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Mortgage Guide

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It's an excellent time to apply for a home mortgage or even refinance an existing one considering the interest rates are near historic lows. The challenge for some can be deciding on what the right mortgage is for them. Here is a quick guide on today's most common mortgages.

FHA Mortgages

Federal Housing Administration (FHA) mortgages are normally designed for the first–time home-buyer and others who face some difficulties securing a mortgage. FHA mortgages usually feature lower down payments, flexible requirements, and consistent rates throughout the entire term.

Adjustable Rate Mortgages (ARMs)

ARMs start with low rates for a set period, and then change based on market conditions. The initial rates are much lower than fixed rate mortgages. This is usually why individuals find this type of loan attractive but borrowers must be prepared for the possibility of increase in mortgage payments later. Risk is involved; ARMs are suited for borrowers who plan to stay in their houses for a much shorter period of time.

Conventional Loans -Fixed Rate

One of the most common mortgages are fixed rate mortgages, this is where the rates are stable for the life of your loan. No guesswork, as you will know exactly what your monthly payment will be throughout the life of the loan. The most popular fixed–rate mortgages are 30 and 15–year terms.

Jumbo Mortgages

Individuals that need a larger loan than the conforming loan limits set by Fannie Mae and Freddie Mac, Jumbo Mortgages are definitely the way to go. Jumbo loans are a much higher risk to lenders and usually have higher mortgage rates and some strict mortgage criteria, which can include a higher down payment and a much higher credit score.

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