Understanding Different Types of Mortgages

Purchasing a home is one of the more rewarding and exciting decisions a person can make. The road to move-in day, however, is filled with many twists and turns, especially when it comes to deciding on the type of mortgage that will best fit your needs.

Traditional Loans

In order to understand the type of mortgage needed, the amount you can reasonably afford, and how your payments will break down, it is important to provide accurate financial information to your mortgage lender in order to first gain pre-approval for your loan. Working closely with a partner, such as Sun West Mortgage, can help you determine if a fixed vs. adjustable rate mortgage is your best option. As the name implies, fixed mortgages lock the borrower into rates that do not change, thus guaranteeing the same payments each month. Adjustable loans provide lower upfront costs with interest rates subject to change over time.

Other Types of Loans

Aside from these traditional options, users may qualify for an FHA loan, which caters towards first-home buyers or those with lower credit scores. Other options include USDA for those purchasing in rural areas, conventional loans which reward those with higher credit scores with lower interest rates and fees, and the VA program for active military or veterans.

It is imperative to have a solid understanding of your ability to apply for and pay off a mortgage from a credit and income perspective. Ensure you know your options and choose the loan that is best for you and your family.

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