My New Blog

Who wants to buy a pizza missing one piece? Who wants to buy an apple pie with one piece missing? When you buy something, you want all the pieces. Why then buy a house and not get what you want? You will be spending most of your time there and you should buy a house that give you the space and amenities you need.

By using a 30 year fixed rate loan, that is what potential home buyers are doing. They are forcing themselves to buy less house then they really want or need. Or they will live in an area that they really don’t want. That is why the 5/1 or short term fixed rate loans are great options for today’s home buyer. The rates on the 5/1 compared to the 30 year are almost a whole percentage point lower. This allows the borrower to qualify for 12.5% more loan amount. That is just like one eighth of a piece of pie.

Here is an example of the qualifying:

A home buyer family earns $70,000 per year or about $5,800 per month.

With today’s interest rates (look at our rate sheet for today’s rates) the 30 year fixed will only qualify the potential home buyer(s) for a loan amount of 330,000, but the 5/1 will allow the buyer(s) to qualify for a 375,000 loan amount. That’s an increase of $45,000. That could be another bedroom. It could be a new kitchen. It could be a third car garage. It could be the whole pizza. Not a pie that is missing a piece.

Be sure to ask and look at all the financing options not just the most popular options of the day.