| For a first time home buyer, buying a new house can | | | | for that year. The monthly payments for the first few |
| be an exciting as well as tough affair, especially if you | | | | years will be low since the interest will be less. |
| are planning to get your house with a home loan. | | | | However, as the years go by, the interest rates will |
| Because of the current economic conditions and the | | | | rise, making your monthly payments more expensive. |
| number of outstanding bad debts companies have, | | | | This option should only be taken if you plan to move |
| getting a loan is not easy and requires a lot of | | | | out of the house in a couple of years. |
| searching if you want to get a good loan. If you really | | | | There is another type of loan which is known as an |
| want to find a good loan deal and get a mortgage that | | | | interest only mortgage loan. If you are someone who |
| suits your financial capabilities, you will have to learn a | | | | gets paid a big some of money once or twice in a |
| bit about the different types of mortgages that are | | | | year then this is the right loan for you. Interest only |
| offered. | | | | loans do not mean that you get to pay only the |
| The first type of mortgage loan which is probably the | | | | interest, but instead means that you have an option to |
| most common one is the Fixed Rate Mortgage Loan. | | | | pay an interest only payment. This choice is open for a |
| In this mortgage, you are able to choose the period of | | | | short period of time, probably the first one or two |
| the loan and you will have to pay the same interest | | | | years of the mortgage term. You must not go in for |
| rate for the rest of the mortgage term. This is why it is | | | | this option unless you really need to. |
| known as the fixed rate mortgage. You can choose a | | | | There are several other types of mortgage Home |
| loan for 10 years, 15 years, 20 years, 30 years, 40 | | | | Loans but these are the most common. If you are low |
| years and 50 years. If the current mortgage rates are | | | | on cash and want to pay a lower interest rate for the |
| low, and if you are planning to keep the house, then | | | | initial period of the loan you can opt for Mortgage |
| getting a fixed rate mortgage is probably the best | | | | Buydowns. The interest rate will be reduced since |
| option. | | | | fees will be paid to lower the current rate. This is why |
| If you are planning to sell the house in a few years, | | | | it is known as a Buy Down. Be careful while selecting |
| say 5 to 10 years, getting a fixed rate mortgage is | | | | a mortgage loan type for your new home since you |
| something you should avoid. In this case, you can get | | | | will have to live with that decision for the next couple |
| something called an adjustable rate mortgage (ARM). | | | | of years. And most importantly, pay more attention to |
| Here the rate of interest depends on the current rate | | | | the home loan rather than the home itself. |