Understanding Today's Mortgage Options | RealtyPin.com
LOS ANGELES, Feb. 7, 2013 /PRNewswire-iReach/ -- Mortgage options for home buyers are plenty in the market, and home buyers too often do not look beyond what the lender has as offering. This article by the real estate experts from RealtyPin.com; briefly examines four mortgage options.
The Fixed-rate mortgage is the most common option in real estate purchases. If you purchase a home under a fixed-rate mortgage, your interest rate stays unchanged over the period of the loan. The term is usually 15, 20, or 30 years. Although you enjoy a fixed interest rate, your rates may increase when interest rates fall.
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While home for sale signs do not last long on the real estate property, a mortgage on the other hand, spans many years. Get to know the draw backs of your mortgage type. Like the fixed-rate mortgage, an Adjustable-rate (ARM) or variable-rate mortgage allows the buyer lower interest rate at the onset, however, interest rate remains unstable through your loan period. If interest rates rise, your payments will likewise rise.
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A VA Loan allows veterans of the armed forces to buy a home or real estate property with little or no down-payment. A VA Loan is guaranteed by the Department of Veteran Affairs and made available by a private lender. Though rates are competitive, loan is often restricted in size.
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Unlike the three options covered so far, a Reverse Mortgage allows seniors to convert the equity in their real estate into cash. Note, this not a home for sale deal, you receive money from the lender instead of making payments to the lender. You do not have to repay the loan if you reside in the home or real estate property on which the reverse mortgage was taken. Lenders are repaid when you sell or no longer live in the property.
Note, these options are not comprehensive, there many options out there. A few hours of research will return tons of information, all you have to do is narrow it down to the mortgage option that best suit your needs. You should have an understanding of mortgage options before looking out for home for sale signs.