If you own property, it’s essential that you plan for the future, as in, answering the tough question of what will happen to your assets when you die? You can (and should) have a will in place that will spell out your wishes and how assets should be distributed after your death.
Options for homebuyers in a high-interest rate environment
We’re always looking for ways to make purchasing a home more affordable. When interest rates go up and cause higher mortgage costs, some borrowers may feel like they can’t afford to buy a home.
If you’re in the market for a new home, know that you do have options!
Guild Mortgage Lock and Shop program
If you’re shopping at a time when interest rates are in flux, you may feel pressured to find a home fast before rates go up even more. With such a big investment on the line, it’s not wise to rush your home search.
That’s why Guild Mortgage offers borrowers a Lock and Shop option*, which allows you to lock in the current interest rate for up to 120 days. Even if rates go up as you shop for a home, your rate stays the same. You can also take advantage of a one-time float-down option if rates go down.
For full Lock and Shop program information, plus terms and conditions, visit www.guildmortgage.com/cap-hbe-terms.
Buy points to help reduce interest costs
You can also buy mortgage discount points to help reduce interest costs. These points are paid upfront and one discount point costs 1% of your mortgage amount (or $1,000 for every $100,000.) When you choose this option, you are prepaying interest. Points can be a beneficial option if you have the cash to pay for them upfront and plan to stay in the home for a long period of time.
ARMs have a lower introductory period
ARMs**, or adjustable-rate mortgages, start out at a lower rate than fixed-rate mortgages in an introductory period. ARMs can be a good option for those borrowers who don’t plan on staying in their homes for a long period of time.
Before accepting an ARM, ask your lender if there is a limit on how low and high interest rates can go, how soon payments can increase, and how frequently interest rates can change.
Refinance for a lower rate
If you are already a homeowner at a high rate, or you had no choice but to buy in a high-rate environment without applying one of the tools above, know that you aren’t locked into that rate for the life of your loan. You may be able to take advantage of a better rate by refinancing. It is tough to know when the best time to refinance is though. When your mortgage is serviced by Guild we will monitor your loan and recommend refinancing when your accrued equity and market conditions indicate there is an opportunity. You can also check your equity in your free Homebot*** account to see how close you might be to this goal.
At SmartMortgage.com, we want to make sure that you’re educated about your options for purchasing a home. We will help you find the right mortgage for your needs and discuss various programs to make purchasing more affordable.
*Upfront lock-in fee required
**Guild does not offer ARMs with an introductory fixed interest rate of 5 years at this time. 7-year and 10-year initial period terms are available.
***Guild Mortgage Company is not affiliated with Homebot.The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.