Mortgage
Financing
When
you go in for home mortgage financing there are a lot of options
available.it is essential that you sit and discuss the mortgage
financing options with a lender and see what program suits you and
which is more profitable for you.
Some
mortgage financing options
Conventional
fixed rate 30 year mortgage
This
was the most predominant kind of mortgage in the past.It is also the
most prominent one even today.In this mortgage financing system the
loan is obtained and the monthly payments are made for a fixed term
period of 30 years.The interest is fixed it does not change during
the term period.The monthly payments remains standard except for the
last month wherein you pay lower amounts.Intially your monthly
payment will consist more of interest and smaller amount of the
principle.The interest is tax deductible and serves to be
profitable.But towards the end of the term period the monthly payment
constitutes more of the principle and a smaller amount of the
interest.So the tax deductible amount will be lowered.
Conventional
fixed rate 15 year mortgage
This
mortgage financing program is similar to that of the 30 year except
that the loan is repaid in 15 years.This mortgage financing program
is more profitable as the bank provides a ¼ or ½
deduction points in the interest rate
Adjustable
rate mortgage
This
mortgage financing program is for for a term period of 30 or 15
years.Here the interest rate is not fixed. It varies depending on the
economy.intially the monthly payments will be less but as the
interest rate increases the monthly payment also increases.This is
not a suitable one for those who plan to stay in the house for
alonger period of time.
Interest
only mortgages
This mortgage
financing program is not advisable however attractive the plan might
be.here you pay only the interest of the loan and the principle
remains the same.It will not increase the equity of the house too
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