One of the biggest challenges homeowners face is finding the right mortgage loan for their first purchases. There are so many mortgage loan options to choose from, it is hard to decipher which choice will best meet your needs.
The first step when choosing from the multitude of mortgage loan options is to determine your loan term, otherwise known as the length of time you have to repay the loan. This decision will affect your monthly principal and interest payments along with how much interest you will pay over the lifespan of the loan.
The next step with a real estate loan is to choose your interest rate type – either a fixed rate or adjustable rate mortgage. This choice will affect whether or not – and when – your interest rate will change. Ultimately this choice too will determine the amount of interest you will pay over the life of the loan.
Finally, you must decide whether or not you want a conventional loan option or an unconventional loan option, which includes special government programs. This decision will influence how much money you will need to put down for your down payment along with the total cost of your loan (including the amount of interest and mortgage insurance payment).
Which Mortgage Loan Option Is Right For Me
Once you’ve looked at all your loan options, it is time to have a chat with your lender. If you’ve decided upon a conventional mortgage loan, you can choose from a fixed rate, an adjustable rate, or an interest only loan.
If you want to get a little unconventional, you can consider an FHA loan, a VA loan, or a USDA loan, all of which are viable options depending an a homeowner’s specific situation.
Use our beginner guide to find the option that will suit you.