| Are you feeling overwhelmed with the sheer number | | | | approved for a FHA home loan; however. You must |
| of different types of mortgage loans? Not sure which | | | | have good credit history and enough income to cover |
| one will work best for your situation and needs? Read | | | | the loan and your other financial obligations. Typically, all |
| on for tips to help you compare the advantages and | | | | of your housing costs each month, including house |
| disadvantages to the most common types of | | | | note, property taxes and insurance cannot exceed |
| mortgage loans. | | | | 29% of your gross monthly income. In addition, your |
| First, it is important to understand the difference | | | | housing costs plus your other monthly long-term debt |
| between a variable or adjustable interest rate | | | | should not exceed 41% of your gross monthly income. |
| mortgage and a fixed rate mortgage. With a fixed rate | | | | VA loans are made available to veterans of the U.S. |
| mortgage you gain the advantage of monthly | | | | armed services for the purchase of homes. With this |
| mortgage payments that do not change; however, | | | | type of loan you can purchase a single family home, |
| your interest rate may be slightly higher than what is | | | | condo, new construction or even a manufactured |
| offered with an ARM. With an adjustable rate | | | | home. You should be aware that you'll usually need to |
| mortgage while you will typically have a lower | | | | pay a 2% fee when the loan is closed. One of the |
| introductory interest rate, that rate may fluctuate over | | | | best advantages to this type of loan is that 100% |
| the duration of your loan. This can mean your monthly | | | | financing is available. In addition, you don't have to |
| mortgage payments may become higher or lower, | | | | worry about private mortgage insurance, which is |
| depending on whether interest rates are raised or | | | | required in certain cases when you are financing more |
| lowered. | | | | than 80% of the home's value. You may also be able |
| Beyond adjustable rate mortgages and fixed rate | | | | to take advantage of a competitive interest rate. |
| mortgages you also have other options in terms of | | | | Other options include balloon mortgages and hybrid |
| how long you finance your home. The most common | | | | mortgages. With a balloon mortgage you may be able |
| terms are 15, 25, 30, 40 and now even 50 year | | | | to lower your monthly payments by agreeing to pay a |
| mortgages in some areas. Keep in mind the longer you | | | | portion of the mortgage in a lump sum at the end of |
| finance your mortgage the less your payments will be | | | | the mortgage. The disadvantage to this is that you will |
| per month but the more you will pay in interest over | | | | have to come up with the money or try to extend the |
| the duration of the loan. | | | | loan; which may or may not be available. |
| There are also special types of loans offered which | | | | With a hybrid loan you can sometimes take advantage |
| may offer certain advantages. These types of | | | | of a lower interest rate in the beginning of your |
| mortgages include FHA and VA home loans. A FHA | | | | mortgage, perhaps for three to five years, when you |
| home loan is often attractive to first time home buyers | | | | may be struggling more to make the payments. After |
| because it allows the purchase of a home with a | | | | this time period has passed, the interest rate will rise |
| lower down payment, in some cases as low as 3%. | | | | and you will be responsible for a higher monthly |
| There are certain qualification regulations in order to be | | | | mortgage. |