Loans Offered By Mortgage Lenders

by

michael russell

Aspirants for home loans might find it expedient learning the types of loans they can get from the mortgage lenders. Knowing about the terms associated with home mortgages would help one find out and select the best mortgage for their specific purposes.

Loans offered by a mortgage lender can be fixed rate, balloon mortgage, or any other type. Having a good grasp of the basics will help. Different mortgages offered by the lenders are meant for catering to the particular requirements of the borrower. Borrowers should understand the type of the loans they are getting and the terms and conditions attached to it. For instance; the fixed rate loan for 30 years is the traditional and most widely used in the market. After the borrower obtains loans from the mortgage lender, he or she is supposed to repay it in 360 monthly installments. Interest charged on the loan is fixed and will not change over the period of thirty years. Thus the premium paid for the first month and 360 th month would be equal. Another type of home loans is the adjustable rate mortgage or ARM. In this case the rates charge will vary in course of the loan. While the initial term can be any one from one, three, five, seven, and ten years; the rates become higher after that. People desiring to pay lower interest rates initially will find the mortgage attractive. Interest only mortgage is the plan in which the borrower pays only a certain percentage of the note. However, once the term is over, the buyer has to pay balloon payment. During the period marked as the ‘interest only’ period, the borrower will pay interest only. Such plan would be good when there are chances of rise in the prices in real estate market. Since the mortgage lender only takes the interest, borrower benefits from the higher equities in the real estate market. In Balloon payment, mortgage plan the borrower pays only a certain percentage of the home loans obtained to the lender. After the pre-negotiated period allowing the relaxation is over, the borrower will have to pay balloon amount covering the balance part of the mortgage loan. Some borrowers find it attractive since the monthly payments are smaller in comparison to the 30 year plan.

At lenderstreet.com a borrower is matched to the appropriate

mortgage lender

for obtaining best

home loans

. It also offers tools like loan calculators to assess buying, fixing up, or obtaining loans at competitive rates by comparison.

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ArticleRich.com