Below are some mortgage options to consider:
Fixed-rate mortgage: The interest rate stays the same. People usually choose this loan if they want their term to be 15, 20 or 30 years. The only issue is if the interest rate falls, you might have to pay a higher rate.
Adjustable Rate (ARM) or variable-rate mortgage: Unlike fixed-rate loans, this loan offers a lower initial rate of interest. However, when rates fluxgate over the life of the loan, so does your payments.
FHA (Federal Housing Administration) loan: This loan is for buyers that do not qualify for a home loan. FHA loans are ideal for obtaining one Low down payment but the size may be limited.
VA loan: A wonderful opportunity that guarantees loans for eligible veterans, active duty personnel and surviving spouses. It offers a low or now down payment but like FHA loans, the size may be limited.
Balloon mortgage: This is a fixed rate loan with low payments. Pay close attention to the initial period because after its over, the entire balance of the loan is due immediately. This poses some risks for borrowers.
Interest-only: A borrower only pays the interest of the loan. They do so monthly for a fixed term. The balance of the loan is due after the initial period, potentially resulting in higher payments, paying a lump sum or refinancing.
Reverse mortgage: Allows seniors to convert equity in their homes into cash. Fortunately, you don’t have to pay back the loan and interest as long as you are living in the house. Unfortunately, it’s subject to aggressive lending practices and false advertising promises. Many lenders take advantage of seniors so make sure to check and see if the loan is Federally insured.