What are the popular mortgage loan types?
If you are planning to take out a mortgage, you have several options to choose from. However, it will depend on your need and your affordability. It is very important to take out the right kind of mortgage loan. This is because when you take out a mortgage you have to be prepared to make payments for the entire loan term. It implies that your monthly mortgage payments should be consistent. Are you prepared for the same? You can find it out by using the mortgage calculators. There are many websites that allow you to use online mortgage calculators for free.
There are several types of mortgage loans. And some of the popular mortgage loan types are mentioned below.
- Fixed-rate mortgage
The fixed-rate mortgage loan type has always appealed to borrowers. If you opt for fixed-rate mortgage, your monthly payments are predictable. And the amount you have to pay throughout the loan term is fixed. In other words, the rates are not affected by the prevailing market conditions. However, if the mortgage rates drop, you will not be able to enjoy lower rates as you have already opted for FRM.
- FHA Loans
You can opt for FHA loans even if you have a ruined credit rating. In fact you will be able to opt for FHA loan about 2 to 3 years after you have a bankruptcy discharge. However, you should have maintained good credit and your debts should have been discharged. You can also avail FHA loan if you have improved your credit rating ever since your property was foreclosed. The government insures these mortgage loans through mortgage insurance. Such loans are best suited for individuals intending to buy a house for the first time.
- VA Loans
Veterans who have served in US army are eligible to avail these mortgage loans. These loans are sometimes extended to spouses of veterans who are no more. However, the loans are provided depending on whether the discharge was dishonorable or honorable. The VA loans are provided by a conventional lender but they are guaranteed by Department of Veteran Affairs.
In addition to the popular mortgage loans mentioned above, there are other mortgage loan types too. They are as follows
- Piggyback mortgage loans
- Adjustable-rate mortgage loans
- Streamlined K mortgage loans
- Equity mortgage loans
- Swing/ Bridge loans
- Reverse mortgage loans
Prior to taking the plunge, it is important that you identify the mortgage loan that will suit your needs best. It is also important to evaluate your affordability. Finding a qualified Florida real estate agent will help answer all of these questions.