If you’re looking to purchase a home, or you’re interested in refinancing your home, you’ll want to understand the different mortgage products available to you. Looking at a home loan like a product is a great way to approach the situation analytically. Your home mortgage will come with certain terms and conditions, based on a combination of the institution providing you with the loan, your personal credit history, your debt-to-income ratio, and the amount of money you can place toward a downpayment. Here is some general information about the different mortgage products available to you.
Fixed-Rate Mortgages Provide Certainty
Fixed-rate mortgages are the most common type of mortgage, because they offer the most certainty and clarity for those issuing and receiving the loan. If you choose a fixed rate mortgage, your interest rate may be slightly higher than that of other mortgage products, but you can be sure that your rate will stay the same over time. 30-year and 15-year fixed-rate mortgages are the most typical varieties of this product. To secure this type of loan, you may need to meet certain thresholds with regards to your credit score and the down payment that you’re able to place on your home.
Adjustable-Rate Mortgages Offer Short-Term Advantages
An adjustable-rate mortgage will typically have a locked-in interest rate over a shorter period of time, after which the rate can vary. If you don’t intend on having the mortgage for a long period of time, this may be a better option for you. If you believe that interest rates may actually lower in the future, then an adjustable-rate mortgage can be advantageous. These types of mortgages typically have a lower “teaser-rate,” meaning their initial cost is lower than a fixed-rate mortgage.
FHA Mortgages Can Help First-Time Buyers
FHA mortgages are loans that are insured by the Federal Housing Administration. These types of mortgages are ideal for homebuyers who may not otherwise qualify for a mortgage. You can receive a loan in many cases with as little as a 3.5% down payment — well-below the normal standard of 20%. You can also receive this type of loan with a lower credit score than would normally be accepted.
Begin Your Home Search with the Professionals at The Swanson Real Estate Group in Omaha, NE
Bill Swanson and the team at The Swanson Real Estate Group have a wealth of experience and knowledge of the Omaha area. They can help you find a home that meets your needs, whether it’s your first or your tenth. In addition to being reputable real estate agents, The Swanson Group can also connect you to trusted home mortgage lenders. Learn more about home mortgage options by contacting The Swanson Real Estate Group in Omaha, NE at 402-679-6566.
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