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Many times people call us and want to know, "What's the rate?"

They don’t ask about payments, programs, or any other variable with a loan. They just want to know the rate.

Then, they ask how much someone can save by having a lower adjustable rate versus a fixed-rate loan.

At this point in time we are looking at historical rates, meaning there really is no reason to trap yourself into an adjustable rate mortgage when the interest rate is the lowest that is has been EVER. A fixed rate loan will always have the same payment for the life of your loan. plus the fixed rate mortgages are assumable (on certain types of loans) and you will never wonder "how high can my payment go" on a fixed rate loan.

While it is true that an adjustable rate does have a maximum interest rate that you could be obligated to pay, most people don’t go into those loans looking at the highest payment. They go in looking at the lowest.

When adjustable rate loans were more popular there were a lot of people who didn’t stop to ask if they could afford the worse case scenario. They were confident in the market holding steady. Those people now would look back and see how foolish it was to put their financial security on the line -- most of those people ended up losing their home. They had gotten comfortable at the lower payment and once the higher payments kicked in, and continued to rise, they had no options left to them because it was a price they could not pay. This doesn't happen with fixed-rate loans.

Though there are valid reasons for buying a home on an adjustable rate, most of the reasons don’t make sense at today's low rates. When you can secure your payment in a fixed rate and never have to worry about the payment increasing beyond what you know you can qualify for -- and what you are comfortable at -- why would you choose the alternative?

With an adjustable you are banking that things will be a certain way 3, 5, or even 7 years from now. In light of what happed to our economy, can you feel confident that you know what your future holds? With a fixed rate loan you can.

If you have any questions about fixed-rate or adjustable mortgages, please contact Creekside Mortgage, Inc. at 360.571.LOAN (5626).

So you want to pay your mortgage off early, but you are confused about how to do so. The first thing you need to decide is how much extra cash you have available to put towards your current mortgage. Is it $50, $500 or somewhere in between? Second, do you have a specific time frame that you want to have your loan paid off in?

If you want to make larger payments when you have extra money, it is simple to do. All you have to do is make your regular payment and let the lender know, if you are making your payments online or via the mail, that the extra will be going to principal. By doing this on a regular basis, you can easily knock years off your mortgage.

Or, if you have a set time frame that you want to pay your loan off in, you can utilize a program available online, or even on your smart phone, called "Karl's mortgage calculator." This program will calculate how the payment that you need to make to pay off your loan in the desired time frame. It asks a few simple questions and tells you exactly what you want to know. It’s a fun little tool and you can change the numbers anytime you need to readjust your goals.

Keep in mind that you can also refinance to a lower rate and continue making the larger payment, as discussed last week. Then, you can payoff your loan even faster by constantly making higher principal payments.

If you have any questions about your mortgage needs, please contact Creekside Mortgage, Inc. at 360.571.LOAN (5626).

In today's crazy market with interest rates being all over the board and most people getting bombarded with information about refinancing, we often get what the ideal situation for a refinance is. Typically, we tell borrowers to wait until they can lower their interest rate at least a full percentage point before refinancing. Then, the closing costs associated with a refinance make more sense. Of course, there are always exceptions to the rule. It depends on your loan amount, how much you have paid your loan down from the last time you took out a loan, as well as the type of refinance that you are looking at.

For a veteran borrower, there are situations where refinancing down just .50% can be beneficial. If you are a veteran who has VA disability, there are definite advantages. Since you are not obligated to a funding fee, skipping a payment and getting your escrow account reimbursed to you could make it worth your while to refinance. The larger the loan amount, the larger your savings will be if you reduce your interest rate.

One thing we usually recommend to borrowers is to have a game plan. If you continue to make the same mortgage payments you made before the refinance, and you put the payment that you skip along with your escrow balance towards your principal, you are sure to reduce your mortgage at a faster pace than if you just make the minimum monthly payments. We have had 19 customers in the last 6 years payoff their mortgages in full by reducing their interest rate and continuing to make the larger payments they were making before the refinance.

Another thing to consider in a refinance is the logical side of it. If the mortgage company that you are using approaches you about a refinance at “no cost” to lower your interest rate for .25%, look at the paperwork closely. There is always a fee to do a loan whether you are paying closing costs or they are extending your loan back out to its original term. There is no such thing as a free loan.

One thing to note, however, is that if you get any solicitations in the mail about refinancing your home loan, make sure to do your homework and look into the company that is sending you the mail. Many of these companies have changed their names multiple times to avoid going out of business because they aren’t always honest in their business dealings. You should always check a company out through the Better Business Bureau and their “DBA” names as well. A lot of companies avoid legal ramifications by changing their business name.

If you have any questions about your mortgage needs, please contact Creekside Mortgage, Inc. at 360.571.LOAN (5626).

The most popular type of loan is the 30-year fixed-rate mortgage. By choosing the 30-year option, you are extending out your home loan as far as possible and you have the lowest payments possible each month. If you have a 30-year-fixed mortgage, you still have the option to make additional payments and payoff your home loan early with no penalties on the majority of loans.

You can calculate out how much you would have to pay on the loan to payoff your mortgage sooner, all while keeping the benefit of the lower payment. Then, if an emergency arose, you wouldn’t be obligated to the higher payment of the 15-year-fixed loan. That’s right, you can still payoff the loan in 15 years if you wanted, while having the flexibility of a smaller payment. The interest rate on a 15-year loan isn’t generally much lower and you would be committed to a larger payment.

Another thing you may want to consider, is if you have a loan that is assumable, it is easier to get someone to take over your payment when its amortized over 30 years, versus getting someone to commit to a 15-year loan. The lower the payments, the easier it would be to get someone qualified to assume the loan -freeing you up for something else.

All of these factors add up to make the 30-year fixed-rate mortage the most popular. With a commitment to a small payment, options for you to pay it the loan down faster and the abililty to reduce the amount of interest that you will pay over the term of the loan, 30-year fixed-rate mortgages are by far the most popular loan.

If you have any questions about your mortgage needs, please contact Creekside Mortgage, Inc. at 360.571.LOAN (5626).