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Finding the right mortgage is not always easy. That is why Red Door Real Estate Group is committed to helping you in this process. The following information provides a brief overview of the different types of mortgages and loans. Contact us for more information about mortgages and financial information related to buying a new home.
Mortgage Terms
Generally, mortgages are available at 15-, 20-, or 30-year terms. Usually, a longer term will result in lower monthly payments because the total amount borrowed is spread out over a longer period of time. However, you will pay more interest with longer term mortgages.
Mortgage Types
Fixed-Rate Mortgages
With a fixed-rate mortgage, the interest rate and monthly principle and interest payments are agreed upon at the beginning of the term. These rates will not change throughout the entire term of the mortgage.
Adjustable Rate Mortgages
An adjustable rate mortgage allows the lender to adjust the mortgage interest rate periodically. These changes are based on changes in a specified index. The interest rates may move up or down, depending on the market conditions.
Balloon Mortgages
A balloon mortgage is usually a short-term fixed-rate loan that involves small payments for a certain period of time. The balance is usually due in a single, large payment at the time specified in the contract.
Government-backed loans
Government-backed loans usually offer special terms, such as lower down payments or reduced interest rates. These terms are only available to qualified buyers. These loans are sponsored by agencies such as the Federal Housing Administration, the Federal Home Loan Mortgage Corporation (FHLMC) or the U.S. Department of Veterans Affairs.
There are numerous other types of mortgages available to home buyers. Let us help you find the right home for you and the right mortgage to suit your needs. Contact us today.
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