Loan

When financing a home, you can choose from several loan types tailored to different needs and goals.

Loan Term Choices:
Borrowers often select 15-, 20-, or 30-year mortgages. Shorter terms mean higher monthly payments but lower total interest. Some lenders even offer 40-year options for reduced monthly strain.

Mortgage Types:

• Fixed-rate mortgages keep interest steady throughout the loan.
   
• Government-backed loans like FHA and VA cater to first-time buyers and veterans.
   
• Interest-only loans let you pay only interest for a set time, but don’t reduce your principal.
   
• Negative amortization loans are structured so that unpaid interest gets added to your balance—minimizing monthly payments short term.
   
• Hybrid loans combine features like a fixed period followed by adjustable rates.
   
• Option ARMs include multiple payment options, such as minimum, interest-only, or fully amortizing payments.
   

Specialized Mortgage Structures:

• Piggyback loans involve a primary mortgage and a secondary loan to avoid private mortgage insurance.
   
• Bridge or swing loans let homeowners use equity in their current home to finance a new one.
   
• Reverse mortgages provide monthly income to homeowners 62+ using home equity, without monthly repayments.
   

Refinancing & Equity Access:
Refinancing can lower payments or interest rates, but look out for prepayment penalties. Cash-out refinancing taps into home equity, typically after six to twelve months of ownership.

Investor-Specific Loans:
Real-estate investors can use loans with 100% financing, though lenders often cap the number of properties they’ll finance.

Before choosing a loan, research current interest rates and compare offers. Use online calculators to estimate payments, total interest, and refinancing benefits. Then, determine how much you need to borrow based on factors like your credit, income, and home appraisal.