How to Find the Right Mortgage?

According to many researches in the real estate industry, 2009 is one of the best year to buy your new home.  Everywhere across the nation, you can find houses at a historic discount prices.  Many of the real estate experts are recommending people out there to take advantage of the historic low interest rate and deep discount homes in today real estate market.

When it comes to select the right mortgage for your new home, it is very important to shop around and do a little research before finally moving on to proceed with a mortgage loan application.  Selecting the right mortgage can save you thousands of dollars, while the wrong mortgage can put your new home in jeopardy. 

With all the complicated mortgage products available in the market today, it is very critical and important than ever to understand real estate financing.  The right mortgage will depend on many different factors, including your average credit rating, financial situation and how you expect it to change in the future, how long you would like to keep your house, and how comfortable you are with the possible of your mortgage payment change.

Fixed-Rate Mortgages -- This is the most common type of mortgage that offer consistently stable monthly payment plan for the entire life of the loan.  With fixed-rate mortgages, you have the option of choosing a 30-year, 20-year, 15-year or 10-year repayment plan. You also may shorten the loan through a biweekly mortgage, an additional payment to principle each month, a lump sum mortgage payment to the principle, a refinance at a lower rate for a shorter mortgage, or many other mortgage acceleration programs such as Money Merge Account and Mortgage Loop Hole.

Adjustable-Rate Mortgages (ARM) -- With this kind of mortgage, your monthly payment and interest rate may change according to market rates.  ARMs often provide a lower initial interest rate than fixed-rate mortgages, attracting people who need lower payments early in the loan in order to qualify for a fixed rate mortgage and  refinance in the near future or those who expect their incomes to increase in the coming years.

Reverse Mortgages -- A reverse mortgage is a special type of loan made to senior homeowners that allows them to convert the equity in their homes to cash for living expenses, home improvements, in-home health care, or other needs. With this kind of mortgage, you must meet certain criteria that differ greatly from the qualification requirements for other conventional mortgages.

Balloon Mortgages -- Balloon loans are typically five or ten years  term mortgages with some of the features of a fixed-rate mortgage, like low interest rates, but without the benefit of full amortization. At the end of the term, you're required to pay off the loan's balance by refinancing, selling the property, or making a lump-sum payment.

Buy-down Mortgages -- Today's mortgage lenders have developed variations on the old buy-down method of offering an interest rate that is 2 percent below the fixed rate for the first year and 1 percent below the fixed rate for the second year, followed by 28 years of paying the regular fixed rate.

Government Loans -- The Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the Rural Housing Services (RHS) are agencies that offer government-insured loans through a lender that is approved to provide them. All of these agencies require certain minimum standards for the properties being purchased.  The advantages of these loans, it allows you to purchase a home with a very low down payment, flexible criteria, interest below the market interest rates, and more lenient with your credit and income than the conventional loans.

Graduated Payment Mortgage -- The Graduated Payment Mortgage (GPM) is another alternative to adjustable-rate mortgages. GPM starts out with low payment, usually below that of a fixed-rate and possibly that of an ARM, but rise gradually (usually over five to ten years), then level off for the remaining years of the loan.

Remember when buying or refinancing Real Estate, shop around to compare cost and terms, and to negotiate for the best deal.  Shopping for the right mortgage lender is as important as shopping around for the right house.  Be sure you're comfortable working with your lender to get you the best mortgage to fit your situation, guide you through the entire mortgage process and committed to take care of your needs.