Mortgages
Pierce County is the second most populous county in the state of Washington. Pierce County is home to the Mount Rainier volcano, which is the tallest mountain in the Cascade Mountain Range. Pierce County offers its residents and visitors a wide range of natural and geographic attractions and features, as well as several national protected areas, including Mount Baker – Snoqualmie National Forest, Mount Rainier National Park, and Nisqually National Wildlife Refuge.
With all that Pierce County has to offer, it is no wonder that so many visitors fall in love with Pierce County Washington and choose to call Pierce County “home.”
Once you have decided to purchase a new home, one of the first things you will need to do is get a mortgage. Unfortunately, today’s home buyers have fewer choices when it comes to getting a mortgages than they would have during the big real estate boom; today’s lenders have returned to more sensible and safe home lending and financing, and have stepped away from the loans based on risky terms that were so popular from 2000 – 2008. However, there are still plenty of options for you to secure a quality mortgage.
When shopping around for a mortgage, you will come across three basic types of mortgages, for the most part. The three basic types of mortgages are as follows:
Fixed Rate Mortgage
With a fixed rate mortgage, your interest rate on the mortgage stays constant and remains the same for the entire length of the mortgage loan, and they payments are split into equal monthly payments for the entire duration of the loan. Especially during the first few years, only a small percentage of the payment in a fixed rate mortgage actually goes toward paying off the principle; rather, most of it is being applied to the interest on the loan.
While there are also options for 10 years, 15 years, and 20 years loans, the most popular fixed rate mortgage remains the 30-year mortgage, due to the fact that it makes the monthly payments lower.
Adjustable Rate Mortgage
Unlike a fixed rate mortgage that carries an interest rate that remains constant and unchanged throughout the life of the mortgage, the interest rate on an adjustable rate mortgage, or ARM, can change and fluctuate year to year. A particularly popular option is a hybrid adjustable rate mortgage, which features aspects and features of both fixed rate mortgages and adjustable rate mortgages.
For instance, the mortgage could start out as a three year, five year, or ten year period of a fixed interest rate. After the fixed rate period ends, the loan is then amortized over the balance and remainder of the term with an interest rate that can adjust year to year.
Typically, there are caps on these types of mortgages, on the initial interest rate reset, as well as a cap on the amount that the interest rate can change over the remainder of the loan.
Interest Only Jumbo Loan
Affluent homebuyers who have irregular incomes most often use these particular types of mortgage loans. As the name suggests, this particular type of mortgage allows you the option of paying only on the interest of your loan for the first few years. While there are options to pay on the principal as well, the option remains to pay interest only.
Interest only loans are structured similarly to adjustable rate mortgages, in that the interest only period lasts for only a certain period of time, whether it is the first 5 or 10 years. After that, the interest rate will begin to adjust annually, with the homebuyer making payments that go toward both the interest and the principal.
About Pierce County Washington Real Estate
Regardless of the type of mortgage you choose, it is crucial that you do your homework and understand your investment. Be sure that there are absolutely no details of the mortgage that you don’t understand. If you have any questions about how the mortgage process works, or which type of mortgage would be best in your situation, please feel free to call me. I am Vickie Jennings, and I am a Pierce County Washington real estate expert. It is my mission to provide exceptional service to anyone who has come here searching for Pierce County homes for sale. Take a look around my site, then browse through my featured properties to get a feel for the current market. Once you’re ready to search the available homes, give me a call or connect with me online. Let’s get started!
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