• Overview Finance
• Down Payments
• Types of Home Loans
• Monthly Mortgage Payments
• First Time Home Buyer

Finance: Home Loans

There are different kinds of Mortgage loans to choose from, and your mortgage lender will provide you with information about them. Shop for your loan carefully: when you select your type of loan, you need to keep in mind your current and future needs and financial status. Michelle can refer you to a lender that would best serve your needs, whether you need a fixed rate mortgage or more creative financing options.

Here are some general types of mortgage loans:

Fixed rate mortgages are 15 or 30 year loans, that protect you against inflation, allow you to plan long-term what your costs will be and are low risk loans.

Adjustable-rate mortgages (ARMs) start with a lower interest rate and a lower monthly payment. The lower rate (and lower monthly payments) may also allow a higher loan amount. However, the interest rate can change during the life of the loan, which would mean that your monthly payment would increase (or decrease). It's important to understand the specifics of an adjustable-rate mortgage; ask the lender about adjustment periods, indexes and margins, caps, ceilings and floors, and the number system.

Balloon/reset mortgages have monthly mortgage payments based on a 30-year amortization schedule, and you have a choice at the end of the 5- or 7-year term to either pay off the remaining balance or reset the mortgage. You have the advantage of a low monthly payment, like someone with a 30-year loan, but you must pay off the loan at the end of the specified term. Many balloon mortgages have a "reset" option, which means that you can reset the interest rate of your mortgage to the current market rate for the remainder of the amortization period.