Buyers come from all walks of life & the best way to determine which mortgage is right for you is by sitting down with a lender & talk about your financial future & terms of growth in your professional & personal life. Some buyer’s future plans work better with Adjustable Rate Mortgages (ARM) than a fixed rate. For example, a doctor internship, a job that can relocate every 2-5 years. So, finding the right loan is not just about a consistent monthly payment, sometimes it’s more about a better rate for a relatively short period of time in order for you to save more money for your future growth. There are many types of mortgages. Most people use a fixed-rate mortgage. In a fixed rate mortgage, your interest rate stays the same for the term of the mortgage, which normally is 30 years, but can be 15 or less in some cases. The advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, & you can plan for it. Another kind of mortgage is an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate & monthly payments usually start lower than a fixed rate mortgage, but your rate & payment can change either up or down as often as once or twice a year. The adjustment is tied to a financial index, such as the U.S. Treasury Securities index. The advantage of an ARM is that you may be able to afford a more expensive home because your initial interest rate will be lower. There are many government loans too, such as FHA mortgages. FHA doesn’t actually make loans. Instead, it insures loans so that if buyers default for some reason, the lenders will get their money back. This encourages lenders to give mortgages to people who might not otherwise qualify for a loan.
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