What Mortgage Loan Is Right For You?When you are going to buy a home and will be getting a mortgage loan to help you purchase it you need to understand what the different types are. Knowing the different types of loans that are available will help you determine which one would be your best choice.
Because there will be some different factors that may determine the type you are eligible for obviously you will have to take a mortgage lender before you can make the final choice. One factor will include your credit score.
Now that you understand that important information you need to know what the different types are for this loan. Below are the types you need to be aware of the most.
1. Fixed rate mortgage - This type of loan carries a fixed rate for the period of your loan. In other words the rate can't be changed during the course of the loan because they are locked at one specific rate.
2. Adjustable rate mortgage - This type gives you a fixed rate of interest for a specified amount of time and then after that goes to the adjustable rate of interest. The adjustable rate is based on the interest rate changes once the fixed period is over.
3. Sub-prime mortgage - This is a good for someone with bad credit. You may qualify for this type if your credit score is lower than 620. Don't get this type of loan without first consulting a good mortgage lender to be sure it is right for you.
4. Balloon mortgage - With this type you will have lower monthly payments and a lower rate for a specified amount of time. That period could last from three to ten years. After that time is up you will be required to pay the balance as one lump sum payment but if needed this type can be converted into a fixed rate or adjustable loan at the end of the balloon mortgage.
There are other types of mortgages you can check into if none of these sound right for you. Just remember to talk to a mortgage broker to best decide what type would suit your needs for buying a home.
Now that you understand what the different types are you can make a more informed decision with the help of a mortgage lender so you can be sure you get the right type for you. Don't rush this decision and do your homework on it before buying a home because the loan is the first part of the process of buying a home and you want to be sure you make the right decision from the start.
About the Author:
Did you enjoy this article by Paul Mangion on what type of mortgage loan is right for you? He is an Ontario mortgage broker for the Mortgage Centre in Mississauga, Ontario. Visit his site today for the best mortgage rates for your situation. www.gtamortgagematters.com/