Diligent Home Loan Agency, Mortgage Lender & Financial Institution In Sachse, TX

The Highly-Experienced Mortgage Insurance Company In Sachse, Texas



The 5/1 ARMs, Prodigy Lending, Dallas

The city of Dallas is a large metropolis in the Southern United States. The city is the seventh-largest area in America. The city is very populous, taking ninth place after San Diego and just before San Jose. The adjustable-rate mortgages (ARMs) usually get a bad rap. Many people worry that this kind of mortgage is too risky. Their fears may be justified in that when mortgage rates are rising it is crazy to even consider such. It would make more sense to lock in the lowest possible rate for the longest possible time. The ARM is not for the faint-hearted, but if you are ready to save some money on interest, I suggest you take a look at it.

Conventional home loans are suitable for investment property and an individual with good credit as the minimum score is 620 who wish to purchase or refinance property in Dallas. Conventional home loans require a down payment of 3%, flexible terms ranging from 10 to 30 years, no lending fees and have the best ratio for credit scores to interest rates. A USDA home loan can be of three types, direct loans, loans guarantee, and home improvement grants and loans. These loans can be used to purchase, refinance or upgrade the property of the borrower. 

A VA (Veteran Affairs) home loan requires no down payment and offers 100% financing for the property. This home loan may be applied for by veterans, approved spouses and active members of the military. This loan has lower closing costs and requires no mortgage insurance. In addition to these features, VA home loans are easy to qualify for. 

Mortgage rates have been rising ever since 2016, but they are still lower than in previous years (18.45% in 1981). They are even lower than the annual average (5.87% in 2005). Homebuyers have to take a new good look at the options available and consider what works best for their purchase or refinance. For low rates, people more often than not choose fixed-rate loans.

In the 5/1 ARM, the loan has a fixed rate for 5 years which can change after every 1 year within the restrictions called “floors and caps”. 

The “floors and caps” assist both the lender and the borrower. The floor ensures that the interest rate does not go lower than it. This protects the lender. The cap ensures that the interest rate does not go higher than it. This protects the buyer. The “floors” and “caps” are set at the beginning of the loan term.

The 5/1 ARM can be a good choice under the right conditions:

The 5/1 ARM gives a much lower interest rate and payment in its first phase

In this situation, the borrower can save enough money to buy a car or pay college fees for a year. 

It is also a smart choice if you plan to sell the house in less than six or seven years

For younger home-owners, this option is best. They are recommended by the governing body of real estate to own it at least seven years. With this option, they can generate an income.

Interest rates can go down

The real winners in mortgage rates are the ones who go for the ARMs. Predicting where interest rates will go during a certain time is impossible, however 5-year loans have a guarantee of being cheaper than 15-year plans and 30-year plans.

Visit our offices today or contact us at https://prodigylending.com for more information. 


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