In the midst of the real estate bubble, potential homeowners were offered a wide variety of mortgage structures to finance the purchase of their homes. Borrowers often could put down little to no money and finance the entire cost of the home. After the crash, the government enforced stricter standards for lenders to ensure that borrowers have the financial capability to repay their loans. Although increased oversight and regulation has placed limitations on some mortgage plans, borrowers still have an array of options to choose from. It is important to carefully consider the type of mortgage that best meets your financial profile and needs when purchasing your home.
Fixed Rate Mortgages. Under a fixed-rate mortgage, the interest rate and the monthly payment amount are pre-determined when you sign the loan. These payments will not alter or increase for the duration of the loan.
Adjustable Rate Mortgages. In an adjustable-rate mortgage, the interest rate and monthly payments remain the same for a predetermined amount of time. This period often ranges from six months to five years. Once that period passes, the lender has the right to adjust the payment rate based on the interest rates prevailing in the market.
Balloon mortgages. A balloon mortgage provides the borrower with a loan that has a fixed interest rate and monthly payment for the life of the loan. However, the entire mortgage must be paid off a short time later as determined by the lender.
Interest-Only Mortgages. An interest-only mortgage can be used in conjunction with any other type of loan so that the borrower pays only interest payments for some period of the loan. Once the payment is lowered after interest only payments are made, the amount then increases and encompasses both interest and principal payments. These combined payments are often set at higher rates than the payments offered under traditional mortgages.
If you decide to enter into a conventional mortgage loan, there are several factors that should guide you in selecting a loan. Potential borrowers should consider the cost of the home, their credit history, future plans for remaining in the home, and how much risk they are willing to accept.
The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. can help you litigate your real estate claims. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at https://www.markweinsteinlaw.com to find out how they can advise you.