Web www.GCYArticles.com

GCYArticles.com is an Article Directory featuring thousands of articles written by the Internet's top authors
Search Article Directory:



Or browse through our library of Articles written by the Internet's top authors
What you get at GCYArticles.com

 
Thousands of expertly written Articles
Free Content for your website, ezine, and newsletters
Daily Updates
Receive article updates via RSS Feeds
Real Time and Weekly notifications of New Articles
As an Author

 
Generate massive publicity for your web site
Potential readership of millions for your articles
Increase your traffic and sales
Boost your reputation, credibility, and name recognition
Become known as an Expert in your field

Home | Finance

Click the XML Icon Above to Receive Finance Articles Via RSS!

Print This Article

 Post Comment Add To Favorites Email to Friends Ezine Ready

Types of Home Mortgage Loans

By: Lesley Lyon

Mortgage is a loan that is obtained to close the gap between the cash in hand for a down payment and the purchase price of the home. While opting for a home mortgage loan, choosing the type of loan can clear half of the hurdle. There are various types of loans like fixed rate mortgage loans and adjustable rate.

In a fixed rate mortgage loan, the interest rate remains the same irrespective of the economy. Therefore the monthly mortgage payment is the same throughout in effect. The main advantage of this type of fixed rate mortgage is the certainty but the negative aspect is that the amount of the monthly installment for repayment of the loan will be a little higher in the form of a higher interest rate. When the period of fixed rate loan is longer there is a certain amount of risk for the lender because the difference in the increase of interest rate is borne by the lender and hence the higher interest rate.

On the contrary, adjustable rate mortgage rates of interest adjust periodically during the loan term. And for this type of loans the overall interest rate is low. The main disadvantage in this type is the uncertainty of the adjustment phase. During this period the monthly payments will go up and down with the changes in interest rates and it is highly unpredictable.

The third type of loan is the balloon loans or a reset mortgage which starts with the fixed interest rate for a certain number of years, usually seven to ten years which will be as low as adjustable market rates, after which period the balance should be paid in full which is a large sum of money to be paid in one lump sum. Balloon mortgages have interest rates lower than a traditional home loan.

Fixed rate mortgage can be for a term of 30 year fixed rate, which has the greatest interest reduction and easiest type to qualify for. The 20 year fixed rate offers a lower interest rate and 15 year fixed rate, which is the same as 20 years term but increases the monthly amount to be paid.

In addition there are other loans like FHA loans, VA loans and RHS loans. FHA loan is offered by the Federal Housing administration to qualified homebuyers for moderately priced homes with a low down payment, usually three to five percent VA loan is offered by the department of veteran affairs, which has the added benefit of zero down payments. This type of loan is available only to military veterans RHS loans are available to households with low or moderate income located in rural areas or small towns.

To get a fair deal in home mortgage, it is advisable to set a budget, pick the right type of mortgage, choose a suitable locale, compare the cost of loans with similar ones and most importantly inspect the home to be bought. If these things are taken care of, a home mortgage loan can be worth taking.

Article Source: http://www.gcyarticles.com

The web guide www.fundsleader.info discusses the key features of mortgage and refinancing in a comprehensive manner. Also check out www.financialdeals.info for a better understanding of how refinancing works for various types of home loans.

Please Rate this Article

 

Not yet Rated

Additional Articles From - Home | Finance
Members: Login here

Non-Members: Sign Up for a free account or learn more.
Site Navigation

 
Submit Articles
Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds
 
New Stuff
About Us
Link to Us
Contact Us
Privacy Policy
Publisher Guidelines 


© 2006 GCY Article Directory. All Rights Reserved.
Article Directory with Free content for websites and ezines. Authors submit your articles today and gain more exposure.

Powered by Article Dashboard