Everyone’s financial situation is different, and along with a wide variety of property buyers comes a number of types of mortgage options. But with so many options out there, understanding which mortgage is best for you can be difficult.
There are many important factors to consider when determining out of all the types of mortgage, which is the right one for you. Before deciding, consider your long-term financial goals, the stability of your income, and whether you are more concerned with interest rate or payment. Different mortgage programs have varying interest rates, and a loan with a higher rate may allow you to have a lower monthly payment.
Here are a few examples of which types of mortgage fit which types of lifestyle.
Fixed Interest Rate Types of Mortgage
Out of all the different types of mortgage, a fixed interest rate one can be an advantageous option for those who intend on living in the property for five or more years, because it allows the buyer to pay back the loan at a consistent rate.
Interest-Only Types of Mortgage
An interest-only loan is ideal for those whose income isn’t stable. An interest-only loan allows the buyer to pay more than what is due when their income is steady, and only pay interest rates when money is tight.
No Money Down Types of Mortgage
For those who can’t afford a costly down payment perhaps a mortgage that offers no money down is your best bet. One of the major disadvantages to these types of mortgage, however, is that you may not have enough equity to refinance down the road without having out of pocket costs.
Before deciding, be sure to consider these options and speak with a mortgage professional that knows your financial situation and can help you achieve your long-term financial goals. Because there are many types of mortgage out there, it’s important to know which is the right one for you.
Your real estate agent can help you with finding a good mortgage professional if you don’t already have one; check out the video to see how you can find your ideal agent with Sundaybell!