Every one dreams of having a house of their own and it is very exciting to see your dreams turn to reality. Buying a house is an expensive dream and you should tread with care over mortgage policies and mortgage quotes to grab the best deal.
You have chosen your dream house and the seller has finally agreed to sell his house. You visit several money lenders and finally you find someone who has approved your loan.
These are the Mortgage Loan Types that are offered by mortgage lenders and companies –
Fixed Rate Mortgages is the most common mortgage option available. The mortgage loan has to be paid in fixed monthly payments of the principal amount and the interest over the agreed time period. The mortgage rates remain the same throughout the term as on the date the mortgage is issued. Chose the lowest Fixed rate Mortgage to save some money. The term of mortgage repayment can be chosen from 10 to 30 year fixed rate mortgage options. Fixed Rate Mortgage is ideal for people who plan to stay in their house for a long time.
Interest Only Mortgage offers requires no payment of the principal amount during the initial days of the mortgage loan. The borrower has to pay only the interest only mortgage that might be applicable. The primary advantage of these loans is a low monthly mortgage payment which means a bigger mortgage loan. The period for Interest Only Mortgage ranges from 1 year to the half term.
Two Step Mortgage features a 30 year mortgage rate with some add-ons. Your mortgage can be convertible or non-convertible. Popularly referred to as 5/25 and 7/23; 5/25 has a 5 year fixed mortgage interest rates for the initial years and then it steps over to a one year adjustable mortgage rate or a 25 years fixed mortgage rate. Similarly a 7/23 means the borrower has to make fixed interest rate mortgage payments and then the mode changes to a 23 year fixed mortgage rate or a 1 year Adjustable Rate Mortgage.
Veterans Affairs Loan is the mortgage option available only for the veterans and ex servicemen of USA. Veterans are guaranteed by the State and they can get a mortgage loan with negligible or no down payment. For those who joined before 1980 the eligibility is 180 days of active service and or those who joined after 1980 must have served for two years to be eligible for a VA loan.