Virginia
Home Financing and
Mortgages
House appreciation
rates in Virginia have consistently outstripped the national average during
the past five years, according to statistics from the
Office of Federal Housing Enterprise Oversight. In the year ending 31
December 2003, house prices appreciated by a staggering 9.73% in Virginia.
Although there are many
different types of mortgage there are just two basic categories: fixed rate
mortgages and variable rate mortgages (these are also known as ARMs).
A fixed rate mortgage usually has affixed rate throughout the lifetime of
the mortgage, usually a fixed period of 10-, 15-, 20- or 30-year terms, with
15- and 30-year loans being the most popular terms.
Despite the name, ARMs
usually provide an initial fixed interest rate period
of 1, 3, 5 or 7 years. Once this fixed interest rate period expires,
the rate becomes variable and is then usually adjusted on an annual basis.
Fixed rate mortgages
can be advantageous if you plan to stay in your new home for more than five
years and when interest rates are low. Conversely, ARMs offer lower interest
rates during the initial period. This can be to your advantage if you intend
to move on within a short period or in areas such as Virginia where house
prices are rising so rapidly since it helps
first-time buyers finance a home purchase and gain a foothold on the
property ladder.
The range of mortgage
deals available means that you should ensure you do your homework properly
by researching the Internet and by consulting a real estate broker. |
