There are quite a number of mortgage loans being offered today. Admittedly, not many do understand all their options and would just choose what’s first offered to them. However, it’s still best to know the basics of the more popular choices so you’d have an idea which ones would work best for you.
This is a mortgage loan that’s insured by the FHA or the Federal Housing Administration. Primary Residential Mortgage, Inc notes that this program started in the 1930s to encourage buyers with low credit and first-time buyers. It also offers low down payments and can qualify even those as low as a 500 credit score. This is possible since the FHA insures the loan and will pay the lender if the borrower defaults. However, the lower one’s credit score is, the higher the interests their payments will have.
This loan has a fixed interest rate and monthly payment scheme for the whole mortgage period. The only changes will mostly be coming from property taxes, residential association dues and other miscellaneous fees. The main advantage is that your payments will not be affected by sudden inflation rate adjustments, rise in interest rates or other financial issues that may arise in the future. However, be ready to pay interest rates that may be larger than the property’s actual price.
This home loan features mortgage rates that start off low and then goes higher as the years pass. That’s the typical situation since it’s typical for the market prices to rise in the future. However, if the market prices fall, so does your monthly rate. Although this can be alleviated with a progressive career and pay grade, market prices can rise so severely that your house can be more of a financial burden than an asset.
All of these loan offers can be discussed further by a reputable mortgage company. All you need to do is to find a trustworthy and experienced loan provider to guide you through choosing the best package for you. Good luck on your search for a house and mortgage that suits your requirements.