Know about the 5 main types of mortgages

 Buying a home is a dream for many, but once you are done with the financial planning you are good to move to your new build or bought home. The financing process for buying a house can be a little overwhelming but when you witness the outcome, every risk seems worth taking. And to make your moving experience better and tension-free, you must choose a mortgage loan type that suits you best. So here are the 5 main types of mortgages that you can opt for an easier home buying process:
 

1. Conventional mortgage
A conventional mortgage is sponsored by a private lender without any interference from the government. The deal entirely is handled between the lender and the borrower. Further, this conventional mortgage is classified into conforming and non-conforming. Conforming loans follow certain terms and conditions and GSE guidelines whereas non-conforming is without any GSE guidelines.

2. Jumbo mortgage
As of 2021, the maximum loan limit a single-family home can obtain is $548,250 in most areas of the US. Jumbo mortgages are conventional non-conforming loans that do not follow the GSE guidelines and exceed the federal loan limits. Jumbo mortgages can advantage you to buy homes in expensive areas.

3. Government-insured mortgage
This type of mortgage is run and issued by government authorities only where they help their citizens stand o their own. A government-insured mortgage can assist when one is not qualified to have a conventional loan. Whereas this mortgage type gives you a relaxation of not paying heavy down payments but you can end up paying much higher than the actual borrowing cost.

4. Fixed-rate mortgage
If you choose a fixed-rate mortgage, you must have a routine plan where your monthly budget won’t get disturbed if you pay your mortgage instalment. Make double sure that your financial status allows you to opt for this type or you can face serious problems in the future. Though this is a rather convenient way for the service class it will take longer to repay your borrowed amount and pay larger interest.

5. Adjustable-rate mortgage
These can work best for the business class, where you can amend your paying methods and time duration. This is commonly known as the ARMs, the adjustable-rate mortgages. ARMs products have fixed interest rates for the initial years of repayment and then can get variable with time. With this kind of build-up, you end up paying lower rate interest for the initial years of homeownership.

Before considering any of these mortgage types always concern with your financial planner and the real estate agent who will have a better piece of knowledge. Contact Soraya Joud to find the best properties in Atlanta and nearby areas with the best mortgage advice.


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