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After years of falling sales, house prices are now on their way up. In addition, interest rates are still near historic lows. Both factors make now an excellent time to buy one of our new Pasadena houses for sale. You typically have two major ways of financing your purchase with a mortgage. The following examples assume a $500,000 loan with 20 percent down and no points. They also require an excellent credit score of 740 or greater. Your actual figures will vary.

Fixed Rate

Fixed-rate mortgages are slightly more difficult to qualify for because of their higher monthly payments. However, they reward your perseverance with monthly payments that remain constant through the life of the loan.

• The traditional 30-year loan has a current APR ranging from 4.4 percent to 5.66 percent in Pasadena, according to Bankrate. (APR stands for annual percentage rate, which factors in the principal, interest and any fees into the calculation to allow for comparisons across different loan types.) This yields a monthly payment ranging from $2,496 to $2,878. The national average is 4.74 percent.
• The shorter 15-year loan requires higher monthly payments that are still fixed, but cost less over the entire life of the loan. Rates are currently running 3.31 to 4.13 percent, producing payments from $3,513 to $3,730. The national average is 3.75 percent.

ARM

Adjustable-rate mortgages are easier to qualify for because of their lower monthly payments. However, the initial “teaser” rate, which if often a full percentage point below fixed-rate mortgages, lasts only a specified amount of time. For example, a 5/1 ARM has fixed payments only for five years. After that, rates adjust to match prevailing market conditions, which usually means higher monthly payments.

The 5/1 ARM are currently running from 2.82 to 5.8 percent for payments of $2,142 to $4,388. The national 5/1 ARM rate is at 3.69 percent.

For more information about buying a Brandywine Home, please contact us. Don’t wait because interest rates are expected to rise.