Your Mortgage Options? Never Better!

My, oh my how quickly things can change. No, the economy is still in the doldrums and with Congress and our new president on an unprecedented spending spree, there is much that can scuttle the recovery.

But, for the person who is still working, has decent savings and the capacity to take on some debt in the form of a home loan, now is an excellent time to explore your mortgage choices. What’s more, housing prices have likely bottomed in some markets, meaning you’ll want to sharpen your pencil or break out the calculator to see what loan is best for you.

Better than that, why not snag some online tools to check out your options?

Oddly, the news media continues to focus on the trends surrounding the 30-year fixed rate mortgage, perhaps forgetting that there are many other options available to the consumer who is ready to buy a home.

While 30-year mortgages are are a choice pick for most homeowners, the following mortgage options are also worth considering:

Adjustable Rate (Variable) — The loan rate and monthly payment will adjust periodically.

• Rates can go up or down on this mortgage
• Select this product for the lowest rate
• Select this product if you don’t mind flexibility
• Select this product if you plan to remain in your home for less than 3-5 years

Combo Fixed-ARM — A combination of fixed and adjustable rate mortgage loans. The loan rate will be fixed for a specified term and then convert to an ARM.

• Rates and payments fixed for a specified term
• Select this product for a lower rate
• Select this product for initial stability
• Select this product if you plan to remain in your home for less than 5-7 years

Interest Only – Pay interest only for a specified period of time. Then begin an amortized loan repayment term for the remaining term.

• Terms for 15- and 30- years
• Select either fixed or ARM
• Select this product for lower payment
• Select this product if you plan to move-up to better housing

Zero Down — Loans that require little or no down payment. Loans may be subject to PMI or other costs.

• Terms for 15- and 30- years
  
• Select either fixed or ARM
  
• Select this product if you have less than 20% of the home value for a down payment
  
• Select this product to get into a home quicker than waiting to save the 20% down payment

Balloon — Mortgage loans that have a 5-7 year payment plan. At the end of term, the remaining mortgage loan amount is due.

• Fixed rate terms for 15- and 30- years
  
• Select this product for a lower rate
  
• Select this product if you plan to remain in your home for less than 5-7 years

Of course, some of the loan options listed are no longer offered by many lenders. After getting taken to the woodshed the past few years, interest only, zero down and balloon mortgages have largely disappeared. Check with a lender to see what options you have.

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