Newspapers / Winston-Salem Chronicle (Winston-Salem, N.C.) / July 21, 1994, edition 2 / Page 10
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? ? . . ? T , p ; Homebuying, Refinancing; The Rules of the Game Should you buy a home now? Refinance now? Sit tight or move forward? Even when rates are rising, the rules of the game remain the same. If you are thinking about buying a home or refinancing, you should consider the various options that are available, assess your lifestyle and financial situation, and then choose the plan that best suits your needs. In order to make the process Uof buving or refinancing a house more affordable and more convq nient, here are some helpful hints 4o ? keep in mind as you make your" decisions. SEEK PROFESSIONAL ADVICE. Although friends and neighbors are helpful, the best source of information is a full-time mortgage originator at your local branch bank. COME PREPARED. Walk . ing into a bank fully prepared when applying for a loan will help expe dite and simplify the application process. You'll need recent pay check stubs, the past two years' tax returns with W-2s, the previous two months' bank statements, a list of creditors and account numbers, and the names, addresses and phone numbers of previous landlords. EXPLORE ^ALL THE" ALTERNATIVES. When talking to a lender, inquire about all the differ ent programs that are now available through your bank. Consider the following types of loan programs: 1 . Adjustable Rate Mort gages. For first-time homebuyers or those who do not plan to stay in their home for pwre than five years, an adjustable rate mortgage (ARM) is worth consideration. ARMs~offer customers one, three or five years of a lower interest rate. Typically, an ARM has the potential to increase up to 2 percent a year thereafter, but can increase no more than 6 percent over the life of the mortgage. Many ARMs can also be converted into fixed-rate mortgages in the future; however, there may be conversion fees and certain requalifying terms. 2. Balloon Mortgages. Carefully consider balloon mort gages as another alternative to help combat rising interest rates. -This type of mortgage also carries lower, interest rates than a 30-year fixed loan. ..The borrower pays periodic installments of principal and interest that do not fully amortize the loan. The balance of a balloon mortgage is due in a lump sum at the end of the term, which may be five or seven years. { Some have refinance options at the end of the five- or seven-year term. I '? 3. Affordable Rate Mort gages. You should also be aware of several affordable mortgage pro grams available to buyers with low -Nv -moderate incomes. Ask your bank about its affordable mortgage products or contact the Federal Housing Administration (FHA) or Veterans Administration (VA) for information regarding qualifica tions, REFINANCING. Refinanc ing may still save you a significant amount of money if you plan to stay in your house for more than two years. If you can obtain a difference of 1 .5 percent in your monthly inter est rate, refinancing is worth serious 1 4 consideration. The average length of recovery in costs ranges from 18 to 36 months. Refinancing is also a good idea for borrowers who wish to consolidate their debts or pay off an equity loan. Consider an adjustable rate mortgage as an option ? and get an even lower interest rate, thus saving yuu more money on a monthly basis. THE RIGHT DECISION FOR YOU. The current fluctuation in markets and general economic jit ters may cause potential borrowers to he skeptical about making major investments. Buying or refinancing a home is an important decision that requires careful consideration and research. But, if you get the right information and thoroughly discuss your options with a mortgage expert, you should be able to choose a mortgage product that is attractive,, affordable and right for you. ? Jane Bodenhamer, Assistant Vice President and Mortgage Specialist , First Union National Bank sale^ Directions: S. Broad Street, turn right onto Cotton Street, turn into Salem Pointe, fin ished model ? 845 Salem Pointe Lane will be on the right. OPEN HOUSE SUNDAYS 1:30pm - 5 :00pm For more information call: DANCY REAL ESTATE CO. 725-0106 OR DUPLEX AND SINGLE FAMILY HOMES PRICES START IN THE MID $60's Choice of plans ?Cathedral Ceilings ?Optional Garages ?Low Maintenance Exterior ?Gas Log Fireplaces ?Customization ? - ? ? ? ^ ? ?1st Time Homebuyer Program* $3,000 cash/$540 per month Builder/Developer: DANCY CONSTRUCTION CO., INC. *Qualified Buyers through City of Winston-Salem
Winston-Salem Chronicle (Winston-Salem, N.C.)
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July 21, 1994, edition 2
10
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