Types of Mortgage Loans New Homeowners Should Know

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Purchasing a home requires you to do a lot more than just shop around for the perfect location and the perfect property - you also have to shop around to find the loan that works best for you. 

Now, while you may think that you know which type of home loan you'd like to apply for, since there are a few different kinds, it's best to know your options before you start speaking with lenders. Below, take a look at some of the most common mortgage programs homeowners choose from:

Fixed-Rate Mortgages
This is likely the one you've heard over and over if you've started house hunting - fixed-rate mortgages can last for 10 years, 15 years, 20 years or more, with 30 year loans usually proving to be the most popular. With fixed-rate mortgages, the interest rate remains the same from your first payment to your last.

Adjustable-Rate Mortgages
With an adjustable-rate mortgage, the interest applied to the loan can ultimately change at any moment. In some loans you'll see the interest rate remain fixed for a few years before it changes, while in others, the interest rate may change on a monthly basis or a yearly basis.

Interest-Only Mortgages
Interest-only loans allow the borrower to make interest-only payments if they wish, however, this opportunity does not last for the entire life of the loan. These loans are typically designed like adjustable-rate mortgages, with the interest-only period lasting for a number of years, after which the rate adjusts on a regular basis.

FHA Loans
FHA loans are relatively popular with those who are buying their first home, mostly because they don't require a large down payment. Normally the government insures these through mortgage insurance, which is included within the loan.

VA Loans
These loans are specifically for veterans who have served in the United States Armed Services, and they may also be extended to spouses of deceased veterans in certain situations as well. VA loans are particularly desirable if you meet the eligibility requirements since they do not require a down payment on the home.

Let's rewind for a moment - before you can start thinking about purchasing a home, you need to get your finances in order and know how much you'll need to save in order to have the home of your dreams.

Here at American Investment Planners LLC, we can help with all kinds of financial planning matters, and can work with you to develop a strategy that helps you meet both your short and long term financial goals. To learn more about our services or to meet with an advisor, please call (516) 932-5130 or email info@americaninvestmentplanners.com.