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Buying a home is changed a lot in the last couple of years. Now there are more mortgage options than ever before. Not all mortgages are right for each person, or each property. Before you decide which mortgage, take a look at all the options available. Fixed Rate Mortgages: A fixed rate mortgage is a mortgage with an interest rate that never changes over the term of the loan. Most fixed rate mortgages are available in either 15, 20, or 30 year terms. Fixed rate mortgages are preferred during periods of high interest rate, because they offer consumers a steady, reliable interest rate and a mortgage payment that won't change over the life of the loan. Adjustable Rate Mortgages: Adjustable rate mortgages (referred to as ARMs) offer a variable interest rate that tracks with the national prime interest rate. ARMs are attractive because their initial interest is lower than traditional rates and the initial monthly payment tends to be lower than a fixed rate loan. The time period with the fixed interest rate is always specified at the onset of the loan. When the initial period is concluded, the interest rate and the monthly payment changes according to market conditions - if the national rate goes up, the interest rate on the loan increases. How often the interest rate adjust is part of the terms of the loan. ARMs are great for buyers that aren't planning to stay in the home for a long period of time. Government Loans: There are a number of government programs that make it easy for individuals to qualify for mortgage loans. These programs include: FHA Loan - an FHA loan is insured by the Federal Housing Administration and is available to all qualified home buyers. FHA loans offer low down payments and usually cover moderately priced homes. There are limits to the total amount of the loan. VA Loan - a VA loan also offers a low or no down payment to qualified military veterans. The veteran must obtain a certificate of eligibility from the Department of Veterans Affairs. You'll find that there are a number of options for loans under each category of loan. For instance, you can find fixed rate loans that have an option for a minimum down payment or sometimes, even no down payment. Your best option is to consider the types of loans and discuss them carefully with a mortgage loan officer. You'll find that a great loan officer can show you a number of programs that you can qualify for, all with the goal of finding the best loan for you.
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