This article describes some of the different options you may encounter as you shop for a mortgage.

Fixed-Rate Mortgages: As the name implies the interest rate is set at the time you take out the mortgage and remains constant over the life of the mortgage.

 

Adjustable Rate Mortgages (ARMs): With an adjustable-rate mortgage, the interest rate and monthly payments can change as interest rates change.

 

Other Issues

 

Negative amortization: Some lenders offer mortgages with lower monthly payments than what is needed to pay interest and ultimately pay off the mortgage. Avoid this.

 

Balloon mortgages: Balloon mortgages are similar to fixed-rate mortgages with steady monthly payments using a 15- or 30-year amortization. However, with a balloon, there’s a large final payment due at the end.

 

This is just the tip of the iceberg when it comes to mortgages. For more detailed info that pertains to your unique situation, give us a call today.