Top Mortgage Options To Consider
If you are like most people that are thinking about getting a mortgage, it might seem a little overwhelming with all of the options that are available. There are many different types of mortgages, some of which will be exactly what you need, and other options that you should certainly stay away from. In this article, we will briefly touch on a couple of good options for you to consider.
Interest Only Mortgage OptionsWhen you initially take out a mortgage, one way to minimize the amount of money that you pay out each month is to only pay only interest. When you make a traditional payment, part of the money goes toward your principal, and the rest goes toward paying the interest on the loan. If you make an interest-only payment, you are fulfilling your obligation to pay the interest owed. This is something that you can do for the first year of the loan depending upon how it is structured. This is a great way to minimize your monthly payment until you can start paying the full amount.
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Reverse Mortgages
This type of mortgage is at the other end of the spectrum, and is designed for people that have substantial amounts of equity already built into the property that they own. Based upon the amount of equity that you have built up, you will receive a monthly stipend that represents a portion of your equity. In essence, you are receiving money that is technically built into your property in small monthly payments. There will be closing costs that must be paid, but if you need access to your equity, but not all at once, a reverse mortgage is definitely a good choice for generating the extra cash that you need.
Variable Rate Loans
If you are able to qualify for a new loan, or even a refinance, you might want to consider a variable rate mortgage if you are trying to lower your monthly payment amounts. These loans must be refinanced in a couple years when the interest rate begins to rise, or you may find yourself in a reverse situation, unable to make your payments. However, for the short-term, getting a variable rate loan is an excellent option for paying on both your principal and interest, yet having an affordable monthly payment.
There are many other options to consider when looking at mortgage options. By using any of the three tips that we have just provided, you can easily lower your monthly payments, or gain access to additional cash if you have already established quite a bit of equity in your property.
There are many other options to consider when looking at mortgage options. By using any of the three tips that we have just provided, you can easily lower your monthly payments, or gain access to additional cash if you have already established quite a bit of equity in your property.