Exploring Mortgage Options

Posted by Eric Miller on Saturday, March 3rd, 2012 at 12:24pm.

Whether it is your first home or your fifth, the decision to purchase a home is quite significant. After all, you will be investing a substantial amount of money into the home while making a major commitment to repay the money that you have borrowed. Whether interested in purchasing Austin real estate or a home in Ft. Lauderdale, it is important to explore all of the financing options that are available to you. This way, you can be sure you are taking on the mortgage loan that best suits both your current and future needs.

Taking Out a Fixed-Rate Mortgage Loan mortgage-options_466_01

When choose from among your mortgage loan options, there are many different choices to select from. The most common option selected by homebuyers is the fixed-rate mortgage loan. With a fixed-rate mortgage loan, the interest rate remains unchanged throughout the lifetime of the loan. For those who want to know exactly what they will have to pay each month toward repayment of their loan, the fixed-rate mortgage loan is the best option. It is important to note, however, that borrowers who take out a fixed-rate mortgage loan cannot take advantage of declining interest rates unless they take out an entirely new loan, which will result in paying the closing costs all over again.

Borrowing with an Adjustable-Rate Mortgage

An adjustable-rate mortgage is a type of loan where the interest rate changes over time. While this type of loan allows the borrower to take advantage of falling rates, the borrower is also subject to paying higher interest rates when the rates go up. Furthermore, those who take out adjustable-rate mortgages will generally find that their monthly repayment amount changes over time. On the plus side, borrowers who choose an adjustable-rate mortgage will typically enjoy a much lower initial interest rate than those who choose a fixed-rate mortgage.

Borrowers who are interested in taking out an adjustable-rate mortgage will find that there are several different types of mortgage options available within this category. For example, the frequency of adjustment may vary from one loan to the next. Furthermore, there may be certain caps in place regarding how high or how low the interest rate may fall.

Buying a Home with an Interest-Only

 Mortgage A third option available to homebuyers is the interest-only mortgage. With interest-only loans, the borrower pays toward the only the interest each month. Once the interest has been paid off, the rest of the loan becomes due. Therefore, while this option does keep the monthly payment amount down, this type of loan is generally best reserved for those who only plan to stay in the home for a few years.

About The Author - Eric Bramlett specializes in helping buyers with Downtown Austin condos and Steiner Ranch real estate as broker of One Source Realty in Austin, TX.

Eric Miller is an award winning Florida Realtor, salesperson and broker. His website, FortLauderdaleGroup.com provides an up-to-date guide to Fort Lauderdale Condos for sale, and the most complete buyer, seller and investor information for the Fort Lauderdale Real Estate Market.

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