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Delaware Mortgages: What You Should Know
Living In Delaware
Because of its small land stature and location at the far East end of the U.S., the state of Delaware may not exactly provide a flourishing housing market for new homebuyers. However, the state is a beacon for new retirees looking to pay low property taxes in cities like Wilmington and Dover. Statistics have shown that Delaware interest rates throughout 2004-2005 were slightly lower than the national average while the percentage of adjustable mortgage loans was significantly lower than the national average (20% in Delaware compared to a 35% Nationwide average) making Delaware a suitable location to retire. However, there are other important factors to consider when researching a mortgage loan.
How to obtain the best mortgage rates
Securing a locked low interest is generally in the best interest for any homebuyer as it can most often yield low monthly payments on a mortgage, therefore preparation beforehand can make all the difference. Generally, one way to acquire a low interest rate involves good credit management, as credit scores are often the determining factor for an approved loan. Currently, the Delaware credit average hovers at 681 (the current national average is 677). Beyond having solid credit it is also important to research trends in mortgage rates, as they generally tend to correlate with Wall Street trends. Another research factor involves comparing APR’s (Annual Percentage Rates) between Delaware lenders to calculate total yearly costs.
Types of plans available
When researching a mortgage loan for a new home there are different plans that can help Delaware homebuyers reduce costs based on certain eligibility prerequisites. For example, war veterans can qualify for Veterans Administration loans. Certain income requirements may qualify those who want lower down payments to receive loans from the Federal Housing Administration. Traditionally, those in good standing may consider a time-based mortgage. These types of mortgage plans allow homebuyers to repay mortgages at different time spans. These plans typically range from 15, 20 or 30 years. For those not wanting to be locked in to a fixed rate, an adjustable rate mortgage (ARM’s) may be employed. ARM’s usually vary from month to month, depending on the stability of the economy so Delaware homebuyers not wanting to gamble may consider a time based plan to be sufficient.
Why refinance a Delaware mortgage?
Refinancing a home in Delaware is a method used when a lower interest rate is desired. For example, if a new homebuyer has a locked in rate of 6.1% on a home and in a year’s time that rate drops to 5.8%, refinancing at the new rate can usually allow lower costs per month on a mortgage. Though it is very important to remember that a refinance is essentially a new 30-year loan. Hence, refinancing a home in hopes of chasing a lower monthly rate too often may end up being more costly in the long run. Any homebuyer looking to prepare for years to come would be wise to break down the costs of refinancing in terms of the entire thirty-year period versus the current Delaware interest rate being paid.