Home Mortgage Loan Information - Which Type of Home Loan is Best For You?If you are considering buying a home, then you may be more than a little confused by all of the terms you hear about home loans. After all, lenders throw around words like fixed rate, balloon mortgages and adjustable rate mortgages without a thought. But if you aren't at least familiar with the basics-those terms can be pretty confusing! Here's a basic guide to the three most common types of home loans. Study it, and determine which one is right for you. Fixed Rate Home Loan If you are thinking about buying a home and staying in it until you pay it off, then you will probably want a fixed rate home loan. With this type of loan, you will be assigned a fixed interest rate, and then that rate will not change for the life of the loan. If interest rates skyrocket, yours will remain the same. On the other hand, if they plummet, you will likely be paying a higher rate. (You can always refinance in order to get a lower rate.) Adjustable Rate Mortgage (ARM) The interest rate with this type of loan goes up and down with the market. In other words, if the interest rate is low, the rate on your home mortgage will be low, but if it's high, your loan interest rate will reflect it. And because the interest rate on a home mortgage loan affects the payments, you will never know from reporting period to reporting period what your monthly mortgage payments will be. This type of loan obviously isn't for everyone. So, who might use an ARM? For starters, if you are purchasing a house for investment purposes and plan to sell it quickly, you might take advantage of low interest rates by getting this type of loan-particularly if it looks as if they may go lower. Another reason to use an ARM as a home loan is if you are buying a home in a time when interest rates are on the decline. You can take out an ARM, and then change it to a fixed loan once the interest rates bottom out. Balloon Mortgage With this type of loan, you will make monthly payments for a fixed amount of time, with a fixed interest rate. The difference is that at the end of the payment schedule, you will owe the unpaid balance in one lump sum. If you use a balloon mortgage, you will find that the interest rates are much lower than either a fixed rate mortgage or an ARM. The obvious negative to this type of loan is that huge payment due at the end, but if you are planning to hold the house for a short period of time, then this might be the loan for you. By understanding the various types of home loans that are available to you, you will be better prepared to make a decision that is just right for you and your family. To view our recommended sources for home mortgage loans, visit: Recommended Home Mortgage Lenders Online. Carrie Reeder is the owner of ABC Loan Guide, an informational website with articles and the latest news about various types of loans.
MORE RESOURCES updated Fri. April / 26 / 2024 Mortgage Refinance Rates: Compare Current Rates Business Insider 10-year refinance rates: What to know about the current market CNN Underscored Should You Refinance Halfway Through Your Mortgage? Bankrate.com How to Refinance Your Mortgage NerdWallet Loan Modification Vs. Refinance Bankrate.com 30-Year Mortgage Refinance Rates Business Insider Mortgage Interest Rates Today, April 24, 2024 | Rates Still Slated to Go Down This Year Business Insider Only Half Of Black Seniors Approved For Home Repair Or Refinance Loans To Age In Place Block Club Chicago 15-Year Mortgage Refinance Rates: Compare Current Rates Business Insider Types of Mortgage Refinance Options Bankrate.com Mortgage Interest Rates Today, April 22, 2024 | The Still-Hot Economy is Keeping Rates High Business Insider Mortgage Interest Rates Today, April 21, 2024 | Rates Remain Near 7% Business Insider Will Interest Rates Go Down in May 2024? | Mortgage Rates Forecast The Mortgage Reports How To Get The Best Refinance Rate Bankrate.com Average Mortgage Interest Rates: Mortgage Rates by Credit Score, Year, and Loan Type Business Insider The best mortgage lenders for refinancing in April 2024 CNN Underscored Best Mortgage Refinance Lenders In 2024 Bankrate.com Should You Refinance Your Mortgage In 2024? Bankrate.com MBA: Mortgage Applications Decreased in Weekly Survey Calculated Risk Current mortgage refinance rates CNN Underscored When to Consider Refinancing Your Mortgage Business Insider Best Refinance Lenders of April 2024: Refinance Your Mortgage The Motley Fool How To Refinance A Rental House Bankrate.com Mortgage Rates Chart | Historical and Current Rate Trends The Mortgage Reports Refinance Requirements: What You Need to Refinance Your Home in 2024 The Mortgage Reports Best Mortgage Refinance Lenders of April 2024 Business Insider How Soon Can You Refinance a Mortgage? NerdWallet How To Refinance An Underwater Mortgage Bankrate.com Conventional Refinance Rates and Guidelines for 2024 The Mortgage Reports 30-year refinance rates: What to know CNN Underscored Current 15-year refinance rates — and lenders that offer them CNN Underscored Refinancing a Home Equity Loan (2024 Guide) MarketWatch Mortgage Rate History: 1970s to 2023 Bankrate.com Mortgage Rate Forecast February 2024 Bankrate.com Mortgage Rate Predictions: Are 7% Rates Here to Stay in 2024? Norada Real Estate Investments When should I refinance my mortgage? To determine if a refinance is the right move for you, you’ll need to know the ... The Wall Street Journal Pros and Cons of a Cash-Out Refinance Bankrate.com What Credit Score Do I Need To Refinance? Bankrate.com Should I Refinance My Mortgage Now? When to Refinance As Rates Drop Business Insider Office of Research blog: A look at cash-out refinance mortgages and their borrowers between 2013 to 2023 Consumer Financial Protection Bureau The Sales Pitch for an 8% Mortgage: Buy Now, Refinance Later—for Free The Wall Street Journal Mobile Home Refinancing | Loans & Rates 2023 The Mortgage Reports CFPB Releases Study of Refinance Mortgage Loans Between 2013 and 2023 Consumer Finance Monitor Current mortgage interest rates: Mortgage rates today CNN Underscored
|