Whenever you are looking for a mortgage, one of the most important things that you need to remember is that there are many different kinds of mortgages available. This is especially true right now, with the way that the economy is.
It is a buyer’s market right now and homebuyers really have never had this many options of home mortgages before. It can be extremely overwhelming and you should definitely consider educating yourself as much as possible before diving into getting a mortgage! For example, take some of these options into consideration:
Whenever you have a closed mortgage, it means that you will have a guarantee internet rate for a small period of time. You will have a contract with the mortgage lender to keep the mortgage what it is for that period of time so your payments will not usually fluctuate. If you do happen to choose this of mortgage and you decide that you want to pay it off early, there can be a penalty for breaking the time period contract, so that is definitely something that you should take into consideration.
A lot of different closed mortgages have a pre-payment plan that comes with the mortgage and it will let you pay the mortgage off faster, up to ten or twenty percent faster without paying a penalty!
While it is not usual for a lot of closed mortgages rates to move up and down, it can happen, especially if the closed mortgages are closed for a specific amount of time. A lot of closed mortgages are available for six months and up!
Cash Back Options
These mortgages are usually for certain individuals as they are usually priced at the posted rate at the bank. These types of mortgages are where the mortgage lender usually pays between three and five percent of the original mortgage balance, this takes place on the same day of the funding of the mortgage.
One of the greatest things about open mortgages is the fact that they are open to prepayment at any time without you having to pay any penalties. Usually, an open mortgage will start out as a six month to a year term where the interest rate does not move for that period of time. Usually, unless you intend to pay off your mortgage right away, it is better to take the closed mortgage, but you should definitely weigh all of your options before committing to anything.
Secured Line of Credit
One of the biggest things that people do not consider before they get themselves into a mortgage is their credit. This is why you should definitely consider getting yourself a secure line of credit. Not only will you be able to openly pay down the entire balance without a penalty, but you should be able to get away with only paying about three percent of interest, which is really good!
If you are in the market for a short term mortgage, a convertible mortgage is going to be your best bet. Honestly, when you have one of these mortgages, you will not only be able to obtain yourself a short term mortgage, but you can also switch over to a long term if needed, all it takes is a conversation with your mortgage lender.
Variable Rate Mortgages
These mortgages are honestly one of the most popular types of mortgages. Variable rate mortgages are the mortgages that will typically fluctuate in the interest rates. The reason for this is so that you can constantly be getting the better rate, but this mortgage can also backfire as you could end up paying more as a payment for one month but in turn pay less in another month.