What Mortgage Fits Your New Jersey Home?

By Gabriel Traverso
Local Lender Columnist
Jul 18, 2007
Buying a new home can be confusing if you don't understand the terminology and all the mortgage options available to you. The more you know the better prepared you will be to buy your New Jersey home.

Check Your Credit

Before you even start talking with mortgage lenders or filling out applications, check your credit report. Most mortgage lenders can offer you a few different options if your FICO score is 650 or higher. If you are below that, or below 600, consider taking steps to improve your credit before applying for a new home loan. With a low score you can end up paying much more for a mortgage.

Fixed-Rate Mortgages

This is what you might consider the traditional home loan. A fixed-rate mortgage interest rate doesn't change for the life of the loan. Considered low risk, this loan option makes budgeting for your mortgage payments much easier. Fixed-rate home loans are usually available with 10- to 40-year terms.

Adjustable-Rate Mortgages

These home loans come in a variety of flavors. They offer a home loan with a low introductory rate -- an interest rate below the average market rate but only for an initial period. Introductory periods can range from six months to ten years. Afterwards your interest rate will fluctuate depending on the market index used for the loan. This means your mortgage payments can go up or down depending on how the financial markets perform.

Find the Right Home Loan

Before you get your heart set on the New Jersey home you want, talk with a few mortgage lenders to discuss your options. Make sure you budget accordingly and can afford the loan, and therefore the home.

About the Author
Gabriel Traverso is a freelance writer, professional musician, and an artist. He resides with his family in Reno, NV.