Different Types of Mortgage Loans for Home Buyers

1. WHAT ARE MORTGAGE LOANS? There are times when we use our assets to get ourselves a financial boost. But we can also use our assets to get ourselves a loan and that too a secured one. Wondering how? A mortgage loan is the answer to your question. Later, investing in mortgage refinancing and home refinances services can help you reduce your interest rates. However, let us first understand what basically a mortgage loan is. A mortgage loan is a secured loan that you can get by keeping your asset mortgage with the creditor. The asset that you keep mortgage can be any immovable asset. A residential property or a commercial property can act as mortgages. Immovable properties such as heavy machineries can also act as an asset to avail mortgage loan. Mortgage loan is different from a home loan. You might avail a mortgage loan to buy a home. However, that does not imply mortgage loans are only meant for home buyers. Also, unlike home loans, you get a mortgage loan by keeping in an asset of yours, as a guarantee, with the lender. Types of mortgage loans for home buyers •30-year fixed-rate mortgage

2. Fixed Rates Mortgage loans This can be one good option for home buyers because of the convenience this mortgage loan allows. You are entitled for a loan with a set interest rate for a period of 30 years straight. Your monthly payments are lower in comparison to those in short-term loans. You enjoy the same interest rate throughout. This saves you from the constant need to keep a record for your monthly payments. •15-year fixed-rate mortgage This loan, too, offers a fixed interest rate. However, your monthly payments rise a bit in this mortgage loan. If you are opting for home refinance and mortgage refinancing, then this could work for you. A mortgage refinance company provides such interest rates that are comparatively lower than those for long-term loans. Predictable monthly payments are another perk of this mortgage loan. •Adjustable rate mortgage These loans offer a fixed interest rate for a certain period initially. However, the interest rates change after that fixed period. This can be a good option for those who bid on possibilities of lower interest rates in future. Home buyers who do not wish to hold the mortgage for long years can invest in this loan. •FHA mortgages This loan is insured by Federal Housing Association. FHA loans are generally backed by the government. If you wish to buy a home but hold low credit scores, then you may qualify for this loan. You also enjoy lower down payments. •Jumbo mortgages

3. Interest only mortgage is a good option for home buyers These loans may have a fixed or a varying interest rate. Home buyers who are investing in expensive properties can opt for this loan. However, you will be subjected to a higher down payment percentage. Also, you must have a decent credit score to qualify for this loan. People looking for mortgage refinancing may opt for this loan. •Interest-only mortgage If you are a home buyer who does not have plans to reside in the same place, then this can be a good option for you. This is a good loan option for people who have high monthly cash flow. Also, if you enjoy huge amounts as yearly bonuses, then you may go for this option. However, lenders of such a loan usually ask for a guarantee. You must showcase your proven ability to pay back the loan to lender. Then only a lender invests his money in you. Now that you have learnt different types of Mortgage loans options available for you, choose the one most suitable for you for buying your dream home. Always remember before moving ahead with an option, carefully analyze your financial situation. Nevertheless, review your needs and requirements, do a proper research as you must always be aware of what you are opting for. Read all the terms carefully before investing in any plans whatsoever.