Here are some terms you will need to understand while shopping for a home mortgage:
- Fixed rate mortgage – this type of mortgage has a fixed interest rate as
well as a fixed term, meaning that the rate, term and monthly balance are
set at the beginning of the loan and do not change through out.
- Adjustable rate mortgages (ARMs) have more lenient credit and income requirements,
but the interest rates rise and fall with the market, so the owner could end
up paying more or less than initially anticipated.
- FHA loan a mortgage or loan that is insured by the federal government
through the Department of Housing and Urban Development. This insurance allows
lenders to lend more to less qualified applicants with lower interest rates
and low down payments.
- Veterans Administration (VA) loan like the FHA loan this mortgage is insured
through the federal government for qualified applicants who served in the
military. These loans are especially appealing as they require little or nothing
down.
- Conventional loans loans from private lenders that are not insured by
the federal government.
- Home Construction loan funds the land, labor, materials and permanent
financing for home buyers who are building a home.
