Home Mortgages
A home mortgage is defined as a contractual pledge of property as collateral to one party in exchange for repayment of a debt to another party. Until the debt has been paid in full, the mortgagor owns the title to the property. Although there are various types of home mortgages programs from which to choose from, the 2 most common types fall under the heading of Fixed Rate mortgages and Adjustable Rate Mortgages. Other, less common mortgage programs include:
- Home Equity Line of Credit (HELOC)
- Balloon Products / Programs
- Credit Comeback / Repair
Fixed Mortgages generally cover periods ranging from 10 to 30 years, although the 2 most common timeframes are 15-year and 30-years. With a fixed mortgage, the buyer locks themselves into a fixed interest rate that is guaranteed to remain constant for the full loan term. That is to say it will never increase or decrease. This can be good or bad depending on the nature of the market. If you find that market averages have decreased substantially from the rate at which you purchased your mortgage, you might want to consider refinancing to take advantage of the potential savings.
Adjustable Rate Mortgages can have contracts that cover as short a term as 1 year. Adjustable rate mortgage interest rates face an adjustment period every 6 months during which the lender has the ability to change the rate to better represent market rates. Adjustable rate mortgage rates are discounted, and can decrease during the adjustment periods, however, if you are planning on living in your home for more than 5 years, it is recommended that you select the security of a fixed rate mortgage program.
HELOC'S, otherwise referred to as home equity lines of credit, can be compared to a credit card. If you are a responsible borrower with a good credit rating, you might want to consider a home equity line of credit. There is a "draw" period throughout which you can borrow money against your home's equity, and as your payments are made, your credit line is restored. (In this sense, the loan is like that of a credit card)
Balloon Products / Programs are mortgage loans that are paid out on a monthly basis and liquidated over the course of a predetermined timeframe. At the culmination of this timeframe, the balloon payment will be due in the form of a lump sum payment of the remaining balance of the loan.
Credit Comeback / Repair mortgage products are designed for peoples with a less than admirable credit history. This type of program helps people with previous mortgage late payments by offering program holders the ability to decrease their interest rate by as much as .375% each year for the first 4 years of the loan every time they make 12 successive payments on time. Interest rates have the ability to be decreased by as much as 1.5% whilst being guaranteed not to increase.
Already own a home? Check out our ( HOME REFINANCE ) page
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