If you are searching for a mortgage loan, you will likely
discover that there are several different types available
for borrowers, depending on their financial situations and
other circumstances. To determine which type of mortgage is
right for you, you should consult with your lender and
review your own financial circumstances and loan needs.
This article will provide some basic information about a few
of the most common types of mortgages.|
There are two basic mortgage categories: fixed-rate and adjustable rate. The most common type of mortgage is the 30-year fixed rate mortgage, because of its predictable and stable payment structure. Borrowers who choose this type of mortgage usually plan to keep their homes for many years.
Another common type of fixed rate mortgage is the 15-year fixed-rate mortgage, which allows borrowers to pay less total interest and gives them the ability to own their homes in a shorter amount of time, but requires higher monthly payments. While fixed rate mortgages have higher monthly payments, they sometimes end up costing borrowers less money in the long run because of their stable payment structure and typically lower interest rates.
There are both advantages and drawbacks to adjustable rate mortgage types. Because the interest rate on these types of mortgages is always fluctuating, you may end up paying different amounts each month. This can be a good thing if the national interest rate is low, but not such a good thing if the national interest rate happens to be higher.
Your credit score is one of the most important deciding factors when it comes to the mortgage loans that individual borrowers can qualify for. Before you begin exploring your mortgage options take the time to review, and if necessary, repair, your credit score. This is the best way to help insure that you are able to lock in a low, affordable rate for your mortgage at the outset, regardless of the type that you choose.
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