The question of which mortgage to apply for is a common one. Do you go for the 15 year or the 30 year mortgage? Both have specific pros and cons and depending on your unique situation, determining which one is right for you can be difficult. So let’s look at the numbers.

Lower Monthly Payments = Higher Total Interest

The main difference between these two options relate to monthly payments. With a 30 year mortgage the monthly payment is lower than with the 15 year option. However, because of this, you will pay more in interest fees. For that added 15 years there is a potential for you to pay an extra $100,000 in interest payments alone.

That may sound like a huge “con” in terms of the 30 year mortgage option but it’s not if you’re driven by smaller monthly payments. In the same above example that worked out an extra $100,000 in interest fees for a 30 year mortgage, will also show a monthly payment difference of roughly $400. That’s $400 that could go to any number of other expenses, like childcare.

So the main question to ask yourself about 15 and 30 year mortgages is how much do you want to pay monthly? If you’re fine with paying more in interest fees, go with the 30 year. If you’d like your monthly payment to be a bit higher to get out of debt faster, then choose the 15 year.

You also want to consider how long you plan on staying in the house. If you’re considering retiring to a different location sooner rather than later then a 15 year mortgage may be a better option. But if you’re just starting a family in a home and neighborhood where you feel comfortable and plan on staying then a 30 year may be better suited for you.

The best way to go about this process is to do some initial research that outlines all of the fine print differences between these two mortgage options before you talk to a lender. In most cases it’s more beneficial to take a 15 year mortgage if possible because of the interest fees. But if you go with a 30 year mortgage you can invest the money you’re saving in monthly payments and still have the option to pay off the loan in 15 years. It’s a personal decision that’s different for different situations. Consider yours carefully before heading into a lender’s office. The last thing you want is to lose your house so make sure you choose a mortgage that you can live with.

Northwest Georgia Bank is a leading Chattanooga home loans bank that offers Chattanooga mortgages for first-time home buyers and those looking to build or buy second homes for their growing needs.

Buying a home is one of the biggest decisions a person makes in their lifetime. Undoubtedly, this major decision is accompanied by many other decisions such as deciding on a neighborhood, selecting a floor plan and even choosing home décor. Yet before we can find answers for any of these questions, we must first understand how much money we have to work with, and that task requires choosing a mortgage.

The thought of taking out a mortgage may seem daunting, overwhelming and simply unpleasant. However, when equipped with the right knowledge, you can select a mortgage with peace of mind and assurance. When making your mortgage decision, keep in mind these tips:

1. Understand the types of mortgages that exist. While there are many mortgage products available, most mortgages can be placed in one of four categories. These include the following:

• Fixed Rate:  These are traditional loans that typically include terms for 10, 15, 20 or 30 years. Your monthly payments for interest and principal on these loans are among the most predictable and constant, since they do not change over the life of your loan. Down payments are typically much lower than for other types of loans.
• Adjustable Rate:  These mortgages have fluctuating interest rates and payments that change with the market’s interest rates. While they typically start out at a lower interest rate, they are often adjusted annually—if not more frequently—and increases may be capped for a specific year as well as for the term of the loan.
• Balloon Mortgage:  If you’re planning to move in 5-7 years, but still want a low interest rate, these mortgages might be ideal for you. It’s important to note that these loans must be paid at the end of the 5-7 year term or else you’ll have to take out another mortgage to finish payments on the first one.
• Jumbo Loans:  When buyers need to take out more than the maximum amount for average loans, which is typically $252, 700, then a jumbo loan may be the right option.

2. Get pre-approved for a loan prior to house hunting. The lender of your choice can take care of this step for you, and once pre-approved, you can actually buy a house if you find one you like. Keep in mind that you are not required to borrow the full amount that they are willing to lend you. The approved lending amount is a maximum; the less you have to borrow, the better.

3. Decide whether you should pay discount points. Paying points requires paying money up front to help lower your monthly payments. Usually each point is the equivalent of one percent of the borrowed amount. Typically, if you plan to be in the house for a long period of time, then it can be beneficial to pay points, since you’ll end up spending less in overall interest. A lender can advise you whether paying points would be advantageous for you.

Mortgages require research and patience, yet choosing the right mortgage can help pave the way for future decisions that will increase your satisfaction and peace of mind as you plan for your new home.

Northwest Georgia Bank is proud to be a leading Georgia home loans bank. With additional branches in Chattanooga, Northwest Georgia Bank offers competitive mortgage rates in Tennessee and provides our customers guidance on selecting the right mortgage to purchase their dream home.

Once you have decided to remortgage your home, one of the first steps you will take will be to approach various banks and other lenders in order to obtain a remortgage quote from them. The quote will contain the information that you need  to determine whether or not the loan will be a good deal for you, such as the length of the loan, early repayment fees, closing fees, and of course the interest rate.

The remortgage quote provided by the bank is the main document that you will be looking for. It provides all the detailed terms and conditions of the loan that you need. Everything you need to know, including the interest rate, monthly repayment amount, as well as any penalties and fees, will be included in the quote.

