Types Of Finance For Homebuyers

finance

When you’re looking to buy your home in Moultrie or Colquitt County you’ll want to investigate all the possible finance options, and you should know about the terms that you may encounter so you can understand all the information you get. Then you can make an informed decision on how to finance the purchase of your new home.

Different Finance Options

A Fixed-Rate Mortgage (FRM)

A fixed-rate mortgage offers the buyer security of the knowledge that all their repayments throughout the period of the mortgage which is normally 15 to 30 years. That means that the interest you pay each month always remains the same. This is a good option if you’re worried that sharp rises in interest rates might hinder your ability to pay in the future, but the initial rates are usually quite a bit higher than the rates offered by an adjustable rate mortgage. They also can’t be assumed by someone who buys your home, at least in most cases.

Adjustable Rate Mortgage (ARM)

An adjustable rate mortgage is usually a 25-30 year loan that has the interest amortized over the period of the loan; many will have a fixed rate for the first few years of the mortgage and then after that period has expired the interest rates will fluctuate based on the rates set in financial markets. The rate may adjust on a monthly or yearly rate, and payments can go up or down over the period of the loan – it’s a good idea to look at an ARM with a rate cap so that you can understand what the most you might be expected to pay under such an agreement might be.

Balloon Mortgage

A balloon mortgage is a shorter term mortgage than the other mortgage products and must be paid off over a period of 5-7 years. The big plus over the other types of mortgage is that they typically offer is that the interest rates are often much lower than on other mortgages. However balloon mortgages are more often used for commercial purchases rather than residential loans. With balloon mortgages there are substantial re-financing risks as the banks set these up to benefit someone who sells or re-finances the property prior to the mortgage expiring.

Whichever mortgage you decide to take we can help you find the right property in Colquitt County or Moultrie to get the best value for you money.

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