Which Of These 4 Types Of Mortgages, Is Best, For You?

Which Of These 4 Types Of Mortgages, Is Best, For You?




For most of us, owning a home, of one’s own, is an basic part, of what we refer to, as, the American Dream! However, for many, this requires, depending, on securing, a mortgage loan, in order to provide, this buy. After, more than 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I generally, take the opportunity, to discuss, with possible clients/ buyers, some of the options, at the onset, of this course of action! Basically, there are, at the minimum, four types, of mortgages, often, obtainable, depending on an individual’s needs, qualifications, finances, comfort zone, etc. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, these, and explain, their differences, in addition as some of their possible advantages, and disadvantages.

1. Balloon: At times, one’s personal circumstances, indicate, considering a balloon loan. This kind of loan, generally, is for a comparatively, shorter – period (often, between, 5 to 7 years), requires, very little, down – payment (other than fees, etc), and, a slightly – affordable, monthly payment. However, at the end of the period, the borrower must, either, refinance, repay the balance, or sell the home! You probably, consequently, recognize, both, the advantages (in the short – term), in addition as, the possible, longer – term considerations/ ramifications!

2. Adjustable: Many homeowners take advantage of an Adjustable – Term mortgage, for a variety of reasons. Often, the interest rate, etc, is lower, and, consequently, more affordable, than for a more traditional, kind of loan! Because of this, some might qualify, because many loans, are based on, the total of the monthly payments. However, it must be recognized, these terms and rates, change, from time – to – time, at regularly – scheduled intervals, and dependent – upon, the inner, overall, interest costs, might, increase, sometimes, by a meaningful amount!

3. 15 – Year traditional: A traditional Mortgage, is one, which, has the same, monthly payments, for the term of the loan. The only things, which change, are the allocations paid, into – escrow, for items, such as real estate taxes, insurance, etc! Usually, the shorter, the term, the lower, the rate, paid, but, also, this creates, since, the pay – back, period, is shorter, a higher installment – payment!

4. 30 – Year traditional: Usually, traditional Mortgages, are obtainable, in a variety of time periods, but, the 30 – year, kind, are generally, most, in – need. Since, nearly, all mortgages, no longer, have prepayment – penalties, those, seeking to pay back, in a shorter – term, increase, their monthly payment, but, have the flexibility, to pay, the regular amount, when it makes the most sense, for them. clearly, since, the principal, is repaid, over a longer – period, monthly payments, are reduced, but, often, lenders charge, slightly, lower rates, for shorter – term, loans.

I will always tell you what you need to know, not just what you want to hear (TM). This trademark, which I am proud to rule, my specialized conversations/ interactions, directs me, to ensure my clients, are knowledgable, and informed!




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