If you’re purchasing a home, you’ll likely have a lot of questions about the process. Which neighborhood should you live in? How much space do you need? However, you have something else even more pressing to figure out: Which mortgage loan makes the most sense for your situation? To answer that question, you’ll need to know more about different kinds of mortgage loans. From fixed-rate loans to loans for military veterans, let’s review some of the most common mortgages.
Fixed-rate mortgages are the most common type of home loan. The name explains the purpose of the loan: The interest will remain the same for the entirety of the loan, So you never have to worry about rates going up. The downside is that you’ll never benefit from rates going down, either.
An adjustable-rate mortgage, also called a variable-rate mortgage, offers a different path for those who don’t want to go the fixed-rate route. If you pick this mortgage, your interest rate will change after a certain period. The risks are clear –– you risk rates going up. However, you also could pay a lower rate in the future, which would lower your monthly payments.
An FHA loan is often appealing to first-time homebuyers. This loan is insured by the US Department of Housing and Urban Development, and it allows first-time home buyers to pay as little as 3.5 percent of a property’s total cost when making a down payment. The loan program also provides resources for seniors and people who are looking to make their homes more energy-efficient.
Lastly, you could qualify for a special loan not available to most Americans if you’ve served in the military or are married to someone who has. VA home loans are only available to veterans and eligible spouses, but include a number of benefits, like no down payment when purchasing.
We’ve only scratched the surface when it comes to the different types of mortgage loans, but this guide will give you an idea as you keep an eye on the market. If you’re navigating the often-confusing mortgage process, it’s a good idea to reach out to Choice Mortgage Bank. Give us a call at 561-362-8204, and we’ll help you figure out which mortgage loan will be most beneficial for you.