Types Of Mortgages

Types Of Mortgages

Most people will have to take out a mortgage before they can get a home. If you are thinking about taking out a mortgage, then it is important to remember that there are different types. A lender can help you find the mortgage that best fits your needs.

Types Of Mortgages

Loan Types

Fixed-rate Mortgages

If you have a fixed-rate mortgage, then you will pay the same interest rate for the duration of the loan. You will also have the same monthly payment. Even if you take out a 30-year mortgage, you will still have the same monthly payment and interest rate.

Adjustable-Rate Mortage

If you have an adjustable rate mortgage, then the interest rate will be adjusted from time to time. In many cases, the interest rate will change every year after remaining fixed for a certain amount of time, which typically lasts for five to 10 years. The interest rate on adjustable-rate mortgages may be lower than fixed-rate mortgages. However, the interest rate and payments will likely rise over time. You may want to get an adjustable-rate mortgage if you plan on living in the home for a short amount of time.

Jumbo Mortgages

Jumbo Mortgages are loans that exceed the limits that are set by the Federal Housing Agency. The loans typically range from $417,000 to $3 million. You can get a fixed or adjustable interest rate on a jumbo mortgage. However, the interest rates are typically much higher than those on conventional mortgages.

Veterans Affairs

Veterans Affairs loans are better known as VA loans. You can get one of these loans without having to make a down payment. However, in order to qualify for this type of loan, you must be a member of the military. Spouses of military personnel can also qualify for this type of loan.

DreaMaker Mortgage

You may be able to get a much lower down payment if get a DreaMaker mortgage. You can also get reduced mortgage insurance and lower monthly payments. However, there are income requirements that have to be met. The interest rates on DreaMaker mortgages are fixed.

Home Affordable Refinance Program

Home Affordable Refinance Program allows people to refinance their current mortgage and get a lower rate. People with adjustable-rate mortgages and fixed-rate mortgages can qualify for the home affordable refinance program.

Once you have decided which type of mortgage is right for you, the next step is to get pre approved for a mortgage online.