Getting To know The different Types Of Mortgages

Mortgage loan agreement application with house shaped keyringFor a lot of people, buying a home is a dream come true. It is also one of the biggest financial decisions you can make. Fortunately, mortgage companies in Draper are something homebuyers can take advantage of to buy the home they want.

Here are some of the different types of mortgages you can choose from:

  •  Adjustable and Fixed Rate

A fixed rate mortgage can be best defined as a mortgage that has the same interest rate for the duration of the loan. As a result, you’ll be paying the same amount every month. This allows you to accurately budget for your mortgage.

On the other hand, a mortgage with an adjustable rate will have its rate of interest change from time to time. Mortgages with adjustable rates are also cheaper upfront and have the possibility of lowering further if the market allows it.

  • Government Insured and Conventional Loans

Conventional loans refer to mortgages that have not been guaranteed or insured by the federal government. This is the total opposite of government-insured mortgages such as Federal Housing Administration loans or Veteran Affairs loans.

  •  Jumbo and Conforming Loan

This category distinguishes mortgages based on its size. A conforming loan refers to a mortgage that is within the guidelines of Freddie Mac and Fannie Mae regarding its size.

A jumbo loan, on the other hand, goes beyond the conforming loan limits that were created by Freddie Mac and Fannie Mae. A jumbo loan is also riskier than a conforming loan hence those who take it need to have excellent credit.

With all the different kind of mortgage offers to choose from, you’re sure to find one that suits your needs. By doing your research and enlisting the help of a good mortgage broker, you’ll be able to finance your dream home in no time.