Home Mortgage FAQs
How do I know if a fixed or adjustable-rate loan is better for me?
Fixed-rate loans offer the benefit of a stable monthly payment so you will know exactly what you'll pay each month for the life of the loan. You don't have to worry about rates going up or down. A fixed-rate loan may be the right choice if you plan to be in your home for many years and you want the stability of making the same payment every month.
Adjustable-rate loans often have lower starting rates than fixed rates loans, because they are based on shorter-term interest rates, which tend to be lower than longer-term rates. The payments on an adjustable rate loan can change over its life as market interest rates change. If you are interested in adjustable products, you should consider how and when the rate changes and what the impact on your monthly payment could be. Adjustables start out like fixed-rate loans. They have an initial period in which the interest rate and your monthly payment remain the same. The initial period can vary from several months to several years. After that, the rate and your monthly payment can go up or down for the remainder of the term. The rate you pay on an adjustable loan is based on a fluctuating index (based on government securities rates or similar market rates) plus a fixed amount, called a margin. If the starting rate on an adjustable loan is lower than the fixed-rate alternatives, that could help you buy a more expensive home or make your loan more affordable. An adjustable may also be a good choice if you don't plan to be in your home for more than a few years or you think interest rates may be decreasing.
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Which mortgage term is better, a 15 or 30-year mortgage?
It depends on your situation. If you need lower monthly payments to fit into your overall budget, choosing a longer term results in a lower monthly payment. For that same reason, qualifying for a 30 year loan may be easier than for a shorter-term loan — you don't require as much income. Choosing a 30-year mortgage may also allow you to afford a more expensive home. A term of 15 years instead of 30 years can mean higher monthly payments. It also means, however, that you will build equity in your home faster and pay off your mortgage sooner . Apple Bank offers 15 and 30-year fixed-rate mortgages and 30-year adjustable rate mortgages.
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What kinds of costs should I expect to pay in taking out a mortgage?
Mortgage loans involve several kinds of costs. Typical fees paid to the lender include:
- Application Fee (a fee to begin the mortgage approval process)
- Appraisal Report Fee (the cost of conducting an appraisal of the property you intend to buy)
- Credit Report Fee (the cost of ordering a credit report)
- Processing Fee
- Underwriting Fee
- Document Preparation Fee
In addition, you will most likely have to pay the third-party fees listed below:
- Title Insurance (insurance that you have clear title to the property and that it is clear of other lienes and encumbrances)
- Survey (depending on how recently a survey was made of the property you are purchasing, and any changes that have been made to the property since the last survey was made, you may have to order a new survey)
- Attorney Fees (fees for the Bank’s attorney and your attorney to prepare legal documents)
- Recording Fees (fees to record the transfer of title and the mortgage or UCC-1 lien in the public record.)
- Mortgage Recording Tax (a tax charged by the State of New York for new mortgages on real property, which varies by geographic area. Co-op loans are not subject to this tax.)
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