What types
of mortgages are available?
| There are two categories of mortgage loans: |
|
Government loans are FHA, VA, or an RHS loan |
|
Conventional loans are any non-government loan |
|
Of
these two categories, there are many classifications like fixed rate
loans, adjustable rate loans or
combinations of both. |
 |
The interest rate and mortgage
payments on a Fixed rate mortgage remain the same throughout the
term of the loan. They are offered for periods of 30, 25, 20, 15 and 10
years. Usually the shorter the term the lower the interest rate, but the
payment will be higher. |
|
|
Adjustable Rate Mortgages are
loans that the interest rate and monthly payments are adjusted
periodically, based on
changes in a defined index. One such index is the Prime Rate index.
Most ARMs have an interest rate cap to protect you from drastic increases. They should also include cap limits on how much the interest rate can be increased at a certain time, and some may cap the interest rate increase for the term of the mortgage.
Be sure to check with your lender and read any
agreements. |
|
|
There are many different types
of mortgages available to you. The right mortgage will depend on how
long you plan on staying in your home and the amount of the monthly
payment you are comfortable with. For more information on the
types of mortgages available, visit the
Mortgage-X Information Service for
ideas, then ask your lender what types of mortgages they offer. |
|
|
This information is provided as a service of Owens
& Company Real Estate. It is meant for general information purposes only
and is not a guarantee of approval or qualification for a loan. Check
with your lender for their rules and requirements. |
Copyright © 2002 Owens & Company Real Estate.
