Purchasing a home is a very complicated and stressful undertaking. The decisions you make during this process will play a role in your life for years to come. As you might expect, this makes it critical to understand the different mortgage options available to you.
Over the years, our real estate law attorneys have accrued much knowledge about mortgages in Minnesota. We like to pass this knowledge on to our neighbors in the Ramsey area in order to help you make sound decisions when purchasing a home. The three main mortgage options include:
This option means that your loan will have the same interest rate until you pay it off in full. People typically choose this option because it is easy to plan around in terms of your monthly budget.
Adjustable-rate mortgages (ARM)
With this loan, you can expect your interest rate to change periodically until you pay it off. Many homebuyers fear this type of loan because of its changeability. However, most ARM loans cannot increase more than a certain amount each year. This cap helps protect you from unfair interest rate increases.
These mortgage loans feature elements from both fixed-rate and adjustable-rate loans. For example, a mortgage can begin with a fixed-rate and then become an ARM loan after a period of time has passed. To protect your finances from inflation, it is wise to seek legal counsel before accepting a hybridized mortgage option.
Using caution when you decide to make a major purchase is always a wise decision and so is seeking professional legal advice. Most buyers do not consider consulting with a lawyer when buying a home. However, doing so comes with many benefits, such as finding the right lender and making sure your mortgage is sound.
Please feel free to browse our other real estate law web pages to stay informed about mortgage trends in our state.