Homeowners have a few different options when it comes to obtaining mortgage loans in America. You should be up-to-date with this information before you go out shopping for the best mortgage product on the market. This read offers information on different types of mortgages available in America.
The fixed rate mortgage is one of the most popular mortgage loan products in the United States. With this kind of loan product, the interest will remain the same for the entire repayment period of the loan and the payment is split into equal monthly installments for the whole period of the loan. During the first few years of the loan, the borrow covers only a small part of the principal amount while the largest part goes to pay off the interest. The duration of the loan can differ according to the age and repayment capacity of the borrower. There are 10, 15, 20, 25, and 30 year repayment periods offered by most lenders on the market. The most popular product is the 30-year loan.
The ARM or adjustable-rate mortgage is another popular mortgage product in the United States. The interest rate of this product changes from year to year unlike the fixed rate offered for the fixed rate mortgage. The period of repayment can vary from 3, 5, 7, and ten years. This is a good option to consider if you intend to sell your home sooner than later.
The interest-only mortgage is another favorite product in the United States. It is an ideal option for Long Island Home Loans who have irregular incomes. The borrower has the possibility to pay only the interest for the first few years of the loan.
These are some of the most popular types of mortgages available in the United States of America.