Mortgage Moves: What kind of mortgage will you get?
Note: This is the fourth blog in a series where you can make choices about buying your first home.
Choosing the right mortgage isn’t quite as fun as shopping for the right home, but it’s just as important. Most people will need a mortgage to buy a home, which means that the choices you make on your mortgage will affect your bottom line every month for years to come.
The most popular mortgage is a 30-year fixed-rate mortgage, which means the interest rate won’t change, and your payments are calculated so that you’ll pay off your home in 30 years. But, this is not the only mortgage option.
Just as you look for certain features in a home — like having a two-car garage, having a yard, or the right location — there are many features to choose from when getting a mortgage.
As you continue your journey, how will you decide what kind of mortgage to get?
I’ll explore my loan options
Good Choice. While a 30-year fixed-rate loan might wind up being the best choice for you, you should know your options.
A loan option is actually three distinct choices:
- Loan term – The term of your loan is how long you have to repay the loan.
- Interest rate type – Interest rates come in two basic types: fixed (stays the same over time) and adjustable.
- Loan type – Mortgage loans are organized into categories based on the size of the loan and whether they are part of a government program.
You’ll want to check out our guide to understand loan options in “Buying a House” to explore these three factors in detail. The option that is right for you will also depend on your down payment and the amount you can pay each month.
“Buying a House” has a helpful tool that can help you explore interest rates for different loan options. Here you can play around to see what different mortgage options might mean for you in terms of the interest rate you can expect. The interest rate you receive is a big factor in determining the size of your mortgage payments.
You can find all this information and more in “Buying a House,” which has lots of resources for anyone thinking about buying a home. If you are ready to make another mortgage move, you can go to our next blog post, or visit the first in this series.
I know I want a 30-year fixed
A 30-year fixed-rate loan is a good choice for many people, but it’s not the only kind of loan available. Depending on your circumstances and goals, you might also see if a different kind of loan might suit you better. There are a lot of options to consider when it comes to a mortgage loan that will affect how much you pay on a month-to-month basis. The kind of loan you choose also affects the level of risk you take on.
A loan option is actually three distinct choices:
- Loan term – The term of your loan is how long you have to repay the loan.
- Interest rate type – Interest rates come in two basic types: fixed (stays the same over time) and adjustable.
- Loan type – Mortgage loans are organized into categories based on the size of the loan and whether they are part of a government program.
You’ll want to check out our guide to understand loan options in “Buying a House” to explore these three factors in detail. The option that is right for you will also depend on your down payment and the amount you can pay each month.
“Buying a House” has a helpful tool that can help you explore interest rates for different loan options. Here you can play around to see what different mortgage options might mean for you in terms of the interest rate you can expect. The interest rate you receive is a big factor in determining the size of your mortgage payments.
You can find all this information and more in “Buying a House,” which has lots of resources for anyone thinking about buying a home. If you are ready to make another mortgage move, you can go to our next blog post, or visit the first in this series.