Mortgages

Popular Types of Mortgage Loan Programs

Fixed-Rate Mortgages: 10 year, 15 year, 20 year, 30 year, 40 year and even 50 year fixed-rate mortgages.

FHA Loans, VA Loans, Interset-Only Mortgages, Option ARM Mortgages, Adjustable-Rate Mortgages, Bridge/ Swing Loans, Equity Loans, Reverse Mortgages.

Of course this list is not all inclusive, but gives you an idea of how many loan programs there are to choose from.

Should I Choose a Fixed-Rate or Adjustable-Rate Loan?

Most mortgage loans have either a fixed interest rate or an adjustable interest rate. With a fixed-rate mortgage, the interest rate never changes and your payments remain stable throughout the life of your loan. With an adjustable-rate mortgage (ARM), the interest rate changes at regular intervals- usually once a year- based on a formula that uses a market index. For most ARM options, rate adjustments begin after an initial period- usually between three months and ten years- during which the rate is fixed.

A fixed rate is usually best if you plan to stay in your home for the long term and are buying at a time when rates are relatively low. An ARM is usually best if you plan to move before the rate adjustments begin, or if you are buying when rates are relatively high.

Should I Lock My Interest Rate?

Locking your interest rate means your lender guarantees the rate on your loan even if market rates change before closing. Most lenders will allow you to lock your rate for 30 to 60 days, with the option to extend the rate lock period for a fee. So how do you know whether to lock your interest rate? No one knows for sure which direction rates will go at a given time, so it's difficult to make a reliable prediction. Talk to you lender for advise about what may happen in the near term.

What Happens At Closing?

Despite all the new technologies that are streamlining the mortgage process, the closing phase remains very paper-intensive. You will have to review and sign a hefty stack of documents, some of them in duplicate and triplicate. You will also have to pay for any closing costs, including:

Lender Fees, such as origination points and discount points

Third-party Fees for services not provided by your lender, which may include a settlement fee, title insurance, appraisal fee, credit report fee, and attorney's fees

Prepaid items that must be paid to your lender in advance, such as prepaid interest, hazard insurance, and deposts to set up an escrow account