All Posts Tagged: goals

4 questions to help assess if a mortgage is right for you

Victor Polich
Mortgage Banking

With the outlook for mortgage rates to rise this year, some people have asked me, “What’s the best mortgage when rates are rising?”

Man and woman seated next to each other, checking paperwork and entering figures into a calculatorMy answer is always the same: It depends.

Potential and current homeowners should start with, what we call at Bank of the West, a “mortgage assessment.” It is important to understand your housing situation now and in the future to gauge what mortgage options may be right for you.

Mortgage assessments (which are complementary for our customers) can help current homeowners and prospective buyers judge the merits or potential drawbacks to a fixed- versus an adjustable-rate mortgage or a 30-year versus a 15-year mortgage, for example.

Here are just four questions you may want to ask yourself in evaluating what type of mortgage is right for you:

What is your time frame for staying in your home? This is a big factor in determining what mortgage may be right for a borrower. As general guidance, I tell people if they expect to stay in their home more than 10 years, a fixed-rate mortgage is likely more preferable. The security of locking in an interest rate for the long term often outweighs the near term savings during the initial years of an adjustable rate loan.

Where do you want to live? Are you looking at a home in a location you think is your dream location, or are you perhaps making trade-offs on location for some other benefits? How you feel about location may influence how long you stay in a home, which in turn may influence the type of mortgage you want.

What’s your family situation? Look at your situation today and in the future. Will you need more space in the future for children? Do you have children heading off to college soon? Are you downsizing?

What’s your income situation? What are your income projections looking out 3, 5 or 10 years? Of course, it is sometimes difficult to forecast, but you can estimate. If you expect your income to remain relatively stable, then a fixed-rate mortgage may be more appropriate, so you don’t face increases in your monthly mortgage payment in the future, as can occur with an adjustable rate mortgage.

These are four of the essential questions I recommend a prospective home buyer or current homeowner consider first before looking at the various types of mortgages that are available today. There are other factors, of course, that a mortgage banker can help explore when a potential buyer goes through an assessment.

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It’s not too late to hone your goals for 2015

Don Mercer
Posted by Don Mercer
Small Business Banking
African American man giving a high five to a team member in a meeting, viewed from behind glass.

What are your goals for the year: Grow sales? Increase efficiency? Introduce new products?

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