For those who are planning to apply for a home loan, because maybe you fancy bukit jelutong corner house for sale or the bukit jelutong condo, before applying, you should equip yourself first with the knowledge about the different types of home mortgages. Yes, you actually have a number of options. So, better research about them first for you to know which one suited your situation best. Take note that applying for a home loan is a life changing decision.
You will be dealing with that responsibility for about 30 to 40 years and if you are in the wrong type, you might end up facing complications that are too hard to resolve. As your hard earned money is at stake here, taking all the necessary precautions would be beneficial. Don’t rely greatly on other people. Be armed with the needed knowledge for you to come up with the best decision and the best deal.
Different types of home mortgages:
Fixed-Rate Mortgage Loans
Among all the types of loans, this is the most availed and most popular and for good reasons since with this type of home loan, you already know what to expect for the entire duration of your loan term. No matter if the environment you are in will develop into higher or lower interest rates, your loan will not be affected. But just like any situation, there is also a downside with this option and that is you need to pay a premium because of the stability of the loan. The premium comes in the form of greater interest rates that is why, most of the time; fixed rate loans have higher interest rates.
Adjustable-Rate Mortgage Loans
This is somewhat opposite to the fixed rate though not entirely as it usually starts with a fixed rate loan for a period of time in which after that will be converted to adjustable rate mortgage. This is because these types of loans are usually what is considered as hybrid products or loans that are the combination of the fixed rate and the adjustable rate. Those who will avail of this type of loans are usually those borrowers that are planning to either refinance their loan or sell the property.
Conventional Home Loans
This type of loan is not backed up by the government. It can be insured by private entities but certainly not insured by any government entities. With these types of loans, qualifications and standards are higher and far stricter. It is for such reasons why most borrowers would still prefer government backed up loans as they are more lenient.
FHA Home Loans – another very popular type of loan as this is backed up by the government. If you want to avail of this loan, then better check this out with the Department of Housing and Urban Development as they are the one handling this or the Federal Housing Administration who is also the administrator of this type of loan. Check out more at our blog, here.