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If you're brand new to the wonderful world of home loans, you might be a bit overwhelmed by how many different types of financing options are really out there. Both primary loan types (fixed-rate and adjustable-rate) have many variations, so how do you know which one is best for you?
Let’s start with Fixed-Rate Mortgages. The most popular loan in today's marketplace is the 30-year fixed. This is a loan paid over the course of 30 years, with a fixed interest rate, meaning you’ll pay the same interest rate in year one as you will in year 30 of your mortgage. Your payment may change due to insurance or taxes, but generally a 30-year loan is seen as a practical option due to its stability, simplicity, and month-to-month affordability.
So, what's the attraction of the 15-year-fixed? A 15-year loan will have slightly lower interest rates compared to a similarly priced 30-year loan, but since the term is so much shorter, you’ll pay much less in interest over the life of the loan. The tradeoff is that the monthly payments will be much higher because the term isn’t stretched out over 30 years. If a buyer’s goal is to save as much as possible over the long term, and they can afford the steeper monthly payment, a 15-year is a good choice.
If you’re interested in a 15-year term but the high monthly payments make you wary, consider a 20-year or a 25-year term. These two choices provide a "middle of the road" option when it comes to balancing monthly payment and long-term savings.
The other primary loan type is the Adjustable Rate Mortgage (ARM). With an ARM, your interest rate will change annually (or sometimes semi-annually) based on the market rates and your loan agreement.
Today, most ARM loans for property buyers are really Hybrid ARMs. These types of ARM loans feature a fixed initial period where the interest rate is locked, with rates adjusting on a regular basis after that. For example, a 5/1 ARM has an initial fixed rate period of 5 years, with the rate adjusting annually (the “1” in 5/1) after that. 3/1, 7/1, and 10/1 are other common hybrid ARMs.
With an ARM, the interest rate during the initial period will be much lower than that of fixed rate loans. The downside is that after the initial period, the rate will adjust based on the index the loan is tied to and most often this means an increased payment over time. ARMs can be a really good choice for a handful of prospective borrowers:
Borrowers who are confident in future earnings: If you’ve recently graduated from medical school (congrats!) or you’re the beneficiary of a trust that’s not paying out yet (also, congrats), a hybrid loan will allow you to qualify for a larger loan despite your current financial status, as you’ll be able to afford the rising rates later on.
“Here for a good-time not for a long-time” homeowners: If you’re confident you’ll be in the home for a very short period of time (say, less than 5 or 10 years), you can enjoy a super-affordable interest rate and sell the home before the end of the initial fixed rate period.
You plan to pay off the loan fast: Let’s say you’re downsizing to a smaller home but haven’t received funds from the sale of your previous home. An ARM will allow you to enjoy a low payment until your cash is disbursed, at which time you can pay off your ARM before the end of the initial fixed-rate period.
Mr Lapuma always caring and dedicated to what he does best “Building your Dreamz” after his love for Jesus of course and doing the right thing even when he don’t have to. His integrity can not be questioned and his years of experience are some of the many assets that you will count on if you hire his services.
I have hired Dream Builderz for multiple projects at 2 homes in the past and all of the projects (bathroom remodel, back deck and full roof replacement and repair to front of home with water/squirrel damage) went very smoothly and exactly on budget as quoted.
We had an accident and someone crash into our house - Anthony the owner and his dream builderz team was wondering - they did great work and wore masks when needed to do inside work to keep us all safe ! I would definately recommend them ! And for the price, quality of work and customer service you can’t beat it !!
Very professional. Gets work done in a timely manner. Friendly and talented. Recently had my home sided and new windows placed. Increased my home value quite a bit.
Highly recommend
I am impressed with the service provided by Dream builderz. We hired them for complete renovation of our 2 bedroom and 2 bathroom apartment. During the actual work, They kept me informed of progress and acted quickly if things were not going well or up to my standards. Overall Great experience
Anthony and his crew are superb and always making sure I was well inform while I was out working , my finish floor was done on time and professionally.. Anthony is in my opinion is a caring contractor that cares for his work and finishes the job only if he and I the customer is 100% satisfied .. never once did Anthony complain when I called him for questions about what’s been done day by day and again I have to say his guys and work is above and beyond , I will use Anthony always as long as he is around 👍🙏🏼..
Dream Builderz did an amazing job on our house!! You would not even know that we had ice dams from last years storms. Our house looks new again, thanks Tony!!
We used Dream Builderz to construct a new deck. They did a fantastic job. We will definitely use them again.
Thankyou for your amazing service. From initial start to final completion of the project everything went smoothly. I will definitely give them 5 out of 5 .
Anthony Puma by far was the most professional and detailed builder we had the fortunate experience to work with . His proposal was very well laid out and explained all the details of our renovation. The renovation turned out beautifully, with a few hiccups but to be expected with an old house. His honestly and integrity made a stressful home improvement project more bearable. His workers were professional, thoughtful and pleasant to work with throughout the renovation. We love our new dining room, laundry and bathroom. I would highly recommend Dreamz builders for your home improvement project . Thank you Anthony and team The Bernier's
Good Afternoon Tony,
On behalf of Sarah, Ed and myself, we want to thank you personally for all your patience, professionalism and timely communication to bring Sarah's kitchen disaster project to its final completion. We recognize the arduous challenges you faced with the property management person from the start as well as the age of the building and its problems. I know it would have been easy to walk on this project even before it got underway given the daunting obstacles that were presented to you.
Without the dedication, competency, respectability and hard work done by yourself and all your support workers and contractors, Sarah never could have gotten her beautiful kitchen. Please thank each and every one of them on our behalf for a job well done.
Sarah is very happy and deeply appreciative of how her kitchen turned out and we are very thankful to you for sticking with us till the end. We are all looking forward to a brighter future.
Thank you again for your support and patience. You are truly a professional contractor. Have a wonderful Summer!