East Coast Properties, LLC

Types of Mortgages Buyers Can Choose From

by East Coast Properties, LLC 08/11/2019

There are different kinds of mortgages available to prospective homeowners today. The right mortgage for you will depend on a number of factors, including your level of income and credit rating. While there are numerous mortgage products available to buyers today, they will mostly fall under the categories below:

FHA-Backed loans

Most folks getting a home for the first time will purchase it with the help of a Federal Housing Administration loan. Introduced back in the 1930s after the Great Depression, these loans are insured by the government and hence come with attractively low-interest rates. Since the government backs them, even folks with a bad credit score can confidently apply for FHA loans. If you can't raise all of the down payment the seller is asking for, an FHA loan is ideal. 

VA loans

This kind of loan was established by the US Department of Veteran Affairs to enable former members of the nation’s armed forces to buy homes. You can also access this type of mortgage if you’re the spouse of a deceased veteran. Those who fit under this category can get a mortgage even without a down payment. 

Fixed-rate mortgage

If you want to buy a house to stay in for the long haul, a fixed-rate mortgage is a good idea. With this type of loan, the interest rate will remain fixed for the duration of the mortgage. If economists are projecting a rise in interest rates, you can cushion yourself from higher repayments with a fixed-rate mortgage. The predictability of this type of mortgage is ideal for planning since the payment consistency makes it easy to budget your paycheck. While this protects you if the interest index rises, you won’t benefit if there is a fall in the interest index. 

Adjustable rate mortgage

If you’re confident that interest rates will decline soon, this kind of mortgage will help you take advantage of that trend. Should the interest rate dip, you can expect your monthly repayments to reduce accordingly. 

Despite the name, the interest on the mortgage is usually not flexible for the duration of the loan. The loan starts with a period of fixed interest followed by a period where it becomes adjustable. Such an arrangement will work well for you if you intend to sell the house before the end of that initial period.

Find out the kind of loan you qualify for and see if you can push for better terms. Not sure where to apply? Ask your real estate agent about their recommended lenders.

About the Author
Author

East Coast Properties, LLC

You can trust Mary Merkley with your real estate business! Mary is a career Realtor, having enjoyed the real estate business for 30 + years; she is extremely knowledgeable in all aspects of buying and selling property. Besides having fun with her clients and enjoying meeting their real estate needs, Mary is a diligent and discreet broker as she represents her client buyers and sellers doing what is truly best for them. Mary is a seasoned Real Estate Broker licensed in both Maine and New Hampshire. She has a vast knowledge of the NH and Maine seacoast area having started her business in her home town of Dover, NH.Additionally, Mary is a licensed and bonded Auctioneer! She has the capacity to offer liquidation needs in both "personal property" as well as in"real property" for her clients anywhere in the seacoast. Mary's experience covers the following Seacoast towns: Dover, Durham, Rollinsford,Rochester, Somersworth, Newmarket, Barrington, Northwood, Strafford, Hampton,North Hampton, Stratham NH; and in southern Maine, Kittery, South Berwick, York,Cape Neddick, Kennebunk and Wells area. In addition to excellent service, Mary is detailed oriented and because of her love for the business is a pleasure to work with and goes above and beyond what is expected. Mary has also assisted many of her clients with property staging needs whenever necessary. One transaction at a time, Mary's clients have rewarded her careful work with their "repeat" business, by also referring their family and friends to her.