subject: 8 Different Types Of Mortgage Loan Programs For Your Real Estate Property Needs [print this page] Fixed-Rate Mortgage, Interest-Only Mortgage, FHA Loans, VA Loans, Option ARM Mortgage , Combo / Piggyback Mortgage Loan , Adjustable-Rate Mortgage , and Mortgage Buy downs are the common types of mortgage and loan programs that you might need for your real estate property.
Home ownership is generally secured by obtaining a financing through financial institutions in most countries. The basic types of mortgage loan programs has varied and expanded over time to cater to the strong demand of domestic markets. If you are thinking of securing a property by the means of mortgage loan, take note of common types of basic mortgage loan programs that will fit your needs.
Fixed-rate mortgage
A Fix-Rate Mortgage is the oldest and most common mortgage loan program. It is a mortgage loan where you can choose a fixed-rate mortgage plan of 10, 15, 20, 30, 40, and 50- year fixed rate mortgage types. All of these types of fixed-rate mortgage loans will be amortized over time.
Interest-only mortgage
This is a mortgage loan type where options are available for the applicant to pay only for the loan interest for a certain period. It will also require the applicant to pay the original balance of the loan during its maturity period.
FHA loans
This is a loan type funded by a mortgage insurance of the government. This is an ideal mortgage loan type for home buyers who are buying a place for the first time. Down payments are lower and FICO scores are not considered.
VA loans
This is a loan granted by the Department of Veterans Affairs for the veterans of the U.S Armed Services and their families. The approval of the loan will depend on the veteran's number of years on service and discharge evaluations. VA loans do not require a down payment even if it is not funded by the government.
Option ARM mortgage
This is a loan type where the interest rate periodically changes. Payment options and index rates vary too. Be reminded that minimum payment options on this type of mortgage loan can result in a negative amortization.
Combo / piggyback mortgage loan
Combo/piggyback mortgage loans are composed of a first and second loan mortgage. The options of the mortgage rates are adjustable too. Borrowers can avoid the private mortgage insurance payment by taking out two loan mortgages if the down payment is lesser than 20%.
Adjustable-rate mortgage
Adjustable rate mortgage comes in fluctuating interest rates. The interest rate can either change annually or semi-annually. It can also remain fixed before it will change again.
Mortgage buy downs
Mortgage buy downs have a lower initial interest rate. Fees are paid by the lenders or buyers to reduce the interest rate for the borrowers.
Home financing can be easy when you choose the correct mortgage loan program that you can afford and meets your needs.
