Best Mortgage Loan :The Major 3 Types of Mortgage Loans
It has been quiet confusing scenario these days when you go for a mortgage loan. Lenders give you a variety of options regarding your mortgage loan and you are not very sure where to start and what to choose. Mortgage loans also vary from State to State. Different States have their
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It has been quiet confusing scenario these days when you go for a mortgage loan. Lenders give you a variety of options regarding your mortgage loan and you are not very sure where to start and what to choose. Mortgage loans also vary from State to State. Different States have their own rules for the mortgage loan applied. In this article I have discussed the 3 types of mortgage loans that are generally offered by most lenders in America today.
Fixed Mortgage Loan
These type of loans are the most common and popular type of mortgage loans. In this you take a loan from a lender and pay him a certain repayment over a fixed time period. People generally go for long term of 30 year fixed mortgage loans as the monthly repayment are low enough and also the interest rates events out in this long period. But the disadvantage is that, in the long run of 30 years you have to make more repayment than the others who take it for a short period.
Convertible Loans
Convertible loans have become popular as it gives the mortgage loan borrower more flexibility over their loans. At any time if it seems to you that the interest rates are high then you can get converted into fixed mortgage loan. If interests are low then you can get converted to ARM based mortgage loans. The most common example of convertible loan is Balloon Loan. It is basically a fixed rate convertible loan where you repay small monthly amounts over a period of 5 – 7 years. After this period you need to repay the loan amount in one go. The advantage is for the real estate investors who want to sell the house in a short period of time to make money.
Special Mortgage Loans
These mortgage loans are categorized according to different groups of people, such as FHA mortgage loans are to those who go for first time home buying or for people with bad credit history. Another is veteran affairs mortgage loan which are offered to widows of the US armed forces.
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