Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

The top 5 most preferred mortgage types

By Apil Gupta Subscribe to RSS | June 24th 2012 | Views:
loading
 
  



When it comes to choosing the mortgage types that are available to a home buyer, the options are aplenty. There are many different kinds of mortgages that can be availed, and one can always choose the one that best fits serves his/her needs from these options. Following is a brief description of the most frequent kinds chosen by home buyers:

• Fixed Rate Mortgage: This mortgage type entails the same interest rate being applicable throughout the entire term of the loan period. One can ger a fixed loan mortgage for 10,15 and 30 years. This period can be negotiated with the lender, and this mortgage is perfect for the buyer who wants an accurate idea of how much would be the monthly payment of the house, since it would be fixed for the coming times, and wants to live in the house for more than ten years.

• One (five) Year Adjustable Rate Mortgage: Also popularly known as ARMS, this kind of mortgage has fluctuating interest rates in accordance with the financial indexes, which are in turn influenced by the prevailing market scenario. It can also sometimes result in exorbitant monthly payments, as well as a strong, and sometimes unrealistic, dip in the interest rate as well. Home buyers need to be prepared for both the situations, since the interest rate changes every year. The offered rates are generally lower than a fixed rate mortgage type, since the buyer is taking a risk for the future. Further, the terms can always be re-negotiated at a later stage.

• 10/1 (5) Year ARM: This kind of mortgage features the same interest rate for a period of 10 years, with the starting of the 11th year bringing with it the element of fluctuation every year according to the index the lender chooses to the base the interest rate on. This is the ideal mortgage type for those who want to live in the house for 10 years and wish to have a stable payment plan during this time.

• 7/1 Year ARM: Alike the 10/1 Year ARM, this mortgage type has a shorter term, with the interest rate remaining static for 7 years, and then starting fluctuations from the 8th year onwards according to the index. Buyers who wish to stay at their new home for 7 years or more, and prefer a fixed monthly payment in the initial years should opt for this kind of a mortgage,

• Balloon Mortgage: This is a sort of a high risk mortgage wherein at the end of the loan term, the buyer might have to pay a large sum, since the loan amount is due in full. Although the term is negotiable, 3, 5 and 7 year balloon mortgage plans are the most common ones. The home buyer needs to pay a fixed interest rate during the loan term, and at the end of the same, must pay the remainder amount all at once. This kind of mortgage is the right choice for buyers who want to live at the property for more than the term of the loan.

Apil Gupta - About Author:
Author is providing Low Mortgage rates, Finance, Refinance , Loans in California, USA.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/mortgage-articles/the-top-5-most-preferred-mortgage-types.htm

Related Mortgage Articles Subscribe to RSS

Low interest rate brings cheaper mortgage deals
Published by Sandra Jeux on January 25th 2012 | Mortgage
Interest rates are at the lowest side for mortgages at current time which is leading people of the c...
 
Exploring best adjustable mortgage rates as per expectations
Published by Jack Smith on July 23rd 2012 | Mortgage
The act and need for searching best adjustable mortgage rates is common in the world, where people s...
 
Explore the different options of mortgage rates available
Published by Jack Smith on April 14th 2012 | Mortgage
It is advisable to first thoroughly investigate about the most lucrative mortgage rate in the market...
 
The best mortgage rate is only a systematic approach away!
Published by Jack Smith on May 22nd 2012 | Mortgage
Investigate the property market well and fulfill your dream of achieving the best mortgage rate for ...
 
The coming back of the long-term fixed rate mortgage
Published by DavidVila on February 14th 2012 | Mortgage
There is a return of long-term deal of mortgage that is as long as 7 years as well as 10 years. Skip...
 
Beware of Yield Spread Premium on California mortgage rates
Published by Apil Gupta on June 24th 2012 | Mortgage
If you are going to refinance your mortgage because the California mortgage rates on your current pr...
 
Find the perfect california mortgage broker online
Published by Apil Gupta on June 24th 2012 | Mortgage
The importance of finding a good California mortgage broker online is paramount in today's times, pa...
 
Bad credit and mortgage refinance option
Published by Kam Brar on December 16th 2011 | Finance
As people think, it is not easy to get mortgage refinance with bad credit. There are various factors...
 
Fall in mortgage rates leads to better home sales
Published by Apil Gupta on July 16th 2012 | Mortgage
Riding high on the phenomenally low mortgage rates, there has been an increasing demand for new US h...
 
How can a mortgage loan calculator help you save
Published by Apil Gupta on June 24th 2012 | Mortgage
There would be many of you out there who would be considering taking a mortgage loan for fulfilling ...
 
Your guide to getting the best mortgage rates
Published by Jack Smith on April 18th 2012 | Mortgage
A systematic and well guided approach will certainly assist you in achieving the best mortgage rate ...
 
Second mortgage might require the help of a strong broker
Published by Thomasgalvin on January 3rd 2012 | Mortgage
Availing a loan for a specific purpose is one of he most arduous task in the whole wide world, what ...
 
Consult well about Adjustable mortgage rates before selecting
Published by Jack Smith on July 23rd 2012 | Mortgage
Adjustable mortgage rates are turning worldwide popular because they offer variations on the rate of...
 
Understand and consult bad credit mortgage rates
Published by Jack Smith on July 23rd 2012 | Mortgage
The people seeking bad credit mortgage rates first require to conduct complete research and pay atte...
 
Most excellent home mortgage calculator plus home buying tips
Published by Andrew Watson on December 30th 2011 | Finance
For a number of people it certainly is very much common to look around for best mortgage calculator....
 
Consultants to guide you for bad credit mortgage rates
Published by Jack Smith on July 26th 2012 | Mortgage
In the process of hunting for bad credit mortgage rates there has been seen an immense rise. But, to...
 
Be informed about Colorado mortgage or Denver mortgage and make a wise decision
Published by Serena Woods on February 15th 2012 | Mortgage
Being informed is never bad especially when you need to make an important financial decision....
 
Looking for refinance mortgage loan - How to find the right one
Published by Apil Gupta on June 24th 2012 | Mortgage
In case you are looking to refinance mortgage loan for your home, there are many things that need co...
 
Get smart about mortgage rates
Published by Jack Smith on April 12th 2012 | Mortgage
The huge variety of mortgage rates makes it much simpler for the buyer to identify and take up the r...
 
Tips to taken into consideration while choosing mortgage brokers
Published by Geno on March 28th 2012 | Finance
Majority of the home buyers get struck off when it comes to mortgage loans. Lack of knowledge about ...