Mortgage Loan Center

When you’re looking for a mortgage loan to buy your dream home, one of the most confusing aspects is deciding what mortgage is the best option for you. With so many different types available, choosing the right one can be a tricky path.

Therefore, it’s a good idea to make yourself familiar with the different types there are – that way, you can decide what mortgage loan is best for you, and this can also help you decide which lender has the best deal for you too.

Fixed Rate 30 Year Home Mortgage Loan
Although this is one of the oldest mortgage loans available today, it is still one of the most popular options available. As the term suggests, your loan is for 30 years, and you know exactly what the amount will be, since all your interest rates are fixed, regardless of how the housing market is at any given time.

Fixed Rate 15 Year Home Mortgage Loan
Exactly the same as a 30-year mortgage loan, the difference here is that if you can pay your mortgage off within 15 years, you’ll usually benefit from a lower interest rate. This is usually between 0.25% and 0.50%, and can make quite a difference to your overall mortgage.

Adjustable Rate Mortgage Loan
This type of mortgage is popular with many homebuyers, since the interest rates are usually lower than fixed rate mortgages. However, since the housing market does tend to fluctuate, if the interest rates rise, your mortgage payments will go up accordingly. Therefore, an adjustable rate mortgage is probably more suited to first-time buyers who expect to move home before the 15 or 30-year period.

Interest Only Mortgage Loan
Although this may sound attractive, an interest only mortgage should only really be taken out as a last resort. Yes, you only pay the interest each month, which is obviously a far lower amount than a normal mortgage payment, but all this means is that the remaining monthly balance has to be paid in bulk at the end of your mortgage term. Unless you’ve saved this amount, you could very well find yourself homeless.

Alternative Sources
Of course, it may be that you’re unable to take out any of these options, due to the fact that you have bad credit history. If this is the case, banks or lenders will be very unlikely to offer you a normal mortgage loan.

If this is the case, then you may have to look at alternative finance companies that specialize in borrowers with bad credit, or a poor payment history. The only drawback to this is that interest rates are usually higher than for someone with good or excellent credit history. However, whatever option you go for, always be aware that you can afford the payments, as you could lose your home should you default at any time.