The month of May brought a jump in the number of pending homes for sale across the country.
This, according to a report from the National Association of Realtors (NAR), which found that recently signed contracts for the purchase of real estate increased to 105.4, up from 104.3 on its Pending Home Sales Index. This was the third time over the last four months that an increase has occurred.
In addition, a chief economist from NAR says that potential home buyers are becoming more confident about buying and because of that, the expectation is that real estate activity will increase over the summer.
For Seattle/Renton/Tacoma area home buyers who are looking to jump into home ownership this summer, it is important to begin with loan process first. Part of that is educating yourself on the difference between a fixed-rate and adjustable-rate mortgage.
Fixed-Rate Mortgage
A fixed-rate allows home buyers to have a predictable monthly payment and rate throughout the time your mortgage is active. If you obtain a fixed-rate mortgage, then your rate will not fluctuate because of the market and this will also allow you to budget accordingly knowing exactly what your payment will be over the long-term. You can choose between either a 15-year or 30-year fixed-rate mortgage.
Adjustable-Rate Mortgage
These loans give you the option to select a fixed rate during an initial period of time after you take on the mortgage. When this timeframe ends, it moves to an adjustable rate, which follows the market in terms of increases and decreases. During the initial fixed-period of the mortgage, the interest rates are generally lower than they would be if you selected a fixed-rate mortgage. This option can be ideal if you don’t plan to live in the home for a long period of time.
If you are planning to purchase a home this summer, and you have questions about your home loan options, make sure to contact one of our mortgage consultants today!