The lending markets are much tougher than they used to be, particularly where second mortgages are concerned. But even so, there is still plenty of competition between lending companies for your business. You should use this competitive environment to your advantage, and collect remortgage quotes from as many different companies as you possibly can. It’s only by comparing many different quotes that you can be sure of obtaining the one that’s best for you.

The types of remortgage quotes that you obtain should reflect your reasons and goals for seeking a new mortgage. For example, if you are hoping to get lower monthly mortgage payments, you should look for a mortgage with a long term and low interest rates, whereas if your goal is to take cash out of your property’s equity, you need a mortgage that will allow you a high loan-to-value ratio.

One strategy that is likely to result in the best remortgage quote is to obtain quotes online from several different sources, and then use those quotes to bargain with your current lender, who might be able to provide a better deal in order to retain your business.

If you are buying a house for the first time, you might want to look into 95% mortgages. With these mortgages, you pay a 5% down payment and get a mortgage for the balance. To qualify, you have to fit the industry’s definition of a first-time homeowner—an individual who has not bought a house in 3 years. Many people fit this definition, which is why 95% mortgages are extremely popular in the United Kingdom. They are also gaining prominence in California.

In terms of interest rates, 95% mortgages are usually fixed at higher rates. Yet, if you are willing to pay more than 5 percent, you might be able to lower your rates. It all depends on your mortgage income multiplier. This type of mortgage and cheap homeowner insurance are encouraged for the first-time home buyers.

The Disadvantages

Unfortunately, a 95% mortgage tends to have heavy backend fees. In the industry, this is considered your lending charge. Regardless, it is an expense that could result in a higher mortgage payment. To avoid such a scenario, applicants should pay the fee in cash. This way, nothing extra gets tacked onto the mortgage.

The Mortgage Multiplier

New homebuyers may not be aware of the mortgage multiplier. Also known as an income multiplier, this is an estimate that determines how much a borrower can afford. To make this determination, mortgage companies look primarily at the borrower’s overall income. Borrowers who rely on one wage may qualify for a mortgage that is three times their salary. Conversely, those relying on dual incomes may qualify for a loan that is 2.5 times their salary.

Now, if an applicant has a low income multiplier, mortgage companies will have to rely more on their credit score. In fact, a good credit score will almost always be more valuable than a high multiplier.

Another Consideration

As already stated, the interest rates for 95% mortgages are generally higher than traditional ones. However, sometimes the amount you end up paying is not that much different. It might mean an extra $50 or so a month, which is not all that bad if your mortgage remains fixed. If you go the traditional route, banks may only approve you for an adjustable rate mortgage. So, even if that $50 was eliminated initially, the amount might double or triple after your introductory rate ends.

This is a guest post written by the writer of MyGetRidOfGuide.com, a website that offers several ways to get rid of just about anything.

Most people want to be financially secure. Well, if you’re one of those people, one way you can attain financial security is to make sure that you are free from huge debts. If you’re still paying for your home loan or mortgage, don’t you think it would be best if you’re able to pay it off quickly?

Here are five ways in which you can pay off your mortgage early:

1. Take note of your current financial condition. Ask yourself: What is my current financial standing? Do I live on a lot of credit? Do I borrow a lot of money to pay for another loan? Then try to see how much money you’ve got by calculating your net income, savings, and other investments minus your liabilities. If you think you don’t have enough financial resources, then it’s probably time you make some changes with your lifestyle to enable you to accelerate the payment of your mortgage.

2. Calculate how much of your income is used to pay for debts. This is also known as your debt to income ratio or DIR. It’s quite easy. All you have to do is add all your monthly payments including your mortgage and then divide this by your total net monthly income and then multiply this by 100. Here’s the catch. If your DIR is more than 50%, you will probably have a hard time speeding up the payment of your mortgage. You might not be able to cope up with the payments. However, if your DIR is less than 50% then you should have no trouble accelerating the payment of your mortgage.

3. Make large, lump-sum payments against your mortgage loan. You can opt to pay your mortgage early with your lump-sum payments at the expense of short term savings. You can do this if you’re really serious about fast repayment of your mortgage. However, you have to keep enough funds in savings to use in case of emergency.

4. Use most of your freed up income to pay for your mortgage. In order to do this, just subtract all your monthly expenses from your total monthly net income and indicate any additional payment as “principal payment” when paying for your mortgage.

5. Pay your mortgage biweekly. One sure way of being able to pay your mortgage early is to shift your mode of payment to a biweekly payment. By doing this, you can make 13 full payments every year, or 26 half payments if you make a half payment every other week. With the extra payments you make, you will be able to save on the amount of interest.

As you can see, there are several ways to pay down your mortgage quickly. If ever you need motivation, just take a look at how much you’re paying in interest. It’s hard to look at, but it’s what will continue to happen over the years to come if you don’t pay it off!