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Comparing mortgage options for buying a San Diego homeBuying a home can be a daunting task. It can be even scarier if it's your first. Once you've expressed interest in your purchase, you'll be flooded with mortgage information and will have to make some tough decisions. Fifteen-year or 30-year? Fixed rate or adjustable rate? What happens if you need to refinance? What does it mean to take on a second mortgage? These are all questions that your financial institution can help you figure out. But there are other questions that your bank can't answer for you—namely, what other institutions are offering. A traditional mortgage isn't for everyone, and some groups have come up with plans to accommodate first-time home buyers or those whose income might not be steady. Below you'll find explanations of mortgages that you might not know existed. Package DealsSome financial institutions are offering a combination of a first mortgage and a home equity line in one package. Under this deal, your line of credit automatically increases as you pay off your mortgage and as the value of your property goes up. You'll still be getting about the same rate as you would under a traditional mortgage, and your credit standing would be about the same as if you applied for the home equity under other circumstances. But the benefit lies in the convenience: you won't have to re-apply; everything is taken care of automatically. Wells Fargo and Countrywide Home Loans are among the San Diego institutions offering this option. Portable MortgagesE*Trade Financial is offering what are called “portable mortgages”—something that has been introduced in the past but hasn't caught on because the rates start higher than a traditional mortgage. This might be a good choice for you if you plan on relocating again soon. A portable mortgage basically means that you can keep your mortgage when you move and apply it to your next home. If you need to borrow more money for that second home, E*Trade will give it to you at the same rate as your first mortgage. Deferring PaymentsFirst-time home buyers who are a little nervous about the proposition or those whose work is sporadic might want to consider a mortgage that allows them to skip a couple of payments a year. Countrywide Home Loans offers such a mortgage. Ten monthly payments over the life of the loan can be deferred, raising the monthly payment each time to reflect the new balance. Borrowers who choose to do so, however, will pay a penalty of a couple hundred dollars (varying according to the size of the loan). While this mortgage option is offered at the same rate as a traditional mortgage, these penalty payments could prove costly and should be avoided. Basically, this loan choice should only be an option if you feel like you need something of a “security blanket.” |
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