Homebuyers and homeowners need to decide which home Mortgage
loan is right for them. Then, the next step in getting a mortgage loan is to
submit an application ( Uniform Residential Loan Application ). Although we try
to make the loan simple and easy for you, getting a mortgage loan is not an
insignificant process.
Below is a short synopsis of some loan types that are
currently available.
CONVENTIONAL OR CONFORMING MORTGAGE Loans are the most
common types of mortgages. These include a fixed rate mortgage loan which is
the most commonly sought of the various loan programs. If your mortgage loan is
conforming, you will likely have an easier time finding a lender than if the
loan is non-conforming. For conforming mortgage loans, it does not matter
whether the mortgage loan is an adjustable rate mortgage or a fixed-rate loan.
We find that more borrowers are choosing fixed mortgage rate than other loan
products.
Conventional mortgage loans come with several lives. The
most common life or term of a
Mortgage loan is 30 years. The one major benefit of a 30
year home mortgage loan is that one pays lower monthly payments over its life.
30 year mortgage loans are available for Conventional, Jumbo, FHA and VA Loans.
A 15 year mortgage loan is usually the least expensive way to go, but only for
those who can afford the larger monthly payments. 15 year mortgage loans are
available for Conventional, Jumbo, FHA and VA Loans. Remember that you will pay
more interest on a 30 year loan, but your monthly payments are lower. For 15
year mortgage loans your monthly payments are higher, but you pay more
principal and less interest. New 40 year mortgage loans are available and are
some of the the newest programs used to finance a residential purchase. 40 year
mortgage loans are available in both Conventional and Jumbo. If you are a 40
year mortgage borrower, you can expect to pay more interest over the life of
the loan.
A Balloon Mortgage loan is a short-term loan that contains
some risk for the borrower. Balloon mortgages can help you get into a mortgage
loan, but again should be financed into a more reliable or stable payment
product as soon as financially feasible. The Balloon Mortgage should be well
thought out with a plan in place when getting this product. For example, you
may plan on being in the home for only three years.
Refinance Mortgage loans are popular and can help to
increase your monthly disposable income. But more importantly, you should
refinance only when you are looking to lower the interest rate of your
mortgage. The loan process for refinancing your mortgage loan is easier and
faster then when you received the first loan to purchase your home. Because
closing costs and points are collected each and every time a mortgage loan is
closed, it is generally not a good idea to refinance often. Wait, but stay
regularly informed on the interest rates and when they are attractive enough,
do it and act fast to lock the rate.
An Interest Only Mortgage loan is not the right choice for
everyone, but it can be very effective choice for some individuals. This is yet
another loan that must be thought out carefully. Consider the amount of time
that you will be in the home. You take a calculated risk that property values
will increase by the time you sell and this is your monies or capital gain for
your next home purchase. If plans change and you end up staying in the home
longer, consider a strategy that includes a new mortgage. Again pay attention
to the rates.
A Reverse mortgage loan is designed
for people that are 62 years of age or older and already have a mortgage. The
reverse mortgage loan is based mostly on the equity in the home. This loan type
provides you a monthly income, but you are reducing your equity ownership. This
is a very attractive loan product and should be seriously considered by all who
qualify. It can make the twilight years more manageable.
Article Source: http://EzineArticles.com/558647
