What Type Of Mortgage Loan Is Right For You?

Homebuyers and homeowners need to decide which home Mortgage loan is right for them. Then, the next step in getting a mortgage loan is to submit an application ( Uniform Residential Loan Application ). Although we try to make the loan simple and easy for you, getting a mortgage loan is not an insignificant process.

Below is a short synopsis of some loan types that are currently available.

CONVENTIONAL OR CONFORMING MORTGAGE Loans are the most common types of mortgages. These include a fixed rate mortgage loan which is the most commonly sought of the various loan programs. If your mortgage loan is conforming, you will likely have an easier time finding a lender than if the loan is non-conforming. For conforming mortgage loans, it does not matter whether the mortgage loan is an adjustable rate mortgage or a fixed-rate loan. We find that more borrowers are choosing fixed mortgage rate than other loan products.

Conventional mortgage loans come with several lives. The most common life or term of a
mortgage loan is 30 years. The one major benefit of a 30 year home mortgage loan is that one pays lower monthly payments over its life. 30 year mortgage loans are available for Conventional, Jumbo, FHA and VA Loans. A 15 year mortgage loan is usually the least expensive way to go, but only for those who can afford the larger monthly payments. 15 year mortgage loans are available for Conventional, Jumbo, FHA and VA Loans. Remember that you will pay more interest on a 30 year loan, but your monthly payments are lower. For 15 year mortgage loans your monthly payments are higher, but you pay more principal and less interest. New 40 year mortgage loans are available and are some of the the newest programs used to finance a residential purchase. 40 year mortgage loans are available in both Conventional and Jumbo. If you are a 40 year mortgage borrower, you can expect to pay more interest over the life of the loan.

A Fixed Rate Mortgage Loan is a type of loan where the interest rate remains fixed
over life of the loan. Whereas a Variable Rate Mortgage will fluctuate over the life
of the loan. More specifically the Adjustable-Rate Mortgage loan is a loan that has a
fluctuating interest rate. First time homebuyers may take a risk on a variable rate for qualification purposes, but this should be refinanced to a fixed rate as soon as possible.

A Balloon Mortgage loan is a short-term loan that contains some risk for the borrower. Balloon mortgages can help you get into a mortgage loan, but again should be financed into a more reliable or stable payment product as soon as financially feasible. The Balloon Mortgage should be well thought out with a plan in place when getting this product. For example, you may plan on being in the home for only three years.

Despite the bad rap Sub-Prime Mortgage loans are getting as of late, the market for this kind of mortgage loan is still active, viable and necessary. Subprime loans will be here for the duration, but because they are not government backed, stricter approval requirements will most likely occur.

Refinance Mortgage loans are popular and can help to increase your monthly disposable income. But more importantly, you should refinance only when you are looking to lower the interest rate of your mortgage. The loan process for refinancing your mortgage loan is easier and faster then when you received the first loan to purchase your home. Because closing costs and points are collected each and every time a mortgage loan is closed, it is generally not a good idea to refinance often. Wait, but stay regularly informed on the interest rates and when they are attractive enough, do it and act fast to lock the rate.

A Fixed Rate Second Mortgage loan is perfect for those financial moments such as home improvements, college tuition, or other large expenses. A Second Mortgage loan is a mortgage granted only when there is a first mortgage registered against the property. This Second Mortgage loan is one that is secured by the equity in your home. Typically, you can expect the interest rate on the second mortgage loan to be higher than the interest rate of the first loan.

An Interest Only Mortgage loan is not the right choice for everyone, but it can be very effective choice for some individuals. This is yet another loan that must be thought out carefully. Consider the amount of time that you will be in the home. You take a calculated risk that property values will increase by the time you sell and this is your monies or capital gain for your next home purchase. If plans change and you end up staying in the home longer, consider a strategy that includes a new mortgage. Again pay attention to the rates.

A Reverse mortgage loan is designed for people that are 62 years of age or older and already have a mortgage. The reverse mortgage loan is based mostly on the equity in the home. This loan type provides you a monthly income, but you are reducing your equity ownership. This is a very attractive loan product and should be seriously considered by all who qualify. It can make the twilight years more manageable.

The easiest way to qualify for a Poor Credit Mortgage loan or Bad Credit Mortgage loan is to fill out a two minute loan application. By far the easiest way to qualify for any home mortgage loan is by establishing a good credit history. Another loan vehicle available is a Bad Credit Re-Mortgage loan product and basically it’s for refinancing your current loan.

