Are you looking for a mortgage to finance your home? If so, don’t just take the first option presented to you. You have a handful of choices when it comes to financing your house. There are different types you can consider when you want to get a loan.
This type of loan carries the same interest for the length of the payment term. This means your monthly payment will be the same throughout, regardless if it is a 30-year option. Community Lending Group, a mortgage company in Salt Lake City, cites that this is an ideal option for those who have already made up their mind about purchasing a house in a certain neighborhood or city.
This type of mortgage has an interest rate that changes or adjusts, depending on the payment terms. The rates often change after an initial stretch of a fixed rate. Many creditors refer to this loan as a hybrid because of the varied and changing interest rate. This is an option to consider if you’re unsure of whether you’re staying in a certain place in the short or long-term. It is also beneficial for those whose income may increase or decrease over time.
The government insures this loan type through an insurance put into it. This is an option to consider if you’re a first-time buyer because the requirements for down payments aren’t as stringent and the FICO scores aren’t a big factor.
With this type of loan, you have the option to pay only for the interest. This choice is available for a set time within the life of the mortgage. However, in some cases, you may have to pay a balloon payment, which consists of the original balance at the maturity of the loan.
These are a handful of the mortgage options you have when you want to finance the home you want to buy. Weigh the advantages and disadvantages of each one before making a choice.