For most of us, owning a home is an essential part of what we call the American dream! However, for many, this requires, depending on the obtaining of a mortgage loan, to be able to pay for this purchase. After more than 15 years as a licensed real estate seller in New York State, I often take the opportunity to discuss with prospective clients/buyers some of the options early in this process. Basically, there are at least four types of mortgages often available, depending on need, qualifications, finances, comfort zone, etc. of an individual. With that in mind, this article will attempt to briefly consider, examine, review, and discuss these and explain their differences, as well as some of their possible advantages and disadvantages.

1. Balloon: Sometimes, one’s personal circumstances indicate, considering a balloon loan. This type of loan is generally for a relatively shorter period (often 5-7 years), requires very little down payment (other than fees, etc.) down payment. However, at the end of the term, the borrower must refinance, pay off the balance, or sell the home. You probably therefore recognize both the (short-term) benefits and the possible longer-term considerations/ramifications.

two. Adjustable: Many homeowners take advantage of an adjustable-term mortgage for a variety of reasons. Often the interest rate etc. is lower and therefore more affordable than for a more conventional type of loan. Because of this, some may qualify, because many loans are based on total monthly payments. However, it should be recognized that these terms and rates change, from time to time, at regularly scheduled intervals, and depending on the underlying general interest costs, they may increase, at times, by a significant amount. !

3. 15 – Conventional Year: A Conventional Mortgage is one that has the same monthly payments for the term of the loan. The only thing that changes is the assignments paid, in escrow, for items, like real estate taxes, insurance, etc.! In general, the shorter the term, the lower the rate paid, but, also, this creates, since the repayment term is shorter, a higher fee!

Four. 30 – Conventional Year: Conventional mortgages are generally available in a variety of time periods, but the 30-year type is generally the most in demand. Given that almost all mortgages no longer have prepayment – penalties, those who seek to repay in a shorter term increase their monthly payment, but have the flexibility to pay the regular amount when the largest amount is made. sense, for them. Obviously, since the principal is paid over a longer period, the monthly payments are reduced, but lenders often charge slightly lower rates for shorter-term loans.

I will always tell you what you need to know, not just what you want to hear. (TM). This trademark, which I am proud to lead, my professional conversations/interactions, directs me, to ensure my clients are well informed and informed!