Saturday, August 15, 2015

Vahe Hayrapetian on Weighing Home Financing Options

When looking to buy something, most people look at the price first and then try to haggle down. The idea is simple: get the most bang for your buck by minimizing the bucks you have to shell out. However, what they usually don’t consider is the other side of the equation. How much bang does each choice produce? In other words, what’s the value?

Housing Options are Easier to Grasp than Loan Options

In the case of home buying, people can easily see the value in the houses they choose from (in terms of amenities, proximity to urban centers, accessibility, and so on), but seeing the value in different financing options can be harder. Inexperienced and financially challenged home seekers may tend to go for the cheapest home financing option right off the bat, without regard for the actual terms of the loan. The only question is “can I afford it”? Fortunately, experts like Vahe Hayrapetian are available to guide them.

A Classic Tradeoff: Adjustable vs. Fixed-Rate Mortgages

One example of a choice that people may struggle with is picking between an adjustable and a fixed-rate mortgage. An adjustable-rate mortgage generally starts out with a low interest rate; the interest rate may then increase or decrease, depending on conditions in the housing market. On the other hand, fixed-rate mortgages have a higher interest rate than adjustable-rate mortgages usually, but since the rate is fixed, the payor is insulated from any market effects.

Adjustable versus fixed-rate is just one decision that homebuyers have to contend with when considering financing options. With the number of competing financial institutions out there, along with their attempts to differentiate themselves from the competition and the complex terms and jargon they tend to use, it’s hardly surprising that people get confused and go back to the most basic criterion they can understand, which is “which has the lowest interest rate?” That is why experienced loan consultants like Vahe Hayrapetian are invaluable when making a decision on which loan option to choose.

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