In addition to fixed rate and adjustable rate mortgages, there are several others types of mortgages you should be aware of:
- Seller Financing
These are loans that exceed the loan limit set by corporations who buy mortgage loans from lenders. This is a good loan if you need more than the limit allows, but it comes with a much higher interest rate.
These mortgages are a combination of fixed rate and adjustable rate mortgages. They usually begin with a fixed-interest rate followed by an adjustment leading to a new fixed-rate for the rest of the loan period. These loans are advantageous for those with bad credit.
These are loans that can be given to a buyer or assumed by a buyer. They reduce monthly payments and you can save on closing costs. However, sellers tend to charge more for houses, forcing the buyer to gather more money to make up the difference between the loan balance and the sale price of the house.
Beneficial loans for people with bad credit, providing you with money and high interest rates. They also come with more burdensome terms. The rates and terms vary significantly, so people considering this type of mortgage should shop around.
A variance on the standard fixed-rate mortgage. Provides you with a budget-efficient tool by cutting down on the length of time it takes to pay the loan off. However, if financial difficulties arise, it can really put you in a bind considering the payments are so close together (every 2 weeks rather than once a month).
These are great loans for people who have short-term plans for the property they’re buying. They come with lower rates and lower payments, with a lump sum payment to cover the balance and the end of the loan term. If your short-term plans change to longer-term following the acquisition of a balloon mortgage, it is always possible to refinance or convert to a fixed-rate or adjustable-rate mortgage.
These are loans suited to people interested in having a home built for them rather than purchasing an already existing home. They come with higher rates at the start and once the building is completed, become more of a fixed rate mortgage.
This is a contract between the buyer and the seller without the assistance of a bank. The seller lends money to the buyer, which the buyer pays back monthly. The property acts as collateral. Sometimes this type of funding is accompanied by an assumable mortgage.
Should I Consult a Mortgage Lawyer about my Mortgage Issues?
Buying and financing a piece of real estate can be one of the most burdensome financial endeavors you pursue. An attorney can advise you of the different mortgage financing options. An attorney can also review any financial documents, and advise you about your obligations and the best way to proceed. See this article for information regarding Mortgages, Trust Deeds and Promissory Notes.
Consult a Lawyer - Present Your Case Now!
Last Modified: 11-15-2012 11:23 AM PST
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