A mortgage is a loan that is used to purchase real estate. Unless you have enough cash to buy outright, you’ll need a mortgage when you purchase a home. One of the most important questions potential homebuyers ask before they apply for a mortgage is “How much will my monthly payments be?”
It’s a crucial question because it affects the answers to so many other questions. How much mortgage can I afford? How will the mortgage expense impact the rest of my budget? Is buying the right decision right now or would it be better to rent for a while? Would a refinance lower or raise my payments? Will the payments be low enough to make the costs of refinancing worthwhile, or can I afford the higher payments needed to pay off my home debt sooner?
What Mortgage Can I Afford?
As a potential homebuyer, or current homeowner, thinking about applying for a mortgage or refinancing, you should take an in-depth look at your current financial picture. The first step is to write down all of the bills you pay for purposes other than your housing, plus the amounts you tend to spend on other necessities — food, toiletries, clothing, savings, etc. Then list and estimate the cost of items that may not be strictly necessary but are still important — dining out, vacations, etc.
What’s left? The goal is to find out how much you can afford to spend on a house. Is it more, less, or approximately the same as what you are paying now? At this point, you should consider if you’re willing to give up any discretionary spending to put more money toward a mortgage. The other option would be to have a smaller mortgage to increase the money you have available for fun, charity or even helping out you grown children. This would mean, however, paying off the mortgage over a longer period of time.
If you are a new homebuyer, you’ll also need to consider how much you have available for a down payment, since this will directly affect the size of your mortgage. Note that putting down more than 20%, if possible, eliminates the need for private mortgage insurance. That money is freed up to put toward paying the mortgage itself.
If you know your budget, your available down payment and how much you want to borrow, you can get started today with our quick online application. After you apply for a mortgage online, one of our Bethpage mortgage representatives will help guide you through the rest of the process.
The Different Types of Mortgages
The type of mortgage you apply for will ultimately affect your monthly payments. The two major types of mortgages are fixed-rate and adjustable-rate. Both types can be used for purchasing or refinancing a home.
Fixed-rate mortgages have a set interest rate and a monthly payment that is determined from the start and never changes.
Adjustable-rate mortgages have interest rates that reset at specified intervals. After an introductory fixed-rate period, rates and payments can vary during the loan term, rising and falling with a market index.
The biggest advantage of fixed-rate mortgages is their stability, which makes long-term budgeting easy. They are popular with homeowners who have established careers, growing families, and/or intend to stay settled in their home for a number of years.
The biggest advantage of adjustable-rate mortgages is that they generally have lower initial interest rates and monthly payments. After this initial period, rates and payments can rise, but adjustable-rate mortgages help young homebuyers who are just getting established to get into the housing market at an affordable price.
There are a few other types of mortgages to consider as well:
Jumbo mortgages — fixed- or adjustable-rate, these are mortgages used to finance properties that are too expensive for a conventional loan
FHA mortgages — federally insured, these loans are available with low down payments and enable homebuyers to enter the market who might otherwise not be eligible
10-year fixed mortgage — Bethpage offers this special mortgage option to help homeowners consolidate other consumer debt or build home equity quickly
At Bethpage, we have many loans available so that each of our members can find one that works for them. As payments differ from month to month depending on your choice, be sure to pick the one that best fits your financial picture.
Mortgage Rates Calculator
Bethpage’s mortgage rates calculator, makes it easy for you to compare common loan types and figure out monthly payments for the size, type and length of loan you’re considering. Taking advantage of this tool offers several benefits:
Know what to expect when applying: Understanding exactly what goes into a monthly mortgage payment is essential. A mortgage calculator factors in the amount and length of the loan, the interest rate, plus property taxes and insurance.
Look to the future: Where do you see yourself in five years? How about 25? Life can change dramatically over time. When choosing a mortgage, think long and hard about what lies ahead of you. How long do you want to stay in this home? How is your income likely to change in the future? Are you planning on growing your family? A mortgage calculator can help you choose a loan that suits your income and lifestyle, both now and in the future.
Understand available options: Use the mortgage loan estimator to compare all your options. These include Adjustable, Fixed-rate, FHA and Jumbo mortgages. Contact a Bethpage expert to help you select the best type for you.
Other information: When you use our mortgage calculator, you can also access vital information such as the latest available mortgage rates, important term definitions and related articles.
Local Mortgage Rates for Long Island
Find up-to-date mortgage loan rates for Long Island anytime on the mortgage page of our website. We feature fixed rates for loans from 10 year to 30 year plus adjustable rates for mortgages with initial fixed-rate periods from 3 to 10 years.
Apply for a Mortgage with Bethpage Federal Credit Union
Have you figured out how much mortgage you can afford, reviewed your different mortgage options and estimated your potential monthly payments? Start the mortgage process today and get the low credit union mortgage rates and personal service that we pride ourselves on providing.