According to the National Association of Realtors® (NAR), 2012 will go down as a record year for favorable housing affordability conditions, and a great year for buyers who qualified for a mortgage. In New Jersey, not only are housing prices generally lower, but the affordability index has increased, too.
If you’re not familiar with it, the NAR affordability index formula incorporates many variables that contribute to how affordable home buying is in New Jersey, including home price, mortgage rates, payment as a percentage of income, median family income, qualifying income, and monthly Principal and Interest (P&I) payments.
According to Lawrence Yun, NAR chief economist, in the United States, “2013 likely will be the third best on record in terms of household buying power. A window of opportunity remains open for buyers who can qualify for a mortgage.”
Before perusing the latest listings, though, we suggest you first meet with a knowledgeable mortgage professional to help determine the mortgage amount for which you qualify. You’ll also learn about the available financing options to make the best decision for you and your family.
Banking institutions provide numerous mortgage solutions, and mutual banks such as NVE Bank not only offer a full range of products and services that compare with any large financial institution, they also offer one thing bigger banks can’t: an unparalleled commitment to customer service. Mutual banks like NVE also have a vested interest in controlling risk and act as a stable local financial influence.
Understanding which mortgage is best for your situation is a daunting task. To help, here are four key questions to ask your lender:
1. What loan is best for me based on my current needs?
Understanding the stage in your life – single, planning a family, etc. – is important when selecting a mortgage.
2. What are the terms of loan amortization on each of your loan options?
You need to know how much of your monthly payment is going towards the principal vs. interest and make sure it fits your goals.
3. Is there a lifetime cap on adjustable rate mortgages?
A lifetime cap will lock in the highest interest rate on your ARM, thereby limiting the risks of substantial interest rate increases over the life of the mortgage.
4. Which index is used to determine the interest rate on an ARM mortgage, and how often can rates be adjusted?
Find out if your ARM mortgage is based on one-, three-, or five-year Treasury securities, how much the index has fluctuated in the past and where it is published so you can monitor it.
You should also select a mortgage professional who understands the community, knows the towns you are considering, and can offer personal, experienced insight. Those are staples of mutual banks, and NVE Bank is one of New Jersey’s largest and most successful mutual banks, with 126 years of service to Northern New Jersey and beyond.
To learn more about NVE Bank’s mortgage options visit our website. You can also call one of our experienced Mortgage Specialists today at 1-866-NVE-BANK or stop by one of our neighborhood branches and schedule an appointment to sit down with a member of our experienced branch staff. We’ll help make finding the right mortgage quick, easy and hassle-free.