Types Of Mortgage Loans...

Fixed Rate Mortgage Loan

A fixed rate mortgage loan is a mortgage loan in which the interest rate remains the same from the day you take out the loan until the day you pay it off.  It is among the safest type of loan you can take.  A fixed rate mortgage loan is good if you know you will be living in your home for a long time and you don't have to worry about your payment ever increasing.  The biggest advantage is the fact that your interest rate will never change.  A disadvantage is that many may find it difficult to come up with the huge down payment that is usually required.  Another downside is if the lender reduces its rates, you will end up paying a higher rate for the fixed period.  The rate on a fixed rate mortgage loan is generally higher than an adjustable rate mortgage loan.

Adjustable Rate Mortgage Loan

An adjustable rate mortgage loan is a mortgage loan where the interest rate is occasionally adjusted based on a specific index.  It is usually made to finance or refinance real estate and is secured by a lien on your property.  An adjustable rate mortgage loan is know as an ARM for short.  It is initially significantly lower than a fixed rate loan but may adjust up to 2 percentage points per year reaching a fixed cap over and above the fixed rate.

An FHA Mortgage Loan

An FHA loan is a loan made by a federally qualified lender and insured by the Federal Housing Administration.  It is a home mortgage that allows for a purchase or refinance with a low down payment.  An FHA loan is perhaps one of the easiest mortgages to obtain because the requirements are extremely flexible, and the down payment is very low.  It is excellent for someone who has less money to put down, and someone who has large debt or whose credit is poor. 

A VA Mortgage Loan

A VA loan is a loan that is guaranteed by the Department of Veterans Affairs, or VA.  It is available only to veterans and is geared toward providing modest housing for individuals with moderate to low incomes.  A VA loan is an excellent opportunity for eligible veterans to purchase a home, often at a lower interest rate.  It is literally no money down and is simply a fixed rate mortgage with a very competitive interest rate.