Jan 10
6
What Types Of Mortgages Are Best For You?
The economy right now has made a lot of people wary of any kind of mortgage payments if they don’t already have one to contend with. If you are a new home buyer or you are the owner of a home and need help with your payments, then you are going to need to know a little about the different types of mortgages and how they can help you.
One of the most common types of mortgages is the conventional mortgage. There are many people who choose to go this way in that it is a traditional way that their parents and probably their grandparents have used time and time again. This mortgage entails that the lender you have chosen will be entitled to a lien or other legal agreement of the property financed until you pay it off.
Your parents may also have chosen another kind of conventional loan known as the FHA conventional loan. This mortgage has the same terms as the conventional mortgage only it is also secured under the Federal Housing Authority. You may feel better about having these types of mortgages.
If you would like to be able to escape the current mortgage rates of interest, you may be interested in adjustable rate types of mortgages. If you choose this kind of borrowing, you will be locked into a certain amount for your payments and your loan will locked into the interest available when the loan was taken out. This arrangement is agreed upon for a specified number of payments before the loan is turned to fall under the later and current interest rate.
A purchase money mortgage means that there will be a senior lender involved that is entitled to seniority of the money paid on the mortgage. In the event that there is foreclosure, this means that the senior lender is secured above the junior lenders in getting paid what they have invested in the property. If you are unsure about the pros and cons of this kind of mortgage and whether it would be in your best interests to get one, you should talk to a lender about your options.
Whenever you go to a real estate agent and start looking at houses, there is somewhere in the back of your mind the numbers 15 and 30. These two numbers are going to be related to what is called a fixed mortgage. You can choose a 15 year mortgage and have greater equity built up in your home faster at the cost of having higher monthly payments. You can also choose a 30 year mortgage and pay lower monthly payments, but your equity in the home will take a great deal longer to build up to an amount that is worth anything.
Which of the fixed mortgages would be the best way for you to go? If you are unsure, you can talk to a financial adviser and find out. If you choose a 15 year fixed mortgage, then you will have higher payments each month, but you will also have the benefit of gaining more equity at a faster rate. If you choose a 30 year fixed mortgage, then you will have lower monthly payments, but the equity will take a longer time in growing into anything of worth.
If you are a new home buyer or if you have been down the mortgages road before, you will still have that excitement of buying a new home. Make sure that all your finances are stable and that you have a secured and steady income before committing yourself to any mortgage payments.
Whether you’re looking for mortgage rates or great GIC rates, with Meridian Credit Union you’ll have a customized financial plan that makes sense for you. Just for you.
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