When purchasing a home a buyer will have several loan options. It is important to understand the types of loans available before you commit to one of them.
The most common type of home loan is a fixed rate mortgage. With this loan the interest rate remains the same for the entire loan. The terms are usually 10,15, or 30 years. With a fixed rate mortgage you will not have to worry about your payment changing.
Another type of Home Loans Tuscon is an adjustable-rate mortgage. With this type of loan your interest rate changes. It may change monthly, annually, or remain the same for several years. If you are considering an adjustable-rate mortgage you should be aware that your payment can go up.
There are also FHA mortgage loans. These are insured by the federal government. If someone is a first time home buyer this may be a good loan for them. The down payment on this type of loan is typically low.
There are also combo loans that consist of two mortgages which are a first and second mortgage. They can both be either adjustable or fixed rate. By taking out these two loans a bower who does not have a 20% down payment can avoid having to have extra mortgage insurance on their loan.
With low interest rates available, many homeowners are finding that it they should refinance their mortgage. You may think that you won’t save much money if your interest rate is lowered 2-3%, but you may actually save more than you think. If you currently owe $100,000 on a 28 year fixed rate loan with an interest rate of 5% to an interest rate of 3% for 28 years, you could save around $70,000 during the span your loan. That is a huge savings.
Refinancing your Home Loans Tucson is a quicker process than you may think. When you refinance you may choose to extend the length of your loan or stay with the amount of years you currently have. You should speak with your lender to discuss what the best option is for you.
