There are many types of mortgages. The most popular is the fixed rate mortgage. More homes are bought on a fixed rate than any other type of mortgage. The main reason for this is the security of knowing what your mortgage payment will be for the duration of the loan. Once the mortgage papers are signed, the interest rate is locked in for the term.
Another choice that certainly has some advantages is the adjustable rate mortgage. This may be the best option if you don't plan on living in your home for more than a few years. You may be able to get an ARM at an initially low interest rate, and then sell the home before it is time for the interest rate to rise. If the interest rate has gone up considerably since your mortgage went into effect, you may be in for quite an increase in your monthly mortgage payments if you don't sell.
Balloon notes are another option for many homebuyers. This is often offered in combination with a fixed rate mortgage. The first part of the loan, which may be seven years on a 30-year mortgage, is at a fixed rate. Then, when the first segment is over, the total balance must be paid or refinanced at the current interest rate. This is a gamble, but often pays off, especially if financing is hard to get due to a poor credit rating.
At Park Place Real Estate Company, we have all the options for you. We know the market, and we will help you to determine the very best choice for your financial situation. Our loan officers and real estate professionals are here to make home ownership happen for you. Give us a call at 949-540-2300 to see what we can do to help get you into the home of your dreams.