Are you considering taking out a new home mortgage loan? Whether you are purchasing a home for the first time or you are refinancing the home you already own, it is a good idea to learn more about the different types of mortgage loans available. In this way, you can be sure to obtain the right type of mortgage to suit you personal needs and lifestyle. While there are many different types of mortgage loans available, the majority of home mortgage loans fall into one of three different categories.

Hybrid Adjustable Rate Mortgages (ARMs)

With Hybrid Adjustable Rate Mortgages (ARMs), your payments are fixed for the first few years. After this period is over, your loan turns into an adjustable loan. The type of Hybrid Adjustable Rate Mortgage loan you obtain will determine its exact name. For example, with a 2/28 Hybrid Adjustable Rate Mortgage, the loan has a fixed rate for the first 2 years and then becomes adjustable for the last 28. With a 3/27 loan, on the other hand, the loan has a fixed rate for the first 3 years and an adjustable rate for the last 27 years.

Hybrid Adjustable Rate Mortgages may have other configurations as well. For example, you may obtain a 5/1 or 3/1 mortgage loan. With this type of loan the first number is the number of years the mortgage loan will be at a fixed rate, while the second number refers to how often the rate is changed. As such, a 5/1 Hybrid Adjustable Rate Mortgage will have a fixed interest rate for the first 5 years, but the rate will be adjusted every year after that.

Adjustable Rate Mortgages

Adjustable Rate Mortgages (ARMs) have an adjustable interest rate right from the beginning and the rate remains adjustable throughout the lifetime of the loan. As such, the amount you pay on your mortgage loan will change over time because your interest payment will change in accordance with interest rate changes. Therefore, when interest rates are low, you will enjoy a lower monthly payment. As interest rates increase, however, you will start paying larger monthly payments.

Fixed Rate Mortgages

With Fixed Rate Mortgages, the interest Brand Viagra rate on your loan is fixed for the lifetime of your loan. In other words, the rate remains the same. Therefore, your mortgage loan payment remains the same from year to year. If you have your payments set up through an escrow account, however, your payment monthly payment can vary slightly depending upon your taxes as well as your insurance costs.

If you already have a Hybrid Adjustable Rate Mortgage or an Adjustable Rate Mortgage and you are unable to keep up with increasing payments, you might want to consider refinancing your home with a Fixed Rate Mortgage. By refinancing your loan before you start missing payments, you will be more likely to qualify for a lower rate and should be able to get your monthly payments decreased. By refinancing with a Fixed Rate Mortgage, you can also be certain your rates will stay within your budget for the lifetime of the loan.

Author Bio: Jim Olenbush works in the Austin real estate industry. His team sells southwest Austin real estate, and they are very experienced with Steiner Ranch. Jim and his team would love to answer any questions you may have about Levitra Professional the area.

Category: Finance/Mortgage
Keywords: mortgage, loan, options, rates