Financing

If you think about financing your dream house or your investment, we can help you to find the right motgage.

In general, 80 % or more of the purchase price or of the appraised value of an object can be financed. At present, the rates are around 6 % depending of the type of mortgage.

There are several models, for example:

• Fixed-rate mortgages with constant rates and payments for 15, 20, 30, or even 40 years.
• Adjustable-rate mortgages (ARMs) with changing interest rates. An ARM offers an initial interest rate that is 2 to 3 percentage points below a fixed-rate mortgage. After the initial constant-interest rate period the interest rate is adjusted periodically based on an index, e.g. the LIBOR. A 5/1 ARM for example means that the interest rate is constant for the first 5 years, but then can change annually. The benefits of ARMs are lower payments for a specified time and significant savings, especially when the borrower knows that he will refinance or sell the property before the adjustments begin. 
• Balloon loans are short-term mortgages that keeps the interest rate lower than that for fixed-rate mortgages, for example for 5 to 7 years, and then requires the final payment of the entire balance. Balloon loans can save money but are risky.
• Interest-only (IO) programs offer the lowest payment possible because the monthly rates do not pay anything toward the principal. IOs have fixed rates for 3, 5 or 10 years and the remainder of the term fully amortizing. Benefits are reduced payments for the first 3, 5 or 10 years and a maximum tax deduction for these periods.

For the loan application several documents are necessary: Personal ID, income verification, Bank statements, verification of employment, or tax assessments if the borrower is self-employed, verification of deposits, credit score, debts, etc.

At the closing of the mortgage contract the downpayment, fees and commissions for the broker, the appraiser and the mortgage loan processor, taxes and other public fees have to be paid.

There is the possibility of refinancing an object when the borrower wants to lower the monthly payments and as long as the interest rates are declining.