Getting a Loan in Rhode Island

Lending Center — Thu, 02 Nov 2006 03:12:40 +0000

Home Buying in Rhode Island - Despite the fact that Rhode Island is not, in fact, an island, it still carries with it a bucolic charm that comes with being primarily a rural state. However, the very rural-ness of the Ocean State is what attracts settlers to the area. This means that homes are in high demand, with a median cost of about $280,000. It is important, though, that one take special care to avoid common problems with Rhode Island home mortgage loans. The two most common things to avoid when looking into loans in the smallest state in the U.S. are:

1. Interest only loans, which can be tempting because it artificially lowers your monthly mortgage payment on the expensive homes in Rhode Island. But you don’t hear much about the balloon payments that take effect five to seven years after you start paying on your mortgage loan.

2. Prepayment charges for paying off your home loan early. You may be charged a large amount of money because finishing your loan before the term is up deprives lenders of the large amounts they were still counting on. Choose a loan with no prepayment charges.

Becoming borrowing savvy about tactics lenders use to get you to pay more than you need to can help you get the best deal on a Rhode Island home mortgage loan.