When the time comes time to shop for mortgage loans for your new home, the sheer number of options can be downright daunting. While there’s a plethora of different loan types when it comes to financing your home, we’ll focus on the most common types of mortgage loans: Fixed Rate, ARM, Balloon and 2-Step.
Fixed Rate Mortgages: Payments remain the same for the life of the loan, which is generally 15 years or 30 years. Interest rates remain the same for the entire duration of the loan, so payments are predictable.
Adjustable Rate Mortgage, or ARM: ARM payments increase or decrease on a regular schedule with changes in interest rates, though increases are typically subject to limits.
Balloon Mortgage: These mortgages offer very low rates for an initial period of time, which usually runs for 5, 7, or 10 years. When the time has elapsed, the balance will be due. You can also refinance, though you’ll have to do some shopping for refinancing options since it’s not an automatic process.
Two-Step Mortgage: Interest rates adjust only once and remains the same for the life of the loan.
Many other types of mortgage loans are available, including government-insured mortgages and VA loans for veterans. Talk to lenders and real estate professionals to assess your situation and find the right fit for you.
At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.
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