on winning the lottery
Pay Option Adjustable Rate
- Monthly payment: four choices each month: very low minimum, low interest-only, or higher principal/interest options
- Interest rate: very low
- Rate changes: monthly
- Total interest: depends on current interest rates
- Best for: making minimum payments, can lead to a mortgage growing over time
If you have any questions, please feel free to give us a call at 918-449-9838 and we’d be glad to give you a hand. We look forward to hearing from you! 
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