Purchase
Mortgage
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Owning your first home is a huge milestone, it is often
considered one of the biggest achievements any individual can make.
There are many different factors to take in to account when looking
at the various factors involved in financing your first home.
Choosing the right purchase mortgage can make the difference
between a successful homeowner experience, and possible
foreclosure. The many different types of purchase loans
include: fixed rate mortgage, adjustable rate, balloon loans,
government loans, and jumbo loans; just to name a few. Of
course your loan officer will help you make the right decision when
choosing a purchase loan, however it is always best to go into these
situations properly educated. Not all loan providers have the
homeowner's best interests at heart, as such to protect yourself
from predatory lending practices do as much research as he can
before agreeing to any purchase loan terms. Below you'll find a
brief outline of some of the various options available with
different purchase loans.
Fixed-rate mortgage:
When interest rates are low a fixed-rate
loan is one of the best purchase loans available. A fixed-rate
loan, as the name implies, guarantees the same interest rate over
the period of your loan. Fixed-rate loans can span anywhere
from 10 to 30 years.
Balloon mortgage:
Balloon loans are hybrid fixed-rate
loans. They start out as a fixed-rate loan for a period of
time, and then at the end of the fixed-rate, a large lump sum is
due. Balloon loans are an option for individuals looking to
quickly turn around property. Real estate buyers like this
option because they pay low monthly payments, and then can include
the balloon payment in the cost of selling the home.
Adjustable rate mortgage:
Adjustable rate mortgages often
start with a low monthly payment that then changes to keep in step
with a financial indicator such as treasury bills. Adjustable
rate mortgages can be a gamble because the homeowner is at the mercy
of market conditions.
Jumbo mortgage:
Jumbo loans are simply a classification used
to describe large purchase loans. A jumbo loan can either be
fixed-rate or adjustable, come in many different down payment
packages, and are usually only available for the most expensive of
properties.
Government mortgage:
There are many government programs
available that helps homeowners secure a purchase loan. VA
loans are available to veterans and families of veterans.
These loans can include terms such as zero down payments, and very
low interest. The FHA, Federal housing administration,
provides mortgage insurance to qualified potential homeowners.
This insurance that lowers their monthly mortgage payments.
FHA terms vary between different states, so speak to your mortgage
lender for more information.
These are just some of the myriad of options available when
looking for purchase mortgage. The housing market is rife with
individuals who have made poor decisions resulted in the foreclosure
of their properties. Choosing the right purchase loan is
absolutely necessary to ensure your success as a future
homeowner.
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