Another factor when considering applying for a mortgage loan is the rate lock-in. We discuss this at length in our mortgage loan primer. Remember that getting the right mortgage loan is getting the keys to your new home. It can sometimes be difficult to determine which mortgage loan is applicable to you. How do you know which mortgage loan is right for you? In short, when considering what mortgage loan is right for you, your personal financial situation needs to be considered in full detail. Complete that first step, fill out an application, and you are on your way!

Florida Mortgage Loans

Buying a home is one of the most important investments a person can make. Most people look for a mortgage or a loan while buying a house. The Florida real estate market is currently booming with falling interest rates and easy loans, and mortgage loan lenders are offering several kinds of loans and special mortgage loans to attract customers.

A mortgage rate is the rate of interest that is charged on the loan used for buying a house or a property. Mortgage rates keep changing over a period of time. A lower mortgage rate means a lesser cost of the house and lower monthly payments. A mortgage lending company looks after all the aspects that need to be considered such as the length of the mortgage period (fifteen-years or thirty-years), the kind of interest rate (fixed or variable), and even home inspections, taxes and property appraisals. Most people do not understand the typical mortgage terminology like PMI (Private Mortgage Insurance), APR, settlement costs, points etc. In such cases, a professional mortgage company would prove to be very useful. The main factors that are considered when issuing a mortgage loan are income of the applicant and his/her credit record.

Only Florida citizens are eligible to receive Florida mortgage loans. The various kinds of mortgage loans available in Florida are: FHA (Federal Housing Administration) loans, consolidation loans, land loans, conventional loans, balloon loans and refinance mortgage loans. Mortgage loans can also be refinanced. Refinanced mortgage loans have several benefits like lower monthly payments, lower interest paid, and cash equity. There are also bad credit mortgage loans that are offered at a slightly higher rate of interest for people who have bad credit records. The most popular kind of mortgage loans in Florida is the fixed rate loans- because of their predictability. The typical term of this loan is 15 years or 30 years. The ARM (Adjustable rate mortgage) loans are also popular because the interest rate is likely to decrease sometime in the future. This is generally preferred by people who plan to sell off the home in a few years time after paying off the loan. Other kinds of special Florida Mortgage loans are: hard equity loans, interest only loans, 100% cash out refinance, construction loans, commercial mortgage loans, farmer’s home loans, no PMI (Private Mortgage Insurance) loans, vacant land and acreage mortgage loans and cross- collateralization of properties.

Florida offers very competitive mortgage rates. The best way to find a good mortgage lender in Florida is to ask friends or family members for suggestions. The Internet is a great source to find good mortgage companies who are advertising extensively about good rates and terms and also best service.

Mortgage Loan Rates

There are mainly two types of mortgages – fixed rate mortgage and adjustable rate mortgage (ARM). With fixed rate mortgages, interest rates do not change with time. But in the case of adjustable rate mortgages, the interest rates are adjusted at certain intervals. Mortgage loan rates greatly differ with state, lending company, loan amount, value of the security, credit rating of the buyer and the type of the loan.

Mortgage loan rates are governed primarily by the Federal Reserve Board. So, if the board changes the interest rates, the mortgage lenders should adjust their interest rates accordingly. Mortgage loan rates are also influenced by many market and economic factors such as inflation. Generally, lower mortgage loan rates can be availed if you pay a down payment of 20% or more of the loan amount. On the other hand, if you pay a down payment of 5% or less of the loan amount, you may only qualify for a higher interest loan.

Generally, the mortgage loan rates fall somewhere between 5% and 13%. Long term loans have slightly higher interest rates than short-term loans; usually the difference is below 1%. Loan rates also differ with mortgage loan types such as commercial loans, FHA loans, VA loans, home equity loans, home improvement loans, and bad credit/sub prime mortgage loans. First mortgage loan rates are usually lower than those of second mortgages.

Many Internet sites provide comparison and reviews of different mortgage loan rates offered by lenders. Most mortgage lenders update their records and rates daily. Many Internet sites also provide mortgage rate calculators, which help you calculate the exact interest rates and monthly payment amounts. These Internet sites also provide information on loan securing points, closing costs and fees, monthly installments, and penalties.