Which Mortgage is Right for You?

By Terry A Smith

Buying your first home can seem very intimidating, Buying your first home can seem intimidating when you are challenged by many different loan types What mortgage is right for you? Its even harder when you have bad credit. In this article we are going to go over the different types of home mortgages.

First there are the fixed rate home mortgages. This is when the Interest rate & monthly payment stay the same for the complete period of the loan. You want to get this loan if you are looking to live on a property for 10 years or more and if you have payment stability. Another type is the 5/25 2-step this is when Interest rate & monthly payment stays the same for 5 years. On the sixth year, the interest rate is changed to reflect the existing interest rates. The final payment will stay the same for the rest of the loan. This is good if you plan on living on the property for seven years.

There is also the 5 year balloon mortgage, The Interest rate & monthly payment remain the same for 5 years , when the 5 years is done the loan is due in full. The borrower has to refinance into new loans at existing interest rates. This is good if you plan on living on the property for 5 years and are willing to refinance.

Another type is the 3/3 & 3/1 year adjustable rate mortgages. This ones interest rate and monthly payment stay the same for 3 years. The 4th year, the interest rate adjusts every 3 years (for 3/3 ) and every year (for 3/1 ). This is good for people who plan to live on a property for more than 3 years and can deal with later changes.

Some other types of mortgage loans are 1 year adjustable rate mortgages these are risky. This is when the interest rate is changed every year, so monthly payment will change every year for entire 30 year loan term. This is a good choice for people who want to take advantage of the lowest rate possible and for people with bad credit and do not qualify for the higher programs. Here are some mortgage loan options for different kinds of people, if your stuck here go seek professional help.

I am the owner of http://freecreditinfo.biz I've been doing research on mortgages for over 4 years

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