So Many Mortgages, So Little Time

Fixed rate. Adjustable rate. Think those are the only type of mortgages available? Think again, your financing options are endless. The first type of mortgage is a jumbo mortgage. This type of mortgage is for individuals who need to borrow more than the standard loan limit thus incurring more risk. With higher interest rates, a jumbo mortgage is for those buying larger homes.

If a larger home is not on your list of priorities, but paying off your loan quicker is, a biweekly mortgage is what you are looking for. A biweekly allows you to pay on your loan twice a month instead of once, cutting your pay period drastically. This is both a pro and a con. Because your payments are so close together, the margin of flexibility is slim. If you run into any financial problems, it is hard to adjust your payments because they are due twice a month.

Another option to a traditional mortgage is a balloon mortgage. If you don’t expect to be in a home for a long period of time, a balloon mortgage is a good option. With very low rates up front, it requires the remainder of the principal be paid after the introductory period is up. So if you don’t plan on being in a house long, set the introductory period to be longer than you plan on staying, therefore you don’t have to pay off the balance.

Ideally you can pass it off to the new buyer - which is called an assumable mortgage. These don’t happen very often, but when they do, they save a lot of money. These are ideal in a market when interest rates are high. The new buyers can avoid higher payments by assuming the seller’s lower interest mortgage.

With so many options to obtaining a mortgage, it’s not a matter of which one you choose, but will you have enough time to weigh all of your options.