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What Kinds of Mortgages are out There

There are many great Phoenix Area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at 602-252-4191 for a FREE home buying or selling consultation to answer any of your real estate questions.

 Today we want to go over a couple of things with you. First, we will cover all of the types of mortgages out there for you in today's market. Then, we'd like to talk to you about escrow, and how to distinguish between the different kinds of escrow. First, the mortgages:

1. Fixed-Rate
A fixed rate mortgage is a mortgage with no surprises. The rate that you sign for initially will be the rate for the life of your loan.

2. Adjustable-Rate
This kind of mortgage usually offers a lower initial interest rate than a fixed rate loan. However, after the initial period, rates tend to fluctuate and generally when they go up, so does your payment. 

3. FHA
 This loan is great for buyers who may not qualify for another type of loan otherwise. This type of loan has a lower down payment than most, but with new changes recently in FHA loans, the mortgage premiums on these loans are steadily increasing.

4. VA 
 VA loans are guaranteed loans for qualified veterans, active duty service, and surviving spouses. These loans often have no  or a very little down payment.

5. Balloon
 A balloon mortgage has a relatively low rate for a set period of time. After that time, however, the entire balance of the loan is due immediately, hence the name "balloon".  This is a pretty risky loan because there is so much money to pay at one time. 

6. Interest Rates Only
 For a fixed term, buyers only pay the interest rate. However, after the term, the entire balance is due at once

7. Reverse Mortgage
 This type is popular with seniors to convert their equity into cash. With this mortgage, you don't have to pay back the loan and interest as long as they live in the house.

If you have any questions about these or any other topics relating to real estate, please give us a call. We'd love to help you out!