Osborne Realty

Common Types of Mortgages and Their Benefits

by Judy Osborne 02/23/2020

Image by mohamed Hassan from Pixabay

Most homebuyers take out a mortgage when they purchase a house, and there are several different types of mortgages to choose from. Here are some of the more common mortgage options and the benefits of each one.

Conventional 30-Year Fixed Mortgages

Perhaps the standard starting point for a mortgage is the conventional 30-year fixed home loan. This mortgage is underwritten by a private lending institution but conforms to standards set forth by federal programs. The terms of the loan last for 30 years, and the interest rate is fixed so that it doesn’t change throughout this period.

A conventional 30-year fixed mortgage is a good option for many homebuyers. It lets you spread out the cost of a house across three decades, and you know what the interest and payments will be for the full duration of the loan.

Conventional 15-Year Fixed Mortgages

Conventional 15-year fixed mortgages are just like their 30-year counterparts, except these last half as long. Because the duration of these mortgages is half as long, homebuyers end up paying a lot less in interest.

You’ll have to pay more per month if you cram your mortgage into 15 years, but the interest savings are substantial. If you can afford higher monthly payments, this option will end up saving you a lot.

Adjustable-Rate Mortgages

Adjustable-rate mortgages come in various durations, just as fixed-rate mortgages do. The difference between the two is that the interest rate on an adjustable-rate mortgage can adjust. The interest rate is set according to an index, and as the index changes so does the interest rate on the loan. Which index is used and how adjustments are made are detailed in the paperwork of a loan.

Most adjustable-rate mortgages come with lower initial interest rates than fixed-rate mortgages offer, although the rates on adjustable mortgages can end up being much higher. If you can financially manage an increase in your mortgage’s interest rate, this option might be a way to save a little bit of interest (although there is risk involved).

Guaranteed Mortgages

The federal government offers several guaranteed mortgage options for qualifying individuals. Some of the most common ones are VA and FHA guaranteed home loans. 

In these programs, the government guarantees a mortgage if the homebuyer fails to make their payments. This reduces the risk to the lender, and many lenders relax their qualification requirements as a result.

If you can’t get a conventional mortgage and qualify for a federally guaranteed program, one of these could help you attain the dream of home ownership.

About the Author
Author

Judy Osborne

Thank you, for taking your time to visit our website for buying or selling your home investment in the Pineville, Ballantyne,  Fort Mill and Charlotte and surrounding area. Osborne Realty will work with experienced home buyers, and experienced sellers or first time home buyers, and first time home sellers, builders, and investors.  It may be an excellent time for you to buy or sell a home.  Homeownership is the most significant investment most people make and the only investment that you or someone else lives in! Whether you are planning to stay here for a few years or the rest of your life, you will enjoy the stay. The good news is that most Charlotteans are not from here either. Like you, people hail from all over for reasons ranging from work to weather. Although some will tell you, the southern hospitality, BBQ, and sweet tea sealed the deal. You'll fall in love with Pineville, Charlotte, Ballantyne, and Fort Mill or any area you like!

"All I can strive to be is the absolute best possible version of myself." real estate business is all about listening to you, our client, to find out what you expect either selling or buying a home.   Osborne Realty is dedicated to learning about your hopes and dreams concerning the most significant investment most people make and how best to help you achieve your realistic expectations. When you are buying or selling property in today's real estate market, it's essential to have confidence in your real estate professional. Our commitment as your local REALTOR® is to provide you with the specialized real estate service you deserve. Osborne Realty knows we have accomplished your goals when you refer a  family member or friend to sell or buy with us.  We appreciate your continued relationship and look forward to becoming your Realtor for life that tells others about how we help people every day with the selling and buying of homes.

When you are an informed seller or buyer, you'll make the best decisions for the most important sale or purchase in your lifetime. That's why our goal is to keep you informed on trends in the marketplace using the latest statistics in your local area. With property values continuing to rise, real estate is a sound investment for now and for the future. If you are considering selling or buying a home or would just like to have additional information about real estate in your area, please don't hesitate to call or e-mail us. Thank you for visiting PinevilleHomes.com - please consider it as your online source for local real estate information, and often return for the latest property listing updates.

Pineville, Fort Mill, and Ballantyne or any area you like Realtor!

Judy Osborne

Osborne Realty (704) 763-4486

E-Mail: [email protected]