Types of Mortgage Loans

Investing in a home is a tough assessment as you have to learn everything that is important to purchasing a property – such as what sort of taxes to expect, how to get the most out of your property, and how you are going to pay for that property. In order to afford real estate, you will want to get a mortgage loan that is right for your situation. Not every mortgage loan is going to be right for you, so knowing what each type entails will benefit you in paying off that loan. Here are some of the most popular loans for homebuyers and some information about them.

              

Fixed-rate home loans are highly popular for many different reasons. As one of the oldest forms of mortgage loans, you are able to choose from 10, 15, 20, 30, and even 50-year fixed-rate mortgages depending on the amount you need and how much you can afford every month. Fixed-rate means that the interest is going to stay the same for the whole duration of the loan, meaning that you are going to know exactly how much you owe every month because it is never going to change. This is popular because many homebuyers have a budget to stick to, and knowing what that payment is, is beneficial for them. However, this means that if interest rates fall in the real estate market, you will be paying a higher rate for your home than what you could be paying.

              

That is why some people choose adjustable-rate mortgages, another highly popular mortgage loan. Adjustable-rate mortgages, or variable-rate mortgages, offer you a lower interest rate at the beginning, a large benefit for those that are seeking lower payments. The interest rate will change every year, so if interest rates fall you will be paying a lower interest rate overall. The downfall to this is that if the interest rates go up, you could find yourself paying for more than you can afford and you are not going to know exactly how much the payment is going to be.

              

Federal Housing Administration loans (FHA) are also highly popular as those that cannot always qualify for a loan can receive one low down payment on a loan with FHA. This is something that first-time homebuyers can benefit from, or someone that has a bad credit score. The downfall is that the size of the loan can be limited so you might not receive as much as you need with an FHA loan.

              

These are just a few of the mortgage loans that are offered to homebuyers and they tend to be the most popular ones offered. If you are looking into purchasing a home, one of these three are going to be the easiest and most popular that you come by.

 

About the Author

Real Estate Agent Lori Corken is pleased to bring you this article on different types of mortgage loans. Lori deals with primarily luxury homes in Parker Colorado and Castle Rock Colorado. If you are interested, please check out her website at http://www.loricorken.com/.