Buying a home will be the most expensive purchase many people will make in their lifetime as well as their most complicated purchase. Having a good understanding of the types of mortgage available and determining which mortgage is most suitable for you is important before buying Winding River Plantation real estate.
Unless you are a cash buyer you will need to obtain a loan to purchase a property. Most loans come from a bank, credit union or mortgage company. In some cases the person selling the home provides the buyer a loan. A good place to start the process for finding a mortgage is online. There are quite a few websites that allow you to comparison shop mortgage rates.
Winding River Plantation real estate loans are available in fixed rate and adjustable rate. With a fixed rate loan the mortgage rate stays the same for the entire life of the loan. With adjustable rate mortgages the interest rate is fixed for a period of time then adjusts every year after.
The most popular type Winding River Plantation real estate loans are fixed rate loans because the borrower knows exactly what their interest rate and monthly mortgage payments will be.
Among the fixed rate loans are 15 year, 20 year, and 30 year loans. There are two types of fixed mortgages, conventional mortgages and jumbo mortgages.
Conventional mortgage loans are mortgages that meet certain criteria set out by Federal Housing Finance Agency (FHFA). There is a maximum dollar mortgage loan limit set for each county in the United States.
Jumbo mortgage loans are for home loans that have a dollar amount higher than conventional loan amounts. Jumbo rates are higher because third party investors demand a higher premium due to the extra risk of a jumbo loan.
Adjustable mortgages have a fixed rate period and then the mortgage rate changes every year after. The most common are 5/1 adjustable loans. With a 5/1 loan the rate is fixed for the first 5 years and then adjusts every year after. Other common adjustable loans include 1 year, 3/1, 7/1 and 10/1. There are yearly caps and lifetime caps on how much the rate can adjust.