With the current real estate market as it is, many people have begun to educate themselves about mortgage loans and the options available. Whether you are looking to refinance your current mortgage or looking to purchase a new home, researching mortgage options is the best thing you can do in this current market.
As you research, you will quickly learn about many different loans and the options they give to the borrower. As these options build up, you will begin to see which options are most beneficial to you and the right choice as to which mortgage loan to get will become obvious. Make sure to keep in mind your financial situation, what you can afford, and your future plans. These will help you narrow down the options and the benefits they have for you.
Mortgages come in many different types nowadays, but all can generally be categorized into Fixed Rate, Adjustable Rate, or Hybrid mortgages. Fixed rate mortgages have the interest rate fixed in stone for the life of the loan, so you will not have to worry about the rate increasing and your mortgage payments increasing. Currently, in this market, fixed rate loans are the most popular and common. Adjustable rate mortgages allow for the rate to fluctuate, up or down, to match the market. These can be useful if the interest rate drops, but are often painful when rates hike up. Nowadays, with rates as low as they are, many people believe the floor to be nearby, indicating that the only direction for a rate to adjust is up. Thus, adjustable rate mortgages have fallen to the wayside more or less. Hybrid loans are a combination mortgage where the rate is fixed for the first few years and then becomes adjustable.
Generally speaking, if you are planning on staying in your home for the next five years or more, a fixed rate will be more beneficial due to predictability and stability over the life of the loan. Interest rates are amazingly low right now, so even with less than perfect credit, it is possible to get a good fixed rate on your mortgage.
While looking into the different loan options, you should look into government insured loan programs. The Federal Housing Administration has a loan insurance program to help boost the real estate market. Low down payments and competitive fixed rates make this an option to look into. If you are a veteran, the Veterans Administration has a VA home loan option that may be right for you. Even the U.S. Department of Agriculture has a loan insurance program. The USDA rural development loan helps people get into homes in areas of under 10,000 people for no money down.
We’ve covered a fair amount, so remember these basics and you’ll do fine:
• Research, research, research! Focus on the pros and cons of each type of mortgage loan
• Compare your research to your personal situation to find the best plan for you.
• Make sure to research government insured loans, such as the FHA loan and USDA loan.
Make your final decision after you’ve evaluated your options and you’ll do fine. If you have any questions during your research, you can contact CREFCO toll free. We’re glad to help. You can also visit us online. We even have forums set up to help you during your research.
(866) 854-4242
http://www.crefco.com
http://www.crefco.com/forums
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